Posted on July 21, 2014
Gold Spot Price Open: $1,310
Gold Spot Price Close: $1,313
Change in Gold Spot Price: +$3
Silver Spot Price Open: $20.94
Silver Spot Price Close: $20.99
Change in Silver Spot Price: +$0.05
Precious metals, for the most part, performed decently on Monday thanks to continued attention being paid to developments in Ukraine and Gaza. When all was said and done, gold picked up about three dollars while silver was able to add roughly 5 cents. Platinum moved by about as much as gold while palladium traded marginally downward a majority of the day.
Last week offered its fair share of geopolitical developments, so much so that the attention being paid to them spilled over into this week.
In the Middle East, Israeli ground troops continued their methodical destruction of the Gaza Strip in an effort to wipe out any and all Hamas rocket units. Over the past few weeks and all across recent history, Hamas militants have been firing long and short-range missiles across the Gazan border into Israel. Despite Israel’s routine and often disproportionate counter-attacks, Israeli PM Benjamin Netanyahu has decided that enough is enough. Now, as the total death toll climbs to near 600, the world and its leaders are doing anything in their power to bring about peace in Gaza, even if it is only temporary.
In Ukraine, the international investigation with regard to last week’s downing of a Malaysian Airlines flight is just beginning. Over the weekend, it was reported that pro-Russian separatists were moving bodies and debris from the wider debris field; something that should never be done as it can drastically alter the conclusion of the investigation. As this week plays out, I expect the market to pay less and less attention to the investigation as it has already made its splash and has since settled quite considerably.
The US Dollar did not do much moving at all today and, like precious metals, continues to be on the receiving end of some lift due to investors shying away from risk. Tying hand in hand with this is the fact that US stock indexes, across the board, traded downwards today. With that said, however, it is the opinion of many that both the developments in Ukraine and violence in Israel will cease to be market-movers before long.
John Chisholm of Acadian Asset Management in Boston echoed these sentiments when he was quoted as saying, “We’re certainly paying attention to the issues abroad, but right now, they don’t seem like the kind of events that will have anything beyond a short-term impact.” If things do calm down in the coming week or two, this could potentially spell trouble for the spot values of precious metals, which have really benefited from a recent spike in the number of noteworthy geopolitical developments.
Apart from the continued analysis of last week’s noteworthy events in Israel and Ukraine, there really wasn’t much going on today. The same rings true for the rest of the week too as very little economic data, and even less major economic data, is scheduled to be made public. As a result, it will be interesting to see just how quickly risk-aversion ceases to be a major influence on the market.