Gold Spot Price Open: $1,331
Gold Spot Price Close: $1,324
Change in Gold Spot Price: -$7
Silver Spot Price Open: $19.83
Silver Spot Price Close: $19.59
Change in Silver Spot Price: -$0.24
Precious metals, after gaining on Thursday, ended up losing more value to close out the week. When all was said and done, gold lost about 7 dollars while silver lost well over 20 cents. Platinum and palladium ended the day mixed, with palladium ending where it started while platinum lost more than 20 dollars.
Dollar Gains for 5th Consecutive Week on Policy Expectations
The USD Index is set to close the week in a better position than where it started, and this will mark the fifth straight week where that was the case. Driving the Dollar forward primarily is the expectation that the Fed will, in fact, move to increase interest rates at some point in the near future. Of course, as has been the case for sometime now, no one really knows what the phrase “near future” really means. At this juncture almost no one is expecting a rate hike announcement at July’s FOMC meeting, but at the same time there is no guarantee that the Fed will hold off. It is all very interesting to analyze, but it seems as though the market is slowly but surely coming into agreeance that the next move for the Fed will be to raise rates.
What is really helping the Dollar is the fact that a move to raise interest rates in the US would mean that US monetary policy is, once again, actively diverging from that of the rest of the world. This alone is providing the greenback with a lot of support. In the words of expert currency analyst Marc Chandler, “Even if dollar index slips from here, I still think the real story this week is the strength of dollar index and this divergence.” Going forward, even the idea that the US may choose a monetary policy path that differs entirely from their global counterparts is something that will fuel the greenback. Unfortunately, it may also continue putting a solid amount of pressure on gold and silver.
Stocks Improve Despite Weaker Earnings
As we began reporting yesterday, stocks in the US were on the verge of taking a downward turn thanks to a mostly disappointing batch of economic data, specifically earnings reports, that was released yesterday. Today we are slowly starting to realize that the somewhat poor earnings reports are being mostly overlooked by investors who are still confident in the US economy.
The Nasdaq, S&P 500, and Dow Jones were all significantly higher to close out this week, and that meant that gold and silver were always going to have a tough day. As we look forward to next week it will be interesting to see what direction stocks head in. With interest rate hikes becoming increasingly expected as the days pass, it is hard to envision things getting any easier for precious metals. Safe-haven demand is slowly starting to evaporate thanks to BRExit fears subsiding, and with us being in the middle of the slow summer months there are very few pieces of underlying support.
Wrap-Up
As we look forward to next week, there aren’t many significant happenings to pay attention to. This is not such good news for precious metals, which are current succumbing to a lot of outside pressure. So long as stocks and the Dollar continue to perform well, metals will have a tough go of things. With the FOMC meeting right around the corner, it will be intriguing to see if the outlook on potential interest rate hikes will shift at all, or remain right where it is presently.
