Gold Spot Price Open: $1,324
Gold Spot Price Close: $1,318
Change in Gold Spot Price: -$6
Silver Spot Price Open: $19.70
Silver Spot Price Close: $19.52
Change in Silver Spot Price: -$0.18
Precious metals opened up this week in much the same way that they finished last week, by moving downward. By day’s end, gold fell by about 7 dollars while silver declined by roughly 30 cents. Platinum and palladium both fared about the same as gold and silver, however platinum’s losses well outpaced those of palladium.
Metals Lower Thanks to Lack of Fresh News
The downward trend that began to take shape little more than a week ago for gold and silver is being exacerbated by a general lack of bullish news items. In the past few weeks, we have seen upbeat data as well as a change in thought with regard to what might happen to interest rates drive up both US stock markets and the US Dollar. This has all amounted in nothing more than increasingly building pressure which is preventing metals from gaining any ground at all.
The big news story of the week will unfold over the course of Tuesday and Wednesday as those are the two days during which the FOMC meeting for July will be held. Though no one is really expecting any policy changes to be made as a result of this month’s meeting, the eyes and ears will be fixated on the meeting—and specifically the post-meeting statement—in search of any clues as to what the future holds for interest rates. As for what investors think presently, there is a growing number who think that at least one more rate hike will happen by year’s end. There are even some people who are predicting 2 more rate hikes before the end of the year, however such does not seem very likely.
Another noteworthy happening this week is the expected announcement of further monetary stimulus by the Bank of Japan. Even though last week brought about commentary from top BoJ members which stated, plainly, that they are not going to increase their stimulus package just for the sake of doing so, it still seems as though an increase to the stimulus package may be announced before week’s end.
Don’t Count Metals Out Yet
If you look at the past few weeks, precious metals have performed quite poorly and the reasons for this are many. With that being said, however, this temporary lull does not mean that the bull market has evaporated. Right now, many of the losses incurred by metals, and specifically gold, can be attributed to all of this talk about raised interest rates.
If the first half of 2016 is any indication of how the second half will go, we might as well stop holding our breaths with regard to multiple interest rate hikes. Given the way the global economy is growing, and the uncertainty posed by the UK’s exit from the EU, it is still reasonable to believe that the Fed will be forced to hold off on hiking rates, even if the economy in the US continues to perform well. With no changes in policy expected to be announced at this week’s FOMC meeting, and as we go further and further with no changes made, the allure of metals will pick back up once more.
Wrap-Up
The summer doldrums were in full effect on Monday as very few new, noteworthy pieces of news or data made their way to the table. There were a handful of terror attacks around the world in recent days, but as these events become increasingly common the market tends to more quickly overlook them. In the past, events such as those that happened in Germany might have created a temporary safe-haven push for metals, but that has not proven to be the case this time around.
