Gold Spot Price Open: $1,323
Gold Spot Price Close: $1,343
Change in Gold Spot Price: +$20
Silver Spot Price Open: $19.69
Silver Spot Price Close: $20.32
Change in Silver Spot Price: +$0.63
Precious metals opened the day moving mostly sideways, but by early afternoon things began improving thanks to a few different factors. When all was said and done, gold managed to tack on 20 dollars while silver added more than 60 cents. Platinum and palladium also gained on the day, with platinum picking up close to 40 dollars while palladium added roughly 20 dollars.
Durable Goods Miss Mark in June
According to the US Department of Commerce, the US saw 4% fewer orders for durable goods in June than what was recorded in May. In fact, if you combine May and June’s report we have seen a decline in durable goods orders of more than 6% over that 2 month span. Being that the median expectation was for durable goods orders to fall only by a little more than 1%, it is easy to see why this piece of data is being viewed as quite poor by the market. In the immediate wake of the durable goods report, investors were seen flocking to precious metals, which recorded a nice rally shortly after noontime.
If we pick the report apart, there isn’t one single aspect of the report that sticks out more than any other. The simple fact of the matter is that durable goods orders were down across the board and have been down for a majority of the Spring.
Helping push precious metals a little further forward was the fact that, even before the post-meeting speech was delivered, investors became convinced that any commentary regarding interest rates was not going to be in favor of rushing towards a hike. Instead, most investors were anticipating a statement that did not deliver much in the way of fresh news.
Fed Statement Comes and Goes with Little Reaction
When the time finally came for the FOMC to deliver their post-meeting statement, most investors had already made up their mind with regard to what the FOMC was going to do, or not do. When it finally came time for Janet Yellen to speak, the things she said echoed many past Fed meetings.
As you might have expected, interest rates were maintained at current levels as the Fed decided to make no changes. In fact, Yellen did not even hint at when the next round of interest rates might come to fruition. What she did make very clear, however, is the fact that the US economy now faces fewer threats than it did only a month or so ago. With the BRExit decision not destroying the global economy and June employment data rebounding nicely from May’s, there are visible signs of strength coming from the US economy at present.
With all that being said, precious metals were able to rally thanks to the lack of commitment with regard to rate hikes. Many people were holding out hope that the Fed would offer clues as to when the next rate hike might come, but such never proved to be the case on Wednesday. With a long 4 weeks between now and the next FOMC meeting, it will be interesting to see if today’s boost can keep metals moving higher.
Wrap-Up
As we head into the latter half of the week, there isn’t much on the table for investors to look over and discuss. We will be dealt the weekly jobless claims report sometime tomorrow afternoon, but apart from that there really isn’t much in the way of fresh news or data for investors to latch onto.
