Gold Spot Price Open: $1,329
Gold Spot Price Close: $1,337
Change in Gold Spot Price: +$8
Silver Spot Price Open: $20.01
Silver Spot Price Close: $20.13
Change in Silver Spot Price: +$0.12
Precious metals have picked up some lost ground through the middle parts of this week and are back to winning ways, or so it seems. When all was said and done on Thursday, gold gained just about 8 dollars while silver tacked on a little more than 10 cents. Platinum and palladium finished the day mixed with neither metal finishing too far from where they opened the day.
Gold Soars to 2-Week High Before Falling
As you might have guessed, the precious metals rally that occurred early on this morning had almost everything to do with the mostly dovish FOMC statement delivered yesterday afternoon. After the meeting concluded and after no policy changes were made, Janet Yellen took to the stage to deliver an address that failed to raise any eyebrows and did not really pique the interest of investors. She commented on the fact that economic growth is strong and so too is employment, however she provided little to no indication as to when the Fed will raise rates or if that is even still the plan. Having made almost no mention of interest rates, the market is viewing this month’s policy meeting as mostly a miss.
As a result, we are seeing gold sit right a little below a 2-week high while silver is hovering just under its multi-year record mark that was recorded towards the beginning of this month.
As we move forward, however, there is going to be a lot of continued speculation with regard to the future of interest rates in the US. That has been a theme through the entirety of the first half of 2016, and I do not think that is going to be changing at any point in the near future.
BoJ Meeting Kicks Off
As soon as the Fed wrapped up its policy meeting, investors immediately began turning their attention to the Bank of Japan policy meeting which is going to begin today and wrap up sometime tomorrow. The reason this particular BoJ meeting is being paid attention to by investors is the fact that an expansion to monetary policy is expected to be announced upon the meeting’s conclusion.
At this particular juncture, there are very few people out there who expect the BoJ to do anything other than expand its monetary stimulus plan. With economic recovery moving along at a snail’s pace, something has to give; or at least that is how most people are feeling. If more stimulus is added to the Japanese economy, you can expect that the Yen will take a hit and the Dollar will likely benefit.
What this means for precious metals remains unclear, but with interest rate hikes being held off and more monetary stimulus about to make an appearance, it is looking like gold and silver may continue to have some bullish support. Of course, we must still await the post-meeting statement from the BoJ in order to determine if rates are, in fact, going to move upward.
Wrap-Up
All in all, there weren’t many new pieces of data brought to the table on Thursday. We saw a more complete reaction to the Fed’s decision to keep rates steady, and that only ended up benefitting gold and silver. As we look forward to the last day of the week, it will be interesting to see if metals can finish this 5-day trading session positively or if profit-taking, among other factors, will drive spot values back downward. For now, however, metals are sitting pretty and about where they were at a little more than 2 weeks ago.
