Posted on July 29, 2015
Gold Spot Price Open: $1,097
Gold Spot Price Close: $1,097
Change in Gold Spot Price: NO CHANGE
Silver Spot Price Open: $14.72
Silver Spot Price Close: $14.87
Change in Silver Spot Price: +$0.15
Precious metals remained stable through the day on Wednesday as markets patiently awaited the release of the FOMC’s statement from this week’s meeting. When all was said and done, gold did not finish far from where it started the day while silver managed to add more than ten cents. Platinum and palladium ended the day mixed, with neither metal moving too far in either direction.
A telling piece of data was made public today via the pending home sales report for the month of June. According to the report, the National Association of Realtors pending home sales index fell by nearly 2% during the month of June. While this is honestly not the most important piece of data, it underlies a growing theme that suggests perhaps the housing market in the United States may be losing some momentum. The housing market has been a bright spot in recent months, with first-time home buyers and other US citizens generally more eager to purchase property. However, as competition for a limited number of houses (in certain regions/markets) intensifies prior to interest rate hikes, prices are naturally being driven upward, and often times so drastically upward that a potential home buyer may hold off and weigh their options as opposed to jumping in on a mortgage.
According to the NAR’s chief economists, “Competition for existing houses on the market remained stiff last month, as low inventories in many markets reduced choices and pushed prices above some buyers’ comfort level. The demand is there for more sales, but the determining factor will be whether or not some of these buyers decide to hold off even longer until supply improves and price growth slows.”
The Federal Open Market Committee of the United States offered very little fresh insight with regard to interest rate hikes at their post-meeting conference held this afternoon. Not only did the Fed keep interest rates at current levels, it also refused to offer much in the way of fresh insight with regard to economic growth in the US. What the Fed did say, however, was that economic activity between June and July’s meeting grew “moderately” and maintained its upward trajectory. For precious metals, this news was mostly a non-factor, but did very little in the way of actually moving spot values.
Despite the downturn of sorts witnessed in the housing market, the US labor sector remains strong as ever, as employment grows with each passing month. This is a huge factor as far as interest rates are concerned considering the labor market, up until a few months ago, had been lagging behind noticeably compared to other sectors of the US economy. All in all, the Fed’s meeting and post-meeting statement had very little impact on spot values because they were both, in truth, more non-factors than anything else. Going forward we will continue to keep a close watch for any standout US economic data, but it is going to take a lot for investors to become convinced that interest rate hikes will not be coming sometime this Fall.
As we look forward to the last few days of the week, it is very clear that the focus of the global market will remain on the US. For one, there is an all-important piece of GDP expected, while the weekly jobless claims numbers will also be watched over carefully. This week has been a slow one, but for precious metals investors this is not such a bad thing as spot values have remained put for the most part. It will be interesting to see if that much will stay true as the week moves forward or not.