Gold Spot Price Open: $1,337
Gold Spot Price Close: $1,352
Change in Gold Spot Price: +$15
Silver Spot Price Open: $20.24
Silver Spot Price Close: $20.30
Change in Silver Spot Price: +$0.06
Precious metals finished off the week in positive fashion thanks to a less than stellar piece of economic data from the United States. When all was said and done, gold gained almost 15 dollars while silver picked up a little more than 5 cents. Platinum and palladium also made gains on the day, with both metals picking up about 15 dollars apiece.
US Q2 GDP Mostly Disappoints
This week has been quite interesting up to this point, and things got even more intriguing upon the release of the 2nd quarter GDP data from the United States. After disappointing growth was recorded through the 1st 3 months of the year, most experts anticipated that the US economy would bounce back considerably in the 2nd quarter. According to the Commerce Department, however, such proved to not be the case.
Officially, the US economy grew at an annualized rate of 1.2%, which is far less than what was forecast. The median forecast from polled experts was for growth of at least 2.5%, so it is easy to see why people are reeling after this report. Now, we are looking at interest rate hike expectations that have all but disappeared. Now, you will find few people who expect even one rate hike to occur between now and December.
Looking at the GDP data, a number that sticks out more than any other is the fact that investments in houses fell by more than 6% during the April-June timeframe. After that same number was up by more than 7% during this year’s first three months, some concerns are rightfully being raised. For gold and silver, the poor GDP data delivered a boost that transformed small weekly gains into more significant gains.
What’s more, the marketplace witnessed US stocks cool off to close out the week. This cool off was a major theme across the entire week and stock indexes that were only a few weeks ago performing well were turning downwards.
BoJ Surprises Everyone
Another big focus of investors from around the world was the Bank of Japan meeting that kicked off on Thursday. When this meeting wrapped up in the pre-market hours of Friday, the BoJ surprised everyone by not making only a small change to their monetary stimulus program. Officially, the expansion involved nothing more than an increase to the purchase of ETFs. People were anticipating a much larger expansion and, as such, were disappointed to see the BoJ’s reluctance.
Up until today, the expectation was that current Japanese stimulus measures were going to be expanded upon. With poor growth continuing to have a negative impact on the Japanese economy, the expansion of stimulus programs seemed to be the next logical move for the BoJ to make. With this news now being digested by the market, it will be interesting to see what investors think about the future of the Japanese economy come market-open on Monday.
Wrap-Up
After the first few days of this week, it is surprising to most people to see both gold and silver rebound and finish the trading week having made gains. As we look ahead to the week to come, we will begin receiving some month-end economic data from the month of July. All in all it seems as though July was an upbeat month for the US economy, but most people thought that Q2 would emit positive growth as well, so it is easy to see why people are not so quick to believe anything with regard to US economic performance.
