Posted on July 08, 2014
Gold Spot Price Open: $1,317
Gold Spot Price Close: $1,320
Change in Gold Spot Price: +$3
Silver Spot Price Open: $21.03
Silver Spot Price Close: $21.11
Change in Silver Spot Price: +$0.08
Gold and silver spot values traded sideways for a majority of the day, while platinum and palladium soared to new heights. When all was said and done on Tuesday, gold managed gains of about three dollars while silver was able gain a few pennies.
Most market experts are attributing today’s limited price movement to a lack of many fundamental, bullish factors making their way to the marketplace. With talk of raised interest rates continuing to dominate the US market, the emphasis being placed on tomorrow’s FOMC minutes is growing with each passing hour. Afshin Nabavi, lead trader at MKS SA put the market’s expectations for tomorrow into perspective when he was quoted as saying, “Tomorrow we have the minutes and hopefully we will get a better idea, also based on the economic data, of what U.S. interest rate policy will be in coming months.” With this in mind, however, it is highly unlikely that tomorrow’s minutes will provide any great deal of insight with regard to what the Fed plans to do with interest rates going forward.
What we do know, however, is that raised interest rates in the US would almost assuredly spell bad news for the precious metals market. If interest rates are raised sometime down the road, investors would likely drop safe-haven precious metals and instead turn to higher interest-paying assets in hope of deriving more of a return from their investments.
The US Dollar is doing a bit better as of late, but has not moved too far in either direction after the progress it made last week. The same cannot be said about major US stock indexes, however, as the S&P 500, DOW, and Nasdaq are all recording losses over the last 5 days. The recently poor performance of US equities is providing gold, silver, and other precious metals with a nice buffer against all this bearish talk of potentially upward-moving interest rates.
Despite gold and silver more or less stagnating to begin the week, platinum and palladium have been seen making healthy gains. Boosted by reports of June being the best auto sales month in the United States in the last 8 years, Palladium is currently sitting at a 13-year high and looking to edge even higher. Palladium, a metal used in car’s catalytic converters, is almost always going to benefit from any report indicating a rise in auto sales.
Platinum may not be seeing gains as drastic as those being made by Palladium, but the metal has been faring extremely well over the past month or more. Thanks to concerns with regard to the supply of the metal being hurt by mine strikes in South Africa, demand for physical platinum has been at all-time highs. While many of the striking mine workers have gone back to work, the more than 5 months that 3 major South African mines spent at a standstill is enough for investors to be concerned about the supply of the metal.
As we look ahead to the duration of the week, we find that there isn’t very much to look forward to. Of course, tomorrow’s FOMC minutes will be a major concern for the global marketplace, but other than that there really isn’t much economic data on the slate. The ongoing violence in Iraq is still simmering on the back-burner of the market’s attention, but it is becoming more of a non-factor with each passing day.