Gold Spot Price Open: $1,362
Gold Spot Price Close: $1,354
Change in Gold Spot Price: -$8
Silver Spot Price Open: $20.42
Silver Spot Price Close: $20.42
Change in Silver Spot Price: NO CHANGE
Precious metals are losing value to begin the week despite data suggesting the opposite should be happening. When all was said and done, gold lost about 8 dollars while silver actually ended up finishing where it started the day. Platinum and palladium both also gained on the day, however neither metal added more than 10 dollars.
Palladium Soars to New Highs on Chinese Auto Sales
It isn’t too often that we talk about palladium, however the metal has recently been performing well and is likely to continue doing exactly that. Thanks to auto sales that seem to be continuously improving, the demand for palladium is increasing steadily. For those who are unaware, palladium is critical in the pollution-regulating parts of gasoline-powered vehicles. As an increasing number of vehicles are sold in China, it logically follows that an increasingly large amount of palladium will need to be purchased in order to satisfy this rising demand.
Palladium is now sitting about on par with a high point realized last October, and has gained 20% since the beginning of April. As we look at the future of Chinese auto sales, things are looking bright. Analysts are expecting to see year on year auto sales growth between 9% and 10% over the coming years, and this does well to boost the allure of palladium as an investment.
Also helping palladium is the same factor that is helping most other precious metals in recent days, and that is the fact that the Federal Reserve seems as reluctant as ever to raise interest rates in the United States. With rate hikes not overly likely to happen before the end of the year, metals will continue to benefit.
Gold, Silver Mostly Ignore Downbeat US Data
Data released by the Institute for Supply Management pointed towards a manufacturing sector in the US that seemed to lose a bit of momentum during the month of July. Officially, the manufacturing PMI fell in July to a reading of 52.6, down from a reading of more than 53 in June. Though this downward movement is not too significant, any downward turn is going to raise a few eyebrows.
Investors did not emit much of a reaction to this piece of data by day’s end, as precious metals mostly ended up spinning their wheels on Monday. Perhaps part of the reason for such a subdued reaction was due to the fact that, apart from this piece of data, economic reports from the US have recently been mostly upward. Long story short, it is going to take more than 1 piece of poor data for the global marketplace to think that the US economy is showing signs of weakness.
The one piece of today’s manufacturing data this is worth noting, however, is that the sector’s employment situation seems to be getting increasingly worse. The manufacturing employment index fell from June to July and has really fared quite poorly for much of the past few months. Perhaps this is nothing more than a seasonal slump, but perhaps this is the beginning of a wider downturn on the part of manufacturing employment and US employment overall.
Wrap-Up
Monday offered up very little in the way of fresh pieces of economic data, and this did not bode so well for precious metals. Looking forward to Tuesday and beyond, it is difficult to say that the story is going to change. The simple fact is that we are now in the middle of a time of the year where economic data is light, and this is something that keeps the global marketplace as a whole quieter than it is at most any other point during the year.
