Posted on August 10, 2015
Gold Spot Price Open: $1,096
Gold Spot Price Close: $1,105
Change in Gold Spot Price: +$9
Silver Spot Price Open: $14.88
Silver Spot Price Close: $15.35
Change in Silver Spot Price: +$0.47
Precious metals gained on a day where the Dollar slipped on the back of some comments from a high-ranking member of the Federal Reserve. When all was said and done, gold managed to gain close to ten dollars while silver added roughly 50 cents. Platinum and palladium finished the day on the up and up, but platinum was the bigger winner of the two having boasted gains of more than twenty dollars.
Less than a week after a voting member of the FOMC commented on his support for September interest rate hikes, we have gotten wind of another Fed official whose sentiments differ drastically. Today, Vice Chairman of the Federal Reserve Stanley Fischer expressed his doubts with regard to the plausibility of a September rate hike. Citing global deflationary trends as something that “bothers” the Fed, Fischer maintained that rate hikes are in no way a guarantee. With these comments, you can bet that the next month or more will consist of investors picking apart every single bit of global deflationary data.
The US Dollar backed off a bit in the wake of Fischer’s comments, giving gold and silver the room they need to make moves forward. Still, the Dollar is hovering near multi-year highs achieved last week, so while the Dollar did back down today the greenback is still in a great position overall. Going forward, this is something that will make it difficult for gold and silver to make any lasting gains.
It has been no secret in recent history that gold and silver are suffering. With interest rate hikes on the table and the Dollar surging forward for the last few weeks, the outlook on gold and silver as investments is something that has diminished a lot in recent months. Seeing as interest rate hikes would increase the opportunity cost associated with holding metals, it is only natural that investors are looking to rid themselves of the safe-haven properties of gold and silver.
After gold’s massive slide during the final two weeks of July, the metal has maintained its subdued position and has continuously traded at right around $1,100/ounce. The thing about gold’s current positioning is that there is nothing existing in the marketplace to allow any confidence to be put behind the thought that gold’s slide is done and dusted. In fact, there are plenty of people who think that metals may make yet another move downward should the global market remain as bearish as it has been through most of the Summer.
Being that this week is expected to be generally light as far as economic data is concerned, I would not be at all surprised to see gold and silver hold these positions for most of the 5-day trading session. Of course, this is barring any unforeseen news stories or geopolitical happenings.
All in all, today offered up a slow start to what is looking like a slow week. With some luck, we will be on the receiving end of some more information regarding the Federal Reserve’s outlook on interest rate hikes, but that much cannot be said for certain. For now, the market remains convinced that rate hikes will be announced next month.
Another event to keep an eye on is the violence in Ukraine. Though we have not spoken about it for a while, rebel forces and Ukrainian military forces are doing battle and have been for quite some time. Just today, we received word of the strongest shelling put forth by rebel forces in more than a half year, so this is something we will have to continue watching as the week and month play out.