Gold Spot Price Open: $1,346
Gold Spot Price Close: $1,355
Change in Gold Spot Price: +$9
Silver Spot Price Open: $19.68
Silver Spot Price Close: $19.70
Change in Silver Spot Price: +$0.02
Gold and silver both managed to bounce back a bit after Wednesday, when the FOMC minutes from July’s meeting were more hawkish than expected. When all was said and done today, gold managed to pick up about 9 dollars while silver added a few pennies. Platinum and palladium were both up as well, by more than 10 dollars apiece.
Slumping USD Boosts Precious Metals
The USD Index hit a 7-week low during the overnight hours and while this may be shocking to some, it was something others saw as a long time coming. For the past month or so, the USD Index has been almost constantly losing value, culminating in last night’s historic low. For precious metals this is a good thing because a Dollar that is weaker relative to competitive currencies means that gold becomes cheaper for foreign investors. What’s more, investors worry at the first signs of greenback weakness, and seeing as precious metals are safe-haven assets, it only follows that spot values would jump upward upon the Dollar slumping.
It is tough to say what the future holds for the Dollar, but in the meantime metals are going to continue to benefit. Since February, in fact, the USD Index has been slumping, so there is a thought that it is high tide things start moving back upward again. Of course, there isn’t much to suggest that this will actually happen as planned.
US Economic Data Dealt
It wasn’t only the weekly jobless claims report that had investors perking up on Thursday. The Philadelphia Federal Reserve released data which showed that their consensus outlook on the manufacturing sector of the US economy is growing better all the time. In fact, the Philadelphia Fed’s manufacturing business outlook survey rose to a reading of 2 for this August. While this may not mean much to the average investor, the same reading was just a hair shy of negative 3 in July, and it is clear to see a drastic improvement in what isn’t a very long period of time. To make a long story short, investors interpreted this data as being one more sign that the US economy is continuing to gain strength.
The weekly jobless claims report was dealt on Thursday and the Department of Labor delivered yet another batch of data that lends itself to the monetary policy hawks who would like to see rates raised at least one more time before the year is through. Officially, the number of first-time claims for unemployment benefits fell by 4,000 last week, bringing the seasonally-adjusted number of claims to 262,000.
Most experts were anticipating that last week saw a spike in first-time unemployment claims, however the opposite happened.
Wrap-Up
There was a surprising amount of activity across the global marketplace on Thursday, however the US took up most of the headlines. Today gave investors from around the world and here in the US a chance to digest what the FOMC minutes really met, and upon closer inspection it seems as though the market has decided that the minutes might not have been as hawkish as originally anticipated.
With no consensus on what to do with rates, the Dollar is going to continue to fall and precious metals spot values will likely benefit. What will be interesting to see is if whether gold and silver can end the week on a high come market’s close on Friday, or if spot values will once again push lower.