Gold Spot Price Open: $1,354
Gold Spot Price Close: $1,365
Change in Gold Spot Price: +$11
Silver Spot Price Open: $20.48
Silver Spot Price Close: $20.56
Change in Silver Spot Price: +$0.08
After losing to begin the week, precious metals jumped forward on Tuesday as risk-appetite is beginning to wane. When all was said and done, gold managed to gain more than 10 dollars while silver tacked on about 8 cents. Platinum and palladium also gained on the day, with platinum picking up close to 10 dollars while palladium more or less spun its wheels.
Weakening Dollar Pushes Metals Forward
Though there is not one single factor influencing this move, the USD is moving downward throughout the early parts of this week. The USD Index hit a 4-month high last week, but ever since then the greenback has been moving lower and lower. This is just one of many factors helping push spot values higher.
Also helping gold and silver today was the spot value of crude oil, which is moving lower and lower. In fact, by most estimates the price of a barrel of crude oil has moved below the $40 mark. In recent months, the movement of precious metals and crude oil has been inversely related such that every time gold and silver move up, crude oil moves downward.
Finally, stock indexes around the world are moving lower and lower thanks to an appetite for risk that seems to be disappearing. In Europe, stock indexes are lower despite a somewhat upbeat piece of economic data being dealt. According to the data, the Producer Price Index for June rose by .7% on a monthly basis. On an annual basis, PPI was down by more than 3%, but this number was better than expected. Still, inflation across the Eurozone is not near target levels set forth by the European Central Bank.
Japan Introduces New Stimulus Plan
Earlier in the day on Tuesday, the Bank of Japan announced a stimulus package worth an estimated $276 million per month. As you may or may not know, this stimulus package is aimed at bringing the struggling Japanese economy out of a slump that has lasted more than a year at this point.
In the short term, expectations are that this new stimulus package will increase the country’s GDP by more than 1%. Whether these 1% increases can be sustained or not, however, is something that no one is overly confident in. For this year, GDP growth estimates have toppled from a projected near 2% to under 1%. Long story short, the Japanese economy is continuing to struggle and there have been little signs of progress up to this point.
Consumer Spending Increases in June
The US economy was given another batch of decent economic data when it was reported that consumer spending increased in June. Officially, the rise in consumer spending in June came in at .4%. After a .4% increase was recorded in May, and a more than 1% increase recorded in April, it is clear to see that consumers in the United States are growing increasingly confident in the economic conditions at home in the United States.
Fortunately for gold and silver, the upbeat US consumer spending report did not do much to improve the posture of US stocks, which have been not doing so great since the middle part of last week.
Wrap-Up
As you could have probably easily gathered, Tuesday was one of the more uneventful days we have seen in the past few weeks. Only light pieces of data streamed in, and they were mostly ignored by investors. We are slowly but surely seeing investors, mostly those outside the US, grow less comfortable with risk-laden investments, and this is something that is lending clear support to precious metals. As we move further into this week, it will be intriguing to see if spot values can continue climbing or not.
