Posted on August 24, 2015
Gold Spot Price Open: $1,166
Gold Spot Price Close: $1,154
Change in Gold Spot Price: -$12
Silver Spot Price Open: $15.45
Silver Spot Price Close: $14.88
Change in Silver Spot Price: -$0.57
Precious metals finished Monday having posted disappointing results thanks to an upheaval of sorts across the global equities market. When all was said and done, gold managed to gain around 3 dollars while silver lost closer to 50 cents. Platinum and palladium had equally poor days to begin the week and finished down to the tune of more than 30 dollars apiece.
China’s stock market opened up the day on Monday by immediately falling by noticeable margins. Shanghai’s Composite Index fell by more than 8% today in what is now being dubbed “Black Monday.” This was the worst single-day decline China’s stock market has seen since 2007 and is coming just on the heels of news released last week which indicated that the Chinese economy is, in fact, in the midst of a significant slowdown.
Thanks to worries regarding China’s economy, US stocks shadowed Chinese stocks and fell by considerable margins to open up the trading week. This much allowed for gold to hit a fresh 6-week high, though early day performances were later cancelled out, most likely thanks to crude oil plummeting and hitting a more than 6-year low. As is often the case, oil declining means that it is going to be tough for gold and silver to make gains. This time, oil fell not necessarily because of a supply-glut, but because there are legitimate concerns with regard to how much of the natural resource will be bought up by the struggling Chinese economy.
Even in the midst of all this talk of impending interest rate hikes, gold and silver may be on the verge of receiving widespread investor attention. Over the course of the past few weeks, the market has been dealt a lot of serious news regarding China, one of the most important economies in the world. Report after report has streamed in and almost all of them, without exception, have been on the poor side of things. Now, with the market more or less in agreement with regard to China’s struggles, what only a short time ago looked like smart investing decisions are quickly deteriorating, and this is being reflected in the unpredictable nature of global equity indexes.
Now, with all these worries circulating across the global marketplace, gold and silver are once again beginning to appeal as investment options. It may be a slow go, but we are already seeing investors more apt to acquiring precious metals as a means of defending themselves against such volatility.
It will be interesting to see if today’s developments in China have any sort of lasting impact on what will happen with interest rates. For now, the preliminary belief is that interest rates will still be risen, but will be risen much less dramatically than originally anticipated. Of course, this is nothing more than speculation as the Fed has remained cryptic as ever about elaborating on what they intend to do with interest rates.
To be honest, Monday offered up a bit of excitement in that very few people were anticipating that US and Chinese stocks would perform as poorly as they did. Looking ahead to the rest of the last full week of August, I anticipate that the market will continue to see what sort of ripple effect recent equity index declines will have on the rest of the market. Being that this week is expected to be light from an economic data standpoint, the eyes of the world will continue to be fixated on global equity markets.