Posted on August 28, 2015
Gold Spot Price Open: $1,124
Gold Spot Price Close: $1,136
Change in Gold Spot Price: +$12
Silver Spot Price Open: $14.48
Silver Spot Price Close: $14.60
Change in Silver Spot Price: +$0.12
Precious metals were able to bounce back a bit on Friday thanks to a small uptick in safe-haven demand. When all was said and done, gold managed to gain about twelve dollars while silver had gains that closed in on fifteen cents. Platinum and palladium both also gained today, and their gains were above $15.
With the way things have gone in recent history, we have not had much discussion regarding the possibility of more monetary stimulus measures taking hold in the United States. The reason for this is that any and all talk regarding monetary policy in the United States centers around the pending raising of interest rates. Just today, the president of the Minneapolis Federal Reserve Narayana Kocherlakota commented on the possibility of lowering interest rates even further. In an interview with Bloomberg, Kocherlakota said that the US economy could benefit from asset-purchasing programs much like the quantitative easing that was not too long ago done away with.
In response to this interview, the idea that interest rates in the US would be risen by September took a massive hit. For gold and silver, however, the comments made by Kocherlakota acted as a propellant pushing spot values higher. Graham Leighton, trader at Marex Spectron, commented on today’s precious metals price action by saying, “Kocherlakota’s comments are 100 percent what this is about. Lower interest rates basically means a weaker dollar and strong gold, and lower interest rates are always positive for gold.”
So while these comments should not be bought into 100%, they are definitely something to think about. After all, it will take more than just one member of the Fed to change policy, but an idea has to come from somewhere.
Despite it being an off-peak shopping season, US consumers were out in full force during the month of July, According to a report made public earlier this morning, US consumer spending upticked by about .3% during July on an annualized basis. The Commerce Department offered some comment on the matter, saying that purchases of big-ticket items like motor vehicles allowed for the decent jump forward.
Another report indicated that salaries and wages moved upward during July by .5%, which is the largest such increase the US has seen since last November. While it is important to see job growth, the Fed and economic experts have time and time again stated that wages need to increase as well; it now seems as though that finally might be happening. As we look ahead to next week, you can bet that there will be a whole lot of economic data from around the world for us to reflect on. With that said, the data from the United States will be hawked over more than data from anywhere else.
Reflecting on the last 5 days, there are very few positives to take away for gold and silver. While it is nice to see metals having made some decent gains on Friday, the other 4 days have seen metals post a sizable downtrend. Heading into next week, you can expect interest rate talk to consumer the marketplace. Economic data is bound to play some role in next week’s proceedings, but at this point it is impossible to say what that might mean for gold and silver spot values.