Gold Spot Price Open: $1,323
Gold Spot Price Close: $1,326
Change in Gold Spot Price: +$3
Silver Spot Price Open: $18.75
Silver Spot Price Close: $18.81
Change in Silver Spot Price: +$0.06
Precious metals were able to make small gains to begin the week, but outside markets are beginning to look bearish already. When all was said and done on Monday, gold gained about 3 dollars while silver ticked upward by about 6 cents. Platinum and palladium gained to begin the week as well, with both metals tacking on a little more than 5 dollars.
US Consumer Spending Ticks Upward in July
For the fourth time in as many months, consumer spending in the United States moved upward in July. Demand for motor vehicles stuck out as being a major contributor to the upbeat data, but it seemed as though spending was up across the board. According to the Commerce Department, consumer spending rose by .3% in July and was revised upward to growth of .5% in June as well. Being that consumer spending accounts for roughly 2/3’s of all economic activity in the US, it is easy to see why this report is deemed as important by investors.
There was not such a big reaction to the upbeat consumer spending mostly because the .3% increase was more or less in line with what market experts anticipated. Looking at the wider picture, consumer spending has been doing extremely well all year long. In Q2 alone, consumer spending increased by more than 4% much to the surprise of many.
For those that might have been away last week, today’s consumer spending data comes on the heels of news from Friday, which included a speech delivered by Fed Chair Janet Yellen. For those that might have missed her remarks, the biggest takeaway was that Yellen very much left the door open for hiking rates at least one more time this year. Though she did not get into anything even close to specifics, she spoke with confidence about the current pace of growth as well as what is expected in both the near and longer-term futures. Long story short, Yellen and her colleagues are expecting the US economy to finish off this year in impressive fashion. If all goes to plan, I would not be at all surprised to see rates hiked at least one more time. As of right now, however, the best chance for rate hikes is December, and even then there is only a 40% chance that the Fed will make a move.
Investors Look Forward to Jobs Data
Being that we have but 2 more days left in the month of August, it goes without saying that a good bit of economic data awaits us just around the corner. Bigger and more important than just about any other report is the jobs data which is due out towards the end of the week. With so much talk of interest rates potentially being hiked, it is only right that investors focus their full attention on what the Department of Labor has to say about the state of employment in the country.
Recently, almost every bit of employment data has been upbeat and better than expectations. This is just one of the many reasons behind why investors are becoming increasingly optimistic about the chances for a rate hike sooner rather than later.
We will be dealt the ADP private-sector jobs growth report on Wednesday, and though that report is not the most significant, it will begin a 3-day batch of employment report after employment report. Should everything be as positive as people are anticipating, precious metals may be at risk of being pushed further downward.
Wrap-Up
Apart from the consumer spending report, there wasn’t all that much fresh news for investors to discuss on Monday. We have a plethora of economic reports coming out over the course of the next week or so, and what this really means is that the Summer Doldrums are just about finished. With this flurry of economic activity you can also expect a flurry of investment activity and all that comes along with it.
