Posted on August 06, 2013
Gold Spot Price Open: $1,303
Gold Spot Price Close: $1,284
Change in Gold Spot Price: -$19
Silver Spot Price Open: $19.79
Silver Spot Price Close: $19.60
Change in Silver Spot Price:-$0.19
Gold and silver lost value for the second day in a row on Tuesday thanks to some remarks made by the President of the Atlanta Federal Reserve bank. When all was said and done gold lost about 19 dollars while silver’s losses were just shy of 20 cents.
Dennis Lockhart, president of the Atlanta Federal Reserve, made some remarks today that shook up both the general marketplace and the precious metals marketplace. Mr. Lockhart announced that the tapering of US government bond-buying, also known as Quantitative Easing, still stands a chance of happening before the end of the 2013 calendar year. He offered no reliable timeline or very many details, though his statement was enough to put heavy downward pressure on both gold and silver.
This statement is shocking not because QE might be wound down, but because it is directly contrary to what Ben Bernanke had to say a few weeks ago, and what the FOMC had to say only last week. It seems as though every time we turn around, someone from the Fed is saying something wholly contrary to what another person from the Fed said only moments before. The Fed can contradict themselves all they want, but when their constant contradictions have a direct effect on the spot values of precious metals it becomes irritating to anyone involved in the precious metals market, or any other affected market for that matter.
Also not helping gold and silver was the fact that the European Union saw more upbeat economic news today. It was reported that orders for manufactured goods in Europe jumped up by almost 4% from May to June. This news coming only one day after we reported a strong PMI reading for the Euro Zone has given investors a renewed confidence in Europe and its many economies. Whether this confidence is well-founded is something we will find out in the coming weeks and months as Europe progresses further.
Despite all of this news being adversarial to the spot value of both gold and silver, one positive we can take from the day is the fact that the US Dollar Index started Tuesday low and remained subdued for a large majority of the trading session; sticking near a 5-week low. Gold and silver’s losses could have been much worse if today saw all of these economic news stories and a surging Dollar.