Posted on September 12, 2014
Gold Spot Price Open: $1,239
Gold Spot Price Close: $1,230
Change in Gold Spot Price: -$9
Silver Spot Price Open: $18.69
Silver Spot Price Close: $18.69
Change in Silver Spot Price: NO CHANGE
Precious metals mostly moved sideways on Friday, closing out a slow week in mostly unimpressive fashion. When all was said and done, gold lost close to ten dollars on the day while silver finished the day in about the same position it was in when markets opened. Platinum and palladium also held steady for most of the day.
US and European equity markets finished the day and week in relatively subdued positions. European equities specifically are heading for their first weekly losses in quite some time. With next week’s FOMC meeting already on the minds of investors from around the world, it really shouldn’t come as much of a surprise that we are not seeing the same level of action this week as we witnessed the previous two weeks or so.
According to Guillermo Hernandez Sampere of Eppstein, “Markets are waiting for clarity on when the Fed will raise interest rates. At every Fed meeting, we hope we get the exact timeline because markets want to price it in. So we’ve seen markets go a bit sideways. There’s no conviction in the market whether it’s going up or down.” The FOMC meeting is expected to begin sometime early in the day on the 16th and wrap up sometime in the afternoon on the 17th.
Friday played host to the release of the latest retail sales figures from the United States this past July. After the last retail sales report came back far weaker than expected, investors were wary about what today’s data might have to say about the strength of the US economy. Fortunately, the report indicated that US retail sales rose by .6% in July, a number that was more or less in line with expectations. One of the most noteworthy figures was the 1.5% increase in US auto-sales as well as the near 1% increase in sales involving furniture and electronics.
All of this data does not necessarily mean that interest rates are going to be hiked in the immediate future, but it does lend credence to the belief that rates will be pushed upwards sooner rather than later. All in all, what can be derived from today’s retail sales report from July is that the US economy is still definitely improving and gaining strength as time moves forward.
As difficult as it may be to believe, the ceasefire in Ukraine was still holding as of the writing of this post today. Having lasted for nearly a week now, this is the longest period of peace Eastern Ukraine has seen in months. Unfortunately for precious metals, the removal of the crisis in Ukraine as a concern for investors has only made it more difficult for gains to be made and sustained.
In other geopolitical news, Russian president Vladimir Putin announced this morning that any US airstrike in Syria (Russia’s close ally) would be perceived as a strike against Russia itself. This was unnerving to hear, but was mostly ignored by the market. Obama made it clear that the airstrikes will be concentrated in Iraq, but did not rule out Syria as a possible locale for some of the attacks.
As we look ahead to next week, it is clear to see that investors will have plenty of information to mull over and discuss. In addition to the all-important FOMC meeting, there is a referendum on Scottish independence expected to be held next Thursday. The vote will determine whether Scotland remains part of the United Kingdom or if they will become an independent country (ie Ireland).