Posted on September 16, 2013
Gold Spot Price Open: $1,334
Gold Spot Price Close: $1,308
Change in Gold Spot Price: -$26
Silver Spot Price Open: $22.41
Silver Spot Price Close: $21.79
Change in Silver Spot Price:-$0.62
Gold and silver both posted fairly significant losses to start what is already shaping up to be a dismal week for precious metals. When all was said and done, gold lost a little over 25 dollars while silver’s losses edged above 60 cents.
If investor appetite for risk was prevalent last week, it is even more prevalent this week and it’s only Monday. The reason for this lies in the agreement made by the US and Russia which will see the rest of Syria’s chemical weapons placed under the control of the international community. When Russia announced this proposal last week, Syrian officials hinted that they would abide by it and have actually viewed it as a much more productive answer to a mounting international issue.
Only two weeks ago it seemed as though the United States was going to wage military strikes on Syria in response to the alleged use of chemical weapons by the Syrian regime on innocent civilians. At the time, many of the circulating news stories made it seem as though a US attack could be initiated within the next few days. Quickly, however, tensions began to decrease as a majority of the world, especially US citizens, look upon a new military altercation in the Middle East as the last thing the world needs. Finally, it seems as though cooler heads are prevailing, but they are prevailing at the expense of the spot values of both gold and silver.
Also on the slate for this week is the Fed’s monthly policy meeting. At this point it is expected that the Fed will announce a reduction in its monthly bond-buying initiative, also known as Quantitative Easing. Whether a reduction will happen is yet to be seen, but if it does we can be confident that it will not be good news for the spot values of gold and silver. Since Quantitative Easing works by devaluing the US dollar, any reduction in this monetary plan will boost the USD’s value and inevitably put selling pressure on gold and silver.