Gold Spot Price Open: $1,312
Gold Spot Price Close: $1,316
Change in Gold Spot Price: +$4
Silver Spot Price Open: $18.84
Silver Spot Price Close: $19.13
Change in Silver Spot Price: +$0.29
Precious metals were able to gain some traction on Monday thanks, mostly, to a weaker US Dollar. By the time things were brought to a close, gold managed to gain about 5 dollars while silver moved past the $19/ounce threshold en route to gaining more than 25 cents on the day. Platinum and palladium also gained on the day, with platinum picking up close to 10 dollars while palladium gained close to 20.
Metals Rise on Bullish Outside Markets
To begin the week, a weaker US Dollar is helping precious metals pick up some of the ground that was lost during the middle and latter parts of last week. As you could have probably guessed, most market activity today is being influenced by what investors are expecting to come as a result of the Fed’s policy meeting which is taking place tomorrow and will wrap up Wednesday afternoon. The Dollar’s poor performance today suggests that perhaps the Fed will remain put and not do anything to change monetary policy, but nothing is set in stone quite yet.
Speaking of the Fed, their meeting kicks off tomorrow and will be watched closely by investors from all over the world. At this point, the falling USD would indicate that expectations are for the Fed to keep interest rates put, at least for the time being. Right now, the likelihood for a rate hike being announced this week sit somewhere between 10% and 15%. If we are being realistic, it does not seem as though there will be much hope for a rate hike prior to December’s FOMC meeting.
Even though it does not seem very likely, a rate hike being announced this week would mean a lot of trouble for the precious metals market. Long story short, a rate hike announcement would give the US Dollar a boost which would, in turn, push metals lower. We will just have to stay tuned until Wednesday afternoon, but there are very few people who are actually expecting to hear a rate hike announcement.
Weekend Terrorism Has Little Impact on Markets
Apart from a bombing in Manhattan on Saturday that injured in upwards of 30 people, another explosion was reported on in Elizabeth, New Jersey early Monday morning. No one was injured in the attack in Elizabeth thanks to law enforcement personnel arriving on scene before the devices had a chance to detonate in what would have been a crowded train station.
Though these events might lead you to believe otherwise, all of these plots and attacks have had little impact on the global marketplace. Perhaps gold and silver are making gains thanks to a spattering of safe-haven demand, but a majority of the marketplace is overlooking this weekend and this morning’s events.
Wrap-Up
Naturally, the biggest event of the week will be taking place from tomorrow until Wednesday in the form of the FOMC policy meeting. With that being said, that isn’t the only big event of the week as the Bank of Japan will be holding their meeting as well. With an announcement and post-meeting statement expected to be delivered by the time markets open tomorrow, investors are interested to see if the BoJ will do anything to expand, continue, or do away with their current monetary easing policy.
With these two policy meetings making waves, the early parts of this week will more or less be consumed with speculation and, if policy changes are made, reactions on the part of investors. It is unclear what will happen to precious metals over the coming days, but we do know where the attention of investors will be.
