Posted on September 02, 2014
Gold Spot Price Open: $1,287
Gold Spot Price Close: $1,265
Change in Gold Spot Price: -$22
Silver Spot Price Open: $19.56
Silver Spot Price Close: $19.25
Change in Silver Spot Price: -$0.31
Precious metals opened up this shortened trading week in less than impressive fashion as spot values, across the board, traded significantly downward for a majority of the day. When all was said and done, gold lost more than 20 dollars while silver fell by just over 30 cents. Platinum and palladium followed in the footsteps of gold and silver and lost a good bit of value today as well.
As opposed to what we have witnessed over the past half month or so, this week is expected to bring about a good amount of economic data from the US and abroad. Today played host to the release of a few reports, including the US manufacturing PMI, construction spending, ISM manufacturing report, as well as the global manufacturing PMI. Generally, the reports were upbeat and ended up adding to the selling pressure experienced by precious metals.
Though these reports were important to investors, events and data later in the week will prove to be much more noteworthy. The European Central Bank is scheduled to convene on Thursday for their monthly policy meeting, and it will be intriguing to see if there is any mention of further monetary stimulus across the EU. After all, ECB president Mario Draghi, just a few weeks ago, was quoted as saying that further monetary stimulus measures are not yet out of the question.
Finally, this busy week will wrap up on Friday with the release of the latest employment figures from the United States. Despite August being a fairly slow month, current expectations are that at least 215,000 non-farm jobs were added to the economy. This piece of data is vitally important to investors simply because, at this point, it seems as though the condition of the labor situation in the United States is what is dictating the future of interest rates in the United States.
A report released by the OECD earlier today with regard to global inflation was a cause for concern for some market experts. According to the report, inflation levels for the 34 member economies was reported as being down by 1.9% this past July on an annualized basis. The 1.9% decline was slower than June’s 2.1% drop, and stoked concerns with regard to deflation.
So long as deflationary price pressures are visibly present throughout the global economy, investors and market experts have cause for concern. For precious metals specifically, slowing inflation is not good at all and is only adding to the selling pressure being experienced.
After performing well for a majority of the week last week, US equity markets began this one posting mixed results. While the Nasdaq was able to finish the day positively, both the S&P 500 and the Dow Jones were seen losing value by the time markets closed.
The USD Index, on the other hand, eclipsed a 13-month high earlier in the day and was seen hanging around that same spot for a majority of the day. In recent weeks, the greenback has been a consistent performer and has been seen gaining a lot of value in the face of rival currencies such as the Euro. With as much economic data as is expected to be made public this week, the US Dollar will surely be pushed around a bit more before the dust settles. Whether it is pushed upward or downward, however, remains to be seen.
Today was a fairly busy day from an economic standpoint, but the week is only just beginning. There will be a flurry of activity for investors to focus on throughout the remainder of the week, most of which will be of vital importance to precious metals investors. After suffering major losses today, it will be interesting to see if precious metals will be able to bounce back in the forthcoming days, or if the pressure will continue to pile on.