Gold Spot Price Open: $1,143
Gold Spot Price Close: $1,136
Change in Gold Spot Price: -$7
Silver Spot Price Open: $14.70
Silver Spot Price Close: $14.83
Change in Silver Spot Price: +$0.13
Precious metals posted mixed results for a second consecutive day as the market continues to see-saw back and forth during the first few days of September. When all was said and done, gold lost about 7 dollars while silver managed to tack on about 13 cents. Platinum and palladium both managed to add about ten dollars to their previous tallies.
Fed’s Beige Book Reignites Rate Hike Talk
Over the course of the last week or so, the market has gone back and forth between thinking interest rates will be risen this month and thinking that they will be raised sometime further down the road. Today, the belief that rates will be raised this month was given a bit of a boost thanks to the release of the Fed’s latest Beige Book. According to the report from the Federal Reserve, most sectors of the US economy made gains during the months of July and August. In addition, there was some noticeable wage growth recorded too–something that is particularly interesting as wage growth seemed to have been lagging for the better part of the last year or more.
This report is a big deal for the country’s central bankers, who meet in just about two weeks. It is at this point when most hope to find out for sure whether interest rates will be raised for the first time in more than 6 years or not. When it comes down to it, other than some fluctuations and unknowns stemming from the Chinese economy, market conditions favor an interest rate increase this month. Of course, that much remains to be seen.
Stocks Rally, Dollar Rebounds
The early parts of this week proved to be especially hard on US stocks as well as the US Dollar. The fact that China announced its ceasing of the purchase of domestics stocks ended up having a negative affect on US stocks. Today, however, stocks in the US rallied to begin the day before having that very same rally deflated before trading came to a conclusion. This time, it was the falling price of crude oil (now right around $45/barrel) that ended up dooming stocks. With the previously agreed upon Iranian deal having been approved by Congress, Iran is just one step closer to unleashing its oil production on the Western world. Should this happen, the price of crude oil may dip even further.
The Dollar, on the other hand, posted nice gains today thanks to the Fed’s beige book. According to ADP, however, the private sector of the US economy added less than 200,000 jobs during the month of August despite expectations of job increases of at least 210,000. Now, the attention of the market turns to the Labor Department’s release of August’s non-farm payrolls data. Should this data fall in line with or exceed the expectations of the marketplace you can expect the belief that interest rates will be risen this month to get another boost. With that being said, there is no saying what the last two days of this week have in store.
Wrap-Up
As we look ahead to the last few days of the week, it goes without saying that the most important happening is the release of the non-farms payrolls data. While other economic data from the US and elsewhere around the world is sure to trickle in, this report on US employment is, in many ways, the last big piece of data before interest rates are **potentially** hiked. In addition, it will be intriguing to see just how much speculating the investing world will do in the lead up to the FOMC meeting that is slated to happen two weeks from now. For now, it is impossible to say what the Fed is going to do, but some upbeat economic data will likely convince the market that the Fed is ready to pull the trigger on increased rates.