Gold Spot Price Open: $1,329
Gold Spot Price Close: $1,324
Change in Gold Spot Price: -$5
Silver Spot Price Open: $19.13
Silver Spot Price Close: $19.17
Change in Silver Spot Price: +$0.04
Precious metals continued to fall on Wednesday, this time thanks to comments made by Federal Reserve Chair Janet Yellen. When all was said and done, gold lost a few dollars while silver ended up adding close to 5 cents. Platinum and palladium finished mixed again, with platinum losing about 5 dollars while palladium managed to add more than 10.
Yellen Makes Hawkish Comments
In her second of two addresses to the House of Representatives, Janet Yellen made some comments that were perceived as meaning that the door is most definitely still open for interest rate hikes before year’s end. In her remarks, she stated that accommodative monetary policy—the likes of which we have in place right now—would need to be decreased or done away with altogether should the US economy continuing to improve like it has over the past year or more. In her remarks, she made it clear that the unemployment rate is hanging steady and that the overall labor situation is the best it has been in years. Despite her reiterating that there exists no concrete timeline for the further hiking of rates, investors are interpreting her comments today as meaning that a rate hike in December is something that really might occur.
Apart from Yellen, other members of the Fed spoke as well. Yellen was more cautious in her approach, but the other members and their remarks did well to stoke the fire that is an expected December rate hike. Naturally, the more hawkish comments from the Federal Reserve today did a number on precious metals and kept spot values subdued. The Dollar, on the other hand, was able to build off of yesterday’s gains en route to another positive day. As is typically, the case, a stronger greenback is something that makes gains on the part of gold and silver difficult to attain.
Finally, the last noteworthy event from Washington DC today came in the form of Janet Yellen commending the strength of US banks. To make a long story short, Yellen was heard speaking positively about how the 8 largest banks in the country are now much better prepared to handle and withstand a crisis like what we saw in 2008. By, in many cases, doubling the required reserves of banks, Yellen and her colleagues feel confident that a recession like the one in 2008 will not happen anytime soon.
Durable Goods Orders Remain Steady
Today was less active as far as US economic data was concerned, and the only really important piece of data that was dealt came in the form of August’s durable goods orders report. According to the US Commerce Department, durable goods orders from July to August did not change much at all, and actually backed off ever so slightly.
After falling by more than 3% in July and not improving in August, the outlook on durable goods is as bleak as it gets. Unfortunately for metals investors, the reaction was more muted than anything else. This was true even after the realization was made that durable goods orders have fallen in 3 of the last 4 months.
Wrap-Up
Apart from Fed commentary by Janet Yellen, James Bullard, and others, the investing world was caught up with very little else. The economic data released on the day was mostly ignored, and investors are already looking ahead to tomorrow’s weekly jobless claims as well as a few other noteworthy pieces of data. For gold and silver, it seems as though only an overtly negative piece of data will reignite safe-haven demand. Short of that, this week is quickly beginning to look like it will result in sizeable losses for both metals.
