Posted on September 29, 2014
Gold Spot Price Open: $1,219
Gold Spot Price Close: $1,216
Change in Gold Spot Price: -$3
Silver Spot Price Open: $17.66
Silver Spot Price Close: $17.54
Change in Silver Spot Price: -$0.12
Precious metals were seen holding steady to slightly lower for a majority of Monday’s slow day of trading. When all was said and done, gold lost about three dollars while silver was down by a little more than ten cents. Palladium and platinum, however, both managed to pick up about 10 dollars.
Though this week marks a week-long holiday in China, citizens of Hong Kong have taken to the streets in order to protest what they see as a limitation to democratic reforms. Despite clashes with riot police on Saturday, protesters have denied calls to disperse and continue to take to the streets, more or less paralyzing the flow of traffic through the crowded financial hub. Though protests have remained mostly calm and subdued, the impacts that they have had on financial markets are anything but minor.
Major stock indexes around the world, including US equity markets, spent most of the day today trending downward. According to many, unrest like this has not been seen in Hong Kong since China reclaimed the land from Britain nearly 2 decades ago. It will be interesting to see how this situation plays out through the duration of the week and what kind of impact it will have on equities going forward.
During the early parts of Monday, the US Dollar hit a near 2-year high against the Euro and a 6-year high against the Japanese Yen. The greenback continues to benefit from the widespread belief that the US Federal Reserve will continue tightening monetary policy while central banks in Europe and Asia seem to be leaning towards looser policies.
Though the USD performed well through the first half of the day, by the time markets closed the USD Index was in the red and posting minor losses. Regardless, the current strength of the greenback is such that gold, silver, and all other precious metals are having an incredibly difficult time adding much of any value. So long as the market is convinced that interest rates in the US will be on the rise sometime in the near future, most experts agree that the Dollar will continue to benefit.
Today and the next few days will remain fairly quiet from an economic standpoint, but come Thursday, the market will be abuzz with activity. First and foremost, the European Central Bank will be meeting for their monthly policy meeting on Thursday. With recent economic data out of the European Union being as poor as it has been as of late, investors will be interested to hear what ECB president Mario Draghi has to say about the economic future of the region. Just today, in fact, The EU’s Economic Sentiment Indicator fell below 100 for the first time in 2014.
On Friday, investors will be paying attention to the release of the latest employment report from the United States for September. As of now, the market is expecting healthy job growth simply because of the upbeat nature of the US economy. Whether that much pans out remains to be seen, however.
With plenty of economic activity to look forward to during the last two days of the week, I anticipate that Tuesday and Wednesday will be fairly quiet and subdued as investors hold their positions ahead of Friday’s non-farms payrolls data. The ECB meeting will be important, but as has been the case recently, there aren’t too many people expecting any major policy announcements to be made.