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    JM Bullion Gold and Silver Market Update (9/30/16)

    Gold Spot Price Open: $1,327

    Gold Spot Price Close: $1,318

    Change in Gold Spot Price: -$9

    Silver Spot Price Open: $19.18

    Silver Spot Price Close: $19.15

    Change in Silver Spot Price: -$0.03

    Precious metals seem to have found some traction to close out the week, but this traction is doing little to nothing in the way of contributing to gains. When all was said and done on Friday, gold ended up losing about 9 dollars while silver ended up losing about 3 cents. Platinum and palladium both ended up gaining about 5 dollars on the day.

    Deutsche Bank Worries Persist

    Keeping precious metals from succumbing to a stronger US Dollar was a continuation of the worries that really gained a foothold in the middle parts of this week. Thanks to a number of top hedge funds pulling excess cash from the bank amid scandal, the company’s shares have been in a free-fall of sorts. In fact, yesterday saw shares hit an all-time low during intraday trading. What’s more, it seems as though Deutsche Bank’s poor performance is having a wider impact on equity markets as a whole. Not only are US indexes trending downward, but so too are those in Europe.

    What does this mean for gold? Well, it is a great news because worries over the strength of stocks is something that almost always breeds safe-haven demand. Unfortunately, the potential gains that might otherwise be recorded are not happening thanks to a US Dollar that is gaining strength almost continuously.

    Consumer Spending Data Mostly Confuses Investors

    So long as the economic data stream from the United States remains upbeat, the likelihood that interest rates will be raised before year’s end will slowly but surely improve. With that being said, it only takes one important report to come back below expectations for investors to break out into a panic of sorts and begin to question when, if ever, rates will be pushed higher. Today we were dealt one of those reports as consumer spending was down in August by much more than was anticipated.

    According to the Commerce Department, consumer spending in the month of August fell by .1% from July. While this might not seem like the biggest drop in the world, the fact that consumer spending makes up a majority of the US economy is something that puts a damper on interest rate outlooks. What’s more, most forecasts were calling for at least a .1% gain in August, with some reports claiming that a .2% or .3% gain wasn’t out of the question.

    What is to blame for the lack of consumer spending? According to experts, a lack of business investments and reduced inventories after weak growth in Q2 of this year. When you look at the larger picture presented by this data, it seems as though US households are not as eager to spend their excess income as they were earlier in the year. In fact, throughout much of the 3rd quarter consumer spending has missed the mark. What does this mean for interest rates? That is tough to say, but being that consumer spending is such a big piece of data, it does not likely lend itself to rates being hiker sooner rather than later. With all that said, however, most are still holding out hope that a rate hike will be realized come the December meeting of the FOMC.

    Wrap-Up

    In many ways, this week was a primer for the load of economic data we can expect to receive throughout the whole of the next 5-day trading session. Gold and silver seem to be in perfect position to make gains what with the Deutsche Bank controversy and some data points that have missed the mark, but a stronger US Dollar is constantly threatening to keep metals subdued. All in all, the next few weeks are going to be interesting and very telling for what the future holds for US interest rates and what direction they will head.

    Disclaimer: All Market Updates are provided as a third party analysis and do not necessarily reflect the explicit views of JM Bullion Inc. and should not be construed as financial advice.

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