Gold Spot Price Open: $1,354
Gold Spot Price Close: $1,348
Change in Gold Spot Price: -$6
Silver Spot Price Open: $20.16
Silver Spot Price Close: $19.75
Change in Silver Spot Price: -$0.41
Precious metals moved down on Wednesday, but that downward movement had more to do with consolidation after yesterday’s gains than anything else. When all was said and done, gold lost about 6 dollars while silver lost in upwards of 40 cents. Platinum and palladium also lost on the day, both by about ten dollars.
Metals Still Susceptible to Pressure
Even though yesterday saw both gold and silver put forth some of their best performances since the announcement of the UK’s exit from the European Union towards the end of June, analysts are warning that metals may still be susceptible to downward pressure. The move for gold above $1,300/ounce is a great psychological boost for investors, but many experts warn that the last time the yellow metal moved above $1,300, there was a lot of resistance around the $1,360 mark. That is exactly what we saw today.
Barring any major bullish developments, the spot value of gold and silver are both at risk of moving lower in the near-term. This is especially true should rate hike expectations creep back in. For now, however, the small steps backwards we saw today are not going to be enough to put investors on edge. It will be interesting to see, however, just how the rest of this week pans out, what with the weekly jobless claims report coming out sometime during the day tomorrow.
Poor Data Helps Metals
As we saw yesterday, poor economic data from the United States is something that will almost always come to the aid of precious metals. Yesterday’s poor ISM non-manufacturing reading saw the US service sector reach low points that have not been realized in more than 6 years. Being that the services sector accounts for roughly 2/3’s of the US economy, data this overtly poor is going to cause a spike in safe-haven demand for metals.
Further boosting the allure of metals is the fact that this very same bit of data, in conjunction with August’s weak reading on job growth, is putting a massive dent in rate hike expectations. Barely more than a month ago, hope was revived that perhaps we would see one and maybe even two rate hikes before the end of the year, but now there are very few people expecting the same. Now, we would be lucky to see rates moved up even one time between now and December. Of course, this is mere speculation as no one truly knows what the Fed is going to do with interest rates. Much like it has been for the last year or more, expect the interest rate conversation to be present just about every day.
For now, low expectations regarding rate hikes are boosting gold and silver, but like we have seen many times before this is liable to change within a moment’s time.
Wrap-Up
All in all, Wednesday was a much slower day than Tuesday. Investors, especially those from overseas, were pouring over the ISM data released Tuesday, but other than that there were very few new happenings. Going forward, there will be a good amount of weight placed on the weekly jobless claims report, which is due out on Thursday. Other than that, we are looking at a somewhat quiet finish to the week. For gold and silver, it will be interesting to see if today’s losses will become even larger, or if further gains will be made. At this point, it is tough to say exactly what is going to happen to spot values through Friday.
