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    JM Bullion Gold and Silver Market Update (9/8/14)

    Posted on September 08, 2014

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    Gold Spot Price Open: $1,268

    Gold Spot Price Close: $1,255

    Change in Gold Spot Price: -$13

    Silver Spot Price Open: $19.26

    Silver Spot Price Close: $19.09

    Change in Silver Spot Price: -$0.17

    Precious metals have been moving downward for a majority of the day today, fueled mostly by a stronger USD index. When all was said and done, gold lost more than ten dollars while silver’s losses nearly exceeded 20 cents. Platinum and palladium also trended downward for a majority of the day.

    Progress of USD Weighs Heavy on Metals

    If you are wondering why precious metals spot values opened the week in poor fashion, look no further than the progress being made by the US Dollar. Shortly after markets opened in the United States today, the USD Index surged to a fresh 13-month high. After taking a bit of a hit due to the sub-par nature of last Friday’s US non-farm payrolls report, the Dollar got immediately back on track to begin the week. Spot gold, on the other hand, fell to its lowest point in three months.

    According to Afshin Nabavi of MKS NA, it’s “the stronger dollar driving the price, but although Friday’s non-farm payrolls took the market by surprise, gold managed to close only around $1,271. There’s a good possibility that we will see prices test the lower-$1,250 area.” So long as the one-two punch of strong equities and a strong greenback continue to be factors in the market, precious metals are going to have an extremely difficult time making gains, and will have an even tougher time sustaining whatever gains they do manage to record. 

    Mixed Economic Data From China, Japan

    Despite most Asian markets being closed today in observance of a holiday, a few key economic reports were released during the overnight and early morning hours. According to data from China, the large nation’s trade surplus moved up to near $50 billion during August. That same report also indicated that Chinese exports were up by more than 9% during this year’s second quarter and imports fell by little more than 2% (on an annualized basis).

    Though the trade surplus data was far superior to even the loftiest of expectations, the fact that Chinese imports are down is an underlying bearish factor for precious metals and all other commodities. After all, China is the world’s largest importer of raw commodities year in and year out.

    Another report released during the overnight hours, this time from Japan, indicated that the Japanese economy contracted by more than 7%. This report had a negligible impact on the wider market, but did help illustrate just how poor the Japanese economy has been performing in recent months and years.

    Wrap-Up

    Apart from the progress made by the US Dollar, Monday was a fairly subdued, quiet day. Spot gold has been on a fairly consistent downward trend over the last two weeks and is in dire need of some good, bullish support. With that said, however, such support does not seem like it is on its way anytime soon.

    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.