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

    Posted on September 09, 2014


    Gold Spot Price Open: $1,253

    Gold Spot Price Close: $1,256

    Change in Gold Spot Price: +$3

    Silver Spot Price Open: $19.03

    Silver Spot Price Close: $19.13

    Change in Silver Spot Price: +$0.10

    After some short-covering helped prop up precious metals during early day trading, a stronger US Dollar caused marginal gains to turn into slight losses. but by day’s end metals managed to add a bit of value. When all was said and done, gold gained about 3 dollars while silver picked up nearly 10 cents. Platinum and palladium had pretty awful days straight from the offing today.

    Metals Continue to Lose Ground to Surging US Dollar

    Spot gold and silver both hit fresh 3-month lows today while the USD Index, for yet another time, surged to a 13-month high. Against the Yen specifically, the greenback hit an unbelievable 14-month high. As it stands, metals are heading for their first quarterly loss in 2014. The recently back-tracking tensions in Ukraine are only making matters worse for the near-term prospects of precious metals as alternative investments. According to Frank McGhee of Chicago-based Integrated Brokerage Services LLC, “Political turmoil in various parts of the world that made gold attractive earlier this year seems to have eased, and now economics is overriding geopolitical events. People are moving to the dollar as the U.S. is emerging as the safe-haven economy.” 

    Making matters worse, a recent research survey from the San Francisco Federal Reserve bank indicated that investors might just be underestimating how quickly the Fed can raise rates. This data only lent the US Dollar more support and made certain the fact that precious metals were headed for daily losses across the board. Spot palladium, which fell by more than $25, was perhaps the day’s biggest loser.

    Currency Market Focus Will Continue

    This week has thus far proven to be fairly quiet and devoid of any major pieces of economic data. Because of this, investors the world over have been paying extremely close attention to the progress, or lack thereof, of certain currencies. It is no secret that the US Dollar has been trending higher against the Euro currency in recent weeks. According to the experts, the diverging economic policies of the US and EU are likely to keep the two currencies moving in opposite directions.

    In the United Kingdom, the British Pound has been taking a bit of a hit recently as polls show that Scotland’s referendum on whether to leave the UK or remain a member might go the way of Scotland’s independence-seekers. The vote is officially scheduled for next week and will undoubtedly be dominating the news headlines in the forthcoming days.

    World Equity Markets Fade Into Background

    US equity markets performed poorly across the board for a second consecutive day on Tuesday, fueled by poor performances from Apple, Home Depot, and General Mills.

    Home Depot saw its value fall by nearly 1.5% as investors continue to mull over the recent data breach that saw hackers break into the company’s records of in-store purchases. Investors are particularly worried about this most recent data breach as it follows in the footsteps of Target’s falling victim to a data breach almost a year ago.

    General Mills’ value fell by more than 30 cents after it announced that it will soon be acquiring organic food producer Annie’s. It will be interesting to see what the duration of this subdued and quiet week will bring for equity markets in the United States and elsewhere around the world.

    Wrap Up

    As we look ahead to the last few days of the week, it is likely that investors will continue paying close attention to the progress of currencies. With talk of raised interest rates in the United States making rounds once again, I would not be at all surprised to see the US Dollar continue its recent dominating trend. Without any tensions in Ukraine and few other underlying bullish factors, precious metals will be looking for anything in order to stop their current slide.

    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.