Gold Spot Price Open: $1,124
Gold Spot Price Close: $1,108
Change in Gold Spot Price: -$16
Silver Spot Price Open: $14.85
Silver Spot Price Close: $14.65
Change in Silver Spot Price: -$0.20
Precious metals took massive steps backwards on Wednesday as global equities surged and the general risk-on attitude prevailed. When all was said and done, gold managed to lose roughly twenty dollars while silver fell by about twenty cents. Platinum and palladium fell today too, with platinum losing more than twenty dollars while palladium declined by little more than ten.
Gold Suffers Thanks to Stronger Dollar, Stocks
Spot gold fell closer to a 1 month low thanks to a stronger Dollar on Wednesday and stocks that seemed to have bounced back after worries regarding China’s economy have subsided. With Federal Reserve policymakers set to meet for their September meeting next week, the talk regarding interest rates is beginning to pick back up. With super-low interest rates having dominated the US landscape for years now, many feel as though the time has come for rates to be risen. Risen rates raise the opportunity cost of holding gold and silver in lieu of other investments, so higher interest rates, and even the possibility of them, are likely to hurt spot values.
Talking about current market conditions to day was Mitsubishi’s Jonathan Butler, who said, “The dollar’s back up again today, which is underpinning the fall, and there is possibly some pressure from the resurgent equity market. We have another week to go before the Fed, and I think a September rate hike has been all but ruled out. The situation is just too uncertain.” While it is clear that some people think rates may remain put for this month, it seems almost inevitable that rates will be risen in the very near future. And that thought is currently having an adverse effect on spot values; almost constantly pushing them downward.
European, Asian Equities Move Forward
After the last few weeks have brought about nothing other than losses, recently calm market conditions have allowed for equities to move forward by considerable margins. The risk-on attitude is clear to see and is very much weighing on the spot values of gold and silver. The price of crude oil has also been on a bit of a downtrend recently, and as a leading commodity the fact that oil is on its way down is not helping gold and silver much at all. In fact, the price of crude oil is quite likely to take another step backwards upon the overall and complete approval of the most recent nuclear deal with Iran.
After swinging wildly over the course of the past two to three weeks, it will be interesting to see how stocks fare going forward. For now, it seems as though things across the global equity market have calmed down, but we all know that that can change in the blink of an eye.
Wrap-Up
As we move to the latter part of this trading week, it will truly be interesting to see how gold and silver fare. Seeing as every bit of economic data from the US or elsewhere will, in all likelihood, relate back to interest rates, there is no saying what these next few days will have in store. One of the big pieces of data to look out for is the weekly jobless claims report. In recent history this bit of data has been on the positive side of things, so investors are going to be hoping to see a continuation of that trend.