Gold and silver spot values have been trading sideways for a majority of the day thanks to a lack of any bullish fundamental inputs. Still, what small movements have been made by precious metals are on the positive side of things. Palladium and Platinum, on the other hand, are and have been trading upwards for the past few days. This week is expected to continue being just as quiet as it has been for the past few days, only tomorrow will bring about the release of the FOMC’s minutes from their June policy meeting.
Now that summer is in full swing, you can expect more quiet weeks like this one to come. The simple fact of the matter is that traders and investors, especially those in the United States, are busy taking vacations and spending time away from the office, resulting in more lackluster trading sessions. This seems to be the case every summer, and this time around is no exception.
Gold and Silver Fall Victim to Interest Rate Talks
After last week’s US Labor Department report showed that more than 280,000 jobs were added to the US economy last month, investors were quick to revive talks 0f interest rates in the United States rising before long. While high-ranking members of the Fed have recently been quoted as saying raised interest rates are still a while away, recent economic data has a large portion of investors thinking otherwise. Since last Wednesday, all this talk of higher interest rates has caused some investors to ditch safe-haven investments in gold and silver in pursuit of assets that will, in time, payout handsomely as a result of higher interest rates.
Looking to gain some insight into how the Fed is thinking currently, the marketplace will want to pay close attention to anything and everything tomorrow’s minutes have to say. While I am under the impression that tomorrow’s data will be more of a bust than anything else, this will not stop investors from closely scrutinizing everything the Fed has to say.
Platinum and Palladium Post Solid Gains
While gold and silver have both recently hit speed bumps, the same cannot be said about platinum and palladium. In fact, over the course of the past 30 days or so, both metals have been trending almost directly upward.
Fueled by a recent report indicating that June was the best month for auto sales in more than 8 years, palladium has soared to a 13-year high today. Palladium is a main component for automobile’s catalytic converters and, as such, will almost always benefit from upbeat reports with regard to the auto industry. Now, whether palladium can hold its current position or not is a different story entirely.
For a majority of the past 5 months, 3 of South Africa’s biggest platinum mines have been at a complete standstill due to striking workers demanding more pay. Now, most of those disgruntled workers have gone back to work and a large portion of the shutdown mines have been put back into operation. While this is good news, there is still an overriding fear that the last 5 months’ worth of inactivity will shortly be seen weighing heavily on the supply of platinum available for public consumption. Fueled by fears of shortages of the metal, many investors have been seen scrambling to get their hands on as much platinum as they can. As this situation plays out over the next few weeks, it will be interesting to see if the long-feared shortage of platinum will actually have an affect on the physical demand for the metal.
Stocks Taking Hits, USD Holding Steady
As you probably could have guessed after seeing how lackluster of week this one is shaping up to be, the US Dollar Index is moving mostly sideways. After gains came in the wake of the Labor Department’s June employment report, a lack of any further economic news has caused the Dollar to more or less stagnate.
US Stock indexes, on the other hand, have been trading down for the past 5 days or more. The S&P 500, DOW, and Nasdaq are all posting losses since last week and are continuing to feel downward pressure. This news alone is helping keep gold and silver from declining in value too drastically.
