Gold Firm on Missed Market Expectations Posted by CgXchange on January 09, 2015
Despite falling three of the last five days the gold spot price has risen almost $30 since January 1, and this week culminated with gold’s $7.40 per ounce gain on Friday. The gold spot price as of 1pm CST is $1217.90, a 0.6% gain for the trading session.
In related news, the silver spot price spiked to $16.60 earlier this week before declining slightly to the $16.45-$16.50 per ounce range, where it currently hovers. At the time of this writing silver has gained $0.07 for today’s trading session.
The recent growth in gold and silver prices has not been attributed by analysts to one specific event or market indicator. Rather, a mixed bag of missed market expectations combined with a lower dollar index has resulted in the higher prices seen today.
U.S. Payroll & Employment Report
The Department of Commerce released the latest U.S. employment numbers this week, and while figures did rise slightly from the last report, expectations were not met. Some analysts expected readings to be close to last month’s 300,000 new jobs but the actual figure of 252,000 disappointed, thus boosting precious metals prices.
Investors’ risk appetite has lowered somewhat in recent weeks, as rumors of higher interest rates has caused many to back away from stocks and real estate. This development has led to a slight increase in gold and silver investing globally, especially among investors in the United States, India and China.
Following a holiday season in which purchasing levels were largely lower than expected, consumer confidence has declined entering into 2015. The fact that consumers are less sure of the U.S. economic recovery now than during the fourth quarter of 2015 has led to renewed and increased interest in privately-held commodities such as gold bullion and coins.
U.S. Dollar Index
After notching a 10-year high on Thursday, the U.S. Dollar Index fell slightly on Friday morning. By default, this caused higher gold and silver prices, since the dollar is the currency on which precious metals prices are based.
What to Expect
In the near-term, factors such as the soon-to-be-released monthly wholesale trade report and the constantly fluctuating dollar index are expected to play the largest roles in manipulation of the gold spot price. The Certified Gold Exchange research department expects some volatility in the near future, but stands by its assertion that higher interest rates are likely to push gold and silver prices upward. Historically, including during the last rising interest rate cycle of 1960-1980, rising interest rates cause stocks and bonds to suffer. Alternatively, during that 20-year period gold and silver increased more than 1,500% each.
For answers to your questions regarding the gold and silver markets, or to buy/sell/trade metals directly through the Certified Gold Exchange, call us toll-free at (800) 300-0715 today and discover why we are known as “America’s Trusted Source For Gold.”