Gold Spot Price Open: $1,235

Gold Spot Price Close: $1,236

Change in Gold Spot Price: +$1

Silver Spot Price Open: $17.84

Silver Spot Price Close: $17.95

Change in Silver Spot Price: +$0.11

Precious metals continued losing to start the day Friday, but turned those losses around and finished the day slightly higher. When the dust settled, gold gained a dollar while silver added more than ten cents. Platinum and palladium both gained on the day, with both adding about ten dollars apiece.

Yellen’s Hawkish Comments Mostly Overlooked

This week has been dominated by commentary from the Federal Reserve, and Friday was no exception. This time, it was investors reacting to prepared comments delivered by Chair of the Federal Reserve, Janet Yellen. Continuing with what we have been hearing all week long, Yellen said that the FOMC will definitely consider the prospect of raising interest rates at this month’s meeting. What’s more, Yellen added that inflation and the economy in general have reached points where the Fed should feel comfortable going back to a normal monetary policy.

In this case, a normal monetary policy would mean that rates can and should be hiked in the near future. This prepared commentary did not have as much of a negative impact on the precious metals market as many might have thought it would, however it definitely didn’t relieve any of the pressure facing metals. Going forward, we can expect that so long as interest rate hike expectations are high, metals will be facing some pressure.
As we move further into March, you can bet that any comments made by members of the Fed will be hawked over by investors. At this point however, the expectation is slowly but surely becoming one where a rate hike announcement is expected to be made before the month comes to an end.

ISM Services Sector Data Impresses

According to the Institute for Supply Management, the US services sector is already beginning to build momentum through the early parts of 2017. Being that the US economy is largely based on services, this only reinforces the belief that the Fed should hike rates at this month’s meeting.
According to the ISM data, January’s non-manufacturing Purchasing Manager’s Index was up to 57.6 in February, up from a reading of 56.5 in January.

Both of the aforementioned readings are positive and suggest that the services sector of the US economy is growing, and that just adds to a long batch of upbeat data that we have received this week. What’s more, the PMI reading for February was reportedly the best such reading since the latter stages of 2015. Though gold and silver did not offer too much of a reaction to the data, it did not do anything to push metals forward.

Wrap-Up

Something that must be mentioned in the midst of all this rate hike talk is that investors must consider that most of the rate hike has already been priced in. This week saw both gold and silver suffer massive losses and there are many people who think that the March rate hike is already being priced in. If this is so, a rate hike announcement would end up being mostly overlooked when it happens.

As we look forward to next week, you can bet that further US economic data will be dealt. While there is not such a big chance that any poor data would be enough to undo the long, consistent batch of upbeat data we have received, it will be hawked over nonetheless.