Gold Spot Price Open: $1,296

Gold Spot Price Close: $1,292

Change in Gold Spot Price: -$4

Silver Spot Price Open: $19.49

Silver Spot Price Close: $19.53

Change in Silver Spot Price: +$0.04

Apart from silver making marginal strides forward, precious metals were, once again, trending downwards for a majority of the day. When all was said and done, gold lost about four dollars while silver was able to add four cents. For a second consecutive day, both platinum and palladium conceded value.

Palladium’s Rally Might Soon Be Finished, Says Experts

For a majority of the past 12 months, palladium’s spot value has been on the up and up, moving from near an even $700/ounce to highs a few days ago that were approaching $900. Over the last year, a number of factors, including supply concerns and rising geopolitical tensions, have played their part in providing palladium with underlying support. Now, however, South African mine strikes have ended and worries with regard to the supply of palladium have almost entirely subsided. Because of this, a report released today from Caroline Bain, senior commodities economist at Capital Economics, said that the company is reducing its year-end price forecast to near an even $800, down from previous forecasts of $875.

In her report, Bain made it clear that “the recent rise in palladium prices can be attributed to actual and potential disruptions to supply and to solid demand growth. But the scale of the price increase is looking increasingly hard to justify.” This is so because of two reasons. For one, South African mine strikes have wrapped up and, before long, South African palladium will reenter the market and alleviate supply pressures. In addition, sanctions levied against Russian businesses have yet to affect the supply of palladium from the country and many feel as though they never will. It will be interesting to see what direction the metal heads in over the course of the next few months, but very few people are expecting it to do much else other than lose value. 

Dollar Makes More Gains Against Rivals

For yet another day, the USD index was seen making gains against rival currencies, including the Euro and the Yen. Helping the US Dollar was yesterday’s report which stated that housing starts in the US are steadily rising while the cost of living has stopped its march upward. Marshall Gitler, of IronFX, said that yesterday’s data “has given the market more confidence that the Fed is likely to start hiking rates soon. Fed Chair Janet Yellen has cited the weakness in the housing market as one reason for being cautious.”

Hopefully this Friday’s global central bank meeting will see Janet Yellen shed just a bit more light on the future of interest rates in the United States. She is expected to make a public address, but the contents of her speech are not yet known.

FOMC Minutes Deemed Hawkish

One of the most highly anticipated data points of the week came this afternoon in the form of the minutes from the FOMC’s latest meeting. The minutes were deemed to be hawkish after it was made clear that the Fed anticipates the US labor situation to continue improving. The market perceived today’s minutes as meaning that interest rates may be increased sooner rather than later.

Now, the attention of the marketplace shifts towards Janet Yellen and the address she is expected to make on Friday in Jackson Hole, Wyoming. With some luck, we will find out a bit more about the future of interest rates in the United States.

Wrap-Up

Though today brought about the FOMC’s latest minutes, the market’s reaction was incredibly subdued. No one really knows what to think about the future of interest rates in the United States, and instead of speculating many investors are electing to wait it out and see what Ms. Yellen has to say in Jackson Hole on Friday.