Wednesday morning was largely uneventful for the precious metals, as prices held very close to where they closed on Tuesday. Spot gold lost less than 0.2% this morning, and is still trading near $1,248 per ounce. Spot silver was also essentially flat, shedding just 1¢ to $16.47/oz. Platinum was slightly lower while palladium actually poked into positive territory.
Stocks in Europe were higher this morning as investors continue to look fondly upon the eurozone as its economic outlook appears to be gradually improving. (Of course, equity investors have a habit of getting ahead of themselves in this regard!) The euro remains above $1.16 versus the U.S. dollar, as well. Nonetheless, both the S&P 500 and the Nasdaq saw record-high closing numbers on Tuesday while the Dow Jones was not far behind, notching a new intraday record high in early trading on Wednesday.
Here are Tuesday’s closing numbers for the metals:
Gold: $1,249.60/oz (-$5.40, -0.43%)
Silver: $16.48/oz (+1¢, +0.06%)
Platinum: $925/oz (-$4.00, -0.43%)
Palladium: $855/oz (+$8.00, +0.94%)
Bear in mind that there will be no press conference with Fed Chair Janet Yellen at the conclusion of the FOMC meeting this afternoon. One would think this could lead to greater market volatility during the late stages of today’s session due to the ambiguity involved in the task of parsing the FOMC statement that lays out the central bank’s position on interest rates and other aspects of monetary policy. Close attention will be paid to what the Fed says about continued balance-sheet reductions—i.e. an unwinding of quantitative easing.
At any rate, investors seem to be jumping headlong into the pervasive “risk-on” sentiment on Wall St. Corporate earnings for the second quarter have continued to be largely optimistic, which is driving some money to flow into equities. For the same reason, demand for government bonds has fallen sharply, as we are now seeing a sell-off in Treasurys. The 10-year yield jumped 6 basis points to 2.32%.
There is some buzz surrounding the announcement that the U.K. is passing a new law which will ban automobiles with gasoline-powered engines by the year 2040. This development seems like the first step in an unavoidable process as automakers (and the broader economy) begin to embrace green technology.
One development that may be helping the U.S. stock markets is the progress made by Senate Republicans on the healthcare issue. With Arizona Senator John McCain returning to the chamber after being diagnosed with a brain tumor, the Senate is now prepared to hold an open debate on its alternative plan to the Affordable Care Act, which has still not had a clean repeal (as Senator Rand Paul of Kentucky has repeatedly called for). If momentum builds in favor of successful healthcare reform, it will not only reflect positively on the Trump administration as a key legislative achievement, but it will also provide investors with a bit better clarity on the pending changes to the health insurance market.
The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.