Daily Gold & Silver Market Report – 3/31/2015

Lorrie Freeman

3/31/2015 12:31:00 PM

GOLD SEES NO LOVE; U.S. DATA WEAK

Gold has experienced very little love and had another 1.25 percent drop Monday, giving up what little gains it has had in 2015. The path ahead does not look inviting as the U.S. Federal Reserve is expected to raise interest rates as early as June. A short-term rise makes holding Gold less attractive as people will likely keep their money in greenbacks. This will cause the dollar to rise in value, which will make the Gold price lower in the U.S. but more expensive for overseas buyers. “Since about 60 percent of all buyers of Gold are from Asia/Pacific region, most of the buyers are buying it not in local currencies, but in terms of U.S. dollars,” S&P Capital IQ Equity Chief Investment Officer Erin Gibbs said. “So as we see this continued dollar appreciation, that makes Gold expensive for foreign buyers.”

U.S. labor market conditions in March will keep economists and investors occupied this week. U.S. Federal Reserve Chair Janet Yellen made it clear Friday the central bank is likely to raise borrowing costs later this year. Data from the labor market is likely the deciding factor on the U.S. economy’s health and its ability to withstand rate increases. Weak U.S. data at the start of the year has some economists scaling down their growth views, expecting a September rate hike. Some see a lack of wage pressure as a sign that recovery is not complete. “I’m still in the June camp,” UniCredit’s Chief U.S. Economist Harm Bandholz said. “But it’s been a weak Q1 and the Fed wants certainty that this [is] transitory and not related, for example, to the dollar.”

 

At 1:30 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,185.80 Down $2.10
• Silver, $16.70 Down $0.07
• Platinum, $1,142.70 Up $23.80
• Palladium, $736.40 Up $5.40