The gold price held near $1,800 per ounce Wednesday morning as the markets await the outcome from today’s Fed meeting. While the price of gold stabilized, silver rose 0.6% to $39.98 per ounce. U.S. equity markets looked to open slightly lower, with S&P futures down 1.30 to 1,194.70. European markets were lower across the board after euro zone meetings on the Greek bailout proceeded but thus far led to no concrete outcome.
On Tuesday the gold price rallied $24.79 to $1,803.58 per ounce as precious metals bounced back from Monday’s large sell-off. The price of gold rebounded to $1,795 in morning trading and extended its gains after the U.S. housing starts in August came in below expectations. The spot gold price reached an intra-day high of $1,812.70 before backing off a bit in afternoon trading.
Silver headed north in concert with the gold price, but posted a more moderate gain of $0.20, or 0.5%, to end the day at $39.85 per ounce. Gold and silver stocks surged higher, with the Philadelphia Gold & Silver Index (XAU) rising 2.1% to 220.03. Among gold producers, IAMGOLD (IAG) and Yamana Gold (AUY) rallied 4.6% and 4.7%, respectively. As for silver mining companies, Coeur d’Alene Mines (CDE) advanced 1.4% and Silver Standard Resources (SSRI) added 1.2%.
Housing starts fell 5% to 571,000 in August, versus a consensus estimate among economists of 590,000. In doing so, housing starts declined by the most since April of this year, and became the latest batch of disappointing U.S. economic data. Sal Catrini at Cantor Fitzgerald commented that “The housing market is not only bad, but still missing low expectations.” Scott Brown, chief economist at Raymond James, argued that the housing market “won’t improve until the labor market improves substantially and that doesn’t look like that would happen this year.”