How Do News Headlines Affect Spot Prices of Precious Metals?

When it comes to the market, news headlines can cause chaos even before anyone reads the actual article.

Many people assume things before they know all the facts. One news headline about the failing economy or plummeting stocks on Wall Street could send investors running to change their investment strategies.

Two words of advice for coin investors: slow down.

Spot prices and your investment decisions

Spot prices are the current market value of a precious metal or other commodity in the moment. As with anything relating to the market, spot prices can change constantly throughout the day.

Because spot prices can change so quickly, they should not drive your decision-making when it comes to your precious metal investments. News headlines, depending on what they are, can definitely affect spot prices. So what should you do if a news headline drops that may affect your precious metal investments? Here are some considerations before you take action:

• Observe and learn as much as you can about how news headlines affect spot prices on precious metals. There’s usually a pattern, and over time, you can begin to better predict the outcome.
• Remember that news is often somewhat delayed. By the time you hear a headline, the market may have already rebounded from whatever economic crisis popped up.
• Consider the type of news and its possible effect. If it’s something that would drive investors toward a safer option (i.e. some type of global crisis), then you can reasonably assume the cost of gold will go up. If it’s something that would drive investors toward riskier options (i.e. good news about the economy), then the opposite may be true.

Find more resources on what causes market volatility and an introduction to the US Commodities Market on our website.