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Gold and Silver Spot Prices Soar

Daily Gold & Silver Market Report – 03/16/2017

Following the U.S. Federal Reserve meeting where they announced the next interest rate increase, the U.S. dollar dropped to its lowest in more than a month, causing Precious Metal stocks to surge over one percent Thursday morning. Federal Reserve Chair Janet Yellen said the central bank would stick to gradual interest rate hikes, even if inflation runs above its 2 percent target. ETMarkets.com said Gold “was trading 1.41 percent up at around 11 a.m. (IST),” while Silver prices were “up 2.26 percent around the same time.” According to Sean Williams, “This marks just the third time in the past decade that the Fed has raised its key measure on interest rates.” Although the Fed does not directly control interest rates, the rate increase does impact the financial sector that lifts rates on variable lines of credit while also boosting interest-bearing assets such as savings accounts and bonds. Williams provided what he thinks are the two main reasons the Precious Metals market soared Thursday. First is Gold and Silver prices have been trending low in anticipation of the Fed meeting so once the official word was out Wednesday about the 25 basis point raise, investor nerves calmed. Yellen “noted that inflation was expected to stabilize around its targeted 2 percent level this year, implying that a slow but steady approach to rate hikes is warranted.” In others words, the Gold and Silver market may not be as bad as many advertised. Secondly, Williams believes low opportunity costs could favor Gold and Silver, saying, “Having a dissenting opinion this early in the rate-hike cycle could imply that the Fed's march to its targeted 3 percent federal funds target rate could be slower than everyone expects.” Nonetheless, Fed rate hikes are great news for investors looking to earn nearly guaranteed income from safe assets such as Gold and Silver.

Strong Fundamentals Support Precious Metals ETFs

A lot has happened since the U.S. presidential election and the Precious Metals market has definitely seen some movement, especially as of late with increasing interest rates, a rise in jobs, economic inflation, movement within the dollar and much more. “With a lot of these metals, it comes down to a really easy concept: a lot of demand and lack of supply,” ETF Securities U.S. Head of Distribution Steven Dunn said. “In that type of situation, you have sort of a rise in prices, and that’s what you see in things like the Platinum and Palladium world.” Dunn also says with strong auto sales and lack of supply, prices for Precious Metals such as Palladium are set to rise. He also mentions the dollar being pressured downward, which is very supportive for commodities in general. Dunn closes by stating those “risks” and “unknowns” within the marketplace are what investors look for to add to their portfolios and offer diversity.

At 11:05 a.m. (ET), the APMEX Precious Metals spot prices were:

  • Gold, $1,232.10 Up $28.60
  • Silver, $17.47 Up $0.48
  • Platinum, $963.30 Up $24.50
  • Palladium, $771.60 Up $24.60

APMEX’s Account Managers now have extended hours Mondays through Thursdays and are here to serve you until 8 p.m. (EDT)! Or call us Fridays until 6 p.m. (EDT)! If you have any questions about investing in Precious Metals or simply would prefer to place your order by telephone, we are here to help.

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Disclaimer:
APMEX Market Reports provide our readers with a review of spot price activity and some of the factors that may be affecting the market for Precious Metals. While the information is obtained from sources we believe to be reliable, we do not guarantee its accuracy or its completeness and we encourage you to conduct your own investigation prior to making any decision based on the information. The Market Reports are not intended as a comprehensive discussion and there may be other factors affecting the financial marketplace. These Market Reports are provided for informational purposes only and do not constitute a recommendation by APMEX to hold, purchase or sell any Precious Metal product. All orders, purchases and sales, if any, are subject to the terms of the User Agreement and other applicable policies.

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