Daily Gold & Silver Market Report – 10/19/2016

Brandi Brundidge

10/19/2016 11:33:00 AM

GOLD RISES ON WEAK U.S. DOLLAR; WHEN WILL THE FED RAISE RATES?

The U.S. dollar fell further against other major currencies due to weak economic data, boosting Gold Wednesday.  With U.S. economic data “not nearly as robust as was hoped, there are now expectations of, at least, a mild recession in the U.S. next year.  The U.S. cannot afford even a mild one.  Certainly, the [Federal Reserve] cannot afford a[n interest] rate hike just ahead of one,” Julian Phillips, a founder of GoldForecaster.com, said in a daily note. He added, ”if the U.S. is headed to a recession, then certainly the rest of the developed world is and one that will be far worse than seen in the U.S.”  With recent downbeat economic data, the market is curious if the Federal Reserve will stand firm on increasing interest rates this year.  The next Fed policy meeting is set for November 1-2, but there is low expectation of a rate hike before the presidential election. George Milling-Stanley, head of Gold investment strategy at State Street Global Advisors, shared his thoughts with MarketWatch on how Gold might perform depending on who wins the election.  “I would look for a sustained rise if [Republican nominee Donald] Trump is elected, with perhaps a gain of shorter duration if [Democratic nominee Hillary] Clinton is victorious,” he said.

The market is still anticipating an interest rate increase from the Federal Reserve in December, but there is concern with the U.S. economy’s stability and growth to support the hike.  “The market, I think, keeps telling the Fed, 'Wait 'til we have growth, and then you can raise all you want,' because then the market can handle it. But at zero or negative growth, it can't,“ Fidelity Investment macro expert Jurrien Timmer told CNBC's "Squawk Box." There still appears to be mixed emotions on how the Fed should proceed with increasing rates as they have not provided too many clues on their next move. 

At 12:32 P.M. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,272.00 Up $7.60
• Silver, $17.72 Up $0.04
• Platinum, $945.10 Down $0.40
• Palladium,$637.90 Down $2.50

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