Daily Gold & Silver Market Report – 12/29/2016

Cassie Bastien

12/29/2016 9:51:00 AM

GOLD TRIES FOR FOURTH WINNING DAY IN A ROW

Trading at two-week highs, countering a 2 percent December decline, Gold futures are looking for a fourth-straight advance Thursday as the dollar index pulled back from 14-year highs and stocks pointed lower. Rachel Koning Beals with MarketWatch reported, “Gold futures for February delivery rose $5.30 to $1,146.20 an ounce in light volume. Their finish at $1,141 on Wednesday marked the highest settlement since December 14.” Precious Metals have seen a small advance during this short week after Gold ended last week with a seventh-straight weekly decline, Gold’s longest weekly losing streak in more than 12 years. Due to Gold being priced in dollars, Koning Beals notes, “any advances for the greenback make the metal more expensive for other currency holders, presumably lowering demand.” As Treasury yields rose in December following President-elect Donald Trump’s stimulus promises, Gold dropped. Koning-Beals said, “That outlook prompted upward revisions to expectations for additional monetary tightening by the Federal Reserve, which is bullish for the U.S. dollar and negative for Gold and Silver.” Nigel Green, CEO of deVere Group investment advisory firm, said, “Considering the likelihood of a stimulus package when [Trump] takes office, and given the already near full employment rate, inflation could go higher than the Fed’s goal of 2 percent.” He added if this does happen, “the Fed could perceive the inflationary pressures as leading to an overheating of the economy and raise interest rates quicker than markets anticipate to cool it down.”

SILVER TRUMPS GOLD IN 2017

“Prior to Trump being elected,” ResourceInvestor.com’s Kenneth Ameduri said, “the markets were pricing in a Trump win as negative, with the markets turning down when his polls were up and markets up when his polls were down. Since Election Day, the markets have decided to trade favorable in anticipation of economic strength, infrastructure spending and a perception of U.S. strength.” Trump's plan to lower corporate tax rate from 35 percent to 15 percent is definitely benefiting stocks “To be fair,” co-founder of financial publication letter CrushTheStreet.com Ameduri said, “the markets are massively benefiting from the ramping-up of debt during this election year, which was supposed to benefit Hillary Clinton and obviously failed.” Unemployment dropped to 4.6 percent and the GDP grew 3.2 percent last quarter. “In light of doubling down on debt and spending on infrastructure,” Ameduri believes Silver will “Trump” Gold in the short- to mid-term period. Trump is already proposing massive government spending increases, including $1 trillion on infrastructure, which will certainly benefit metals, namely Silver. Ameduri closes saying, “Trump's plan is both inflationary and an injection into the industrial component of the economy, which are both aspects of where Silver derives its luster,” and could very well benefit Gold as well.

OIL IN 2017 SEEN CAPPED BELOW $60/BARREL BY STRONG DOLLAR

A Reuters poll Thursday showed oil prices will gradually rise toward $60 per barrel by the end of 2017, with further upside capped by a strong dollar. According to the poll of 29 analysts and economists, Brent crude futures will average $56.90 a barrel in 2017. Previous surveys forecast prices at $57.01 per barrel. The highest 2017 Brent forecast came from Raymond James Financial at $83 per barrel, while the lowest, at $44.90, came from GMP FirstEnergy. “A stronger upside potential should become evident especially in the second half when the market fundamentals will record a significant improvement (under the assumption of strong compliance to the OPEC [Organization of Petroleum Exporting Countries] deal),” Intesa SanPaolo analyst Daniela Corsini said. “Earlier this month,” Reuters’ Vijaykumar Vedala said, “OPEC and non-OPEC producers reached their first deal since 2001 to curtail oil output jointly and ease a global glut after more than two years of low prices that overstretched many budgets and spurred unrest in some countries.” Capital Economics analyst Thomas Pugh said, “Many of the non-OPEC countries are likely to renege as are many of the smaller OPEC members, but cuts should still be large enough to help rebalance the market.” Giorgos Beleris, analyst at Thomson Reuters Oil Research and Forecasts, added, “A broad risk for the recovery of oil prices is the U.S. dollar, which has risen to multi-year high levels.”

At 10:51 A.M. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,150.70 Up $8.10
• Silver, $16.15Up $0.09
• Platinum, $900.90 Down $0.30
• Palladium, $675.90 Up $8.10

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.