Daily Gold & Silver Market Report – 01/04/2017

Cassie Bastien

1/4/2017 9:34:33 AM

LITTLE CHANGE IN SILVER AFTER HOLIDAYS

The first trading session of 2017 saw investors preparing for Federal Open Market Committee minutes and nonfarm payrolls, holding Silver prices steady. Silver gained in four of the last five sessions of 2016, though it lost 17 percent in Q4. As the U.S. dollar fell to two-week lows last week against a basket of other major currencies, Precious Metals moved higher. Sam Bourgi with EconomicCalendar.com says "A stronger dollar was largely responsible for the sharp decline in Precious Metals in the final quarter of the year. … Looking ahead, investors are bracing for a deluge of market-moving events beginning on Wednesday with the release of the December 13-14 Federal Open Market Committee (FOMC) meeting minutes." The U.S. Labor Department reports Friday on December nonfarm payrolls, the most-watched economic calendar event of the month. According to a median estimate of economists, the U.S. economy added 175,000 workers in December and hourly wages are forecast to have risen 0.3 percent from November.

PLATINUM, PALLADIUM JUMP AS INVESTORS GEAR UP FOR 2017

Platinum and Palladium both soared by more than percent Tuesday as investors scrambled for position to being the new year. Jan Harvey with Reuters reported, "The themes of late 2016 appeared to be persisting in the wider markets, with equities bouncing while the dollar posted its biggest rise in three weeks." Mitsubishi analysts Jonathan Butler said, "The repositioning in the futures market in the dying weeks of last year saw in Platinum a rebuilding in the gross short position, and at the same time long positioning remaining fairly steady. Right now, I think this is some short-covering driving prices higher. It's the start of the year, and there are some funds rebalancing their portfolios." Both Platinum and Palladium are widely used in auto-catalyst manufacturing, and are more exposed than Gold to the economic cycle due to their industrial applications. Harvey reported Palladium saw its biggest annual gain in six years and was 2016's best-performing Precious Metal, rising 20 percent. "The market has carried the theme of higher dollar, yield and stocks into 2017 – a formidable challenge to Gold," Saxo Bank's Head of Commodity Research, Ole Hansen said.

DOLLAR RETREATS FROM 14-YEAR HIGH

The dollar weakened from a 14-year high Wednesday against other major currencies as investors awaited minutes from December's Federal Reserve meeting. MarketWatch Markets Reporter Sara Sjolin said, "An account of the confab, where the U.S. central bank raised interest rates for only the second time in about a decade, are due at 2 p.m. Eastern Time Wednesday. The minutes could shed more light on the pace of interest-rate hikes and how policy makers will respond to President-elect Donald Trump and impact currency markets." FxPro Chief Economist Simon Smith said in a note, "We're at something of an inflection point with the dollar. For the dollar to push ahead from here, we'd need to see the Fed follow through on [the] anticipated hikes, but also for Trump's bullishness on the economy to start to come to fruition." Sjolin said the dot-plot of interest rate predictions showed the Fed has penciled in three 2017 rate increases. Cathal Kennedy, European economist, said "…we expect that the [European Central Bank's] preference will be to maintain the policy course it set out in December and ‘look through' energy influenced price developments in coming months."

At 10:47 A.M. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,166.60 Up $2.90
• Silver, $16.47 Up $0.04
• Platinum, $946.00 Up $2.80
• Palladium, $738.90 Up $28.00

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