Daily Gold & Silver Market Report – 01/09/2017

Cassie Bastien

1/9/2017 10:54:00 AM

GOLD RISES AS MARKETS AWAIT TRUMP

Gold improved Monday as uncertainty rises ahead of President-elect Donald Trump’s inauguration Jan. 20. However, the yellow metal didn’t climb too far with an uptick in the U.S. dollar. Reuters Jan Harvey said the Precious Metal “lost some ground on Friday after a U.S. payrolls report supported the view that the Federal Reserve will raise interest rates this year, boosting the dollar.” Julius Baer Analyst Carsten Menke said Trump’s press conference this week “will be very interesting given how Gold has reached since his election. … We are still bullish on the dollar, we still see more upside for bond yields, which of course translates into some headwinds for Gold.” Gold prices are very sensitive to rising U.S. interest rates, which boost the dollar and increase the opportunity cost of holding non-yielding bullion. Capital Economics said in a note they “still expect the central bank to hike rates four times this year in response to some of Trump’s more inflationary policies.”

SILVER PRICES STABLE TO START WEEK

Although gains were limited following last week’s impressive rally, Silver prices edged slightly higher Monday. “The grey metal rose more than 3 percent last week, reaching its highest since December 14, the day the Federal Reserve voted to raise interest rates for the first time in a year,” EconomicCalendar.com’s Sam Bourgi reported. Precious Metals started 2017 strong as the dollar corrected lower and bargain hunters moved to lock in metals at favorable prices. Bourgi said, “The near-term outlook remains volatile, as higher inflation expectations in the United States pressure the Federal Reserve to normalize monetary policy at a faster pace. The U.S. dollar stabilized against a basket of other major currencies on Monday following sharp declines last week. The dollar index edged up 0.1 percent to 102.32.”

STOCK MARKET INVESTORS FOCUS ON BANKS AS EARNINGS SEASON BEGINS

“Big banks kick off their fourth-quarter earnings season in the coming week, but investors are more interested in their outlooks as the industry faces the prospect of a faster pace of interest rate increases and more deregulation,” MarketWatch’s Wallace Witkowski reported. “Stocks ended the week sharply higher as the Dow Jones Industrial Average advanced 1 percent for the week but came up just short of touching the 20,000 mark.” Robert Pavlik, Chief Market Strategist at Boston Private Wealth, said, “The market is going to be expecting leadership going into the first quarter. But if they get cautious about a higher dollar or a rise in yields, you have to watch out for that.” According to John Butters, senior earnings analyst at FactSet, fourth-quarter S&P 500 earnings are expected to grow 3 percent from one year ago. Pavlik said two key areas to look for in bank earnings are trading revenues and loan growth. Witkowski noted, “A promise of deregulation by President-elect Donald Trump, if fulfilled, could boost trading activity, while the prospect of a faster pace of rate increases by the Federal Reserve may generate higher loan demand as borrowers seek to lock in interest rates while they are still low.”

At 11:54 A.M. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,185.10 Up $9.90
• Silver, $16.74 Up $0.20
• Platinum, $979.20 Up $9.60
• Palladium, $764.00 Up $4.70

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