GOLD PRICE UNCERTAINTY

Cassie Bastien

1/10/2017 10:08:35 AM

Daily Gold & Silver Market Report – 01/11/2017

Although the U.S. dollar strengthened a bit Wednesday, Gold has been supported by a decline in bond yields and uncertainty surrounding U.S. economic policies. Gold edged higher in Asian trading, with Chinese physical demand helping underpin prices. Caution ahead of President-elect Donald Trump’s scheduled press conference Wednesday has tempered movement. Tim Clayton with EconomicCalendar.com said, “European equity markets moved higher, however, which did not suggests any significant underlying risk aversion in the market and Gold drifted towards $1,187 [per ounce] ahead of the U.S. open. There are no major economic data releases due during the New York session and markets are likely to take their cue from Trump’s press conference, although there is a possibility that there will be little of substance.” If fiscal expansion is a key point in Trump’s speech, Gold prices will likely lose ground.

COULD SILVER PRICES SOAR 75 PERCENT ON INFLATION?

Investors are focusing on inflation to see where the price of Silver is headed because as inflation increases, so do Silver prices. In the U. S., inflation is rising rapidly. Moe Zulfiqar said with CommodityTradeMantra.com reported, “Since January 2015, we have seen inflation in the U.S. move higher. In November 2016, inflation stood at the highest level since late 2014. … Inflation expectations have soared over 50 percent in a matter of months.” The Consumer Price Index (CPI), which the government uses to measure inflation, increased 14.35 percent in the last eight years, while Silver has increased 44.33 percent. Simple math, as Zulfiqar calls it, shows “for every one percent increase in inflation in the U.S., Silver prices increased over three percent.” If the CPI increases 25 percent in the next eight years, Silver prices could likewise soar 75 percent.

WHAT’S DRIVING PALLADIUM ETF RALLY?

It’s no secret that Palladium has been the top-performer in the Precious Metals industry the last couple of months. Lopamudra Bhattacharya with NASDAQ said, “Now that market conditions are witnessing a reversal, Palladium is clearly emerging as a winner in the Precious Metals space, thanks to its industrial uses.” Last year, Palladium, which is mostly used in the automotive industry for catalytic converters, U.S. new car and truck sales hit record levels on strong consumer confidence and low fuel prices. Bhattacharya notes, “Supply shortages are expected to continue this year. The Palladium market is expected to post a deficit of 651,000 troy ounces this year and another shortfall in 2017,” primarily due to rising automotive demand. Bhattacharya closes by saying, “The global supply outlook appears fragile at the current level, making the metal an intriguing option for investors.”

At 10:59 A.M. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,182.00 Down $5.80
• Silver, $16.66 Down $0.23
• Platinum, $965.40 Down $16.40
• Palladium, $755.90 Down $10.40

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