GOLD PRICES JUMPS WITH TRUMP AND BREXIT UNCERTAINTY

Cassie Bastien

1/17/2017 9:34:00 AM

Daily Gold & Silver Market Report – 01/17/2017

As investors drew in their horns in response to comments on the dollar from U.S. President-elect Donald Trump and ahead of a speech on Brexit from British Prime Minister Theresa May, while Gold prices rose, stocks, bond yields and the dollar fell this morning. Trump's comments about the dollar being too strong and hurting U.S. competitiveness pushed the greenback down across the board. Investors are seeking clarity on his policies after campaign pledges on tax cuts and government spending helped lift stocks, the dollar and were deemed positive for economic growth. Trump said in response to the Wall Street Journal’s publication on its website yesterday stating that U.S. companies could not compete with China "because our currency is too strong. And it's killing us." Nigel Stephenson with Reuters said, “Safe-haven investments such as Gold and government debt also gained.” Neil Wilson, Senior Market Analyst at ETX Capital said, "These gains are largely down to dollar weakness, however, and Gold has risen amid a bid for safer assets ahead of this speech and Donald Trump's inauguration on Friday." Stephenson said that Prime Minister May speaks at 11:45 GMT and is expected to say Britain will not seek a "half in, half out" deal when it leaves the European Union (EU); setting 12 priorities for talks with the EU, and media reports said these would include an indication she is prepared for Britain to leave the bloc's single market. Stephenson reported, “Gold hit its highest in more than seven weeks, and was last trading at $1,213 an ounce, up almost 1 percent on the day XAU=. It has now risen for seven consecutive days.” Richard Xu, fund manager at China's biggest Gold exchange-traded fund, HuaAn Gold said, "Gold is going to do very well in the first half of the year due to Brexit concerns, Chinese currency pressure, and uncertainty surrounding Donald Trump's policies."

MILLENNIALS SAVE, BUT DON’T INVEST

Although many think they know a fair bit about investing, many people actually know little to nothing about it. Seeking Alpha’s Ian Bezek says that this is especially true for his generation, showing a low amount of interest in the stock market. Bezek says that there is a false accusation that millennials don’t have the money to invest; however, he said that is false and that “millennials actually have unusually high savings rates.” After providing hard evidence from a graph provided by the Wall Street Journal, Bezek said, “millennials have fully 70 percent of their assets in cash, compared to 60 percent or less for significantly older generations.” Portfolio theory suggests that investors should own more equities early in the accumulation stage of life, and then gradually shift to bonds. Compared to millennial investing trends, the silent generation, whom are well into retirement, hold a higher ratio of stocks to bonds. Interestingly enough, Bankrate’s research found that millennials actually save more for emergencies and retirement than previous generations.

DOLLAR DROPS DUE TO TRUMP AND MAY

After President-elect Trump called the U.S. currency “too strong” and the pound rallied on British Prime Minister Theresa May’s plans to leave the EU, the dollar weakened as politics dominated global markets causing bonds and Gold to advance. “The dollar is the guiding light at this point, and all eyes are on the shape U.S. policy will take,” said Fredrik Nerbrand, global head of asset allocation at HSBC Holdings Plc in London. Nerbrand continued by saying, “If Trump wants to become as growth-generative as he’s planning to be and you don’t have the same fiscal push coming from the rest of the world, then it’s a question of where does the capital flow to. The dollar is the tallest pygmy.” Twin themes which have controlled markets this year and last, Samuel Potter and Natasha Doff with Bloomberg.com say, “There’s no end in sight to the impact of Brexit and Trump.”

At 10:34 A.M. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,217.00 Up $18.30
• Silver, $17.72 Up $0.45
• Platinum, $989.80 Up $4.40
• Palladium, $757.40 Up $7.30

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.