SILVER, PLATINUM, PALLADIUM SEEN AS SAFE HAVENS

Cassie Bastien

2/1/2017 10:21:00 AM

Daily Gold & Silver Market Report – 02/01/2017

As GoldSeek reports, new research confirms in addition to Gold, Silver, Platinum and Palladium bullion all act as safe havens during economic uncertainty, which is particularly prevalent due to the impacts of Brexit on the UK and the eurozone along with financial and geopolitical risk under newly-elected President Donald Trump. Research by Dr. Brian Lucey and Sile Li, of Trinity College Dublin and Trinity Business School, suggests each of the Precious Metals play safe-haven roles and that “there are times when one metal is not while another may be a safe haven against an asset.” Their research finds economic policy uncertainty is a “positive and robust determinant of a Precious Metal being a safe haven,” which shows true for many countries. Their findings also support the vast academic and independent research showing Gold is a safe-haven asset and other Precious Metals, such as Silver, Platinum and Palladium, are important for investment diversification. GoldSeek explains when Gold was not acting as a safe haven, Silver stepped in, showing the complementary nature of the two metals.  “We have long advocated owning all four Precious Metals for diversification and financial insurance purposes with larger allocations to Silver and especially Gold due to its monetary characteristics and smaller allocations to Platinum and Palladium.”

GOLD RETREATS ON ADP REPORT

Gold prices moved downward Wednesday as the U.S. dollar improved following “a stronger-than-expected snapshot of private-sector hiring was seen lifting the odds for a series of interest-rate hikes from the Federal Reserve this year,” MarketWatch News Editor Rachel Koning-Beals reported. Moves in the dollar tend to affect Gold’s appeal to holders of other currencies. Gold also tends to move inversely to Treasury yields as it offers no yield. ADP reported Wednesday, “private-sector hiring picked up in January, as employers added 246,000 jobs, well above expectations.” Think Markets Chief Market Analyst Naeem Aslam said, “The ADP data has set a good tone for Friday and this has pushed the dollar higher because an improving job market strengthens the case for a rate hike.” Fed officials previously penciled in three interest rate increases to occur in 2017. However, markets expect just two moves, in June and December. Ilya Spivak, senior currency strategist with Daily FX, said, “A cautious tone reflecting decidedly uneasy market conditions since the beginning of the year may spur a further downgrade of the expected rate-hike path, extending Tuesday’s moves [for higher Gold, a lower dollar and falling Treasury yields] for another day.”

CRUDE OIL PRICES STRUGGLE

Alexander Gorodezky with EconomicCalendar.com said, “Crude oil prices enrolled solid gains during early Tuesday’s trade, supported by Reuter’s report that [the Organization of Petroleum Exporting Countries] producers have slashed their production to 30.01 million barrels a day in January, compared to the production of 31.17 million in December.” Due to President Donald Trump’s comments Tuesday regarding the euro, the dollar index extended its current trend, declining nearly 0.8 percent against a basket of other major currencies. Gorodezky noted, “Growth in U.S. oil inventories for the fourth consecutive week also weighed on [oil] prices. According to the American Petroleum Institute, U.S. crude oil stocks increased by 5.8 million barrels, beating analysts estimate for the build of 3.08 million barrels.” As producers are focusing on higher-margin areas, “U.S. oil production could increase at a massive rate in the coming years,” Gorodezky said.

At 11:21 A.M. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,205.00 Down $7.10
• Silver, $17.50 Down $0.13
• Platinum, $997.30 Up $1.80
• Palladium, $759.00 Up $3.30

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