SPOOKED PRECIOUS METAL FUND INVESTORS DRIVE GOLD DEMAND TO THREE-YEAR HIGH

Cassie Bastien

2/3/2017 9:46:00 AM

Daily Gold & Silver Market Report – 02/03/2017

According to Gaurav Sharma with International Business Times, “Investors searching for a safe haven in the wake of a series of unpredictable political developments sent Gold demand rocketing to a three-year high. In its annual appraisal of the market, the World Gold Council (WGC) said investors' takings via exchange-traded funds (ETFs) helped total global demand climb by around 2 percent to 4,309 metric tons in 2016, the highest since 2013.” Total ETF demand hit a four-year high as investors leaned heavily toward Gold following Donald Trump’s presidential election, June’s Brexit vote, the Italian Referendum and fears of other upheavals in Europe. WGC’s Head of Market Intelligence Alistair Hewitt said, “ETFs are easy ways for people to access Gold. Geopolitical issues have driven continued inflows into Gold-backed ETFs. Last year saw an unprecedented degree of political upheaval, which underpinned huge institutional investor flows into Gold.” FXTM Research Analyst Lukman Otunuga said a vulnerable dollar plus uncertainties surround President Trump uncertainties boosted Gold's safe-haven appeal, pushing Gold to a three-week high over $1,220 an ounce Thursday.

CRITICALLY HIGH U.S. SILVER SUPPLY RELIANCE IN JEOPARDY

Money Metals Exchange says it is not a matter of if, but when the U.S. Silver supply will be in jeopardy, as they expect the highly inflated paper markets to eventually crack. The U.S. Geological Survey reported, “Of the apparent 8,100 metric tons (260 million oz) of total Silver consumption in 2015, the United States relied on 6,156 metric tons of foreign Silver imports to meet total demand.” Money Metals reports, “Since 1999, the United States Silver net import reliance has increased from 69 million ounces to 198 million ounces in 2015,” the majority of which was Americans physically buying the gray metal. They continued, “U.S. Silver net import reliance surged even move than the increase in American physical Silver investment demand in this 16-year time period due to falling mine and scrap supply.” According to the GFMS team at Thomson Reuters, for every ounce of physical Gold Americans invested in 2015, they purchased 43 ounces of Silver. Today, Gold and Silver prices are surging higher while the Dow Jones falls 150 points from its “cliff upon the mountain of debt that it rests.”

CRUDE OIL PRICES SOAR

Despite oil prices struggling to make recent gains due to the threat of rising U.S. oil production, “[President Donald] Trump’s fresh sanctions against Iran could offer significant support to crude oil prices,” Alexander Gorodezky with EconomicCalendar.com reports. “Iran has aggressively ramped up their production above 4 million barrels a day since the [former President Barack] Obama administration and Iran agreed on a nuclear deal.” The last few weeks have seen higher-than-expected U.S. oil and gas inventory growth, plus recent growth in oil rig counts, adding to analyst concerns. Gorodezky reported, “U.S. producers added nearly 44 oil rigs [in the last two weeks], indicating a significant potential growth in oil volumes. Despite the threat of rising U.S. production, crude oil prices are likely to receive a positive support from the production cuts from OPEC and non-OPEC members in the short-term.” Overall, it is believed oil prices will remain strong in the coming days.

At 09:46 A.M. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,223.30 Up $3.40
• Silver, $17.61 Up $0.10
• Platinum, $1,002.80 Up $4.20
• Palladium, $755.80 Down $4.80

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