INVESTMENT VETERAN FAVORS GOLD

Cassie Bastien

2/6/2017 9:50:00 AM

Daily Gold & Silver Market Report – 02/06/2017

According to Independent Strategy Ltd.’s David Roche, who has about 45 years of experience covering markets, said that Gold will climb about 6 percent through the end of the year as investors seek a shelter from the rising political risk surrounding President Donald Trump. It’s no surprise that Trump’s first two weeks in office have been eventful, and Trump has fired up investor concerns with his withdrawal from the Trans-Pacific Partnership, the commitment to build a wall on the Mexican border and a storm over immigration curbs on seven Muslim-majority countries. Roche said that while the Federal Reserve may raise interest rates three times this year, increasing risk will lure investors more towards the yellow metal. Bloomberg reporter Ranjeetha Pakiam said, “Prices have already risen to the highest in more than two months and posted an advance of 6.8 percent this year, reversing a 13 percent slump in the fourth quarter.” Roche explained that the prospect for accelerating inflation is another reason to own Gold bullion, even with the outlook for rising interest rates.

MORE MILEAGE IN PALLADIUM  

Palladium prices jumped by a fifth in 2016, and they have made a solid start to 2017, reaching a near-two-year high of almost $800 an ounce last week, and MoneyWeek.com’s reporter Andrew Van Sickle says there may well be further to go. The Precious Metal is a key component in catalytic converters, and the car industry accounts for 80 percent of demand, notes Ira Iosebashvili in Barron’s. Not only does China and the U.S. use Palladium in catalytic converters, but Europe favors Platinum as well. Van Sickle said car sales in both the U.S. and China have been solid recently, with the latter rising at their fastest pace in three years last year and the former potentially set for another boost thanks to President Trump’s fiscal stimulus. So what does that mean for Palladium? As car emission standards rise, so will the demand for Palladium.

DOLLAR SEEKS DIRECTION

The U.S. dollar was little changed Monday morning as investors continued to digest mixed signals from the January jobs report and as political uncertainty remained elevated. On Friday, the January payroll report painted a mixed picture of the economy, with strong hiring but slow wage growth. The White House has also been in view; on Friday, President Trump took action to roll back financial regulation, which in result boosted bank stocks, though the ongoing fallout to an ordered travel ban continues to be a question mark. Today, J.P. Morgan said that “erratic policy emissions from the White House” could further weigh on the dollar going forward. Also weighing on the market moods was the possibility for a stronger yen, depending on the U.S.-Japan summit meeting scheduled in Washington on February 10. With investors still anxious about the Bank of Japan’s policy stance to keep a lid on recent rises in Japanese government bond yields, market reporters Hiroyuki Kachi and Ryan Vlastelcia with MarketWatch said, “moves may be particularly large in the yen.” Chief FX Strategist at Citigroup Global Markets Japan Osamu Takashima said that the “dollar may struggle to rise ahead of that summit,” adding that trade is the most important risk for the dollar-yen trade, though the currency policy may come up for discussion as Finance Minister Aso is expected to sit in on the meeting.

At 10:50 A.M. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,230.70 Up $9.30
• Silver, $17.71Up $0.15
• Platinum, $1,011.30 Up $5.60
• Palladium, $771.10 Up $20.60

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