WHY SILVER PRICES IN 2017 WILL SOAR

Cassie Bastien

2/7/2017 10:27:00 AM

Daily Gold & Silver Market Report – 02/07/2017

According to Peter Krauth, resource specialist with Money Morning, the price of Silver is up 9.3 percent year to date, as of Feb. 3. Since taking office Jan. 20, President Donald Trump has signed no less than 19 executive orders, from travel bans to reorganizing the National and Homeland Security Councils, creating uncertainty among Precious Metals investors and leaving them on edge. However, Krauth notes, “[The uncertainty has] been great for the Silver price and I expect this to be a continuing theme through 2017 and beyond,” adding he expects the gray metal to climb another 25.8 percent by the end of this year. In addition to Trump-related uncertainty, the recent record-high stock market could scare investors into safe-haven assets like Silver.

GOLD PRICES HAMMERED BY DOLLAR RECOVERY

As EconomicCalendar.com’s Tim Clayton reports, “An improvement in risk appetite and dollar recovery stifled further Gold demand with prices edging lower on Tuesday, although support was still firm as U.S. economic and political uncertainty continued. Monday’s U.S. economic data had little impact with a 1.3 gain in the Labor Market Conditions Index from a revised 0.6 gain the previous month and this was the fourth successive monthly advance.” Deteriorating risk appetite pressured equity markets, helping Gold peak at a 12-week high near 1,235 per ounce Monday. Clayton stated, “Wall Street indices closed above their lows, as has been the case consistently over the past few sessions, and this was significant in curbing further defensive support for Gold.” The dollar’s trade-weighted index strengthened around 0.70 percent, causing Gold prices to consolidate near $1,230 per ounce ahead of Tuesday’s open.

MINING STOCKS UPSTAGE OIL AS INVESTORS SCOUR FOR REFLATION TRADES

Following President Donald Trump’s election in November, investors have returned to sectors aligned with the global economic cycle, expecting boosts in manufacturing, infrastructure spending and global growth. “While both energy and mining stocks rose,” Reuters reporters Vikram Subhedar and Barbara Lewis said, “the latter charged higher in the second half of the year led by bellwethers such as Anglo American and Glencore, in stark contrast to a dismal 2015. Since October last year, the mining sector has easily outperformed the energy stocks on monthly returns.” There has not been a mining surge since 2010 when rising Precious Metals prices helped investors move into mining stocks, while at the same time the U.S. shale revolution took off, flooding markets and weakening oil prices. As Subhedar and Lewis noted, “the fundamentals [for miners] look more bullish as supply starts to be constrained following cuts in exploration budgets linked to the commodity price downturn of 2015.”

At 11:27 A.M. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,235.80 Up $3.10
• Silver, $17.83 Up $0.06
• Platinum, $1,010.90 Down $2.20
• Palladium, $769.60 Down $6.20

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