Yellen Can’t Halt Trump Gold Rally

Cassie Bastien

2/20/2017 9:08:10 AM

Daily Gold & Silver Market Report – 02/20/2017

Bloomberg Markets reporter Luzi-Ann Javier said Gold bulls “should’ve had more faith,” acting as if they can’t believe a good thing when it’s happening. Right before Gold prices neared a two-month high and capped a third straight week of gains, Javier said, “hedge funds reduced their wagers on a bullion rally for the first time in three weeks.” Even with concern of President Donald Trump’s fiscal policies and anxiety regarding this year’s elections in the Netherlands, France and Germany, investors have snapped up the Precious Metals market. “Any indication that there could be more exits from the [European Union] could make money come into Gold -- any sign of potential European instability,” BB&T Wealth Management Senior Vice President Walter Hellwig said. “There are also concerns about the U.S. deficit because Trump’s fiscal policy is going to be very aggressive, and that could also benefit Gold.” Although investors don’t believe her, Federal Reserve Chair Janet Yellen told a Senate panel last week that more interest rate hikes are to come to help the U.S. economy stay on course. Suki Cooper, an analyst at Standard Chartered in New York, said that any decline in Gold prices “caused by the Fed raising rates next month would be temporary and could be a buying opportunity.”

Why Silver Stocks Could Surge in 2017

Moe Zulfiqar with Lombardi Letter said demand for the gray metal could soar and buying into Silver stocks could be the best way to make money. Within the Silver market, there’ i a disparity between the basic economic factors of supply and demand. The demand for Silver is currently soaring, while the supply side is struggling. Despite the new U.S. administration being friendly toward coal and other fossil fuels, Silver is used in solar cells, making Silver demand solid. Zulfiqar said investors need to look beyond the U.S.noting that “solar energy is becoming mainstream, and it’s going to require Silver." Furthermore, Silver is used as a store of value, similar to Gold. Investors rush toward the gray metal in times of uncertainty and currency depreciation. On the other hand, Zulfiqar said there isn’t enough Silver being produced, causing supply to run low. Zulfiqar said, “It’s not irrational to think there could be a shortage of some sort in the Silver market. We have soaring demand and anemic supply. Economics 101 suggests this is a perfect recipe for higher Silver prices.” How high of prices are we talking? That all depends on the Gold-to-Silver ratio.

Crude Oil Prices Up After a Weekly Loss

“Crude oil prices extended their volatility in Asian trade on Monday following a first weekly loss in the last three weeks,” EconomicCalendar.com analyst Alexander Gorodezky said. “Moving between small gains and losses due to the opposing market fundamentals,” Gorodezky reported oil prices trading above $50 per barrel since the start of 2017. Gorodezky noted, “Latest reports showed that OPEC producers have slashed almost 90 percent of their agreed supplies” in January. Still, thanks to continued increasing inventories from U.S. shale players, U.S. production strongly weighed on oil prices the last couple of weeks.

• The Energy Information Administration reported a solid growth in U.S. oil stocks in the last few straight weeks.
• Baker Hughes reported a fifth consecutive week of growth in U.S. oil rig counts to 597, almost 80% higher than the low touched in May 2016.

At 10:42 a.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,240.10 Down $0.30
• Silver, $18.12 Down $0.01
• Platinum, $1,005.40 Up $0.40
• Palladium, $773.50 Down $7.70

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