How Trump Affects the Price of Gold

Cassie Bastien

3/9/2017 10:13:07 AM

Daily Gold & Silver Market Report – 03/09/2017

There is no doubt President Donald Trump has made his fair share of promises to help spur economic growth. However, investors remain watchful with talk of adding nearly $1 trillion to the U.S. debt, which could cause safe-haven assets such as Gold and Silver to increase in demand. “To the extent we have a large amount of debt that's yielding 0 or close to 0, it could continue to make Precious Metals attractive,” PureFunds CEO Andrew Chanin said, noting that investors are starting again to take a large interest in tangible assets within their portfolios. “People are realizing Precious Metals have been under-owned or unowned and maybe they're missing that allocation which could cause an increase in demand for Precious Metals.” Precious Metals have been around for thousands of years, Chris Ciaccia with TheStreet reported, and many think that is likely to continue.

• According to BullionVault.com, Gold and Silver have rallied nearly 8 percent and 12 percent, respectively, since the start of 2017.
• Silver, which is used in everything from your iPhone to the fillings in your teeth, has historically traded at a ratio of 70 to 1 in relation to Gold (TheStreet.com).

Why Bitcoin is Worth More than Gold

According to NASDAQ Reporter Martin Tillier, the SEC will issue a decision next week “on whether or not to recognize an ETF designed to replicate the performance of the digital currency, bitcoin, [which] would make it easier for people to invest.” Tillier said one bitcoin, a digital currency that exists as a computer record, is currently worth more than one ounce of Gold. How is something that only exists in computers worth more than a tangible metal? Tallier compares a bitcoin to the dollar saying, “Dollars have value because people will accept them in exchange for goods and services, and in that respect bitcoin is no different. ... Bitcoin will increase in value over time whereas dollars will decrease” as long as the confidence of currency remains. Bitcoin Creator Satoshi Nakamoto believed currency would become more valuable, making smaller amounts more necessary to pay for things. Furthermore, Tallier said, “The original protocol that established the [Bitcoin] currency limited the total amount that could ever be issued to around 21 million and, by making them increasingly hard to create, ensured that the rate of supply would diminish over time.” Therefore, assuming this entire bitcoin idea will hit the ground running and eventually be accepted as payment for goods and services, a bitcoin’s value is “literally programmed to increase over time.” Bitcoin not only acts like Gold being a hedge against inflation, but it is easier to store and spend; however, many investors prefer to physically hold their Precious Metals. The real test will be which one takes off first, physical Gold or the Bitcoin?

Rising Dollar Cause Gold and Silver Prices to Continue to Sink

Kitco News says, “A very strong U.S. ADP jobs report and a rallying U.S. dollar index are bearish elements for the Precious Metals” Thursday. The February ADP national employment report soared past market expectations, coming in at 298,000 jobs, far ahead of the expected 190,000. As a result, Gold and Silver prices decreased to their session lows. The European Central Bank holds its regular monetary policy meeting Thursday “and is likely to give new insight regarding its ongoing quantitative easing of monetary policy,” Kitco said. The marketplace is also looking forward to next week’s Federal Open Market Committee meeting, where the Federal Reserve is expected to raise U.S. interest rates by 0.25 percent. With all that is happening in recent new, it’s no surprise that Precious Metals prices are shifting.

• April Comex Gold was last down $6.00 an ounce at $1,210.10 and May Comex Silver was last down $0.166 at $17.36 an ounce (Forbes).

At 11:13 a.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,204.40 Down $7.70
• Silver, $17.15 Down $0.22
• Platinum, $941.60 Down $9.90
• Palladium, $754.00 Down $17.90

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