Gold Finally on the Rise

Cassie Bastien

3/13/2017 12:31:13 PM

Daily Gold & Silver Market Report – 03/13/2017

After nine straight sessions of losses, led by strong expectations of an interest rate hike at the Federal Reserve's Wednesday meeting, Gold prices are finally turning positive early Monday morning due to “uncertainty surrounding elections in the Netherlands” MarketWatch News Editor Rachel Koning Beals said. Koning Beals said according to CME’s FedWatch Tool, “the Fed-funds futures market is currently pricing in a nearly 90 percent chance that the Fed will raise interest rates at the conclusion of its two-day meeting the Wednesday.” Gold, known as a safe-haven asset, has more people investing due to uncertainty in the air, causing prices to finally rise.

• Gold for April delivery rose $3.40, or nearly 0.3 percent, to $1,207.90.
• The yellow metal’s nine-session slide has marked the longest streak of declines since July 2015, FactSet data showed.
• According to the Commodity Futures Trading Commission’s statistics, the latest fall in the price of Gold was accompanied by a reduction in net long positions held by speculative financial investors (MarketWatch.com).

Silver Prices Bouncing Into Resistance

Starting last Friday, Silver prices, along with other Precious Metals prices, are finally on their way up. DailyFX Market Analyst Paul Robinson said, “The bounce is carrying over so far to start the week, but is already facing resistance in the low-17s, an area we had penciled in as possible support last week.” Although neither Gold nor Silver have reached a level of support to provide comfort to investors, many are eager to see the results of Precious Metals after this well-anticipated interest rate hike scheduled to happen later this week.

Bumpy Roads Ahead for Commodities

“The dynamics of the traditional drivers of market — geopolitics, monetary policy, currency and weather,” TheHinduBusinessLine.com Commodities Editor G Chandrashekhar says, “are going to play an important role in impacting commodity fundamentals and, in turn, prices.” From a worldwide perspective, those involved with the commodity market are preparing for a tidal wave of events, starting with the Federal Reserve raising interest rates, that are set to heighten risk, leaving a large impact on the marketplace. If this expected rate hike does occur, Chandrashekhar says it will “likely send the dollar soaring higher as and when the rate hike takes place and will, in turn, cap the upside for commodity prices.” In addition, President Donald Trump’s promises of economic growth will also boost commodity consumption. A debt ceiling resolution would provide insights on fiscal policy and send strong signals to equities and bond markets. Rationally speaking, market uncertainties should increase Precious Metal prices; however, Gold is facing its own set of challenges, with weak demand for two of the world’s largest Gold importers and consumers, India and China.

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