Dollar Recovery Caps Gold Prices

Cassie Bastien

3/29/2017 11:25:09 AM

Daily Gold & Silver Market Report – 03/29/2017

Although the impact was offset by a fresh decline in eurozone yields and overall firm demand for Gold, Tim Clayton with Economic Calendar said Gold price increases were curbed due to the U.S. dollar finally rebounding and an improved tone surrounding risk appetite. Clayton said, “The U.S. consumer confidence data was stronger than expected with a sharp increase to 125.6 for March from a revised 116.1 the previous month which was the highest level for over 16 years.” Furthermore, Federal Reserve Vice-Chair Stanley Fischer mentioned two interest rate hike increases are very likely in 2017, causing positive impacts on yield potentials. In addition, U.S. bond yields moved to highs around 2.42 percent and the combination pressured Gold spot prices. Although there was mixed evidence on physical demand, Clayton said, “The U.S. data releases are unlikely to have a major impact with markets continuing to focus on trends in the dollar and risk appetite.”

Silver Looks Poised For a Massive Rally

Although Gold prices are experiencing an 8.5 percent gain as a result of the so-called “Trump-mentum,” ETF Daily News reporter Sean Brodrick says Silver prices are “sprinting with a 13.5 percent gain.” If this gain continues, Brodrick believes this new Precious Metals bull market could result in a 65 percent gain for Silver for 2017, because “more coiling up [of the chart] means the eventual explosion higher will only be bigger.” So what’s fueling this move? ETF Daily News says it is due to multiple reasons such as the rarity of Silver, a decrease in Silver mining from the 2015 peak and a surge in industrial demand for not only Silver, but all Precious Metals. Silver is used for many different things, from wiring in cell phones to chemical reagents to the paste used in solar cells. Brodrick says he hopes we experience a pullback in Silver prices to allow a buying opportunity for investors. Then, hopefully, Silver bypasses Gold prices and skyrockets.

Investors are Bailing Out Of U.S. Stock ETFs

The recent debate surrounding President Donald Trump’s first big legislation, the Affordable Healthcare Act, has caused an increase in market volatility and subsequently raised investors’ concerns about other promises from Trump. A report from SeekingAlpha says “Investors are worried that if the Republican cannot deliver on such an important issue, then the future of tax reforms, the primary reason for the stock market rally since the election, is also uncertain.” Instead, investors are shifting their portfolios toward consumer defensive sectors like utilities and safe-havens assets such as Precious Metals. 

At 12:25 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,254.10 Down $4.30
• Silver, $18.30 Down $0.03
• Platinum, $954.70 Down $5.00
• Palladium, $792.60 Down $2.00

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