Gold Prices Advance for Third Straight Day

Cassie Bastien

4/4/2017 10:26:57 AM

Daily Gold & Silver Market Report – 04/04/2017

As investors nervously await the meeting between U.S. President Donald Trump and Chinese President Xi Jinping, Gold futures climbed for a third-straight day Tuesday. Furthermore, the safe-haven asset found ground as the U.S. non-farm payrolls report Friday could contain clues regarding future interest-rate hikes. Carsten Fritsch and the commodities team at Commerzbank said in a commentary, “Gold has been profiting not only from the weak U.S. vehicle sales figures in March, which have weighed on sentiment among market participants, but also from falling stock markets and lower bond yields.” MarketWatch News Editor Rachel Koning-Beals said, “Global financial market volatility over U.S. diplomacy could definitely underpin haven Gold and Silver prices this week.” Gary Wagner of TheGoldForecast.com said, “Considering statements made by President Trump about China’s trade policies, it will be interesting to see if the two presidents can work with each other.” Koning-Beals says the Federal Reserve will look to Friday's jobs report to help determine its pace of rate hikes, saying, “A more aggressive pace of rate hikes also can erode demand for commodities that don’t offer a yield… and some insight into the Fed’s thinking could come with Wednesday’s release of the central bank’s most-recent policy meeting.”

• A recent recovery in the U.S. dollar DXY, +0.16 percent, which was up 0.2 percent on Tuesday, capped Gold’s gains, making the yellow metal less appealing to those buying the commodity using weaker currencies.

ETF’s In Focus for Another Possible Silver Rally

Investors are keeping an eye on whether or not President Trump will fulfill promises of tax cuts and deregulation. However, Seeking Alpha says, “markets have [since last week] pared the previous losses, with the consumer confidence reaching a 16-year high. During periods of high uncertainty in the equity markets, demand for safe haven assets pick up.” Besides being a Precious Metal, Silver is also varied industrial use, causing demand to peak. Although investors are anxious about the impact of rate hikes on the price of the gray metal, the fact that spot Silver prices surged 2.6 percent when interest rates were hiked in March is certainly a positive.

Oil Prices Rise in Recent Production News

Oil is on the rise Tuesday “as expectations of a drawdown in U.S. crude and product inventories outweighed news of higher Libyan production,” Reuters reporter Leah Schnurr said. “Both [Brent crude and U.S. light crude] benchmarks recovered from four-month lows last week on expectations that the Organization of the Petroleum Exporting Countries would manage to tighten supply by cutting production under a deal agreed at the end of last year.” Demand is on the rise ahead of summer, but analysts forecast this week's industry data could potentially show a decline in oil investments. Carsten Fritsch, commodities analyst at Commerzbank in Frankfurt, said, “U.S. product stocks need to be watched closely, since they have fallen massively over the last few weeks.” However, Schnurr says investors expect it to be months before oil prices respond convincingly to lower output. UBS analyst Giovanni Staunovo said, “We believe the implemented production cuts will trigger a material drawdown in [the Organization for Economic Co-operation and Development] oil inventories and thus higher crude oil prices. We expect Brent oil prices to rise above $60 a barrel in three months.”

• Benchmark Brent crude oil was up 40 cents at $53.52 a barrel by 8:10 a.m. (ET). U.S. light crude was 25 cents higher at $50.49 a barrel.
• U.S. light crude may drop to $49.62 a barrel as it failed to break resistance at $50.95, Reuters commodities markets technical analyst Wang Tao said .

At 11:26 a.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,258.30 Up $3.90
• Silver, $18.40 Up $0.11
• Platinum, $964.40 Up $6.20
• Palladium, $810.40 Up $5.90

APMEX’s Account Managers now have extended hours Mondays through Thursdays and are here to serve you until 8 p.m. (EDT)! Or call us Fridays until 6 p.m. (EDT)! If you have any questions about investing in Precious Metals or simply would prefer to place your order by telephone, we are here to help.