Gold Hits 5-Month High after U.S. Missile Strike

Cassie Bastien

4/7/2017 9:34:31 AM

Daily Gold & Silver Market Report – 04/07/2017

After the United States fired cruise missiles at a Syrian airbase, tensions heightened and investors moved their focus to safe-haven assets, especially Precious Metals. Commodity Discovery Fund founder Willem Middelkoop said, “There is the risk that the fight over Syria will lead to a larger confrontation in which Iran and Russia, and the U.S., could get involved, so it could have more serious implications overall. That explains why Gold moved quite fast after the news broke.” NASDAQ reporter Zandi Shabalala said, “An increase above the consensus is likely to reinforce expectations of higher U.S. interest rates, which could pressure Gold [and Silver]. Higher interest rates reduce investor appetite for the non-interest bearing Precious Metal.” Furthermore, higher U.S. rates may also mean a stronger currency, which makes dollar-denominated Gold more expensive for holders of other currencies, potentially weakening demand.

European Stocks Fall

European stocks fell Friday after a U.S. airstrike against Syria shook up many investors. MarketWatch Markets Reporter Carla Mozee said, “Stocks in Europe were tracking moves lower for U.S. stock futures, which came after the U.S. Navy fired dozens of Tomahawk cruise missiles on a Syrian air base early Friday local time.” IronFX Global Senior Analyst Charalambos Pissouros questioned, “What impact does this have on U.S.-Russian relationships, considering that Russia is Syria’s biggest ally, and what might Russia’s reaction be? Also, was this a one-off strike, or the first of many to be carried out by the U.S.? If this uncertainty escalates further in the days to come, it could keep the market in a risk-off mood in our view. Safe haven assets [such as Precious Metals] could stay supported, while equities may underperform.” Additionally, the meeting between U.S. President Donald Trump and his Chinese President Xi Jinping is set to continue Friday, which could also cause movement in the markets.

At 10:34 a.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,269.30 Up $15.50
• Silver, $18.46 Up $0.12
• Platinum, $968.60 Up $9.70
• Palladium, $807.80 Up $1.70

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