Dow Plummets 100 Points

Cassie Bastien

4/11/2017 10:52:47 AM

Daily Gold & Silver Market Report – 04/11/2017

Investors remain on edge as they keep a close watch on geopolitical tensions around the world. “The Dow Jones industrial average dropped more than 100 points, with Apple contributing the most losses,” CNBC Reporter Fred Imbert said. Furthermore, the Dow transports were also pressured, as United Continental's shares dropped more than 4 percent following recent video of a passenger being forcefully dragged off an overbooked flight. Safe-haven assets such as “Gold futures for June delivery rose 1.3 percent to $1,269.90 per ounce,” Imbert said.

Gold Prices Follow Rate Hike Patterns

Among many key political factors, the Federal Reserve's March 15 interest rate hike announcement was by far one of the biggest drivers for the Precious Metals market. Other political activity such as November's U.S. presidential election helped drive prices for Gold and Silver. Seeking Alpha says, “The Trump administration has suffered two strikes: the courts are blocking the implementation of new travel restrictions, and the [U.S.] House has blocked healthcare reform. In our opinion, these early defeats make it increasingly unlikely that the administration will be able to deliver on the expected pro-growth reforms that drove the market to new highs following the election.” Many investors feel a third strike may “create a confidence crisis, which makes meaningful tax reform the next issue that will be vital for Trump's presidency to gain some positive momentum.”

What’s Next for Gold Miners?

VanEck Vectors Gold Miners ETF, and other Gold-related ETFs, could be pushed much higher on “increased market uncertainty, tensions around the world, rising inflation, as well as positive fundamental and technical factors surrounding Gold miners in general,” Seeking Alpha Reporter Victor Dergunov says. Historically speaking, inflation has been the strongest driver for Gold and Silver prices, and, Dergunov says, “as prices of these underlying assets continue to appreciate, so should the companies that operate in this industry.” Considering the fundamental factors surrounding the Gold mining sector, Dergunov says, “companies such as Newmont Mining, Barrick Gold and Goldcorp should do particularly well as they have strong balance sheets, extremely high margins and are still relatively cheap.” Moreover, recent geopolitical events and mounting market uncertainty could provide support for spot Gold prices going forward. Nonetheless, Fed tightening does not necessarily mean lower Gold prices so long as inflation is present within the economy.

At 11:52 a.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,275.40 Up $20.70
• Silver, $18.38 Up $0.37
• Platinum, $967.10 Up $27.10
• Palladium, $806.20 Up $14.20

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