Gold Price Surge As Risk Aversion Swept Financial Markets

Cassie Bastien

4/12/2017 10:01:45 AM

Daily Gold & Silver Market Report – 04/12/2017

Senior Currency Strategist Ilya Spivak with DailyFX says, “Haven-seeking capital flows pushed up Treasury bonds and sent yields lower while the priced-in 2017 [Federal Reserve interest] rate hike outlook implied in futures markets flattened.” This strengthened the appeal of non-interest-bearing assets, including Gold. A risk-off mood may continue boosting the spot Gold price as U.S. Secretary of State Rex Tillerson travels to Russia, where Spivak says a “diplomatic showdown” could be possible after the recent missile strikes against Syria. Additionally, S&P 500 futures are down alongside local stock markets in Asian trade, suggesting investors remain cautious.

Silver Climbs to Six-Week Highs

As geopolitical uncertainty drove up demand for traditional safe-haven assets, spot Silver prices rose to six-week highs early Wednesday morning. Economic Calendar Market Analyst Sam Bourgi reports Silver prices have gained 2.3 percent the past two days, saying, “Bullion surged more than $20 on Tuesday to reach its highest level in five months.” The main driver for Precious Metals currently seems to be geopolitical uncertainty surrounding Syria. Bourgi notes, “Earlier this week, U.S. Secretary of State Rex Tillerson said Russia must abandon support of Syrian President Bashar Assad. Meanwhile, North Korea has warned of “catastrophic consequences” in response to further provocation by the U.S. Trump has called on China to alleviate the “problem” posed by Pyongyang.” The dollar index changed very little Wednesday following two days of losses due to gains in the Precious Metals market.

Oil Prices Set for Longest Gain Since 2012

In addition to geopolitical uncertainty surrounding Precious Metals, oil is also being affected. Bloomberg Markets Reporter Grant Smith said oil progressed for its eighth day in London, its the longest gain since 2012, “on speculation Saudi Arabia will support an extension to OPEC-led output cuts just as stockpiles show signs of shrinking. ... Saudi Arabia is likely to back prolonging the curbs into the second half of 2017 in an effort to boost prices.” In addition, other countries such as Kuwait have expressed public support for an extension. Speculation that OPEC “and its allies will extend their six-month pact aimed at eroding a global glut is helping boost prices,” Smith says. Abhishek Deshpande, chief energy analyst at Natixis SA in London, said in a Bloomberg television interview, “OPEC just has to have patience because the markets are rebalancing.”

• U.S. crude stockpiles drop 1.3 million barrels last week: API.
• Nationwide inventories have expanded by about 56 million barrels since the start of 2017 (BloombergMarkets.com).

At 11:02 a.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,278.70 Up $4.00
• Silver, $18.44 Up $0.09
• Platinum, $968.50 Down $1.50
• Palladium, $795.80 Down  $9.40

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.