New Opportunity for Gold

Cassie Bastien

4/19/2017 10:01:15 AM

Daily Gold & Silver Market Report – 04/19/2017

According to CNBC reporter Louisa Bojesen, investors “have pushed spot Gold prices up to around 8 percent since the beginning” of 2017 due to geopolitical and economic uncertainty. Especially with recent events in places like Syria and North Korea, many people are turning toward those safe-haven assets such as Precious Metals. Bojesen says, “The potential for deflation is a thing of the good old days (like 2016), but even with inflation gods sprinkling inflation dust, Gold as an inflation hedge is not the only reason to buy the metal.” Kieron Hodgson, a commodity and mining analyst from Panmure Gordon & Co, says despite having a bullish outlook for the U.S. dollar, all other factors are in place to push the spot Gold price higher. As Bojeson explains, Hodgson lists “economic uncertainty, concerns over high equity valuations, trading positions (short positions were peaked around the recent U.S. rate decision and then collapsed when the conversation switched to deleveraging the Federal Reserve’s balance sheet) and indeed the pickup in inflation as being the main issues” that should support the prices of all Precious Metals. Bojesen noted, “Hodgson says that the long term trend of lower Gold prices that has been in place since 2011, will come to an end due to gathering risks, which could impact record high equity markets and lead to a correction.” Hodgson thinks Precious Metal investors will likely benefit from the risk of contagion linked to Brexit and U.S. inflation being pushed up by "Trumponomics".

Silver On the Rise – What it Means for Investors

If you have been watching any news lately, it is clear the economy has been busy – whether it is Brexit, the Fed's interest rate hikes or President Donald Trump saying the U.S. dollar is too strong. Following Trump’s comments, Trevor Gerszt with NewsMax.com says the dollar dropped nearly 0.6 percent. In retrospect, our economy works as a ripple effect, meaning “when one investment is threatened, people naturally turn to another type of investment, to protect them” such as Gold and Silver. As two of the most popular options, spot Gold and Silver prices tend to go up as other markets go down. So what does all of this mean for investors? In comparison to Gold, Silver is much cheaper, making it easier to buy and sell in smaller quantities. Furthermore, during market volatility, Silver prices tend to rise higher than Gold, as far as percentages go, which Gerszt says “[makes] it a profitable investment overall.” Additionally, supply and demand of Silver is shifting favorably for investors; inventories are on the decline due to a reduction in Silver mines over the last few years. 

At 11:01 a.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,282.40 Up $12.40
• Silver, $18.28 Up $0.09
• Platinum, $973.10 Up $6.00
• Palladium, $777.90 Down $4.90

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