Gold and Silver Prices Up Ahead of French Elections

Cassie Bastien

4/21/2017 1:17:29 PM

Daily Gold & Silver Market Report – 04/21/2017

With the first round of French presidential elections scheduled for this Sunday, banter between support and resistance in Precious Metal prices continues. James Stanley, currency strategist with DailyFX, feels strongly that when election results are released, we will see a move in Gold and Silver prices. Why, you ask? If either Jean-Luc Melanchon or Marine Le Pen make it to the next round, investors may see heightened geopolitical risk out of Europe, which will likely extend the up-trend in spot prices. Conversely, Stanley says, “if we get a second round with Emmanuel Macron and Francois Fillon, that fear might take a back seat as fears of ‘bigger issues’ in Europe recede; and this could further allay those themes of geopolitical pressure that became prominent in early-April.”

In addition to Gold, Silver prices are up almost 3 percent since last Thursday, according to market analyst Sam Bourgi with EconomicCalendar.com. Although European stocks were trading slightly higher midday Friday, market growth was subdued as investors turned toward the French election. As Bourgi reports, “Latest polls show far-right leader Marine Le Pen advancing to the second-round run-off election against centrist Emmanuel Macron. France’s multi-stage election goes to a second vote if no candidate secures a majority in the initial round.” Nevertheless, the commonly used term of ‘geopolitical uncertainty’ recently has caused investors around the world to keep a close watch on world markets.

OPEC Cut Doubts Put Oil on Track for Biggest Weekly Drop

CNBC reported Brent crude oil was on course for its biggest weekly drop in a month due to worries that an OPEC-led production cut will give balance back to an oversupplied market. Russian Energy Minister Alexander Novak declined to say whether his country would adhere to an extension before a joint meeting on May 25, saying global stocks were declining. “The situation has gradually been improving since the beginning of March.” Nordic bank SEB Chief Commodities Analyst Bjarne Schieldrop said, “Not only is there no need for [extending production cuts], but it would also create a risk for more stimulus of the U.S. shale oil sector, which might make it difficult for OPEC to re-enter the market again with its full volume at a later stage.” Reuters reports, “Demand for crude oil is set to rise in the coming weeks as refineries around the world return from seasonal maintenance ahead of peak summer demand.” Furthermore, exports from Iran, which was exempt from the cuts, are set to hit a 14-month low in May, suggesting the country is struggling to raise exports after clearing out stocks stored on tankers. Reuters said the chief executive of France's Total warned this week that prices could fall further due to rising U.S. production.

• Both oil benchmarks fell this week as doubts emerged over the effect of the OPEC/non-OPEC production cut by almost 1.8 million barrels per day (bpd) during the first half of the year.
• Thomson Reuters Eikon data shows that a record 48 million bpd of crude is being shipped across ocean waters in April, up 5.8 percent since December (CNBC.com).

At 2:17 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,287.70 Up $3.00
• Silver, $17.98 Down $0.15
• Platinum, $977.60 Up $4.10
• Palladium, $795.50 Down $12.40

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