Gold Prices Slip to Two-Week Lows

Cassie Bastien

4/26/2017 10:10:43 AM

Daily Gold & Silver Market Report – 04/26/2017

Reuters reported, “Investors opted for riskier assets such as equities on renewed optimism over the U.S. economy and as political uncertainty in France receded,” causing demand for safe-haven assets such as Gold and Silver to soften. Mark To, head of research at Hong Kong's Wing Fung Financial Group, said, “Over the past two sessions, the momentum for Gold to move ahead has actually faded away. We can see that risk appetite has increased after the easing situation in North Korea and French election results. ... For Gold investors this may not be good news as the overall situation for the [President Donald] Trump administration is to ensure that there is sufficient capital inflows to asset markets including equities or dollar to finance fiscal deficit.” Furthermore, Reuters Reporter Nallur Sethuraman explains, “political concerns in France ebbed after business-friendly centrist Emmanuel Macron won the first round of the French vote on Sunday and opinion polls indicated less support for the [anti-EU] Marine Le Pen.” Reuters Technical Analyst Wang Tao expects spot Gold to fall to $1,249 per ounce after breaking support at $1,265.

Trump’s Tax Cut Proposal Increases Wedge between Precious and Industrial Metals

Luzi-Ann Javier with BloombergMarkets reported that speculations surrounding President Donald Trump’s proposed tax cuts have caused a wedge between Precious Metals and industrial metals. Javier said, “Gold futures posted their biggest two-day loss in seven weeks amid optimism that a possible plan to cut the U.S. corporate tax rate to 15 percent from 35 percent will boost company earnings.” Bullion has rallied in 2017, “helped in part by delays in Trump’s pro-growth agenda, tensions between the U.S. and North Korea, and political uncertainties in Europe.” BMO Capital Markets Director of Commodity Products Trading Tai Wong said in an email, “Reports that Trump would propose a sharper-than-expected corporate tax cut have helped to boost U.S. stock prices.” 

• The 120-day inverse correlation between Gold and copper is at the biggest since 2003.
• A gauge of 15 big global Gold miners tracked by Bloomberg Intelligence fell 3.5 percent, poised for the biggest decline since December 15 (BloombergMarkets.com).

At 11:10 a.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,266.00 Down $2.30
• Silver, $17.56 Down $0.15
• Platinum, $952.00 Down $6.10
• Palladium, $810.00 Up $8.40

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