Gold Set for Seven-Week Low

Cassie Bastien

4/28/2017 10:58:20 AM

Daily Gold & Silver Market Report – 04/28/2017

Spot Gold prices were poised for the biggest weekly fall in seven weeks as investors look towards higher returns by buying into riskier assets rather than Precious Metals. NASDAQ and Reuters reporter Swati Verma said, “Gold is on track for a weekly drop of about 1.5 percent, the biggest weekly percentage fall since the week of March 10, but is heading towards a gain of about 1.3 percent for the month.” Currently, things are settling down until the next round of French elections scheduled for May 7^th; until then, investors are buying Gold while it’s low and then hoping prices skyrocket once results are released for the new French President.

• Silver set for worst month since November 2016.
• Palladium hits highest since March of 2015.
• Surprisingly, however, Gold is up one percent in April (NASDAQ.com).

Silver Prices Continue to Drop

Although prices rose slightly earlier today, Silver is on track for large weekly declines, as the appeal of Precious Metals fell out of sight with investors after the first round of the French elections. Sam Bourgi with Economic Calendar reported that the Gold and Silver “ratio climbed this week to its highest level since November… On Thursday, the ratio was 73.1,” which essentially means that 73.19 ounces of Silver are needed to buy one ounce of Gold. French election optimism combined with upbeat corporate earnings to lift global equities to fresh highs. According to Bourgi, “French stocks soared to more than nine-year highs, while the broader European markets reached their highest levels since 2015.” Meanwhile, U.S. stock futures were trading slightly higher ahead of Friday’s open.

Fed Could Lean Against Tax Cut

President Trump's plan to cut business and household taxes could shift the U.S. economy into higher gear, but Reuters reporter Howard Schneider says “it may have one effect the White House would not welcome - interest rates ratcheted higher than expected by a wary central bank.” The Trump administration says there are hundreds of billions of dollars fed into the economy through deep cuts in business taxes and with more generous exemptions for individuals, it could unleash a flood of investments and make the U.S. economy more competitive than ever before. Analysts and economists who follow the U.S. central bank say that Fed officials will need to start debating if they can maintain a measured pace of rate hikes or they might need to move faster. Trump has mentioned that he hopes low rates will continue; a potential source of friction with the Fed if officials do decide they need to move faster because of his policies. Schneider  said, “An estimated up to $700 billion a year in tax cuts could threaten to derail such a scenario, especially if not all of that money finds its way into productive investments, or drives price and wage hikes.” Nonetheless, uncertainty as to whether or not and in what shape the plan will get implemented adds to other challenges the Fed faces in trying to chart its course over the next few months. IHS Markit economist Chris Christopher said, “The next few months are going to be make or break. They are going to have to show they are going to get something done.”

At 11:57 a.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,269.60 Up $2.40
• Silver, $17.30 Down $0.09
• Platinum, $951.90 Down $2.10
• Palladium, $834.00 Up $16.00

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