Gold Price Finally Rebounds After 8-Week Low

Cassie Bastien

5/10/2017 1:47:22 PM

Daily Gold & Silver Market Report – 05/10/2017

Spot Gold prices finally rebounded (up 0.1 percent according to Reuters reporter Swati Verma) with a weaker dollar after U.S. President Donald Trump shocked Washington by abruptly firing FBI Director James Comey. INTL FCStone analyst Edward Meir said, “We should see some decent buying set in, as a roughly 10-percent correction from the highs should make holding the Precious Metal a more attractive risk-reward proposition.” Furthermore, fears regenerated that North Korea could be gearing up for another weapons test which has also supported Gold prices. According to CME Group's FedWatch tool, interest rate futures implied traders saw close to a 90-percent chance the Federal Reserve would raise interest rates at its June 13-14 policy meeting.

• U.S. Gold futures climbed 0.4 percent to $1,221.50 an ounce.

Silver Prices Steady

With the futures market consolidating in a narrow range after a nearly three-week rout sent Silver prices to five-month lows, the gray metal was finally able to firm late Tuesday. According to Economic Calendar Market Analyst Sam Bourgi, Silver prices declined roughly 12 percent from last month’s peak. The U.S. dollar has also been a source of resistance in the early part of the week, when the greenback rallied half a percent against a basket of global peers. Bourgi reported the dollar index extended gains Tuesday, rising 0.3 percent to 99.39. In regards to economic data, the Federal Statistics Office reported Tuesday that German industrial production declined less than expected in March. Also, following a downwardly revised 1.8 percent increase the previous month, industrial output declined at a seasonally adjusted 0.4 percent.

A Year of Anomalies for Precious Metals

Looking at Precious Metals price performances, Gold steadied near seven to eight-week lows Wednesday while Platinum also took a hit, having fallen by close. Peter Major said, “The price gap between Platinum and Palladium has continued its drop to now $100, which then illustrates the support a deficit in the palladium market is providing right now.” Now investors are wondering if Palladium will actually have a premium over Platinum. Major explained, “Platinum can do most of the things that Palladium can’t do so if Palladium gets any closer to Platinum, people are just going to say, ‘Gee, Platinum is more tradable, it’s got other uses as well. I’d just as soon pay a $50 premium or maybe a $20 premium and have platinum as opposed to Palladium.’” He strongly feels that 2017 will be the year of anomalies that continue to be bigger anomalies. Major also feels Platinum mines are going to do what Gold mines have done for years now, which is “be ruthless about cutting out marginal and loss-making production.”

At 2:47 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,220.60 Up $2.20
• Silver, $16.28 Up $0.12
• Platinum, $912.30 Up $9.40
• Palladium, $802.00 Up $3.40

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