Despite Weakness, Long-Term Views for Precious Metals

Cassie Bastien

5/12/2017 9:41:45 AM

Daily Gold & Silver Market Report – 05/12/2017

Although we have watched Gold and Silver take a hit the past couple of weeks, one of the world's leading Precious Metals analysts, Jeff Christian, thinks it is “more of a short-term reaction to subsiding geopolitical fears and reiterates his long-term bullish outlook based on a number of fundamental drivers.” In April, the U.S. bombed a Syrian airbase and President Donald Trump's administration commented on sending an aircraft carrier group off the Korean peninsula. At that time, spot Gold prices were around $1,250 per ounce. CommodityTradeMantra.com says Christian sees positivity for Gold going forward, arguing the yellow metal is driven by “investment demand, which is heavily influenced by economic conditions, financial market trends, and political uncertainties.” However, Christian is focusing more on long-term effects, saying Precious Metal prices have “the potential to accelerate a little bit in 2018, but really beyond 2018, we expect another recession to emerge in the U.S., possibly in 2018 or 2019.” Beyond that time-frame, Christian remains very pessimistic about U.S. debt and other long-term economic and financial market trends.

Gold Prices Firm with Support of U.S. Political Concerns

Even with the U.S. dollar heading for its strongest week of 2017, spot Gold prices managed to also make a gain and are set to close the week slightly higher on concerns surrounding the U.S. ETF Securities Analyst Martin Arnold mentioned the removal of FBI Chief James Comey and the upcoming British election as sources of uncertainty, saying, “You continue to see the political uncertainty continue to support Gold.” Arnold also noted support following concerns that equity valuations, which have been boosted by promises of more spending by the Trump administration, could run out of steam due to “policy paralysis”. In addition to that, recent news from CME Group's FedWatch showed traders have 100 percent expectations of an interest rate increase in June. With Precious Metals being so sensitive to rising interest rates, investors are on their toes waiting for mid-June.

Trump Intensifies War with Comey

President Trump took his “fight” with the FBI to a new level early Friday morning, mentioning on Twitter that he may have taped his conversations with Former-Director Comey before firing him. Additionally, Trump suggested he may cancel future press briefings and instead “hand out written responses for the sake of accuracy” because “as a very active President with lots of things happening, it is not possible for my surrogates to stand at podium with perfect accuracy!” Yet try as he might, Bloomberg says Trump cannot escape Russia as congressional probes push ahead and the nation’s top law-enforcement agency shows no sign of backing down in the face of the president’s criticism. Trump told NBC’s Lester Holt he had sent a letter to Republican Senator Lindsey Graham, certifying he had no business interests in Russia: “I have no investments in Russia, none whatsoever.” Bloomberg Politics added, “The clash between the president and the nation’s premier law enforcement agency continued a week of high drama in Washington. Fired Acting Attorney General Sally Yates testimony May 8 raised new questions about why the White House waited 18 days to dismiss National Security Advisor Michael Flynn from his post after he misled officials -- including Vice President Mike Pence -- about his conversations with Russia’s ambassador to the U.S.” Nonetheless, Trump dispatched with that explanation, saying he would have fired the director regardless of what his top Justice Department officials said. Even with all the drama surrounding Washington, the administration tried Thursday to show it was conducting business as usual.

At 10:41 a.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,232.30 Up $5.60
• Silver, $16.51 Up $0.15
• Platinum, $921.30 Up $1.60
• Palladium, $807.00 Up $3.00

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