The Best Is Yet to Come for Oil and Silver Prices

Cassie Bastien

5/16/2017 8:29:02 AM

Daily Gold & Silver Market Report – 05/16/2017

Commodities started the week strong with both crude oil and Silver prices gaining early Monday morning. Although both suffered in recent weeks, some investors believe those prices will continue to rise. But what caused this boost? CNBC Reporter Matt Maley says crude oil rallied not only because of an agreement Sunday between Saudi Arabia and Russia, which would extend existing output cuts through next March, but also a weaker U.S. dollar. What's more is after a severe 12 percent correction over just a four-week time frame, with help from a lower U.S. dollar, Silver prices have been recovering since Wednesday. Maley said, “The positioning within Silver right now is no longer anywhere near as bearish as it was last month. Thus, the selling pressure from this area should continue to abate, which raises the odds that this bounce in Silver will prove to be more than simply a ‘dead cat bounce.’”

U.S. Rate Hike Prices Guide Gold Prices

Prathamesh Mallya with EconomicTimes.com says the recent fall in spot Gold prices “was on account of low risk and uncertainty across the globe with the outcome of the French elections [and the] U.S. Federal Reserve being more hawkish by giving a possibility of two more rate hikes in 2017.” Furthermore, Mallya explains, “the labor market is close to full employment, with the unemployment rate near a 10-year low of 4.4 percent.” With recent low prices for the yellow metal, investors were able to bargain shop within the markets. However, Mallya says “there is not much support in terms of the news flow from any part of the globe (for prices to rise) and there is not much action in the physical markets in India as well as China.” With the next Fed meeting scheduled for the June 14, investors are keeping an eye on Gold prices across the globe. Mallya also notes that European Central Bank President Mario Draghi is speaking May 18, which could create volatility across commodity markets, including Precious Metals.

At 9:29 a.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,236.70 Up $4.10
• Silver, $16.81 Up $0.11
• Platinum, $941.70 Up $11.00
• Palladium, $802.90 Up $1.90

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