Stock, Bonds, Gold and Silver Go Up

Cassie Bastien

6/5/2017 11:35:13 AM

Daily Gold & Silver Market Report – 06/05/2017

With a disappointing jobs report, Precious Metals, especially Silver prices, started to take off Friday. In just three hours, reporter Keith Weiner with GoldSeek.com said Gold and Silver “gained $18 and 39 cents [respectively].” Not only did Gold and Silver prices go up, so did stocks and even the euro. Weiner said “this is how the monetary system is supposed to work, according to mainstream economic thought. This creates a wealth effect, as rising asset prices makes people (at least those who own those assets) feel richer.” In Silver, Weiner says as prices have risen, there has been a slight increase in abundance.

Gold Rate Seen Rising to Four-Year Highs

After disappointing monthly reports concerning U.S. employment and wages, Gold prices extended their gains to the highest level in six weeks. According to Nikos Kavalis, director and founding partner of independent consultancy Metals Focus Ltd., Gold prices will probably increase to a four-year high above $1,400 an ounce this year as a “less-than-inspiring” recovery means the Federal Reserve will not increasing the pace of raising borrowing costs, leaving rates in negative territory. Bloomberg Reporter Ranjeetha Pakiam said, “While the Federal Reserve is poised to raise interest rates at its meeting next week after increases in March and December, investors increasingly doubt the central bank’s projection for additional hikes.” Toronto-Dominion Bank’s Bart Melek said, “As we move deeper into 2017, we are probably going to expect less and less aggressive actions, so chances are that the Fed will certainly hike in June, but after that, the certainty and then the rate that they’ve been talking about, may not actually materialize to the same extent. We’re fairly confident that Gold should do well.”

June Rate Hike Probability Rises

According to the CME FedWatch tool, the probability of a June interest rate hike is up to 95.8 percent as on Monday morning, up from 91.2 percent Friday. Barbara Rockefeller with FXStreet said, “We thought the low payrolls number would fire up talk of no hike in September. But the 10-year yield remains soft at 2.179 percent (from 2.110 percent on Friday morning).” Furthermore, Rockefeller said, “The Atlanta Fed revised its Q2 GDP estimate on Friday to 3.4 percent from 4 percent on June 1, based on a drop in expected real consumer spending from 3.6 percent to 3.1 percent, in turn based on the employment report.” Regardless of where GDP is headed, the U.S. dollar has underlying support from the interest rate hike scheduled in two weeks; European Central Bank President Mario Draghi says the eurozone still needs support and inflation has not proved itself sustainable.

At 12:35 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,282.10 Up $1.70
• Silver, $17.67 Up $0.05
• Platinum, $958.80 Up $2.90
• Palladium, $846.80 Up $6.70

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