Gold Jumps after U.K. Election

Cassie Bastien

6/9/2017 2:48:55 PM

Daily Gold & Silver Market Report – 06/09/2017

The results of Thursday's election in the U.K. sent shock waves through the markets, causing Precious Metals including Gold to rally, but Bloomberg Market Reporter Eddie Van Der Walt says only for British investors. Furthermore, Palladium prices surged more almost 8 percent to their highest since 2001. This drastic move was triggered by the pound, which sunk after British Prime Minister Theresa May failed to win an overall majority vote. Jonathan Butler, a Precious Metals strategist at Mitsubishi Corp. in London, said, “The political situation is anything but strong and stable. There is quite a bit of potential for support for Gold, certainly in sterling and possibly also in dollars, in the near term.”

• In dollars, Gold retreated 0.3 percent to $1,274.07 an ounce as the dollar strengthened.
• Bullion is set for the first weekly loss in a month, sliding 0.4 percent.
• Gold priced in sterling rose as much as 2.2 percent to 1,007.52 pounds an ounce, a seven-week high (BloombergMarkets.com).

Silver Prices Can’t Make Up Their Minds

With much volatility Thursday, Silver prices finally leveled out early Friday morning. Christopher Lewis with FX Empire says, “I recognize that the $17.50 [per ounce] level above will probably be resistive, as it was supportive in the past. Nonetheless, I still believe that the longer-term target of $18 [per ounce] is far too interesting and juicy for traders to ignore, and that’s exactly what I expect to see.” He feels if the price of Silver can get past the $18 mark, than $20 will be more attainable . If Precious Metals continue to dip, investors will continue buying.

Oil Prices Continue to Plunge

Since the Organization of Petroleum Exporting Countries (OPEC) announced its original production cut deal last November, oil prices have continued to plunge. As NASDAQ reports, “the underlying factors for the price drop are the same as before: U.S. shale production continues to rise, inventories remain elevated and the markets are concerned that the OPEC cuts are not doing enough to drain the surplus.” However, the most recent drop in prices came from an unexpected report regarding Energy Information Administration inventory. “The report was especially bad news because both crude oil and gasoline inventories increased by 3.3 million barrels each at a time when stocks typically decline heading into the driving season. ... WTI and Brent [crude oil] dropped roughly 5 percent.” Nigeria has also shown downside risks to oil prices for quite some time, although the threat was latent for most of the year. Nigeria is set to add the equivalent of one-fifth of the size of the OPEC cuts back into the market. An oil analyst at KBC Advanced Technologies told Bloomberg, “The market is already drowning” in oil supplies that are of similar quality to Forcados, Ehsan Ul-Haq. If that isn’t enough, NASDAQ reports, “several Russian officials have made some eye-raising comments recently regarding their production.” Although nothing is for certain just yet, the comments offer an important reminder that Russia’s willingness to prop up oil prices cannot be taken for granted. Gene McGillian, research manager at Tradition Energy, told the Wall Street Journal, “Unless OPEC wants to do something else, the idea of $50 or $55 [per barrel] oil is basically not realistic.”

At 3:48 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,271.00 Down $8.60
• Silver, $17.31 Down $0.20
• Platinum, $943.80 Up $3.20
• Palladium, $867.00 Up $10.50

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