Price of Gold Starts To Rise

Cassie Bastien

6/12/2017 1:47:05 PM

Daily Gold & Silver Market Report – 06/12/2017

The U.S. Federal Reserve policy meeting taking place Tuesday and Wednesday caused Asian stocks to fall as the U.S. dollar to ease slightly, as investors expect the meeting minutes to give hints as to the pace of future 2017 interest rate increases. Also from these expectations, the price of Gold started to work its way up on growing worries. It is almost certain the Fed will raise interest rates at the meeting, but the worry comes on whether there will be additional rate hikes into 2018. Jeffrey Halley, a senior market analyst with Oanda, said, “With the UK event risk successfully negotiated, it would appear the market is putting more emphasis on this week’s FOMC [Federal Open Market Committee] rate hike.” Nithin Thomas-Prasad with BusinessDay.com noted, “Higher interest rates tend to boost the dollar and bond yields, putting pressure on Gold prices by increasing the opportunity cost of holding non-yielding bullion.” Halley also noted markets are anxious to see if the Fed becomes more dovish in its outlook.

• Asian stocks edged lower in early trade Monday following a slide by U.S. technology shares.
• The dollar index against a basket of currencies dipped 0.1 percent to 97.176 following its rise to a nine-day high of 97.500 Friday (BusinessDay.com).

Is the Supply of Silver Expected to Fall?

Brenton Garen with ETFTrends.com says Silver exchange-traded products have strengthened in recent weeks with SLV and SIVR both gaining 2 percent over the past three months. However, Garen notes, “some commodities market observers are expressing concerns about the integrity of Silver's recent jump.” ETF Daily News reports, “Given that SLV’s put-call ratio is back toward historical lows, the contrarian indicator is exhibiting a “sell” signal here.” According to a recent report by a leading Precious Metals consultancy, “Silver supply is expected to fall this year, but it won’t fall as hard as demand.” Furthermore, BullionVault says, “a possible correction in equities and ‘capped upside’ for the U.S. dollar against other major currencies – thanks in part to an improved situation in the Eurozone – could also support Silver prices, together with numerous global political risks.”

U.S. Natural Gas Futures Edge Higher

After the latest U.S. weather model called for warm temperatures over the next two weeks, Investing.com says U.S. natural gas futures edged higher Monday. Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting outlooks on spring heating demand. Typically, Investing.com says that gas prices will usually hit a seasonal low with spring's mild temperatures, before warmer weather increases demand for gas-fired electricity generation to power air conditioning. According to the U.S. Energy Information Administration, total natural gas in storage currently stands at 2.631 trillion cubic feet which is 11.2 percent lower than levels at this time a year ago but 9.0 percent above the five-year average for this time of year.

• U.S. natural gas for July delivery was at $3.078 per million British thermal units by 9:15 a.m. (ET), up 4.0 cents, or around 1.3 percent (Investing.com).

At 2:46 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,268.80 Down $2.90
• Silver, $17.05 Down $0.27
• Platinum, $947.30 Up $4.50
• Palladium, $881.10 Up $14.90

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