Gold Prices Firm on Weaker Dollar

Cassie Bastien

6/23/2017 1:06:35 PM

Daily Gold & Silver Market Report – 06/23/2017

The softening U.S. dollar, down 0.2 percent, along with risk aversion due to geopolitical events boosted the safe-haven appeal of Precious Metals Friday. Brian Lan, managing director at Gold dealer GoldSilver Central in Singapore, said , “The political situation in the United States, the UK, and North Korea-related developments are among the other factors creating a safe-haven demand for Gold. ... Gold is used as an alternative investment during situations of political and financial uncertainty.” Investors will closely watch U.S. economic data, especially for possible news regarding a third and final 2017 Federal Reserve interest rate hike, said to be discussed next week. Reuters Reporter Nithin ThomasPrasad said, “U.S. data due next week include the June consumer confidence indicator, pending home sales, crude oil inventories, revised first-quarter GDP and the [Personal consumption expenditures] price index.”

Have Silver Prices Already Peaked for 2017?

Both Silver and Gold follow cyclical patterns observed by watching the calendar, according to Business Buzz by TGDaily.com. Reporter Nikole Wilson says Precious Metals in general tend to peak in April before trending downward, and if this stands true than the question arises, has Silver already peaked for 2017? Though many question if this rule holds true this year, Wilson says, “If you are prone to believe base metals will stay up front, you might be getting ready to buy Silver in May and June.” The upside to Silver is that it has multiple different uses. Wilson explains Silver is “used as a Precious Metal for jewelry, high-end furnishings, etc., but it is also used extensively for industrial purposes [providing] the foundation of the base metals market.” President Donald Trump's recently released tax cuts propose a reduction in the corporate income tax from 39 percent to 15 percent. If it succeeds, Silver could become the runaway favorite among metals. If this does happen, Wilson says “It would put people to work who, in turn, would pay income taxes and boost government revenues, which then could spur a run on base metals that would include Silver and Copper.”

U.S. Equities Experience Biggest Outflow

Data from Bank of America Merrill Lynch (BAML) Friday showed investors pulled $7.7 billion from U.S. equities, the biggest outflows in five weeks. Fox Business and Reuters Reporter Claire Milhench stated, “Globally, equities attracted just $500 million in the week to Wednesday as the heavy outflows from U.S. stocks offset $2.1 billion of inflows to emerging markets and $1.1 billion of inflows to European stocks.” Furthermore, Amazon buying upscale grocer Whole Foods Market helped the S&P 500 climb to record highs with tech stocks rebounding from recent declines. Even still, some investors are pulling away as BAML data displayed nearly $200 million was pulled from tech funds in the week to Wednesday. BAML said “This is a country “that has spent 33 percent of the past 200 years in default and has defaulted three times in the past 23 years. Central banks, the reason behind high asset prices and low volatility are now in a desperate dilemma.”

At 2:06 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,258.30 Up $7.40
• Silver, $16.79 Up $0.17
• Platinum, $933.10 Up $4.50
• Palladium, $865.20 Down $25.30

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