What Could Happen to Silver Prices in July?

Cassie Bastien

6/29/2017 12:52:25 PM

Daily Gold & Silver Market Report – 06/29/2017

As the month of June comes to an end, it is easier to see the price of Silver trends over the past 30 days. Even with a Federal Reserve interest rate hike and a spot price decline overall, the gray metal has shown positive signs of an increase. Gold Eagle News Reporter Darren Capriotti questions if the absence of another Fed meeting like June’s could be good for the Precious Metal. Capriotti says, “Although the controversial political headlines seem to have tapered off a bit over the last month, there is always one thing about these surprising headlines no analyst can count on: they're unpredictable.” With Silver prices being low in comparison to other Precious Metals, they are much more sensitive to movement within commodities, which is why Capriotti says “worldwide economic and political headlines will always bear watching.” In addition to market movements, Capriotti says investors mainly interested in Silver will also watch Gold “to get a sense of where the less expensive metal might be heading.” DailyFX recently put out a report that said it is very difficult to watch just one metal, “Because the Precious Metals are highly linked to the strength of the dollar, they’ll tend to move in harmony over the long term.” Nonetheless, there are key reports and data to keep a close watch on to see what could potentially happen to Silver prices in the month of July, such as the U.S. dollar index and the industrial use of Silver along with the corresponding supply/demand factors that correspond.

Gold Prices Retreat as Government Bonds Yields Rally

After a three-session climb, Gold prices started to drop Thursday after a global rise in government bond yields lowered the appeal of investing in safe-haven assets such as Precious Metals. Reporter Mark Decambre with MarketWatch says “The 10-year Treasury note was at 2.28 percent, compared with 2.146 percent to start the week, while the 10-year German bond, known as the bund, was yielding 0.43 percent, compared with 0.254 percent at the start of the week.” Furthermore, recent hawkish remarks from the Federal Reserve come as the Fed Reserve “also has been attempting to normalize its monetary regime in the wake of the 2008-09 financial crisis.” Decambre goes in to explain, “Such moves in the past have tended to result in sharp swings in markets known as taper tantrums. In 2013, the yield on the 10-year Treasury note surged after then-Fed boss Ben Bernanke said the central bank may slow its asset-purchase program.” Goldman Sachs analysts led by Jeff Currie said in a research note Thursday they expect rising interest rates to pressure the yellow metal. Conversely, pressure on Gold could be offset by weak U.S. global growth, causing the appetite for Precious Metals from emerging-markets amid expected softness in the dollar and peak supply late in 2017, “Making gold more attractive to longer term investors.”

Recent Fall in Commodity Prices Could Trigger Buying Opportunity

Analysts say the recent drop in commodity prices could result in a hot buying opportunity for all investors. According to data from ETF Securities, commodity prices have dropped 5.8 percent, with industrial metals down 4.4 percent, over the past six months. MorningStar Reporter Karen Kowk says global growth “should support demand for commodities – at least for metals – which should encourage a more positive price momentum.”

At 1:52 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,248.20 Down $3.10
• Silver, $16.75 Down $0.12
• Platinum, $922.20 Down $3.00
• Palladium, $854.80 Down $9.90

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