Gold is Getting Bored

Cassie Bastien

7/26/2017 12:38:42 PM

Daily Gold & Silver Market Report – 07/26/2017

Although political leaders continue shocking viewers like never before, one of the most popular safe-haven assets, Gold, has remained surprisingly calm. Furthermore, Bloomberg Reporter Eddie Van Der Walt says, “Miners have given up hedging future production under pressure from shareholders concerned that it pushes metals prices lower. At the same time, central bank trading has dried up, handing more control of the market to jewelers who tend to buy on dips and sell on rallies.” Matthew Turner, an analyst at Macquarie Group Ltd. in London, said, “Since Brexit, volatility has been coming down, down, down. Much of this reflects wider markets but it also seems like many of the shocks that rippled through the Gold market in the past have disappeared.” Van Der Walt says Gold’s 120-day volatility was around 18 percent when Britain voted to leave the European Union, marking a two-year high. Since then, it has fallen to about 10 percent, the lowest since 2005. And while investors thrive on volatility and rallies within Precious Metals, Van Der Walt says measures of global shares are at record highs.

Dollar Steadies Ahead of U.S. Fed Meeting Results

With investors largely expecting the Federal Reserve to remain on course regarding another interest rate hikes this year and offer additional insight into its intention to start to selling its $4.5 trillion in holdings of Treasury’s and mortgage-related bonds, market reporter Carla Mozee with MarketWatch says the U.S. dollar has steadied. Although Fed Chair Janet Yellen isn’t scheduled to hold a news conference after the Fed releases its statement, results of the Federal Open Market Committee meeting are due 2 p.m. (ET) Wednesday. Matthew Weller, senior market analyst at Faraday Research, said if the Fed either announces or implies an imminent reduction in its balance sheet, the buck could rally toward its falling 50-day moving average, referring to a closely watched chart level.

• The U.S. Dollar Index recently hit its lowest level in more than a year and lost 1.4 percent last week (MarketWatch.com).

Industry Rediscovers How to Make Money at Lower Prices

“Big Oil is starting to beat the crude-market slump as the industry rediscovers how to make money at lower prices,” Bloomberg Reporter Rakteem Katakey said. According to analyst estimates compiled by Bloomberg, Exxon Mobil Corp. and Royal Dutch Shell Plc are forecast to see year-over-year profits from the second quarter more than double, far surpassing the 8 percent gain in benchmark Brent crude. BP Plc Chief Executive Officer Bob Dudley said earlier this month in Istanbul said, “We have to remain very disciplined about spending and not assume that the price will go up.” Katakey said Bernstein analyst Oswald Clint wrote in a July 19 report, “Europe’s seven-biggest oil companies together generated 42 percent more cash in the second quarter than a year earlier.” Clint predicts oil prices of $50 per barrel for 2017 and 2018 and noted “over the next two to three quarters producers should generate enough cash to also phase out dividends paid as shares.” Katakey said, “Despite cutting billions of dollars of capital expenditure, the producers are now proceeding with projects they began before the downturn. [The International Energy Agency said this month] the industry is expected to increase spending “modestly” in addition to oil and gas exploration and production projects this year after a 44 percent plunge between 2014 and 2016.”

At 1:39 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,252.30 Down $2.80
• Silver, $16.62 Down $0.10
• Platinum, $924.00 Down $0.60
• Palladium, $872.40 Up $7.40

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