Gold Prices Hit 7-Week Highs

Cassie Bastien

7/31/2017 1:02:55 PM

Daily Gold & Silver Market Report – 07/31/2017

Boosted by a struggling dollar and U.S. economic data that has caused investors to doubt whether the Federal Reserve will increase interest rates again this year, Gold values have climbed above $1,270 per ounce. Commerzbank Analyst Eugen Weinberg said, “Dollar weakness is driving the Gold price. It's not just against the euro, it's against most major currencies. U.S. politics is a mess and U.S. data has not been inspiring.” Although the Fed raised interest rates twice already this year, Reuters Reporter Pratima Desai said, “Analysts said decelerating wage growth and subdued inflation have weakened the case for another rate rise this year. [Additionally,] hopes that President Donald Trump's administration will implement tax reforms and economic stimulus in the near future, seen as dollar-positive factors, faded after the U.S. Senate on Friday failed to dismantle Obamacare, in another political setback for the president.” However, many investors don’t foresee this rally lasting very long; Desai said the weak physical demand for Gold prices are limiting its growth.

Silver Prices Outperform Gold

Many may not even realize it, but Silver has outperformed Gold even with lower-than-average spot prices and sales. But commodities reporter Steve St. Angelo with Investing.com says these lower prices are only temporary and will rise once “the market surges as the highly inflated stock market finally cracks and plunges lower.” When the stock markets do crash, investors who preemptively moved their assets into tangible metals will see a significant increase, or so St. Angelo says. Although it is true that in “dollar terms”, investors bought more physical Gold than Silver, St. Angelo notes it is not so much how many dollars you have but how many ounces. In relative terms, this means investors are buying a larger percentage of Silver supply than Gold.

Concerns Surrounding North Korea Continue

North Korea tested its first intercontinental ballistic missile (ICBM) on July 4. Former U.S. Ambassador to the United Nations, Bill Richardson, told CBS News that test was a “game changer” because Kim Jong Un is “basically saying to President Trump 'come at me.” It has been confirmed North Korea launched its second successful ICBM test late Friday. When pressed on how he would “take care” of the North Koreans, President Trump told reporters, “We'll handle North Korea, we'll be able to handle North Korea, it will be handled, we handle everything.” As the U.S. assesses the next steps, many officials feel we may be too late. CBS News Reporter Emily Tillett said, “Analysts say Friday's launch proves that North Korea could be capable of hitting the U.S. mainland, including Los Angeles and possibly Chicago, New York and near Washington, D.C.” With questions surrounding if and when this could happen, as well as if and how President Trump will “take care” of this concern, many investors are turning to Precious Metals as a safe-haven asset.

At 2:03 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,270.40 Down $1.90
• Silver, $16.89 Up $0.09
• Platinum, $942.50 Up $4.90
• Palladium, $891.10 Up $5.00

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