Gold Prices Hit 2-1/2 Week Lows

Cassie Bastien

10/25/2017 9:38:19 AM

Daily Gold & Silver Market Report – 10/25/2017

The price of Gold fell to a 2 1/2 week low early Wednesday, according to Reuters Reporter Peter Hobson, as reports came out “that Republican senators favored John Taylor to become the next head of the U.S. Federal Reserve drove the dollar and U.S. bond yields higher.” Hobson says that Taylor, a Stanford University economist, “is seen as someone who could put the Fed on a path of faster interest rate increases compared with current Fed Chair Janet Yellen, whose term expires next February.”  Higher interest rates tend to strengthen the dollar, reducing the appeal of dollar-denominated assets such as Gold and Silver. Commerzbank analysts said in a note, “If he (U.S. President Donald Trump) does indeed choose Taylor, Gold is likely to fall sharply.” But many traders and market investors are wondering why Gold prices have been so weak, or even numb, lately? Societe Generale Head of Metals Research Robin Bhar said, “You've got equities at record levels, the dollar creeping up, bond yields moving higher and tax cuts perhaps giving a tailwind to the U.S. economy, all of which has to be negative for Gold.”

What Is Affecting Precious Metal Prices?

Reporter Meera Shawn with Market Realist says the overall geopolitical environment has had a significant impact on the price of Precious Metals, especially the past few months. Moreover, tensions surrounding North Korea, which have been quiet in recent weeks, have boosted safe-haven assets such as Gold, Silver, Platinum and Palladium. Shawn says the topic of rising interest rates has been part of price movement within the metals market, but not particularly one way or another. Lastly, Shawn says, “Major U.S. bond prices fell on Friday, October 20, pushing the ten-year U.S. Treasury yields up towards early October’s three-month highs at 2.4 percent,” in result of the Senate vote to approve President Trump’s push for tax cuts.

Silver Expected to Start November Weak

Money Morning Resource Specialist Peter Krauth said, “I expect the price of Silver may see a bit more weakness in the first couple of weeks of November.” However, focusing on the long-term outcomes, Krauth says his Silver price forecast shows the gray metal rebounding before 2018. Although Silver prices are down 2.1 percent the past week, volatility remains within all markets, which could cause a spike in Silver prices. Nonetheless, many of this weighs on whether or not the Fed will raise rates again in December. According to the CME FedWatch Tool, there is a 96.7 percent chance the Fed will raise rates at the conclusion of the December Federal Open Market Committee meeting.

At 9:38 a.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,277.20  Down $2.20
• Silver, $17.03 Down $0.02
• Platinum, $923.40 Down $3.10
• Palladium, $972.00 Up $2.80

APMEX’s Account Managers now have extended hours Mondays through Thursdays and are here to serve you until 8 p.m. (ET)! Or call us Fridays until 6 p.m. (ET)! If you have any questions about investing in Precious Metals or simply would prefer to place your order by telephone, we are here to help.