Silver May Be Poised for a Rebound

APMEX

8/22/2018 10:56:24 AM

Daily Gold & Silver Market Report – 08/22/2018

Due to the ongoing strength of the U.S. dollar, commodities trading in dollars have had a tough year, including Silver. Since May 2018, the Bloomberg Commodity Index has dropped 9.9 percent, a decline that began just as the trade dispute between the United States and China gained momentum. However, Wells Fargo Head of Real Asset Strategy John LaForge stated in a release, “We should note that Wells Fargo Investment Institute (WFII) believes the dollar’s strength likely will fade into year-end.”

The investment strategy from Wells Fargo recommends Silver as an area of top priority for investors. Right now, the low spot prices for Silver make it a bargain for long-term investment. LaForge said, “Silver looks to be the best buy. It is down 12 percent, since May 23 and it has a good fundamental backdrop... For long-term investors, accumulating silver in the $13-$14 [per ounce] range, looks like a ‘good deal,’ in our view.”

Gold Prices Gain After Trump Remarks

On Tuesday, Gold prices climbed after U.S. President Donald Trump stated he was “not thrilled” with higher interest rates announced by the Federal Reserve. These remarks led to a weaker U.S. dollar while continuing the gains for Gold. U.S. futures for some commodities including Gold were also up. The dollar index also showed declines against the Chinese yen. According to a release by Reuters, Atlanta Federal Reserve President Raphael Bostic announced this week that he expected another interest rate hike later this year amid trade tensions that add a degree of downside risk to an otherwise favorable U.S. market forecast. A number of economists for the U.S. business sector pointed out new tariffs on billions of dollars in Chinese imports will likely cause Americans to pay more, further weakening the value of the U.S. dollar.

Platinum Group Metals Prices Remain Volatile

Platinum is experiencing its lowest prices in more than a decade, with Palladium is seeing new lows as well. As with Gold and Silver, PGMs have seen a great deal of volatility this year due to a strong U.S. dollar, fluctuations in demand and trade tensions among the world’s leading economies. Platinum is the rarest Precious Metal but is also the most expensive to produce, mined almost exclusively in South Africa. Because of this high cost, Palladium, with similar properties, has long been known as a low-cost substitute for Platinum. As noted on Seeking Alpha, Palladium climbed to its peak price in January 2018 and has gone down somewhat since, but is still trading at a much higher rate than in the first quarter of 2016. Continued trade issues between the United States and China, along with diminishing demands from the fuel-cell car industry, are likely to lead to continued volatility for all Platinum Group Metals.

At 11:54 a.m. (ET), the APMEX Gold and Silver spot prices were:

• Gold, $1,198.20 Up $2.50
• Silver, $14.82 Down $0.05
• Platinum, $797.10 Up $1.10
• Palladium, $940.60 Up $5.60

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