Gold Price Tops $1,200 as New U.S. Tariffs Commence

APMEX

9/17/2018 10:49:15 AM

Daily Gold & Silver Market Report – 09/17/2018

• Price of Gold sees a lift in Monday morning trading.
• China could refuse further trade negotiations with the U.S. due to a threat of tariffs.
• Overproduction from Platinum mines could lead to long-term low prices.
• Economists predict a three-year slump for Platinum.

On Monday, the price of Gold again topped $1,200 per ounce, a critical threshold for the Precious Metal. This strength comes during continued concern over the ongoing trade war between the United States and China, the two largest economies in the world. Gold futures were also up Monday morning, a signal of high expectations for Gold in the coming weeks. Much of the financial market will likely be focused on the U.S. tariffs set to commence against China. According to Investing.com, White House officials stated the tariffs will likely be in the 10 percent range, rather than the 25 percent mark that President Donald Trump recently announced.

According to the same article, the Wall Street Journal reported the Chinese government might decline the invitation to take part in further trade negotiations later this month. They see the Trump administration's tariffs on imported goods as a direct threat and they do not wish to participate in trade discussion while being threatened. The WSJ also mentioned officials in China are considering retaliatory steps toward the U.S. if the tariffs do go into place. Amid all of this global tension, investors have stayed away from dollar-traded Gold, which some see as a signal that the Precious Metal may no longer be seen as a safe-haven asset.

Platinum Mining Continues Operations Even at Record Low Prices

While Platinum prices have been suffering for months, the largest mining operations continue to produce at a similar capacity. According to a Bloomberg report published by MSN.com, some economists estimate nearly half of the total Platinum output from South African mining will be unprofitable. One of the world’s top suppliers, Anglo American Platinum Ltd., has increased production. This decision may be because the South African rand is currently weak, which makes production less costly, improving profit margins.

However, these output levels could lead to an oversupply of Platinum in the marketplace, which could keep prices down. Johnson Matthey PLC estimated there will be a 316,000 ounce surplus of Platinum this year. The report states many economists agree that prices will be down for at least the next three years. Over time, stricter vehicle emissions laws may lead to increased demand, as Platinum is a crucial component in catalytic converters of fuel-cell vehicles. Several mining companies have no choice but to keep production high to fulfill existing contract obligations, but overproduction could lead to more problems down the road, even if demand increases.

At 11:26 a.m. (ET), the APMEX Gold and Silver spot prices were:

• Gold, $1,205.00 Up $6.20
• Silver, $14.29 Up $0.10
• Platinum, $807.70 Up $6.10
• Palladium, $986.80 Up $5.30

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 Precious Metals investing or simply would prefer to place your order by telephone, we are here to help.