Trade Dispute Weakens Dollar, Gives Gold a Push

APMEX

9/19/2018 10:48:16 AM

Daily Gold & Silver Market Report – 09/19/2018

• Gold prices up amid growing trade war concerns.
• Silver’s discount to Gold grows deeper.
• Platinum and Palladium see strength Wednesday morning.
• Bitcoin watchers await SEC news.

Gold prices went up Wednesday morning as the dollar weakened. This is an indicator of growing concerns about the ramifications of the U.S.-China trade disputes and the potential effects on the global economy. Gold spot prices went up in early trading after seeing declines late Tuesday, according to a report by Reuters and published by Nasdaq. National Australia Bank's Sovereign Risk Economist John Sharma said, “It appears that investors are beginning to view tariffs - while likely negative for China's exports - could also prove detrimental to the United States as well, given the disruptive impact on global supply chains.”

The price of Gold has gone down approximately 12 percent in the last six months, challenged profoundly by several upticks in U.S. interest rates and ongoing faith in the U.S. dollar. Many investors have felt the United States had little to lose, compared to China, in the current trade war, although those sentiments could be shifting. The report also observes the market has bottomed out and the expected long-term direction is upward. Silver, Platinum and Palladium also saw spot price increases early Wednesday.

Silver See Widest Discount to Gold in Two Decades

At current market prices, Gold bullion is trading at about 85 times the price of Silver per ounce, a ratio that has not been seen since the mid-1990s. While both Precious Metals have suffered losses this year, the Gold-to-Silver ratio has widened. These numbers have sent many investors in exchange-traded funds to take an interest in the cheaper of the two, according to a report in Bloomberg. Commerzbank AG Analyst Carsten Fritsch told Bloomberg, “Smart investors and long-term investors are seeing a lot of value in Silver at these levels. Silver prices are low in both relative and absolute terms.”

Bitcoin Volatility Subsides Ahead of SEC Decision

The price of Bitcoin calmed somewhat as attention becomes focused toward the new SEC deadline to rule on a request from Direxion for a Bitcoin exchange-traded fund. Many watchers of cryptocurrencies see this pending approval, or lack thereof, as a “make or break moment,” according to a report by FX Street. The updated deadline is September 21, so the SEC could make an announcement at any time this week. Bitcoin has been trading over $6,200 this week, a critical threshold for crypto economists.

At 11:24 a.m. (ET), the APMEX Gold and Silver spot prices were:

• Gold, $1,206.20 Up $5.10
• Silver, $14.37 Up $0.13
• Platinum, $827.10 Up $9.20
• Palladium, $1,040.50 Up $24.70

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