Soft Dollar and Italy Crisis Give Gold Prices a Lift

APMEX

10/3/2018 2:17:34 PM

Daily Gold & Silver Market Report – 10/03/2018

• Gold gets a lift amid financial concerns in the eurozone.
• Platinum and Silver prices see a slight increase in early trading.
• South African official expressed need to build interest in Platinum.

Gold spot prices were up Wednesday morning amid a softer U.S. dollar and news regarding Italy’s budget crisis. This week, the European Union officially announced their worries over Italy’s planned budget,  which would profoundly widen the country’s deficit. This news gave way to new concern over a full-out financial crisis in the eurozone. It was later reported Italy has ambitions to cut the budget deficit at a faster pace than expected initially, but this news was not enough to fully mitigate the damage. According to a report by Nasdaq, Gold futures were up in morning trading in the U.S. Spot prices were also up, after Gold saw a 1.3 percent daily gain Tuesday, the most significant since August.

Phillip Futures Commodities Analyst Benjamin Lu said in the article, “Overall, our assessment is it's a knee-jerk reaction. We are seeing a little bit of selling and buying activities supported by equity markets... But it's still a dollar story. Gold prices are still very susceptible to the dollar.” The dollar index was down 0.2 percent Wednesday morning. Platinum and Silver prices saw a slight increase, as well.

Gold Markets Seem to Adhere to Well-Known Trends

While the global trade war between the U.S. and China, along with a September Federal Reserve interest rate hike, challenged Gold and other Precious Metals for several months, the market’s reaction seems to follow previous trends. In an analysis by Money Morning, resource specialist Peter Krauth observed, “Speculators have their biggest futures bets against Gold in 17 years. The last time levels were similar was in 2001, and that's when Gold rallied by almost 300% in just over 24 months.” He also points out while there is no guarantee Gold prices have hit bottom, many signs are pointed in that direction. Krauth also outlined the recent dollar index and spot price movement, suggesting these fluctuations could indicate an upcoming rally for Gold.

South Africa’s Mineral Resources Minister Calls for Platinum Mandela Coin

In a recent speech, Gwede Mantashe, the relatively new Mineral Resources Minister in South Africa, called for a Platinum coin honoring Nelson Mandela as a way to increase interest in the Precious Metal. Mantashe also expressed interest in marketing Platinum-catalyzed fuel cells that could be used in areas outside the power grid. South Africa is the world’s largest mining source of Platinum Group Metals. Global demand has decreased, however, as automobile markets have turned their interests toward battery-powered cars that do not require fuel cells. Platinum and Palladium are vital components in diesel-powered engines.

Mantashe said he believes the mining industry should contribute significantly to the GDP of the South African economy. Mining Weekly quoted him saying, “If mining contributes a bigger chunk, we will go beyond 3% growth. ... We must develop demand for Platinum. We must develop the Mandela coin and every person in mining must buy that coin.” Mantashe went on to encourage the mining industry to bring management systems up to date with modern technology.

At 3:01 p.m. (ET), the APMEX Gold and Silver spot prices were:

• Gold, $1,200.90 Down $4.80
• Silver, $14.74  Down $0.01
• Platinum, $831.80 Down $1.70
• Palladium, $1,065.50 Up $0.80

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