Fed Officials Uncertain On Economy, Interest Rate Hikes Will Continue

APMEX

10/19/2018 10:20:58 AM

Daily Gold & Silver Market Report – 10/19/2018

• Spot prices for Gold see a lift in early Friday trading.
• Minutes for September Federal Reserve meeting reflect uncertainty.
• Platinum miners increase chrome production to offset waning profits.

On Wednesday, the U.S. Federal Reserve released their September meeting minutes after a three-week delay. Precious Metals investors look to these minutes as critical information for forecasting the market, as economic strength and interest rates can directly influence the prices of Gold and Silver. As analyzed on Investing.com, the minutes reflected uncertainty about the economic outlook of the United States, acknowledging a robust economy but also noting new labor shortages and tensions with trade partners around the world. One thing that was clear is the Fed’s intention to raise interest rates again in 2018, with potentially three additional hikes in 2019. Rising U.S. interest rates can be a challenge for Silver and Gold, long considered safe-haven investments. When U.S. bonds present a promise of above-average yields, many investors shy away from diversifying their portfolios with Precious Metals.

Gold Edges Higher as Dollar Index Eases

During early trading Friday, Gold prices edged higher, seemingly poised for a weekly gain. The dollar index eased somewhat as market watchers turned their focus to a pending budget crisis in Europe. Many economists feel these financial challenges could have broader implications in the near future. For now, December Gold futures were also up Friday morning at their highest levels since July, according to FactSet data quoted in MarketWatch. Overall, Gold is up almost 3 percent for October, yet still down for the year.

Italian government officials are at odds with some other leaders in the region and the spread between Italian and German bond yields is at its widest in five years.  Commerzbank Commodities Analyst Carsten Fritsch wrote, “The attempt by Gold to lastingly exceed the 100-day moving average looks promising. If it succeeds, technical follow-up buying should push the Gold price further up. At the same time, gold is resisting the firm U.S. dollar.” Silver spot prices were also up, along with December Silver futures.

Platinum Miners Ramp Up Chrome Production to Improve Profits

In an effort to improve profitability, South Africa’s Platinum mining companies have become the largest producers of chrome ore in the world. The country produced more than half of the global supply last year, some from dedicated chrome mines and the rest as a by-product from mines that focus primarily on Precious Metals such as Platinum and Palladium. According to a report in Mining Weekly, the Merensky reef is abundant with Platinum deposits, while the nearby Upper Group 2 reef has high levels of chrome and Palladium. Platinum producers in South Africa have seen many blocks to profits in the last few years, including power shortages, labor issues and falling market prices. To overcome these obstacles, most Platinum Group Metals producers have dramatically increased their focus on chrome, a byproduct with minimal additional costs to extract.

At 11:17 a.m. (ET), the APMEX Gold and Silver spot prices were:

• Gold, $1,229.10  Down $0.50
• Silver, $14.72 Up $0.06
• Platinum, $837.50  Up $5.80
• Palladium, $1,087.80  Up $11.10

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