Gold Sees Lift Surrounded by Brexit Turbulence

APMEX

11/16/2018 12:57:11 PM

Daily Gold & Silver Market Report – 11/16/2018

• Brexit uncertainty is a boost for Gold prices.
• Silver oversold during long-term bear market.
• Palladium nearing price parity with Gold.

The price of Gold saw increased traction Friday morning as many investors moved away from risky investments on continued Brexit turbulence. On Thursday, U.K. Brexit Secretary Dominic Raab resigned, leading to further concern over Prime Minister Theresa May’s planned deal. Raab stated openly he was unable to get behind the prime minister’s terms as drafted. Investing.com published data from Reuters showing Comex Gold futures for December delivery increasing by 1.43 percent to $1,216.30 per ounce as of 5:04 a.m. (ET). The U.S. dollar also remained flat this week, adding further appeal to Gold bullion and Precious Metals investing. When dollar strength is on the rise, many investors using other currencies are less interested in dollar-denominated commodities such as Gold.
Market watchers are keeping an eye on the trade war between the U.S. and China, even as other events take center stage. On Thursday, a White House official told Reuters a written response from China to demands for trade reform from the U.S. are “unlikely to lead to a deal in talks between U.S. President Donald Trump and Chinese President Xi Jinping at the G20 summit later this month.”

Silver Oversold Amid Long-Term Low Prices

Because the price of Silver has been held down for an extended period of weeks, it has become heavily oversold. Peter Krauth, a resource specialist for Money Morning, observes because of the ongoing strength of the U.S. dollar, Silver bullion has been sold at levels last witnessed in 2015. Toward the end of 2015, Silver spot prices were also experiencing a long-term low trend. These losses have been a disappointment for Silver supporters, who have seen the bullion gain 5.4 percent in October after hitting bottom in September. As Krauth observes, “Smart money silver hedgers are still near extreme all-time low net short positions, suggesting they believe Silver to be very cheap with little downside risk from here.”
The article goes on to predict if the U.S. Dollar Index remains down, it could mean new interest in buying Silver, but if the dollar rises, the Precious Metal may hit yet another low. Several base metals have been struggling in recent weeks and part of the bearish market for Silver could be because, due to industrial uses, many investors group them together. Strong demand from the automotive and solar panel manufacturing sectors should eventually change things, separating the Precious Metal from others.

Palladium Just $46.40 Behind Parity with Gold

On Friday morning, Palladium, long seen as a value-priced Precious Metal, reach only $46.40 away from a price parity with Gold. The recent bull markets for Palladium, primarily used to reduce emissions in automotive catalytic converters, is likely driven by speculative buying from investors that demand will soon increase. Nasdaq stated Chinese car dealers have been vocal about their proposals for Bejing to cut taxes on smaller cars, where fuel-cell carbon emissions are less of a concern. The metal is on track to have its largest weekly gain since September, rising more than 4 percent so far in November. Out of all other Precious Metals, Palladium is the only one poised for a yearly gain in 2018.

At 12:43 p.m. (ET), the APMEX Gold and Silver spot prices were:

• Gold, $1,225.00 Up $7.70
• Silver, $14.479 Up $0.12
• Platinum, $849.30  Up $4.00
• Palladium, $1,183.10  Up $24.70

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.