Gold Set for Weekly Gain Despite Fall Back

APMEX

12/21/2018 11:08:41 AM

Daily Gold & Silver Market Report – 12/21/2018

• Gold prices see setback but still on track for a weekly gain.
• U.S. stock markets open higher after Thursday declines.
• Platinum has potential for much growth in 2019.

In early trading Friday, Gold futures backed off from the recent six-month high. In spite of this retreat, the yellow metal is still set to close the week with considerable gains. Significant losses for stocks, fueled by the Federal Reserve’s message about a slowing economy in the coming year, led to widespread interest in low-risk investments. Silver bullion was also on track for weekly gains as of Friday morning. MarketWatch reports that recent numbers reflect third-quarter U.S. gross domestic product rose 3.4 percent, adjusted for seasonality and inflation.

The Federal Reserve changed policy plans earlier this week, announcing only two interest rate hikes are planned for 2019 with only one likely in 2020. Rising interest rates typically pressure Precious Metals, so a slowdown in the number of hikes could be positive for Gold and Silver in the coming months. Gold spot prices have slowly climbed since August when more economists began to predict that trade tensions could soon have a negative impact on the U.S. economy.

U.S. Stock Market Up In Midst of Budget Standoff

After a distinctly lower close Thursday, U.S. stocks opened higher on Friday morning. These changes come amid concerns about a government shutdown if elected officials cannot reach a budget agreement. Also, many around the world are concerned about the stability of the global economy. According to the Wall Street Journal, “A prolonged bull market in equities has been propped up by years of loose monetary policy, and by major central banks’ bond-buying programs, known as “quantitative easing,” in particular.” However, recent trade and political tensions and current Federal Reserve decisions have created a downward turn in the markets.

Precious Metals prices have been on the rise, but Friday’s slight stock market rebound created some downward pressure. If stocks continue their upward climb in future sessions, a rally for Gold may not happen as quickly as some investors predicted. If the rebound is short-lived, a great deal of new interest in safe-haven investments such as Precious Metals could be ahead in January.

Platinum Could Bounce Back in 2019

While all Precious Metals have seen price increases in recent weeks, Platinum is the one most due for a significant rebound. Commodities Analyst Andrew Hecht wrote an article on Seeking Alpha suggesting 2019 could be Platinum’s year. Suitable for a wide variety of industrial uses, and the rarest of all Precious Metals, Platinum traded at a premium to Gold for many years. While this has not been the case since 2014, many investors remember this price ratio. As Platinum prices slip, new interest builds on the speculation that premium pricing may one day return to the market. While it is more expensive to extract than other metals, any large increase in industrial demand for Platinum could send prices soaring in a very short period.
At 11:57 a.m. (ET), the APMEX Gold and Silver spot prices were:

• Gold, $1,259.90 Down $7.20
• Silver, $14.74 Down $0.15
• Platinum, $797.20 Down $1.60
• Palladium, $1,230.20 Down $31.70

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