Gold Moves for Weekly Gain as Dollar Retreats

APMEX

1/25/2019 8:51:57 AM

Daily Gold & Silver Market Report – 1/25/2018

• U.S. dollar weakness gives Gold prices a boost. 
• Platinum production decreased due to low trade value.
• Ongoing government shutdown hits commodities markets worldwide.

Gold futures moved up during early trading Friday, aiming for an overall weekly gain. Meanwhile, the U.S. dollar saw losses driven by economic growth concerns in many major markets around the world. MarketWatch reported Gold for February delivery was up .3 percent on Comex as of 7:55 a.m. (ET) and March Silver futures were up 0.5 percent. If Gold can hold onto these wins until the end of Friday’s session, it will mean a weekly gain of 0.1 percent. The ICE Dollar index, which measures the U.S. currency against a basket of competitors, was down 0.3 percent during international trading Friday morning.

Earlier this week, the International Monetary Fund reduced its 2019 growth forecast due to disappointing Chinese economic data, which brought in new support for Gold. But many analysts are waiting for progress in the U.S.-China trade negotiations, due to several conflicting headlines released by the Trump administration over the last few days. Lukman Otunuga, a research analyst at FXTM, said in the article, “Such concerns have the ability to support Gold prices by instilling bulls with enough inspiration to challenge $1,295 and $1,300, respectively.”

Platinum Prices Near Record Lows, Production Declining

While Palladium is reaching record highs, Platinum is near record lows. Currently, spot prices for Platinum have fallen to nearly $800 per troy ounce, a low not seen since 2016. Declining value led to a drop in production, putting a dent in already slim margins for mining of the Precious Metal. SeekingAlpha points out Palladium and Rhodium, two other Platinum Group Metals, are experiencing a great deal of market support but Platinum continues to struggle.

When it comes to industrial use, Palladium and Platinum have very similar composition, but the latter is preferred due to better resistance to heat and higher density. For many years, the lower price of Palladium appealed to many manufacturers and demand increased. Today’s bargain prices for Platinum could be a unique buying opportunity for investors, but buyers will likely need to wait for their return.

U.S. Government Shutdown Battering Commodities

The historic U.S. government shutdown is hitting commodities markets in both North America and Europe. According to S&P Global, many critical data releases published by the United States have not been released since before the shutdown began. Companies in Russia who expected a break from sanctions are still awaiting the green light. There may be a “knock-off effect” due to growth declines in GDP. Nobuo Tarua from S&P Global Platts Analytics states, “Given how many people have been impacted, a simple rule of thumb is that the shutdown subtracts an annualized 0.1% from GDP growth every two weeks.” The article includes data regarding declines to many significant commodities markets, including agriculture, energy, minerals and metals.

At 9:35 a.m. (ET), the APMEX Gold and Silver spot prices were:

• Gold, $1,294.90 Up $11.50
• Silver, $15.63 Up $0.26
• Platinum, $817.50 Up $11.50
• Palladium, $1,338.50 Up $11.80

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.