Gold Pushes Higher as Dollar Stagnates

APMEX

2/8/2019 10:56:33 AM

Daily Gold & Silver Market Report – 2/8/2019

• Gold prices move up as U.S. dollar shows signs of weakness.
• The U.S. government shutdown did not impact economy as harshly as many predicted.
• St. Louis Fed President describes current monetary policy as "restrictive."

As U.S. Treasury yields soften and the dollar shows signs of weakness, Gold prices have again started higher. The U.S. Dollar Index, a measure of the currency against a basket of other major players, developed a two-day pattern of topside resistance, according to a report on Daily FX. This could be a signal that a rally for the greenback has lost steam. However, news the U.S. government may avoid another shutdown if a deal between Democrats and Republicans is reached this weekend could lead to new support for the dollar. Data that the American economy suffered less than expected during the last shutdown is also giving confidence to many buyers.

While there are many signs of economic strength, trade negotiations between the U.S. and China seem to have hit another stalemate. An ongoing trade war between the two countries could prove to be a wildcard. The FX Street article points out a pattern in the recent trade war: “The cycle goes: (1) Trump administration is tough on China; (2) financial markets sell off on trade war concerns; (3) Trump administration hints at US-China trade deal; (4) financial markets rally on trade deal hopes; (5) No deal materializes.” Lower yields are good for Gold markets, as many people turn to Precious Metals as a risk-averse investment when Treasury yields diminish.

St. Louis Fed President Views Federal Funds Rate as ‘Restrictive’

St. Louis Federal Reserve President James Bullard recently described the Fed’s December rate increase as “a little bit restrictive,” voicing concern it may push the economy in the wrong direction. Bullard forecasts the Fed will miss their inflation target in 2019, a problem he feels has damaged the U.S. central bank’s public credibility. CNBC quotes Bullard as saying, "We are putting downward pressure rather than upward pressure on inflation" that is likely shifting farther beneath the Fed’s 2 percent target.

After Bullard’s statements were published, Gold prices lifted slightly. While there is no proof his criticism of the Fed directly influenced spot prices, it is possible his comments could have an overall impact. Since Bullard is an influential figure within the central bank, his beliefs do have the potential to affect markets and, in turn, the prices of Gold and Silver.

At 11:55 a.m. (ET), the APMEX Gold and Silver spot prices were:

• Gold, $1,316.80 Up $3.80
• Silver, $15.84 Up $0.04
• Platinum, $799.20 Up $0.90
• Palladium, $1,402.70 Up $12.60

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.