Weekly Market Reports

Pending U.S.-China Trade Resolution Challenges Gold Prices

Daily Gold & Silver Market Report – 2/13/2019

  • Hope for U.S.-China trade war resolution challenges Gold price.
  • The diminishing potential for another government shutdown builds market confidence.
  • Palladium shortage likely to worsen in the coming year.

As news mounts that the United States and China may finally resolve a months-long trade war, Gold prices are challenged. Precious Metals like Gold, long considered a safe-haven asset by investors, become more appealing when riskier assets such as stocks become volatile. But as the investment community builds sentiment that the world economy is more stable, some buyers are turning away from Gold bullion. MarketWatch reports the price of Gold slid Wednesday morning, but alternated between narrow wins and losses after settling higher Tuesday. Gold futures for April delivery fell $1.20, just under 0.1 percent, to $1.312.80 per troy ounce.

U.S. President Donald Trump announced Tuesday he would be willing to extend the deadline for a trade agreement with China if a deal seems close at hand. Conversations have been active for several days and Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer expected to arrive this week for further negotiations. News reports also indicate U.S. congressional negotiators reached a tentative agreement to prevent another partial government shutdown, which helped support stocks. President Trump has not approved the plan. If favorable agreements are soon finalized for both matters, Gold could take another hit in the market.

Palladium Supply Shortage Likely to Get Worse

In 2018, the global supply of Palladium saw a 29,000 oz shortfall while the surplus of Platinum reached 48,000 oz. The extreme shortage of Palladium, in high demand by the automobile industry, pushed the price of the Precious Metal to record highs. Reuters Africa reports Johnson Matthey, a significant manufacturer of catalytic converters, predicts the market deficit will grow even more in the coming year. Approximately 10 million ounces of industrial Palladium are used each year but tighter carbon emissions standards are leading to even more demand. Recycling of industrial metals has increased, but not enough to get adequate levels of supply on the market.

Platinum is also used in catalytic converters, but typically in diesel engines, which have slipped out of favor since 2015. Johnson Matthey states about 8 million ounces of Platinum are used each year. The company suggests industrial use of the now bargain-priced Platinum may see increased demand, but consumption by the jewelry industry may continue to decline for several more years.

At 11:33 a.m. (ET), the APMEX Gold and Silver spot prices were:

  • Gold, $1,316.20 Up $3.00
  • Silver, $15.76 Down $0.01
  • Platinum, $791.10 Up $0.50
  • Palladium, $1,408.60 Up $1.20

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APMEX Market Reports provide our readers with a review of spot price activity and some of the factors that may be affecting the market for Precious Metals. While the information is obtained from sources we believe to be reliable, we do not guarantee its accuracy or its completeness and we encourage you to conduct your own investigation prior to making any decision based on the information. The Market Reports are not intended as a comprehensive discussion and there may be other factors affecting the financial marketplace. These Market Reports are provided for informational purposes only and do not constitute a recommendation by APMEX to hold, purchase or sell any Precious Metal product. All orders, purchases and sales, if any, are subject to the terms of the User Agreement and other applicable policies.

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