Weekly Market Reports

Gold Prices Stable as Stocks Pullback

Daily Gold & Silver Market Report – 5/15/2019

  • Gold prices stabilize as stock markets struggle.
  • Trade tensions escalate between the U.S. and China.
  • South African mining unions expected to demand wage increase. 

Gold prices held steady Wednesday morning, reaching above the key $1,300 mark at 8 a.m. (ET). Stock markets worldwide, however, pulled back, reflecting an increased interest in safe-haven assets such as Precious Metals. Reuters reports that globally, many investors hope for more clarity on the trade war between the United States and China. The bounce for global equities, influenced by positive trade statements by President Donald Trump toward China, diminished as sparse data regarding the Chinese economy affected global markets.

The new numbers from China reflected low retail sales and industrial output growth, despite recent stimulus from Beijing. Quantitative Commodity Research Analyst Peter Fertig told Reuters, “As long as there is no decision made that there will be no further imports duties on Chinese goods, you cannot say the worst is over.”

U.S.-China Trade War Escalates

Investors around the world are again focused on the ongoing trade war between two of the biggest global economies: the United States and China. As heated rhetoric and tensions escalate, many individuals and other countries are growing concerned about how high tariffs and new policies will affect them. As the New York Times observes, until last week, all signs indicated the two countries were close to resolving their trade disputes. This quickly changed when President Trump abruptly announced tariffs on $200 billion in Chinese goods.

Global head of macro research for Oxford Economics, Gabriel Sterne, said, “An escalation scenario would be terrible all around. A negative impact on trade flow is going to be bad for global growth for several years. It’s bad news for almost everybody.” As the trade war wages on, the prices of Gold and Silver could move upward. During times of economic uncertainty, buyers typically turn away from riskier assets and hedge their investments with Precious Metals.

South African Miners Brace for Wage Negotiations

Miners in South Africa, the world’s top producer of Platinum, are getting ready for another round of wage talks with native workers. Recent news of higher producer profits is expected to prompt labor unions to ask for even higher wages. According to Reuters Africa, rising prices for Palladium and Rhodium, alongside weaker values for the South African rand, resulted in profits for mining firms after several years of diminishing returns. This news may give leverage to the Association of Mineworkers and Construction Union to insist on higher wages for members. Equity analyst Arnold Van Graan remarks, “A strike is a big risk for [Platinum Group Metals] producers, especially those who have a majority AMCU membership. That remains a challenge, despite the higher basket price.”

At 9:51 a.m. (ET), the APMEX Gold and Silver spot prices were:

  • Gold, $1,302.60 Up $4.30
  • Silver, $14.90 Up $0.01
  • Platinum, $849.30 Down $11.30
  • Palladium, $1,312.90 Down $31.10

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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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