Weekly Market Reports

Gold Prices Gain Momentum Amid Growth Concerns

Daily Gold & Silver Market Report – 6/12/2019

  • Disappointing global growth data gives Gold momentum.
  • Palladium prices rise for five-consecutive sessions.
  • Slowing Chinese economy could nudge Silver toward a major rally.

On Wednesday, Gold prices gained momentum as the U.S. dollar slipped on concerns of global economic growth. Increased predictions the Federal Reserve would cut interest rates also contributed to wins for Gold. Reuters reports spot Gold traded 0.5 percent up at $1,332.80 per ounce as of 10:18 a.m. (ET), climbing up from the previous session when it stumbled to a 10-day low of $1,319.35. Gold futures were also up 0.4 percent, trading at $1,336.60 per ounce. Market strategist Bob Haberkorn is quoted by Reuters as saying, “If the Fed cuts rates in June, you’re going to see some substantial gains here in the Precious Metals market. ... People are trying to get ahead of that and add some Gold to their portfolio.”

Recent data shows U.S. consumer prices rose only slightly in May, adding to the growing pool of signals many major world economies are slowing down. In other Precious Metals, Silver and Platinum were higher Wednesday morning. Palladium traded at $1,415.54 as of 11:38 a.m. (ET), a six-week high, adding the fifth entry to a consecutive streak of winning sessions.

Slowing Chinese Economy Could Provide Silver’s Biggest Boost

The Trump Administration’s ongoing trade dispute with China has led to increased tensions between the countries and renewed interest in Silver and other Precious Metals. Still, some analysts wonder whether the rally will continue. An article on Seeking Alpha suggests negative demand pressures for Silver due to weakened Chinese manufacturing activity may be more critical to Silver’s growth than the trade war. In May, China’s manufacturing PMI dropped to 49.4 from 50.1 in April, indicating a small amount of shrinkage. Declines for the U.S. dollar have given strength to Precious Metals, but a slowing economy in China could provide more critical growth support for Silver.

Over the last decade, Silver prices have suffered many losses since reaching $50 per ounce in 2011. The downtrend fell below $14 per troy ounce in 2016 and has since struggled to gain popularity. Inflation trends have also been lower than anticipated and markets have been surprisingly resilient. All this market activity has kept investors comfortable with riskier assets, instead of driving demand for safe havens like Silver. However, the article points out Silver has entered an annual supply deficit five of the last six years, with another shortage predicted for 2019. A significant rally in Silver prices, however, might also prompt Silver miners increase production.

At 12:20 p.m. (ET), the APMEX Gold and Silver spot prices were:

  • Gold, $1,339.50 Up $9.50
  • Silver, $14.92 Up $0.08
  • Platinum, $818.30 Up $1.00
  • Palladium, $1,416.10 Up $14.90

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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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