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Weekly Market Reports

Gold Feels Pressure Following Upbeat U.S. Data

Daily Gold & Silver Market Report – 7/17/2019

  • Positive retail data in the U.S. puts downward pressure on Gold.
  • U.S. Treasury and Fed must collaborate to weaken the dollar.
  • Palladium volatility leads some analysts to question predictions.

The price of Gold slid early Wednesday morning following surprisingly positive retail sales data in the United States. The U.S. dollar reached one-week highs as investors continue to wait for news on any Federal Reserves changes regarding interest rates. CNBC published a Reuters report showing August Gold futures dipped 0.6 percent to $1,403.10 during early trading. Analyst Peter Fertig believes it is critical for Gold to stay above $1,400 per troy ounce. 

After news came Tuesday that U.S. retail sales were up, the U.S. dollar stayed strong, near a one-week high. The announcement further tarnished hopes the Fed would cut interest rates sooner than later. Remarks from the Fed on the effects of global trade tensions and how they have impacted the economy are expected Wednesday afternoon. President Donald Trump stated Tuesday that trade negotiations with China have a long way to go and another $325 billion in tariffs were a real possibility. 

Trump Needs Fed Support to Weaken U.S. Dollar

President Donald Trump recently stated his position that Europe and China are manipulating the value of their currency, and the U.S. ought to follow suit. Bloomberg reports if Trump decides to take action and weaken the U.S. dollar, the support of the Federal Reserve will be needed. President Trump has openly criticized the Fed on numerous occasions, going so far as to suggest he might try to replace the Chair Jerome Powell. A weaker dollar typically increases interest in dollar-denominated Gold and Silver from buyers using other currencies. 

The Bloomberg article observes the Treasury Department and Federal Reserve have worked together on the last three U.S. dollar interventions. Support from the Fed could double the impact of the $94 billion held by the Treasury that could be used to impact currency markets. Economist Nathan Sheets believes “Fed involvement would bring a technical endorsement, and strengthen the case that the move is justified by fundamentals.”

Palladium Price Volatility Increases

After several months of significant gains, Palladium prices have entered a pattern of volatility. Investing.com reports Chinese auto manufacturing has slowed, partially due to the trade war with the U.S. This, along with an overall slowing global economy have weakened interest in Palladium, a key component in fuel cell engines. While prices for Platinum and Palladium are still expected to rise this year, changing demand forecasts and a weak economy could change things at any time.

At 2:37 p.m. (ET), the APMEX Gold and Silver spot prices were:

  • Gold, $1,426.00 Up $13.60
  • Silver, $16.05 Up $0.32
  • Platinum, $848.00 Up $2.10
  • Palladium, $1,545.60 Up $20.30

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Disclaimer:
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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