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Weekly Market Reports

Gold Settles but Poised for Weekly Gain

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

  • Gold prices decline but still on track for another weekly gain.
  • Trump's recent tariff tweet may have been strategically timed. 
  • Palladium sees a sharp decline, but still in high demand. 

Gold prices declined Friday morning, dropping as much as 1 percent. This downward movement was attributed to investors booking profits after a 2 percent rise in the previous session. Thursday’s rally came following a tweet from U.S. President Donald Trump that warned of new tariffs against China. As reported by Reuters, spot Gold fell 0.6 percent to $1,436.45 per troy ounce by 6:59 a.m. (ET). Even after the setbacks, Gold bullion was still on course for a 1.3 percent overall weekly gain. U.S. Gold futures were also up 1.1 percent to $1,448.60.

Lower interest rates often rally support for Gold, putting pressure on the U.S. dollar, and limiting the opportunity cost of holding onto non-yielding Precious Metals. Some analysts observe that Gold could potentially break above $1,450 if the U.S. dollar collapses under the pressure of more dismal economic data. This week, the Federal Reserve cut interest rates for the first time in ten years. Many in the market are also waiting for U.S. non-farm payrolls numbers due on Friday. President Trump stated he would leverage an additional 10 percent tariff on about $300 billion in Chinese goods if trade negotiations are fruitful soon.

Stock Traders Share Theories on Trump’s Tweets

Stock markets saw sharp declines on Wednesday following Federal Reserve Chairman Jerome Powell’s announcement of an interest rate cut. On Thursday, the S&P 500 fully recovered after U.S. President Donald Trump sent out a tweet threatening new tariffs against China. Several stock traders have been vocal about their doubts that the timing of this tweet was coincidental. In a report from Bloomberg, stock players elaborate on their theories. 

Ryan Larson, head of U.S. equity trading at RBC Global Asset Management said: “The timing is certainly interesting and leads one to wonder whether the President would still be announcing the additional tariff now had yesterday’s FOMC press conference gone differently.”

Chief market strategist at Oanda Corp, Ed Moya, further explains: “I don’t think anyone is surprised that we’d see a new tariff threat but not even 24 hours after this rate decision, we saw this come out. He wants to see the Fed deliver an easing cycle not a mid-cycle adjustment. The Fed has been very clear that there are a few things would make them deliver rate cuts and a fallout of trade talks with China is going to be very damaging for economic growth and that would warrant the beginning of an easing cycle.”

Palladium Sees Biggest Decline in Four Months

On Thursday, Palladium futures fell by more than 7 percent, the most significant decline in more than four months. Platinum, a Precious Metal closely related to Palladium, with similar industrial uses, also fell. October Platinum futures sank 3.1 percent. A MarketWatch article points out that both Palladium and Platinum have been volatile in recent weeks, so an “exaggerated move” makes sense. Platinum became overbought, according to some analysts, following a recent two-month rally. Still, Palladium is in high demand, due to its practical application of reducing emissions in fuel-cell automobiles. Despite the declines, Palladium is still trading approximately 18 percent higher, year over year, according to the report. 

At 9:06 a.m. (ET), the APMEX Gold and Silver spot prices were:

  • Gold, $1,436.10 Up $12.90
  • Silver, $16.15 Down $0.09
  • Platinum, $844.90 Down $5.40
  • Palladium, $1,395.60 Down $26.70

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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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