Gold Spot Price Open: $1,205
Gold Spot Price Close: $1,219
Change in Gold Spot Price: +$14
Silver Spot Price Open: $16.88
Silver Spot Price Close: $17.18
Change in Silver Spot Price: +$0.30
Precious metals continued to perform decently on Tuesday thanks, in large part, to continued extrapolation of Trump’s commentary and what his words mean in the grand scheme of things. When all was said and done, gold gained more than 14 dollars while silver added about 30 cents. Platinum finished Tuesday having not moved all that much, however palladium ended up adding about 5 dollars.
Trump’s Stance on China Continuing to Aid Metals
While the beginning of this week saw us focusing on comments made by President-elect Trump regarding his stance on Taiwan’s autonomy, the second day of the week saw investors focusing on what Trump had to say about the US Dollar. In short, Trump was reported as saying that the Dollar’s growing strength (over the past year) and the fact that the Chinese are actively devaluing their own currency is something that is hurting the US economically. While Trump isn’t necessarily wrong, it is the way he phrases things and the timing of when he makes these comments that is making investors uneasy.
In essence, Trump is saying that the US has a competitive edge over the United States because China’s comparatively weaker currency is bringing foreign buyers to Chinese companies over a more expensive American alternative.
What is really coming to the aid of precious metals in this whole scenario is not the fact that Trump is pointing out that a stronger Dollar is bad for US businesses as it relates to them dealing with foreign buyers, but rather the very apparent anti-Chinese rhetoric being conveyed. Before he has even officially assumed the office of President of the United States Trump seems to be making strong, foreign enemies, and this is something that is continuing to drive safe-haven demand for both gold and silver. After dipping below key price points towards the end of last week, gold has now pushed above $1,200/ounce once more, and silver is just narrowly above the $17/ounce threshold. If the uncertainty surrounding Trump continues, precious metals will continue to fare well.
UK PM Promises Parliamentary Brexit Vote
This week is already bringing surprises with it as Theresa May, the newly elected Prime Minister, promised Parliament a vote on the terms of Brexit. The vote, if it even happens, will allow Parliament to decide whether Brexit will mean a clean break from the EU, or something else.
During the initial wake of the Brexit referendum, the plan for most was to leave the EU, but by way of a new trade agreement still be able to participate in some aspects of the organization’s structure. When May got involved, she made it clear right away that the UK was going to completely and entirely abandon any role in the EU. With two different opinions floating around, it now seems as though the decision is going to be left to a Parliamentary vote.
This is breeding even more uncertainty amongst investors and, as a result, is helping push precious metals spot values higher. There is no word on when the vote will take place, but one can only assume that it is going to happen sooner rather than later.
Wrap-Up
Tuesday wasn’t an eventful day as far as economic data is concerned, however the geopolitical front has been ripe with activity recently. We received more Trump commentary and, as has been the case recently, it did nothing other than help push spot values higher. The focus of the marketplace will remain fixated on Trump as we navigate further into the week and closer to his inauguration, which is scheduled to be held on Friday. For gold and silver, this seems to be a good thing.
