Gold Spot Price Open: $1,252
Gold Spot Price Close: $1,259
Change in Gold Spot Price: +$7
Silver Spot Price Open: $18.23
Silver Spot Price Close: $18.32
Change in Silver Spot Price: +$0.09
Precious metals continued Thursday’s impressive performance by finishing the week in solid fashion. When all was said and done, gold tacked on in the neighborhood of 7 dollars while silver added almost 10 cents. Platinum nded the week strong by adding 20 dollars, however palladium ended the day more or less unchanged.
Gold’s Near-Term Looks Promising
For a second straight trading session, gold (and most other precious metals) posted some decent earnings. While the lingering safe-haven demand is definitely contributing to the recent performance, today it was a weaker USD that really helped precious metals out. We are at an interesting point in time where the Dollar gaining ground is not having much of a negative impact on metals, but it losing ground comes to the aid of gold and silver noticeably.
According to some analysts, the fact that gold managed to breakthrough its recent range of $1,220 to $1,240/ounce means that the metal could move even further upward. Richard Perry, analyst for Hantec Markets, talked about gold’s recent price action by saying, “Breaking higher from the recent range between $1,220-$1,244 implies a $24 upside target to $1,268, whilst the move above minor resistance at $1,251 early this morning means that the upside into the high $1,200s should not be ruled out.”
As most things are nowadays, how precious metals will perform going forward will depend not only on the movement of the Dollar, but the actions of President Trump. His tax plan is now reportedly going to be slowly implemented, and it is unclear what impact, if any, that will have on spot values.
Rate Hikes Still Being Discussed
This week was dominated by rate hike talk, and we suspect that that will continue as we head further into March and eventually the Spring. After the dovish tone of the FOMC minutes earlier this week, there is almost no one expecting to see rates hiked in March. Even April seems like an unlikely month for rate hikes to occur.
Even when rates are eventually hiked, the growing feeling is that it may not have all that much of an impact on precious metals. Analyst Edward Meir, of INTL FCStone, commented on this by saying, “Even in the event of a rate increase, we doubt the precious metal will lose much ground ahead of the key presidential elections in France in April, coupled with the Washington gridlock that seems to be calcifying with greater intensity after each passing day.”
Holding back rate hikes is the lingering uncertainty surrounding President Trump and his economic plans for the country. We have mentioned this many times already, but it is worth repeating. Until the Fed is confident as to what campaign promises Trump will or will not live up to, it will be difficult for them to make major decisions such as hiking rates.
Something unrelated to Trump, but also something that is helping out precious metals, is the French presidential campaigns. Far-right candidate Marine Le Pen seems to be gaining more and more support, and this is something that gives safe-haven demand a huge boost. Le Pen is dead-set on pulling France out of the EU, and this alone is creating a lot of concern. Add to that her stance on immigration and foreign policy, and it is easy to see why investors are so uncertain of what the future holds.
Wrap-Up
Friday was a good representation for the week as a whole as it brought about very little in the way of markets-moving economic data. The major focal point at the moment remains a multitude of different geopolitical situations, most of which are fueling safe-haven demand. As long as this remains the case, and as long as interest rate hike expectations are pushed further and further back, precious metals are in prime position to continue moving forward.
