Posted on March 20, 2017
Gold Spot Price Open: $1,233
Gold Spot Price Close: $1,236
Change in Gold Spot Price: +$3
Silver Spot Price Open: $17.49
Silver Spot Price Close: $17.40
Change in Silver Spot Price: -$0.09
Gold and silver continued to add value to open up the new week, however some chart consolidation limited the gains metals were able to make. When all was said and done, gold ended up adding about 3 dollars while silver lost almost 10 cents. Platinum and palladium were both down on the day, however both metals lost only a few dollars apiece.
The greenback extended its losses on Monday as a less than hawkish FOMC is continuing to wreak havoc on the Dollar. Right now, the USD is sitting at near 6-week lows against many rival currencies, and is looking like it may move even lower. The reason for this is due to the fact that the Federal Open Market Committee was much more dovish than most people expected last week. Though everyone was anticipating that a rate hike announcement would be made, many of those some people were also expecting the FOMC to be more hawkish with regard to where it sees rates going in the future. Fully expecting to hear a commitment to 3 or 4 more rate hikes this year, investors were let down when the Fed remained vague with regard to their future intentions.
For the time being, this is not only hurting the US Dollar, but lending some support to precious metals that have really recovered in recent days. With no future rate hikes imminent, and plenty of geopolitical concerns in Europe, investors are slowly but surely putting their money back into precious metals. Just how far metals can rally, however, remains to be seen.
The G20 meeting is a organized convention involving 19 of the world’s largest economies as well as the European Union. The group conducted its most recent meeting last weekend, and what was said there has really began to unnerve the investing public. To make what can be a long story quite short, the investing world is concerned about protectionist policies taking hold in some of the world’s largest economies. From the US, to Japan, and everywhere in between, it seems as though countries are looking to shut their doors as oppose to open them to new trade ventures.
The immediate response to this meeting was great for precious metals, because a rise in protectionism is something that will assuredly spike safe-haven demand. Though not every country in attendance agreed with what was said, it is clear that the G20 nations are actively abandoning their previous commitment to open and free trade. President Donald Trump’s rhetoric with regard to putting America first seems to be taking hold in other countries, and that is worrisome.
A representative from the Societe Generale group commented on this weekend’s meeting by saying, “Mnuchin (US Secretary of Treasury) made the point earlier last week that the Trump administration has no desire for trade wars but does want certain trade relationships to be fairer for U.S. workers. Exactly how this will be reflected in actual policy, however, remains uncertain with the future of NAFTA, a potential Border Adjustment Tax (BAT) and view on currency manipulation as the focal points … Our baseline assumes that ultimately the U.S. politic bark will ultimately prove worse than the bite as more protectionism would hurt all, including U.S. households.”
Monday offered a rather slow start to the week which saw most investors focusing on last week’s FOMC meeting. With that being said, gold and silver have been pushing forward for the last few days and seem to be taking hold of a good bit of safe-haven demand. If this continues, there is no saying how high spot values may venture.