Posted on April 10, 2017
Gold Spot Price Open: $1,258
Gold Spot Price Close: $1,258
Change in Gold Spot Price: NO CHANGE
Silver Spot Price Open: $18.08
Silver Spot Price Close: $17.92
Change in Silver Spot Price: -$0.16
Precious metals began the week having lost some ground, but are still hanging on to the near-term technical advantage. When all was said and done, gold ended up finishing the day about where it started while silver lost about 16 cents. Platinum and palladium were down as well, but crawled back and eeked out marginal gains by day’s end.
A recent trend we have seen, or rather not seen, in the precious metals market is that investors are growing less concerned with violence in the Middle East. Though last week’s US missile attack on a Syrian airbase prompted concern and an increase in safe-haven demand for metals initially, that initial concern faded quickly. Part of the reason investors are not reading too heavily into the actions of the US military is due to the fact that it is widely believed that the missile attack was a one-time event, and not the start of further US involvement in Syria’s civil war.
Now, if the US continues military attacks in Syria, we very well might see precious metals pick up steam once more. At this point in time, however, a continuation of US attacks in Syria is something that we do not feel is very likely.
Though the Dollar ended up cooling off before the day was through, the greenback did get the week started sitting at 3-week highs. Fueling the Dollar’s run was commentary from New York Federal Reserve president William Dudley, who reaffirmed the Fed’s intent to continue gradually raising rates over time.
Dudley commented on the Fed’s currently unfolding plan of shrinking their more than $4 billion bond portfolio. Insinuating that raising rates at the time as the Fed is reducing the size of their portfolio would not be a good idea. As such, there may be delays with regard to the regular raising of rates that so many had expected. Still, at the end of the day, Dudley made it very clear that the Fed has no intentions of straying away from the rate-hiking plan.
Though you probably wouldn’t realize it by looking at the action of US stocks today, there are some worries with regard to tensions between the US and North Korea. Just this weekend, the US sent warships towards the Korean Peninsula to participate in joint naval drills with South Korea. These drills, as expected, have brought about harsh commentary from North Korea, who insists that these drills are nothing more than a provocation on the part of the US.
Though world markets may not necessarily be buying too heavily into this situation, it is one everyone will keep an eye on going forward. Between the US and North Korea and the US and Syria, the geopolitical front is heating up in a hurry. In the past, this has been something that has come to the aid of precious metals, so it will be interesting to see how things play out this time around.
Metals were down to start the week on Monday, as the world marketplace was generally quieter across the board. Though there was very little in the way of economic data made public, investors have plenty of global geopolitical happenings to discuss and consider. As the week wears on, I would expect that geopolitics will remain the center of conversation. What’s more, with this being the week before the Easter holiday, I would not be surprised to see things slow down considerably come Thursday and Friday.