Dealing Desk: Gold Impacted by Economic and Political HeadlinesAug 18, 2017·Rachel Stonier
Goldmoney clients have been net selling all precious metals over the past two weeks, with gold being the most actively traded. Clients have preferred vaults in Zurich, London, Singapore, and Hong Kong, and have shown less preference for the New York, Ottawa, and Toronto vaults.
The gold price has been sensitive to political and economic news this week, and the metal experienced choppy trading sessions influenced by geopolitical risk and good economic data.
Better-than-expected U.S. jobs data, showing non-farm payroll above consensus and private payroll at a five-month high, together with outperforming manufacturing and retail spending data (an increase of 0.6% vs the expected 0.4%) put pressure on gold. The effect of positive economic data was then offset by events in North Korea and President Trump’s escalation of the situation. Mounting tensions caused global equities to pull back from recent highs and investors headed toward safe-haven assets, which resulted in a reversal of fortune for the yellow metal.
Gold was at $1,260 on low volumes but moved to a nine-week high of $1,290 as the tensions surrounding North Korea continued unabated before dipping below this level. Minutes released by the Fed maintained a forecasted rise of inflation to 2% over the medium term and indicate that there will now be no rate increase until 2018. This caused gold to move from $1,277 to $1,283, while silver fell to a two-week low of $16.20 before reaching an eight-week high of $17.25 on its safe-haven appeal.
Platinum and palladium have been less volatile; platinum saw a two-week high of $968 then continued upward to hit a three-and-a-half month high of $986. Palladium, up 4.5% from the beginning of August, hit a new annual high of $929. Automobile sales in China increased by 5.5% to 1.7 million in July and 0.6% more cars have been sold in the first seven months of this year than in 2016. Additionally, the average palladium content in catalytic converters of Chinese cars has risen due to the more stringent emission standards.
All precious metals were up over the past two weeks: Palladium saw the biggest rise of 3.8%, gold gained 1.2%, silver rose by 1.9%, and platinum increased by 1.5%.
17/08/2017 16:00 – Gold: $1,283.60; Silver: $17.01; Platinum: $976.53; Palladium: $926.37. Gold/Silver Ratio: 75.48
NOTES TO EDITOR
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