Dealing Desk: Brexit and Trump Inauguration Leave Investors on the Sidelines

Trump’s inauguration, continued Brexit news and the potential risk of inflation make markets susceptible to downward pressures and Comex gold futures show strength.

Goldmoney Wealth clients have remained fairly neutral on all precious metals this week. Clients have favoured vaults in Zurich, Singapore, Hong Kong, and Toronto, and have shown less preference for the London vault.

Driven in part by unpredictable political events such as Trump’s inauguration, continued Brexit news and the potential risk of inflation, markets are susceptible to a potential tailspin.

“Following Trump’s remark regarding an overly strong U.S. dollar, increased buying pushed the price of gold from $1,202 to an eight-week high of $1,218,” said Rachel Stonier, dealing manager at Goldmoney Wealth. “Having surged from $16.85 to a two-month high of $17.36, silver has also benefited from prevailing geopolitical uncertainty; the metal could also find extra shine as a result of increased demand from the photovoltaic sector due to the worldwide expansion of renewable energies.”

Used in gasoline-burning catalysts, palladium spiked at $758 due to pressure from China’s world-dominating automotive industry. Platinum, featured in diesel-burning catalysts, reached $992 but has felt strain from stagnating automotive sales in the European market.

Despite gains seen earlier in the week, most precious metal prices remained almost static; silver posted no change, gold only dropped by 0.2%. Palladium fell by 1.5%, while platinum suffered a 2.7% loss.

19/01/17 16:00 – Gold: $1,199.56; Silver: $16.88; Platinum: $951.46; Palladium: $750.66. Gold/Silver Ratio: 71.06.

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NOTES TO EDITOR
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