Dealing Desk: Pre-Election Safe-Haven Play Bolsters Gold

Goldmoney clients have been net selling all precious metals this week, with gold and silver being the most actively traded. Clients have preferred vaults in London, Singapore, and Hong Kong, and have shown less preference for the Toronto and Singapore vaults.

Increased safe-haven demand for precious metals has been driven by traders’ safety plays leading up to the U.K. general election, ECB announcement, and former FBI director James Comey’s testimony – all of which take place on Thursday. Conflict between Saudi Arabia and Qatar has rattled Middle Eastern markets, and the demand for a hedge against uncertainty has further bolstered the gold price.

Soft May job and wage growth in the U.S. weakened the U.S. dollar and pushed gold to a six-week high of $1,279 last week, while silver rose alongside to hit a five-and-a-half week high of $17.61. The weaker-than-expected employment data also cast a shadow over the Fed’s ability to raise interest rates next week.

With most European bourses closed in observance of the Whit Monday holiday and London recovering from last weekend’s terrorist attack, gold and silver moved in tight trading ranges and hit new six-week highs of $1,283 and $17.69 respectively.

Gold then rallied to a seven-month high of $1,295 on safe-haven buying interest amid choppy and volatile markets ahead of the U.K. general election. Platinum hit a three-week low of $932 before jumping to $956, while palladium continued its two-week uptrend and hit $850.

All precious metals posted gains this week; gold was up by 2.2% and silver rose by 2.7% while platinum and palladium gained 1.8% and 1.9% respectively.

07/06/17 16:00 – Gold: $1,292.62; Silver: $17.67; Platinum: $951.61; Palladium: $839.50 Gold/Silver Ratio: 73.15

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NOTES TO EDITOR
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