Dealing Desk: Metals see a weak start to May

May 5, 2017·Rachel Stonier

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

Morale was boosted in the EU once Macron took the lead in polls following the first round of the French elections, and spirits were further lifted by stronger-than-expected Eurozone inflation data reflecting economic confidence in the area. The safe-haven buying of hard assets declined as a result and record outflows of gold ETFs appear to confirm this sentiment. 

Despite an overall gain of 1.3% in April, gold reached a six-and-a-half-week low of $1,263 last Friday ahead of the U.K. Bank Holiday weekend. Gold felt added pressure at the start of the month as Treasury Secretary Steven Mnuchin raised the possibility of the U.S. issuing 50-year or longer-dated bonds, which triggered a drop in current bond prices. Gold was subjected to further strain following a strengthened U.S. dollar on the back of better-than-expected U.S. economic data. With inflation running as expected and the Fed leaving the rate unchanged, selling pushed the metal down to $1,238.

Having dropped by 6% in April, silver’s weakness has continued into May; copper’s sharp decline of more than 3% on Wednesday had a significant negative impact on silver, which fell to a 16-week low of $16.40, and the rapid price drop has put increased pressure on speculators to close out long positions and limit losses.

Platinum fell to a four-month low of $903 while palladium hit a near 14-month high of $830 ahead of the weekend. The move was driven by a combination of speculative fund buying and short positions being covered; however, it was unable to hold at that level and dropped to $800.

All precious metals were down this week. Silver fell the most, suffering a loss of 5.8%, while platinum dropped by 4.7%, gold fell by 2.9%, and palladium declined by 1.9%.

04/05/17 16:00 – Gold: $1,219.61; Silver: $16.33; Platinum: $900.63; Palladium: $795.52. Gold/Silver Ratio: 75.30.


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