Dealing Desk: Metal Prices Reflect Trump’s First Days in Office

Goldmoney Wealth clients have been marginally net selling all precious metals this week. Clients have favoured vaults in Zurich, Hong Kong, and London, and have shown less preference for the Singapore and Toronto vaults.

Despite the robust U.S. economy, the markets were uneasy while President Trump spent his first few days in office at the start of the week and remained on the sidelines whilst his policies took form. Gold reached a two-month high at $1,219 on Monday before pulling back to $1,212. The rotation out of bonds into equities saw global stock markets advance; the S&P reached record highs and the Dow broke above 20,000 for the first time on Wednesday. Investment demand for the yellow metal was dulled by ‘risk-on’ mentality, causing gold to slip to a two-week low of $1,193.

Although liquidity in the markets picked up slightly, volumes remained low due in part to lack of activity from China ahead of the Lunar New Year holiday. Volatile trading conditions created by a thin market have resulted in a relatively wide Bid-Ask spread as market makers look to protect themselves.

Silver has been less impacted by these events; starting out the week at $17.01, it moved higher to $17.15 then dropped to $16.93.

The other precious metals were more volatile this week; after starting the week out at a two-week low of $948, platinum soared past $1,000 and hit an 11-week high. Palladium saw a 20-month high, stopping short of $800. Both metals were then caught in panic selling, pushing platinum to retreat to $980, while palladium dropped to $745. This seemingly random movement of metal prices has kept both investors and industrial buyers on the sideline.

With the exception of Platinum, the precious metals are down on last week. Palladium was the biggest loser posting -2.7% loss, gold followed next, down -1.1%. Silver declined by -0.7%. Platinum was up week on week by 2.7%.

26/01/17 16:00 – Gold: $1,186.76; Silver: $16.76; Platinum: $977.33; Palladium: $730.72. Gold/Silver Ratio: 70.81.

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NOTES TO EDITOR
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