Dealing Desk: Risk-On Sentiment Boosted by French Election Results

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

Gold reached $1,288 on safe-haven buying interest last Friday ahead of the French election, which was closely watched globally as the future of the EU seemed to stand against a tide of growing nationalism. The tide turned and markets cheered Macron as he performed in line with opinion polls. European shares and the euro rallied on the back of the outcome while gold headed lower amid growing optimism. Traders sold hedge positions immediately after the election results and there was a selloff in hard assets, which saw gold dip to $1,270 on Tuesday.

The equity hype crossed the Atlantic and whetted risk appetite, pushing the S&P 500 to an eight-week high. Optimism about U.S. corporate tax reduction and positive corporate earnings saw the Nasdaq close above 6,000 for the first time. Large corporations, including McDonald’s and Caterpillar, posted positive earnings that saw the Dow jump by 200 points. Both rallies resulted in another decline for gold, which fell to $1,263.

Silver came under attack after it touched $18.15 at the start of the week; it first dropped to a two-week low of $17.79 on selling interest then continued its decline to a four-and-a-half-week low of $17.53, eventually hitting a five-week low of $17.36 on Wednesday.

Platinum fell to a two-week low of $952.95 after hitting $973 last Friday as traders squared up their positions ahead of the weekend. Palladium rallied to a weekly high of $806.07 before dropping as it failed to find additional buyers above that price level, then went on to hit a three-week high of $810 on Wednesday.

Precious metals have been down this week with the exception of palladium, which posted a gain of 0.9%. Gold was down by 1.4%, silver suffered a loss of 4.1%, and platinum fell by 3.5%.

27/04/17 16:00 – Gold: $1,265.81; Silver: $17.33; Platinum: $944.91; Palladium: $811.17. Gold/Silver Ratio: 73.05.

NOTES TO EDITOR
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