Dealing Desk: Safe Heaven Assets Are in Play

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

Several events caused global unrest this week. Missile strikes in Syria prompted fear of wider conflict in the surrounding areas and the impact they could have on oil supplies, while North Korea’s increased military activity caused tension between the U.S. and Russia. Uncertainty in the Eurozone is also on the rise with the first round of the French election looming and a Scottish referendum on the horizon.

There’s an uneasy feeling in the financial markets as traders assess how these geopolitical factors will play out. Gold initially reached a high of $1,271 on buying interest after U.S. non-farm payroll data posted at 98,000, well below market estimates of 180,000. The yellow metal continued in an upward pattern all week as safe heaven assets came into play. The price enjoyed a further boost when President Trump said the U.S. dollar was “getting too strong”.

Silver reached a six-week-high of $18.50, then moved higher alongside gold before dropping back down. Underpinned by industrial demand, institutional funds are bullish on the metal and there’s been a lack of interest from ETFs.

Platinum started out at a four-week low of $939 due to increased producer selling, the financial instability of South Africa, and the volatility of the rand. Investment funds have been reducing their platinum exposure and buying palladium as the metal has its own set of fundamentals and the prospect of a deficit in production underpins performance. Palladium hit a year-to-date high of $816.45 before it pulled back.

With the exception of palladium, which dipped by 0.7%, precious metals gained this week: gold rose by 2.5%, platinum was up 2.1%, and silver gained 1.3%.

13/04/17 16:00 – Gold: $1,285.02; Silver: $18.49; Platinum: $973.16; Palladium: $798.18. Gold/Silver Ratio: 69.50.

NOTES TO EDITOR
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