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Gold Prices Steady to Start April

April 3rd, 2017 by

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Barring some unforeseen “April Fools” revelation from over the weekend, gold has charted a steady path to close March and begin April. The gold price has held ground at almost exactly where it began last week, hovering just below $1,250/oz. Spot gold was trading around $1,247/oz on Monday morning, largely flat. Meanwhile, spot silver was down about 0.3% to $18.20/oz.

Platinum and palladium were each unchanged this morning, steadying at $950/oz and $800/oz, respectively. This means that palladium has significantly narrowed the gap with its PGM counterpart: At times in the past year, the platinum-palladium ratio has been close to 2:1.

Friday’s Action

Friday saw the stock market in the U.S. fall slightly, about 0.3%, while the dollar also slipped against its peers. The bond market saw a bit more demand on the last trading day of the month—and the last day of the first quarter—as the 10-year Treasury yield slid below 2.40%. The gold price climbed about 0.4% on the day.

Oil capped off its best weekly performance of the year with another trading day in the green on Friday. WTI crude added roughly 0.5% to cross above $50 per barrel, and Brent crude moved above $53/bbl. Much of the rally was supported by speculation that OPEC will maintain its production cuts for a prolonged period of time. Despite a blistering week of upward movement, oil prices still remain well below where they ended 2016.

Solid Second Quarter

In general, Q1 was unkind to commodities. The sector was no doubt dragged lower by the losses in the oil market over the year’s first three months. However, gold managed to defy this trend for the most part, gaining nearly 10% over the quarter. Silver and palladium logged an even better performance, each around 15% higher.

As we move into Q2, stock markets around the globe continue to look firm. World stock indices were almost uniformly in positive territory on Monday, with the exception of London’s FTSE 100 and France’s CAC 40. While the Brexit decision in the U.K. has been cause for some anxiety in the country’s renowned financial markets, concerns about the upcoming presidential election in France are weighing on equities, as well.

Xi Jinping

In other economic news, manufacturing has seen an uptick in many of Europe’s biggest powers—Italy, France, and a fresh six-year high in Germany. Japan and China both saw an improvement in business sentiment. The world will be watching as President Trump meets with Chinese Premier Xi Jinping in Florida. The gathering at the president’s Mar-a-Lago resort is primarily for the two leaders to become acquainted, though there are obvious trade policy implications between the U.S. and China that may be discussed.

 

The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.

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