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In this week’s Market Report for Precious Metals we see some recent high prices reached, followed by quick downturns in anticipation of several meetings taking place in the week ahead. Comments from the ECB President Draghi following their meeting on Thursday, April 21st, triggered price increases. He stated that if necessary the central bank could ease monetary policy further. After those increases though, investors took a nervous step backward in anticipation of central bank meetings coming up in the week ahead. The Federal Open Market Committee (FOMC) will meet on Tuesday and Wednesday. While it is expected that there will be no changes in U.S. monetary policy from this meeting investors are looking for clues on the timing of the next policy move. The FOMC will release a statement Wednesday evening. The Bank of Japan holds its regular monetary policy meeting on Thursday. Anticipation of upcoming interest-rate strategies from the Bank is holding back Asian stocks, mostly due to the country’s negative-rate tactics.
Gold started the week at $1241.70 per ounce on Tuesday, April 19th. It reached a high of $1257.65 on Thursday, following news from the ECB president. On Friday it fell back to $1243.25. There was not much change by the end of Monday, April 25th, with gold ending at $1240.50. The metals market was boosted somewhat Monday by a lower Dollar Index, falling stock and crude oil prices. Another interesting development for gold happened on Tuesday, for the first time a Chinese premiere, The Shanghai Gold Exchange (SGE), published a reference gold price in local currency. It will take some time to see if this becomes a new international benchmark.
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Silver followed along with gold this week. It started at $16.62 per ounce on Tuesday. Silver reached a recent high of $17.32 on Thursday. Silver seems to have found its underlying industrial-use demand, advancing 3.6% for the week. This marks the third straight weekly gain. On Monday silver ended at $17.06.
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Platinum also preformed the same during the beginning of the week, it started Tuesday at $990 and broke the $1000 mark on Wednesday, hitting $1008. Platinum saw its high for the week on Thursday also, reaching $1041. Platinum is being boosted by good auto sales over the last few weeks. Diesel exhaust systems, which use platinum, came into view again as news surfaced that a total of 630,000 cars from several different brands will be recalled in order to update the software. Platinum ended Monday back down to $1008.
Palladium had a positive week, starting out at $571, reaching $616 on Thursday and breaking the $600 barrier. Palladium fell to $611 on Friday and ended Monday at $602. Physical demand remains strong so we expect more price gains in the long-term.
The week ahead will likely remain fairly quiet until the central banks have finished with their meetings and released statements. Precious metals still have a positive long-term outlook.
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