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In this week’s Market Report for Precious Metals we see gains across the board. Both gold and silver have hit 15-month highs this week. After the Federal Reserve meeting on Wednesday it seems that an interest rate increase in June is becoming more unlikely. U.S. economic growth has slowed a bit lately, with the GDP growing only 0.5% year on year. This is leading to a weakening Dollar Index, which fell to an eight-month low. The yen pushed a 1.5-year high against the dollar on Monday, May 2nd. This is causing some concern among other Asian stock markets, they preformed weaker on Monday due to worry about a surging yen and declining Japanese market. Crude Oil has been on an uptrend this week, trading just below $45.00 a barrel. The G20 is set to meet at the end on May, we will be waiting to see if any interventionist jargon comes out of meetings, which could impact the precious metals market.
Gold started the week at $1234.50 per ounce on Tuesday and rose steadily throughout the week, hitting $1285.65 on Friday. On Monday gold finished at $1294.30, these are the highest prices seen since January 2015. Gold has been boosted by a weak dollar alongside some recent safe-haven demand from nervous world stock markets and chart-based buying interest. According to Trading Director Peter Hug, “Right now, it certainly looks to me like the dollar will continue to weaken in the short-term and that’s been one of the catalysts for the move up in gold.” We will be watching to see for the support at $1306.00.
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Silver made significant gains this week also, it started out at $16.95 on Tuesday. By Wednesday it got a boost up to $17.34, and on Friday it ended at $17.85. Monday saw a slight decrease to $17.64. It is usual to see short-term price correction when significant gains are made. Long-term, we expect gains to continue, and suspect that investors who had not being paying attention to silver might jump on the bandwagon now and give it another boost.
Platinum started the week at $1005 and was up to $1065 by Friday. Monday it ended at $1079. These are significant gains for platinum, which had been struggling to push past the $1000 mark. This is also resulting in positive news for the mines. In recent days Anglo American Platinum reported a 7% increase in production for the first quarter. The World Banks says that investment could fall with the wage negotiations coming up, but there is also strong demand from the automotive sector in the wake of low oil prices.
Palladium also did well this week, starting at $598 on Tuesday and reaching $628 on Friday. It fell just a couple of dollars to $624 on Monday. These are strong gains for palladium, which has been trying to break the $600 barrier. Demand for palladium sponge is staying strong, which should help keep it above $600.
Most analysts agree that the dollar will continue to be weak in the near-term, which will be a catalyst for precious metal gains. There is even talk that if gold can reach $1350 per ounce, $1400 would be an achievable goal in the coming months.
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