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In this Weekly Market Report for Precious Metals we see gold and silver get a big price boost while platinum and palladium make no significant moves. The major news of the week was, of course, the Brexit referendum decision to leave the European Union. The historic decision came as a surprise to most investors. There was an immediate financial downturn following the vote. Many see the Brexit decision as accentuating and deepening the global forces that have been building for years.
Most people don’t have an interest in the exact details of Britain’s trade relationship with Europe, however the decision to leave does make a strong statement about the global economy. Federal Reserve Chair Janet Yellen has backed out of a central bank conference organized by the European Central Bank. Yellen had been scheduled to speak on a panel on Wednesday, June 29th. From the U.S., GDP and consumer confidence data will be released on Tuesday, June 28th, and personal income and pending home sales on Wednesday. Weekly jobless claims and Chicago PMI are slated for Thursday, while ISM manufacturing data is scheduled for Friday. We will see if investors begin to make more moves as this data comes out. This may give an indication of what the continuing impact of Brexit will be.
Gold started the week at $1280.80 per ounce on Tuesday, June 21st. On Wednesday it was down to $1264.85, and on Thursday it was down again to $1262.15. On Friday we saw the big price jump, up to $1315.50. On Monday gold got another boost to end at $1326.60. Gold rallied up 4.5% on Friday and another 1% on Monday. This trend is in reaction to the decline in the British pound. On Friday the pound dropped to its lowest level in 30 years, which also marked the largest intraday move in history. With this, gold hit its two-year high. It remains to be seen how long Brexit will dominate the market. Some analysts are calling for gold to hit $1400 per ounce. It is difficult to call levels at this point as no one is sure how long this volatility will continue. At this time, it looks like the Federal Reserve is staying on the sidelines. The Fed may not be able to raise rates until December 2016 or into 2017, which will be good for gold.
Silver also had a great performance on Friday and into Monday. It started the week at $17.36 and was down to $17.29on Thursday. On Friday it jumped up to $18.04. Silver slid some on Monday, it ended down at $17.82, mostly due to lack of action in trading and markets. Silver is a safe haven option in times of financial uncertainty, sometimes it does not react as quickly as gold. We expect silver to continue to make gains along with gold.
Platinum started the week at $986 and was down to $963 on Thursday. On Friday it ended up at $987. Platinum went up another couple of dollars to end at $989 on Monday. Platinum is not reacting as strongly to market news as gold and silver. However, if gold prices continue to raise it will likely follow suit.
Palladium also did not see significant change over the week. It started at $548, it ended Thursday at $560. Palladium was actually down on Friday, falling back to $548. The price went up again a bit on Monday to end at $554.
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