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In this week’s Market Report for Precious Metals we saw gains across the board up until Monday. Last week members of the Federal Reserve met to discuss the U.S. economy and when they will impose the next rate hike. As was expected, no change was made in interest rates at this meeting. The consensus reached is that the economy is doing well and a rate hike could come as soon as April, although June is more likely. San Francisco Fed President John Williams told Market News International, “Assuming everything else is basically the same and the data flow continues the way I hope and expect, then April or June would definitely be potential times to have an increase in interest rates.” Monday saw the dollar trading 0.2% higher against a basket of half a dozen currencies, putting some pressure on gold prices. Crude oil prices also rose Monday with West Texas Intermediate up 0.41% to $39.60 a barrel.
Gold started the week at $1233.60 per ounce and was up to $1269.60 on Thursday. Monday, March 21st saw gold fall to $1244.25. Despite the pullback it may not be time to sell just yet. Boris Schlossberg, managing director of FX strategy for BK Asset Management says, “Everyone thinks gold will come down below $1,200 but at these levels, I think $1,225 is as good as it will get.” He adds, “When investors begin to see they get less money than they put in, they will flock to gold.” Worldwide, the increasing number of central banks that are implementing negative rates policies, reflecting continued economic weakness, will continue to boost gold prices. This pullback will be temporary and could be an ideal time to buy.
Silver did well this week. It started at $15.32 per ounce on Monday, and steadily increased to $15.94 on Friday. On Monday silver fell a little also to $15.88 per ounce. Silver has been following gold’s trends fairly closely over the last couple weeks, so this pullback is not unexpected. Silver will also bounce back and should continue gains along with gold. We will be looking for silver to reach $16.00 an ounce in the coming weeks.
Platinum did will throughout last week also, raising from $952 on Tuesday to $977 on Friday. Following the other precious metals, it fell to $966 on Monday. Palladium also followed suit, starting the week at $559 and ending Friday at $592. On Monday it fell to $586.
The pullbacks we have seen on Monday are likely very temporary. Although the dollar and crude oil are showing some strength, other economies are not doing as well, and precious metals should continue to make gains against them. This could be an ideal time to make some investments before prices rise again.
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