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In this week’s Market Report for Precious Metals we have seen fluctuations in price among all major metals. As we discussed in last week’s market report, on Tuesday March 29th, Janet Yellen, the Chair of the Federal Reserve gave a speech, “which largely reiterated a number of near-term concerns expressed in her post-meeting press conference in March, suggests the Fed chair clearly remains ‘cautious’ with respect to adjusting policy,” Deutsche Bank analysts wrote in a note. The minutes from the Fed’s meeting in March will be released on Wednesday, but no new information is expected. According to CME Group the only opportunity for a rate hike that has more than a 50% chance of passing is in September. Investors are still getting mixed messages though, as on Monday April 4th, Boston Fed President Eric Rosengren said at a speech in Boston, “Financial-market volatility has fallen, and most economic forecasts do not reflect expected large spillovers from continued headwinds from abroad.”
The market also reacted to solid manufacturing data and a jobs report that was better than expected. The jobs report showed that non-farm payrolls rose by 215,000 last month, higher than expectations of 205,000, underscoring the strength in the US economy. Crude oil prices also fell, ending at their lowest level in a month due to doubts that the Organization of Petroleum Exporting Countries can agree upon a production freeze when members meet in Doha on April 17th. The leak of confidential documents from Panamanian law firm has raised questions over lax global financial regulation that has made rampant overseas tax avoidance possible.
Gold started the week at $1216.45 per ounce, and jumped to $1238.20 on Wednesday March 30th. On Friday gold was back down to $1232.10 per ounce. On Monday, April 4th gold fell again to $1224.30. Despite these fluctuations and drops in price, many believe that there is still steam left in the recent gold rally. As policy makers globally keep rates low to spur growth there should continue to be investment in metals. Higher prices are also lifting shares of producers including Newmont Mining and Freeport-McMoRan. The lack of inflation right now is good for gold.
Silver started the week at $15.06, and stayed steady at $15.38 Wednesday through Friday. Monday April 4th saw a steep drop to $15.03. The drop is likely due to the strong U.S. economic data boosting investor risk sentiment, and continued uncertainty about the Federal Reserve’s interest rates path.
Platinum started the week at $945. It was up to $982 on Friday, and on Monday it fell along with other metals, dropping to $959. Palladium began the week at $568, and was down to $559 by Friday evening. Palladium actually strayed from the pattern of other metals and went up to $567 on Monday April 4th.
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