Gold Silver Market Report 13 April 2017

Fundamentals and News^*

Political Risks Push Gold to Five-Month High on Haven Demand

Concerns about rising global tensions surrounding Syria and North Korea are revitalizing demand for gold as a haven, with the metal trading near the highest since Donald Trump was elected U.S. president.

Bullion touched a five-month high Wednesday. A standoff between the U.S. and Russia after an American missile strike on Syria and Trump’s pledge to solve the North Korean “problem” with or without China have deepened concerns about political stability. There are also signs that Russia and the U.S. are increasingly at odds over Afghanistan.

The metal slumped after Trump’s election on his promises of tax cuts and more infrastructures spending, but rebounded since mid-December amid worries about the unpredictability of his presidency. While gold may extend gains in the next few weeks, better U.S. data and higher real interest rates will then push prices lower, Goldman Sachs Group Inc. said.

Trump “did it again,” David Govett, head of precious metals trading at Marex Spectron Group in London, said by email. “Just continue to hold gold as a hedge against all this uncertainty, but be very aware that if diplomats can reach agreements, the price will fall back again.”

Gold futures for June delivery gained 0.3 percent to settle at $1,278.10 an ounce at 1:39 p.m. on the Comex in New York, after touching $1,281.80, the highest for a most-active contract since Nov. 10. On Tuesday, the price closed above its 200-day moving average for the first time since November.

The U.S. said evidence showed Syria was behind a chemical attack on civilians, and Secretary of State Rex Tillerson urged Russia to abandon its support of Syrian President Bashar al-Assad’s regime. America has moved a naval battle group closer to North Korea amid fears it may conduct a nuclear or missile test, and the Asian country warned of a nuclear strike if provoked.

The uncertainty is supporting physical demand for gold, with holdings in SPDR Gold Shares, the largest exchange-traded fund backed by gold, rising 4.2 metric tons to 842.4 tons as of Tuesday. That’s the highest in more than a month.

Goldman remains cautions. While a further unwinding of Trump-related equity trades and geopolitical risks may push prices higher in the next few weeks, the metal will retreat to $1,200 in three and six months, it said in a report dated Wednesday.

In other precious metals:
Silver futures also rose on the Comex, while platinum and palladium declined on the New York Mercantile Exchange.
(*source Bloomberg)

Data – Forthcoming Release

Technical Outlook and Commentary: Gold

Gold for Spot delivery was closed at $1286.78 an ounce; with gain of $11.92 or 0.93 percent at 1.00 a.m. Dubai time, from its previous close of $1274.86

Spot Gold technically seems having resistance levels at 1288.8 and 1298.1 respectively, while the supports are seen at $1258.5 and 1249.1 respectively.

Technical Outlook and Commentary: Silver

Silver for Spot delivery was closed at $18.49 an ounce; with gain of 16 cent or 0.87 percent at 1.00 a.m. Dubai time, from its previous close of $18.33

The Fibonacci levels on chart are showing resistance at $18.58 and $18.77 while the supports are seen at $17.95 and $ 17.76 respectively.

 

Resistance and Support Levels

Indications only, open & closing prices are bids; data source: Bloomberg; important disclaimer below; Times as per Dubai

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