Gold Bullion Up 1.6%, Silver Surges 3.7% After Poor U.S. Data and Dovish Fed

Gold bullion was up 1.6% and silver surged 3.7% yesterday, their second consecutive day of gains, after U.S. durable-goods orders dropped sharply, adding to speculation that Federal Reserve policy makers will maintain ultra loose monetary policies. Gold and silver consolidated on those gains in Asia and in early European trading.

2016 YTD Relative Performance

Both precious metals are set for further gains in July consolidating on the gains in the first two quarters. This is bullish from a technical, momentum and sentiment perspective.

Bookings for durable goods, goods meant to last at least three years, fell a very sharp 4 per cent in June, a bigger fall than forecast and the most since August 2014.

Gold moved higher as the Fed concluded a two-day meeting, where policy makers left interest rates unchanged claiming risks to the U.S. economy have subsided.  This means there is still the possibility of very small rate increases this year. The durable goods number though shows that the U.S. recovery remains fragile at best.

Gold has climbed 26 percent this year in dollars terms and silver by 46%. Both have seen even bigger gains in most currencies and especially sterling. This is largely due to continuing ultra loose monetary policies globally and growing concerns about the financial and economic outlook.

The Fed has indicated it will hold interest rates lower for longer. Central banks have pledged even more monetary easing amid concerns over the fallout from the U.K.’s vote to leave the European Union and geopolitical risk globally. Japan Prime Minister Shinzo Abe announced plans for even more QE – 28 trillion yen ($265 billion) to help prop up the very weak Japanese economy.

Platinum surged 3.1 percent to $1,125.80 per ounce, the highest in nearly 14 months, extending gains after the Fed statement. Palladium has risen every day this week, following five straight weeks of gains. On Wednesday, palladium climbed to a 9 and a 1/2 month high, firming by as much as 2.3 percent to $702.50 an ounce.

Gold and Silver Bullion – News and Commentary

Hong Kong’s new gold rush: ‘Big Mother’ investors from mainland China buy big (SCMP)

Gold extends gains after Fed holds interest rates steady (Reuters)

Gold Moves Higher After Fed Statement (Nasdaq)

Gold Gains as U.S. Durable Goods Data Underscore Growth Concerns (Bloomberg)

Dollar Extends Decline as European Stocks Slip; Metals Advance (Bloomberg)

Why gold prices spiked after the Fed decision (Marketwatch)

‘Impending gold production cliff’ may deliver a jolt to prices (Marketwatch)

Gold Flood Consolidates After Record Fund Inflows: Chart (Bloomberg)

European banks prepare for possible shockwaves from stress test results (TheGuardian)

Is this the beginning of the end for cash?(MoneyWeek)

Gold Prices (LBMA AM)

28 July: USD 1,341.30, EUR 1,208.78 & GBP 1,017.64 per ounce
27 July: USD 1,320.80, EUR 1,200.21 & GBP 1,007.77 per ounce
26 July: USD 1,321.25, EUR 1,199.56 & GBP 1,006.40 per ounce
25 July: USD 1,315.00, EUR 1,196.91 & GBP 1,000.32 per ounce
22 July: USD 1,323.20, EUR 1,199.22 & GBP 1,005.10 per ounce
21 July: USD 1,322.00, EUR 1,199.32 & GBP 1,000.75 per ounce
20 July: USD 1,325.60, EUR 1,204.31 & GBP 1,005.86 per ounce

Silver Prices (LBMA)

28 July: USD 20.41, EUR 18.41 & GBP 15.51 per ounce
27 July: USD 19.58, EUR 17.81 & GBP 14.95 per ounce
26 July: USD 19.68, EUR 17.89 & GBP 15.00 per ounce
25 July: USD 19.41, EUR 17.66 & GBP 14.77 per ounce
22 July: USD 19.70, EUR 17.87 & GBP 15.03 per ounce
21 July: USD 19.34, EUR 17.55 & GBP 14.66 per ounce
20 July: USD 19.70, EUR 17.88 & GBP 14.95 per ounce


Recent Market Updates

– Marc Faber: Invest 25% Of Investment Portfolios In Gold Bullion
– “Could Not Invent A More Bullish Story For Gold Bullion”
– Gold In Bull Market – “Every Reason For It To Continue” – Frisby In Money Week
– Is Gold Set To Hit $1,500 Per Ounce?
– Why Italy’s bank crisis could be a ‘ticking time bomb’
– Gold Holds Near Two-Week Low as Risk Appetite Rises on U.S. Data
– IMF Scraps Forecast for Global-Growth Pickup on Brexit Fallout
– Gold, Trump and Rates: Bank That Foresaw Rally Flags $1,500
– Gold Lower After Central Bank’s Surprise Move
– “We Are On the Cusp of an Explosion in the Silver Price” – John Embry

– Stocks Rally – Is Brexit Systemic Risks Contained?
– Britain has a new prime minister – here’s what that means for you
– Metals Caught Between Global Gloom, U.S. Job Gains as Gold Slips

Mark O'Byrne

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