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Daily Resources Overview - 16 Nov 2018
PRECIOUS METALS COMMENTARY
Gold and silver prices are modestly higher in early-afternoon U.S. trading Thursday. Some
worries about the health of the U.S. stock market, following the recent sell-offs and increased
volatility, are supporting the safe-haven metals. A batch of U.S. economic data today was a
mixed bag for the marketplace, with the metals prices seeing no significant reaction after
their morning releases.
U.K. Prime Minister Theresa May had two of her cabinet members resign Thursday,
including her Brexit secretary, following May’s pronouncement Wednesday that she is
sticking with her controversial Brexit plan. The British pound sunk on the news of the
resignations, while European bond yields rose. There is now talk May could see Parliament
move to a no confidence vote. Gold may be seeing some limited safe-haven buying interest
from this matter. However, the situation is not a serious geopolitical factor for the world
marketplace.
The U.S. dollar index is trading higher today and not far below this week’s 1.5-year high. The
strong U.S. economy compared to most other world economies, and the interest rate
differentials in those economies that see U.S. rates significantly higher, are bullish underlying
elements that are likely to continue to provide strong support for the greenback. The
marketplace took note of U.S. Federal Reserve Chairman Jerome Powell’s comments at a
speech late Wednesday that the Fed is closely monitoring the modest deceleration in world
economic growth. However, Powell implied that situation is not now altering the Fed’s
monetary policy tenor of continuing to slowly raise U.S. interest rates. Powell added that a
further U.S. stock market sell off could impact the Fed’s policy decisions. Traders and
investors are also keeping a close eye out for new developments on the U.S.-China trade
war front. Reports this week say there has been movement on China’s part to better
communicate with the U.S. regarding getting formal discussions under way. Most believe the
G20 meetings in Argentina later this month will see U.S. President Trump and Chinese
Premiere Xi meet face-to-face on the matter. A U.S.-China trade agreement would likely see
the metals markets react in bullish fashion, as China is a major metals importer. Source: Kitco