Weekly Market Update - May 23, 2017

Last Wednesday saw a nearly 2% jump in gold prices – the highest gain since Britain’s June vote to leave the European Union, on political allegations against the US President Trump. At the beginning of this week gold prices are holding ground and seeing prices increase moderately on continued political instability in the US which is weighing on the dollar. Gold is set to trade sideways with the slight upward potential as the markets are shifting their focus to promised tax cuts and infrastructure spending in the US – with the potential to provide certain relief to precious metals prices. Last week saw increases for silver but it succumbed to the bearish pressure towards the end of the week. This week in Monday trading silver price is following gold and the price is rising.

An important piece of economic data was released with Japan’s exports rising for a fifth consecutive month on higher shipments of semiconductors and steel. Exports to the US expanded 2.6% in April from a year ago down to higher sales of automobiles and parts.  As Japan’s export growth is seen as a proxy of global demand – this piece of news is set to provide a certain degree of downward pressure to balance out continued political instability in the US somewhat.

Palladium price took a slight dip in Monday trading and it’s a metal to continue to watch out for. This metal relies heavily on the demand from the automotive sector as its main driver unlike platinum which enjoys the demand in other sectors such as jewellery. While the sales in the auto sector are expected to hold up strong in the US, China continues to see softening and the sector saw several events which can impact its demand – 1) Volkswagen emissions scandal and 2)Toyota recently announced the availability of new smaller catalyst – Flow Adjustable Design Cell (FLAD) which uses 20% less precious metal. Both of these factors have the potential to reduce demand in the future. Platinum price is holding up well in Monday trading and has registered a slight uptick.

Gold is currently trading at $1260/oz, silver at $17.16/oz. Palladium stands at $755/oz and platinum at $941/oz