Weekly Market Update - May 30, 2017

Precious metals have been seeing price volatility over the past week with gold falling for a third day on Wednesday, set for its first monthly drop since December last year. This happened largely a result of the US data release this week which showed US consumer spending recording its biggest increase in 4 months in April and inflation rebounding pointing to improvements in the domestic demand. These conditions all point to an increased probability of Federal Reserve raising interest rates this month. The market is on the lookout for the US jobs report due to come out this Friday as one of the key decisive factors to watch out for on whether the Fed will raise interest rates. An interest rate hike has the potential to reduce the demand for non-interest bearing bullion and strengthen the U.S. dollar in which gold is priced. This is keeping the precious metals market high in uncertainty this week. That said, so far political tensions in the U.S. and Europe have supported gold and have prevented any major losses. Silver some volatility and dipped on Monday to regain ground later in the week. The metal price movements balance out and remain stable through the week.

Platinum has been experiencing downward price pressure for the past 2 days through Wednesday trading. As its price remained low through 2016 the dynamics of the metal is shifting somewhat. Apart from being used in as a catalyst converter in the autos industry, jewellery is another big driver of the metal. Since the price remains the demand from the jewellery side continues to grow pushing the demand up with a possibility of price increases further down the line. Year 2016 saw platinum demand in India soar 11.4%, US 5.4%, with further increases expected this year. Palladium price has been moving upwards over the past few years. Downside potential exists as more capacity is set to come online as Russia-based Eurasia Mining has hit a significant milestone in the advancement of its Monchetundra palladium and platinum project.

Gold price currently stands at $1265.15/ounce and silver is trading at $17.36/ounce. Palladium is at $816.92/ounce and platinum at - $943.45