Gold - Precious metals continue to gain

In the second week of Jan 2019, spot gold price increased as US central bank hinted on pausing rate hike in the year over the forecasts of economic slowdown. Spot gold gained to $1,290.84 per ounce, almost 0.4 per cent in the week. The futures were up 0.3 per cent. Analysts predicted slowdown in US economy at the end of 2019 and at the start of 2020. Dollar was down against major global currencies in the week over the reports of no more monetary tightening. US government shutdown on the 20th day and the US president Trump’s message on using emergency power over US Mexico border increased confusion in the market.

Gold is gaining but is holding back over the expectations of trade war truce in the year.  The trade dispute continues to pose uncertainty. Once it is resolved, dollar may remain low and gold may gain.  

Precious metal bullish trends

Precious metals had bullish trend at the end of 2018, and in terms of, year-to-date data, gold remained positive but  it ended 31 per cent lower than the start of the year 2018.  The speakers at  mid January Cambridge House Vancouver Resource Investment Conference  said the US dollar is waning and US president continues to take impulsive steps, which can be seen by the way of the US government funding shutdown. Precious metals provide risk diversification and retail investors want to secure investment.

Analysts at the meet said there are over a dozen companies having exponential growth in 2018 but global economies are slowing and stock markets are affected by such changes, which have increased interests in precious metals. For the last 19 years, the price of precious metals is growing, amidst market fluctuations, and investors are bullish about it. Some believe gold can hit $1300 per ounce.

Gold investment, at this time, is supported by falling dollar, improvement in Euro currencies and recovery in gold mining stocks.  The movement of dollar remains one of the biggest factors for gold gains, although, dollar selling pressure is intermittent.  

Other base metal trends  

Amongst base metals- copper driven growth has been restricted by US China trade war, even though, there exists a copper deficit and most cooper mining firms, are waiting for the trade situation to normalize. Warehouse inventories of the metal remains low and if the metal crossed $3.35/lb, it can gain significantly.

Platinum was up 0.2 per cent to reach $821.60 per ounce.

Palladium was 0.4 per cent up to $1,326.75 per ounce, and silver gained 0.6 per cent to $15.65. Palladium was once considered unattractive by-product, but is now hitting new records where spot price was at all time high to $1,344.41 a troy ounce. In the last few weeks, it gained more than gold and some experts believe the prices are still not high enough, and may, further, continue to gain.

Miners are seeking better price for the metal due to higher cost of production. Further, it is used in car catalyst converters and industrial processes, and tighter pollution regulations will increase its demand.

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