Monthly Commentary

September 2019

Gold and silver both retreated during September in what can be described as the most volatile month for precious metals in 2019.  Gold dropped 3.8% to finish at $1,466.00 and silver fell 7.7% to end September below $17.00, its lowest price in seven weeks.  PGMs were mixed for the month, with platinum falling 4.8% and palladium rising 8.9% to a new record high.

On September 4, gold and silver reached $1,556.00 and $19.57, their highest levels in six and three years respectively.  After rising so sharply over the past few months, it seemed that September was shaping up to be another huge month for precious metals—especially silver.  Silver outperformed gold, rising as much as 5.5% in a single trading session to drop the gold to silver ration below 80 for the first time since February. Despite precious metals’ notable performance to begin the month, ongoing global growth concerns and unstable trade relations between the world’s two largest economies continued to drive investors’ decisions. Volatility hit new highs as investors dissected and reacted to every market development; a tweet suggesting the US would delay tariffs against China could lead to $40.00 swing in gold or a 150-point boost for the Dow Jones. As a result, gold spent most of the month seesawing up and down as markets reacted to ongoing developments.

Equities, which had been moving in unison with gold prices over that past few months on rate cut hopes, returned to their more traditional relationship, moving against precious metals as interest rates took a backseat to a soaring US dollar and improving trade relations.  September ended with gold and silver suffering their greatest single day losses of the month, falling 2.2% and 3.7% respectively on the 30th.   Stocks soared the same day and ended the month up with the Dow and S&P 500 each gaining around 2% and the Nasdaq rising 0.5%.

 

Historical Trends & Pricing

Commentaries

October 16, 2019

Gold is up $8.50 on weak retail sales which dropped .3% in September to snap a six-month winning streak and missed projections by .6%.  The data shows the effects the trade war is already having on consumers.  After gaining ground on a potential trade deal and strong bank earnings, stocks are flat today as they await more crucial earnings.  Doubts are also rising about China’s commitment to purchasing US agricultural goods which was a significant selling point of the current trade negotiations.

October 14, 2019

Gold and silver are both up modestly to begin the week as investors may have overreacted to Friday’s  trade deal progress between the US and China. Both sides remain weary and have stated that a lot still needs to be done to reach a meaningful trade agreement.  Stocks begin the week virtually flat after having their best single day in over a month of Friday.

October 11, 2019

Equities are soaring today on renewed trade hopes as reports indicate a partial deal between the US and China may be finalized shortly.  The Dow is currently up 470 points, on track for its best day in a month.  Gold is down .80% to its lowest price of the week on the news. 

October 09, 2019

FOMC minutes released today showed the Fed became more worried about the state of the economy, citing an increasing likelihood of a recession and softening labor market as two central concerns.  The minutes also showed that Fed officials were not unified in their decision to cut interest rates in September, illustrating the disconnect between market expectations and Fed policy that will likely continue in the absence of clear forward guidance. Gold and silver are holding onto their recent gains, trading at $1,508.00 and $17.77 respectively.  Stocks are also up on renewed trade optimism as talks continue in DC.

October 07, 2019

Markets are relatively quiet to begin the week as investors turn their eyes to DC for the next round of US-China trade talks.  The outcome of these negotiations will likely greatly impact markets since $300 billion in China tariffs are set to take effect next Tuesday if a deal isn’t reached.   Fed minutes and key inflation data are also due out later in the week.  Gold is down slightly ahead of such a busy week, currently trading at $1,499.00 and equities are virtually flat.

October 04, 2019

Equities got a much-needed boost on today’s job report.  September’s jobs growth fell short of expectations, but August and July’s numbers were revised up for a combined 45,000 additional jobs.  More importantly, the unemployment rate dropped to 3.5%, a 50-year low.  The Dow, S&P 500, and Nasdaq are all up nearly 1%.  Gold and silver are still well above their Tuesday lows, and on pace to end the week in the green. 

October 02, 2019

Gold is hovering around $1,500.00, up 2.2% in the past two days, as troublesome economic data continues to pound US equities.  Yesterday, the ISM Manufacturing Index dropped to its lowest level in a decade and showed that the manufacturing industry is continuing to decline after August’s data already showed it in contraction.  Today, ADP jobs data missed estimates showing private-sector growth continues to slow.  Stocks continue their selloff with the Dow, Nasdaq, and S&P 500 all down almost 2% midday.

 

September 30, 2019

Gold and silver fell to multi-week lows today as the US dollar continues to climb after reaching its highest level since 2017 as trade tensions between the US and China eased slightly over the weekend.  Last week’s report that the White House was considering banning Chinese companies from US exchanges seems to be unsubstantiated and stocks are responding well to the news with the S&P500 and Dow each up about 0.6%. 

September 26, 2019

After a turbulent trading day yesterday during the events that led to Pelosi’s announcement to launch a formal impeachment inquiry against President Trump, stocks have since rebounded with the Dow Jones up 130 points midday. Gold is dropping sharply as equities continue to rise, currently down $30.00, trading at $1502.70. Much of this drop can be attributed to a natural correction, as gold and silver rose sharply over the past two days without many substantiating reasons.

September 23, 2019

Gold and silver are both up significantly as increasing tension between the US & China and the US & Iran, coupled with weak manufacturing data out of Europe have boosted metals’ safe haven appeal.  Gold is currently up over 1% and silver has soared, up nearly 5% today.

September 20, 2019

Gold is currently up $10.00, rebounding above $1,500.00 as global growth concerns continue to weigh on markets.  The IMF, World Bank, and the Organization of Economic Cooperation and Development (OECD) all recently modified their 2019 forecasted global growth downward, citing increasing trade tension between the US and China as the primary cause. Stocks began today in the green but dropped sharply after China announced it had canceled its delegations scheduled to visit US farms. 

September 18, 2019

Gold is up slightly today, currently trading at $1,509.00, as investors await the results of this week’s Fed meeting.  The overwhelming consensus is that the Fed will cut rates 25bps, and like July’s meeting, the Fed’s outlook moving forward will likely be more influential on markets than the rate cut itself.  After snapping an eight session winning streak yesterday, stocks continue to trend downward ahead of today’s decision.

September 16, 2019

Gold and silver both begin the week trading up as geopolitical tension in Saudi Arabia and weak economic data out of China boost metals’ appeal as a safe haven asset.  Terrorists attacked two large Saudi oil fields on Saturday, cutting off over 5% of the world’s oil supply and causing oil prices to surge once markets reopened.  Economic data released by China today shows that their industrial output is up  4.4% YOY, its lowest level in 17 years.

September 13, 2019

Gold is trading at $1,489.50, its lowest level in over a month, and silver is down 2.7% today on easing trade tensions between the US and China.  The US agreed to delay some tariffs ahead of scheduled trade talks and China has exempted certain US agricultural products from tariffs.  Stocks are up on the news, but only slightly as some investors remain wary of the impact these gestures will actually have on the ongoing trade tension between the two superpowers. 

September 09, 2019

Gold and silver are teetering around $1,500.00 and $18.00 respectively, their lowest levels in nearly two weeks as US equities continue to climb and the US 10-year treasury yield ticked above 1.61%, to its highest level in nearly a month.  Ongoing tension in the UK and Hong Kong, unpredictable trade relations with China, and next week’s Fed meeting could all cause increased volatility in trading over the next few weeks.

 

September 6, 2019

After dropping significantly yesterday on renewed trade optimism between the US and China, gold and silver are up slightly based on weaker than expected jobs data.  130,000 jobs were created in August, missing expectations by nearly 30,000.  Stocks remain unchanged on the news, continuing to climb after yesterday’s rally.

September 4, 2019

Gold and silver both rose sharply yesterday on weak economic data out of the US and ongoing trade tensions.  Gold is currently holding steady around $1,546.00 and silver is trading at $19.36, a three-year high after gaining 6.5% yesterday.  The gold to silver ratio dropped below 80 for the first time in 13 months as silver continues to play catch-up to gold’s recent surge.

August 30, 2019

After a volatile trading day yesterday, gold and silver have firmed up around $1,522.00 and $18.35, down from their recent highs reached earlier in the week.  Even with the drop, gold and silver are poised to have their best month in years, up 8.6% and 14.8% respectively in August.  Stocks are trying to eke out a positive trading session to close the month ahead of the holiday weekend.

August 28, 2019

Gold is hovering around $1,536.00, down slightly from yesterday and silver continues to hold most of its gains made this past week.  Silver is up about 8% from last week’s low as the gold to silver ratio reaches its lowest level since February, right around 84.  Strong earnings are driving stocks higher even as rising trade tensions and an inverted bond yield curve continue to weigh on investors’ minds.

August 26, 2019

Gold climbed as high as $1,555.00 overnight after President Trump announced an increase in Chinese tariffs on Friday after markets closed,  but fell sharply back to the $1,530.00 range as both the US and China seem more willing to work towards a trade agreement now.  US equities are trading up on the news, trying to regain some of last week’s losses. 

 

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