Monthly Commentary/ 2019 Year End Summary 

2019 was an impressive year for precious metals as gold, silver, and PGMs all saw multi-year record gains.  Gold rose 18.9%, its best performance since 2010 and silver had its best year since 2016, jumping 15.4%. Platinum and palladium soared 22.4% and 57.2% respectively as supply concerns, primarily for palladium, continued to drive prices higher.

The primary factors driving markets this year were declining global growth and the ongoing trade war between the US and China. The year began during a truce enacted at the G20 Summit in December 2018. Relations seemed to be improving between the two superpowers and a trade deal was looking more likely.  This sentiment quickly changed, however, the majority of 2019 consisted of ineffective trade negotiations and systematic increases in tariffs.  Global growth showed signs of decline and several central banks acted to preemptively limit the effects of increasing uncertainty plaguing the world economy including the Federal Reserve, which lowered interest rates three times during the year.  The uncertainty surrounding US-China relations coupled with multiple rate cuts from the FOMC helped gold rise above $1,550.00 in early September, its highest level since 2013.

Stocks performed better than most would have expected given the increasing trade tension between the world’s two largest economies and subsequent global economic decline.  Fueled by positive earnings across multiple sectors and falling interest rates, equites had one of their best years of the decade.  The Dow rose 22.3% in 2019, and the S&P 500 and Nasdaq performed even better, gaining 28.9% and 35.2% respectively.

Overall, 2019 brought increased volatility across major markets.  Trade war developments would send markets oscillating sometimes daily.  Fed minutes were scrutinized to a level not seen before as investors picked apart any changes in forward guidance and acted on them.  Through the volatility though, precious metals spent most of the year climbing and ended December on a high note, which bodes well for continued success in 2020.

 

Historical Trends & Pricing

Commentaries

January 22, 2020

Gold and silver are trading sideways after consolidating around $1,556.00 and $17.80 as metals markets look for any news to swing prices in a particular direction.  Falling bond yields have offset a rising US dollar and President Trump’s impeachment trial isn’t having any meaningful impact on markets.  Equities, which fell yesterday on China’s corona virus fears, have rebounded slightly, but remain lower than they were earlier in the week.

January 15, 2020

Gold got a boost today on weak PPI data that showed wholesale pricing rose 0.10% in December, missing estimates of 0.20%.  For the year, wholesale pricing rose only 1.3%, totaling just half of its 2018 rise.  Gold is up $13.50 currently, as weak inflation data could signal a possible 2020 rate cut, or more likely,  not any rate hikes this year.  The US and China have signed phase one of a trade deal but the ambiguity of when and what phase two will entail leaves much uncertainty regarding future relations between the two countries.  Tariffs are expected to remain in place for the time being.

January 13, 2020

Gold and silver dipped below $1,550.00 and $18.00 on positive US-China news as both countries are scheduled to sign phase one of a trade deal on Wednesday.  The US will also remove China from its currency manipulator list as a sign of good faith.  Stocks are up ahead of this week’s meeting on hopes that phase one will lead to substantive growth and pave the way for further negotiations between the two countries.

January 10, 2020

Gold and silver are poised to end Friday in the green,  after a volatile trading week that saw price fluctuations greater than 4% for each metal.  Today’s rise comes after a somewhat disappointing December jobs report missed expectations for both job growth and wage growth.  Stocks, which began the day on a tear as the Dow broke 29,000 for the first time, have since retreated and are currently down across the board.

January 08, 2020

After rising above $1,610.00 last night when Iran bombed two Iraqi airbases housing US troops, gold has since retreated significantly and is currently trading at $1,560.00 on apparent easing of tension between the two countries.  No lives were lost in the attack prompting speculation that Iran was merely showing their military capabilities.  President Trump’s response this morning called for increased sanctions against the Iranian regime but no military response.  Stocks are surging today with the S&P and Nasdaq hitting record highs.

January 06, 2020

Gold continues to soar, rising as high as $1,589.00 in early-hour trading before stabilizing around $1,563. 00.   Silver rose as high as $18.50 but quickly dropped and is currently trading at $18.10.   Increasing hostility between the US and Iran and subsequent uncertainty surrounding the future political landscape of the region continue to weigh on investors. Stocks so far,  are on track for a better day than their last two trading sessions with the Nasdaq positive and the Dow and S&P down only marginally.

January 3, 2020

Gold is trading at $1,547.90, up $22.80, after a US drone strike killed General Soleimani, head of the Iranian Revolutionary Guard Corp and one of the highest-ranking military officials in Iran.  While Iran’s conventional military capacities are limited, its financing and influence of groups like Hezbollah throughout the region are cause for concern.  Oil prices are up significantly, and equities are down, with the Dow losing over 180 points midday.

December 30, 2019

Stocks are down heading into the final two trading sessions of 2019,  as manufacturing and pending home sales data both fell short of expectation. Gold and silver are trading virtually flat Monday afternoon, as weak economic data is being offset by promising trade news between the US and China as the two countries are likely to sign the first phase of a trade agreement by the end of this week.

December 27, 2019

Gold and silver are on pace for one of their best weeks in months, rising 2.3% and 4.4% respectively as the US dollar continues to lag, down over .50% today. Stocks are up marginally, hoping to continue their impressive winning streak that has seen several record closes over the past two weeks including the Nasdaq breaking 9,000 for the first time ever yesterday.

December 20, 2019

Metals are mixed with gold down slightly trading at $1,477.20 and silver reaching its highest level in over two weeks, currently trading at $17.20. Platinum and palladium are down significantly, dropping 2.1% and 4.6% respectively Friday.  Equities are on pace for another record-breaking week, still feeding off improving trade relations and unphased by President Trump’s impeachment.

December 18, 2019

Gold and silver are still hovering around $1,475.00 and $17.00 as volatility continues to decrease amid increasingly predictable monetary policy from the world’s major central banks and less erratic trade relations between the US and China.  Impeachment hearings in DC seem to be having little to no effect on markets, with the House poised to vote to impeach a President for the third time in US history.  Stocks are up marginally midday, with the Nasdaq leading the way, 0.25% in the green. 

December 16, 2019

Stocks continue to soar on news of a preliminary phase one trade agreement between the US and China and positive housing data released today shows homebuilder confidence is at a 20-year high. The S&P 500 and Nasdaq are up about one percent and the Dow is up about 0.65%, each hitting new records today. Gold and silver are trading near $1,475 and $17 respectively, both maintaining most of their gains made last week.

December 11, 2019

Gold and silver are both trading at weekly highs, currently $1,471.30 and $16.82 respectively,  ahead of today’s FOMC meeting conclusion.  Rates are expected to remain unchanged but Fed Chair Powell’s press conference and the Fed’s outlook for 2020 could stir markets a bit.  Palladium is having a record-breaking week and is now trading above $1900.00 as supply concerns out of South Africa continue to push it higher.  The US dollar and stocks are relatively flat heading into this afternoon.

December 09, 2019

Both equities and metals are relatively quiet to begin the week with gold and silver trading flat and stocks down marginally.  This week’s FOMC meeting will provide some insight into future monetary policy but will unlikely shake up markets like they have in the past this year, as the likelihood of an additional rate cut is near zero.  US-China relations will remain in focus as markets digest any new trade revelations ahead of Sunday’s tariff deadline.

December 06, 2019

Gold and silver are currently down 1.1% and 2.5% respectively, on pace for one of their worst days in recent months after the US jobs report shattered expectations.  In November, 266,000 jobs were added (vs. 180,000 expected) and unemployment dropped to 3.5%, a 50-year low (vs. remaining at 3.6% expected).  Equities are surging today after the report was released, with the  Dow, Nasdaq, and S&P 500 all up over one percent.

December 04, 2019

Gold and silver continued their recent surge this morning in early trading after yesterday’s comments from President Trump about delaying a trade deal until after the 2020 election sent metals soaring and equities sliding. Later this morning, however, reports that an initial trade deal may be likely much sooner,  reversed Tuesday’s market moves sending gold and silver falling, currently down $5.10 and $0.33 from yesterday’s settlement prices. Stocks are up significantly on the news, trying to break a three-day losing streak.  The past two days once again illustrated how volatile markets have become as a result of ongoing trade tension.

December 2, 2019

Gold and silver are currently trading at $1,464 and $16.92, down slightly from last week’s highs reached after President Trump signed a bill supporting Hong Kong protestors, further increasing trade tension between the US and China. Equities begin the week in the red as well after weak manufacturing data missed estimates and showed the US is in its fourth consecutive month of contraction. The Nasdaq is currently down 0.90% and the Dow and S&P 500 are each down around 0.60%. 

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