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Gold, Silver Dip On Stronger Dollar

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Gold, Silver Dip On Stronger Dollar

The precious metals gave back all of Monday's gains in early action this morning, facing selling pressure from traders taking profits as well as the effects of a stronger dollar. Spot gold traded down about $10 to $1,272/oz while spot silver lost 23¢ (-1.3%) to $16.98/oz. Prices for both metals were essentially back where they began the week.

Platinum fell farther than silver, giving up $14 (-1.5%) to $920/oz. The palladium market finally showed signs of cooling off, as spot prices were down around 0.6% to $988/oz.

Here are the closing numbers for Wall St on Monday:

Dow Jones: 23,548.42 (+9.23, +0.04%) S&P 500: 2,591.13 (+3.29, +0.13%) Nasdaq: 6,786.44 (+22.00, +0.33%)

This is how the precious metals ended yesterday:

Gold: $1,281.50/oz Silver: $17.20/oz Platinum: $934/oz Palladium: $994/oz

balance of gold and dollar

Aside from regular trading activity, the U.S. dollar was the primary culprit robbing each of the precious metals of momentum. The greenback was up 0.35% to nearly 95.1 on the DXY index, extending what is nearly a four-month high.

Yesterday, the trend was temporarily flipped: the Japanese yen rallied to better than ¥113.8 per dollar while the slumping euro recovered to $1.161. Both currencies swiftly reversed direction on Tuesday, as the euro ($1.157, -0.33%) and yen (¥114.3, -0.45%) each fell when markets opened in New York.

There was still some fallout in Western markets over the reams of published documents known as the Paradise Papers. The leak revealed the tax practices of many major corporations in addition to the financial maneuvers used by wealthy individuals like the Queen of England. This has brought even more scrutiny on Apple Inc., which was already being reviewed by tax authorities in the European Union over the placement of its corporate headquarters in Ireland. The Paradise Papers show that Apple then used Jersey, a small island and Crown dependency of the U.K., as its new tax haven.

The leaks do implicate others in money laundering and other financial crimes, but all of Apple's uncovered tax dodging was technically done lawfully. The firm does pay tens of billions in taxes in the U.S. each year, but was reportedly able to reduce the effective tax rate on its profits held overseas to just 4%.

Wall St opened higher, with the Dow Jones and S&P 500 each adding about 0.2%. The Nasdaq lagged behind in negative territory. Shares in Asia were sharply higher overnight, especially in Tokyo (+1.7%), Hong Kong (+1.4%), and Shanghai (+0.75%). European shares were slightly lower.

In commodities news, OPEC is forecasting greater production of shale oil that could lift crude prices even in the face of ongoing output curbs by the oil cartel. WTI crude traded 27¢ lower to $57.08/bbl, but is still close to its highest in more than two years.

 

The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.

About the Author

Everett Millman

Everett Millman

Analyst, Commodities and Finance
Managing Editor

Everett has been the head content writer and market analyst at Gainesville Coins since 2013. He has a background in History and is deeply interested in how gold and silver have historically fit into the financial system.

In addition to blogging, Everett's work has been featured in CoinWeek, Advisor Perspectives, Wealth Management, Activist Post, and has been referenced by the Washington Post.

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