Precious Metals Weekly Round-Up: Gold Dips as Stocks Gain

- April 5th, 2019

Gold and palladium were down on Friday as they were pressured by a stronger greenback. Meanwhile, silver and platinum made gains.

Gold prices slipped on Friday (April 5) thanks to a global stocks rally and the US dollar rising against the yen.

Even though the greenback put pressure on the yellow metal, bullion managed to hold above the 10 week low it touched in the previous session ahead of US jobs data being released this afternoon.

“The market is being a little bit cautious ahead of the non-farm payroll figures, after we had a disappointing figure in February. Bond markets are trading lower, which means yields are up, increasing opportunity cost for holding gold,” Quantitative Commodity Research Analyst Peter Fertig said.

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“It also seems a bit more out of the leaders and into the laggards; platinum is up, silver is up while gold and palladium are down. It is a little bit of buying underperformers and taking profits in those who did quite well over the last couple of weeks and months.”

As investors turn their attention towards US jobs data, results are expected to show an increase of approximately 180,000 jobs in March, according to a Reuters survey. Investors will also be watching whether February’s 20,000 job count is revised higher.

As of 9:26 a.m. EDT on Friday, gold was trading at US$1,291 per ounce.

Meanwhile, silver made over 1 percent in gains for the week, as investors seemed to show interest in the white metal’s underperformance. As of 9:29 a.m. EDT, silver was trading at US$15.15 per ounce.

As for the other precious metals, platinum moved up, climbing just under 2 percent for the week.

“Platinum is probably benefiting at the expense of palladium, as the market takes a view on auto-catalyst substitution,” said Nicholas Frappell, global general manager at ABC Bullion.

The gap between platinum and its sister metal palladium has begun to shrink in the last few weeks, dipping 42 percent to a difference of around US$438 from a record US$753 in mid-March. Both metals are primarily consumed by automakers for catalytic converter manufacturing.

As of 9:46 a.m. EDT, platinum was up 1.97 percent for the week, trading at US$902 per ounce.

For its part, palladium was down 2.49 percent for the week and on course for its second weekly decline. As of 9:48 a.m. EDT, the metal was trading at US$1,332 per ounce.

Top precious metals news stories

Our top precious metals stories this week include a look at the price of gold during the first quarter of 2019, a report from the World Gold Council (WGC) on how global gold-backed exchange-traded funds (ETFs) fared during the month of March and a round-up of the current top five TSX-listed silver stocks.

1. Gold Price Update: Q1 2019 in Review

While gold rallied from the lows seen throughout most of 2018, the yellow metal only managed to make slight gains during the first quarter of 2019, climbing just under 1 percent.

A softer US dollar, geopolitical issues and a slow in economic growth were the main catalysts behind the precious metal’s ability to stay above US$1,250 throughout the quarter. Additionally, investors regained interest in the metal as a safe haven and after the US Federal Reserve paused rate hikes.

Despite gold’s reaction to these factors, prices remain in murky territory. However, many industry insiders believe that gold is primed to rise and sustain US$1,300 and above.

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2. March Shows Incremental Growth for Global Gold-backed ETFs

In March, holdings in global gold-backed ETFs increased by 3 tonnes to 2,483 tonnes, which is equivalent to approximately US$183 million in inflows, the WGC reported on Thursday (April 4).

Despite global assets under management falling 1.6 percent to US$103 billion over the course of the month, the WGC notes that global gold-backed ETF flows remain positive year-on-year thanks to strong January inflows.

The 1.6 percent decline was due to a 2 percent drop in the price of gold during the same period.

“All regions saw marginal increases in holdings. Interestingly, by month-end, North American funds had fully reversed the US$2 billion in outflows seen earlier in the month,” says the WGC.

3. Best Silver Stocks of 2019 on the TSX

The silver price took some tumbles during the first quarter of the year, and, while it managed to hit a high of US$16.04 on January 30, it was down 2 percent overall in Q1.

Despite those struggles, some silver companies still managed to make progress and expand the resource potential of their assets. Now that Q1 has come to a close, the Investing News Network has rounded up the best silver stocks on the TSX with the biggest share price gains year-to-date.

Also in the news

On Thursday (April 4), Goldcorp (TSX:G,NYSE:GG) announced that its shareholders have officially voted in favor of merging with Newmont Mining (NYSE:NEM).

The merger was approved by more than 97 percent of Goldcorp shareholders, either in person or by proxy at a meeting.

The deal is planned to close during the second quarter of this year. All that remains to ensure that happens is approval from Newmont shareholders.

Additionally, Kirkland Lake Gold (TSX:KL,NYSE:KL,ASX:KLA) reported that it boosted its Q1 production by 57 percent year-on-year to 231,879 ounces, leaving the miner in the ideal position to meet its full year guidance of 920,000 to 1 million ounces of gold.

The company noted that the production increase was thanks to record output at the Fosterville mine in Victoria, Australia, and Macassa mine in Ontario, Canada.

Don’t forget to follow us @INN_Resource for real-time news updates!

Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.

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