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Happy Days Are Here Again

Commentaries & Views

For those investors and traders who intrinsically believe that gold pricing should be higher than current pricing, a revival of optimism has emerged as market sentiment shifts to a much more bullish demeanor. This rekindled solid bullish market sentiment is based upon the perception that the current negotiations between the United States and China are making headway and moving closer to a resolution.

This newfound optimism has resulted in extremely strong price advances in the precious metals complex as well as U.S. equities. Today gold futures are experiencing a dynamic and robust rally, with the most active April Comex contract currently fixed at $1344.30. This is a direct result of today’s increase of well over $22, a 1.68% gain.

The gains in gold as respectable as they are dwarfed by today’s upside movement in palladium which has seen the greatest price advance both in dollars as well as percentage gains of any other precious metal. Palladium is at an all-time new record high, and with today’s $47 price gain is currently fixed at $1454.40.

Although a 90-day tariff truce which has been in effect between these two superpowers is quickly approaching the point in time in which tariffs will ratchet up from 10% to 25%, recent statements by this administration have alluded to a much more flexible timeline.

According to MarketWatch on Sunday President Trump tweeted about the trade talks saying, “big progress being made on sooooo many different fronts”. He went on to tweet that, “our country has such fantastic potential for future growth and greatness on an even higher level!”

Add to the current optimism regarding the trade talks the dilemma currently in the European Union in regards to Brexit. British parliament will once again be forced to make a decision in approximately five weeks. Peter Hug, global trading director at Kitco metals said that the issues surrounding Brexit, “has the potential to derail the entire continent, and dealers across the pond are seeing increased physical demand for gold.” His commentary also mentioned the importance of the minutes from the Federal Reserve’s FOMC meeting which will be released on Wednesday.

Although the geopolitical issues that have sparked this substantial rally in the precious metal’s markets could move sideways at any point in time, until that occurrence, market participants have a renewed sense of optimism and have expressed that by bidding gold and palladium substantially higher and adding fuel to the current rally in U.S. equities.

Truly many traders believe that at least for now, happy days are in fact here again.

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Wishing you as always, good trading,

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.