President Trump's threats to put new tariffs on European goods seemed to dampen risk appetites, pressure the dollar and support gold overnight.
The market also may have drawn support from reports indicating that ongoing strike action in South Africa is posing a more serious threat to gold production than previously thought. Sibayne's 1st quarter South African production is expected to be about 104,000 ounces, which is only about 36% of year-ago levels and is roughly 90% of what was expected under strike conditions.
Goldman has revised down its price forecast for silver and is looking for gold to outperform it. Gold and silver managed to break out of their recent consolidation zones on Monday, and they could be set for some follow through gains on today, especially if dollar weakness continues and/or the stock market weakens.
Reports over the weekend that China had raised their gold reserves in March lend a bullish fundamental backdrop, is it suggests sustained demand. The trade will be looking to the release of the FOMC March policy meeting notes on Wednesday for more clues on the Fed's temperature.
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Non-Reliance and Risk Disclosure: The opinions expressed here are for general information purposes only and should not be construed as trade recommendations, nor a solicitation of an offer to buy or sell any precious metals product. The material presented is based on information that we consider reliable, but we do not represent that it is accurate, complete and/or up to date, and it should not be relied on as such. Opinions expressed are current as of the time of posting and only represent the views of the author and not those of Zaner Financial Services LLC, unless otherwise expressly noted.
