Gold News: March, April and May Precious Metal Analysis

Precious Metal Market – Stagnant

After yet another flat few months of trading in the precious metal market – I take up the mantle of writing another article. It will be yet another stat feast, albeit one showing pretty much the hypotenuse that the range has been fine. I will make a brief comparison to the figures in the previous article, which covered the gold and silver price from January to February. My belief is that the figures are not vastly different.

Before delving straight into numbers, I know you are chomping at the bit, I thought I would start with what has happened this month. Usually I do it the other way round, but perhaps we ought to look at the wider news that has happened. (I’m mainly doing this as the gold price and it’s lack of movement this year has begun to make my eyes hurt and I actually do want to get you through the article. I’m definitely doing this for your benefit. Not mine).

So over the last couple of months we have had numerous events, both financial and political. Let’s start with the UK-centric first:

Brexit

Not much of a surprise, but March and April as will most of this year be, focused on Brexit. At the EU summit in March, it took the 27 EU leaders took just two minutes to approve the Brexit transition period and guidelines for negotiations on it’s future relationship with the U.K.

EU

In the EU, the European Central Bank (ECB) have confirmed to continue buying bonds. As before the ECB have signaled that bond buying could continue beyond the September cut off pint. In the ECB meeting on 26th April, it showed all the hallmarks of a let-us-not-run-before-we-can-walk mentality. Mario Draghi mentioned the word caution almost in every paragraph of his summary. The Euro responded immediately with a three month low against the dollar. Draghi did however say the EU slowdown was ‘temporary’, so much will be made from further data released this year.

North Korea

Perhaps a little surprisingly, Donald Trump could be seen as something of a peacemaker. Not exactly what one would have guessed at the start of the

Picture: AFP

Picture: AFP

year. However in March, North and South Korean leaders declared to end the long term war and commit to a denuclearisation of the peninsula. Whilst I can’t say I enjoyed watching the two leaders holding hands, in what can only be described as one of the most hideously stage-managed attempts at re-conciliation ever recorded. I did also thoroughly enjoy watching the bodyguards running alongside the car – I can’t wait until someone on Youtube has put music to that. Fundamentally however awkward it was to watch, it is at least a break through. Whether it continues is another matter and one has to wonder at what has been promised to North Korea to relation to thaw dramatically. Regardless, Trump rather remarkably has seemed to be instrumental. I will be keenly watching the meeting between Trump and Kim Jong Un scheduled on the 12th June. The meeting of two great minds.

So with the above in mind how has that effected the precious metal market. Here are the key facts and figures for gold and silver – its a quick snapshot and I’ll give a brief analysis afterwards:

LBMA AM Gold Fix (1st Mar) LBMA Gold Fix (1st May) Change +/- Percentage Change
£953.80

$1311.25

€1075.75

 £956.37

$1309.20

€1087.68

+£2.57

-$2.05

+€11.93

+0.26%

-0.15%

+1.10%

Median Currency Exchange (1st Mar)  Median Currency Exchange (1st May)
Change +/- Percentage Change
GBP to USD = 1.3753

GBP to EUR = 1.1258

 GBP to USD = 1.3622

GBP to EUR = 1.1336

-0.0131

+0.0078

-3.49%

+6.20%

Silver Fix (1st Mar)  Silver Fix  (1st May) Change +/- Percentage Change
£11.87

$16.315

€13.39

£11.87

$16.25

€13.51

No Change

+$0.065

+€0.12

No Change

+0.39%

+0.89%

When I look at those figures, I think it is fair to conclude that the precious metal market has been quite staid. It isn’t so much that precious metals haven’t moved as the range in which the metals have traded is a little more interesting than a straight comparison between a small selection of numbers. But the point I am trying to get across is how little the market has moved. I think a lot of that comes down to the following – gold is used as a hedge and as things get better, the market normalises. Well that has begun to happen but gold actually is staying quite resistant. It is not correcting back down and neither is it moving up? It sits still and waits. What is it waiting for?

Precious metal markets – your move..