Metals Minute 39: Negative Yields Update

It has been a mostly up week this past week for the metals, with gold up 1.5% to $1,837, silver up 3.3% to $26.05, platinum down 1.8% to $1,065, and palladium up 0.4% to $2,703, as of 830 AM.

For the one-year time frame, gold is down 9%, silver is precisely flat, platinum is up 13%, and palladium is up 26%.

The employment report was somewhat negative this week, with not as many people going back to work as was hoped. The stock market is mostly lower this morning in response, as earnings are also coming under pressure. Several indicators are pointing to a correction shortly as well.

But a bigger support for precious metals comes in the form of negative real yields for treasury securities.  The entire yield curve of US Treasury products, including the 30-year bond, is yielding below the level of inflation.  This has historically been an excellent environment to promote higher gold and silver prices, as the Federal Reserve is currently trapped into pursuing even lower interest rates in the near future.

The bad employment numbers being reported indicate lower interest rates, higher inflation, and higher gold and silver prices are likely up ahead.