SWOT Analysis: Perth Mint Reports Rising Sales on Geopolitical Issues

Jon Banking, Economy, Fiscal Policies, Geopolitics, Gold, Government, Market Commentary, Precious Metals, Silver

Strengths
The best performing precious metal for the week was silver, up 0.31 percent, just edging out the gains in gold. Bloomberg reports that China’s holdings of U. S. Treasuries have dropped by the most on record last year. The second-largest economy has been seeking to rely less on U. S. currency. Japan, which is the largest holder of Treasuries, also sold nearly $202 billion in Treasuries last year. These countries seem to be backing away from financing the U. S. government in the era of the Donald Trump presidency, and concerned about the prospects of rising inflation. Flows into the largest exchange-traded debt fund, featuring Treasury Inflation Protected Securities, increased to $547 million during the past two weeks. Meanwhile, China’s gold reserves have held steady. Gold has rallied in seven out of eight weeks lately on concerns that the stock rally is done and investors are anticipating that inflation will take off. Analysts at Commerzbank commented that gold is ‘finding support from a weaker U. S. dollar and falling bond yields. In addition, rate hike expectations have declined.’ The Perth Mint reports rising sales this year. Neil Vance from The Perth Mint said, ‘Certainly in terms of geopolitical issues, we still see people moving into precious metals for that safe haven.’ In addition to strong sales in the U. S., the mint reported exceptional sales in China, partly due to a popular rooster coin in conjunction with the Lunar New Year. Weaknesses
The worst-performing precious metal for the week was palladium, down 0.87 percent. Hedge fund managers boosted their bullish bets on palladium this week to the highest level in three weeks. Jonathan Butler, a precious metals strategist at Mitsubishi in London, commented that ‘U. S. equities continue to ride high in expectation of Trump’s corporate tax reform, and this has weighted on gold.’ Butler went on to say, ‘Gold is probably going to be on the defensive this week,’ based on Federal Reserve Chair Janet Yellen’s testimony.

This post was published at GoldSeek on 21 February 2017.