SWOT Analysis: Silver Is Outshining Gold

news.goldseek.com / By Frank Holmes / 11 July 2016

Strengths

The best performing precious metal for the week was platinum, up 3.38 percent and marking eight straight trading days of gains. China has seen an 11 percent jump in auto sales through May, spurred by a tax cut on purchases.
Gold demand has surged this year as seen in global gold ETF holdings. Holdings have increased by more than 500 tonnes since January, reaching a high of over 2,000 tonnes for the first time in three years. Investor gold demand has been prompted by slow global growth, negative interest rates in Europe and Japan, and the unlikelihood of the Federal Reserve raising rates in the near future.

China resumed buying gold in June after taking an uncharacteristic break in May. The People’s Bank of China, the country’s central bank, purchased 15.6 tonnes, increasing its reserves to 1,823 tonnes. Retail investor buying is on the increase in China as well, as outstanding shares in the Huaan Yifu Gold ETF, China’s largest bullion-backed ETF, jumped to a record high of 17.58 tonnes of bullion equivalent on Tuesday this week, according to David Xu at Huaan Asset Management Co.

Weaknesses

The worst performing precious metal for the week was gold, up 1.83 percent, which has been pretty steady as of late marking the sixth consecutive weekly gain.
Payrolls for June busted through expectations, climbing to 287,000. At the same time, wages advanced less than expected. The news sent gold into a swing between gains and losses. Chris Gaffney, president of EverBank World Markets in St. Louis, commented that members of the Fed “are breathing a sigh of relief after this report, but the U.S. economy and more importantly the global economy is still in a state of uncertainty,” and that those concerns “will keep them from moving rates higher in 2016.”