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Precious Metals Review

Market information and news is critical for precious metal investing. However, many investors have limited time to sort through the massive amounts of market data and gold, silver and platinum news. The Monex Precious Metals Review consolidates the week's activities in a concise snapshot of the precious metal markets.

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PRECIOUS METALS REVIEW - JUNE 24, 2016

In the precious metals markets this week . . .  

GOLD:
Monex spot gold prices opened the week at $1,285 . . . traded as high as $1,334 on Friday and as low as $1,259 on Thursday . . . and the Monex AM settlement price on Friday was $1,320, up $35 for the week.  Gold support is now anticipated at $1,308, then $1,274, and then $1,259 . . . with resistance anticipated at $1,328, then $1,345, and then $1,378.

SILVER:
Monex spot silver prices opened the week at $17.45 . . . traded as high as $18.03 on Friday and as low as $17.20 on Tuesday . . . and the Monex AM settlement price on Friday was $17.81, up $.36 for the week.  Silver support is now anticipated at $17.62, then $17.10, and then $16.61 . . . and resistance anticipated at $18.06, then $18.38, and then $18.80.

PLATINUM:
Monex spot platinum prices opened the week at $979 . . . traded as high as $996 on Friday and as low as $965 on Thursday . . . and the Monex AM settlement price on Friday was $989, up $10 for the week.  Platinum support is now anticipated at $985, then $952, and then $918 . . . and resistance anticipated at $1,009, then $1,038, and then $1,083.

PALLADIUM:
Monex spot palladium prices opened the week at $544 . . . traded as high as $567 on Thursday and as low as $541 on Tuesday . . . and the Monex AM settlement price on Friday was $547, up $3 for the week.  Palladium support is now anticipated at $543, then $522, and then $495 . . . and resistance anticipated at $555, then $588, and then $620.

QUOTES OF THE WEEK:

From Mark Decambre, in a posting on the MarketWatch website on June 24th:

''Gold prices surged Friday, catapulting past $1,300 to a multiyear high after a historic referendum will result in a U.K. exit from the European Union.

Gold tends to rally in times of economic, market or political uncertainty because precious metals are considered a haven asset.  As might be expected, riskier assets, including U.S. stocks, tumbled.

'The surging gold price clearly shows the panic sweeping financial markets,' Adrian Ash, head of research at BullionVault, told MarketWatch.''

''The U.S. Dollar Index, the measure of the buck against a basket of currencies, was up 2.8%.  The dollar and gold often move inversely, but as other vote-sensitive currencies moved lower against the dollar, the greenback logged short-term gains that unhooked the currency from its typically inverse relationship to gold.

'This is just the kind of crisis [that] gold helps savers and investors insure against.  Gold offers certainty and security as stock markets and currencies sink, just as it did during the 2008 meltdown.  The difference is that this shock was clearly signposted and many private investors didn't wait for today's result to get prepared,' Ash said.''

. . . and from Jamie Chisholm, in a posting on the Financial Times website on June 23rd:

'' 'There is a growing chorus of market participants, ourselves included, who are wondering aloud whether the world's central bankers have lost touch with reality, wilfully ignoring anecdotal evidence that negative interest rates [NIRP] do more harm than good.'

So said Strategas Research in a note published this week.  Quite.

The New York-based boutique listed the unintended consequences of NIRP.

They include: damaging consumer and business confidence; providing little incentive for business to invest in capital rather than buy back stock; hurting savers; and a likely widening of the wealth gap.''

. . . and from Russell Napier, in an interview in the June 20th edition of Barron's magazine:

''The most damaging and dangerous thing for the equity market is deflation, because it means falling cash flows; if you have a lot of debt and can't pay it, equity gets wiped out.  Deflation often comes with credit distress.  The market falls quickly, whether in 2007-2008, 1928-1929, or 1919-1921.

The market remains high today, but I see global growth falling and trade looking bad.  We might slump to a recession with deflation.  Markets move quickly when there is a credit distress because assets disappear.  We saw that with Lehman.  In the past two years, many borrowers have been in distress globally.  I have long thought emerging-market debtors are the weak link, because they were borrowing in someone else's currency.  I still believe the stock market has to go below its March 2009 levels.''

. . . and from Jonathan Chevreau, in a posting on The Motley Fool website on June 20th:

''In a world of 'fiat' electronic and paper money, real money (that is, gold or silver coins or bullion) could be the ultimate uncorrelated asset should the whole house of paper-money cards come tumbling down after decades of currency debasement by the U.S. Federal Reserve and its global cousins.''

''. . . while this Fool doesn't plan to go overboard on the asset class, I plan to maintain my usual 10% position and hope the gold bugs and bear authors are proved wrong.  But on the off chance they're even half right, this 'insurance' position does seem to help me sleep better at night.  And isn't that the whole point about insurance?''

. . . and from Narayana Kocherlakota, in a posting on the Bloomberg website on June 21st:

''One of the officials responsible for setting interest rates at the U.S. Federal Reserve -- St. Louis Fed President James Bullard -- has signaled a big change: Previously an outspoken advocate for raising rates aggressively, he now thinks the economy is so weak that a mere quarter-percentage-point increase would be enough for the foreseeable future.

''The shift in Bullard's outlook sends an important message to investors and the public: The Fed is constantly reassessing the state of the economy, and can thus change its plans for interest rates sharply.  This means investors should put less emphasis on the outlook for interest rates, and focus instead on whether the Fed is making fast enough progress toward its economic goals.''

. . . and from Bob Wiedemer, in the June issue of the Aftershock Publishing Newsletter, received on June 23rd:

''The reason QE has worked so far, and will continue to work for a while longer, is that people understand it as only an emergency measure.  After all, it's only an extension of what the Fed already does in its open market operations.  Buying bonds is normal practice for the Fed; QE just means buying more bonds than usual until the economy gets going under its own steam.

Of course, the Fed has already strained the believability of this interpretation by printing more than $3 trillion and effectively quintupling the U.S. money supply.  But when you have a public that really wants to believe that Fed support of the market is good, you can get away with even an amount as ridiculous as that, for a while.

However, now that we're seven years past the financial crisis, emergency measures like QE are going to strain people's confidence.  The Fed will still get away with it for a while, but QE4 will almost certainly be the last round of QE.  What begins as $50 billion or $100 billion a month could easily rise to $250 billion a month as it takes more and more printed money to boost the stock market.  Eventually even that fails.  Confidence has been destroyed, and the Aftershock is upon us.''

Last update: Jun 24, 2016 12:44:18 PM

This is not a recommendation to buy or sell.