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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 - AUGUST 26, 2016

In the precious metals markets this week . . . 

GOLD:
Monex spot gold prices opened the week at $1,334 . . . traded as high as $1,344 on Tuesday and as low as $1,316 on Thursday . . . and the Monex AM settlement price on Friday was $1,320, down $14 for the week.  Gold support is now anticipated at $1,317, then $1,300, and then $1,293 . . . with resistance anticipated at $1,327, then $1,336, and then $1,358.

SILVER:
Monex spot silver prices opened the week at $18.97 . . . traded as high as $19.01 on Tuesday and as low as $18.42 on Thursday . . . and the Monex AM settlement price on Friday was $18.62, down $.35 for the week.  Silver support is now anticipated at $18.51, then $18.36, and then $18.11 . . . and resistance anticipated at $18.69, then $18.89, and then $19.00.

PLATINUM:
Monex spot platinum prices opened the week at $1,116 . . . traded as high as $1,116 on Monday and as low as $1,062 on Friday . . . and the Monex AM settlement price on Friday was $1,075, down $41 for the week.  Platinum support is now anticipated at $1,061, then $1,051, and then $1,022 . . . and resistance anticipated at $1,085, then $1,099, and then $1,137.

PALLADIUM:
Monex spot palladium prices opened the week at $711 . . . traded as high as $712 on Monday and as low as $681 on Wednesday . . . and the Monex AM settlement price on Friday was $691, down $20 for the week.  Palladium support is now anticipated at $679, then $658, and then $611 . . . and resistance anticipated at $691, then $704, and then $720.

QUOTES OF THE WEEK:

From Ira Iosebashvili, in a column in the August 22nd edition of Barron's magazine:

''After three disappointing years, gold has regained its shine in 2016, and investors are betting the gains will continue.

By any measure, the precious metal's comeback has been impressive.  Gold recently traded at $1,340.40 a troy ounce on Comex, riding a 26.4% gain so far this year, off less than $25 from its highest level in more than two years.  That compares to a less than 7% gain in the Standard & Poor's 500 index.

Investors expect that many of the factors that have driven gold higher remain in force and will continue to buoy the metal.  Chief among these is a belief that the Federal Reserve is unlikely to raise interest rates in the coming months -- and perhaps for the rest of the year -- thanks to a U.S. recovery that has generated weaker-than-expected growth in areas such as gross domestic product and retail sales, even while other key areas, such as employment, have been robust.''

''Limited expectations of Fed action this year have also weighed on the dollar, providing another tail wind for gold.  Since the metal is priced in U.S. currency, a falling dollar makes gold more affordable to foreign buyers.  The Wall Street Journal Dollar Index, which measures the buck against a basket of 16 currencies, is down around 5% this year.

Gold shot up after the United Kingdom's June Brexit vote, as investors sought a safe harbor.  Though U.S. stock markets have reached record highs since then, gold prices have continued to rise.  Gold is also getting a boost from abroad, as central banks in Europe and Japan cut interest rates to record lows in a bid to boost economic growth.''

. . . and from David Stockman, writing in the Daily Reckoning newsletter, published by Agora Financial, LLC on August 24th:

''Assume for the moment that economic performance during the next 10 years will be no better or worse than the average of the last 10 years, including the last decade's 2.5% growth rate of wage and salary income . . .

The result is that by the out years, the CBO has overestimated taxable income by more than 20%, or $2 trillion per year.  That means, in turn, that the CBO's current forecast is built on massive phantom revenues, given that under current law, the payroll and income tax take from wages and salaries is just under 35%.

So with sober economic assumptions and existing policy, the annual deficit is heading for $2-3 trillion per year by the middle of the next decade.  This means the nation will accumulate incremental debt of $15 trillion or more in the interim.  And by 2026, the national debt will reach $34 trillion, or 140% of GDP.

Those are Greek-style figures.  And they would come at the very time that the 78 million-strong baby boom generation is at peak retirement levels.''

''The fact is, Washington is still spending upward of $700 billion per year on defense, international security assistance, foreign aid and the rest of the surveillance state.  And the total is more than $850 billion if you count the cost of supporting veterans from all the misbegotten wars and interventions going back to the 1950s.

More importantly, the iron law of Washington politics -- demonstrated in spades during the Reagan era -- is that entitlements and other domestic programs will never be cut or reformed so long as massive funding is being pumped into the military-industry-security complex.''

''Too bad the nation can't afford it.''

. . . and from the Silver Institute, in the August issue of Silver News, received on August 25th:

''Silver's price performance soared in the first half of 2016, fueled by increased investor interest in silver as a safe haven asset and as leveraged exposure to gold's price rally.  In the period January 4-August 5, silver's price increased 44 percent, based on the LBMA Silver Price, significantly outpacing all of the other precious metals.''

''Coming on the heels of record global silver coin demand in 2015, silver coin sales increased in the first quarter of 2016 by 29 percent globally, according to the GFMS Thomson Reuters Quarterly Coin Sales Survey.  Regionally, North America has continued to be the bright spot in silver investment product demand.  In the coin market, coin sales grew at double-digit paces in all the major regions (North America, Europe, Japan, Asia, Africa, & Other), as coin demand has remained elevated since the second half of last year.''

. . . and from Marcy Nicholson and Jan Harvey, in a posting on the Reuters website on August 26th:

''Gold extended gains above 1 percent on Friday, breaking a five-day streak lower after Federal Reserve Chair Janet Yellen said the case for raising U.S. interest rates has strengthened, although increases should be gradual.

Yellen pointed to improvements in the U.S. labor market and expectations for moderate economic growth, reinforcing the view that such a move could come later this year.  She did not, however, lay out a clear roadmap for what the Fed needs to see to raise rates. 

'After the initial Yellen headlined-induced stumble, gold has rallied impressively, helped by a weakening dollar,' said Tai Wong, director of base and precious metals trading for BMO Capital Markets in New York.

'Short-term, holding support above $1,315 (an ounce) may let the recently listless gold bull convalesce in the familiar and safe $1,330-$1,360 range,' he added.

The U.S. dollar index fell as much as 0.6 percent as Yellen spoke, but then pared losses, and Wall Street stocks rose.''

Last update: Aug 26, 2016 01:34:49 PM

This is not a recommendation to buy or sell.