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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 - May 19, 2017

In the precious metals markets this week . . .  

GOLD:
Monex spot gold prices opened the week at $1,235 . . . traded as high as $1,261 on Thursday and as low as $1,230 on Monday. . . and the Monex AM settlement price on Friday was $1,254, up $19 for the week.  Gold support is now anticipated at $1,237 then $1,215, and then $1,191. . . with resistance anticipated at $1,261, then $1,278, and then $1,295.

SILVER:
Monex spot silver prices opened the week at $16.70 . . . traded as high as $16.99 on Wednesday and as low as $16.42 on Thursday. . . and the Monex AM settlement price on Friday was $16.78, up $0.08 for the week.  Silver support is now anticipated at $16.54, then $16.15, and then $15.80. . . and resistance anticipated at $16.85, then $17.12, and then $17.34.

PLATINUM:
Monex spot platinum prices opened the week at $932. . . traded as high as $947 on Wednesday and as low as $825 on Monday. . . and the Monex AM settlement price on Friday was $942, up $10 for the week.  Platinum support is now anticipated at $930, then $895, and then $888 . . . and resistance anticipated at $960, then $978, and then $991.

PALLADIUM:
Monex spot palladium prices opened the week at $816. . . traded as high as $819 on Monday and as low as $756 on Thursday. . . and the Monex AM settlement price on Friday was $756, down $56 for the week.  Palladium support is now anticipated at $755, then $739, and then $708 . . . and resistance anticipated at $775, then $791, and then $820.

QUOTES OF THE WEEK:

Want to know the latest on gold and silver in this age of uncertainty?

Monex VP Mike Maroney offers analysis and commentary on recent activity in the economy, geopolitics and the precious metals markets.  Check out video here http://www.monex.com/age-of-uncertainty/

From Riva Gold in 5/18 Wall Street Journal  Investors Turn Sharply Pessimistic

''Turbulence in Washington jolted markets out of an extended period of calm Wednesday.

Stocks, the U.S. dollar and government-bond yields slid as investors pulled back from bets on the swift passage of President Donald Trump's agenda.  Wagers that his policies would boost growth and inflation have been unwinding for months, but those moves accelerated Wednesday.

In one of the clearest signs of waning investor confidence, a closely watched measure of the dollar's value erased its postelection gains.

Stocks fell around the world, with major U.S. stock indexes posting their biggest declines in months.

Investors piled into assets that they perceive as havens, sending gold up 1.8% to $1,257.50 an ounce, its largest one-day gain since March 16.''

. . . and from 5/18 seekingalpha.com  4 Reasons Why Silver Is A Strong Buy

''The 4 reasons I would offer for silver as a strong buy are:
Inflation hedge
Track record of value holding
Current price disparity of gold to silver
Premium pricing of other asset classes

Hopefully my equities will comfortably outpace inflation.  A fundamental tenant of all investing, however is diversification.  An allocation of bonds is highly encouraged by the vast majority of advisors, but precious metals seem to get lost in the shuffle.  Why?

The short answer I'd offer is that they have no yield.  Treasury bonds are oft considered the safe haven asset of choice, as one can still collect yield when their prices are low.  In the current investing climate, I would discount this strategy, but I will speak to that in a bit.

When things go south (see the markets yesterday), gold and silver prices spike.  This is accepted as the way things are even by avowed critics of precious metals.  Most would say equity markets will always rebound on a long enough timeline, but what do you do until then?

As a long-term investor, I firmly believe in not selling low and buying high always.  This statement is easy to scoff at; who doesn't believe that?  The difficulty is executing according to this principle.  When recession hits, and my equities take a dive, those companies hopefully retain favorable prospects upon a recovery in the business climate.  What do I do until then to pay the bills, or to snatch up more shares at the most opportune time of all?

I might take a pay cut or even be laid off as a declining business climate puts pressure on all industries.  Concerns over the solvency of the underlying issue could depress their prices.  Gold and silver are highly liquid, and can be sold quite easily when needed to the most.

The question of gold versus silver is a simple one.  They both act as inflation hedges and safe haven assets. The disparity of the price of silver versus gold is what currently makes physical silver a strong buy.

France and the United States had the gold:silver ratio fixed at 15:1 throughout the 1800s when bimetallism was the status quo of currency.  From a supply/demand perspective, some posit the supply in the Earth's crust of silver to gold to be around 16:1.  The current ratio of gold spot price to silver spot price is over 74:1.

If both the ratio contracts and the equity markets head south, silver stands to make a massive profit.  One will counter that markets can remain irrational longer than you can stay solvent, but how can one be insolvent on an asset that has held value for thousands of years and increases in times of market distress?''

. . . and from Pamela and Mary Anne Aden in 5/19 The Aden Forecast

''It's been a wild week. . .

As you know, the stock market had been ignoring the political stories for months, but this has now changed. With Trump related disappointments emerging almost daily, it was finally too much. Investors became increasingly concerned as uncertainty took center stage. Stocks were hit hard. The U.S. dollar also felt the heat, but gold surged as investors again turned to safe havens. Bond prices rose too.

The stock market had a steep fall yesterday, recouping a bit today. But the stock market remains very bullish and so far this is just a normal downward correction within the bull market. Even though the fear index (VIX) shot up and stocks could decline further, we recommend keeping the stocks you have, at least for the time being. Most of our stocks are holding up and they should be fine (U.S. Steel, X, is the exception but it may be bottoming, so keep it too.)

Gold shot up and it's looking good. If gold can now stay above the $1240 - $1255 level, it'll be a sign the B decline is ending. That would be confirmed above $1295, meaning a C rise would then be underway. And with the U.S. dollar breaking down, this may happen sooner rather than later. Silver and the gold shares are perking up too, and so is the oil price. Keep your positions.

The decline in long-term interest rates was fast and steep. As the political news intensified, bond prices moved up, reinforcing their position as a safe haven. This upmove will likely be temporary and it will provide a good opportunity to sell bonds if you're still holding some. We still advise staying on the sidelines because bonds are set to fall further once this rebound rise is over.''

This is not a recommendation to buy or sell.

Last update: May 19, 2017 11:26:26 AM

This is not a recommendation to buy or sell.