HTML5 Incompatible Browser

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.

PRECIOUS METALS REVIEW - July 14, 2017
In the precious metals markets this week...
GOLD

Monex spot gold prices opened the week at $1,209 ... traded as high as $1,232 on Friday and as low as $1,206 on Monday and Tuesday... and the Monex AM settlement price on Friday was $1,228, up $19 for the week. Gold support is now anticipated at $1,211 then $1,189, and then $1,170... with resistance anticipated at $1,233, then $1,258, and then $1,297.

SILVER

Monex spot silver prices opened the week at $15.25 ... traded as high as $16.01 on Friday and as low as $15.19 on Monday... and the Monex AM settlement price on Friday was $15.89, up $0.64 for the week. Silver support is now anticipated at $15.78, then $15.46, and then $15.14... and resistance anticipated at $16.05, then $16.17, and then $16.51.

PLATINUM

Monex spot platinum prices opened the week at $895... traded as high as $921 on Wednesday and as low as $890 on Monday... and the Monex AM settlement price on Friday was $921, up $26 for the week. Platinum support is now anticipated at $911, then $888, and then $857... and resistance anticipated at $938, then $962, and then $987.

PALLADIUM

Monex spot palladium prices opened the week at $827... traded as high as $870 on Thursday and as low as $826 on Monday... and the Monex AM settlement price on Friday was $857, up $30 for the week. Palladium support is now anticipated at $838, then $819, and then $802 ... and resistance anticipated at $868, then $881, and then $911.

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 Reuters in 7/12 investing.com Gold Advances As Dollar Eases From High

"Gold rose on Wednesday, after Federal Reserve chair Janet Yellen's testimony to congress revealed that the central bank believes it would not have to lift rates "all that much" to reach the neutral fed funds rate, pointing to a slower pace of future rate hikes.

The Fed "continues to expect that the evolution of the economy will warrant gradual increases in the federal funds rate over time," Yellen said in her prepared testimony.

Yellen noted that the federal funds rate "would not have to rise all that much further" to reach a neutral level, suggesting a slowdown in the pace of future rate hikes.

The somewhat dovish statement from Yellen weighed on the dollar and yields, boosting demand for the precious metal.

Gold is sensitive to moves in both bond yields and the U.S. dollar - A lower dollar makes gold cheaper for holders of foreign currency which a fall in U.S. rates, lowers the opportunity cost of holding non-yielding assets such as bullion.

Other precious metals shrugged off negative sentiment to trade higher, as silver futures added 0.88% to $15,560, a troy ounce while platinum futures fell 0.30% to $901.35."

...And in the July 2017 The Aden Forecast Is The Economy Ready For Higher Interest Rates?

HIGHER INTEREST RATES
"Behind the scenes there's a big debate going on, and the outcome will be important for all of us...Here's the deal...

The Fed recently hiked interest rates for the fourth time in 18 months. They feel the economy is strong enough to withstand these rate hikes.

In their favor, they point out the employment picture is the best in decades. Housing continues to improve with sales picking up, and housing prices are hitting their highest levels since prior to the financial crisis. Manufacturing is also surging and the risk of deflation has diminished.

Plus, the index of leading economic indicators continues its upward march, hitting a new high and signaling the economy will likely keep plugging along for the rest of this year.

FAMOUS LAST WORDS
These positive signs led Janet Yellen to make her boldest statement yet...she said that another financial crisis, like the one that exploded in 2008, was not likely in our lifetime.

You'll remember Lehman Brothers went bust in 2008, and the banking crisis pushed the economy literally to the brink. The Fed then intervened, embarking on its QE economic stimulus program.

Other central banks did the same, also dropping interest rates to zero or below, in a successful attempt to keep the financial system and the world economy afloat. But there was high price to pay…

HARD JOB AHEAD
As our old friend Jim Grant points out, since the start of the 2008 financial crisis, the world's central banks have materialized the equivalent of $12.25 trillion.

To put this into perspective, the value of all the gold that's ever been mined amounts to $7.4 trillion. So the money that's been created in the past nine years is 65% greater than all the gold that's been accumulated throughout world history. This alone is pretty mind boggling.

Yellen, however, had more calming words, stating the banks are much stronger than they were in 2008. That is, not only does she feel the economy is good to go as far as more interest rate hikes are concerned, but she also wants to start reversing the Fed's lopsided balance sheet. Like higher interest rates, this too would have a tightening effect...and that's where the debate comes in.

ON THE OTHER HAND...ECONOMY NOT SO STRONG
In the opposite corner are the naysayers, warning that higher interest rates could prove to be a disaster. They say the economy is not nearly strong enough to handle more interest rate hikes and they have a laundry list of items baking up their case.

There's a slew of indicators thet've been going down, like housing starts, retail sales, bank loans and durable goods. These indicators have essentially offset the positive indicators, so basically the economy is mixed. Consumer debt is back up to record highs and so is corporate debt. Plus, 50-80% of those polled said they don't have enough money in savings to cover a $1000 emergency.

It (the decline in the velocity of money) tells us that, despite all the monetary stimulus over the past eight years, people aren't borrowing or spending like before. That is it's a sign of a lackluster economy that isn't responding like the Fed would like.

THE DANGER OF TOO SOON
At this point, some of you may wonder, who cares if the Fed raises interest rates moderately again?...Well, our dear friend and colleague, Matt Kerkhoff at dowtheoryletters.com summed it up best. "The answer to that very important question is that if the Fed hikes rates under the wrong conditions, it could throw the economy into a recession and provide a nice haircut to asset prices. Adopt too many rate hikes at the wrong time, particularly when inflation is already weak, and we risk crossing the threshold from economic expansion to economic contraction, aka recession.

The weaker U.S. dollar will also be bullish for gold, and at some point we'll likely see it head North. So the bottom line is, stay diversified and continue to go with the major trends. Regardless of all the news, commentaries and opinions, the price action in the markets themselves will keep us on the right track. And for now, that track is telling us to diversify, also keeping a large portion of our portfolio is cash."

Last update: Jul 14, 2017 12:07:53 PM

This is not a recommendation to buy or sell.