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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.

PRECIOUS METALS REVIEW - October 20, 2017
In the precious metals markets this week...
GOLD

Monex spot gold prices opened the week at $1,305 . . . traded as high as $1,306 on Monday and as low as $1,278 on Wednesday and Friday. . . and the Monex AM settlement price on Friday was $1,278, down $27 for the week. Gold support is now anticipated at $1,277 then $1,261, and then $1,233. . . with resistance anticipated at $1,290, then $1,307, and then $1,324.

SILVER

Monex spot silver prices opened the week at $17.45 . . . traded as high as $17.45 on Monday and as low as $16.89 on Wednesday . . . and the Monex AM settlement price on Friday was $17.00, down $0.45 for the week. Silver support is now anticipated at $16.90, then $16.57, and then $16.15. . . and resistance anticipated at $17.27, then $17.45, and then $17.80.

PLATINUM

Monex spot platinum prices opened the week at $947. . . traded as high as $949 on Monday and as low as $921 on Wednesday. . . and the Monex AM settlement price on Friday was $924, down $23 for the week. Platinum support is now anticipated at $915, then $888, and then $865 . . . and resistance anticipated at $948, then $965, and then $1,002.

PALLADIUM

Monex spot palladium prices opened the week at $1,003. . . traded as high as $1,005 on Monday and as low as $943 on Thursday. . . and the Monex AM settlement price on Friday was $969, down $34 for the week. Palladium support is now anticipated at $958, then $927, and then $905 . . . and resistance anticipated at $987, then $1,002, and then $1,020.

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 Corrie Driebusch and Michael Wursthorn in the 10/19 Wall Street Journal Dow Races Through 23000

"The Dow Jones Industrial Average powered past 23000 on Wednesday, but the latest milestone masks a potentially perplexing trend: Investors keep yanking money out of stock funds.

Investors pulled roughly a net $36 billion out of U.S. stock mutual and exchange-traded funds in the third quarter, according to EPFR Global. Overall in 2017, more money has flowed out of such funds than has flowed in, EPFR data show, even as the Dow has climbed to 51 flesh highs this year. A surge in stock buy-backs and growing inflows from foreign investors and sovereign-wealth funds helped offset outflows from U.S. stock funds.

Many investors are concerned that the steady rise in U.S. indexes has left shares looking expensive. They also recently have grappled with elevated tensions between U.S. and North Korea, hurricane-related disruptions to the economy and signals that the Federal Reserve is planning to raise interest rates further and wind down its unprecedented asset-purchase program.

The S&P 500 hasn't suffered a daily pullback of 3% or more since Nov. 4, the longest stretch without a decline of that magnitude since the mid-1990s. So far this year the Dow has surged 17%, compared with the S&P 500's 14% rise. Some investors worry that means stocks are overdue for a substantial selloff.

Others think the money leaving U.S. stock funds is a positive development. The outflows have coincided with elevated cash holdings and could signal major indexes can climb even higher. They figure with less invested in U.S. stock funds, there is plenty of money to put back in if investors get more optimistic.

These analysts and investors reckon some caution is healthy in a rising market. What would make them worry that a peak may be near, they say, is the kind of exuberance they remember seeing from investors in the dot-com boom in the late-1990s."

...And from David Hodari in the 10/17 Wall Street Journal Palladium Puts the Pedal to the Metal

"Palladium prices broke through the $1,000 barrier in intraday trading, with strong demand from the auto industry and investor bullishness briefly pushing the price to its highest level since 2001.

The price of this precious metal is up 43% this year, making it one of the best performing assets in global markets.

On Monday, palladium's most active contract climbed to $1,005 a troy ounce in intraday trading, its highest level since 2001, before retreating and settling down $9.20, or 0.9%, to $976.30, on the New York Mercantile Exchange.

Palladium, which is used in the catalytic converters on cars to sift out pollution, has gained more than 5% in the past week alone, pushed higher by strong auto-industry data out of China. Chines auto sales data for September, released last week, showed an 8% year-over-year increase in purchases."

...And from CPM Group Founder Jeffrey Christian in 10/15 www.macrovoices.com podcast: Gold On Course for New All-Time Highs by 2020

"Erik Townsend: Where do you see - short, medium, and long term - where is gold headed from here?

Jeffrey Christian: We think that over the next few months the price is probably going to move back up toward $1,340 to $1,360 - probably into late November and December before we get to those levels. But we're sort of looking at the gold price moving in a range between $1,260 and $1,360 over the next three months. And then getting into 2018, depending on what happens in the global financial markets, we think that the gold price will probably continue to rise at perhaps a slightly faster rate than it has risen in the last couple of years.

Erik: How about silver? Obviously there is this ongoing debate about whether silver is an economic or an industrial metal. Where do you see silver going and particularly with its relationship to gold?

Jeff: I think silver's got a firm base around $16-$16.20, but I think it also has a firm ceiling around $18.50 or $19 over the next several months. So we're looking for silver to move sideways. Silver is a financial asset, to some extent, like gold. But it's much more of an industrial metal and an industrial commodity. In some ways it trades more like gold than it does industrial commodities. But in other ways it trades more like an industrial commodity like copper or oil or platinum than it does like gold. And I think that will weigh on silver going forward. You know, one of the things that you see is that investment demand really drives prices higher or lower, and investors are much more focused on gold right now, it seems than they are on silver."

...And from Simon Constable in 10/17 www.usnews.com If Precious Metals Rally, Then Pick Silver

"Precious metals could be just the right thing to put a shine in your portfolio. But which metal should you pick - gold, or its scrappy sidekick, silver? There's a case to be made for silver over gold, at least for people looking to hold the commodity for at least a year or two.

Silver prices tend to be more volatile than those of gold prices. In 2016 gold prices rose 8.1 percent, but silver prices rose 16 percent, according to data from the London Bullion Market Association.

It works in reverse as well - when the price of gold falls, silver prices tend to fall further.

The reason for this is because changes in the supply of silver are less reactive to changes in the price than is the supply of gold. When gold prices fall dramatically, some gold miners will find it less profitable to continue mining so will stop digging. That lower supply tends to put the brakes on a price fall.

That doesn't happen as much with silver because the metal is often a byproduct of mining other metals. Therefore whether the price goes up or down, the supply of the metal doesn't necessarily change. As the demand for the metal increases, the supply doesn't move and the price increases.

It is worth noting that the extra volatility of silver versus gold is something of a two-edged thing. 'Volatility can be your friend when prices are going up,' says George Milling-Stanley, head of gold strategy at State Street Global Advisors. 'Volatility isn't your friend when prices are falling.'

That means you need to get the direction of precious metals prices correct or you could lose money quickly."

Last update: Oct 20, 2017 11:39:16 AM

This is not a recommendation to buy or sell.