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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 - DECEMBER 2, 2016

In the precious metals markets this week . . .  

GOLD:
Monex spot gold prices opened the week at $1,189 . . . traded as high as $1,192 on Monday and as low as $1,160 on Thursday. . . and the Monex AM settlement price on Friday was $1,174, down $15 for the week.  Gold support is now anticipated at $1,171, then $1,157, and then $1,120 . . . with resistance anticipated at $1,178, then $1,204, and then $1,233.

SILVER:
Monex spot silver prices opened the week at $16.63 . . . traded as high as $16.78 on Friday and as low as $16.26 on Thursday. . . and the Monex AM settlement price on Friday was $16.74, up $.11 for the week.  Silver support is now anticipated at $16.62, then $16.15, and then $15.80 . . . and resistance anticipated at $16.78, then $17.08, and then $17.43.

PLATINUM:
Monex spot platinum prices opened the week at $911 . . . traded as high as $934 on Friday and as low as $897 on Thursday. . . and the Monex AM settlement price on Friday was $930, up $19 for the week.  Platinum support is now anticipated at $908, then $880, and then $857 . . . and resistance anticipated at $938, then $952, and then $980.

PALLADIUM:
Monex spot palladium prices opened the week at $748 . . . traded as high as $776 on Thursday and as low as $740 on Friday. . . and the Monex AM settlement price on Friday was $743, down $5 for the week.  Palladium support is now anticipated at $735, then $702, and then $683 . . . and resistance anticipated at $748, then $778, and then $805.

QUOTES OF THE WEEK:

From Akane Otani and Riva Gold in the 12/1 Wall Street Journal  Stocks Close Out a Roaring November

''Rally kept on rolling as Trump's win stocked optimism, but month was brutal for bonds.

The Dow Jones Industrial Average rose for the sixth day in seven and U.S. Treasury yields touched their highest level since July 2015, concluding a month viewed by man traders as the most eventful in financial markets since the euro crisis ended in 2012.  

Bond prices declined.  The yield on the benchmark 10-year Treasury note settled Wednesday at 2.465%, its highest closing level since July 2015.  

The buy-stocks/sell-bonds trade picked up steam as the month wore on, reflecting in part a string of economic reports showing the housing market improving, consumer prices picking up and jobless claims falling.  

November's bond losses sent yields approaching 2.5% for the first time this year, a sign that some investors view as evidence that the lower-for-longer theme in style earlier in 2016 has lost credence in the market.

Skeptics point out that uncertainty remains around Mr. Trump's administration and policy stances, and caution that the market's rally may be premature.

Multiples remain extended by historical standards and uncertainty is rife over what parts of Mr. Trump's platform will pass muster with Congress.  

Some, who view the market's rapid climb over the past few weeks as having been driven mostly by a pickup in investor sentiment, say weak spots like flagging business investment and soft global growth could derail the rally.

''The market's has a nice run, but it's also in the process of running out of steam'' said Wouter Sturkenboom, senior investment strategist at Russel Investments.''


...and from Pater Tenenbarum in 11/27 Seekingalpha.com  A Note On Gold and India - What is Driving The Gold Price?

''It is well known that India's government wants to coerce its population into ''modernizing'' its financial behavior and abandoning its traditions.  The recent ban on large-denomination banknotes was not only meant to fight corruption.

It is a nigh apodictic certainty that governments are lying - whether outright or by omission - when they impose such drastic measures.  It should be clear how the State operates once one recognizes its true nature and realizes that ''we'' are definitely not the State.

Thus there are several reasons for the currency ban that have nothing to do with the official justification forwarded by the government.  One is of course that the government hopes to be able to confiscate a sizable proportion of the citizenry's allegedly ''ill-gotten'' - wealth.

A special one-off tax penalty will be imposed on deposits government officials arbitrarily deem ''too large'' - under the cover that only criminals will be deprived of their possessions, for the benefit of public at large (meaning Modi's supporters. As an aside, this may well turn out to be a major miscalculation).

Another reason is that the government wants to coerce people into transferring much of the cash they currently hold into the banking system.  This will transform their cash into digital money substitutes.  

This increase in deposit money will be a great boon for India's fractionally reserved banks.  It represents extremely cheap funding for them and will enable them to vastly expand credit creation ex nihilo.  At the same time, the government will achieve far greater control over the economic life of its citizens.

A recent article posted at Zerohedge discusses the possibility and attempts to estimate what the potential impact on gold prices might be.  First let us consider the question whether the recent decline in gold prices may have had anything to do with rumors about India imposing a ban on gold imports.  We would argue this is extremely unlikely.

The correction has in fact turned out to be a lot more extensive than we thought it would be, partly driven by the market reaction to the Republican clean sweep of the election.  At least we didn't neglect to mention that the large speculative position was likely to ''require more work'' (this has probably been achieved by now).

The proximate driver of the decline in gold prices was the surge in the US dollar, which in turn appears to have been egged on by rising bond yields - particularly a reversal in real interest rates as reflected by TIPS yields.  These have in the meantime reached positive territory again, if only by a few basis points.  It is the trend that counts though, as perceptions about the future trend.''

...and from Cecilia Jamasmie in 12/2 mining.com  China Gold Premiums Soar Amid Import Limits


''Gold premiums in China, the top consumer of the metal, held near three-year highs this week amid short supply due to Beijing's decision to restrict imports of the precious metal in an attempt to prevent capital from leaving the country.  

As the Yuan dropped to lowest level since the financial crisis of 2008/09 and declined close to 5% so far this year, Beijing has been weighing measures to reduce outflows.  One of them is placing tighter quotas on imports of the precious metal, which has pushed Chinese gold prices higher than international spot benchmark by as much $46 per ounce, compared to normal levels of just $3 per ounce.

Gold prices were slightly stronger in early US trading Friday, on a short-covering rebound in the futures market and amid some perceived bargain-basement-buying in the cash market.''

Last update: Dec 02, 2016 12:57:49 PM

This is not a recommendation to buy or sell.