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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 21, 2015

In the precious metals markets this week . . .  

GOLD:
Monex spot gold prices opened the week at $1,119 . . . traded as high as $1,162 on Friday and as low as $1,110 on Tuesday . . . and the Monex AM settlement price on Friday was $1,161, up $42 for the week.  Gold support is now anticipated at $1,130, then $1,111, and then $1,089 . . . with resistance anticipated at $1,165, then $1,188, and then $1,212.

SILVER:
Monex spot silver prices opened the week at $15.32 . . . traded as high as $15.59 on Thursday and as low as $14.73 on Tuesday . . . and the Monex AM settlement price on Friday was $15.34, up $.02 for the week.  Silver support is now anticipated at $15.15, then $14.82, and then $14.55 . . . and resistance anticipated at $15.60, then $15.95, and then $16.26.

PLATINUM:
Monex spot platinum prices opened the week at $996 . . . traded as high as $1,037 on Thursday and as low as $983 on Tuesday . . . and the Monex AM settlement price on Friday was $1,028, up $32 for the week.  Platinum support is now anticipated at $1,014, then $992, and then $955 . . . and resistance anticipated at $1,046, then $1,085, and then $1,138.

PALLADIUM:
Monex spot palladium prices opened the week at $615 . . . traded as high as $625 on Thursday and as low as $590 on Tuesday . . . and the Monex AM settlement price on Friday was $607, down $8 for the week.  Palladium support is now anticipated at $600, then $588, and then $555 . . . and resistance anticipated at $626, then $666, and then $690.

QUOTES OF THE WEEK:

From former Congressman Dr. Ron Paul, writing in the Daily Reckoning newsletter, published by Agora Financial, LLC, on August 15th:

''China has inflated their currency because they had a lot of dollars and instead of letting people spend those dollars and send them back to the U.S., what they did was print yuan and give them to the people who sold us goods while lending the dollars back to us to prop up our debt.

My concern is that this devaluation won't work -- we did 10% and 8% in 1971 -- China's moves were only 2%.  But it's still bad and it's still moving in the wrong direction.  What I think is going to happen is that these currency wars are going to get much worse, we're going to see price inflation and then there will be a breakdown.

Afterwards, somebody is going to come along try to restore confidence.  But there's never been a time in history where they could restore confidence in a currency once it's been destroyed.  The only way they can restore confidence is to use some kind of commodity to do so.

I think the U.S. will be the loser because we're the ones who are most out of balance.  Our whole economy has been built on a foundation of sand.  It's been built on expectations that should [not] have been had, such as the idea that we can create real wealth with a few keystrokes on a computer.

Our monetary expansion since the recession started is a devaluation.  When you do QE you're printing money like crazy so you're devaluing the currency.  It makes things look alright in the short run, but in the long run, we're just building up more anxiety and more problems.''

. . . and from David Stockman, in a posting on his David Stockman's Contra Corner website on August 16th:

''There is an economic and financial trainwreck rumbling through the world economy.  Namely, the Great China Ponzi.  In all of economic history there has never been anything like it.  It is only a matter of time before it ends in a spectacular collapse, leaving the global financial bubble of the last two decades in shambles.''

''In due course, China will be aflame with campaigns against corruption and 'enemies of the state' as it seeks to cope with its collapsing financial bubbles and endless herds of economic white elephants.  Chairman Mao's axiom as to where state power really comes from -- that is, the barrel of a gun -- will become the increasingly evident modus operandi of the communist party rulers.

The resulting deflationary spiral will suck the global economy into its vortex.  And Wall Street will go down for the count because this time the Fed will be utterly powerless to reverse the tide.''

. . . and from Richard Russell, founder of Dow Theory Letters, in remarks posted on his website on August 17th:

''The Chinese devaluation of the yuan in my mind officially marks the beginning of the currency wars.  Every nation desires a cheaper currency to aid it in its exports.  The US dollar is already considered overpriced.  This places the Fed in a dilemma.  If they raise short rates for the first time in six years, the dollar will become more overpriced than ever.  Exports will be hurt.  It also will be very interesting to see if the Fed has the courage to raise rates this year or next.  If the Fed does raise rates, my guess is that the boost will be something like 1/10th of one percent.  The Fed, by literally announcing a rate raise, has placed itself in an incredible box.

Gold is a sworn enemy of the Federal Reserve.  Unlike with fiat paper money, the Fed cannot produce more gold with the tap of a computer.  Nor can the Fed reduce the supply of gold when it wants to.  To my mind, the greatest negative of gold is that it cannot provide the most powerful bullish force in the market, which is compounding.  Since gold produces no dividends, holding gold does not allow for compounding.  However, gold shines during a booming bear market.  Unlike a stock like General Electric, gold cannot drop to zero, even in a major bear market.  An ounce of gold, regardless of inflation or deflation, always has value.  Silver and gold constitute pure wealth.''

. . . and from Steve Forbes, in a posting on the Forbes website on August 19th:

''Today's economic nomenklatura think money is a tool to drive and control economic activity.  That's about as accurate as saying that manipulating the way in which scales measure weight can drive down obesity levels.

Money is not wealth.  It measures the value of products and services, just as scales measure weight, rulers measure length and clocks measure time.  Money is a claim on goods and services.  It makes buying and selling infinitely easier.  Without the ability to trade with one another, we'd still be living in caves.  Fixed weights and measures are essential to a smoothly functioning marketplace.  So is money that has a stable value.

Unstable money hurts investing.  After all, why take a risk if you don't know the value of the currency in which you're going to get paid back?  It shortens the investing time horizon.  The longer the wait period, the more risk of chaos.

By suppressing the market price of borrowing and lending dollars, the Fed has reduced the volume of bank lending, in the same way that rent control damages the building of new apartments.''

''Needless to say, the roller-coastering dollar has hurt just about every nation, which is hardly conducive to sound domestic politics or constructive global behavior.  It provides fuel for 1930s-style currency wars and protectionism.''

. . . and from Joseph Ciolli, in a posting on the BloombergBusiness website on August 21st:

''A global stock selloff sparked by world growth concerns showed no signs of relenting, sending U.S. stocks toward the worst week since 2011.

The Standard & Poor's 500 Index fell again after its steepest one-day decline since February 2014.  The benchmark gauge is down more than 6 percent from its last record in May, after dropping below a trading range that has supported it for most of the year.''

''Equities continued to slide today after China released its weakest manufacturing data since the global financial crisis, which accelerated losses in riskier assets.  Worries about the world economy had already been intensifying after China devalued its currency last week, compounded by uncertainty about what Federal Reserve inflation concerns portend for interest rates.

'This market won't have legs until we have further clarity on the Chinese currency and U.S. rates -- right now we have neither,' said Michael Ingram, a market strategist at BGC Partners in London.  'Even then, the dependent question mark over growth will linger.  Investors are scared and confused, and if you are an emerging market equity investor, probably close to suicidal.' ''

Last update: Aug 21, 2015 11:37:09 AM

This is not a recommendation to buy or sell.