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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 - SEPTEMBER 23, 2016

In the precious metals markets this week . . .  

GOLD:
Monex spot gold prices opened the week at $1,315 . . . traded as high as $1,345 on Thursday and as low as $1,312 on Monday and Tuesday . . . and the Monex AM settlement price on Friday was $1,337, up $22 for the week.  Gold support is now anticipated at $1,336, then $1,321, and then $1,307 . . . with resistance anticipated at $1,346, then $1,372, and then $1,424.

SILVER:
Monex spot silver prices opened the week at $19.22 . . . traded as high as $20.06 on Thursday and as low as $19.08 on Tuesday . . . and the Monex AM settlement price on Friday was $19.72, up $.50 for the week.  Silver support is now anticipated at $19.47, then $19.08, and then $18.80 . . . and resistance anticipated at $19.82, then $20.06, and then $20.48.

PLATINUM:
Monex spot platinum prices opened the week at $1,025 . . . traded as high as $1,067 on Thursday and as low as $1,017 on Monday . . . and the Monex AM settlement price on Friday was $1,054, up $29 for the week.  Platinum support is now anticipated at $1,048, then $1,017, and then $980 . . . and resistance anticipated at $1,061, then $1,102, and then $1,135.

PALLADIUM:
Monex spot palladium prices opened the week at $679 . . . traded as high as $707 on Friday and as low as $679 on Monday and Tuesday . . . and the Monex AM settlement price on Friday was $706, up $27 for the week.  Palladium support is now anticipated at $686, then $662, and then $635 . . . and resistance anticipated at $708, then $727, and then $748.

QUOTES OF THE WEEK:

From Simon Black in a posting on Sovereignman.com September 20th newsletter:

''A few days ago, the federal debt of the United States rather quietly and unceremoniously passed the $19.5 trillion mark.

And while that figure may seem absolutely confounding, what's even more alarming is how rapidly the US government is racking up this debt.

In fact, for the 2016 fiscal year that ends in just ten more days, the US government's debt growth of $1.36 trillion is on track to be the third biggest annual increase ever.

The only two years in all of US history that posted higher US debt growth were 2010 and 2011-- the peak of the financial crisis.

Even more acutely, last month the US federal debt grew by $151.5 billion.

Not counting the financial crisis, and a few anomalous months following a debt ceiling reset, August 2016 was the single biggest expansion of US debt EVER.

In other words, US federal debt is expanding at its fastest rate since the financial crisis, and one of the fastest rates in all of US history.

This isn't supposed to be happening. We're in 'peacetime'. The financial crisis is over. The economy is supposedly growing, and unemployment is supposedly falling.

None of the normal big deficit triggers exists; if you read the mainstream press, the news about the US economy is all rainbows and buttercups.

You'd think they would actually be running a surplus at this point and paying down the debt. Or at a minimum the rate of debt growth would be shrinking.

But no. Despite all of this good economic news, the government is still piling up debt at record levels.

If the debt is growing this quickly in good times, just imagine how dire the debt situation will become once the economy slows down and recession kicks in.''

...and from James Rickards in a posting on the Daily Reckoning website on September 19th entitled,''World Money and Hyperinflatio'':

''This world money has existed for some time, but it's about to become a lot more important.

In 1944, John Maynard Keynes proposed a form of world money, which he called the''bancor,'' at the Bretton Woods international monetary conference.  

In March of 2009, U.S. Treasury Secretary Timothy Geithner supported greater issuance of Special Drawing Rights (SDR's) at the depths of the financial crisis.

As as recently as October 2015, the former undersecretary general for economic and social affairs (ECOSOC) of the United Nations, Jose Antonio Ocampo, wrote an Op-Ed calling for new issues of SDRs with a disproportionate share going to emerging markets.

The list of prominent international monetary elites calling for greater use of SDRs as a world money keeps growing.  It's critical for you to understand this new trend.

The SDR has the power to reduce the dollar to the status of a local currency no different than the Mexican peso.  Understanding SDRs will also help you avoid losses from inflation and benefit from new opportunities that will be created by their use.

Much as been written about the collapse of the dollar.

We define collapse as a spontaneous loss of confidence in the dollar as a store of value resulting in sudden hyperinflation.

The source of such hyperinflation is not money printing (that happened already) but the rapid turnover of money.  Those who lack confidence in dollars as a store of value will quickly dump dollars for other assets.

In this scenario, the alternative to the dollar can be as familiar as gold or land.  It could be one of the new digital assets such as Bitcoin.  The dollar alternative could even consist of natural resources such as oil or water.  

When it comes to hyperinflation, the alternative doesn't matter that much...

What matters is that investors will dump dollars as fast as they get them.  The resulting turnover (what economists call velocity) will feed on itself and lead to skyrocketing dollar prices.  It is important not to think of hyperinflation as prices ''going up'' (although that is literally true).

A better understanding is that assets, goods and services have a constant real value, while the dollar itself is collapsing.

That dollar devaluation is the real source of ''higher prices.''  After all, gold is gold, land is land and water is water.

When you see hyperinflation, you are really seeing the collapse of the dollar relative to everything that dollars can buy.''

...and in a posting on the seekingalpha.com Newsletter on September 19th:

''I have been getting a lot of questions lately about the validity of the bull market in silver, especially with the US dollar really showing strength these past few days.  Before we get into silver, let's have a look at the dollar chart to confirm that despite recent strength, we are still definitely making lower lows in the greenback.

Since December 2015, the greenback has been making lower lows.  Recent strength has only been a symptom of interventions by the Bank of Japan and the ECB.  I still do not see us taking out the July highs in the dollar.  In fact, the Fed's decision this week could put a hard top in the dollar, which would spike prices in the precious metals.  The patters of lower lows is continuing.

However, recent strength has had ramifications for the silver market.  Although the silver chart may not look that bullish at the moment, I would encourage silver investors to follow gold's chart and not silver's chart.  Silver will always invariably follow gold, and more often than not outperform it, especially now considering the above-historic average gold-to-silver ratio.

Even if silver dips below its August lows, it is not the end of the world.  My cycle counts on silver are always taken from the gold chart, which is still very much in an uptrend.''

Last update: Sep 23, 2016 01:47:37 PM

This is not a recommendation to buy or sell.