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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 - August 17, 2018
In the precious metals markets this week...
GOLD

The Monex AM closing price on Friday was $1,178, down $21 for the week. Monex spot gold prices opened the week at $1,199 . . . traded as high as $1,202 on Monday and as low as $1,175 on Wednesday and Thursday. Gold support is now anticipated at $1,168 then $1,152, and then $1,133. . . with resistance anticipated at $1,194, then $1,214, and then $1,233.

SILVER

The Monex AM closing price on Friday was $14.61, down $0.50 for the week. Monex spot silver prices opened the week at $15.11. . . traded as high as $15.21 on Monday and as low as $14.33 on Wednesday. Silver support is now anticipated at $14.58, then $14.35, and then $14.10. . . and resistance anticipated at $14.78, then $15.14, and then $15.56.

PLATINUM

The Monex AM closing price on Friday was $776, down $36 for the week. Monex spot platinum prices opened the week at $812 . . . traded as high as $814 on Monday and as low as $755 on Wednesday. Platinum support is now anticipated at $775, then $710, and then $689 . . . and resistance anticipated at $811, then $830, and then $862.

PALLADIUM

The Monex AM closing price on Friday was $888 down $8 for the week. Monex spot palladium prices opened the week at $894. . . traded as high as $901 on Monday and as low as $830 on Wednesday. Palladium support is now anticipated at $858, then $830, and then $806. . . and resistance anticipated at $890, then $935, and then $954.

Monex VP Mike Maroney and CPM Group Managing Partner Jeffrey Christian offer analysis and commentary on recent activity in the economy, geopolitics and the precious metals markets in our "Prepare & Diversify with Gold & Silver" video series. Watch now to learn what gold and silver could do for you https://www.monex.com/prepare-and-diversify/
QUOTES OF THE WEEK...
From Wall Street Breakfast in 8/15 www.seekingalpha.com Turkey Fires Back With Tariffs

''A reeling Turkey has responded to U.S. tariffs with retaliatory duties on U.S. passenger cars, alcohol, tobacco, cosmetics, and other products. Tariffs on cars are set to rise by 120% and those on made-in-the-U.S. alcoholic drinks by 140%, alongside a 60% increase on tobacco products. The move comes amid increasing fears of contagion from Turkey's collapse.''

...And From Steven Russolillo, Paul Vigna and Akane Otani in 8/15 Wall Street Journal Digital Currencies Tumble

''A broad investor retreat has pushed the market for digital currencies down 80% from its January high, reflecting user frustration over their modest inroads into commerce and a general shakeout in speculative investments.

The value of all cryptocurrencies in circulation this week fell below $200 billion for the first time in 2018, its lowest since November. The selling has been widespread and, some holders say, indiscriminate. Of the top 100 cryptocurrencies by market value, 98 were down over 24 hours, according to research site CoinMarketCap.

While the intense selling reflects a handful of market and economic factors, many users say plunging cryptocurrency prices point to the apparent failure of bitcoin, either and other popular units to gain widespread adoption in the economy.

'People are starting to realize that they drove this stuff up in a feeding frenzy, and they're just starting to realize just how dangerous it is,' said Mark Grant, chief global strategist and managing director at B. Riley FBR Inc., who has for months been warning clients against putting money into cryptocurrencies.''

...And From Geoff Colvin in 8/1 Fortune The End is Near... The Economy Will Slow. The Bull Market Will Expire. Here's Way And What You Need To Do About It.

''The optimism is beaming like the summer sun. America's big-company CEOs are bursting with confidence, in June expecting to take in even more revenue and make bigger investments than they foresaw in march, when they were more confident that ever before in the 15 years the Business Roundtable has been surveying them. CFOs are just as ebullient. Their perception of the North American economy was recently the highest in the eight years Deloitte had been asking about it. Leaders of small businesses also are brimming with optimism - more than at any time in the past 30 years, reports the National Federation of Independent Business. At least figuratively, confetti is flying, disco balls are spinning, and Champagne corks are popping across the length and breadth of American business.

It seems a shame to pull the plug on the dance music, so we won't exactly. As of mid-July, forecasters were expecting the announcement of a knockout GDP growth number for the second quarter, and it wouldn't be surprising if the U.S economy continued to grow impressively for at least a few quarters more. Unemployment is near historic lows, and better job prospects are drawing more workers back into the labor force. No wonder business leaders are confident.

Yet all these signs of economic strength mask fundamental realities that won't fade away and mustn't be ignored. The current economic expansion is much nearer its end than its beginning, as accumulating hints suggest - including the stagnating stock market, about which we'll say more in a bit. Already the concerns are pushing up long-term interest rates, which is bad for asset values. Uncertainty about the effects of a trade war is causing many companies to postpone action, dampening potential investment. A significant slowdown or even recession is coming sooner or later and it's probably coming sooner than you think.

A Seasonal Change Is Coming
Economies follow cycles. Unlike with seasons or the moon or the ocean tides, the timing of the business cycle is never easy to predict. But at some point, economic activity reaches a temporal peak, then begins to contract until eventually it bottoms out and starts growing one more. A familiar sign that we're in the waning stage of the growing season, ironically, is that the economy overheats - think of it as an Indian summer: Companies push factories to produce more than their long-term sustainable output, pushing employees to work more overtime. Demand is so strong that inflation starts to increase, leading central bankers to raise interest rates, which causes asset valued including stock prices, to level off or fall. Ray Dalio, CEO of the world's largest hedge fund, Bridgewater Associates, writes, 'That is why it is not unusual to see strong economies accompanied by falling stock and other asset prices.'

The labor market continues to be tight, with workers so confident that they're voluntarily quitting their jobs at the highest rate in 17 years. Meanwhile, employers will have to bid up wages in order to attract and keep good workers, hitting corporate earnings directly.

A Trade War Makes Other Problems Worse
By the numbers, the trade-related skirmishes so far are insignificant in America's $20 trillion-a-year economy. Even the tit-for-tat imposition of tariffs on $34 billion of trade by the U.S. and China in early July will not, by itself, noticeably reduce GDP. Yet the effects could easily mushroom, in two intertwined ways.

First, even the biggest wars typically start with minor battles that spark and unstoppable cycle of escalation.

But the second way the current dispute could damage the U.S. economy doesn't even require that hostilities get worse. It requires only that people become less certain bout where all this is headed. That effect - an 'uncertainty shock' as Bank of America Merrill Lynch economist Michelle Mayer called it in a recent note is happening already, and it worries the Fed.

Indeed, the economy, by all traditional measures, seems to be growing smartly. After years of low-horsepower expansion, 2018 could be the best year for GDP growth in at least a decade. But don't count on the stimulus to keep stimulating.

Many Companies Are Already Overleveraged
''While much has been said about the growing menace of federal debt, trouble is brewing as well in the different and largely overlooked credit risk: corporate debt. Without many alarm bells sounding, the debt of nonfinancial companies has risen to 73.5% of GDP - an all-time high.

It hasn't been a problem so far because interest rates have been so low - which is a big reason companies borrowed so heavily in the first place. But as interest rates rise, the Goldilocks environment is darkening. Today's record corporate debt 'would be a problem if rates are rising while the economy slows - a double whammy,' says S&P Global credit analyst Andrew Chang. That's exactly the scenario that is beginning to seem more likely. 'People are aware of the risk but not quite behaving like an aware citizen,' he tells Fortune.

So Don't Just Beware, Prepare
When the markets and the economy inevitably do turn, it will be, like all change, an opportunity. Stocks will be on sale, and corporate managers should remember that the competitive order in any industry always changes more in adversity than in smooth sailing.

Clearheaded investors and leaders come through downturns fine because they confront reality early - and in the best of times, they prepare for the worst.''



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This is not a recommendation to buy or sell.

Last update: Aug 17, 2018 11:13:47 AM

This is not a recommendation to buy or sell.