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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.

In the precious metals markets this week...

The Monex AM closing price on Friday was $1,208, down $18 for the week. Monex spot gold prices opened the week at $1,226 . . . traded as high as $1,233 on Tuesday and as low as $1,206 on Friday. Gold support is now anticipated at $1,197 then $1,186, and then $1,165. . . with resistance anticipated at $1,216, then $1,227, and then $1,248.


The Monex AM closing price on Friday was $14.10, down $0.48 for the week. Monex spot silver prices opened the week at $14.58. . . traded as high as $14.66 on Wednesday and as low as $14.06 on Friday. Silver support is now anticipated at $14.05, then $13.80, and then $13.62. . . and resistance anticipated at $14.20, then $14.55, and then $14.88.


The Monex AM closing price on Friday was $854, down $12 for the week. Monex spot platinum prices opened the week at $866. . . traded as high as $878 on Wednesday and as low as $853 on Friday. Platinum support is now anticipated at $848, then $826, and then $809. . . and resistance anticipated at $861, then $878, and then $927.


The Monex AM closing price on Friday was $1,103 down $11 for the week. Monex spot palladium prices opened the week at $1,114. . . traded as high as $1,129 on Monday and Wednesday and as low as $1,092 on Tuesday. Palladium support is now anticipated at $1,092, then $1,067, and then $1,040. . . and resistance anticipated at $1,108, then $1,124, and then $1,145.

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.
From Simon Black in 11/8 Here Are All The Ways Inflation Is Happening Today

''Something strange happened in the markets last month that signals trouble ahead...

When stocks fell from their September highs, you would have expected investors to run for cover in the world's safe-haven asset - US Treasurys. But that's not what happened.

While stocks were plunging, Treasurys also fell. Yields on 30-year Treasurys increased to 3.4% from 3.22% (and yields have already more than doubled from their 2016 lows).

It's a sign that the market is worried about the US government's ability to pay its exploding debts and that inflation is creeping back into the market. That makes me a bit nervous because we haven't seen inflation in a decade.

We've seen an increase in oil prices, food prices, rent and many other things that eat into people's savings. Unemployment is low and US wages increased 3.1% in September (the highest in nine years). And core inflation is already running above the Fed's target of 2%.

In general, inflation is nothing to panic about. The Fed is supposed to raise rates when inflation heats up, which it's been doing. But as rates have moved higher, we've already seen stocks and real estate fall. The entire financial system has been dependent on super low rates for the past ten years. The Fed held rates at zero for a decade and printed trillions of dollars.

The increase in prices and interest rates to date is only the beginning. Just take a look at what's happening in the economy right now...

Food companies like Coca-Cola, Mondelez, Hershey and Kellogg are all raising prices as both ingredient and transportation costs increase. Kellogg's CEO recently said in an interview, ''We think 2019 will be more inflationary than we have seen historically since the recession.''

McDonald's and Chili's both raised prices. Airlines are paying 40% more for jet fuel than they were a year ago. Manufacturing companies are paying 8% more for aluminum and 38% more for steel than a year ago... and they're dealing with a 10% tariff on Chinese goods. Paint company Sherwin-Williams increased prices in its stores as much as 6% last month, with the CEO saying ''Raw material inflation has been unrelenting and accelerating.'' Even Apple is falling victim to inflation. The company raised prices on its new MacBook Air and iPad Pro by 20% and 25%, respectively.

Companies are passing along price increases to you, the consumer. And that makes it harder for you to ''tread water'' financially. The Fed will have to further boost interest rates in reaction to this inflation. But it's raising rates while the US government is running trillion-dollar deficits into perpetuity. And now it will have to pay more interest on that debt (which it already can't afford).

The world hasn't seen inflation in a decade now. But it's coming. And while the Fed is raising rates to combat inflation, there's zero chance it hits the perfect mix to keep markets chugging along.

Remember, we've already seen the stock market and real estate panic crash in response to a small interest rate hike. And I think there's more pain ahead as inflation really starts to work its way into the economy.

With inflation looming, I'd want to own some gold.''

...And From Ted Kinahan in 11/9 Fed Leaves Rates Unchanged For Now, But Market Sees Another Rate Hike Next Month

''The table appears set for one more Fed rate hike this year after the central bank elected Thursday to keep interest rates unchanged for now. The economy continues to fire on most cylinders, according to the Federal Open Market Committee (FOMC), though the FOMC's statement did note that business investment has begun to moderate.

What's really in question is how the Fed might proceed next year, especially in light of a U.S. economy that continues to charge forward even as many overseas ones look tepid. Generally, the Fed's decision and statement indicate that the economy remains healthy, and puts the Fed in a perfect spot to raise rates next month.

No Surprise Party Today

Today's decision probably didn't surprise many investors. Going into this week's meeting, the Fed funds futures market was flashing about a 7% chance of a rate hike. After Thursday's non-decision, the target range for the federal funds rate remains between 2% and 2.25%. That's the highest it's been since the Great Recession a decade ago, but just barely into the 2% to 5% range where the Fed has historically kept rates.

All eyes now to turn to next month's meeting, which concludes December 19, just ahead of the end-of-year holiday period. Immediately after the non-decision Thursday, Fed funds futures inched back slightly to show just under an 80% chance of rates moving at least 25 basis points higher between now and the end of the year. If the Fed does hike again before 2019, it would be the fourth of the year, and the ninth since the Fed started raising rates from effectively zero in December 2015.

Even as rates steadily rose over the last three years, the economy kept gaining. Inflation has gone from barely being a factor in 2015 to hitting the Fed's target of 2% (based on Personal Consumption Expenditure, or PCE, prices as of August). While this happened in the U.S, overseas economies-including China and Europe-recently started to show signs of slower growth.

That puts the Fed in a tough place as it tries to keep the U.S. economy from overheating even as it faces pressure not to run the value of the dollar so high that it might hurt foreign countries and keep their consumers from being able to afford U.S. products. Remember, the Fed has a dual mandate of stable prices and maximum employment. There are signs that a stronger dollar, along with recent trade battles, might be hurting U.S. company outlooks.

The stock market, which had been swinging back and forth around unchanged most of the morning, didn't seem to have much of an immediate reaction to the Fed decision, but began moving lower about half an hour after the news. That could reflect in part the Fed's language about moderating business fixed investment (see below). In Treasuries, the 10-year benchmark yield rose slightly to 3.23%, just a few basis points below last month's highs.

Policy Drivers

The Fed's statement Thursday didn't evolve much from its last meeting in September. As it did then, the Fed noted 'economic activity has been rising at a strong rate,' and 'job gains have been strong.' It added that the unemployment rate has dropped, and that household spending has 'continued to grow strongly.'

The one significant change was around business investment, and that follows what looked like a slowdown in that category in the Q3 gross domestic product (GDP) report issued last month.

'Growth of business fixed investment has moderated from its rapid pace earlier in the year,' the Fed's statement now reads. Back in September, the Fed's statement said that the category had 'grown strongly.'

On the inflation front, there was no change to the Fed's September prediction that price increases would remain near its 2% target over the next 12 months both for overall inflation and core inflation that strips out food and energy prices.

The Fed's statement follows another quarter of strong U.S. economic growth, with gross domestic product up 3.5% in Q3. Also, the unemployment rate sits near 50-year lows at 3.7%, and wages rose 3.1% in October. All of these data could argue, at least to some, for a continued hawkish Fed. Some analysts even expect four rate hikes next year. The market's average estimate, however, is for 2.5 rate hikes in 2019, according to Fed funds futures.

That said, there are signs of slowing momentum in some sectors. Many housing-related stocks remain under pressure as higher mortgage rates and climbing home prices might be keeping some people out of the real estate market. A number of major companies, including Apple and Amazon gave holiday quarter outlooks that seemed to disappoint Wall Street. Many materials and industrial companies warned that a higher dollar and tariffs might put their business under strain in the coming year. The Fed is probably paying close attention to all of this, and it's likely to influence policy as 2019 gets underway.

Fed Rate Trajectory: Based on the futures market, traders seem pretty sure that the Fed will raise rates in December, and they appear fairly confident of another hike in March. Shortly after today's announcement the futures market was showing a 78% probability of at least a 25-basis-point hike by December and a 60% chance of at least two hikes of the same magnitude by March. The Fed's latest so-called dot plot, from September, suggests the possibility of two or three total rate hikes in 2019.''

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This is not a recommendation to buy or sell.

Last update: Nov 09, 2018 11:22:02 AM

This is not a recommendation to buy or sell.