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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 - April 20, 2018
In the precious metals markets this week...
GOLD

Monex spot gold prices opened the week at $1,344 . . . traded as high as $1,357 on Wednesday and as low as $1,335 on Friday. . . and the Monex AM settlement price on Friday was $1,337, down $7 for the week. Gold support is now anticipated at $1,318 then $1,300, and then $1,285. . . with resistance anticipated at $1,342, then $1,365, and then $1,378.

SILVER

Monex spot silver prices opened the week at $16.61. . . traded as high as $17.33 on Thursday and as low as $16.57 on Tuesday. . . and the Monex AM settlement price on Friday $17.15, up $0.54 for the week. Silver support is now anticipated at $17.07, then $16.89, and then $16.67. . . and resistance anticipated at $17.20, then $17.45, and then $17.78.

PLATINUM

Monex spot platinum prices opened the week at $928 . . . traded as high as $948 on Wednesday and as low as $917 on Tuesday. . . and the Monex AM settlement price on Friday was $933, up $5 for the week. Platinum support is now anticipated at $924, then $888, and then $867 . . . and resistance anticipated at $958, then $974, and then $1,010.

PALLADIUM

Monex spot palladium prices opened the week at $986. . . traded as high as $1,039 on Wednesday and as low as $985 on Monday. . . and the Monex AM settlement price on Friday was $1,020, up $34 for the week. Palladium support is now anticipated at $1,012, then $983, and then $948. . . and resistance anticipated at $1,040, then $1,065, and then $1,088.

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 Stephanie Landsman in 4/15 www.cnbc.com With Investors Nervous Over Syria and Russia, 'Emotional' Gold Could Get a Big Boost, Metal Expert Says

"Gold is in a holding pattern until investors find a fresh reason to get edgy, according to a veteran trader.

Ambrosino Brothers' Todd Colvin told CNBC 'Futures Now' last week that $1330 to $1350 [an ounce] has really been a very comfortable range for gold. The next catalyst is probably going to come from the Fed and the U.S. economy.'

Even though Colvin believes earnings season, which just got underway, will be strong and won't support a bull case for gold, he believes weaker-than-expected U.S. economic growth could prop up prices.

'If you see sub-2 percent GDP, which I think right now isn't on many radars, that could be a real catalyst,' he said.

Last Wednesday, gold reached its highest level since August 2016 as jitters grew over Syria and Russia - with a potential trade war with China still in the picture. Once anxiety eased, gold backed down.

Colvin, who has worked on the Chicago Mercantile Exchange trading floor for more than 20 years, isn't ruling out a new gold spike caused by tensions abroad. He believes a tenuous geopolitical situation could push prices to $1400 in a hurry."

...And From Amirth Ramkumar in 4/18 Wall Street Journal Sanctions, Syria Fuel Commodities' Rise

"Rising global tensions, including US Sanctions against Russia and the continuing conflict in Syria, have sparked a rally in commodities, sending materials from aluminum to oil to fresh multiyear highs.

The S&P GSCI Index of 24 commodities has climbed 5.1% this year, compared with a 1.2% gain for the S&P 500, the equities benchmark. The raw materials gauge has advanced in six of the past seven sessions.

Russia is a key producer of a wide range of commodities from oil to palladium. And with supplies already tight, analysts say, the April 6 announcement of sanctions against more than three dozen Russian individuals and entities has jolted raw materials markets.

Since then, aluminum for delivery in three months on the London Metal Exchange has soared 19% to its highest in 6 1/2 years. The premium U.S. buyers pay to have LME aluminum delivered to the Midwest has rocketed to its highest since February 2015, while other metals, including nickel and palladium, have surged.

The run-up in commodities is a shift from March, when global tensions between the U.S. and China over trade hurt prices of many resources amid fears that rising manufacturing costs would slow global growth.

'Now we're kind of thinking that was maybe an overreaction,' said Bart Melek, head of commodity strategy at TD Securities. Instead, with the Russia sanctions, 'you've got all this geopolitical stuff serving as an added bonus' to thinning inventories, he said.

Russia is an even more prominent producer of palladium, a metal used to scrub emissions in diesel engines, accounting for roughly 40% of global supply. Prices have climbed 12% since the sanctions were announced after tumbling at the start of the year.

'The strategic case for owning commodities has rarely been stronger,' Goldman Sachs analysts said in a recent note.'"

...And from Andrew Hecht in 4/18 www.seekingalpha.com Silver Is Preparing To Surprise

"Silver is like a rubber band; during its quiet times, it stretches the patience of market participants to the point where many throw in the towel, abandon positions and look to other markets for opportunities. However, silver tends to move significantly higher or lower when herds of buyers or sellers flock to the market causing impressive moves on a percentage basis on both the up and downside.

While gold has been threatening to challenge its 2016 high at $1377.50 per ounce and was trading at just $30 below that level on Monday, April 16, silver was miles below its peak from two years ago. In July 2016, silver was traded to a high of just over $21 per ounce and these days, it is almost $4.50 lower. Moreover, silver has traded at a median level of 55:1 versus gold over the past four decades. With the yellow metal at the $1346 level, that would imply a price of just under $24.0 per ounce, and silver is almost $8 per ounce lower than that price these days.

In early 2018, the price of silver made it up to a high of $17.785 on the active month May futures contract on January 25. The continuous contract peak was at $17.705.

Open interest, the total number of open long and short positions in the COMEX futures market moved to a high of 243,411 contracts on April 6, which was a record high indicating a pickup in interest in the silver market by investors and traders.

We may need to see gold take the leadership role and break above $1377.50 before silver gets a bullish jolt and awakens from its nonvolatile slumber. If gold makes it to the $1400 per ounce level, I would not be surprised to see it hand a flaming fullish baton to the silver market which is becoming long overdue for a significant move to play catchup with the yellow metal.

Hibernation is a time to rest and rebuild strength for the future, and the silver market could be lulling market participants into a sleepy sense that the price will continue to languish and trade at a level that lags gold.

However, anyone who has experience trading silver over past decades knows that the metal that tends to move the most on a percentage basis often explodes or implodes when the market least expects. As I look at the silver market these days, I see a potential volcano of bullish price action if gold can make its way over the $1380 level. It has been a long time since we have seen silver move $1 or higher during a trading session, and we may not have to wait much longer."

This is not a recommendation to buy or sell.

Last update: Apr 20, 2018 12:12:39 PM

This is not a recommendation to buy or sell.