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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 - January 19, 2018
In the precious metals markets this week...
GOLD

Monex spot gold prices opened the week at $1,340 . . . traded as high as $1,341 on Monday and as low as $1,325 on Thursday. . . and the Monex AM settlement price on Friday was $1,332, down $8 for the week. Gold support is now anticipated at $1,322 then $1,307, and then $1,296. . . with resistance anticipated at $1,338, then $1,362, and then $1,377.

SILVER

Monex spot silver prices opened the week at $17.31. . . traded as high as $17.35 on Monday and as low as $ 16.89 on Thursday. . . and the Monex AM settlement price on Friday was $17.01, down $0.30 for the week. Silver support is now anticipated at $16.97, then $16.65, and then $16.36. . . and resistance anticipated at $17.27, then $17.45, and then $17.85.

PLATINUM

Monex spot platinum prices opened the week at $1,002 . . . traded as high as $1,019 on Friday and as low as $996 on Tuesday. . . and the Monex AM settlement price on Friday was $1,016, up $14 for the week. Platinum support is now anticipated at $975, then $954, and then $923 . . . and resistance anticipated at $1,020, then $1,057, and then $1,110.

PALLADIUM

Monex spot palladium prices opened the week at $1,125. . . traded as high as $1,125 on Monday and as low as $1,085 on Tuesday. . . and the Monex AM settlement price on Friday was $1,099, down $26 for the week. Palladium support is now anticipated at $1,184, then $1,043, and then $1,023 . . . and resistance anticipated at $1,106, then $1,125, and then $1,150.

QUOTES OF THE WEEK...
***Want to know the latest on gold and silver in this age of uncertainty? Monex VP Mike Maroney offers analysis and commentary on recent activity in the economy, geopolitics and the precious metals markets. Check out video here

From Wall Street Breakfast in 1/19 www.seekingalpha.com

"Markets appear to be shrugging off the potential for a government shutdown as traders are reminded that nearly $6.9T has been added to the U.S. stock market cap over the last year (President Trump will celebrate his inauguration anniversary tomorrow). Though House Republicans have voted to keep the government open, the real drama is the closely divided Senate, which couldn't even agree on holding a vote Thursday night. Congress now has less than 24 hours to avoid a shutdown."

...And From Aftershock Publishing in January Investment Outlook

"Gold got its mojo back with its strongest performance in 2017 coming at the end of December. Gold moved from $1260 an ounce to over $1320 an ounce in less than a month. That also helped gold post a 12.5% gain for 2017. That's not as good as the stock market, but not a bad performance in the face of a good stock market."

...And From Sam Goldfarb in 1/19 Wall Street Journal Treasury Yield Hits 3-Year High

"A continued slide in U.S. government-bond prices pushed the yield on the 10-year Treasury note above 2.6% Thursday to its highest closing level in more than three years, a fresh milestone spurred by investors' growing confidence in the global economy.

Yields, which rise when bond prices fall, have climbed steadily this year after being held in check for much of 2017 by a variety of factors, including soft inflation.

Treasurys have come under pressure because 'inflation is picking up a little bit domestically, global growth is rising, central banks are removing liquidity' and recently passed tax legislation is causing U.S. companies to repatriate foreign earnings, said Daniel Mulholland, head of U.S. Treasury trading at Credit Agricole.

Rising inflation projections have lifted expectations for Federal Reserve interest-rate increases, delivering a particularly heavy blow to shorter-term Treasurys. Federal-funds futures, used by investors to place bets on the Fed's rate-policy outlook, showed late Thursday a 56% chance that the central bank will raise rates at least three times this year, up from 32% a month ago, according to the CME Group data.

...And From Clif Droke in www.seekingalpha.com No Shortage of Worries Bolstering Gold Price

"Gold is slowly working its way back into the spotlight as more and more investors become nervous over the possibility that the coming weeks could witness a long-anticipated stock market correction. There is also a belief by some observers that a war, however unlikely, between the U.S. and North Korea is a possibility further out. Whatever the basis behind the growing gold demand, the metal continues to gain traction in the early part of 2018 and is now headed for its biggest test of strength since last summer.

After slipping in early trading on Tuesday, gold clawed its way back and closed 0.29% higher from the previous day's four-month high. The rebound came on the heels of a pullback in the U.S. equity market and in spite of losses elsewhere in the commodities complex. Spot gold finished the day at $1,338 while February gold futures closed at $1,337. Gold rallied for the fourth consecutive trading session as investors awaken to the possibility that the U.S. economy may finally see the return of inflation this year after years of remaining under the Fed's 2 percent inflation target.

Gold's latest gain also occurred against the backdrop of weak U.S. currency as the dollar clawed back some losses the day after hitting a three-year low. The dollar has weakened as investors have grown increasingly confident that a global recovery could outpace U.S. growth in 2018. The relentless weakness in the dollar is another in a growing list of investor worries that is bolstering near-term demand for gold.

Another concern facing investors right now is the near-term outlook for the cryptocurrencies. Bitcoin fell as much as 25 percent on Tuesday as worries about a regulatory crackdown on the market spread after reports suggested that South Korea may ban cryptocurrency trading.

The commencement of a bitcoin correction roughly coincided with gold's latest rally, which began last month. There have been suggestions among some gold traders that the precious metal's rally is in part a safe-haven reaction to bitcoin's declining fortunes. While that may or may not be true, gold has more than its fair share of safe-haven catalysts right now.

Gold's biggest obstacle ahead, from a technical perspective, is the $1,355 level, which is the nearest intermediate-term peak. Gold last achieved this level on a closing basis on Sept. 8, hitting an intraday high of $1,365 that same day. Gold is only about $20 away from the $1,355 closing high right now and will likely test this level before the momentum carrying its latest rally has become exhausted. If gold manages to close about $1,355, it would send a signal to skeptical commodity traders who have missed this latest rally that gold is indeed mounting a serious turnaround of greater than short-term proportions. This in turn would likely increase demand fro the yellow metal from investment fund managers.

With no shortage of things for investors to worry about, gold appears to have plenty of fuel to continue its rally in the weeks ahead. Additionally, investor sentiment on the metal hasn't yet reached exuberant levels which have historically coincided with major market tops. Thus the gold and gold mining stock rally is still a healthy condition as we head further into what has been a bullish seasonal period for the precious metals."

Last update: Jan 19, 2018 11:54:09 AM

This is not a recommendation to buy or sell.