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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 - February 23, 2018
In the precious metals markets this week...
GOLD

Monex spot gold prices opened the week at $1,347 . . . traded as high as $1,349 on Monday and as low as $1,323 on Thursday. . . and the Monex AM settlement price on Friday was $1,328, down $19 for the week. Gold support is now anticipated at $1,321 then $1,307, and then $1,285. . . with resistance anticipated at $1,338, then $1,362, and then $1,377.

SILVER

Monex spot silver prices opened the week at $16.60. . . traded as high as $16.65 on Thursday and as low as $16.40 on Tuesday. . . and the Monex AM settlement price on Friday was $16.49, down $0.11 for the week. Silver support is now anticipated at $16.42, then $16.16, and then $15.91. . . and resistance anticipated at $16.74, then $17.10, and then $17.45.

PLATINUM

Monex spot platinum prices opened the week at $1,013 . . . traded as high as $1,013 on Monday and as low as $987 on Thursday. . . and the Monex AM settlement price on Friday was $997, down $16 for the week. Platinum support is now anticipated at $985, then $960, and then $938 . . . and resistance anticipated at $1,006, then $1,020, and then $1,045.

PALLADIUM

Monex spot palladium prices opened the week at $1,034. . . traded as high as $1,041 on Friday and as low as $1,016 on Wednesday. . . and the Monex AM settlement price on Friday was $1,041, up $7 for the week. Palladium support is now anticipated at $1,016, then $998, and then $954. . . and resistance anticipated at $1,048, then $1,085, and then $1,127.

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 SA Marketplace in 2/21 www.seekingalpha.com Commodities: It's The Year Of The Bull

"2018 is the 'year of the dog,' according to the Chinese zodiac. Will 2018 also go down as 'the year of the commodities?' Many prominent media outlets think so, including US News, Investopedia, and CNBC. All of them are calling this year the 'year of the bull' when it comes to commodities.

Seeking Alpha's own commodities expert and Wall Street veteran, Andrew Hecht, has also been calling for a commodities boom in 2018. With the stock market on a volatile tear, interest rates on the rise, and fears about inflation increasing, along with a declining dollar, Andy says conditions are rise for a 'commodities supercycle.'

Seeking Alpha: Obviously, the markets have been very volatile of late. What's your take on what is causing that, and where do you think markets go from here?

Andrew Hecht: A correction in the equities market was long overdue. With the VIX hovering around the 10 level for the better part of 2017, the market had bullish blinders on. Tax reform is a positive for stocks, but equities moved one way. The first crack in the armor was the move to the downside in bonds in late January when they broke through a critical support level that threatened the three-decade-long bull market in the debt market.

Higher rates can be bullish or bearish for commodities. When real rates rise, it increases the cost of carrying inventories and long positions in raw materials market, which weights on prices. However, when rates move higher because inflation is rearing its ugly head, that is another story as inflation can be a commodities bull's best friend. After three decades of the bond bull, many market participants do not know how to deal with a bearish cycle in bonds.

SA: You believe we're on the verge of a commodities supercycle. What does that mean, and what's happening in the markets to make you say that?

AH: We are at a very fascinating point in time as a major divergence has appeared. The dollar is moving lower as U.S. interest rates move higher, and at the same time, inflationary fears are increasing. We got validation of those inflationary fears this week when CPI and PPI data and readings rose more than the market had expected.

On the fundamental side, demographics point to more people in the world with more money competing for raw materials, which are finite assets. Population and wealth growth has caused prices to edge higher, and long-term charts over the past two decades or longer in many commodities display a pattern of higher lows even during times of overabundant supply.

At the same time, technical factors point to capital looking for a home as stocks are at high valuations and bonds appear to be moving lower. Many high-profile money managers are increasing their exposure to commodities in the industrial, energy, and agricultural sectors.

My supercycle theory is based on the technicals and fundamentals for the market lining up, which could push prices to much higher levels than most analysts believe possible right now. Whether an investor or trader is involved in commodities or not, it is an imperative for them to watch and understand what is going on.

SA: You're looking for higher prices in precious metals this year. Ray Dalio is buying up gold. Rising rates are pushing down the prices. Commodities move fast, so it's hard to pinpoint the 'perfect' entry point. That said, is this a classic case of 'buy low, sell high' and as such, is now the time to follow Dalio's lead and load up the truck with gold and other precious metals? Or do you see an even better entry point potentially ahead?

AH: I cover five precious metals in the service - gold, silver, platinum, palladium, and rhodium. Each has different fundamentals, but they all tend to move together over time. This sector has been trading tick-for-tick with the U.S. dollar, and it is looking very good at the moment. Platinum is the cheapest metal in the bunch on a comparative basis and offers the best value these days."

...And From Daniel Kruger in the 2/23 Wall Street Journal The Dollar Weakens After Rally Day Earlier

"The U.S. dollar fell Thursday as optimism about the economy isn't leading to bets that the Federal Reserve will accelerate its expected pace of rate increases.

The Wall Street Journal Dollar Index, which measures the currency against a basket of 16 others, fell 0.5% to 83.55, snapping a four-day winning streak. The greenback fell broadly, sliding 1% against the Japanese yen, 0.4% against the euro and 0.3% versus the British point.

The dollar had rallied Wednesday after the minutes of the Fed's Jan. 30-31 meeting showed that several officials believed the pace of economic growth was set to accelerate even after lifting their projections at the Fed's December meeting. Some officials also seemed more certain that over the coming year inflation could head back to the 2% target set by policy makers after years of consistently lagging.

Despite the optimistic tone, the dollar later lost support as investors failed to discern language indicating that Fed officials are contemplating increasing the pace of interest rate increases beyond the three year penciled in for 2018 at their December meeting.

'At this point in time, there isn't anything the markets could latch onto' that would suggest additional rate increases are in the offing, said Paresh Upadhyaya, who manages currencies at Amundi Pioneer Investments."

Last update: Feb 23, 2018 11:51:26 AM

This is not a recommendation to buy or sell.