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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 - September 20, 2019
In the precious metals markets this week...
GOLD

The Monex AM closing price on Friday was $1,507, up $4 for the week. Monex spot gold prices opened the week at $1,503. . . traded as high as $1,511 on Wednesday and as low as $1,496 on Monday. Gold support is now anticipated at $1,500 then $1,488, and then $1,464. . . with resistance anticipated at $1,515, then $1,531, and then $1,548.

SILVER

The Monex AM closing price on Friday was $17.81, down $.02 for the week. Monex spot silver prices opened the week at $17.83. . . traded as high as $18.04 on Tuesday and as low as $17.74 on Wednesday. Silver support is now anticipated at $17.70, then $17.45, and then $17.20. . . and resistance anticipated at $17.88, then $18.05, and then $18.28.

PLATINUM

The Monex AM closing price on Friday was $943, down $10 for the week. Monex spot platinum prices opened the week at $953. . . traded as high as $953 on Monday and as low as $929 on Monday. Platinum support is now anticipated at $930, then $918, and then $899. . . and resistance anticipated at $955, then $970, and then $991.

PALLADIUM

The Monex AM closing price on Friday was $1,636, up $34 for the week. Monex spot palladium prices opened the week at $1,602. . . traded as high as $1,648 on Friday and as low as $1,571 on Wednesday. Palladium support is now anticipated at $1,620, then $1,580, and then $1,555. . . and resistance anticipated at $1,650, then $1,704, and then $1,721.

Watch Managing Partner of the CPM Group, Jeffrey Christian, in our latest "A Year for Accumulation" video. You'll gain insight on recent moves in the metals market, the economy, and current events which could have an impact on how investors accumulate their metals in 2019 https://www.monex.com/year-for-accumulation/
QUOTES OF THE WEEK...
From Craig Torres in 9/18 Bloomberg.com Fed Makes Second Straight Rate Cut, Splits on Further Action

''Federal Reserve policy makers lowered their main interest rate for a second time this year while splitting over the need for further easing, caught between uncertainty over trade and global growth and a domestic economy that's holding up well.

The benchmark rate was lowered by a quarter percentage point to a range of 1.75% to 2% 'in light of the implications of global developments for the economic outlook as well as muted inflation pressures,' the Federal Open Market Committee said in a statement on Wednesday in Washington. It continued to characterize the U.S. labor market as 'strong' with 'solid' job gains.

Treasuries held on to gains, the dollar rallied and U.S. stocks extended losses after the Fed's announcement. The decision didn't alter expectations among futures traders for another 25-basis point cut this year.

Chairman Jerome Powell has been under relentless public pressure to reduce rates from President Donald Trump, who returned to Twitter minutes after Wednesday's decision to say policy makers had failed again by not cutting more.

Fed officials maintained their pledge to 'act as appropriate to sustain the expansion.'

'Although household spending has been rising at a strong pace, business fixed investment and exports have weakened,' the FOMC said.

Five officials wanted to keep rates unchanged, while five saw a quarter point as appropriate this year and seven wanted a half point.

The Fed Board also took a separate step to calm this week's strains in money markets and avert harm to the economy, lowering the interest rate on excess reserves to 1.8%. Earlier Wednesday the Fed injected $75 billion of liquidity to ease a crunch, and key rates pulled back from elevated levels.

Powell is trying to sustain the expansion despite slowing global growth that's been chilled by uncertainty over U.S. trade policy, fanning fears of recession. Manufacturing has been hit hard, particularly in Germany, which prompted the European Central Bank to ease policy last week.

Kansas City Fed chief Esther George and Boston's Eric Rosengren dissented against the reduction, as they did in July, preferring to keep rates unchanged. There was a new dissent by James Bullard of St. Louis, who preferred a half-point cut.

Powell's committee is split between those who don't think cuts are needed because domestic spending is solid and those worried by global weakness and inflation running persistently under their 2% goal.

'This statement seems carefully crafted to be silent on that question,' said David Wilcox, a former senior Fed economist and now at the Peterson Institute for International Economics in Washington. 'There is no clue here as to whether this is the end of the line.'

Fed officials also released new quarterly forecasts:
*The median estimate saw the benchmark rate hold steady after today's move at 1.9% and remain there until the end of 2020, then rise to 2.1% in 2021 and 2.4% in 2022. That's just under the Fed's longer-run ''neutral'' federal funds rate estimate, which was unchanged at 2.5%.
*The unemployment rate was forecast to end this year about 3.7%, up a tenth from June, and finish 2020 at that level. The longer-run estimated jobless rate remained at 4.2%.
*Participants continued to forecast that they wouldn't reach their 2% inflation goal until 2021.

The Fed's back-to-back rate cuts reverse the tightening last year and follow a wave of easing this year by other central banks. In addition to the ECB, some analysts expect the Bank of Japan to act at its meeting Thursday.

U.S. central bankers, who added the reference to exports, worry that uncertainty over trade is denting investment and could slow hiring. Private-sector job growth has slowed from last year.

At the same time, consumption - which accounts for most of the economy - appears strong with retail sales rising 0.4% in August and sentiment indicators relatively solid. Financial conditions have remained easy since the July meeting, although the dollar has resumed gains against major currencies.''

...And From Myra P. Saefong in 9/16 Barron's Russia, China Pile Into Gold

''Emerging markets have beefed up gold holdings, undeterred by prices near heir highest levels in more than six years, as countries such as Russia and China diversify their foreign-exchange reserves - a trend that is likely to continue.

'Central bank buying is, of course, important to the supply/demand dynamic for the metal, but is much more important in terms of sentiment toward the metal,' says Brien Lundin, editor of Gold Newsletter. When central banks are 'buying as heavily as they are, it provides cover and a rationale for other central banks to do the same.'

The moves are due to concerns about the outlook for currencies including the dollar and the euro, says Mark O'Byrne, research director at GoldCore in Dublin. 'While the gold tonnage demand from central banks in recent months has been significant and near records, gold remains a tiny fraction of most central banks' ...foreign-exchange reserves,' he says, adding that the trend is 'sustainable and indeed may accelerate.'

Central banks had a record first half of the year, collectively buying 374 metric tons of gold through June, says Juan Carlos Artigas director investment research at the WGC. That was the highest first half of the year since central banks became net buyers in 2010. Net purchases from central banks year to date are still below those of 2018, but with the significant level of central bank purchases this year, 'we will likely be above the 10-year average,' says Artigas.

The price of gold, which has climbed to six-year highs on and off since June, hasn't hurt that appetite for the precious metal. Gold futures settled at $1,560.40 on Sept. 4, the highest finish since April 2013.

'Price is not the determining factor in central bank buying - rather, [the banks] are more likely being guided to secure an allocation of a percentage of their overall foreign-exchange reserves in gold bullion,' says O'Bryne. The central bank diversification and hedging are likely to support gold at these levels and could be a driver of higher prices in the coming months, he says.''

...And From 9/13 Kitco News Interview with Rob McEwen Gold Price Should be $21,000 If You Follow History

''Historically, gold prices have climbed much more than what we have seen so far during bull rallies, and if we apply historical multiples, gold should be trading closer to the $8,000 to $21,000 an ounce price range, this according to Rob McEwen, chairman of McEwen Mining.

'Gold from 1970 to 1980 went $40 to $800, so a 20x move. And then it dropped to $250 in 1999 and 2001 and ran to $1,900, that was a 7x move. If you apply any one of those multiples to the lowest low we had recently of $1,050, you could see $8,000 to $21,000 price on gold,' McEwen told Kitco News on the sidelines of the Precious Metals Summit in Beaver Creek.''

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This is not a recommendation to buy or sell.

Last update: Sep 20, 2019 11:18:22 AM

This is not a recommendation to buy or sell.