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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...

Monex spot gold prices opened the week at $1,274 . . . traded as high as $1,277 on Monday and as low as $1,243 on Friday. . . and the Monex AM settlement price on Friday was $1,247, down $27 for the week. Gold support is now anticipated at $1,274 then $1,233, and then $1,206. . . with resistance anticipated at $1,262, then $1,278, and then $1,300.


Monex spot silver prices opened the week at $16.29 . . . traded as high as $16.33 on Monday and as low as $15.66 on Friday. . . and the Monex AM settlement price on Friday was $15.76, down $0.53 for the week. Silver support is now anticipated at $15.60, then $15.15, and then $14.65. . . and resistance anticipated at $15.85, then $16.27, and then $16.54.


Monex spot platinum prices opened the week at $931. . . traded as high as $932 on Monday and as low as $882 on Friday. . . and the Monex AM settlement price on Friday was $884, down $47 for the week. Platinum support is now anticipated at $865, then $832, and then $785 . . . and resistance anticipated at $888, then $907, and then $932.


Monex spot palladium prices opened the week at $1,013. . . traded as high as $1,014 on Monday and as low as $975 on Tuesday. . . and the Monex AM settlement price on Friday was $999, down $14 for the week. Palladium support is now anticipated at $995, then $975, and then $958 . . . and resistance anticipated at $1,014, then $1,040, and then $1,054.

***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 Andrew Hecht in 12/4 Precious Metals In The Final Month of 2017

"The four precious metals that trade on the COMEX and NYMEX exchanges have all posted gains through the first eleven months of 2017. The best performing metal has been the one with the least liquidity and the rare metal with a myriad of industrial uses. Other industrial commodities have fared better than gold, silver, and platinum prices this year. Perhaps that is the reason why palladium has been a star in the precious metals sector of the commodities market.

We are now in the final month of 2017. The Fed is likely to hike interest rates for the third time this year and the fifth time since liftoff from zero occurred in December 2015. While in the previous two years, precious metals hit lows during the final month of December, the dollar was moving higher in both of those years. With one month left to go in 2017, the greenback has been in a bear market since early January when the dollar index traded to its highest level since 2002. The index broke through critical support in September, recovered, and is now threatening to challenge lows once again. 2017 is looking a lot different than the previous two years, but the curse of December is still hanging over the markets like a dark cloud.

Gold Shows Strength

With a midpoint of just over the $1241.50 level, gold is going into the final month of 2017 with a strong and bullish tone compared to the price action at the end of 2015 and 2016. Higher rates are likely weighing on the yellow metal while the price action in the dollar and geopolitical landscape combine to provide support for the price of the precious metal that thrives during times of fear and uncertainty.

Silver is Weak

2017 has been a bumpy year in the silver market. A flash crash in early July caused the price of the volatile precious metal to trade down to a low of $15.15 per ounce, a level that was lower than the December 2016 nadir at $15.70.

While gold enters the final month of this year above its midpoint, silver is below. The dollar's weakness and geopolitical tensions are the likely reason for price strength in gold, but the path of interest rates has stood in front of gains. Higher real rates, as the rate of inflation remains below the Fed's target 2% level has dampened the upside of the gold market in 2017. When it comes to silver, open interest declined from 208,500 contracts on November 8 to 187,033 at the end of the month.

Platinum Is The Cheapest of All

Platinum has been the weakest precious metal since 2014 when it moved to a discount compared to the price of gold. In 2017, platinum moved to a new all-time low against gold at a $370 discount to the yellow metal.

Platinum as not only historically inexpensive against gold, in 2017 it became downright cheap against another platinum group metal, palladium.

There are two ways to look at platinum these days. Either it is limping into December and 2018 as the weakest precious metal of all. Or, it is a bargain at the current price at a discount to gold and palladium and trading at below the midpoint price of 2017.

Palladium Remains a Star

Palladium has been a bullish beast since early 2016 when the price found a bottom at $451.50 per ounce.

Perhaps the most compelling argument for price appreciation in the platinum market is the price action in palladium. Both are industrial precious metals, but platinum has a slightly higher melting and boiling point, and it is cheaper than palladium at current prices. The odds favor some degree of substitution by industrial users for economic and industrial reasons over the coming months. However the price trend in palladium has been the strongest in the precious metals sector, and the trend is your friend until it bends.

Commodities prices tend to be volatile. Often the best performer during one period becomes the worst the next. However, palladium has been a star of the sector while platinum has been a dog. As we head into the end of the year with an eye on 2018, platinum continues to offer the best value in the sector while palladium has been a trend-followers dream. Gold and silver are torn between rates and the dollar, but a particularly volatile geopolitical and U.S. landscape lurks in the background."

...And from Amrith Ramkuma in 12/7 Wall Street Journal Gold Trading Is at Quietest Since 2005

"The extraordinary calm that has blanketed markets around the world is spreading to precious metals. Gold traded in its tightest range in more than a decade during November by one measure. Futures prices varied by as much as $34.50 a troy ounce - the smallest gap between the metal's highest and lowest price in the months since October 2005, according to the Wall Street Journal's Market Data Group.

Bullion was stuck in a band between about $1,265 a troy ounce and $1,300 as a unique combination of circumstances kept prices in a narrow range.

Tensions between the U.S. and North Korea, along with doubts about the Trump administration's ability to push through its legislative agenda, have buoyed haven assets like gold sporadically throughout the year.

Net bets by hedge funds and other speculative investors on higher gold prices rose to their highest since September during the week that ended Nov. 28, according to the latest data from the Commodity Futures Trading Commission.

Exchange-traded fund buyers have also wagered on gold. Roughly $390 million flowed into gold-backed ETFs in November, according to data compiled by the World Gold Council, bringing this year's total to $8.1 billion.

Interest rates have been a main concern for bullish gold investors, pulling the precious metal 6.4% off its year-to-date highs from early September.

Most economists expect multiple rate increases next year.

But even if borrowing costs do rise moving forward, some gold bugs are holding out hope that inflation will start to show up, prompting some investors to get back to using the precious metal as an inflation hedge, according to George Gero, managing director at RBC Wealth Management."

...And from Myra Saefong in 12/7 November OPEC Oil Output Drops to 6-month Low

"Oil production from the Organization of the Petroleum Exporting Countries fell to the lowest level in six months in November, according to an S&P Global Platts survey released Thursday. OPEC output declined by 220,000 barrels a day in November from a month earlier, to 32.35 million barrels a day. The decline was driven by 'steady' crude production falls in Angola, Saudi Arabia, Iraq, Venezuela, Libya and the UAE, S7P Global Platts said. Saudi Arabia's output fell by 50,000 barrels a day to a four-month low of 9.97 million barrels a day."

Last update: Dec 08, 2017 11:45:55 AM

This is not a recommendation to buy or sell.