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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.

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PRECIOUS METALS REVIEW - MAY 20, 2016

In the precious metals markets this week . . .  

GOLD:
Monex spot gold prices opened the week at $1,285 . . . traded as high as $1,289 on Monday and as low as $1,244 on Thursday . . . and the Monex AM settlement price on Friday was $1,252, down $33 for the week.  Gold support is now anticipated at $1,243, then $1,211, and then $1,180 . . . with resistance anticipated at $1,258, then $1,295, and then $1,307.

SILVER:
Monex spot silver prices opened the week at $17.33 . . . traded as high as $17.41 on Monday and as low as $16.34 on Thursday . . . and the Monex AM settlement price on Friday was $16.52, down $.81 for the week.  Silver support is now anticipated at $16.34, then $15.84, and then $15.31 . . . and resistance anticipated at $16.83, then $17.13, and then $17.28.

PLATINUM:
Monex spot platinum prices opened the week at $1,060 . . . traded as high as $1,065 on Monday and as low as $1,010 on Thursday . . . and the Monex AM settlement price on Friday was $1,024, down $36 for the week.  Platinum support is now anticipated at $1,015, then $985, and then $951 . . . and resistance anticipated at $1,046, then $1,083, and then $1,124.

PALLADIUM:
Monex spot palladium prices opened the week at $594 . . . traded as high as $599 on Monday and as low as $558 on Thursday and Friday . . . and the Monex AM settlement price on Friday was $559, down $35 for the week.  Palladium support is now anticipated at $548, then $523, and then $496 . . . and resistance anticipated at $588, then $621, and then $665.

QUOTES OF THE WEEK:

From Manuela Badaway, writing in the ''Commodities Corner'' column in the May 16th issue of Barron's magazine:

''It's been a good ride for auto-related precious metals.

Prices for platinum, palladium, and rhodium -- all used to control air pollution in cars -- have been surging this year.  Though the rally is slowing slightly this spring, it is likely to regain momentum during the second half of the year, analysts say.  This dip could be a good chance for investors to ride the metals back up.  Platinum prices have risen more than 32% since the year's lows touched in mid-January, while palladium and rhodium have gained 30% and 15%, respectively.

The metals are primarily used in the automobile industry for filtering air pollution in light and heavy vehicles.  Forty percent of platinum, more than 70% of palladium, and 81% of rhodium demand over the past five years has gone to pollution-reducing catalytic converters, linking the metals to auto sales and production.

Metal demand varies from market to market depending on whether vehicles use diesel or gasoline.  The European auto market is predominantly reliant on diesel, while China and the U.S. use mostly gasoline.  Platinum is used most often in diesel engines, and palladium in gasoline.''

. . . and from Simon Black, founder of the Sovereign Man website, in a web posting on May 17th:

''Liquidity is a major problem at US banks, which typically hold the tiniest percentage of customer deposits (often as little as 1% to 3%) in cash equivalents.

The rest of your hard-earned savings (97%+) is gambled away on crazy loans and other investment fads.

Look, it doesn't take a rocket scientist to see that this banking system clearly has a lot of risk.

Bank liquidity is shockingly low.  Bank solvency is questionable.  Bankers continue making seriously risky bets with your money.

And even eight years after the last crisis, major banks still don't have credible plans to deal with the consequences when their risky bets don't work out.

(Note- this is just the FINANCIAL risk.  We haven't even begun to talk about the legal risk, i.e. how easy it is to have your savings account seized or frozen.)

If you look at the data objectively, it's obvious that it makes no sense to keep 100% of your savings locked up in this system.''

''In the US banking system, the government is bankrupt, the central bank is insolvent, the deposit insurance fund is undercapitalized, the banks are illiquid, and they're making high-risk loans that put customers and taxpayers on the hook.''

. . . and from David Stockman, writing in the Daily Reckoning, published by Agora Financial, LLC, on May 18th:

''Roughly 80% of Federal spending consists of transfer payments, debt service and other essentially locked-in commitments under law.  The debt ceiling is the only frail reed by which the unstoppable expansion of this fiscal doomsday machine can be arrested.

So when the 'full faith and credit' chest-thumpers on both ends of Pennsylvania Avenue quashed the backbench uprising in August 2011, they insured that Washington's actual march toward default would continue unabated.

In fact, total government transfer benefits have grown from $1 trillion per year at the turn of the century to $2.7 trillion at present.  Even then, the baby boom bulge driving this budget breakout is just getting up its demographic head of steam.  During the next 15 years the entitlement tsunami will truly become a fiscal doomsday machine.''

''But the doomsday machine has been permitted to run unmolested by Washington's supposed fiscal watchmen.

Since the turn of the century, government transfer payments have been growing at approximately 2X the rate of wage and salary growth.  Just how long do these geniuses think this trend can be maintained?''

. . . and from Myra P. Saefong and Victor Reklaitis, in a posting on the MarketWatch website on May 19th:

''Gold futures dropped on Thursday to settle at their lowest level in about three weeks as signs the Federal Reserve could raise interest rates in June dampened demand for the yellow metal.''

''Adam Koos, president of Libertas Wealth Management Group, said he'd be shocked to see a rate-hike in June.

'There is too much risk in the equity marketplace,' he said.  Stock bulls are 'losing their religion to the church of gold.'

'If I weren't already long gold, I'd be buying on this dip as I don't see it falling much lower than $1,115, even in light of the Fed's hawkish comments,' Koos said.

Michael Armbruster, principal and co-founder at Altavest, said it's important not to be concerned with short-term movements.

'Beyond interest rates, currencies around the world are being devalued via central bank policy.  China's currency is still overvalued and likely to weaken further,' he said.  'So, the picture really doesn't change for gold unless the Fed hikes rates more than 100 basis points from here.' ''

. . . and from the Laissez Faire Today newsletter on May 19th, quoting a recent speech by former Texas Congressman Dr. Ron Paul:

'' 'Even after all these years,' Ron Paul said at a recent CATO event, 'of studying and reading and trying to figure out the system, I have come to a very fair and balanced position on the Federal Reserve.'
 
'I think there's no doubt that the Federal Reserve is immoral.  It's unconstitutional.  And it's a disaster.  We don't need it.'

Also, we might add, its policies have created one of the most terrifying financial tidal waves this world has seen.

'The hand-writing's on the wall,' Paul goes on.  'I think that's what we're facing today.  That the dollar reserve standard, which the world has embraced for forty years, has come to an end.  I don't think there's any admission to that yet.  And they believe that they can patch it up.'

'But I believe it has ended.  And that the dollar reserve standard has ushered in probably the biggest financial bubble in all of history.' ''

Last update: May 20, 2016 11:48:43 AM

This is not a recommendation to buy or sell.