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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 - JULY 29, 2016

In the precious metals markets this week . . .  

GOLD:
Monex spot gold prices opened the week at $1,315 . . . traded as high as $1,350 on Friday and as low as $1,311 on Monday . . . and the Monex AM settlement price on Friday was $1,350, up $35 for the week.  Gold support is now anticipated at $1,328, then $1,308, and then $1,285 . . . with resistance anticipated at $1,362, then $1,378, and then $1,400.

SILVER:
Monex spot silver prices opened the week at $19.47 . . . traded as high as $20.51 on Thursday and as low as $19.33 on Monday . . . and the Monex AM settlement price on Friday was $20.35, up $.88 for the week.  Silver support is now anticipated at $20.24, then $20.02, and then $19.74 . . . and resistance anticipated at $20.48, then $20.72, and then $21.26.

PLATINUM:
Monex spot platinum prices opened the week at $1,073 . . . traded as high as $1,161 on Friday and as low as $1,069 on Monday . . . and the Monex AM settlement price on Friday was $1,151, up $78 for the week.  Platinum support is now anticipated at $1,120, then $1,084, and then $1,048 . . . and resistance anticipated at $1,168, then $1,215, and then $1,251.

PALLADIUM:
Monex spot palladium prices opened the week at $679 . . . traded as high as $717 on Friday and as low as $679 on Monday . . . and the Monex AM settlement price on Friday was $710, up $31 for the week.  Palladium support is now anticipated at $702, then $685, and then $644 . . . and resistance anticipated at $736, then $757, and then $788.

* * * WHAT'S AHEAD FOR PRECIOUS METALS ? * * *
It's been an interesting year in the world, AND in the precious metals markets as well . . . and Monex VP Mike Maroney has some intriguing thoughts about what the future could hold.  See Mike's new ''Metals Market Update'' video, posted on Wednesday, here: (Link to Video).

QUOTES OF THE WEEK:

From Kim Iskyan, in a posting on TheStreet website on July 28th:

''Under normal circumstances, when an investment is up double digits in just seven months, it's a good time to sell.  But with gold and silver, up 24% and 41%, respectively, so far this year, this may just be the beginning of a much bigger rally.

Of course, with that big of a jump in a short period of time, either one might be due for a pullback . . . But even if the price of either falls, it will likely just be a short-term consolidation.  Both gold and silver still have a long way to run.  As we've previously explained, it's not unreasonable to think gold prices could rise as much as 500%.  And, historically, when gold climbs, silver climbs even higher.

Conditions in the global economy are very supportive for gold and silver.  And these conditions will probably only intensify -- making both precious metals even more attractive.''

''NIRP [Negative Interest Rate Policy] is now in year two, and global economic growth is still stagnant.  Instead of spending money, investors have been using cheap cash to speculate in the real estate and stock markets, keep cash at home (where they won't lose any money to bank fees and zero or negative interest rates) or to buy gold and silver.  In response, the world's central bankers have printed even more money and pushed interest rates even lower.''

''Gold and silver are also destinations for investors' "flight to safety" when they are worried about market conditions.  Brexit was a good example of this -- gold prices rose nearly 5% the day after the Brexit vote.  Markets are also scared by what's happening in China -- the renminbi is down 7% versus the U.S. dollar over the past year and is hitting new lows.  And there is still concern over what's going to happen to China's overall economy.''

''Because the two metals' prices tend to move in the same direction at the same time, they have a high correlation.  But silver is the more volatile of the two.  One reason for this is that there is less silver to trade than gold, so silver prices can have bigger swings on lower trading volumes.''

. . . and from Eddie van der Walt and Joe Deaux, in a posting on the Bloomberg website on July 28th:

''A surprise rally in gold and silver caught the eyes of investors in the first half of the year.  Now, platinum and palladium are shining brighter.

Platinum is up 11 percent in July, putting prices on track for the best month since 2012.  Palladium is even better, jumping 17 percent, the most since 2008.  By comparison, gold added less than 2 percent in July as it lost momentum after gains in the first half.

The two lesser-known precious metals, used in devices that control toxic car emissions, are benefiting from better auto sales in China, concern over labor in South Africa and loose monetary policy from central banks around the world.

'South Africa continues to be world's largest producer of platinum and if anything goes south there, platinum could jump up,' Miguel Perez-Santalla, a sales and marketing manager at Heraeus Metals New York, said in a telephone interview.  'For palladium, auto sales are very strong.' ''

. . . and from Brian Maher, writing in the Daily Reckoning newsletter on July 27th:

''Cracks are now visible in the central banks' wall of deceit.  Trillions of dollars of bonds now trade at negative yields.  Helicopter money is in the cards.  People the world over now sense the jig is up.  So one important question hangs in the air:

Will there be enough gold to match exploding demand?

We have it on good authority that the world is fast approaching a 'gold production cliff.'  Supplies are drying up.  So . . .  Has the world reached peak gold?  And what does it spell for gold prices?  Consider . . .

The crackerjack analysts at Sprott Asset Management say global gold discoveries peaked in the mid-1990s.  And gold production hit a new all-time record in 2015 -- for the seventh consecutive year.  But Sprott says 2015 could go down as the year global gold production maxed.  It's all downhill from here.''

. . . and from Sara Sjolin, in a posting on the MarketWatch website on July 26th:

''Royal Bank of Scotland and Natwest could become the first U.K. banks to charge customers to hold their cash if the Bank of England yanks benchmark interest rates below zero in wake of the Brexit vote.
 
In a letter to about 1.3 million customers, RBS -- which also owns Natwest -- warned that with global interest rates at 'very low levels' the bank could be forced to start 'charging interest on credit balances' dependent on future market conditions.  The letter was sent only to business and commercial customers and not to private clients.

'We will consider any necessary action in the event of the Bank of England base rate falling below zero, but will do our utmost to protect our customers from any impacts,' an RBS spokesman said in a statement.''

. . . and from Thomas G. Donlan, in his ''Editorial Commentary'' column in the July 25th issue of Barron's magazine:

''The American debt problem was almost entirely ignored at the Republican National Convention last week, and we can expect nothing more when the Democrats gather this week.

Both parties support the entitlement spending system and the decrepit tax system that fails to support it.  They compete on the fiscal side of politics with impossible promises to spend more and tax less.''

''The Congressional Budget Office issues a Long-Term Budget Outlook every year.  To sum up this year's report in one sentence, it says, 'The federal budget outlook is projected to worsen considerably over the next three decades under current law, with debt growing larger in relation to the economy than ever recorded in U.S. history.'

By 2035, federal debt held by the public as a percentage of gross domestic product will surpass the peak of 106% set in 1946, and it will keep growing from there.''

''Unfavorable changes in four key variables -- lower labor force participation, lower economic productivity, higher interest rates, and higher per capita health-care costs -- could take the debt above 212% of GDP.''

''Politicians understand the need to act more responsibly, but they also understand that responsible action will have unpleasant consequences for the officeholders who take it.  Social Security became the third rail of U.S. politics for good reasons.  But waiting to make a start on fiscal repairs, or stretching out the policy changes, can only increase the size of the problems.

The stock market, the bond market, and the currency markets all reflect the same deliberate complacency about snowballing debt that has long afflicted politicians and academic economists.  These are challenges neither party can face alone, and this is a time when both parties are incapable of working together.'' 

Last update: Jul 29, 2016 11:07:37 AM

This is not a recommendation to buy or sell.