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Silver Prices Hold Regardless of Dollar Strength

Daily Gold & Silver Market Report – 02/23/2017

The fact that both Silver prices as well as Gold prices have improved while the U.S. dollar has strengthened is definitely worth mentioning. "Last week’s [Consumer Futures Trading Commission] data, up to the close on February 14, showed the net long fund position (NLFP) climbed 6,535 contracts to 84,812 contracts," William Adams with said. "This was the seventh consecutive week where the funds have been net buyers." As geopolitical tensions grow and the UK moves toward Brexit, analysts still believe bullion will remain a a safe-haven commodity in the days and weeks ahead. Along with Brexit, Greece faces debt repayment issues, Europe faces more elections and U.S. President Donald Trump continues settling in. In conclusion, Adams said “the latest up-leg is looking tired, the stochastics have swung lower and another show of dollar strength may act as a headwind, so we would not be surprised to see prices consolidate at lower numbers; but we expect dips will be well supported.”

  • The Silver rebound that began in mid-December has climbed $2.50 per oz in two main waves; the second wave may just be starting to end judging by Thursday’s weakness and the drop in the stochastics.
  • We remain bullish in the medium term on Silver prices; the inverse head-and-shoulders pattern has a target of $18.95 per oz and the 20-Day Moving Average is climbing steadily. (Commody Trade Mantra)

Dollar Strength Having Limited Impact on Gold

The foreign exchange market shows the latest U.S. dollar move is on euro weakness over French election concerns rather than dollar strength. SAXO Group Head of Commodity Ole Hansen said both Gold and Silver prices are "showing resilience with [Gold/euro exchange rate] XAUEUR reaching the highest level since November 10." The market has become skeptical of polls after recent surprises with the UK's referendum known as Brexit and the election of Donald Trump. With that being said, Hansen explains, "we are continuing to see a pick-up in demand for alternative investments such as Gold and Silver. ... Worries about Europe have added another layer of support and has resulted in year-to-date gains for Gold of 8 percent and 12.5 percent for Silver." With this uncertainty, demand for alternative investments such as Precious Metals has been on the rise.

  • The dollar hit a six-week high against the euro Thursday.
  • Euro weakness is largely fueled by fears of a Marine Le Pen presidency in France. Opinion polls give her little chance of winning, but polls were deceptive in 2016's Brexit vote.

Only ‘blind faith’ sees Dow’s Record Run Roaring Onward

Investors are not impressed seeing the Dow Jones industrial average reach its best record-close streak in 30 years Wednesday on just a 0.2 percent gain. “For the markets to mount any positive return going forward, it can be argued that nearly everything must go right from now on. With valuations elevated on a historic basis, optimal outcomes must be achieved,” Seabreeze Partners Management President Doug Kass said. MarketWatch reporter Barbara Kollmeyer reported the DJIA got its ninth-straight win, along with its ninth-straight record close, Wednesday. A chart from Bespoke Investment shows the DJIA's longest winning streak a 14-day run that ended June 14, 1897. Bespoke says, "Once you get below the 12-day threshold, streaks of between eight and 11 trading days are not quite as rare, but they’re still very uncommon.” Kollmeyer closed, “If history is ready to dictate to this market, the show may be over soon.”

At 11:21 A.M. (ET), the APMEX Precious Metals spot prices were:

  • Gold, $1,251.10 Up $16.20
  • Silver, $18.21 Up $0.15
  • Platinum, $1,011.80 Up $9.10
  • Palladium, $777.10 Up $5.60

APMEX’s Account Managers now have extended hours Mondays through Thursdays and are here to serve you until 8 p.m. (EDT)! Or call us Fridays until 6 p.m. (EDT)! If you have any questions about investing in Precious Metals or simply would prefer to place your order by telephone, we are here to help.

Gold Prices Recover Ground Following US PMI Disappointment

Daily Gold & Silver Market Report – 02/22/2017

Although Gold prices saw pressure Wednesday from a strengthening dollar in Asia, a weaker than expected PMI and political uncertainty triggered a reversal in trends with Gold. reporter Tim Clayton said, “The dollar pushed higher in Asian trading on Tuesday following comments from Philadelphia [Federal Reserve President Patrick] Harker that he was not taking a March rate hike off the table.” Clayton reported U.S. Treasuries lost ground as 10-year yields rose to 2.44 percent, “triggering downward pressure on Gold prices with a retreat towards $1,232 per ounce.” Furthermore, strong global equity prices continue curbing potential Precious Metals demand, even with an offset from demand connected to political uncertainty surrounding both the Euro-one and U.S. With the British sterling unable to make an impression, Clayton said, “there was a significant advance in the dollar’s trade-weighted index which maintained downward pressure on Gold.” Trends in the dollar and bond yields, along with political developments, will be in close watch ahead of Wednesday’s Fed minutes.

  • The U.S. dollar maintained a firm tone early in New York with USD/JPY testing the 113.80 areas and Gold hit a low just below $1,228 per ounce.
  • Weaker-than-expected PMI data pulled the dollar off its best levels as USD/JPY retreated to the 113.50 area and Gold bounced back to $1,235 per ounce as U.S. yields also failed to hold above 2.45 percent.

Silver ETFs Keep Their Shine Amid Rate Hike Concerns

Even with concerns the Federal Reserve could raise interest rates in March, Silver prices remain calm for more near-term upside. Along with other Precious Metals, Silver enjoyed safe-haven demand as the equities market plunged into a correction. ETF Trends reporter Brenton Garen said, “The metal also maintained its momentum as the Federal Reserve lowered its interest rate forecast to only two hikes this year from a previously expected four rate hikes.” Along with rallying with Gold as a safe haven, Garen said, “Silver bullion may be strengthening on increased industrial demand while global economies rebound.” ETF Daily News reports, “Precious Metals’ rally this year so far has been fueled by a flight to safe-haven assets, even as equities markets continue to hit fresh all-time highs, amid rising interest rates and geopolitical uncertainty.”

  • The iShares Silver Trust and ETFS Physical Silver Shares nudged higher last week, bringing their year-to-date gains to about 13 percent.
  • Silver’s surge is also boosting mining ETFs, which are among this year’s best-performing non-leveraged ETFs.

Oil Slips on Dollar Strength

Fox Business analyst Sabina Zawadzki said, “Global oil prices slipped on Wednesday as the U.S. dollar rose but they traded broadly at multi-week highs after OPEC signaled optimism over its deal with other producers to curb output.” Organization of the Petroleum Exporting Countries Secretary General Mohammad Barkindo told a conference Tuesday that January data showed conformity from member countries in the output cut at above 90 percent. Adding to this bullish sentiment, Zawadzki said, “hedge funds raised their combined net long position in the three main derivative contracts linked to Brent and WTI by 51 million barrels last week, holding a net long position equivalent to a record 903 million barrels of oil.” According to a research note to clients, both Barkindo and Goldman Sachs expect global inventories to fall, which would boost oil prices. With that in mind, several analysts and market players have noted the near backwardation of both Brent and WTI  as investors begin to reduce future hedges. “In the meantime,” Zawadzki said, “crude oil inventory data from the United States will potentially guide the markets for the rest of the week.”

  • Brent crude was down 35 cents, or 0.6 percent, at $56.83, having touched its highest since February 2 at $56.31 in the previous session.

At 10:42 a.m. (ET), the APMEX Precious Metals spot prices were:

  • Gold, $1,240.10 Down $0.30
  • Silver, $18.12 Down $0.01
  • Platinum, $1,005.40 Down $0.40
  • Palladium, $773.50 Down $7.70

APMEX’s Account Managers now have extended hours Mondays through Thursdays and are here to serve you until 8 p.m. (EDT)! Or call us Fridays until 6 p.m. (EDT)! If you have any questions about investing in Precious Metals or simply would prefer to place your order by telephone, we are here to help.

Hedge Funds Taking Profits in Gold

Daily Gold & Silver Market Report – 02/21/2017

According to latest trade data from the Commodity Futures Trading Commission, hedge funds took profits in Gold for the first time in three weeks as prices hit nearly a three-month high. “Strong U.S. economic data, speculation the U.S. administration will deliver fiscal stimulus, along with [Federal Reserve] statements pointing to possible imminent rate hikes convinced specs to materially reduce Gold length,” TD Securities Head of Commodity Strategy Bart Melek said. Mitsubishi Precious Metals Strategist Jonathan Butler said investor interest in Gold is tied strongly to President Donald Trump. Neils Christensen said, “While Hedge funds have limited their exposure in Gold, they continue to see potential in Silver, increasing their speculative positioning.” According to analysts from Commerzbank, “Speculative financial investors have played a major part in the 13 percent rise in the Silver price since the beginning of the year,” adding that Silver’s net length is now at its highest level since September. “While safe-haven demand for Gold has been fairly muted so far, Silver continues to enjoy rising demand with the recent surge in industrial metals,” said Ole Hansen, head of commodity strategy at Saxo Bank.

Why Silver Bullion Might be the Buying Opportunity of the Decade says there are multiple reasons to add physical Silver to your portfolio. One of those many reasons is because Silver is simply real money, unlike paper investments that do not carry the same benefits. In addition, Silver is a tangible or “hard” asset, meaning you can literally hold it in your hand. Unlike paper profits, digital trading and currency creation, Silver is one of the few assets you can carry around in your pocket. Another reason to add Silver to your portfolio is because it is relatively cheap. Commodity Trade Mantra said it is 1/70th the price of Gold and is much more practical for your everyday smaller purchases. Silver is also used for industrial purposes, including electronics, medical applications, batteries, solar panels and much more. Jeff Clark with Commodity Trade Mantra said, “Due to [Silver's] rare characteristics, the number of industrial applications for Silver has skyrocketed. In fact, industry now gobbles up more than half of all Silver demand.” Silver bullion demand is growing around the world, with virtually all major government mints seeing record sales levels. With all of that being said, Clark said, “It’s hard to find an asset with a greater distortion between price and fundamentals.”

Hints of March Rate Rise May Drive Dollar Higher

Reuters Reporter Patrick Graham said, “The dollar rose broadly on Tuesday after two Federal Reserve policymakers pointed to a potential U.S. interest rates rise next month,” causing investor attention to focus on the bullish fundamentals of the world’s biggest economy. One of the biggest parts of recent drops in the euro are signals the Donald Trump administration is unhappy with the dollar's strength and, as Graham reports, “worries that a sometimes chaotic first month in office does not bode well for the delivery of tax reform and new spending.” Nonetheless, solid economic data and rises in U.S. inflation have led Federal Reserve policymakers, including Chair Janet Yellen, to promise a rise in interest rates in the near future. Neil Mellor, a strategist with Bank of New York Mellon in London, said, “Fundamentals have started to take a greater slice of the attention again, not least because of Janet Yellen's message last week. Whether it will stay like that is the big question.” Graham said, “Much attention has focused in recent days on risks around France's elections. One poll on Monday, while an outlier, showed the gap between centrist favorite Emmanuel Macron and far-right anti-EU nationalist Marine Le Pen shrinking to 16 points.” Gavin Friend, a Currency Analyst with National Australia Bank in London said, “We are still two months away from the French election but there is clearly some safe haven buying as we get nearer.”

  • A more than half percent gain in the U.S. dollar drove the biggest fall in the euro in more than a month.
  • Tuesday morning, the dollar was up 0.6 percent against the New Zealand dollar, 0.5 percent against the Australian dollar and 0.7 percent against the Swiss franc.

At 10:42 a.m. (ET), the APMEX Precious Metals spot prices were:

  • Gold, $1,240.10 Down $0.30
  • Silver, $18.12 Down $0.01
  • Platinum, $1,005.40 Down $0.40
  • Palladium, $773.50 Down $7.70

APMEX’s Account Managers now have extended hours Mondays through Thursdays and are here to serve you until 8 p.m. (EDT)! Or call us Fridays until 6 p.m. (EDT)! If you have any questions about investing in Precious Metals or simply would prefer to place your order by telephone, we are here to help.

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