Roy’s Commentary 11/30/15

Precious metals prices were under pressure while the U.S. market was enjoying the Thanksgiving holiday as the USD continued to strengthen, having broken through the 1.06 level verse the Euro. On the back of this, gold moved lower and took a run at $1,050.00 on the way to recording a low of $1,053.00.  Physical demand seems to have offset the selling pressure for the moment and this morning finds gold back above $1,060.00 while silver continues to trade above $14.00. As we enter the homestretch for 2015, gold and company continue to feel vulnerable. As the USD continues to strengthen, long term long positions continue to be liquidated as witnessed by recent CFTC and ETF data. In addition, speculative short sellers continue to pressure our market despite increased physical demand. On the downside, gold should find support from $1,050.00 through $1,025.00 but a break below this band could see gold prices beginning with a “9” in a hurry. On the upside, there are signs of base metals prices stabilizing as Chinese producers are cutting production, while there is talk that the government is looking to increase their strategic stockpile of aluminum and perhaps other metals. A year-end rally in base metals would certainly add support to our market. A break above stiff resistance in gold from $1,070.00 through $1,085.00 could see us re-visiting $1,125.00 through $1,140.00

Roy’s Commentary 11/25/15

As the U.S. market prepares for a four day holiday weekend, we continue to look for signs on where the market is headed in December and beyond. Supporting the market we have increased physical demand as buyers are attracted by the lower price points, especially on silver. In addition, we have investors looking for “safe haven” assets in the wake of terrorist actions and rising geo-political tension. On the flip side, we have an environment where U.S. interest rates are expected to begin a gradual rise next month and if the “hawks” on the FOMC have their way additional increases will take place in 2016. This will continue to strengthen the USD which will further pressure our market and most commodities. Regardless of the markets direction, I expect silver to outperform gold. Keep an eye on the gold silver ratio which has been hovering around 76 in recent days.  In the short term, I am looking for a short covering rally to begin if we can get the market to trade above the 10 day averages in gold and silver which are at $1,077.25 and $14.21.

The U.S. Mint announced this week that 2015 one ounce gold Eagles are sold out and the last allocation for 2015 silver Eagles will take place on December 14.  The U.S. Mint will not begin taking orders from the Authorized Purchasers for 2016 dated coins until January 11, 2016. This is likely to exert upward pressure on the premiums of the most popular bullion coins. I suggest you call our trading desk daily to make sure you have the current premium and shipping schedule as we approach the busy holiday season.

Roy’s Commentary 11/23/15

Despite an early rally attempt on Friday, gold and company closed on the defensive as the USD continued to strengthen throughout the day. Fueled by growing speculation of a hike in U.S. interest rates, we also have comments from European Central Bank President Draghi that they are ready to act quickly in an effort to further support their economy. This translates to a scenario where the USD continues to strengthen and thus the continued pressure on precious metals and most commodities. Central Bank decision time is rapidly approaching as the ECB meeting is scheduled for December 3 and the FOMC meeting takes place on December 15 and 16.

 According to recent IMF data, central banks continue to aggressively buy gold on the dips which has been the pattern for the past 3 plus years. In October, The Russian Federation purchased over 18 metric tonnes, China purchased just under 15 metric tonnes and Kazakhstan added just under 3 tonnes.  Perhaps the continued purchases and diversification by many of the world’s central banks are telling us all that physical precious metals belong in every large and small investment portfolio.

This morning finds our market under pressure but off the lows as crude oil trades below $40.00 and as concern mounts that rising global inventories can see crude drop another 10 percent. As volume and liquidity exit the market in front of the Thanksgiving day holiday in the U.S., we may be poised for a short covering rally in gold and silver but resistance will be stiff above $1,085.00 and $14.40.

 

 

Roy’s Commentary 11/17/15

Precious metals, with gold in the driver’s seat, had a brief rally Sunday night into early Monday morning as “safe haven” buying was not sustained. As trading on Monday progressed, gold and company gave back the gains as market participants gravitated to the USD, bond market and equities.  By the close, gold and silver were back at $1083.00 and $14.25 as they continue to be drawn towards those levels.

 This morning finds all four precious metals on the defensive in early trading and still feeling vulnerable to lower levels. With gold continuing to show strong resistance on any rally attempt, witness the post Paris tragedy high at $1,092.00, it is beginning to feel like a test of $1,055.00 – $1,050.00 is where we are heading. Silver which continues to trade above $14.00 on the back of increasing physical demand could see another wave of “short sellers” hit the market if $14.00 is breached. I would expect physical buyers to step up to the plate and look for $13.75 – $13.50 to hold which could lead to a short covering rally for both gold and silver.

Keep a close eye on crude oil this week as it may be the catalyst for the next move in our market. If crude holds $40.00 and moves back towards $45.00, it could bring a short covering rally to our market.  A break below $40.00 in crude will likely empower the shorts to continue pressuring our market.

 

Disclaimer:  The content in this commentary is provided for informational and educational purposes only.  It is not a solicitation or offer to make or enter into any sale, purchase or exchange of precious metal products. All items and prices listed are indications only.  Call for exact pricing and availability.  Subject to prior sale.  Neither MTB nor the author of this commentary make any representations or warranties about the accuracy or completeness of the information provided.  The precious metals market is random and highly volatile so it may not be suitable for some individuals.  MTB’s employees are not brokers, investment advisors or financial advisors.  MTB and its employees do not render legal, tax or investment advice.  All prospective investors should always consult with a broker or investment adviser before investing any money in precious metals

 

Roy’s Commentary 11/13/15

Precious metals had a choppy day yesterday as the market kept reacting to hawkish and dovish comments by members of the FOMC. In the end prices remained close to unchanged at the closing bell. As the week draws to a close precious metals continue to feel the pressure of the strong USD as it appears increasingly likely that a rate hike is coming in December. All markets are now reacting to the looming rate hike and this is adding further pressure to our market. Crude oil like gold is being weighed down by the stronger USD and an increase in global inventory levels. This morning finds crude down another two percent and trading below $41.00 per barrel with many commentators calling for a drop into the mid $30.00’s. Add to this the huge fall in platinum, palladium and base metal prices this week and it is difficult to see gold and silver doing anything other than probing lower despite the uptick in demand we have all seen this week. As has been the case for the past few years buyers often wait on the sidelines and then enter the market on the dips. This trend continued in the third quarter of 2015 as the World Gold Council reported that global demand for gold rose by 8 percent when compared to the third quarter of 2014.

 

Roy’s Commentary 11/11/15

Precious metal prices tried to stabilize yesterday and even move a bit higher late in the day but resistance in gold at $1,095.00 and in silver at $14.50 proved to be formidable as sellers emerged around those levels. The stronger USD on the back of an expected hike in U.S. interest rates next month is impacting all markets but certainly appears to be weighing most heavily on the precious metals complex. Crude oil, which like gold, is being pressured by the stronger USD also faces the problem of inventories which continue to grow as the benchmark W.T.I. contract is back to testing $43.50 per barrel. Despite the increased physical demand which began late last week, the market is still being driven by speculative sellers and the continued liquidation of long positions.  In the short term, it looks like gold and silver are heading for a test of $1,075.00 and $14.00.

This morning finds platinum and palladium leading the complex lower as platinum was unable to hold above $900.00 and is currently at $887.00. Palladium is down 3.50 percent at $578.00 after it failed to hold $600.00. While physical demand can be expected to rise off the lower spot prices and may even be the catalyst for a short covering rally, our market could be faced with more downward pressure in early December when the European Central Bank meets again. Speculation is rising that the central bank could launch a new quantitative easing program that would further strengthen the USD and weaken the Euro.  This will be a subject I address further in the coming weeks.

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Disclaimer:  The content in this commentary is provided for informational and educational purposes only.  It is not a solicitation or offer to make or enter into any sale, purchase or exchange of precious metal products. All items and prices listed are indications only.  Call for exact pricing and availability.  Subject to prior sale.  Neither MTB nor the author of this commentary make any representations or warranties about the accuracy or completeness of the information provided.  The precious metals market is random and highly volatile so it may not be suitable for some individuals.  MTB’s employees are not brokers, investment advisors or financial advisors.  MTB and its employees do not render legal, tax or investment advice.  All prospective investors should always consult with a broker or investment adviser before investing any money in precious metals

Roy’s Commentary 11/9/15

Following up on Friday’s very strong U.S. employment report, it appears that investors, traders and speculators in all markets are now pricing in a .25 percent rise in interest rates by the FOMC at their December meeting. While gold  is holding onto a small gain as I finish this morning’s commentary, the rest of the complex is noticeably lower with platinum and palladium currently falling by over 2.00 percent.  Pressure is coming from the 10 year bond which sees the yield moving higher and testing 2.40 percent. Even equities are feeling the heat of higher rates this morning as the U.S. market is down about 1.00 percent across the board. If this were not enough to empower the “shorts” news out of China, the import of raw materials fell by almost 19.00 percent over the last 12 months has the base metals complex under heavy pressure as copper and nickel prices move lower.  Here are a few observations and facts to think about as we look for further price direction.

  1. Gold has now dropped by almost $100.00 in the past three weeks with no significant increase in physical demand.
  2. Silver was unable to hold $15.00 but is showing signs of increasing physical demand following the fall in price on Friday which has, so far, continued this morning.
  3. Platinum now appears poised to test $900.00 and palladium has failed to hold $600.00.  Physical demand from our corner of the market remains light although both saw an increase of interest on Friday which like silver, has continued this morning.

Conclusion – While gold and company may go lower in the coming days and weeks I expect physical demand to pick up sharply on further dips towards $1,050.00 and $14.00.  From there, who knows, but my hunch is we will see a rally led by gold which could see us retesting $1,125.00 to $1,140.00.

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 Disclaimer:  The content in this commentary is provided for informational and educational purposes only.  It is not a solicitation or offer to make or enter into any sale, purchase or exchange of precious metal products. All items and prices listed are indications only.  Call for exact pricing and availability.  Subject to prior sale.  Neither MTB nor the author of this commentary make any representations or warranties about the accuracy or completeness of the information provided.  The precious metals market is random and highly volatile so it may not be suitable for some individuals.  MTB’s employees are not brokers, investment advisors or financial advisors.  MTB and its employees do not render legal, tax or investment advice.  All prospective investors should always consult with a broker or investment adviser before investing any money in precious metals

 

Roy’s Commentary 11/6/15

Precious metals continued to probe lower yesterday as hawkish comments from St. Louis Fed President James Bullard continued to remind all markets, especially ours, that a December rate hike remains a real possibility.  Earlier this morning the Labor Department reported that October payrolls grew by 271,000 which far exceeded even the most optimistic expectations and the unemployment rate fell to a seven year low of 5.00 percent.  The very strong report for October reverses weak reports for the previous two months and sets the stage for the FOMC which all along has said their decision will be data driven to raise rates next month. On the back of this report, the yield on the U.S. ten year bond has jumped to 2.32 percent which is four percent higher than the yield yesterday. The USD is flying higher as the EUR/USD is now trading at 1.0725.  As expected, gold and silver are “taking it on the chin” as both are down 1.50 percent with last levels at $1,087.00 and $14.75.  As we head for the finish line and the end of another trading week our corner of the market is heating up as physical buyers who have been on the sidelines for much of the past two weeks are back in and buying the dip.  It is yet to be seen if the physical demand will be enough to force short sellers to cover. Next week is already shaping up to be an interesting one as I look for big intra-day ranges and increased volatility as market participation grows.

 

Have a good weekend,

Disclaimer:  The content in this commentary is provided for informational and educational purposes only.  It is not a solicitation or offer to make or enter into any sale, purchase or exchange of precious metal products.  Neither MTB nor the author of this commentary make any representations or warranties about the accuracy or completeness of the information provided.  The precious metals market is random and highly volatile so it may not be suitable for some individuals.  MTB’s employees are not brokers, investment advisors or financial advisors.  MTB and its employees do not render legal, tax or investment advice.  All prospective investors should always consult with a broker or investment adviser before investing any money in precious metals

Roy’s Commentary 11/4/2015

As the precious metals complex continues to feel the weight of a surprisingly hawkish FOMC, gold has now fallen for the fifth straight day as it struggled to hold $1,110.00 yesterday.  The combination of a stronger USD / weaker Euro and Yen and continued rally in equities has empowered the short sellers.  Physical demand has slowed as buyers seem content to wait and look for lower entry points as the market appears poised to test the psychologically important levels of $1,100.00 and $15.00. As discussed in my most recent commentary selling in gold picked up when it broke below $1,140.00 and silver has tested and so far held the 50 and 100 day averages at $15.23 and $15.22.  With overall trading volume well below average we have a market that is being driven by technical factors.  With this in mind I would look for gold to test $1,100.00 before any rally attempt but if it holds we could see a sharp move higher as the market tests $1,137.50 through $1,147.50 which is the band where the 10, 50 and 100 day averages currently reside.

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Disclaimer:  The content in this commentary is provided for informational and educational purposes only.  It is not a solicitation or offer to make or enter into any sale, purchase or exchange of precious metal products.  Neither MTB nor the author of this commentary make any representations or warranties about the accuracy or completeness of the information provided.  The precious metals market is random and highly volatile so it may not be suitable for some individuals.  MTB’s employees are not brokers, investment advisors or financial advisors.  MTB and its employees do not render legal, tax or investment advice.  All prospective investors should always consult with a broker or investment adviser before investing any money in precious metals.

Roy’s Commentary 10/26/2015

While gold and silver find themselves trading in narrow daily trading ranges of late on light volume platinum and palladium continue to trade with greater volatility and are attracting renewed interest.  With many investors and traders focusing on their equity, currency and bond positions it will take a move out of the current gold and silver range before we see an uptick in customer activity.  Gold tried to lead the complex higher on Friday morning but ran out of steam above $1,180.00 as the USD reversed its early morning weakness. Friday also gave us another indication of just how weak the global economy is as the People’s Bank of China cut interest rates for the sixth time in the last 12 months. This week we have a mid-week FOMC meeting where it would be a huge surprise for all markets if there was a change in Fed policy.  Given the recent comments by Chair Yellen and the majority of the FOMC voting members along with many economists calling for a weak holiday shopping season a rate hike may not come until Q2 next year. In the short term gold and silver need to find a new trading range as daily volume continues to contract in all corners of the market. Gold appears to be well supported below $1,160.00 and finds resistance above $1,180.00 but when it breaks I would look for a test lower where the 50 day moving average at $1,140.00 and 100 day average at $1,140.50 look like inviting targets. On the upside a break through the mid $1,180.00’s should bring us a test of $1,200.00. Silver is beginning to “feel” like it is ready for “one of those days” and I expect us to see a 50 plus cent intra-day move in the near future.  Like gold, the 50 day average at $15.14 and the 100 day average at $15.24 look like short term targets but a convincing break above $16.00 could see silver run up towards $17.00 as physical buyers jump in.

 

This is not an offering to buy or sell precious meals and should not be taken as investment advice.