Roy’s Commentary 3/21/2016

Following an overnight sell-off during the Asian trading session, gold continues to show weakness this morning as the sharp rally brought on by last week’s dovish FOMC statement on Wednesday has been short lived. While overall volume picked up throughout the week, which is always a good sign, physical demand was not enough to take on the speculators who bought on Wednesday but were content with taking a profit before the end of the week. Despite the increased buying from our corner of the market and the continued rise in the holdings of ETF’s, gold struggles to hold a rally as sellers emerge above $1,265.00, while buyers enter as we begin trading below $1,240.00.  In the short term, we are again faced with a tight trading range as witnessed by the 10 day average in gold at $1,252.60 being within a good days trading range of the 100 day average which currently stands at $1,134.00. Keep an eye on the gold silver ratio in the coming days which is currently trading around 79.00.  While silver failed to hold above $16.00 which was a bit disappointing, I continue to think the demand for silver which continues to be quite good will propel silver into a leadership role sooner than later and be the catalyst for a rally that sees silver testing $17.25 – $17.40.  A silver rally towards these levels likely brings the ratio back towards 75 but enables gold to test $1,300.00.

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Disclaimer:  The content in this commentary is provided for informational and educational purposes only and all estimates and opinions included in this commentary are as of the date of the document and may be subject to change without notice.  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, and will not be responsible for the consequence of reliance upon any opinion or information contained herein or for omissions therefrom.  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 3/16/16

Gold has now fallen over $50.00 from the recent highs after briefly trading above $1,280.00.  The market has been pressured by short term traders who have taken profits and liquidated long positions along with producers who have taken advantage of the rally and have been hedging. In addition, there has been the reemergence of short sellers who are encouraged by higher bond yields, a generally stronger USD and news of a sharp fall in gold demand in India and China.  While physical demand remains good in the U.S. and elsewhere and investment in the ETF’s has at times been robust in 2016 gold appears to be at a cross road and I am looking for a $100.00 move from the current price of $1,230.00 sooner than later.  With that being said, I will not predict which way it goes but I will say gold falls to $1,130.00 or moves up to $1,330.00 in the coming weeks.

As we await the statement from Chair Yellen later today following the FOMC meeting, our market is trading quietly on very light volume with all four precious metals trading slightly above yesterday’s settlement prices.  I do not expect any policy changes from the FOMC today but the tone and content of Chair Yellen’s statement could bring fireworks to all markets.  Any reference to inflation remaining very low and concern about domestic and global growth would indicate a rate hike is likely not on the agenda and no more than two rate hikes the second half of 2016 are likely to occur.  This scenario would certainly support precious metals.  The flip side would be comments about inflation is picking up (which is what the FOMC wants to see) and the uncertainly about economic growth is now behind us as witnessed by the rebound in global stock markets. This scenario will certainly pressure precious metals and set the stage for a possible rate hike as early as next month when the FOMC meets on April 26 & 27.

 

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Disclaimer:  The content in this commentary is provided for informational and educational purposes only and all estimates and opinions included in this commentary are as of the date of the document and may be subject to change without notice.  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, and will not be responsible for the consequence of reliance upon any opinion or information contained herein or for omissions therefrom.  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