Roy’s Commentary 4/27/2016

Precious metals have been resilient on the recent uptick in volatility when the downside has been tested.  Despite the sharp drop in prices we often see in our market,  gold has continued to hold the low $1,220.00’s and silver has again bounced impressively after recent dips below $17.00.  Physical demand which had slowed a bit at the recent loftier levels has once again picked up as traders and investors continue to look for price points to enter the market.  The recent rise in U.S treasury yields has done little to strengthen the USD which, in my opinion, still feels vulnerable to weakening,  this should support higher precious metals prices. As we saw yesterday, economic data here in the U.S. continues to be mixed at best.  The decline in durable goods orders last month coupled with a fall in the Conference Board’s consumer confidence index weakened the USD as gold and silver reversed early losses, moved higher throughout the day and the rally continues this morning.

This afternoon brings us a statement from the FOMC which is concluding a two day meeting.  While a rate hike today is not expected, the tone of the statement should give a clearer picture on what Chair Yellen and her colleagues intend to do at the next meeting, which does not take place until June. In recent days, many market participants and commentators who were not looking for a June hike have changed their opinion and believe June will bring a quarter point hike. I continue to think the rate hikes, if they do come, will not begin before September.

While silver continues to impress with the gold silver ratio falling below 72,  I think gold needs to take over the leadership role.  Gold should find support in the mid to upper $1,230.00’s and again at the previously mentioned low $1,220.00’s.  A break below $1,220.00 could set us up for a test of $1,180.00. Rally attempts above $1,250.00 are likely to be met with short term traders taking profits and a bit of producer selling as we approach month end. A benign FOMC statement today could propel us back to $1,265.00.  Keep an eye on crude oil which is up another two percent this morning as the market tests $45.00. Further gains in crude could support a rally in gold to $1,285.00 – $1,300.00.

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 4/20/16

Silver was the shining star yesterday as it rallied above $17.00 for the first time since June of 2015. The rest of the complex followed suit as all recorded solid gains with platinum breaking back above $1,000.00.  Silver, which has been the headline story recently, has been consistently supported by physical demand from our corner of the market all year and most recently by a surge in physical demand reported to be coming out of China. The gold / silver ratio, which is a favorite subject of mine and something I watch very closely, has also been in play since I mentioned it a few weeks ago when I was looking for silver to lead the complex higher. As witnessed by the holdings of the major silver ETF’s which have risen sharply in the past 6 weeks and are now 30 million ounces higher than where they were at the beginning of the year, it has become clear that most investors have looked more favorably upon silver than gold. This is further supported by looking at the gold / silver ratio which was flirting with 80 not to long ago and is now testing 73.  With silver having done its part rallying up to a well-defined band of resistance, from $17.25 to $17.40, it may be up to gold if the rally is to continue.  The next objective for me is gold testing $1,285.00 and the gold / silver ratio dropping a bit further to 72 which takes silver to $17.85.

As China continues to flex its might on the global economy, it has also set its sight on the global precious metals market where it clearly intends to be a leader.  This week,  China launched the SGE Gold Benchmark.  As the world’s largest producer, importer and consumer of gold, China’s new “gold fixing price” is based on the price of .9999 gold and is priced in Chinese Yuan.

Roy’s Commentary 4/6/16

Precious metals had a “good day” yesterday as strong physical demand in Japan and China carried over into Europe, and then the U.S., as weak equity markets and falling bond yields brought traders and investors to our market. Unfortunately, yesterday’s gains have been followed today by all four precious metals being lower this morning as silver is once again trading below $15.00. As the market continues to be range bound, I will put forth a few factors in the current tug of war.  On the positive side, we continue to receive mixed, at best, economic data from the U.S. and abroad. The recent rally in equity markets appears to be running out of steam and interest rates are again moving lower as witnessed by the U.S. 10 year bond now yielding just 1.75 percent which weakens the USD. On the negative side, we have an FOMC here in the U.S. which has told us interest rates are going up this year and in years to come, the only question is at what pace. I still believe we will see one 25 basis point hike in Q3 and one in Q4 this year, but a third hike along the way could weigh heavily on precious metals. Equally concerning is the lackluster demand for physical metals; not only in the U.S. but throughout the entire market. Along with this we have seen a slowdown in demand for ETF’s and a sharp fall in gold demand in India where imports have fallen by one-third, as compared to this time a year ago.  As gold historically does best in times of uncertainty, we need to look no further than the race for President here in the U.S. to justify everyone having gold and precious metals in their portfolio.

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