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.