Gold and silver traded on below average volume Monday and Tuesday as unconvincing probes higher following Friday’s big rally were sold by recent speculative buyers who locked in profits. There have also been reports of producer selling in front of $1,200.00 gold as we approach month end and the end of the first quarter of 2015. Following a continuation of USD weakness in Europe this morning, with the Euro now testing 110.00 after being at 105.00 last week, gold is again testing $1,200.00 while silver trades above $17.00.

This morning finds U.S. economic data again missing the target as witnessed by a very weak report on Durable Goods Orders which fell for the fifth time in the last six months. On the back of this news, the yield on the U.S. 10-year bond has fallen to 1.86 percent as bond traders appear to be less concerned with a rate hike by the FOMC any time soon which should support gold and silver. Crude oil moving up and a U.S. equity market which again appears to be top heavy should also lend support. Technical trading continues to dominate our market as USD movement on the back of daily economic releases set the tone for the market. Support in gold at $1,185.00 and $16.85 in silver appears to be strong, but if the rally does not continue in the coming days expect the downside to again be probed. If gold breaks $1,200.00, we can expect resistance at the 100-day average at $1,208.75 and the 50-day average at $1,222.50. Silver is trading above its 10-,50- and 100-day averages, but it has surprised me by not taking a look at $17.40 – $17.50.

Precious metals continued to rally throughout the day on Friday as the USD weakened and crude oil rallied. The dovish FOMC report continues to impact our market as speculative short positions were covered before the weekend at the same time as now longs were entering the market. Physical demand was steady at the higher price points with silver leading the charge higher. If you believe like I do that the U.S. economy is still not out of the woods and remains on shaky legs despite the growth in payrolls and drop in unemployment rate, then you also suspect that the USD will continue to weaken through the spring and perhaps longer. The weakening USD will of course support gold and silver and just perhaps we will look back and say the recent dips below $1,150.00 gold and $15.50 silver were indeed buying opportunities. Slow and steady are just not the way for silver and the move I talked about in Friday’s commentary, calling for a run into the spread between the 50 and 100-day moving averages, happened all in one day as silver rallied over 80 cents.

Barring any geo-political news, the direction of all markets appear to be tied to the USD’s intra-day reaction to U.S. economic data. In the short term, gold support should be expected from $1,175.00 through $1,165.00. A break below $1,1650.00 likely means the USD is again in rally mode and sub-$1,150.00 can be expected. Gold is likely to face resistance as we approach $1,200.00 from producer selling, but a break above $1,200.00 should see us testing resistance between $1,225.00 through $1,240.00. Silver support should be strong as we approach $16.50 while a break above $17.00 should bring us a look at $17.40 – $17.50.

Despite the FOMC removing “patient” from the policy statement on Wednesday afternoon, the tone of the statement and Chair Yellen’s subsequent press conference clearly had a more dovish tone than the markets were expecting as witnessed by the big rally that ensued in most markets. As the policy statement was being read, the USD weakened sharply Wednesday afternoon, rallied yesterday and is weaker again this morning as its direction sets the course for gold and silver. While there remains a possibility of a 25 basis point rate hike at any time now, most commentators see the hike coming in August. As Chair Yellen and the FOMC would like to see the unemployment rate fall further while the inflation rate stabilizes at higher levels, I do not think a rate hike will come before the fourth quarter and I am still not convinced we will see one this year. Continue reading →

Ahead of the FOMC decision this afternoon, gold and silver continue to probe lower as witnessed by gold trading down to a four-month low yesterday before bouncing as we continue to trade around $1,150.00 and $15.50. Platinum and palladium continue to move sharply lower as investor and industrial demand highlighted by weak imports from China weigh heavily. Platinum, having failed to hold $1,100.00, is trading at $1,090.00 this morning which is a level not seen since 2009. Continue reading →

Welcome to FOMC week. The two-day meeting concludes on Wednesday afternoon with Chair Yellen scheduled to hold a press conference at 2:30pm EST. All markets will be waiting for any hint on a policy change that would indicate the much talked about rates hike(s) are set to begin.  The tone of her statement and answers to questions will be critical as a dovish nature with words like “patient” continuing to be used would indicate the FOMC may be concerned with the recent weak economic data and a rate hike could be pushed back to the fall or perhaps not at all this year.  Such an indication would weaken the USD and likely bring a big rally to our market as speculative short positions, which continue to grow ,would be covered while fresh buying is being done.  A “hawkish”  tone and the removal of “patient” would signal that a rate hike in June or perhaps August is likely which will pressure our market as the USD will likely continue strengthening.

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As precious metals head for the finish line this week, gold and silver are currently trading above $1,150.00 and $15.50 which may be a victory of sorts considering all the negative factors currently weighing on precious metals. The USD has taken a bit of a break from its “take no prisoners” rally which has helped as physical demand remains for the moment strong enough to offset speculative selling. The next headline we may have to deal with (and it could come today) is from crude oil which is once again under very heavy pressure. Crude is down 2 percent this morning and down 7 percent for the week as it currently sits on either side of $46.00. Extreme U.S. stock market volatility has returned which may support gold if U.S. equities are pushed lower and capital rotates back to our market. Continue reading →

Precious metals and all financial markets continue reacting to the two major economic headlines which are: the strength of the USD and when will the FOMC raise interest rates. The USD has moved higher by leaps over the past two weeks and now sits at 11 year highs. On modest volume, gold and silver continue probing lower as: physical demand, which has picked up, is unable to offset speculative selling, the ETF market experiences liquidations and crude oil saw a drop of over 1 percent yesterday, which added pressure. Platinum and palladium were hit a bit harder as platinum has fallen to 5+ year lows and palladium has failed to hold $800.00.

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Following Friday’s big sell-off on the back of the U.S. jobs report, trading resumed yesterday with a bit of short covering and physical demand bringing us a test of $1,175.00 and $16.00 where selling reemerged. With gold and silver entering a new lower trading range, I would expect the “shorts” to keep the pressure on unless we get an unexpected headline. A test of $1,150.00 gold and sub-$15.50 silver, where physical demand should be significant, is likely to spur on a short covering rally. Adding to negative market sentiment we have platinum trading at multi-year lows as it hovers just above $1,150.00.

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Monday through Thursday saw gold and silver mostly drift lower despite the occasional bounce. Daily trading ranges and overall volume have been below average as many market participants looked elsewhere for a market that had greater intra-day and short term volatility like the FX market. This morning’s release of the February Non-Farm Payroll report is a game changer and has broken precious metals out of the recent range to lower levels as gold and silver have already tested $1,175.00 and $15.75. Employers added 295,000 new jobs in February which far exceeded the estimate of 240,000 new jobs and the unemployment rate fell to 5.50 percent, which is the lowest it has been since May of 2008.

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Precious metal prices have tried higher since trading resumed yesterday as escalating tension in the Ukraine and speed bumps being hit over Greece’s debt negotiations with the ECB and IMF have brought buyers to the gold and silver market. China released terrible economic data yesterday as their exports fell by 3.30 percent while imports plummeted by 19.90 percent as the economic health of the world’s second largest economy continues to show weakness and will weigh on the global economy. Gold and silver, while off the overnight highs, continue to trade in positive territory this morning and silver is above $17.00 which is a welcome sign while platinum and palladium were not able to hold the rally and are trading below Friday’s settlement levels

The unrest mentioned above has U.S. equities trading lower this morning, while bonds continue to sell-off as the yield on the 10 year bond has risen 25 basis points and is back over 1.90 percent. Crude oil continues its recent recovery on a bullish report from OPEC as it has broken above $52.00. All things considered it is a bit unsettling that gold is only up $4.00 this morning. Silver is likely to be the leader this week from a technical perspective. The 50 and 100 day moving averages come in on either side of $16.75 where support should be strong while a break above the 10 day average at $17.30 could bring another test of $17.75.

From Coins to Conflict, International Wholesaler Offers Their Take on Several Key Issues Affecting the Precious Metals Marketplace in 2015

ADDISON, TEXAS (Jan. 13, 2015)—With the new year upon us, many investors and industry experts are offering their predictions for the 2015 precious metals forecast. Dillon Gage Metals, a leading international precious metals wholesaler, offers their take on several key issues ranging from general economic overviews and pricing to interest rates and geopolitical events.
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