Precious Metals Commentary, Analysis and Statistics

By Walter Pehowich,

The question arises again and again. What happens if physical gold and silver demand next year exceeds the supply and we experience the same shortages as we did this year?

I’ve been thinking about this for quite a while now and I thought I’d ask the question to a few chosen mints, refiners and producers. I asked, “Are you planning to add new machinery, hire more people and even add a shift or two to meet the expected demand next year?”

And the overall answer I received was, “How to we plan for something we don’t know will happen. You used the word “expected.” As a manufacturer, do we commit more capital for machinery or hire more people when we have no idea if the demand will be sustained. We try to juggle around some personnel and do maintenance of the machinery on weekends but there is no real answer to making a commitment to expanding capacity in this business with an unknown demand in the future.”

Some mints have laws that govern them, while other Mints have some flexibility to determine their direction. And refineries are kind of stuck in place it seems, trying to figure what road to take on investing in any capital improvements. As much heat that the mints, refineries and producers took this year, it seems in the end, for the most part, they are just fine.

So as a dealer in precious metals, whether a retailer or wholesaler, how does one plan for a shortage of product? It becomes a very difficult situation and it’s almost impossible to determine what products will be in demand and what inventory to carry.

As I tell my kids. “Sometimes in life there are no answers.

Walter Pehowich is the executive vice president of precious metals investment services for Dillon Gage with over 38 years of experience in precious metals investment services. His career began in 1977 at Bache (which evolved to Prudential-Bache Securities and then Jefferies Investment Bank). While at Jefferies, he served as senior vice president with oversight of investment grade precious metal products. Pehowich holds a National Futures Association (NFA) Series 3 license, authorizing him to advise and sell alternative investments in commodities and futures markets.

By Walter Pehowich,

A Love Story.

Hello it’s me, Gold! Remember, just a couple weeks ago as Silver was looking at 15 dollars and saying good bye (or good buy), while I was slipping away…possibly to $1,050. I was your go-to investment. I thought we had a good thing going…you wanted to hold me, put me in a safe place with the hopes of a future together. Meanwhile, your old “friend” the stock market was giving you a migraine and writing bad things in social media about your affair.

Then one day, someone on TV said something just happened to your old fling, Job Number. You left me short…and rallied 25 dollars in fifteen minutes. You broke up with me and went to dinner with Dividend Paying Stocks, you flirt!

And now Silver and I are just hanging together with no place to go. Locked in a trading range.

But we ain’t going down without a fight. We’ll have our day in the sun again. So I guess Silver and I will take a brief vacation together and, if something happens to you, we hope you will return with a gold ring and a silver necklace asking for forgiveness.

So I reserved a chair on the beach. I’ll be sitting there from 1130 to 1160 and Silver is hoping someone will pick her up at 15.00 again.

Have a wonderful weekend

Walter Pehowich is the executive vice president of precious metals investment services for Dillon Gage with over 38 years of experience in precious metals investment services. His career began in 1977 at Bache (which evolved to Prudential-Bache Securities and then Jefferies Investment Bank). While at Jefferies, he served as senior vice president with oversight of investment grade precious metal products. Pehowich holds a National Futures Association (NFA) Series 3 license, authorizing him to advise and sell alternative investments in commodities and futures markets.

By Walter Pehowich,

After talking to Wall Street traders this morning the story is the same.
To put some slang into the statement between $1,117 and $1,154 (price of Gold) “the train ain’t runnin’,the tracks are broken between these two avenues so to speak.

This morning the gold market tested the highs once again, I think it’s the 3rd time we tried to break thru $1,154 with no luck. The Market came off hard, down to $1,145. So we just sit and wait for some news that will put the train back on track.

As I indicated before, gold traders love volatility and look for momentum
in the market place before taking a position.

Coin premiums continue to come off. The reason is, all seems to be well in the equity world. The F=fourth quarter equity market comes in on solid ground, so the retail investor is looking back at dividend paying stocks to invest in.

Some Wall Street trading strategies that have been a topic this morning is the Platinum Gold ratio: buying the platinum January contract and selling the December Gold contract. The spread got as wide as 235 dollars recently and these levels are attracting some speculation in this area.

Silver moving up earlier this week almost 12 percent in three days have taken the wind out of the sails in the coin premiums. Brokerage account executives all say that the retail investor hates stock market volatility and loves Silver under 15 dollars. Those two facts put into play gets our physical market back on track.

Have a wonderful Wednesday.

Walter Pehowich is the executive vice president of precious metals investment services for Dillon Gage with over 38 years of experience in precious metals investment services. His career began in 1977 at Bache (which evolved to Prudential-Bache Securities and then Jefferies Investment Bank). While at Jefferies, he served as senior vice president with oversight of investment grade precious metal products. Pehowich holds a National Futures Association (NFA) Series 3 license, authorizing him to advise and sell alternative investments in commodities and futures markets.

by Walter Pehowich

A good Wednesday morning to you all. CME Future prices have a story to tell in certain circumstances. Today’s topic: How the spot price can affect future prices.

Let’s examine the difference between a Contango market and a market in backwardation. First lets define the two and describe what I look for when the availability of physical metal gets tight:

• Contango market: This is a condition where the forward prices exceed the spot price creating an upward curve in pricing.
  Example: December gold $1,100, February gold $1,101, April gold $1,102, June gold $1,103.
• Backwardation market:This is the opposite condition where forward prices create a downward curve and spot prices exceed the forward prices.
  Example: December gold $1,100, February gold $1,099, April gold $1,098, June gold $1,097.

If the gold market is in a Contango, future price condition means that physical gold is attainable for the most part, and a backwardation will indicate a tightening of supply. The spot price in a backwardated market will have no limits and can trade in large differences to the future months until the metal becomes more available.

Current spot month open interest has a significant effect on the backwardation of the spot price as the days dwindle down to the end of the month, resulting in delivery issues on the exchange.
The old Wall Street guru always says: “There are four things to remember when you begin your career on Wall Street. When entertaining a client, never talk about food, politics or religion and most important, never go into a delivery month with a short position unless you have the metal to deliver.”

We will be watching these levels in the future and report to you any interesting scenarios.

Have a wonderful day.

Walter Pehowich is the executive vice president of precious metals investment services for Dillon Gage with over 38 years of experience in precious metals investment services. His career began in 1977 at Bache (which evolved to Prudential-Bache Securities and then Jefferies Investment Bank). While at Jefferies, he served as senior vice president with oversight of investment grade precious metal products. Pehowich holds a National Futures Association (NFA) Series 3 license, authorizing him to advise and sell alternative investments in commodities and futures markets.

by Walter Pehowich

Today I would like to share with you the other side of the Precious Metals market: the CME Future’s market and the Wall Street Gold Trader. On Friday we talked about who the retail investor is and their role in the marketplace. Now I will explain why you see a total disconnect from the price of gold and silver to the physical demand for metal.

Who is the Wall Street Gold Trader? A person who works for a bank, brokerage house, or hedge fund and most likely trades a proprietary book for his or her firm. They use technical levels, like 200- or 50-day moving average trading levels for gold and silver and have the latest electronic trading platform with the fastest news services available. He/she trades CME futures or options and also has a program that runs an algorithm book to complement their other tools and looks for momentum in the market and their trading activity creates volatility and increased open interest in the futures contracts.

Friday when the job number report came out we witnessed exactly what programming trading can do to the price of gold and silver. Let me explain. At 8:30, when the number was released, gold immediately took a bid and started to rally. The price of gold jumped 25 dollars in 15 minutes. The speed of this quick rally to the upside was initiated by some key news items. Algorithm applications look for specific wording that hits the tape and immediately executes a buy or sell order electronically. In the old days on the Comex floor, there was an open outcry pit. Brokers trading for themselves and for clients (i.e., banks, brokerage houses and hedge funds) quoted market prices back to the proprietary desks for orders to be executed. Market movement took time to react to the news. Today it’s a completely new ballgame. It is my opinion, it would be very difficult to move the price of gold that fast with open outcry. Well it’s different times now. With the speed of the electronic platforms, much larger orders can be executed with ease, where open outcry would take a lot longer.

So while trading futures or spot with an electronic platform you might feel that you have been reading the paper or getting a cup of coffee waiting for the train to arrive and next thing you know it’s at the next station up the line. And your response is how did I miss that?

This is why today there is a total disconnect between the price of gold and silver and the crazy interest in the physical market. The Wall Street trader is not too interested in the physical side of the market. He or she just wants to take advantage of news that could create instant market movement with hopes he or she can beat everyone to the punch. And the Wall Street trader will once again hope for the next opportunity to come by looking to gain an edge in the market place and taking a proprietary risk to generate quick profits in an instant with the electronic platforms and algorithms to help him along.

While the retail investor looking at stock market volatility, currency devaluations, government debt, congress out to lunch, causing them to reposition part of their portfolio is into hard assets like precious metals.

In the end, we still see long delays for delivery for all types of physical metal, but everyone is starting to catch up, and we all wait for the next bit of news that will generate interest in the precious metal markets again.

Have a wonderful Monday.

Walter Pehowich is the executive vice president of precious metals investment services for Dillon Gage with over 38 years of experience in precious metals investment services. His career began in 1977 at Bache (which evolved to Prudential-Bache Securities and then Jefferies Investment Bank). While at Jefferies, he served as senior vice president with oversight of investment grade precious metal products. Pehowich holds a National Futures Association (NFA) Series 3 license, authorizing him to advise and sell alternative investments in commodities and futures markets.

My mother always told me that first impressions are everlasting so before I wrote this comment I put on my best suit and splashed on expensive cologne and got started. Continue reading →

By Peter Aan.

Metals are generally lower this morning, with Gold leading the way south, while Palladium tries to hang tough near yesterday’s close. Here’s what I see now:

Gold
Gold has penetrated that 1120.50 support level (December contract) that I discussed Wednesday. Now we are primed to move towards the more important level at the September low of 1097.70. If that level does not hold, we could see movement towards the critical low from August at 1073.70. That is the lowest gold price since early 2010. The big picture on Gold shows that we have been ratcheting down over recent years, with spurts of falling prices followed by rally attempts that fail to last more than 2-4 months. I continue to look for lower prices.

Silver
Silver seems to be taking a breath after the steep fall on Wednesday. I continue to look for movement towards the September low of 14.240 (December). After that we have the more important low made in late August at 13.950. You have to go back to 2009 to find prices lower than that.

Platinum
Platinum fell further yesterday, then rallied into last night’s session, but that rally could not be sustained. It seems likely that we will see new lows in this market, probably before the week is out.

Palladium
Palladium started a selloff on Wednesday, but buying pressure came in yesterday, lifting the market fairly close to recent highs. We are in the lower part of today’s range as I write this, so we could be making another attempt at lower prices. The first hint of a top formation would be a close below 651.00 (December), and a close below 644.00 would be a more significant signal. As I said on Wednesday, though, any pullback in a market this strong should be considered suspect.

Peter Aan joined Dillon Gage in 1983, and is currently a metals trader for our metals division. He is the author of numerous articles for Futures magazine and Stocks and Commodities magazine. He is the author of The Relative Strength Index: A Comprehensive Research Report and a co-author of Trading Tactics: A Livestock Futures Anthology, published by the Chicago Mercantile Exchange.

By Peter Aan.

Sunday night’s openings in the metals were all close to Friday’s close, but none were able to build from there and all have slid to substantial losses. Here’s what I see now:

Gold
This morning we have seen Gold take out Thursday’s low. As I said on Friday, this is an important short-term level. Now that this has been penetrated (and a close below this level would be a stronger indication), we must now expect a test of another short-term support at 1120.50 (December contract). We are close to that level already, but a more important support level is at the September low of 1097.70.

Silver
Silver is weaker than Gold this morning, crashing through the recent low. Now we turn our attention to the September low of 14.240 (December). After that we have the more important low made in late August at 13.950. You have to go back to 2009 to find prices lower than that.

Platinum
Platinum remains the weakest of these four, and has plunged into new lows this morning, reaching the lowest level since January 2009. As I’ve written before, the mega-low in Platinum is the 761.80 from 2008. That was the culmination of a plunge from the lofty height of 2308.80 reached earlier that year. You have to go all the way back to 2004 to find a lower Platinum price. We are far above 761.80 now, but there’s no reason to expect anything but lower prices for now.

Palladium
Palladium, our strongest market of late, is also pulling back this morning. We have traded below Friday’s low, and a close below that level would certainly indicate the start of a correction. With the recent strength of this market, I would not be quick to call an end to this bull market.

Peter Aan joined Dillon Gage in 1983, and is currently a metals trader for our metals division. He is the author of numerous articles for Futures magazine and Stocks and Commodities magazine. He is the author of The Relative Strength Index: A Comprehensive Research Report and a co-author of Trading Tactics: A Livestock Futures Anthology, published by the Chicago Mercantile Exchange.

By Peter Aan.

Markets are interconnected in many ways that are not always immediately obvious. The accusations by the EPA that VW may have rigged the software on some diesel models is thought to benefit gasoline cars. These cars tend to use Palladium in their catalytic converters more than Platinum, leading to some dramatic moves this week. Here’s what I see this morning:

Gold
The 1120.50 level (December contract) was able to hold on Wednesday, and we saw very strong buying yesterday. There’s no follow through today, however, and we are starting the morning moderately lower. The key for today and Monday is for Thursday’s low of 1129.50 to hold. If it does, we could see the bulls regroup and rally towards the August high of 1169.80.

Silver
Silver also managed to rally yesterday, but with only a fraction of the strength we saw in Gold. We are a little lower as I write this. If we can manage a thrust through Thursday’s high of 15.180 (December) especially on a closing basis, we could see a test and penetration of the 9-18 high of 15.435.

Platinum
Palladium followed through solidly to the upside yesterday and this morning, and remains the strongest metal of this group by a good margin. I would consider any pullback here to be a correction in a bull market for the time being.

Palladium
Palladium followed through solidly to the upside yesterday and this morning, and remains the strongest metal of this group by a good margin. I would consider any pullback here to be a correction in a bull market for the time being.

Peter Aan joined Dillon Gage in 1983, and is currently a metals trader for our metals division. He is the author of numerous articles for Futures magazine and Stocks and Commodities magazine. He is the author of The Relative Strength Index: A Comprehensive Research Report and a co-author of Trading Tactics: A Livestock Futures Anthology, published by the Chicago Mercantile Exchange.

By Peter Aan.

We’re seeing moderate strength in Gold and Silver this morning, despite some bearish signs earlier this week. Palladium is the star performer today, busting through recent highs. Here’s what I see now:

Gold
Tuesday’s weak close was a bearish sign, but buying has lifted prices moderately this morning. The action so far today is inside of yesterday’s range, and that low of 1120.50 (December) is important to hold. If it is breached, it could mean a slide down to the September low of 1097.70.

Silver
We got a bearish close in Silver also on Tuesday, but it’s hanging tough this morning. Another selloff from this area could trigger a trip down to the September low of 14.240 (December).

Platinum
Platinum was the weakest market on Tuesday, collapsing through the lows from early August. This sends us back to the monthly charts, where we see that the next major support level in this market is the 2008 low of 761.80. This is not to say that it will reach that level, but to say that there is no support level on the charts above 761.80.

Palladium
Palladium is on fire this morning, taking us to the highest level since mid-July. This brings it to an overbought situation, but the truth is that overbought markets sometimes just get more overbought, especially when they have good momentum. Stepping back from the chart to look at the bigger picture, there is not significant resistance until you get to much higher levels such as the 803.00 high from May. It’s been a long slide for Palladium since then, and we seem determined to begin climbing back up that ladder.

Peter Aan joined Dillon Gage in 1983, and is currently a metals trader for our metals division. He is the author of numerous articles for Futures magazine and Stocks and Commodities magazine. He is the author of The Relative Strength Index: A Comprehensive Research Report and a co-author of Trading Tactics: A Livestock Futures Anthology, published by the Chicago Mercantile Exchange.

By Peter Aan.

All metals but Silver are moderately lower this morning. Here’s what I see now:

Gold
Gold has pulled back this morning, but all of the action since last night is within Friday’s range. The bulls would not like to see a close below Friday’s low of 1126.9 (December contract). Despite the rise last week, we are still not significantly overbought. I continue to see movement towards 1147.30.

Silver
Silver is hovering around Friday’s close as I write this, and we have an inside day so far. I continue to favor movement towards 15.770 (December).

Platinum
Platinum is moderately weak this morning, after a bullishly confirming close on Friday. I continue to look for more strength in this market. A close today under 972.60 would be a black cloud on the bulls’ horizon, however.

Palladium
The range of Friday and today (so far) have been within Thursday’s range. A breakout of Thursday’s high (618.30 basis December) and low (594.40) will clue us in to further movement. I still favor higher prices and a test of 625.80.

Peter Aan joined Dillon Gage in 1983, and is currently a metals trader for our metals division. He is the author of numerous articles for Futures magazine and Stocks and Commodities magazine. He is the author of The Relative Strength Index: A Comprehensive Research Report and a co-author of Trading Tactics: A Livestock Futures Anthology, published by the Chicago Mercantile Exchange.

By Peter Aan.

Over the last four decades of watching the markets, I have noticed how often the initial reaction to a news event or report is wrong, or at least overdone. Such it was with the Fed announcement yesterday, where the initial reaction in many markets was short lived, and the markets either turned south or moderated their initial gains. The equity markets are overrun with bears this morning, while the precious metals markets have seen the bulls return. Here’s what I see now:

Gold
The strength we saw on Wednesday morning, after having second thoughts yesterday, has followed through nicely this morning, and we are approaching the resistance at 1147.30 (December contract) that I wrote about. If we can penetrate that level, the next resistance is a more important one at 1169.80, the August high. We have plenty of momentum now to the upside, and the market is not overbought, so the easiest path is to head higher.

Silver
Silver easily took out the short-term resistance levels I wrote about previously. It is overbought, but the trend is undeniable. We now have the August high of 15.770 (December) in our sights.

Platinum
Platinum has only a fraction of the strength we are seeing in Gold and Silver, but still seems to by trying to put in a triple bottom as discussed on Wednesday. A further confirmation of this would be a close above Wednesday’s high of 976.7 (October). If the bulls are successful, watch for a test of the resistance levels in the 1024.00 to 1038.50 area.

Palladium
We got a strong close on Wednesday above the 605.00 level I discussed. Today’s strength may put the market back on track to work towards a test of the 625.80 (December) high from August.

Peter Aan joined Dillon Gage in 1983, and is currently a metals trader for our metals division. He is the author of numerous articles for Futures magazine and Stocks and Commodities magazine. He is the author of The Relative Strength Index: A Comprehensive Research Report and a co-author of Trading Tactics: A Livestock Futures Anthology, published by the Chicago Mercantile Exchange.

By Peter Aan.

Markets of all stripes are as nervous as a cat in a room full of rocking chairs as the Fed meets this week to ponder interest rates. The fireworks are expected to start Thursday at about 1:00 CST. Here’s what I see now:

Gold
Gold is showing substantial strength this morning, after failing to close below 1100.00 (December contract). If this strength does not dissipate during the trading day, we could see a close above Monday’s high of 1111.90, an early sign that the recent slump in prices has run its course. If we do start a new leg to the upside, the first resistance level that we will encounter is the 1147.30 level reached on September 1.

Silver
Silver is also strong, after a low volatility day yesterday. There is formidable resistance not far above us at the early-September highs in the 14.930 to 14.950 area. Beyond that—and the psychological 15.000 level–we have resistance at the August high of 15.770.

Platinum
Platinum is higher this morning, but with less enthusiasm that Gold and Silver. It’s possible that it may be trying to form a triple bottom with the July and August lows. On the other hand, we often see a market approach an obvious support or resistance, back away, and then turn right around and plow right through it. At any rate, a close above Tuesday’s high of 963.90 will be our first sign that a bottom may be forming.

Palladium
Tuesday saw Palladium flirting with a penetration of the August high of 605.00, but we are seeing some reluctance this morning. A close above 605.00 would be a strong signal in this market, which remains primarily a congested, sideways market.

Peter Aan joined Dillon Gage in 1983, and is currently a metals trader for our metals division. He is the author of numerous articles for Futures magazine and Stocks and Commodities magazine. He is the author of The Relative Strength Index: A Comprehensive Research Report and a co-author of Trading Tactics: A Livestock Futures Anthology, published by the Chicago Mercantile Exchange.

By Peter Aan.

Gold is hanging tough this morning, near Friday’s close, while the other metals are succumbing to selling pressure. Here’s what I see now: Continue reading →

By Peter Aan.

All four markets are moderately lower this morning and succumbing to selling pressure as this commentary was being written. Here’s what I see: Continue reading →

By Peter Aan.

The employment numbers that were released at 7:30 CST this morning showed fewer jobs added than expected, but other aspects of the report were more encouraging. Continue reading →

By Peter Aan.

The action Sunday night and early Monday shows little of the volatility that we’ve seen in recent weeks, except for Platinum, which is sharply lower this morning. Here’s my take as we begin the week. Continue reading →

By Peter Aan.

Here’s my take on the metals as we begin to close out a very interesting week in the financial markets. Continue reading →

By Peter Aan.

As equities seem stuck in a fall/soar/repeat cycle, the consensus in precious metals is consistent: lower prices. Continue reading →

By Peter Aan.

Nothing is constant except change. As I was writing commentary on these four markets this morning, by the time I got to the fourth one, the markets had rallied to the point where I had to return to the top to rewrite! Here’s what I see…for the moment, anyway. Continue reading →

By Peter Aan

Metals opened Sunday night close to unchanged from Friday afternoon levels, but found some buyers as we worked into Monday morning, although Platinum and Palladium began to slump. Continue reading →

By Peter Aan

One thing I look for on a bar chart when a bottom appears to be forming is a close above the high of the low bar. Continue reading →

By Peter Aan.

As the equities markets fall victim to the China Syndrome, the precious metals markets continue to follow through to the upside. Continue reading →

By Peter Aan.

As I write this late Monday morning, the metals have made a dramatic move to the upside. Let’s look at the current technical picture. Continue reading →

The employment report released this morning was close to estimates, and the initial response by the precious metals markets was bearish. Continue reading →

It’s probable that markets of all stripes will have an eye on the employment data being released Friday morning at 7:30 CST. Reaction to the report is often volatile, but sometimes the market quickly cools down. Continue reading →

By Peter Aan

Signs of the Times: Goldcorp, a major North American gold producer, cut its dividend due to weak gold prices, and stated that it would consider reconfiguring or partially closing mines if gold should linger below $1,000 for an extended period. Continue reading →

Two headlines caught my eye this week: “Prepare for gold prices to plunge…as low as $350” and “Forget about whether $100 silver is possible—how about $1,000”. Continue reading →

by Peter Aan

Gold
On Friday, Gold penetrated the July 20 low, but buyers lifted the market off of its low, and that buying pressure spilled over into today’s session, but then selling returned. Continue reading →

Gold

Gold crashed through the recent 1080.0 low, as discussed earlier this week. Like Sunday night’s selling spree, the market quickly found some buyers, Continue reading →

From Peter Aan, Senior Dillon Gage Trader

Gold

Gold is weak today, being drawn towards the panic low of 1080.0 from Sunday night’s opening. Continue reading →

Gold

Gold was hit with panic selling during the opening minutes Sunday evening, taking the August futures quickly down to a breath-taking 1080.0. Continue reading →

Industry Veteran Will Oversee Precious Metals Investment Services

ADDISON, TX (July 21, 2015) – Dillon Gage Metals, an international precious metals wholesaler, has announced that Walter Pehowich has joined the executive team. Pehowich will serve as the executive vice president of precious metals investment services and will work from the company’s New York City trading office.
Continue reading →

Precious metals continue to feel the weight of a rising USD as gold and company have moved lower throughout the week. With news on Greece and Iran behind us, the market has focused on Chair Yellen’s testimony before Congress which was quite upbeat and leaves no doubt that the FOMC intends to raise rates this year with many “experts” now calling for a quarter point hike in September and again in December.

The headline story for our market today is the Chinese Central Bank releasing their official gold reserves for the first time in 6 years. In 2009, China claimed to have reserves of 1,054 tonnes and today that figure is 1,658 tonnes. If this figure is correct, and there is already chatter that it is not accurate, it falls far short of market expectations. This figure puts Chinese reserves in fifth place behind the U.S., Germany, Italy and France. If this figure is accurate, it may signal that the Chinese Central Bank may be a buyer of gold in the short term as it prepares for a meeting with the IMF in the fall where it wants the IMF to include the Yuan as an approved global reserve currency. In the short term our corner of the market benefits from excellent physical demand as investors of all sizes are attracted by the lower price points.

My next commentary will be on July 27. Have a good weekend and upcoming trading week.

Roy

Roy

Precious metals resumed trading yesterday with a spike higher on the electronic trading platform, which briefly saw silver trade to a high of $15.95 in the spot market. Continue reading →

It has been a very volatile trading week in all markets, highlighted by a resurgence in our market, with extraordinary physical silver demand making this a week we all hope will continue for the foreseeable future. Continue reading →

Precious metals sold off sharply yesterday which resulted in the busiest trading day of the year for our corner of the market as physical buyers especially in silver took advantage of the drop below $15.00. Continue reading →

Two major headlines over the weekend. The first did not yield the results I expected for gold and company, while the second may have calmed fears and weighed on gold and company. Continue reading →

The first half of 2015 ended with a stellar day for our corner of the financial world as physical demand picked up sharply yesterday on a global level. The lower price points and ongoing concerns in Greece certainly had investors and traders seeking the diversity and security an investment in physical metal can offer. This morning finds good and slightly better than expected economic data out of the U.S. continuing, which is fueling a rally in the USD and sell-off in bonds which are weighing on gold and silver as they probe lower and re-test support at $1,165.00 and $15.50. The surprise of the day comes from palladium which rallied sharply during the Asia trading day and briefly traded above $700.00. A rumored large physical order got the market moving higher which may have forced buy stops to be elected on the electronic trading platform.

This morning finds palladium is still up $25.00 at $698.00 and it appears to be assisting platinum, which is up $11.00 at $1,091.00. With liquidity already decreasing in front of a long holiday weekend in the U.S., the rest of the week could bring fireworks as we will receive the June U.S Employment Report tomorrow and the market will continue to trade on Friday. Physical demand should continue to support the market on the dips towards $1,155.00, but a break below $1,150.00 in gold likely signals a revisit of the low $1,100.00s. Technical resistance from the 10-, 50- and 100-day averages, which are currently residing between the low $1,80.00s through low $1,190.00s, should be stiff, but a break above $1,200.00 could see shorts running to cover along with momentum buyers jumping in, so the rally could be significant.

Happy July 4th to all who celebrate and to everyone else have a good weekend. My next commentary will be on Monday.

Roy

As the trading week draws to a close, precious metals continue to probe lower as good U.S. economic data has been impressive and weighs on our market as the yield on the ten year bond is now at 2.46 percent. The uptick in physical demand with the lower spot prices has been impressive and the low volume being seen in the futures market would indicate the pace of speculative selling is slowing. These two factors would indicate, as we approach the lower end of the recent trading range, that a move back up may be in the cards for next week.

When trading began in Europe this morning, silver spiked lower, but held support at $15.50. It has since bounced and is currently at $15.80. As the June 30 deadline for Greece is just around the corner there is still no resolution on debt repayment. Another emergency meeting is scheduled for tomorrow as all markets await news early next week.

Have a good weekend,

Roy

Gold and silver moved lower yesterday with several factors weighing heavily as we move towards the lower end of the recent trading range. Here are the factors, in no particular order: silver’s failure to hold $16.00 was disappointing for the longs and brought speculative sellers back to the table, the situation in Greece appears a bit calmer as headlines would indicate progress is being made over debt repayment, and the USD moved higher as did rates with the yield on the 10-year bond again above 2.40 percent. The good news for our corner of the market is that physical demand picked up sharply on the dip as it continues to do, but the bad news may be that the bottom is not far off and a rally from here means demand will slow down as we move towards the middle or upper end of the trading range.

In a bit of a surprise yesterday, Fed Governor Powell said two rate hikes this year remain a possibility. If hawkish comments like this continue during July and August, the likelihood is the USD will strengthen and, during a period where many market participants are on vacation, gold and silver could be vulnerable to spikes lower as speculators increase short positions during a period where liquidity is not great. In the short term, I would expect the market to test $1,155.00 and $15.40 where I expect it to hold, at least initially. Resistance levels are not far away and gold should face plenty from $1,185.00 through $1,195.00 while silver can expect resistance from $16.05 through $16.15 and again as it approaches $16.50.

Trading resumed yesterday on a quiet note as China was closed for a holiday and all market participants waited for the latest news on Greece. While the potential for a default still exists and headlines are mixed, it does appear as a bit of progress was made today as the deadline for debt repayment draws closer. While gold traded steadily on Friday, it was unable to close above resistance at $1,205.00, which I thought was necessary to get this week off to a good start (for those rooting for higher prices). It appears that many short term position traders may have had the same view as gold’s failure to move higher overnight has brought sellers back to the market with gold now working its way through support which runs from the low $1,180.00s through the mid $1,170.00s.

Platinum and palladium are continuing their move lower this morning as palladium has fallen below $700.00 while platinum has fallen to a $120.00 discount to gold. Silver is the highlight this morning as it is up on the day despite its 3 siblings being sharply lower. News that speculative silver short positions continued to increase last week on the futures exchange while physical demand is increasing may indicate the “shorts” are growing nervous this morning as they look to lighten up. The gold silver ratio, which was at 75.00 last week, is now at 73.30. If the ratio continues to move lower, look for silver to take a run at $16.75 in the coming days.