Precious Metals Market Pause to Reevaluate

After a strong jobs number on Friday, the Precious Metals Market pauses to reevaluate its next move. Very little data this week will give the Gold market a chance to act on its own.

Wall street traders are watching the currencies this week to see if the dollar will continue to strengthen putting more pressure on the metals. Most believe the metals will stay in an offer mode until more data is released. I can’t disagree.

Most say, with the job number so strong, it opens the window for a rate hike in December and gives the Fed a break from all the criticism the Wall street traders have put on them. The majority of traders believe the at the next FOMC meeting a quarter point rate is a done deal. I guess the banks would be happy if this happens and it gives a little hope for retirees with money in the bank, but will hurt the real estate folks.

Precious metals refineries report some new orders for product coming
in late Friday afternoon. A indictor that the demand for product has picked up a bit on this latest move.

Financial advisors indicate this morning they have had orders in silver from retail investors looking to take advantage of the weakness in the market. Silver is still the metal of choice on 8 out of 10 orders they report.

I believe, with the absence of any significant data on the horizon, the market will just be range bound in this area. If we maintain under $1,100 in Gold and $15 dollars in Silver, there will be retail demand for
product but not at a level most dealers would get excited about.

As I said in my comment on Friday, this looks like the train has just stopped to unload some payload and change the crew, but according to many Wall Street Traders this is not the last stop on the line.

Have a wonderful week.

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.