Daily Gold & Silver Market Report – 11/23/2016

APMEX

11/23/2016 12:09:00 PM

DOLLAR SOARS TO RECORD HIGHS

The dollar surged to a more than 13-year peak on Wednesday, bolstered by upbeat U.S. economic data that showed the economy on track for steady growth and reinforced expectations of interest rate increases by the Fed Reserve next month and in 2017” said Reuters reporter Gertrude Chavez-Dreyfuss. After a decline in September, the U.S. durable goods orders rebounded 0.4 percent in addition to solid U.S. jobless claims that have been below 300,000 for 90 consecutive weeks boosted the multiple rate hike view. The research analyst at Forex Time Ltd (FXTM) Lukman Otunuga  said, “Speculation of a December rate hike reached mind-boggling levels…” According to CME FedWatch, markets are now pricing in a nearly 100 percent probability of a December Fed rate increase! Investors are betting that the dollar will be strengthened by President-elect Donald Trump’s plans for fiscal stimulus, which in return could cause the Fed to raise rates faster than had been expected due to the increase of inflation. The dollar rose more than one percent against the yen to 112.36 JPY= ahead of Thursdays U.S. Thanksgiving holiday. Meanwhile, the euro, which could be facing a host of political risks in the coming months, continued to decline to 0.7 percent at $1.0546.

How does all of this affect the Precious Metals market? The fall in Precious Metals over the past month has been driven by the Federal Reserve’s interest rate sentiments and the increasing strength of the dollar. Market Realist Meera Shawn says that “The correlation between Gold and the DXY is -0.36, meaning that about 36% of the time, Gold and the dollar move in the opposite direction. Silver’s correlation with the DXY is -0.32.” In simpler terms, the rising dollar caused much of the retreat in precious metals.

U.S. MINT EXPECTED TO PUT ’16 SILVER AMERICAN EAGLE ON HOLD

It is nearing the time of the year when the U.S. Mint will stop production of its leading Silver coin, the American Silver Eagle. In comparison to previous years, the total sales of the Silver Eagles have been lower this year. Earlier this year, the argent metal rose to 45%, but then eventually wore down retail demand for the bullion coins with an obvious sales slump from June to September. However, the following month of October saw sales double what their September sales were! Everett Millman with COINWeek says that “This makes it a near certainty that annual mintage figures for the Brilliant Uncirculated silver coins will fall short of the record-setting totals from the previous three years.” Millman also stated that “After over 3.8 million ASEs were sold in October, an addition 1.9 million coins have already made their way to the Mint’s Authorized Distributors thus far in November. This correlates with strong sales of the collectible Proof Silver Eagle coins, as well: In fact, Proof ASE sales doubled during the week ending November 13 from the previous week.” As we near Thanksgiving, we also get closer to the end-date for production of the 2016-dated Silver Eagles. Although Michael White, the spokesman for the U.S. Mint’s Office of Corporate Communications, could not provide a definitive timeline for when this year’s production run will cease, Mint officials are typically quiet about the exact date because such a decision is not necessarily made public in advance. With that being said, 2015 ASEs ended production by December 11^th and then sold out by the 15^th of December; which in-return gives the Mint time to get a head start on preparing the following years Silver Eagle production. Millman closes by stating, “If demand remains strong at this late date in the year, we could see supply shortages reminiscent of moments in 2015 and especially in late 2014.”

At 01:09 A.M. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,214.80 Down $21.20
• Silver, $16.64 Down $0.22
• Platinum, $931.00 Down $11.10
• Palladium, $726.00 Down $7.50

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