Daily Gold & Silver Market Report – 11/29/2016

Cassie Bastien

11/29/2016 9:18:00 AM

SILVER FINALLY ON THE RISE

As the Precious Metals market attempted to recover following a three-week skid, Silver prices finally started to rise for yesterday’s Cyber Monday. With a complete 180 from last week’s decline, the grey metal rose nearly 2.4% during the overnight period. It’s no secret that the US currency has been on the uptrend since the somewhat shocking election of Trump on the 8^th of November. Sam Bourgi from Economic Calendar.com says that the Labor Department will release November non-farm payrolls data on Friday, the final major jobs report before the December 13-14 Federal Open Market Committee (FOMC) meeting. With economists forecasting a monthly increase in jobs to around 170,000, it should be more than enough to convince policymakers to hike rates for the first time in a year. Commerce Department will release its revised estimate of third quarter GDP on Tuesday, which is anticipated to show the economy accelerated at an annualized 3% instead of the initially reported 2.9%, Bourgi stated. Then, on Wednesday, government economists will report on personal income and outlays, which provide a monthly snapshot of the health of US households, and will also include the latest core PCE inflation figure, the Fed’s preferred inflationary gauge. That’s not all! The Chicago purchasing managers index (PMI) and Fed’s Beige Book will also make headlines in mid-week trading.

CONSTANT MOVEMENT WITH THE YELLOW METAL

Due to expectations of the rising U.S. interest rates along with a higher dollar, Gold prices started to fall. So what does that mean for investors? According to Pratima Desai and Apeksha Nair with Reuters, investors are likely to favor risk assets such as equities. The U.S. Federal Reserve is seen raising rates in December and boosting the U.S. currency, which when it rises makes commodities more expensive for non-U.S. buyers. Danske Bank analyst Jens Pederson said that, "Gold is struggling here with the higher dollar and better sentiment for growth," also stating "Rising bond yields means it's cheaper to buy U.S. Treasuries, which, like Gold, are viewed as a risk-free asset." With that being said, unlike Gold, government bonds earn interest. However, expectations grow stronger after President-elect Donald Trump takes office in late January has also helped equity markets. On the technical front, traders say a break of a Fibonacci support level at $1,171.76 last week means Gold could see lower levels over coming weeks. In addition to Gold, Silver fell 0.5 percent to $16.54 an ounce, while Platinum lost 0.1 percent to $921.85. At $760.30 on Monday, Palladium gained 0.1 percent to $756.0 after rising to its highest since June 4^th of 2015. So what triggers all of this flux? The answer is higher interest rates.

BUY HIGH, SELL LOW?

Benjamin Graham, a legendary investor once said, “The stock market will continue to be essentially what it always was in the past, a place where a big bull market is inevitably followed by a big bear market. In other words, a place where today’s free lunches are paid for doubly tomorrow. In the light of recent experience, I think the present level of the stock market is an extremely dangerous one.” Even though that was said decades ago, it sure sounds like the wary tone being hit by many in todays market. Count Clarity Financials Lance Roberts says we’re seeing the final evolution of the “bull market psychology” as investors give in to the “if you can’t beat ’em, join ’em” mindset. And so, the spike in “passive investing” interest. “What is important to remember is that for every ‘bull market’ there MUST be a ‘bear market,’” Roberts said. He continued by saying, “While ‘passive indexing’ sounds like a winning approach to pace the markets during the late stages of an advance, it will also pace just as well during the subsequent decline.” Considering the impact of the central-bank interventions, Roberts stated that “there is plenty of historic evidence that suggests such attempts to manipulate markets are only temporary in nature.”

At 10:18 A.M. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,214.80 Down $10.30
• Silver, $16.64 Down $0.16
• Platinum, $931.00 Down $4.30
• Palladium, $726.00 Up $3.00

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