Daily Gold & Silver Market Report – 12/02/2016

Cassie Bastien

12/2/2016 12:48:00 PM

SILVER PRICES LOWER DUE TO HIGHER BOND YIELDS

Tim Clayton from EconomicCalendar.com says higher oil prices have supported Silver, with prices consolidating around $16.70 per ounce Wednesday. With WTI advancing by nearly 8 percent as OPEC agreed to cut production levels, oil prices improved in Europe. Gains in industrial commodities supported Silver prices, but those gains were offset by a development in bond yields and a generally strong U.S. dollar, while equities also progressed. Before a sharp drop, Silver briefly touched $16.80 per ounce early in the U.S. trading. Clayton stated, “USD/JPY advanced strongly to near 114.50, the highest level for close to nine months and there was further upward pressure on bond yields.” The impact on Silver was amplified by downward pressure on Gold, which fell below the important $1,180 per ounce support level. Trends relating to both the dollar and bond yields will be monitored as the U.S. Institute of Supply Management manufacturing data is due Thursday ahead of Friday’s employment report. In addition to that, the oil-market dynamics will also continue to guide overall market movements and Silver developments.

GOLD TEST THE SUPPORT WITH NFP

As a result of the strengthening U.S. dollar since the presidential election, Gold prices have turned bearish. FxPro Blog Technical Analyst Devata Tseng said Wednesday’s “better-than-expected U.S. economic figures” weighed on Gold prices, breaking the $1,180 per ounce support level. Gold spot hit its lowest level since February at $1,160.53 per ounce, though it stayed above the $1,160 support level. November’s non-farm payroll and unemployment figures will likely test the support level, with lower-than-expected figures helping Gold spot rebound and better-than-expected figures weighing on the yellow metal. Tseng went on to say, “The current trend of Gold still remains bearish, the price is trading below both the short term and long term moving averages and has been moving along the lower band of the Bollinger Band Indicator. The price is likely to hold temporarily above the support line at [$1,150 per ounce], yet the upside selling pressure is heavy.”

RALLY ON WALL STREET

Ever since the unexpected election of Donald Trump, major indexes are hitting record levels as investors anticipate him to promote policies that would spur economic growth. Sara Sjolin with MarketWatch said, “The uncertainty was underlined by the November jobs report, which showed 178,000 jobs added in the month, fewer than had been expected, while the count over the prior two months was revised lower. The jobless rate fell sharply, to a nine-year low of 4.6%.” The number of new jobs suggests a moderation in growth, although not enough to influence the expectation of a December interest rate increase from the Federal Reserve. Chief investment strategist Bruce McCain at Key Private Bank says that “The market has been rising on expectations that things will get better in terms of government policy. … It is safe to say we’ve come too far too fast, even while the trajectory is still there.” Sjolin closed with some data stating, “The S&P 500 is down 0.7% while Nasdaq … is down 2.3%, on track for its worst weekly decline the one before the November 8^th election, according to FactSet data. The Dow is up 0.2%; the blue-chip index closed at a record Thursday.”

At 1:48 P.M. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,214.80 Up $7.60
• Silver, $16.64 Up $0.29
• Platinum, $931.00 Up $18.70
• Palladium, $726.00 Down $6.70

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