Daily Gold & Silver Market Report – 12/08/2016

Cassie Bastien

12/8/2016 10:19:00 AM

GOLD TO TRADE IN HIGHS BY MID-2017

An article from ScrapRegister says “Bank of America Merrill Lynch expects Gold to trade around $1,200 an ounce by mid-2017, implying limited upside near-term.” This forecast is not far off current prices as February Gold settled Wednesday at $1,177.50 an ounce. At the BofAML 2017 Year Ahead Press Conference Wednesday, Head of Commodities and Derivatives Francisco Blanch said “a stronger U.S. dollar and higher bond yields will be two major headwinds for the yellow metal next year.” Higher interest rates are obviously bad for commodity, especially when the yield curve flattens. ScrapRegister adds, “Blanch’s subdued tone for Gold is a sharp contrast to just five months ago when the bank was calling for Gold to hit $1,500 an ounce.” Following June’s Brexit referendum and Gold hitting a 13-month high, BofAML increased its 2017 outlook.

SILVER AS INDIA’S NEW METAL OF CHOICE

Gold has long been the preferred metal for the vast majority of Indians, and that is unlikely to change any time soon. However, there is talk of the Indian government cracking down on those holding Gold, which means Silver could take Gold’s place. In fact, the transition from Gold to Silver has already begun! As ETF Daily News said, “Even a small substitution from Gold to Silver would result in a massive increase in the price of Silver. A 10% reallocation from Gold jewelry investment to Silver in India would nearly double the world demand for Silver jewelry.” Although Gold is still king of Precious Metals in India, ETF Daily News says to not discredit the grey metal’s opportunity for growth.

OIL RALLIES OVER $50

Oil prices recovered above $50 per barrel Thursday, bouncing back from the week’s lows as the dollar weakened against major currencies. The U.S. dollar index fell as Treasury bond yields reduced and investors eyed next week’s Federal Reserve meeting. A weak dollar makes dollar-denominated oil less expensive for importing countries. Thursday, both Brent crude and U.S. light crude were up 50 cents a barrel by 1400 GMT. Christopher Johnson with Reuters said, “Both benchmarks have fallen more than $2 a barrel from highs reached on Monday when investors bought heavily in the wake of the [Organization of the Petroleum Exporting Countries] deal.” A meeting is scheduled for Saturday in Vienna with both OPEC and non-OPEC members to talk about last week’s deal, which aimed at overall reduction for output of about 1.5 million barrels per day. Johnson ended saying, “Stocks data on Wednesday provided little guidance on the state of the U.S. oil market.” However, according to the U.S. Energy Information Administration (EIA), stocks at the Cushing, Okla. delivery hub for U.S. crude futures increased by nearly 4 million barrels, the most since 2009.

At 11:19 A.M. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,214.80 Down $4.70
• Silver, $16.64 Down $0.17
• Platinum, $931.00 Down $3.70
• Palladium, $726.00 Down $6.90

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