Daily Gold & Silver Market Report – 12/19/2016

Cassie Bastien

12/19/2016 10:00:00 AM

GOLD IMPORTS SHRINK TO 30.5 PERCENT

As we know, India is one of the world’s largest Gold importers and mainly take care of demand from the jewelry industry. However, from April to November 2016, Gold imports witnessed a 30.5 percent drop to $15.74 billion, partly due to high prices and regulatory changes. As Financial Express.com reports, “Total imports of the Precious Metal in the corresponding period of 2015-16 stood at USD 22.64 billion. … The increase in Gold imports pushed the trade deficit to about two-year high of USD 13 billion in November from USD 10.33 billion in the same month last year.” Despite a fall in jewelry sales following demonetization, India’s imports remained stable at around 100 tons in November. The World Gold Council expects demand for the entire year to be between 650-750 tons.

SILVER PRICES WEEKLY FORECAST

Along with the other Precious Metals, Silver prices collapsed last week after the results from the Federal Reserve’s meeting were announced. The Federal Open Market Committee (FOMC) increased the federal funds target range by 0.25 percent to 0.50-0.75 percent. Tracy Morganthall with EconomicCalendar.com says, “The highlights of the Fed statement included that the Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run.” Silver prices dropped to a new reaction low from the 2016 highs following last week’s drop. Morganthall says, “Maintaining below these former lows, near $16.250 (per ounce), would keep the bias in Silver firmly to the downside.” Precious Metals prices should remain pressured with the dollar expected to maintain its strength. Morganthall feels that “as long as the 102.00 level remains intact, the broader bias in the dollar will remain firmly to the upside,” adding, “Large speculators increased long holdings of Silver futures by 5,545 contracts and decreased short holdings by 2,023 contracts” after the latest Commitment of Traders report was released Friday.

STRONGER DOLLAR CAUSES EASE IN OIL PRICES

Following a renewed dollar rally, oil prices edged lower Monday but Libby George with Reuters says they “…were still supported at levels of around $55 per barrel on the back of delays in new Libyan oil exports and expectations of tighter supplies going into 2017.” Brent crude futures were trading down 23 cents to $54.98 per barrel at 1215 GMT, “having pared earlier gains as the dollar index rose 0.8 percent on expectations that the Federal Reserve will increase the pace of interest rate rises next year,” George reported. Last week, the U.S. dollar hit 2002-level highs, making oil more expensive for holders of other currencies. The deal between the Organization of the Petroleum Exporting Countries (OPEC) and other producers to cut almost 1.8 million barrels per day (bpd) from January’s oil output has some analysts saying oil price strength will continue into 2017. George said, “In the United States, which did not participate in the output-reduction deal, drilling for new oil has increased for seven straight weeks. Drillers added 12 oil rigs in the week to Dec. 16, bringing the total count to 510, the highest since January.” U.S. bank Goldman Sachs added, "Since its trough on May 27, 2016, producers have added 194 oil rigs (+61 percent) in the U.S.” As expected with such additions, U.S. oil production is up from 8.5 million bpd in July to nearly 8.8 million bpd mid-December.

At 11:00 A.M. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,142.00 Up $3.80
• Silver, $16.10 Down $0.15
• Platinum, $922.90 Down $13.20
• Palladium, $679.10 Down $19.10

APMEX’s Account Managers now have extended hours Mondays through Thursdays and are here to serve you until 8 p.m. (EDT)! Or call us Fridays until 6 p.m. (EDT)! If you have any questions about investing in Precious Metals or simply would prefer to place your order by telephone, we are here to help.