Daily Gold & Silver Market Report – 12/20/2016

Cassie Bastien

12/20/2016 12:51:00 PM

SILVER PRICES REBOUND IN 2017

Money Morning’s Resource Specialist Pete Krauth says that anyone who owned the grey metal, or any Precious Metals, last week probably felt a punch in the gut. However, he feels the light at the end of the Silver price correction tunnel may be brighter. Nearly everyone expected an interest rate increase from the Federal Reserve. Krauth explained, “What followed led to a surge of roughly 250 basis points in the U.S. Dollar Index, and in turn some wholesale Silver dumping.” Krauth reported Silver prices immediately dropped 2 percent and another 5.25 percent the following day. He feels that fear is rampant right now in the Precious Metals sector. “My sense,” Krauth says, “is there's a strong possibility Silver's bottom for this correction is behind us. … If the bottom is indeed behind us in Silver, I think we could see the metal regain $17.50 [per ounce] by the end of Q1 and likely challenge the $22 [per ounce] level before the next year is out.”

GOLD PRICES SLIDE AGAIN

Tim Clayton with EconomicCalendar.com says “the underlying theme [for Gold] has been renewed weakness with another round of dollar gains putting downward pressure on prices. … There was no sustained buying support with a fresh decline in prices during U.S. trading as equity markets resisted significant selling pressure.” Federal Reserve Chair Janet Yellen remained optimistic in comments to new University of Baltimore graduates Monday, citing a rise in wages supporting the dollar an boosting the labor market. At the latest policy meeting, the Bank of Japan left monetary policy unchanged, keeping long-term interest rates near zero. Clayton noted, “The dollar gained fresh support against the yen following [Bank of Japan Governor Haruhiko] Kuroda’s remarks with USD/JPY moving back to test resistance above the 118.00 level, while there were renewed losses in bond markets with US 10-year yields again pushing towards the 2.60 percent level. The combination of a strong dollar and an increase in yields put downward pressure on Gold prices with a move back towards the $1.130 [per ounce] area in early Europe as overall sentiment remained negative.” San Francisco Fed President John Williams stated in a newspaper interview he favors a gradual removal of stimulus in 2017, in line with the Fed’s central tendency. Clayton closed saying, “The dollar continued to gain ground during the European session with Gold edging below $1.130 [per ounce] into the U.S. open as underlying sentiment remained dollar positive and negative on Gold as EUR/USD declined to fresh 13-year lows near 1.0350. There has been no let-up in selling of SPDR Gold Shares as underlying investor sentiment remains negative with further selling across Exchange Traded Funds. There are no significant data releases due Tuesday with overall trends in the dollar and bond yields continuing to dominate Gold prices.”

TRUMP WINS ELECTORAL COLLEGE VOTE

Republican Donald Trump officially won the 2016 presidential election Monday, nabbing more than the 270 electoral votes required to win. Trump is set to take office Jan. 20, 2017. “The Electoral College vote is normally a formality,” Eric M. Johnson and Jon Herskovitz with Reuters said, “but took on extra prominence this year after a group of Democratic activists sought to persuade Republicans to cross lines and vote for Democratic nominee Hillary Clinton.” According to the Associated Press, Trump received 304 of 538 electoral votes to Clinton's 227. In a statement responding to the results Trump said, “I will work hard to unite our country and be the President of all Americans."

At 1:51 P.M. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,134.30 Down $9.20
• Silver, $16.12 Up $0.02
• Platinum, $924.00 Up $4.70
• Palladium, $669.30 Down $10.90

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