Silver Prices Hold Regardless of Dollar Strength

Cassie Bastien

2/23/2017 8:25:51 AM

Daily Gold & Silver Market Report – 02/23/2017

The fact that both Silver prices as well as Gold prices have improved while the U.S. dollar has strengthened is definitely worth mentioning. "Last week’s [Consumer Futures Trading Commission] data, up to the close on February 14, showed the net long fund position (NLFP) climbed 6,535 contracts to 84,812 contracts," William Adams with CommodityTradeMantra.com said. "This was the seventh consecutive week where the funds have been net buyers." As geopolitical tensions grow and the UK moves toward Brexit, analysts still believe bullion will remain a a safe-haven commodity in the days and weeks ahead. Along with Brexit, Greece faces debt repayment issues, Europe faces more elections and U.S. President Donald Trump continues settling in. In conclusion, Adams said “the latest up-leg is looking tired, the stochastics have swung lower and another show of dollar strength may act as a headwind, so we would not be surprised to see prices consolidate at lower numbers; but we expect dips will be well supported.”

• The Silver rebound that began in mid-December has climbed $2.50 per oz in two main waves; the second wave may just be starting to end judging by Thursday’s weakness and the drop in the stochastics.
• We remain bullish in the medium term on Silver prices; the inverse head-and-shoulders pattern has a target of $18.95 per oz and the 20-Day Moving Average is climbing steadily. (Commody Trade Mantra)

Dollar Strength Having Limited Impact on Gold

The foreign exchange market shows the latest U.S. dollar move is on euro weakness over French election concerns rather than dollar strength. SAXO Group Head of Commodity Ole Hansen said both Gold and Silver prices are "showing resilience with [Gold/euro exchange rate] XAUEUR reaching the highest level since November 10." The market has become skeptical of polls after recent surprises with the UK's referendum known as Brexit and the election of Donald Trump. With that being said, Hansen explains, "we are continuing to see a pick-up in demand for alternative investments such as Gold and Silver. ... Worries about Europe have added another layer of support and has resulted in year-to-date gains for Gold of 8 percent and 12.5 percent for Silver." With this uncertainty, demand for alternative investments such as Precious Metals has been on the rise.

• The dollar hit a six-week high against the euro Thursday.
• Euro weakness is largely fueled by fears of a Marine Le Pen presidency in France. Opinion polls give her little chance of winning, but polls were deceptive in 2016's Brexit vote.

Only ‘blind faith’ sees Dow’s Record Run Roaring Onward

Investors are not impressed seeing the Dow Jones industrial average reach its best record-close streak in 30 years Wednesday on just a 0.2 percent gain. “For the markets to mount any positive return going forward, it can be argued that nearly everything must go right from now on. With valuations elevated on a historic basis, optimal outcomes must be achieved,” Seabreeze Partners Management President Doug Kass said. MarketWatch reporter Barbara Kollmeyer reported the DJIA got its ninth-straight win, along with its ninth-straight record close, Wednesday. A chart from Bespoke Investment shows the DJIA's longest winning streak a 14-day run that ended June 14, 1897. Bespoke says, "Once you get below the 12-day threshold, streaks of between eight and 11 trading days are not quite as rare, but they’re still very uncommon.” Kollmeyer closed, “If history is ready to dictate to this market, the show may be over soon.”

At 11:21 A.M. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,251.10 Up $16.20
• Silver, $18.21 Up $0.15
• Platinum, $1,011.80 Up $9.10
• Palladium, $777.10 Up $5.60

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