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The new year has so far brought a bludgeoning to the broader U.S. stock market indexes, leaving investors whose portfolios contain considerable holdings in precious metals feeling reassuringly buoyed by the timeless wisdom of owning commodities with tangible worth. Here is the Weekly Market Report for Precious Metals for January 12-18, 2016 for gold, silver, and platinum.
The week looked dismal at first, starting with four days closing in negative territory. Friday’s rebound, however, brought the gold price within sight of $1100, closing at $1093. According to analysts at Kitco.com, gold speculators have at last turned the corner into positive territory after an extended 9-week pause. Sarah Benali of Kitco News reports, “Gold futures rebounded early Friday as U.S. equities took a hit and as investors searched for a safe haven.”
Another factor affecting gold pricing is the expected continuation of a strong U.S. dollar. An article by Dan Caplinger at The Motley Fool expanded on this situation by saying,
“the strong U.S. dollar has put pressure on gold prices. A lot of demand for gold comes from foreign markets, and as many of their currencies have weakened, the price of gold in their local-currency terms hasn’t fallen nearly as much as it has in dollar terms. Indeed, in some countries where the dollar has been particularly strong, gold prices actually rose in local-currency terms in 2015. Those countries include Canada and Australia, whose currencies trade closely with the direction of major commodity prices like gold and oil.”
Encouraging news in a January 18th Bloomberg Business report stated that “investors added to gold holdings in exchange-traded products for the sixth time in seven days. Assets rose 4.4 metric tons to 1,489.1 tons as of Friday, the highest level since the start of December,” according to data compiled by Bloomberg.
The price of silver overall has remained largely steady, fluctuating around the $14.00 mark. It ended the week at $13.92, a slightly stronger position than it held at the end of 2015 ($13.84).
Additionally, analysts at Commerzbank expressed the expectation that silver’s position will strengthen gradually in the near term, noting that “silver saw a moderate increase in net long positions for the second consecutive week.” They cited a Comex futures increase of 1,333 contracts in a COTR (Commitment of Trader Report) report of money-managed speculative gross long positions, bringing the total to 50,421.
Even as gold achieved higher prices at the end of the week and silver looked to be positioned to regain some positive territory, Platinum fell to levels not seen since 2008, down 1.5 percent at $816.99 an ounce. Reporting on the recent performance of platinum group metals, Reuters attributes platinum’s fall to fears over global growth. It was noted that platinum, as “a largely industrial metal, heavily used by the auto sector to make catalytic converters, is more exposed than gold to concerns over economic weakness.”
The platinum mining industry has been making adjustments in recent months as the metal’s price approached the cost of production. Miners are seeking ways to cut costs and some have turned to selling off units. News reports out of South Africa confirm that Sibanye Gold’s shareholders have approved the acquisition of local mines from Anglo American Platinum’s Rustenburg subsidiary. The company has also expressed interest in acquiring Aquarius Platinum, a mining operation northwest of Johannesburg.
With the ongoing turbulence in economies and markets around the globe, Global Monetary Reserve’s track record in precious metals investing is a reliable resource for guidance in balancing segments of your investment portfolio. Contact us for up-to-the-minute information on attractive opportunities in these precious commodities.