Weekly Market Report For Precious Metals: November 3rd – 9th

Today’s Weekly Market Report for Precious Metals indicates that like equities and commodities, metals prices are subject to the Federal Reserve’s decision regarding interest rates in December.

Last week gold got hammered but is bouncing back, according to Kitco.com’s Jim Wyckoff.

Gold prices are firmer in early U.S. trading Monday, following strong selling pressure last week that drove prices to a three-month low on Friday. Some tepid short covering in the futures market and bargain hunting in the cash market are featured. December Comex gold was last up $4.60 at $1,092.50 an ounce. December Comex silver was last up $0.004 at $14.695 an ounce.

As the bond market last week went on a bullish run, the gold market went into bear mode, but seems to have come out of that short-term hibernation.

However, Kira Brecht, also at Kitco.com, warns that gold is oversold and likely to stay stagnant for a few weeks.

Gold is vulnerable to a “holding pattern” phase within that large range ($1073-$1111) into the Fed’s December meeting. If declines were seen below $1,073.70 it would unleash a fresh selling wave. But, the oversold technical indicators along with strong support argue for a period of stabilization in gold.

Although gold does not pay dividends, it is a tangible asset that you can depend on maintaining a floor in pricing as it is a scarce resource. Since metals analysts predict prices to fall a bit more ahead of the Fed meeting, smart investors are taking advantage of gold’s current unpopularity and buying.

Analysis found that silver prices followed gold in a downward slide, although there are some bright spots in the silver market. The week ended with silver at $15.80/oz and Monday trading was slightly lower, at $14.60/oz., which are both close to one-year lows. Silver trading decreased with the positive jobs report and the rising dollar. Demand is increasing in the industrial sector, but it has yet to fully recover; silver coins in the retail sector are showing positive trends for the year.

Platinum wasn’t immune to last week’s drop in precious metals pricing. It closed at $948/oz and late Monday morning had dropped to $913/oz. Miners strikes this year have had a negative impact on demand, and anticipated demand for the metal by car manufacturers never panned out, as the strike meant that the automakers either recycled platinum or used palladium instead. But that could change soon, according to an article in the Financial Times.

Terence Goodlace, CEO of Impala, said he believes there remains a medium- to long-term demand for the metal, which could offset the lows seen recently.”

“Looking forward, medium to long-term demand fundamentals remain strong for PGMs [platinum group metals] against the backdrop of increased automotive sales, tightening emissions legislation and constrained supply,” he said.

The takeaway is that much like gold and silver, smart investors are buying platinum now—the downward trends in pricing mean you can buy that much more. There are solid opportunities in precious metals investing, so contact us to learn how to add them to your portfolio.