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What a difference a day makes! On Friday, June 3, when the May U.S. jobs report was released, markets across the globe reacted immediately and dramatically. After a sleepy Friday morning, markets were shocked awake with the jobs report falling so far below expectations. Here’s where we stand for our Weekly Market Report for Precious Metals for May 31 through June 3, 2016.
Gold ended the week with a bang, touching $1237 per ounce, a jump of 2% against the U.S. dollar after results of the latest U.S. jobs report were released. According to Kitco News on Friday,
“Gold was a significant beneficiary to the shifting expectations; August Comex gold futures have been hitting new session highs following the report. As of 10:22 a.m. EDT, the contract was at $1,243.80, up 2.6% on the day.”
So much is riding on the timing of the U.S. Federal Reserve Bank’s next interest rate hike. The vast difference between anticipated U.S. job creation and what the May report actually revealed has derailed a June rate increase and has set investors to become more bullish in their positions regarding holding and buying gold.
Contrary to expectations, silver actually trended slightly lower early in the week before rising to $16.40 per ounce afterFriday’s jobs announcement.
Longtime silver watcher and newsletter writer Roland Watson focuses on his chosen indicators that have proven to signal long-term prospects for silver market performance.
“When each indicator issues a buy signal in succession, the probability of a long term silver bull market increases and so does my confidence as a precious metals investor.”
Another one of Watson’s indicators issued a strong buy signal on Thursday this past week, the 20 month moving average for silver.
“The thesis is simple, when a given month’s trading range for silver moves above and fully clears its current 20 month moving average, a long term bull market in silver has begun. There are only three times this has occurred for silver in the last 18 years – May 2002, September 2009 and now in May 2016.”
Watson notes that silver may flirt with this average for a few months, but he stands by his forecast for a bull market having already emerged for silver and contends that “it is increasingly looking good for silver in the long term.”
Platinum finished the week at $986 per ounce and is starting the new week with some volatility but an overall upward trend.
Two different comparisons with gold made by analysts this week show platinum in a positive light. One comes from India, where consumers are the world’s second largest buyers of gold. Observations indicate that the rising price of gold is buoying the demand for platinum as a replacement metal. Darpan Anand, the Punjab Jewellers director, was quoted as saying:
“With the prices of platinum declining, the options for customers have increased. The younger generation is opting for platinum jewellery for weddings. Rings and bracelets of platinum are in huge demand. Consumers have also understood that this metal does not erode and has a longer life as compared to yellow metal.”
Back in the U.S., Tom Cloud, a precious metals expert for more than 40 years, makes a remarkable observation in his May 11, 2016 video on the investing.com website, noting that the price of platinum is roughly $200 below the price of gold, when it normally is priced higher than gold. Cloud says that this price discrepancy has happened during only about 31 months out of the past 31 years. Considering this situation along with the shortage of platinum, which Cloud says is 47 times rarer than gold, combined with the big industrial demand for platinum, he considers this to be a prime time to invest in sovereign minted platinum coins as part of your hard-asset investment portfolio.
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