President Donald Trump got things heated with Mexico, signed executive orders approving the Keystone XL and Dakota Access pipelines, withdrew from the Trans-Pacific Partnership and started the dismantling of Obamacare.
In markets, the Dow blew past the 20,000 mark, gold was seeking direction and palladium took a hard fall… but in news you really need…
KFC launched a newly fried chicken and guess what it’s called? Georgia GOLD Chicken. We (obviously) approve.
To end this “light” news week … (can you sense the sarcasm?) President Trump held a press conference with Prime Minister Theresa May; his first meeting with a foreign leader ….Team Trump and Team Justin Trudeau will be meeting “soon,” which should prove to be a sharp contrast in ideologies, as the CBC’s brilliant Rex Murphy said today, “Trump’s policies are diametrically in contrast with the boy-scoutism on global warming that is at the centre of Trudeau’s heart.”
For gold, the metal fell to a two-week low Friday as it headed for its first weekly loss of the year. Spot gold was last up $0.70 and trading at $1,189 an ounce.
A two-day rally in the dollar prompted some investors to cash in gains after the metal hit its highest level since mid-November earlier this week.
Palladium had the roughest ride; Wednesday saw the worst trading day for the platinum group metal in a decade, with the metal falling 7.5% to trade at $736.10. Well-known market watcher Dennis Gartman was quick to sum it up as a “violent, stunning, egregious, amazing historic collapse,” in his latest newsletter. With the dust finally settling, palladium futures closed Friday at $738.60 an ounce, a loss of more than 6% from last week.
And there is always a silver lining, literally. Silver closed its fifth week in positive territory. The precious metal was up 0.40 and trading at $17.14 an ounce…why the rally? Here’s a take as to WHY.
One analyst is not too worried about short-term weakness in the gold market, given that it has potential to shine in the latter part of the year.
“We are bearish gold in the short term. We forecast an average of $1,170 this quarter and $1,140 in Q2. A test of the late 2015 low around $1,046 is possible,” noted Tom Kendall, head of precious metals strategy for ICBC Standard Bank, in a report Friday.
The reasons behind this bearish near-term outlook lies in a few factors: President Trump’s fiscal policies, a more hawkish Federal Reserve than the market anticipates and weaker physical demand from key gold-consuming nations like China and India.
“But we do expect a recovery in gold to emerge in H2 as attention turns from what the Trump administration wants to do, to what it can do and, more importantly, how it will all be paid for,” he wrote.
“[W]e think the dollar will probably peak around mid-year. That plus the issues around deficit spending (a subject on which there is no Republican consensus) will lay the foundations for a more sustainable recovery in gold,” he explained.
For silver, Kendall said he’s a little more optimistic. “[W]e forecast the gold: silver ratio to fall from around 71 presently to the mid-to-low 60s by year-end.”
“More fundamentally, we think growth in industrial demand for silver should outpace improving global GDP growth, led by use of silver in electronics (notably in automotive-related applications) and further large investment in solar energy generation,” he added.
Gold is setting itself up for its first weekly negative close in five weeks with February Comex futures last trading at $1,187.90 an ounce, down 0.17% on the day. Meanwhile, silver is holding up Friday with March futures last at $17.18 an ounce, up almost 2% on the day.
“In 2016, gold had a strong first half followed by a sharp retracement in H2; we expect that pattern to be reversed this year, though in some respects it is like trying to grab a tiger by the tail… There’s no telling when the Trump Twitter account may turn around and bite us.”
Via Soren K and MarketSlant. As more and more applications are found for Silver, its industrial use will bolster and complement its status as a precious metal. We’re Silver Bulls relative to Gold for this reason.
Once upon a time, technology was the silver-killer through film elimination. Now technology is finding increasing applications for Silver. At this rate, we may yet see the 16 to 1 ratio for reasons not yet championed.
Self-heating windows have existed for decades. However, they’ve have always relied on near-invisible wires that can be a distraction when revealed by oncoming headlights. So instead of wires, the laminated glass used in Volkswagen’s new windshields includes an ultra-thin invisible layer of silver connected to the vehicle’s electrical system so that it heats up and melts away ice.- Gizmodo
When film died, we saw many other potential applications in technology and medicine. But the cost was just too high. Batteries for electrical cars were one. Chlorine replacement in pools another. Colloidal Silver suspensions for various ailments a third. Microwave blocking was another. None happened on a large scale for various reasons. But now it is starting to happen in heating elements. This is no aberration. It’s the beginning of an application trend.
Despite being better than copper in many conductive applications, the price of silver was too high for heating elements. And so copper was used. Technology finally devised more efficient use of Silver in windshield heating to replace copper filament and decrease glare. And that means more silver will be used. And that, in turn means more similar applications will be researched.
From Volkswagen’s Site
Perfect visibility with no heating wires –the climate windscreen from Volkswagen
Neither ice scraper nor de-icing spray provides the perfect solution. Volkswagen is offering a genuine alternative with the climate windscreen. It heats up without the use of any filament wires, thus providing perfect visibility. Any renewed misting or icing up is also prevented.In this wire-free system a wafer-thin electrically conductive layer of silver within the laminated glass provides the required heat by converting electric current. Volkswagen is offering the wire-free heated for the Golf, Golf Sportsvan, Tiguan, Sharan, Passat and Passat Variant models. In the summer, the thin layer of silver acts as a passive heat shield… it is able to reduce the inside temperature by up to 15 degrees more than conventional glass with green tinting. Source
Silver is King:
Silver is not owned by Central Banks like Gold is- that is why Silver can and is manipulated higher on occasion when Gold can not be.
It is a necessary industrial metal and the nation has a store of it – like Oil
If Gold wealth should ever be confiscated, Silver will remain and become a proxy for Gold prices- like paper dollars were for Gold pre 1971
JPM is long physical Silver and short paper as a hedge- A brief history of Silver manipulation from the 1990s to now here
Exchange listed spread contracts like the Silver/gold ratio serve to increase investor awareness and narrow the spread long term.
Its industrial applications are growing
(Kitco News) – Gold is fighting to hold on to $1,200 an ounce level an ounce Thursday following mixed U.S. labor market data.
U.S. initial jobless claims rose by 10,000 to a seasonally adjusted 247,000 in the week to Saturday, the Labor Department said.
However, the rise was less than expected as consensus expectations compiled by various news organizations called for initial claims to be around 266,000. The government revised the previous week’s tally up by 2,000 to 237,000.
February gold last traded at $1,201.10 an ounce, up 0.38% on the day.
There were no special factors impacting this week’s initial claims, the Labor Department said.
This marks 97 consecutive weeks of initial claims below 300,000, the longest streak since 1970.
Meanwhile, the four-week moving average for new claims – often viewed as a more reliable measure of the labor market since it smoothens out week-to-week volatility – fell by 1,750 claims to 256,500.
Continuing jobless claims, the number of people already receiving benefits and reported with a one-week delay, dropped by 29,000 to a seasonally adjusted 2.87 million during the week ending Dec. 31, the government said.
Traders monitor jobs data closely to gauge how aggressively the U.S. Federal Open Market Committee alters monetary policy.
Gold prices are moderately higher in early U.S. trading Thursday, hit a six-week high, and have moved above what was a psychological barrier at $1,200.00. World stock and financial markets have become a bit more jittery following U.S. President-Elect Donald Trump’s press conference that was held Wednesday. That’s bullish for safe-haven gold. February Comex gold was last up $7.90 an ounce at $1,204.60. March Comex silver was last up $0.117 at $16.945 an ounce.
European and Asian stock markets were weaker overnight, on some lingering uncertainty regarding the new U.S. president. U.S. stock indexes are also pointed toward weaker openings when the New York day session begins.
The marketplace is still buzzing about U.S. President-Elect Donald Trump’s press conference Wednesday. Trump rattled the U.S. stock market with comments about the drug industry. The U.S. dollar index also sunk during and after Trump’s presser as some worried about his lack of specifics on economic growth plans. Trump also made disparaging comments about China at his press conference.
The marketplace had better get used to Trump’s bombastic personality, which some view as a breath of fresh air in Washington, D.C. and its heretofore “politics as usual” mentality. Others are just plain scared about Trump holding what is arguably the most important office in the world. Either way, many markets have a new and important element that will impact their prices for a long time to come.
The key “outside markets” on Thursday morning see the U.S. dollar index sharply lower and hit a four-week low overnight. The greenback bulls are fading to now begin to suggest a market top is in place for the dollar index. The other outside market finds Nymex crude oil prices trading higher on follow-through strength from Wednesday’s good gains. There are still stiff technical resistance layers that lie just above the market.
U.S. economic data due for release Thursday includes the weekly jobless claims report, and import and export prices. Several Federal Reserve Board members are slated to speak today.
(Note: Follow me on Twitter–@jimwyckoff–for breaking market news.)
Live 24 hours gold chart [Kitco Inc.]
Technically, February gold futures bears still have the overall near-term technical advantage but the bulls have good upside momentum. Prices are in a three-week-old uptrend on the daily bar chart. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,250.00. Bears’ next near-term downside price breakout objective is closing prices below solid technical support at $1,165.00. First resistance is seen at the overnight high of $1,207.20 and then at $1,220.00. First support is seen at the overnight low of 1,190.70 and then at $1,180.00. Wyckoff’s Market Rating: 4.0
Live 24 hours silver chart [ Kitco Inc. ]
March silver bears have the overall near-term technical advantage, but the bulls have some momentum on their side as prices hit a three-week high overnight. Silver bulls’ next upside price breakout objective is closing futures prices above solid technical resistance at $17.30 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the December low of $15.675. First resistance is at the overnight high of $17.02 and then at $17.30. Next support is seen at Wednesday’s low of $16.56 and then at this week’s low of $16.455. Wyckoff’s Market Rating: 3.5.
NEW YORK, Jan 12 (Reuters) – Wall Street stocks fell nearly 1 percent and the U.S. dollar dropped to a five-week low on Thursday after President-elect Donald Trump’s eagerly awaited news briefing the previous day ignored his fiscal policies, which are expected to boost the economy.
Investors were hoping for commentary on the new administration’s plans for fiscal stimulus and tax cuts. Instead, Trump remarked on a broad range of topics such as the Mexican wall, allegations of Russian hacking and his business interests but left out what investors wanted to hear about – fiscal spending.
“The lack of focus in Mr. Trump’s first press conference since winning the election fanned worries about the president-elect’s willingness or ability to drive a pro-growth agenda once in office,” said Omer Esiner, chief market analyst, at Commonwealth Foreign Exchange in Washington.
In late morning trading, the Dow Jones Industrial Average was down 157.13 points, or 0.79 percent, at 19,797.15, the S&P 500 fell 16.5 points, or 0.725173 percent, to 2,258.82 and the Nasdaq Composite lost 53.70 points, or 0.97 percent, to 5,509.95.
The dollar, meanwhile, hit a five-week trough against a basket of major currencies and was on track for its worst week since November. The dollar index , which measures the greenback against six major currencies, last traded down 0.7 percent at 101.04. The dollar slid to a five-week low versus the yen and last traded down 1.3 percent at 113.91 yen .
Trump did not mention tariffs against Chinese exports, a relief for Asian markets fearing the outbreak of a global trade war. But there was more pain for the dollar as the euro drove higher on ECB minutes showing a split over stimulus. The President-elect’s lack of policy detail also put safety plays such as bonds and gold back in favor. and the retreating dollar brought relief for Brexit-bruised sterling and Turkey’s lira .
Benchmark U.S. Treasury 10-year note prices rose 13/32, with the 10-year note yield down at 2.321 percent. German 10-year yields, however, rose to 0.313 percent .
European shares also fell, bucking gains in Asia overnight and weighed down by a 2 percent slump in healthcare stocks after Trump had said pharmaceutical firms had been “getting away with murder” with their prices. FIRMER COMMODITIES
In commodity markets, oil was higher, bolstered by news that Saudi Arabia has cut oil output to its lowest in almost two years, according to its energy minister. The world’s largest oil exporter leads OPEC’s drive to eradicate a global glut and prop up prices. U.S. crude was trading up 1.4 percent at $52.97 and Brent crude was up 88 cents at $55.98 a barrel, following gains of nearly 3 percent on Wednesday.
The weaker dollar also helped metals markets. Gold rose to a seven-week high just shy of $1,200 per ounce while London copper traded up almost 2 percent after electronic trading there was delayed by a five-hour outage. The recently weak Chinese yuan also firmed 0.6 percent.
Asset management giant PIMCO said on Thursday it thought there was a chance Beijing could fully float the yuan this year.
“Over the year, our base case is for the yuan to decline against the U.S. dollar by a mid- to high-single-digit percentage,” said Luke Spajic, PIMCO’s head of Asian portfolios.
“However, we also think the possibility that the PBOC will allow the yuan to float freely, or at least widen its trading band, has increased.”