Gold and Silver Remain in the Same Range They've Been in Since July
September 28, 2016 -- Precious metals sold off again yesterday. Last week’s FOMC decision to hold interest rates steady gave big boost to both gold and silver prices initially, but markets have since relinquished all of those gains.
The outlook is a bit muddled. US stocks have been surging, which indicates equity investors are relieved by the Fed’s decision even if metals investors are not. US Treasuries are also rallying and their yields headed lower, another signal that investors are confident rates will stay lower for a while longer. Yet this sentiment isn’t providing any support in the gold and silver markets.
For now metals remain in the same range where they have been mired since early July. Silver is bouncing between $18.50 and $20.50 while gold has held between $1310 and $1370 per ounce.
Live prices at MoneyMetals.com show gold currently trading at $1,326.50 per ounce on the global market, and silver is coming in at $19.18.
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Gold and Silver Prices Suffered as Investors were in the Mood to Sell
September 27, 2016 -- Gold lost a bit of ground in U.S. trading yesterday and silver prices suffered even more. Investors were in the mood to sell, as stock prices also got clobbered.
Some fear returned to Wall Street following reports of fewer new home sales and mounting troubles at Deutsche Bank. The German lender has been reeling for much of the year because of non performing loans and a massive $42 trillion dollar exposure to derivatives. The share price lost more than 7% yesterday, closing at the lowest price in at least 20 years.
Meanwhile, U.S. regulators recently compounded concerns over the bank’s solvency by proposing a $14 billion dollar fine related to fraud and misdealing around mortgage securities. If the mega bank fails, or is forced to raise capital, the daisy chain of troubles could dwarf the collapse of Lehman Brothers in ‘08.
Live prices at MoneyMetals.com show gold currently trading at $1,330.45 per ounce on the global market, and silver is coming in at $19.29.
88% of Experts Expect a Rate Hike by December - Higher Rates Don't Mean Lower Precious Metals Prices
September 26, 2016 -- Federal Reserve officials punted once again on hiking interest rates last week and precious metals rallied. For the 6th time this year alone, investors got a similar pronouncement -- the economy is strong, the rationale for higher rates is strengthening, but now just isn’t the right time to do it.
The euphoria following the Fed decision faded quickly however. Precious metal markets closed Friday on a weak note as investors soon began to fret over the weeks ahead. While 90% of experts surveyed by CNBC expected the Fed to delay any hike at last week’s meeting, 88% of them expected a hike by December.
Many would like to see officials stop talking and actually hike rates. But higher interest rates don't mean lower precious metals prices. The last rate hike, a paltry quarter percent in December 2015, marked the bottom in precious metals prices and led to heavy selling in the equity markets.
Live prices at MoneyMetals.com show gold currently trading at $1,338.25 per ounce on the global market, and silver is coming in at $19.46.
Precious Metals Bulls are Optimistic for a Fall Rally
September 23, 2016 -- It’s been a big week in the precious metals markets, with gold and silver prices surging following the Federal Reserve’s decision not to raise interest rates from near zero.
The positive post-Fed price action in all the precious metals is an encouraging sign for bulls who are looking for a big fall rally. Many observers of America’s avowedly non-political central bankers seem to want to elevate all asset markets, at least until after the election. At some point, there could be a letdown and possibly a hard landing in the stock market. And at some point, gold and silver may decouple from stocks, bonds, and other financial assets.
But for now, everything is floating on a rising tide of Fed liquidity. Odds favor a higher stock market and higher precious metals prices in the weeks ahead.
Live prices at MoneyMetals.com show gold currently trading at $1,340.05 per ounce on the global market, and silver is coming in at $19.93.
Markets Came Alive Yesterday After the FOMC Announced They Are Keeping Interest Rates Low
September 22, 2016 -- Markets rejoiced yesterday following a decision by the FOMC to stay the course on extraordinarily low interest rates. Gold and silver prices surged to their highest levels in more than two weeks and the major U.S. stock indices gained roughly 1%s.
Given the recent weakness in economic data and the deep reluctance to tighten that Fed officials continue to show, yesterday’s decision came as no big surprise. But regular jawboning from Fed governors about recovery and the “strong case” for higher rates has kept investors guessing.
Janet Yellen and her cohorts also moved to ratchet down expectations for the frequency and size of rate hike over the next couple of years. The so-call “dot plot” shows the forecast for the Fed funds rate at just over 1% by the end of 2017.
However, these officials have a dismal track record when it comes to projections. The forecast at the end of 2015 was for 4 rate hikes this year. The actual number is likely to be zero. In fact, if the recent weakening in employment and GDP continues, we could see the Fed lower rates, perhaps even push them negative.
Live prices at MoneyMetals.com show gold currently trading at $1,338.05 per ounce on the global market, and silver is coming in at $20.00.
Wells Fargo's CEO is Being Advised to Resign in Disgrace Over the Bank's Recent Indiscretion
September 21, 2016 -- Markets were relatively quiet yesterday in advance of today’s FOMC meeting. Gold and silver ended almost unchanged and stock prices were also flat.
Federal Reserve bankers aren’t the only ones gathering this week. Officials from the Bank of Japan met overnight in Asia. Despite prior efforts to weaken the Yen and generate price inflation, the Japanese currency has been strengthening relative to the U.S. dollar. This dynamic has also lent support to gold and silver priced in dollars so far this year.
Wells Fargo CEO John Stumpf appeared before the US Senate’s Banking Committee and answered some tough questions. The firm recently admitted to firing more than 5300 employees for establishing bank and credit card accounts for customers without their knowledge and charging them fees.
The bank has been fined $185 million for the indiscretion, and Senator Elizabeth Warren suggested yesterday the CEO should resign in disgrace.
Live prices at MoneyMetals.com show gold currently trading at $1,325.70 per ounce on the global market, and silver is coming in at $19.67.
Gold and Silver Benefited from Safe-Haven Buying on Monday
September 20, 2016 -- Gold and silver prices rallied on Monday with silver leading the way with a gain of more than 2%. Metals benefited from some safe-haven buying as bombings in New York and Minnesota dominated the headlines.
Absent further violence making national headlines, investors will be fixated on this week’s FOMC meeting. The odds are against officials hiking interest rates.
Marketwatch.com author David Marsh covered the ongoing trend of governments accumulating gold yesterday. The world’s central banks have been net buyers of gold since 2008. Over those 8 years, these institutions have accumulated more than 2800 tons, increasing reserves of the yellow metal by nearly 10%.
It is the longest period of accrual since one ending in 1965. The 2008 financial crisis wasn’t just a wake-up call for private investors. It served as a warning to governments as well about the dangers of complete reliance on paper assets.
Live prices at MoneyMetals.com show gold currently trading at $1,315.50 per ounce on the global market, and silver is coming in at $19.27.
Speculative Interest in Precious Metals is Falling
September 19, 2016 -- Precious metals struggled last week as traders and trading algorithms positioned themselves ahead of this week’s Federal Open Market Committee meeting. Recent economic data has been poor, but markets are behaving as if officials plan to withdraw stimulus anyway.
Much may depend upon what happens in the equity markets. Volatility is spiking, but so far stock prices remain stuck in a range.
The question is whether the combination of bad economic news, extraordinarily high valuations and the growing concerns over higher interest rates will finally throw a wrench into the works which have been driving stock prices higher. Maybe that will require the Fed to actually hike rates. The last big correction in share prices came on the heels of the quarter percent jump last December.
Meanwhile, precious metals prices are languishing. Speculative interest is falling as lower prices push some weak hands out of the futures markets. And there isn’t much in the headlines to catalyze safe haven buying in gold and silver.
Live prices at MoneyMetals.com show gold currently trading at $1,314.80 per ounce on the global market, and silver is coming in at $19.30.
The Justice Department is Slamming Deutsche Bank with a $14 Billion Settlement
September 16, 2016 -- Despite headwinds including opposition from both presidential candidates, President Obama plans to promote the Trans-Pacific Partnership Trading Agreement today at the White House. He's invited a variety of political and business leaders. The guests include Ohio Governor, John Kasich, and former New York Mayor, Michael Bloomberg.
Stocks fell in early trading in Europe today led by banks as Deutsche Bank shares tumbled following the news that the U.S. Justice Department is seeking a $14 billion settlement over its dealing in mortgage-backed securities before the 2008 crisis.
Live prices at MoneyMetals.com show gold currently trading at $1,312.30 per ounce on the global market, and silver is coming in at $18.92.
Gold and Silver Prices Rose Slightly While Stocks had a Mixed Performance
September 15, 2016 -- Markets took a bit of a breather yesterday following 3 days of volatile trading. Gold and silver prices rose slightly, stock markets turned in a mixed performance.
Wells Fargo is in hot water following revelations that employees of the bank created 2 million accounts which were not authorized by customers and then charged a variety of fees. Last week regulators slapped the bank with $185 million in fines. Now Federal Prosecutors have launched an investigation into whether or not any higher ranking executives were involved in criminal activity.
The Justice Department has yet to pursue criminal charges against a single CEO, or other top level leader, since the 2008 financial crisis. This despite revelations of widespread fraud and cheating in everything from mortgages to rigging markets. Banks have paid more than a quarter trillion dollars of fines, but no one goes to jail..
Perhaps, at least, the market will hold Wells Fargo accountable. So far the bank’s stock is down 20% from its July highs.
Live prices at MoneyMetals.com show gold currently trading at $1,325.25 per ounce on the global market, and silver is coming in at $19.15.