Daily Market Report

Friday, May 19, 2017

A mixed bag of indicators to end the week keeping the price of gold virtually unchanged.

A weaker dollar and stronger Ten yield Treasuries sending mixed signals to the market.

Equities seemed to have flattened out, looking for some news for direction.

The CME Fed Watch Tool targeting a rate hike at the next Fed meeting in June at 78.5 percent up from 64.6 percent a day ago.

Platinum Market Overview for 2017

The price of Platinum started the year around the $930 area. Since hitting a high of over $1,030 dollars at the end of February, the price for the most part has been all over the charts. Currently the price of Platinum in the most active CME contract is trading at $ 944.00 .

Platinum ETF holdings in the last ten days have increased by 91,000 ounces. CME Platinum Warehouse stocks currently at 95,000 ounces registered and 130,000 eligible.

This was Platinum week in London where a lot of comments were made by Mining CEOs. The Chief Executive Chris Griffith of the world’s largest platinum miner, Anglo American Platinum, told Reuters on Tuesday, “Policy uncertainty in South Africa and low commodity prices are hurting investment in the mining sector and will lead to further job losses. The miners are awaiting a release of the South African Mining Charter filled with regulations addressing imbalances in South Africa’s past apartheid rule which requires miners to keep black ownership at 26 percent.
Uncertainty is dreadful for investment.”

Sixty percent of the industry is losing money and more jobs are at risk. Amplats has cut 15,000 jobs over the last four years and smaller rival Lonmin fired about 15 percent of its staff in 2016. In the end, he expects more mines to close if prices fail to rise.

Currency issues are also facing the miners with the Rand strengthening against the U S Dollar which raises operating costs.

Platinum has many uses. Jewelry, auto catalysts, many industrial applications as well as medical devises. If this administration fails to get a corporate tax cut in place and the economy slows down, all the areas of Platinum consumption will be effected.

Reuters reports Platinum prices were higher last year, but still near eight year lows despite expectations of a sixth year supply deficit. Two questions remain:, If the price of Platinum falls, at what price does it become an issue for the miners? And if the demand continues to exceed the supply, at what price point might the price of Platinum turn around?

Sorry I have no answers on this one, but it will be an interesting market to watch.

Have a wonderful Friday.

Investing in Precious Metals

Many Investment advisors recommend precious metals as part of a properly diversified portfolio to provide capital appreciation, liquidity, and a hedge against conventional paper assets. Because precious metals are counter-cyclical to paper assets, a diversification into gold, silver, and platinum can therefore reduce the total risk of your overall portfolio and preserve your wealth. History supports the premise that investment in precious metals is the best protection against uncertainties in the future.

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