Gold and Silver Update w/e 9th December 2016

Video transcript:

Today is Saturday 10th December 2016 and we are providing our gold and silver weekly update for the week ending 9th December.

Gold fell in US dollar terms last week by $19 from $1177 to $1158, having hit a high of $1187 and a momentary spike low of $1095. In sterling terms gold finished the week at £921 that’s down £3, and in Euros it closed at 1096 Euros that’s down 8 Euros on the week.

Silver rose 11 cents from $16.75 to $16.86 having reached a high of $17.25 and a low of $16.53. In sterling terms it closed at £13.41 that’s up 26 pence for the week and in Euros it closed at 15.96 euros that’s up 0.26 Euros.

The Gold to Silver Ratio fell from 70.26:1 to 68.68:1

The Dow Jones closed on Friday at 19,756 up 142 points on the day and up 586 points on the week, and the NASDAQ closed at 5,444 up 27 points on the day and up 189 points on the week.

Brent Crude was down 13 cents at $54.33 and US Light Crude was down 18 cents at $51.50

The dollar index stands at 101.59 that’s up 0.82 on the week.

Gold prices moved lower closing at a 9-month low as the dollar continued to gain traction. From a technical point of view, resistance is seen near the 10-day moving average at $1,175, while support is seen near the July lows at $1,076. The main influencer currently is dollar appreciation especially before the much awaited FED decision next week on interest rates.

The RSI (relative strength index) moved lower to a reading of 26 with price action reflecting accelerating negative momentum.

Silver markets vacillated considerably last week and especially to the upside. Despite breaking through the $17 level, it could not sustain the momentum and closed at $16.86 almost 40 cents lower than its weekly peak but still 11 cents higher than its opening price.

Technically speaking there appears to be support around the $16.50 level and resistance at the $17 level.

We saw a divergence last week between gold and silver with one struggling to the downside and the other struggling to the upside. Whilst Gold markets attempted to rally a few times last week it could not really seem to manage it; remained close to or marginally below its opening price and formed a relatively negative candle.

Indications are that unless of course the FED fails to raise interest rates, gold could fall below the $1100 level and move well into the $1000 territory.
Silver on the other hand from Wednesday onwards remained in positive territory but seemed to lack conviction. There is no doubt though that it will be far more volatile in the coming weeks until a committed path in either direction is fixed.

This past week or two we have produced a few videos exemplifying the potential advantages of silver over gold. This does not mean that we believe either will rise in price considerably at this stage, but we are suggesting for a range of reasons that silver may indeed have a brighter future than gold short term and very long term (in percentage terms).

All eyes will be fixed on the FED next week awaiting the decision on Wednesday 14th as to whether rates will be raised or remain the same. We stated in January that we could only foresee 2 interest rate rises this year and then amended it to 1 in March. All economic indicators suggest that a rise will occur next week, and the FED’s credibility in the markets will be shattered if they fail to do this.

Many commentators are predicting that should it rise, stock markets will fall and like last year Gold and Silver prices will go up as opposed to down. Our indicators suggest a different proposition. Yes the markets have risen strongly in recent weeks and so a correction of some sort is necessary. However, so confident are the analysts that rates will go up, it’s probably ‘baked into’ their calculations already.

Similarly with gold and silver, ironically the reason we have seen weaker prices. What will determine their direction in the immediate aftermath of the announcement will be the comments the FED makes at the time and the reported minutes which is usually published the following week.

Now we could of course be wrong, but we believe the FED will say that the economy is doing well, and that interest rate rises will occur next year thereby strengthening the dollar even further.

If one were to assume that the FED is political, as many of our listeners believe it to be, and that it is opposed to a Trump Presidency, by talking the economy up in the last few weeks of an Obama Presidency, can only make it more difficult for a Trump Presidency to impress and much easier for it to prove unimpressive.

We do not believe that gold and silver at this stage will get a significant bounce unless of course the FED fails to raise rates and then a different perspective applies.

We shall be addressing this further in our next video about the FED’s prospective decision and its implications.

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Disclaimer:

Illuminati Silver owners come from a background of Banking, International Wealth Management and Economics. Having now retired from these worlds we are not qualified to give investment advice. Therefore, this and other productions must not be deemed to be giving such advice and merely represent the personal views of its owners.