Tuesday, November 10, 2015
Today’s precious metals complex continues to be under attack as the US dollar continues to strengthen on Fed rate expectations.
Today’s precious metals complex continues to be under attack as the US dollar continues to strengthen on Fed rate expectations. Where will the bottom be? Well, in certain markets this downward price decline is directly the cause of financial crisis. Lonmin one of the world’s largest platinum producers is barely keeping above water. A departure of this miner would cause a squeeze on supply and crisis in employment in South Africa. The belief is that Lonmin will not be allowed to go under but the South African government which are minority partners will feel the pain down the road. Is it really possible to keep kicking that can down the road and there be no repercussions? Not likely. Shorting platinum may look good in the short term environment to fund managers at the moment. In this small illiquid market it can turn on a dime. Often people equate platinum and gold together but in reality this market is tiny in comparison and hence the price moves are often less justified by the market environment than by big money playing the part of a gorilla in a glass house. It looks like we are nearing the end of the recent barrage of attacks and we can expect a bit of recovery before the close today.
Tuesday, November 3, 2015
Trying to find real signs in this market is very difficult. It’s as if trying to find one whistling bird hidden among the trees and bushes. You really have to work hard to isolate the one whistle from the noises surrounding you. The media’s constant prattle does little to give true direction and causes more obfuscation than warranted in most cases. Yet the precious metals on lack of news continues to follow the trend developed since last week’s Fed announcement. Momentum has completely shifted and is targeting the downside. This is the second day in the row the group is in the red and not looking like there is no major support coming out yet. Today’s Factory Orders report was weaker than expected but did little to help the metals. Platinum is likely the one metal that will hold its next support level at 955 and most likely should turn around. For now get your binoculars out to look for any news that may be useful in validating a position, it seems as if it is harder than usual.