{"id":7084,"date":"2020-12-02T15:28:12","date_gmt":"2020-12-02T20:28:12","guid":{"rendered":"https:\/\/www.fundamentalanalytics.com\/?p=7084"},"modified":"2021-04-25T22:01:05","modified_gmt":"2021-04-26T02:01:05","slug":"mid-week-weekly-review-of-gold-silver-and-palladium-december-2-2020","status":"publish","type":"post","link":"https:\/\/www.fundamentalanalytics.com\/pt\/mid-week-weekly-review-of-gold-silver-and-palladium-december-2-2020\/","title":{"rendered":"Mid-Week, Weekly Review of Gold, Silver and Palladium December 2 2020"},"content":{"rendered":"
Mid-Week, Weekly Review of Gold, Silver, and Palladium<\/h5>\n
December 2, 2020<\/h5>\n
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Gold remains slightly below and silver above the support lines identified in last week\u2019s report, which are $1850 and $23, respectively.\u00a0\u00a0As is often the case, the gold support line may now act as resistance holding gold below $1850 for the near term unless there is a significant weakening of the dollar, a fall in the 10-year Treasure yields, or a jump in inflation expectations.<\/div>\n
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The front month contract for gold and silver were up 0.52% and 3.18% respectively at the close of trading yesterday, with respect to the close on November 24th, 2020.\u00a0The ratio of the month 1 Gold contract to the month 1 Silver contract is down 2.58% compared to the close on the 24th, falling to the lowest level since the middle of September. \u00a0\u00a0With the front month gold and silver contracts closing yesterday at $1814.10 and $24.03, respectively, the gold\/silver ratio is now 75.5, 14.3% higher than the corresponding 15-year average.\u00a0February gold (Figure 1) closed yesterday at $1819.90, up 0.52% and March silver (Figure 2) closed at $24.09, up 3.18% from the close on November 24th.<\/div>\n
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From an open interest perspective, gold total open interest has fallen below the lowest level seen since early August 2020 but is still well above levels seen in March 2019, the beginning in the run up in gold price.\u00a0The open interest reduction is consistent with closing of long positions as gold falls.\u00a0It is also mirrored by similar moves in the latest CFTC report for gold (11\/24) for non-commercial net position of funds.\u00a0\u00a0We have mentioned over the last several weeks that the CFTC data showed a continual reduction in net positions while open interest was remaining essentially constant.\u00a0This is the first week where both open interest and CFTC data both show the trends moving down.\u00a0\u00a0Volume on Tuesday was below the 50-day SMA.<\/div>\n
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Now on to silver\u2026 Silver total open interest fell 6.7% since last week on November 24th.\u00a0\u00a0The most recent CFTC report for silver shows net position of funds seem to have reached a maximum and at least for the short term are beginning to trend down. An increase in non-commercial shorts is driving this trend.\u00a0\u00a0Where gold volume was down, silver volume yesterday was at the 50-day SMA.\u00a0\u00a0The Silver Institute released an interim report on November 17 and provided their outlook through the remainder of 2020.\u00a0\u00a0\u00a0They see year-on-year supply and demand down 5.56% and 6.3% respectively, resulting in a year-on-year physical surplus increase of 21%.\u00a0\u00a0This year is the fifth uninterrupted annual surplus in the silver market, and they expect the strength in the global silver investment market will continue to absorb the surplus. Their report can be found here<\/a>.<\/span><\/span><\/div>\n
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Now for Palladium.\u00a0March palladium closed at $2429.7 yesterday, up 2.44% from the close last week Tuesday.\u00a0Total open interest fell another 6.3% and is now down 10.3% from two weeks ago Tuesday.\u00a0Overall, palladium volume is higher than the 50-day SMA, but the trend is going neutral.\u00a0The November 24th CFTC report showed a 1.3% decrease in non-commercial net fund positions, with both long and short positions essentially moving sideways. With total opening interest continuing to fall while price moves up slowly, this makes one question if the funds were caught off guard by the continued strength in palladium while gold and silver weakened.\u00a0For the last week the spot price of rhodium has remained constant as can be found here<\/a>.<\/span><\/div>\n
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The final thoughts I leave with you today are around the price of gold, how the new administration will keep the economy moving and whether their path, combined with the path of the ending administration, will result in a deflationary or inflationary environment.\u00a0The great people at Incrementum, inspired by the extraordinary events of 2020, have just released an In Gold We Trust Special found here<\/a>.<\/span>\u00a0\u00a0I would highly recommend everyone who invests read and take the time to really understand this report.\u00a0Their report, combined with the one I mentioned last week by Lyn Alden, provide an excellent overview of how \u2018this time\u2019 might be different, with respect to inflation.\u00a0On page 4, the authors state \u201cEver since stagflation in the US was defeated in the early 1980s, the global paradigm has been disinflationary. We suspect the Covid-19 crisis represents the beginning of a new inflationary paradigm.\u201d\u00a0Should inflation take off, it may surprise many people with how quickly it comes on.\u00a0\u00a0Their report provides some basic guidance on investments that tend to perform best in an inflationary environment.<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n
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The Fundamental Analytics Team<\/p>\n

The information provided here is for general informational purposes only and should not be considered individualized investment advice. All expressions of opinion are subject to change without notice in reaction to shifting market conditions.<\/em><\/small><\/p>","protected":false},"excerpt":{"rendered":"

Mid-Week, Weekly Review of Gold, Silver, and Palladium December 2, 2020 Gold remains slightly below and silver above the support lines identified in last week\u2019s report, which are $1850 and $23, respectively.\u00a0\u00a0As is often the case, the gold support line may now act as resistance holding gold below $1850 for the near term unless there […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[1],"tags":[],"class_list":["post-7084","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.fundamentalanalytics.com\/pt\/wp-json\/wp\/v2\/posts\/7084","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fundamentalanalytics.com\/pt\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fundamentalanalytics.com\/pt\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fundamentalanalytics.com\/pt\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fundamentalanalytics.com\/pt\/wp-json\/wp\/v2\/comments?post=7084"}],"version-history":[{"count":2,"href":"https:\/\/www.fundamentalanalytics.com\/pt\/wp-json\/wp\/v2\/posts\/7084\/revisions"}],"predecessor-version":[{"id":7089,"href":"https:\/\/www.fundamentalanalytics.com\/pt\/wp-json\/wp\/v2\/posts\/7084\/revisions\/7089"}],"wp:attachment":[{"href":"https:\/\/www.fundamentalanalytics.com\/pt\/wp-json\/wp\/v2\/media?parent=7084"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fundamentalanalytics.com\/pt\/wp-json\/wp\/v2\/categories?post=7084"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fundamentalanalytics.com\/pt\/wp-json\/wp\/v2\/tags?post=7084"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}