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Precious Metals Fundamental Analysis – November 16 – November 20, 2015 Forecast – Gold, Silver & Platinum

By:
James Hyerczyk
Updated: Nov 14, 2015, 12:50 UTC

Analysis and Recommendations:  Expectations for a U.S. rate hike in December pressured gold, silver and platinum last week. The physical market also

Precious Metals Fundamental Analysis – November 16 – November 20, 2015 Forecast – Gold, Silver & Platinum

GOLD BARS
Analysis and Recommendations:  Expectations for a U.S. rate hike in December pressured gold, silver and platinum last week. The physical market also contributed to the weakness, led by further outflows from the largest gold-backed ETF. 

December Comex Gold futures traded to nearly a six-year low while posting a fourth straight weekly loss, on expectations the Federal Reserve is set to raise its benchmark interest rate next month for the first time since 2006. 

Last week’s downside price action and increased volatility was primarily driven by a slew of Fed officials who issued hawkish comments at various times during the week. 

December Comex Gold futures finished down $4.30, or 0.40% at $1083.40. December Comex Silver futures closed the week at $14.23, down $0.46, or 3.13%. Platinum futures were down the most last week, dropping 8.36%, or $78.60 to close at $861.40.

 Rising interest rates tend to weigh on gold prices, as they lift the opportunity cost of holding non-yielding assets while boosting the dollar. Additionally, gold doesn’t pay interest or a dividend which drives down demand from investors. 

Gold is down more than 5 percent since October 28, primarily driven by the stronger-than-expected U.S. Non-Farm Payrolls report released on November 6. The report raised the odds of a December rate hike from 30% to 70%. 

Activity in precious metals ETFs also played a role in last week’s sell-off. Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Shares, fell sharply last week, including a 1.5 tonne decline on November 12. 

January Platinum futures also came under pressure from fund selling. Holdings of platinum ETFs were at a two-year low. In increase in supply from ETFs and other liquidation took platinum to a seven-year low. A drop in palladium prices also contributed to the selling pressure. 

Bearish fundamentals could continue to pressure the precious metals sector this week although technically oversold indicators suggest the markets are ripe for periodic short-covering rallies. Gains are likely to be limited if the U.S. Dollar picks up strength. 

The key report to watch this week is Tuesday’s U.S. consumer inflation data. It is expected to show an increase of 0.2%. A firmer number will be bullish for the dollar, and would likely solidify a December Fed rate hike. This would underpin the dollar and likely trigger a further decline in gold and silver. 

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports. 

Weekly December Comex Gold
Weekly December Comex Gold

 

Weekly December Comex Silver
Weekly December Comex Silver

 

Weekly January NYMEX Platinum
Weekly January NYMEX Platinum

Major Economic Events for the week: 

          Date                          Time             Curr                                        Events                                               Forecast   Previous                       

 

Sun Nov 15

All Day

ALL

 

G20 Meetings

         

Mon Nov 16

 8:30am ET

USD

 

Empire State Manufacturing Index

   

-5.3

-11.4

 

Tue Nov 17

8:30am ET

USD

 

CPI m/m

   

0.2%

-0.2%

 
   

USD

 

Core CPI m/m

   

0.2%

0.2%

 
 

9:15am ET

USD

 

Capacity Utilization Rate

   

77.5%

77.5%

 
   

USD

 

Industrial Production m/m

   

0.1%

-0.2%

 
 

17th-19th

USD

 

Mortgage Delinquencies

     

5.30%

 
 

10:00am ET

USD

 

NAHB Housing Market Index

   

64

64

 
 

4:00pm ET

USD

 

TIC Long-Term Purchases

     

20.4B

 

Wed Nov 18

8:00am ET

USD

 

FOMC Member Lockhart Speaks

         
 

8:30am ET

USD

 

Building Permits

   

1.15M

1.11M

 
   

USD

 

Housing Starts

   

1.16M

1.21M

 
 

10:30am ET

USD

 

Crude Oil Inventories

     

4.2M

 
 

2:00pm ET

USD

 

FOMC Meeting Minutes

         

Thu Nov 19

8:30am ET

USD

 

Unemployment Claims

   

272K

276K

 
 

10:00am ET

USD

 

Philly Fed Manufacturing Index

   

0.1

-4.5

 
   

USD

 

CB Leading Index m/m

   

0.5%

-0.2%

 
 

10:30am ET

USD

 

Natural Gas Storage

         
 

12:30pm ET

USD

 

FOMC Member Lockhart Speaks

         

Fri Nov 20

                 

Sat Nov 21

12:00pm ET

USD

 

FOMC Member Williams Speaks

         

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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