Precious Metals Fundamental Analysis – August 31 – September 4, 2015 Forecast – Gold, Silver & Platinum

Analysis and Recommendations: 

The precious metals complex offered a wide variety of price action last week, primarily driven by the turbulence out of China. December Comex Gold futures rallied to its highest level since July 7, but ended up finishing lower for the week. December Silver never even participated on the upside, making a new low for the year. October Platinum sold-off at the start of the week, but managed to rebound into Friday’s close. 

Gold was primarily influenced to the upside by hedge buying during a huge stock market break and to the downside when stocks firmed after China cut its one-year lending rate and lowered its reserve requirements. The People’s Bank of China also pumped a tremendous amount of Yuan into the financial system. 

Silver was likely the victim of margin calls as big losses in the stock market forced investors to sell-out positions to raise cash. Platinum fell in sympathy with stocks to begin the week, but recovered into Friday’s close on the idea that Chinese stimulus could eventually spur demand. 

Also helping to drive gold to its lowest close in five weeks was strong U.S. economy data that supported the case for a near-term interest rate hike by the Fed. Silver and gold both lost ground after the U.S. reported better-than-expected growth. The latest GDP report released last week showed the economy grew 3.7 percent versus estimates of 2.9 percent. This news appeared to be more supportive for Platinum which tends to act more like an industrial metal than a precious metal. 

Putting a lid on platinum prices last week were comments from Lonmin’s chief executive who said on Thursday that 80 percent of South Africa’s platinum production was making a loss and mines were not responding to cash injections from investors. 

Precious metal prices will be susceptible this week to the price action in the equity markets and economic news from China. The markets will be particularly sensitive to any news regarding Chinese manufacturing. To be specific, Tuesday’s manufacturing PMI data. 

Later in the week on Friday, September 4, traders will get the opportunity to react to the latest U.S. Non-Farm data and whether it is strong enough to encourage the Fed to raise rates at its FOMC meeting later in the month. 

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.

 

 

 

Major Economic Events for the week: 

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