1. President Trump conditionally reopened the U.S. government last week, telling democrats they had three weeks to come up with a plan for funding his border barrier between the U.S. and Mexico or the government would be forced to shut down again over the funding dispute.

The Precious Metals Week in Review - February 1st, 2019
The Precious Metals Week in Review – February 1st, 2019

2. The seasonally adjusted number of Americans filing initial claims for state unemployment surged by 53,000 claims to a new level of 253,000 for the week ending January 26. The previous week’s level was revised higher by 1,000 claims. This is the highest level for initial claims since September of 2017. The four-week moving average of claims jumped by 5,000 to a new level of 220,250. The previous week’s moving average was revised higher by 250 claims. We can continue to expect volatility in the unemployment numbers in the aftermath of the U.S. government shutdown.

3. The U.S. Federal Reserve opted to hold interest rates steady, as was widely expected, at its latest Federal Open Market Committee meeting. At the press conference following the meeting, Fed Chair Jerome Powell signaled that the Fed would likely be pausing interest rate hikes pending further economic data. The effect on the U.S. dollar was nearly immediate as the currency turned lower and showed signs that further weakness was likely under a now seemingly dovish Federal Reserve.

4. The January Non-Farm payrolls report was a complete blowout, beating economists’ expectations by a substantial margin. Payrolls surged by 304,000, well over 100,000 more jobs than economists had projected, despite the partial government shutdown that lasted nearly the whole month of January. Despite the beat on jobs, the unemployment rate still managed to edge higher to 4 percent. Some analysts blamed the bump in unemployment on the shutdown, but officials countered their claims, saying federal workers were generally counted as employed during the survey period because the received pay during part of the time period.

5. Europe’s financial tech companies are now preparing for the very real possibility that the U.K. will split from the E.U. with no deal in place to govern the interaction between the two. The uncertainties over the exit plan will impact payment providers, cryptocurrency exchanges and digital banks that will be dealing with both the U.K. and E.U. Current EU rules allow banks and fintech firms to operate across the whole of the E.U. with a domestic banking license. Once the U.K. exits, this rule will likely change for firms located in the U.K. The uncertainty surrounding the details of the exit has left many of these U.K.-based firms scrambling to try to acquire licenses that will allow them to operate within the E.U.

6. U.S. Crude oil continued to climb this week as OPEC supply cuts and threats of U.S. sanctions against Venezuela tightened supply expectations. Venezuela’s political crisis continued this week as the U.S. imposed new sanctions on the embattled country after Nicolas Maduro defied the European Union’s call for another round of snap elections by Sunday.

7. The euro drifted mostly sideways against the U.S. dollar for most of the week, spiking higher late on Wednesday but dipping back lower again on Thursday. The downward move in the euro was not enough to send it back into negative territory for the wee and it appears set to close out the week slightly higher against the U.S. dollar. The Japanese yen also moved basically sideways against the U.S. dollar for the week, spiking higher late on Wednesday in similar fashion to the euro. The yen drifted sideways, bouncing along at its highs for the week through Thursday but by close on Friday had dipped back near even for the week. The yen appears set to close out the week even against the U.S. dollar.

Brexit is likely to become the news focus in the coming weeks as the deadline approaches without a deal in place between the European Union and the United Kingdom. Theresa May has reportedly reopened talks with Brussels in an attempt to craft a deal that will be more palatable to her parliament but the likelihood that the EU will grant any further concessions is slim given the short time between now and when the deadline passes in March.

Trade frictions between the United States and China also continue to be of major concern since the two have yet to reach any semblance of an agreement over their trade differences.

The political crisis in Venezuela appears to be escalating as well, with the U.S. threatening to place new sanctions on the country after Nicolas Maduro allegedly rigged the elections there in order to reappoint himself as President. Maduro defied a European Union request to hold new snap elections to allow the people a second chance to choose their leader honestly. Should the crisis escalate further, it is not outside the realm of possibility that civil war could erupt in Venezuela. Such an event would likely trigger extreme volatility in the price of oil.

The U.S. is also coming up on its self-imposed deadline to resolve the governmental funding issues that triggered the longest government shutdown in the country’s history last month. A temporary measure passed at the end of January is due to expire after 3 weeks. The measure was designed to allow the government to reopen while negotiations over the spending bill continued. Negotiations are reportedly underway between the Democrats, who hold a majority in the House of Representatives, and the Republicans, who hold a majority in the Senate, but the outcome of those negotiations remains unclear.

President Trump continues to threaten that he will declare a national emergency in order to get his wall project built if the House continues to defy his request for border security funding in the bill they are working on.

The U.S. Federal Reserve indicated this week that it would be pausing its interest rate hikes and exercising continued patience in its future rate hike decisions.

As world events continue to escalate the uncertainty surrounding the state of the global economy, savvy investors continue to seek out ways to ensure that their portfolios are well diversified, offering some measure of protection against an increase in volatility. Many investors have increased their rate of acquisition of physical precious metals, continuing to view them as a way to add some additional diversity to their portfolios while prices remain at a discount.

Remember that precious metals should always be viewed as a long-term investment and that the key to profitability through the ownership of physical precious metals is to actually acquire and own the physical products and to hold them for the long term. Always remember that you should never overextend your ability to maintain ownership of your precious metals over the long term.

Trading Department
Precious Metals International, Ltd.

Friday to Friday Close (New York Closing Prices)

Jan. 25th2019Feb. 1st2019Net Change
Gold$1298.95$1317.6018.65 + 1.44%
Silver$15.69$15.930.24 + 1.53%
Platinum$815.90$824.408.50 + 1.04%
Palladium$1361.80$1352.10(9.70) – 0.71%
Dow Jones24737.2025063.89326.69 + 1.32%

Month End to Month

Dec. 31st2018Jan. 31st2018Net Change
Gold$1279.00$1320.0041.00 + 3.21%
Silver$15.43$16.050.62 + 4.02%
Platinum$794.50$821.0026.50 + 3.34%
Palladium$1262.00$1337.5075.50 + 5.98%
Dow Jones23327.4624999.671672.21 + 7.17%

Previous Year Comparisons

Feb 2nd2018Feb. 1st2019Net Change
Gold$1335.00$1317.60(17.40) – 1.30%
Silver$16.76$15.93(0.83) – 4.95%
Platinum$996.50$824.40(172.10) – 17.27%
Palladium$1047.50$1352.10304.60 + 29.08%
Dow Jones25520.9625063.89(457.07) – 1.79%

Here are your Short Term Support and Resistance Levels for the upcoming week.

GoldSilver
Support1300/1280/126015.80/15.60/15.25
Resistance1320/1360/138016.00/16.25/16.60
PlatinumPalladium
Support810/790/7601350/1325/1300
Resistance840/880/9101375/1400/1425

This is not a solicitation to purchase or sell.
© 2019, Precious Metals International, Ltd.

Leave a Reply

Your email address will not be published. Required fields are marked *