Big Silver Move Foreshadowed as Industrial Panic Looms

Monday, January 14, 2019
By Paul Martin

By: David Jensen
Monday, January 14th

David Jensen Explains the Recent Fireworks in Palladium & Why It Matters…

Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason.

Coming up we’ll hear one of the more important interviews we’ve ever done on the broken nature of the precious metals’ futures exchanges, and what might be the driving force that ultimately destroys the confidence in these markets, paving the way to true price discovery. Mining analyst and precious metals expert David Jensen joins me to talk about how palladium might just be the straw that breaks the back of the paper market. Don’t miss this must-hear interview, coming up after this week’s market update.

As the government shutdown persists, and a declaration of national emergency by President Donald Trump looms, financial markets are unfazed. The Dow Jones Industrials have swung approximately 500 points higher so far this week.

However, the U.S. Dollar Index did hit a 3-month low on Wednesday. That helped boost oil prices in a big way. Crude climbed 10% to $53 a barrel.

The price action in precious metal markets is more subdued. Gold shows a modest gain of 0.4% this week to bring spot prices to $1,291 per ounce. The yellow metal flirted with the $1,300 level last Friday. More backing and filling may be needed before the market is ready to push through that resistance.

Turning to silver, the white metal currently trades at $15.68 per ounce, down 0.4% on the week. Platinum is off 1.0% to come in at $820. And finally, palladium is registering a slight weekly gain of 1.5% to trade at a lofty $1,328 an ounce as of this Friday morning recording.

Metals markets don’t appear to be getting much of a boost due to investor fears over the government shutdown. So far, the standoff between Trump and Democrat leaders has been perceived by investors as more of a sideshow than a genuine threat to the economy.

But the longer the shutdown drags on without a resolution, the more restless those furloughed government employees will become about the delays they face in being paid. People who are dependent on government programs such as food stamps may also start getting nervous. The government says funding could run out for some welfare programs after next month if Congress and the White House fail to come to terms on a deal to reopen the federal bureaucracy.

It’s unlikely the government will actually stop paying out benefits as a result of the present political stalemate. But the risk of a default on government promises will grow in the years to come as the government’s financial condition steadily worsens. A deeply divided and polarized political system that cannot find the will or the way to compromise on a modest allocation to border fencing cannot be expected to get a handle on the rapidly growing $22 trillion national debt.

The masses have been placated in recent years by a strong stock market, relatively tame inflation, and a seemingly strong economy. But the good times won’t last forever. They may even now be behind us. The Federal Reserve is concerned enough about a potential bear market in stocks and slowdown in the economy that is likely to end its rate-hiking campaign.

Elsewhere in the world, the natives are growing restless. France is now on the brink of revolution. Its Yellow Vest protestors refuse to back down until unpopular French leader Emmanuel Macron steps down from power.

The Rest…HERE

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