At least to start the trading week, it appears as if economic sentiment continues to be supported as a result of last week's nonfarm payroll result and perhaps because of hope for something positive from the trade talks this week.

On the other hand, it does appear as if the high level of recession fear seen early in October has been tamped down thereby deflating the gold market's reaction to signs of ongoing Chinese central bank gold demand.

In fact global central banks in August reportedly bought 57.3 tons of gold which has resulted in predictions of very strong annual purchase tallies. It also seems as if the markets are not as sensitive to the lengthening string of daily inflows into both gold and silver ETF's. According to one measure, total ETF gold holdings have reached the highest level since May 2013 with gold ETF's yesterday adding to holdings for the 16th straight session.

Silver also saw ETF holdings rise Monday which brings the 2019 total purchases to 105.5 million ounces and that in turn brings holdings within 16 million ounces of all-time highs at 635 million ounces.

Gold could draft some fresh lift from UBS analyst suggestion that "any pull back in gold is actually a buying opportunity from here". While we suspect the gold market will continue to see greater volatility from the ebb and flow of economic uncertainty and less reaction to classic demand-side news items, the trade will also be watching closely for signs that the Indian Festival season has improved dismal gold demand from earlier in the year.

Certainly gold prices have declined $62 from the recent highs, but adjusted for the Indian currency prices remain high enough to dent demand.

The silver market also waffled within the prior session's range yesterday and from a technical perspective looks to favor the bear camp. In fact, Hecla Mining reported a 30% rise in third-quarter silver production on a significant 3.3 million ounce tally and that is certainly a negative for prices.

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Non-Reliance and Risk Disclosure: The opinions expressed here are for general information purposes only and should not be construed as trade recommendations, nor a solicitation of an offer to buy or sell any precious metals product. The material presented is based on information that we consider reliable, but we do not represent that it is accurate, complete and/or up to date, and it should not be relied on as such. Opinions expressed are current as of the time of posting and only represent the views of the author and not those of Zaner Financial Services LLC, unless otherwise expressly noted.