Gold Silver Market Report 21 July 2017

Fundamentals and News^*

Gold Doldrums Spur ‘Moneyball’ Tactic From ETF Seeking Edge

Frank Holmes is no Billy Beane, but he’s trying to replicate in an exchange-traded fund what the baseball manager did with an underdog team in the movie “Moneyball.”

In the 2011 film based on Michael Lewis’s book, Beane of the Oakland Athletics used quantitative analysis to find underrated players, with a budget that was just a fraction of biggermarket franchises such as the New York Yankees. Beane’s team went on to post a record 20game winning streak in 2002. Holmes, chief executive officer of U.S. Global Investors Inc., is hoping to do something similar with his firm’s newly-launched ETF to lure investors into gold equities at a time when money is exiting in droves.

After gold surged through the first five months of 2017, investors are souring on the metal and mining ETFs as Federal Reserve officials signal their willingness to tighten monetary policy. The retreat in bullion was highlighted by a record $3.2 billion outflow last quarter from VanEck Vectors Gold MinersETF, the largest such fund linked to producers. With mining equities trailing the broader market, fund managers are considering the unconventional to stand out.

“There’s a harder case to be made today than a quarter or two ago” in bringing in new investors into gold-mining equities, Matthew Korn, an analyst at Barclays Plc in New York, said in a telephone interview. “I hear that, I see that among my clients. There’s this sense that you have a Fed that’s operating fairly hawkishly. If that’s kind of the prevailing view, it’s harder to want to go and buy gold stocks.”

Attracting new money into gold assets has been a big challenge after investors have been burned by the gyrations in bullion prices. In the decade-long bull run that took prices of the precious metal to a record in 2011, companies including Barrick Gold Corp., the world’s largest producer, rushed to ramp up output to meet rising demand for the metal, accumulating debt as they expanded. As prices reversed and the metal languished in a bear market for years, investors hit the exit, leaving many miners unable to service their obligations and forcing them to cut cost to survive
(*source Bloomberg)
 

Data – Forthcoming Release

Technical Outlook and Commentary: Gold

Gold for Spot delivery was closed at $1244.49 an ounce; with gain of $3.24 or -0.26 percent at 1.00 a.m. Dubai time closing, from its previous close of $1241.25

Spot Gold technically seems having resistance levels at 1248.2 and 1255.9 respectively, while the supports are seen at $1223.2 and 1215.4 respectively.

Technical Outlook and Commentary: Silver

Silver for Spot delivery was closed at $16.33 with gain of $0.05 or 0.31 percent at 1.00 a.m. Dubai time closing, from its previous close of $16.28

The Fibonacci levels on chart are showing resistance at $16.43 and $16.62 while the supports are seen at $15.81 and $ 15.62 respectively.

 

Resistance and Support Levels

Indications only, open & closing prices are bids; data source: Bloomberg; important disclaimer below; Times as per Dubai

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