The dollar is rising, the metals are collapsing

Contrary to popular beliefs that the dollar is cheaper in times of trade wars, we are seeing the extraordinary strength of the US currency. Earlier this morning, the euro fell to 1.1560 against the dollar and is about to test the critical support at 1.1500. What will happen after this test will most likely depend on the medium-term movement of the single currency.
Otherwise, green money reached a 14-month high against the yuan. China urged a vengeance on Thursday if the US threatens to raise tariffs on exports of Asian-produced goods after US President Donald Trump instructed his trade officials to consider raising customs duties on imported Chinese goods from 10 to 25% of Chinese goods for $200 billion.
But as the US imports much more from China than China from the US, investors see the deployment of the trade war, causing worse trouble for the Chinese economy.
Serious problems due to the appreciation of the dollar have metals. Gold went down this morning near the psychological limit of $1,200 per ounce. Silver is traded at 16.20 dollars per ounce and platinum at $823.

Interest rates on 10-year US government bonds again over 3%

Interest rates on 10-year US government bonds rose again above the exceptionally high level of 3%. This has led to a new appreciation of the dollar against other major currencies, and especially against European currencies.
Interest rate hikes are in the midst of new concerns about the breakdown of US-China talks. There are concerns that trade clash and war between the two sides is inevitable.
This is expected to trigger a rise in inflation and hence lead to a stronger rise in interest rates than current expectations.
Otherwise, the rise in the dollar has already had a very negative impact on the levels of metal trade. Gold went back to trading at $1,310 and platinum and silver fell to $903 and $16.30 per ounce.
Interest rates on 10-year US government bonds rose 2.3 basis points to 3.018 per cent on an annual basis, while those on 30-year bonds added 1.9 basis points to 3.148 per cent on an annual basis.
The popular interest spread between 2 and 10-year bonds remained at a level of 46.6 basis points, or close to its lowest levels in nearly a decade.
It is precisely the potential reversal of the interest rate curve, James Bullard warned yesterday. According to him, the interest rate curve may gain a negative slope at the end of this or early next year.

Platinum and silver became even cheaper than gold

Platinum and silver continue to fall cheaper than gold. Indeed, yesterday, platinum was threateningly approached the psychological limit of $900 per ounce. Silver tried to test its bottom at $16.15.
And while at this stage both metals are able to hold on to the important support, a breakthrough could initiate extremely massive sales and closing down long positions after triggered stops.
It is quite possible to see spikes in platinum and especially in silver, which is extremely volatile and is traded at relatively weak volumes.
Such a spike can safely take the silver with a dollar, and why not with a dollar and a half down. Recall that there are plenty of holidays in many places around the world, which would further weaken the liquidity.
So, all investors should be extremely careful. Meanwhile, we see how the platinum-gold ratio is already close to its record bottom after it is at a level of 0.6870.
At the same time, the gold-silver ratio is at a level of 80.5, which is also extremely high, according to historical standards.
By comparison, in the long run, this ratio was about 40, as every time when it reached this level, it rebounced above the psychological limit of 80.

The prospects for precious metals in 2018

For next year the price of gold is expected to be far more volatile then in 2017, according to Georgette Boyle, an analyst at ABN Amro. The reason for this will be the ambiguity about the Fed's interest rate policy as well as the reduction in balance.
Otherwise, the prospects for gold are positive from a technical point of view after the metal has shed its 100-day moving average during the past week, at a level of $1,295 per ounce. While the metal is traded above this level, it is completely possible to see its further rise to $1,350 per ounce, market observers say.
For other metals, palladium is the best-performing metal, reaching its highest level since February of 2001. Palladium deals with an unusually high premium over other metals such as platinum.
Platinum rose 3% this year and silver only 6%. It is quite possible that this will give them a good catch-up potential for next year, according to analysts.

How did the silver and gold present in September?

Gold fell on the last day of last week, ending with a fall of 0.3 percent to 1 283.61 points. Metal futures with delivery in December ended at $1 284.80 per ounce.
Thus, gold ended the month with a decline of 2.8%, although for the quarter it recorded a growth of 2.9%.
Now the question among all investors is where will the gold take?
There are two factors that completely oppose each other and separate the investment opportunity of radically opposing views on the raw material.
First, the dollar is rising, and signs of inflation in the United States are driving investors to think of a further rise in interest rates by the end of the year. And as we know, gold is in the opposite direction to the direction of the dollar.
On the other hand, gold proponents point to increased geopolitical tensions in connection with what is happening between the United States and North Korea, as well as political instability in Germany and contradictions in Washington.
Meanwhile, silver ended the week with a decline of 0.6% to 16.73 dollars per ounce and for the month it lost 5.1%.