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Gold – A Bottom or Not?

Gold – Bottom or Not?

Commentary for Monday, April 22, 2019 – Gold closed up $1.60 today at $1273.50 in another round of quiet trading. Overnight gold pricing in Hong Kong and London was fairly steady between $1277.00 and $1279.00 – not expecting much here folks with an after Easter market. Domestic pricing however in New York broke down reaching $1274.00 but flattened out at the lower end of this range.

So gold continues left-footed looking for a new and more comfortable price range. If the 60 day gold pricing chart drives your thinking this market still belongs to the bears – but it remains very quiet after the holiday. Not much, at least in what I can see relative to bargain hunting. There are a few mid-sized players across our counter but they are old time players – not new money.

Oil continues firm but stocks are a mixed bag – so let’s call these a “push”.

Actually, gold is holding up fairly well considering the dollar trend – the Dollar Index since last Tuesday has moved from 96.90 through 97.25. Not a big deal but “another” reason to question whether gold can muster its forces after the blow-out at $1340.00 back in February.

You could make a reasonable case that the dollar is overvalued if you are looking for something which would favor higher gold prices in the midst of all this malaise. The dollar has quietly drifted higher since January of 2018 when it settled around 90.00. Still this seems like a reach considering a robust stock market and low employment. But the Democrats continue to probe the President – nothing so far but if they strike a nerve the dollar could weaken, considerably.    

So we are stuck with the same scenario we faced before Easter. Will this latest charge by the bears be able to wear down current trading ranges enough to set up a test of $1250.00 gold? It’s quiet enough out there to suggest that this scenario is on everyone’s mind but no one wants to be the first in the pool, just in case physical demand reasserts itself.

The latest US action against Iran is aggressive – the US will drop oil waivers. This has created some pause on the international scene. Not enough to push gold prices higher but anything which adds to Middle East tensions will at least support the “safe haven” dialogue. It’s problematical however that gold did not offer up more of a rally.

So for now, get ready to get ready. It would seem that gold and silver remain sleepy after the Easter season and it might take another few days for everyone to get back to work and back in the trading game. My hunch however is that you will not see a big breakdown in pricing – this market is already discounted and while real bargain hunting is still absent everyone is looking for that magic number. There is nothing like “cheap” to rally the precious metals base.    

This from Zaner (Chicago) – “While the dollar is lower to start today we doubt that is the primary catalyst for the somewhat impressive initial rally in gold prices. In fact noted strength in crude oil from news that the US will “eliminate” waivers for countries importing Iranian oil has provided all commodities with a lift. Gold might garner some additional lift from the fact that Russia expanded its gold holdings in March. The market might also draft some support off Chinese official comments that were reportedly cautiously optimistic toward their economy and it is also possible that the bombings in Sri Lanka have added in a measure of political safe haven interest. Unfortunately for the bull camp ETF’s continued a recent pattern of selling at the end of last week. In fact last week ETF’s liquidated 528,200 ounces of gold and 1.27 million ounces of silver. However the most recent positioning report in gold has seen the net long brought down sharply over one week and that could increase the chance of respecting solid value at the $1275 level on the charts. The April 16th Commitments of Traders report showed Gold Managed Money traders net sold 59,706 contracts which moved them from a net long to a net short position of 3,969 contracts. Non-Commercial & Non-Reportable traders were net long 80,414 contracts after decreasing their long position by a large 66,029 contracts. With some press outlets noting gold’s relative expensive standing to silver (the gold/silver ratio reached a 25 year peak) one might expect silver to pick up some speculative buying interest but reports of a possible sharp decline in Indian silver exports because of a scandal could provide a demand glitch ahead. However spec long positioning in silver contracted sharply last week and is now only minimally vulnerable to stop loss selling. The April 16th Commitments of Traders report showed Silver Managed Money traders net sold 8,365 contracts and are now net short 10,838 contracts. Non-Commercial & Non-Reportable traders reduced their net long position by 15,139 contracts to a net long 22,478 contracts.

With both PGM markets this morning posting impressive upside action to start it would appear as if they have come back into vogue. In fact the markets have completely discounted news that platinum and palladium ETF’s both reduced their holdings last week and the markets appear to have largely shrugged off reports of a rash of Tesla car fires. Certainly the markets are seeing spillover lift from the strength in gold and from crude oil but the PGM markets are also benefiting from a bullish research report from over the weekend suggesting that palladium could reignite on the upside and eventually hit $1800. The Commitments of Traders report for the week ending April 16th showed Palladium Managed Money traders are net long 9,295 contracts after net selling 678 contracts. Non-Commercial & Non-Reportable traders net sold 759 contracts and are now net long only 8,882 contracts! On the other hand platinum positioning in the Commitments of Traders for the week ending April 16th showed Managed Money traders are net long 22,894 contracts with Non-Commercial & Non-Reportable Traders net long 40,379 contracts and therefore platinum is more overbought than palladium.

The path of least resistance is pointing upward today off a series of minor bullish developments overnight. However dollar weakness doesn’t appear to be a complete reversal and the bull camp might have to rely on persistently positive spillover from crude oil. The $1275 level in June gold is initial support followed by $1273 and the market might not have much in the way of resistance until $1284.90. In silver initial support is seen at $14.89 and then again down at $14.83 with initial resistance seen fairly close in at $15.06.”

Silver closed up $0.02 at $14.96.

Platinum closed down $2.30 at $897.50 and palladium closed down $28.70 at $1374.80. 

We believe our four flat screens downstairs with live independent pricing are unique in the United States. The walk-in cash trade can see in an instant the current prices of all bullion products and a daily graph illustrates the range of the markets on any given day.

Yes – you can visit the store with cash and walk away with your product. Or you can bring product to the store and walk away with cash. We will also wire funds into your account that same day for a small service fee ($25.00) if you are in a hurry.

In addition to our freshly ground coffee we offer complimentary cold bottled water, Cokes and Snapple. We also provide fresh fruit in a transparent attempt to disguise our regular junk food habits as we sneak down the block for the best donuts in the world (Randy’s). 

Like us on Facebook and follow us on Twitter @CNI_golddealer – have some fun.

We appreciate your friendship and business. Thanks for reading.           

Disclaimer – The content in this newsletter and on the GoldDealer.com website is provided for informational purposes only and our employees are not registered financial advisors. The precious metals and rare coin market is random and highly volatile so it may not be suitable for some individuals. We suggest before deciding on a course of action that you talk with an independent financial professional. While due care has been exercised in development and dissemination of our web site, the Almost Famous Gold Newsletter, or other promotional material, there is no guarantee of correctness so this corporation and its employees shall be held harmless in all cases. GoldDealer.com (California Numismatic Investments, Inc.) and its employees do not render legal, tax, or investment advice.

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Gold Settles Quietly into Easter

Gold Settles Quietly into Easter

Commentary for Thursday, April 18, 2019 (www.golddealer.com) – Gold closed down $0.30 today at $1271.90 and was up a few dollars in the aftermarket and a reminder we will be closed for Good Friday. While gold managed to finish virtually unchanged today it is still struggling – the 30 day pricing chart looks more than tired and the 60 day pricing chart is also pointed in the wrong direction.

So the most recent dialogue as to what might be expected from our shiny friend comes from the 6 month pricing chart. This conversation will soon center on whether gold has formed the technically disappointing “head and shoulders” formation. A bit early as yet – you would have to see a breakdown around $1280.00 and a test of $1240.00 to completely take the air out of this balloon but chart watchers are paying attention.

The real plus gold still has in its corner is what I call, for lack of a better word the “valuation” test. In the past the physical market picks up dramatically as gold tries to get on its feet below $1300.00. There is a solid paper trading range between say $1280.00 and $1310.00. Whether this will continue to hold up is difficult to say but the odds of increased activity and bargain hunting go up as gold trends lower.

The dollar remains a threat – the Dollar Index today moved from 97.00 to 97.40, likely because of the Mueller report, which still carries weight even without a smoking gun. The most recent Aden Forecast makes a few bullish points; that the dollar is “Firm but Chugging” – noting that the dollar technically has been in a downtrend since 2017. And “QE Back on Front Burner” – “But now the Fed recently noted that they’re going to start reinvesting when the bonds they have mature. In other words, more QE is coming, which will help the economy grow as well.”

The discussion of dollar strength is really at the heart of the matter. And even recent weakness in gold could prove positive – if it can hold the line at this 4 month low. That is the big question today and pricing will be closely watched over this long Easter weekend.

Finally, folks like to hear what we are doing across the counter in the physical market. Business slowed Tuesday and Wednesday but today the phones are ringing again. Silver is getting the most action – 100 ounce bars for a change, Alex has discounted these so that might be the reason. Monster boxes come in second and then 10 ounce bars – surprisingly $1000 bag sales have lagged.

Trades of palladium for platinum bullion are drying up and there have been some rhodium sales. Also surprisingly our gold bullion sales have picked up today – I would not read too much into this but it might support the idea that folks believe that while this market is weaker it also presents a buying opportunity in a world which might soon turn again to quantitative easing in an effort to support world trade.

This from Zaner (Chicago) – “While June gold might not find sustained support from the $1,275 level today, that level should eventually be seen as a critical pivot point. However, June gold damaged its charts again overnight, the Dollar is applying some initial pressure and there has been some negative supply side news over the last 24 hours and therefore lower lows for the move are in order. Apparently a five month old gold mining strike in South Africa was ended yesterday with a special payment made to miners. In fact, we think the gold market might see additional pressure from the release of the Mueller report today as that is likely to result in a furor in Washington which in turn fosters geopolitical/economic anxiety and a higher US dollar. In retrospect we see the Fed news this week as generally bearish toward gold as the Fed’s Harker yesterday indicated that there “could still be” one more rate hike this year! However, the Fed’s Beige book release yesterday did not result in a positive reaction in gold and for us that suggests the gold trade is simply leaning in favor of the bear camp and isn’t easily distracted. In another disappointing reaction in gold this week, it is clear that favorable Chinese economic data patterns are seen as a negative which clearly suggests the trade isn’t in a position to benefit from the potential for increased physical demand from the world’s largest demand market. Overnight ETF gold holdings declined by 15,662 ounces and silver ETF holdings increased by 2.8 million ounces!

The palladium market appeared to regain leadership in the PGM complex with a massive flare-up in prices yesterday which resulted in a nine day high and a return to the vicinity of a psychologically important $1,400 price level. While the correlation to the ebb and flow of Chinese auto catalyst demand views has been loose recently, the overall uptrend pattern in prices that began last summer was consistently fueled by speculation that Chinese demand would result in historical shortages and therefore the shift up in Chinese economic prospects has probably brought some trades/investors back. Apparently futures margins were raised in palladium and given the range up move yesterday some shorts might be caught the wrong way in the market and might be forced to buy back positions in the event of a higher high today. Chinese direct foreign investment readings were positive today and that should have provided some lift to Palladium but weaker Chinese equities have apparently thwarted the hope for improved Chinese palladium demand this morning. The palladium market bounced off of the 100 day moving average at $1,322.90 for a second straight session yesterday, leaving that level as a potential strong value zone. While we remain very bearish toward platinum, the sudden revival of palladium provides the bull camp in platinum with some near term cover.

The gold market remains vulnerable as we think it has fully lost its bullish buzz from the early April rally. In fact, the bull camp has difficulty pointing to a specific bullish fundamental argument right now, the charts are signaling downside potential this morning and it would appear as if Chinese trade deal hopes are seen as a negative. However, there could be a divergence unfolding between gold and silver, with silver actually finding support from the improvement in global economic sentiment and because of a noted overnight inflow into Silver ETF holdings. We do think the magnitude of declines in gold is set to slow, but pushed into the market we still favor the downside.”

Silver closed up $0.02 at $14.94.

Platinum closed up $13.00 at $899.80 and palladium closed up $19.90 at $$1403.50.  

This is our usual Thursday Chicago Mercantile Exchange report covering the last 5 trading days – so we are looking at the trading volume numbers for the “April” Gold contract: Thursday 4/11  (331482) – Friday 4/12 (326946) – Monday 4/15 (322219) – Tuesday 4/16 (323874) Wednesday 4/17 (323874) and the trading volume numbers for the “April” Silver contract: Thursday 4/11(107832) – Friday 4/12 (103553) – Monday 4/15 (102471) – Tuesday 4/16 (100492) Wednesday 4/17 (90547).

We believe our four flat screens downstairs with live independent pricing are unique in the United States. The walk-in cash trade can see in an instant the current prices of all bullion products and a daily graph illustrates the range of the markets on any given day.

Yes – you can visit the store with cash and walk away with your product. Or you can bring product to the store and walk away with cash. We will also wire funds into your account that same day for a small service fee ($25.00) if you are in a hurry.

In addition to our freshly ground coffee we offer complimentary cold bottled water, Cokes and Snapple. We also provide fresh fruit in a transparent attempt to disguise our regular junk food habits as we sneak down the block for the best donuts in the world (Randy’s). 

Like us on Facebook and follow us on Twitter @CNI_golddealer – have some fun.

We appreciate your friendship and business. Thanks for reading.            

Disclaimer – The content in this newsletter and on the GoldDealer.com website is provided for informational purposes only and our employees are not registered financial advisors. The precious metals and rare coin market is random and highly volatile so it may not be suitable for some individuals. We suggest before deciding on a course of action that you talk with an independent financial professional. While due care has been exercised in development and dissemination of our web site, the Almost Famous Gold Newsletter, or other promotional material, there is no guarantee of correctness so this corporation and its employees shall be held harmless in all cases. GoldDealer.com (California Numismatic Investments, Inc.) and its employees do not render legal, tax, or investment advice.

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Gold Falters?

Gold Falters?

Commentary for Tuesday, April 16, 2019 – Gold closed down $14.20 at $1272.60. So did gold decide the path of least resistance is down? Well it is a bit early to place your bets but the failure of gold to hold $1290.00 opens the door to all sorts of questions. The trade thinks that gold will move opposite the China trade talks – in other words the closer to a “deal” the US and China get the weaker gold prices will become – or vice versa – that also remains to be seen in this world of international shadow boxing but one thing is sure – this past month the US dollar has become stronger. The Dollar Index has moved from 95.75 through 97.40 and more recently has settled nicely around 97.00.

During that same time frame the price of gold has moved from $1320.00.00 through $1290.00 – held that ground for a week, pushed back above $1300.00 and quickly returned to that $1290.00 support line – then weakened further. That picture has taken all the technical pizazz out of this market so since early March gold has been kind of left-footed.  A look at the 6 month gold pricing chart shows that $1280.00 support goes back to early January but if this longer term support line is breached the next support looks like $1240.00.

Also keep in mind that gold competes with the DOW. A happy DOW diminishes the “safe haven” money pool available to the gold trade. And Year to Date the DOW has moved from around 23000 through 26000 – so it would appear people are feeling pretty good about the economy and the Trump plan for further progress. 

And while it’s plain that gold remains defensive it’s a mistake in my mind to get too bearish. Let this market settle and see where the real physical players decide to dance. And importantly let’s see if the central banks continue to accumulate. 

There is an important underlying principle at play here. There is a no questions asked physical market for gold – it’s just a matter of price. And the cheaper gold gets the more all sectors pay attention. Even more traditional money managers hold core positions in gold – just in case. 

For now it’s safe to say that the bears are rallying their forces – paper players are always the first to consider short positions which might show a profit.

But because gold is already discounted I don’t think this sector of the market is as strong as they may appear. They are still wondering if this current weakness is a big deal or just a continuation pattern which has been in place for years.

My usual commentary when across the counter business slows and people get cautious is to say that the precious metals are never as good or as bad as the media would have you believe. Stick with a tried and true approach – buy weakness in smaller numbers and slowly, taking advantage of cost averaging. And keep in mind that because gold has been generally out of favor – or at least in a back and forth pricing mode since 2013 this market remains stuck on both sides of $1200.00. Once you realize that price trough remains in place also keep in mind that all the big sellers have exited this market long ago. This makes sense from our view as well – the big 200 and 300 and 500 ounce gold sellers were gone by 2014 in our building. To me that reinforces the notion that while gold continues to churn away – it remains in a very long consolidation phase which does not have much downside remaining.    

This from Zaner (Chicago) – “While the June gold contract managed to bounce six dollars from yesterday’s low into its close, prices have started the Tuesday trade under fresh pressure and seemingly poised to take out yesterday’s low of $1285.30. With equities starting out positive again, Citigroup touting a “bullish turn” in the Chinese economy and US treasuries suggesting the US economic outlook is also improving it appears as if gold and silver are suffering from rotation toward equities. In fact the PBOC overnight has contributed to the upbeat view toward China as they have suggested they will continue to provide liquidity but will make sure the liquidity will be controlled in the face of an improving economy. Clearly safe haven liquidation from declining global economic uncertainty is in play. While probably not a material addition to the current downward motion on the charts, press reports of Venezuela selling up to $400 million in gold (despite sanctions to prevent such action) adds to the Bears resolve. However forecast from S&P global of 10th straight year of higher world gold output last year and forecasts of production gains of 2.3 million ounces again this year, casts a dark shadow over prices. Even the technical condition in gold favors the bear camp with prices starting out under pressure and closing in on a fresh downside breakout. Therefore we suspect the $1285.30 level will fail to hold and the odds of a slide down to $1282.20 shouldn’t be that difficult. To add insult to injury ETF’s yesterday sold both gold and silver holdings with gold shedding 90,933 ounces and silver reducing holdings by 106,830 ounces.

In addition to negative spillover from gold and silver the PGM complex is also facing mixed to mostly negative fundamental news this morning. Apparently the trade is facing overnight news of softer EU auto sales (primarily diesel) but also evidence of sharp declines in diesel market share in India and that hits right at the heart of platinum demand. In fact despite the run up from the February lows, sources in the marketplace are now suggesting the platinum market might face a “record market surplus” and that combined with the loss of positive leadership in palladium, would seem to set the stage for a return back to the first quarter consolidation below $875 in July platinum. However it should be noted that ETF holdings of platinum increased to 2.51 million ounces which remains a modern era record! We think the platinum market is a sell on any return to $900. While the palladium market has managed to hold against the recent platinum, gold and silver selloffs the charts are negative with a downward tilted coiling pattern. In palladium the net spec and fund long position is only 9641 contracts relative to the all-time record high of 30,000 contracts and therefore the market isn’t overly vulnerable to massive selling. Pushed into the market we favor selling June Palladium on a bounce up to $1354.30 looking for a return to the late January consolidation below $1300.

The path of least resistance is down in gold and silver to start today as macroeconomic improvement in the global economic outlook is resulting in safe haven liquidation/rotation to riskier assets. While the dollar has shown some recent weakness it has clearly rejected last week’s lows and is an ongoing disappointment for the gold bulls this morning. With higher US equity market action early and negative charts we project the lowest gold price since December 27th in the coming hours or days. In fact a logical target/support level is seen down at $1275 in June gold and down at $14.75 and in May silver. Closer in thin support in May silver is seen at $14.845 and then again at yesterday’s low of $14.795.”

Silver closed down $0.06 at $14.89. Steady eddy here – anywhere in this price range is seen as desirable in the physical market. Silver bullion buyers are sold on this metal and the cheaper it gets the more excited our sales have been.

Platinum closed down $10.00 at $880.20 and palladium closed down $6.30 at $1333.40. A bit quiet in this area – the selling of palladium and trading for platinum bullion has slowed.  

We believe our four flat screens downstairs with live independent pricing are unique in the United States. The walk-in cash trade can see in an instant the current prices of all bullion products and a daily graph illustrates the range of the markets on any given day.

Yes – you can visit the store with cash and walk away with your product. Or you can bring product to the store and walk away with cash. We will also wire funds into your account that same day for a small service fee ($25.00) if you are in a hurry.

In addition to our freshly ground coffee we offer complimentary cold bottled water, Cokes and Snapple. We also provide fresh fruit in a transparent attempt to disguise our regular junk food habits as we sneak down the block for the best donuts in the world (Randy’s). 

Like us on Facebook and follow us on Twitter @CNI_golddealer – have some fun.

We appreciate your friendship and business. Blessings and remember we will be closed Good Friday – thanks for reading.           

Disclaimer – The content in this newsletter and on the GoldDealer.com website is provided for informational purposes only and our employees are not registered financial advisors. The precious metals and rare coin market is random and highly volatile so it may not be suitable for some individuals. We suggest before deciding on a course of action that you talk with an independent financial professional. While due care has been exercised in development and dissemination of our web site, the Almost Famous Gold Newsletter, or other promotional material, there is no guarantee of correctness so this corporation and its employees shall be held harmless in all cases. GoldDealer.com (California Numismatic Investments, Inc.) and its employees do not render legal, tax, or investment advice.

Posted on

Gold Weakens – Technical or Not?

Gold Weakens – Technical or Not?

Commentary for Thursday, April 11, 2019 – Gold closed down $20.50 today at $1288.60. So we are looking at a nice downside correction in gold once again pointing out that it is struggling above $1300.00. Most likely today’s downdraft was caused by a combination of a stronger dollar and perhaps a technical correction. This according to Allen Sykora (Kitoc) – RJO’s Pavilonis: Gold Retreats On Technical-Chart Factors – The pullback in gold futures so far Thursday is largely based on the technical charts rather than any fresh news, says Daniel Pavilonis, senior commodities broker with RJ Futures. As of 9:16 a.m. EDT, Comex June gold was $14.80 lower to $1,299.10 an ounce. Some selling set in when the market wasn’t able to push through resistance in the $1,315 area on Wednesday, he says. The market had posted good gains lately, so “there was some profit-taking,” Pavilonis says, adding that sell stops may have booted some traders out of positions as well. “I think this is purely technical.”

Well, let’s wait and see as they say – but gold has some positives and negatives hanging in the wind. The good news for gold enthusiasts is that inflation is stirring and if you have not noticed crude oil remains strong and pushes higher. We have moved from $42.00 in December through $63.00 currently with talk of $80.00 oil before year end. And the talk of a possible recession pushing the Fed to reduce already low interest rates also encourages a positive gold outlook.

On the negative side – look at the DOW. It has had a nice run since January and after Vice President Pence’s recent nice comments about China analysts are getting more excited that trade talks are progressing. A trade deal here and continued cheap money would be great for Wall Street and encourage higher DOW numbers just in time for the elections. This would certainly cap any gold upward momentum unless the inflation genie returns to haunt us all.

So with all that hedging what do I think gold will do in the shorter term?

First, I would like to see some rebound in today’s weakness – we saw a few dollars in the aftermarket which is too tepid for me so that leaves Friday’s action before the weekend. If this market continues cool I’m not hopeful. Keep in mind that the line in the sand continues to be $1290.00. A real break down here would not be good and most likely would create a short paper pile on typical in today’s liquid paper world.

Second, even with today’s weakness I don’t think the short paper is particularly emboldened at this point – the big question being whether the physical buyers will once again “buy” and support gold as it gets cheaper. The old “bargain” hunting conversation. 

I can’t say the US market is buying gold with both hands but it remains engaged and interested. And why not – with all the hubbub gold is still the only real recourse in case of financial calamity and is now trading at a substantial discount to old highs.

So who is buying? The people we see across our counter are mostly long term customers not fresh money. And the world of course remains engaged – what other choices are there that takes gold’s place if you are serious about everyone’s mounting debt? Sure the dollar will hold up short-term but no one thinks there is a place for a strong dollar when most other countries are embracing weaker currencies and continued quantitative easing – the EU being the poster child of this destructive monetary thinking.  

For sure the US mood at this point is most likely “flat” – everyone prefers that upward momentum scenario and there is nothing like higher prices to motivate the base. But be assured the base is paying attention and with any encouragement at all will reenter this game in a flash. In the meantime this market requires patience and the usual “bigger picture” view.

For now I think gold has not broken down but is defensive. Let’s hope it remains within reasonable limits of todays close and look for something more range bound before deciding which direction it favors on the shorter term. We saw virtually no gold sellers today.

This from Zaner (Chicago) – “Global equity markets overnight were weaker with the exception the Russian market. Economic information released overnight included Chinese consumer prices for March which came in at 2.3% on a year-over-year basis which was weaker than expectations but stronger than in the prior month. The headline Chinese consumer price index for March on a month over month basis actually declined by 0.4% which is a much weaker than expected reading. From the euro zone both German and French consumer prices matched expectations and the prior month readings with both posting 1.3% year-over-year gains. Overnight news of importance included the apparent delay in the exit deadline to October and that news was joined by a series of economic growth downgrades for the EU. The North American session will start out with a weekly reading on initial jobless claims that are forecast to have a modest increase from the previous 202,000 reading. Ongoing jobless claims are expected to have a modest weekly increase from the previous 1.717 million reading. The March producer price index is forecast to hold steady with February’s 1.9% year-over-year rate while the March “core” producer price index (ex food and energy) is expected to have a minimal downtick from February’s 2.5% year-over-year rate. Fed Vice-Chair Clarida, New York Fed President Williams and St. Louis Fed President Bullard will speak during morning US trading hours while Fed Governor Bowman will speak during the afternoon. Earnings announcements will include Fastenal and Commerce Bankshares before the Wall Street opening.

The gold market has initially recoiled from yesterday’s impressive extension of the early April rally as if buyers have suddenly turned cool toward the metal. Apparently the dollar index has failed to give off the impression of straightaway downside action ahead thereby giving pause to buyers. The gold market might be off balance because of a contraction in Chinese consumer prices for March, as that can sometimes be an indicator of poor economic health. Perhaps the gold is undermined as a result of Chinese government promises to increase regulation and clamp down on illegal gold trading, as that could blunt some demand. Not surprisingly the gold market this morning has also discounted/ignored news that South African gold output in January declined again this time by 22.8% relative to year ago levels. Over the last several years the gold market has not embraced a long-held pattern of declining gold production. Offsetting the decrease in South African gold output is news that Zimbabwe managed to post record high gold output last year but the net annual gain of two tons is relatively immaterial to the world Gold market. In the end we think the dovish central bank takeaways this week should underpin the gold market despite this morning’s early weakness but it could take a June dollar index trade back below 96.40 to reverse the corrective early track. Both gold and silver derivative holdings declined again overnight which extends a pattern of investor disinterest.

The platinum market was able to reject some moderate damage on its charts with a recovery bounce yesterday and the market this morning has added to the bullish chart action with a temporary higher high probe. Apparently macroeconomic optimism is missing this morning and the PGM trade has not been able to benefit definitively by dovish central bank headline flow this week. However, the platinum market should be supported by a private forecast suggesting platinum prices will continue to climb but the bull camp might need to see a fresh upside extension in total platinum derivative holdings sometime this week to see the $900 level in July platinum as a solid support zone. In fact, a quasi-double low down at $890.30 might not be solid support without a more definitive improvement in global economic psychology. Unfortunately for the bull camp in palladium, the rally this week in palladium has taken place on declining volume and open interest and that suggests the bull case is not widely attended.”

Silver closed down $0.38 at $14.82. I’m not worried much about silver at least lower levels, the public gets very interested in this range. 

Platinum closed down $12.90 at $890.30 and palladium closed $30.60 at $1335.80. 

We believe our four flat screens downstairs with live independent pricing are unique in the United States. The walk-in cash trade can see in an instant the current prices of all bullion products and a daily graph illustrates the range of the markets on any given day.

Yes – you can visit the store with cash and walk away with your product. Or you can bring product to the store and walk away with cash. We will also wire funds into your account that same day for a small service fee ($25.00) if you are in a hurry.

In addition to our freshly ground coffee we offer complimentary cold bottled water, Cokes and Snapple. We also provide fresh fruit in a transparent attempt to disguise our regular junk food habits as we sneak down the block for the best donuts in the world (Randy’s). 

Like us on Facebook and follow us on Twitter @CNI_golddealer – have some fun.

We appreciate your friendship and business. Blessings and thanks for reading.           

Disclaimer – The content in this newsletter and on the GoldDealer.com website is provided for informational purposes only and our employees are not registered financial advisors. The precious metals and rare coin market is random and highly volatile so it may not be suitable for some individuals. We suggest before deciding on a course of action that you talk with an independent financial professional. While due care has been exercised in development and dissemination of our web site, the Almost Famous Gold Newsletter, or other promotional material, there is no guarantee of correctness so this corporation and its employees shall be held harmless in all cases. GoldDealer.com (California Numismatic Investments, Inc.) and its employees do not render legal, tax, or investment advice.

Gold Remains Firm 

Gold Remains Firm

Commentary for Wednesday, April 10, 2019 – Gold closed up $5.60 today at $1309.10 reclaiming for now the important ground above $1300.00. Since late last week the Dollar Index has softened somewhat – moving from 97.50 through 97.00 – not a big deal but enough weakness to help support the price of gold. And Tuesday’s early dip to $1297.00 was met with a sharp rise pushing to $1304.00 and holding steady. This might indicate that physical demand is also working on the gold price equation.

Today’s firmness in gold might be the result of today’s late FOMC discussion. Everyone expected a continued dovish dialogue but the idea that the Fed will not raise interest rates this year is beginning to seep in around the edges. If true this would be a great help to the price of gold but remember the FOMC can and often does change its mind.    

Inflation data suggests that while higher gas prices and rents boosted US consumer prices in March core inflation remains subdued. What I don’t get is that everyone remains ambivalent about inflation numbers. According to the US Labor Department the Consumer Price Index has climbed steadily higher since 2014 moving from virtually zero through almost 3% before settling closer to 2%. Think about that – a 2% climb in prices will not stop the US economic machine but the accumulated damage over the years makes a substantial case for owning gold and silver bullion. If anyone took 2% of your earnings for 5 years in a row you would be out a great deal of money – this is exactly the case the US government is making in plain sight to support its inflationary spending habits.   

This from Zaner (Chicago) – “While the gold market is not throwing off definitive direction this morning there appears to be a minimally bullish bias in place from the prior four day’s upward action on the charts and a vulnerable looking dollar. With an 8 day low in the Dollar yesterday, and 8 day high in gold yesterday was not that surprising. In addition to a weak Dollar, this week gold has clearly been given fresh lift by reports that China posted its fourth straight month of net central bank gold buying (+11 tonnes!) Unfortunately for the bull camp, the amount of gold China added was nearly offset by a liquidation of IMF gold holdings by Venezuela of 8 tonnes. In a minimally bearish development exchange traded funds sold 40,000 ounces of gold from their holdings yesterday which reduces this year’s net purchases to 808,808 ounces. ETF holdings of silver were also reduced by 210,953 ounces which brings this year’s net sales to 6.27 million ounces. However, with the US potentially opening up a second trade battlefront with the EU (regarding airline manufacturing subsidies), an increased amount of geopolitical safe haven interest could return to the precious metals markets. Furthermore there also appears to be a slight uptick in macroeconomic uncertainty taking place this week in the wake of IMF downward global growth revisions and also because of significant weakness in Japanese machinery orders overnight. Unfortunately for the bull camp, the rally over the prior three sessions was forged on deterioration in trading volumes while open interest has basically been flat, and that suggests to us the bull camp is reserved or hesitant. In short, geopolitical, macroeconomic and currency-related forces give the bull camp a slight edge.

The PGM markets once again saw divergence with the palladium market holding ground while the platinum market is failing in a fashion that suggest it will be vulnerable going forward. The bull camp in the platinum market has to be discouraged as prices slid yesterday despite positive leadership from gold, generally positive motion in many other metals markets and in the face of weakness in the dollar. However, the overall macroeconomic outlook minimally favors the bear camp in platinum unless fresh trade battle fears become reality and or US scheduled data from CPI hints at deflation. While platinum derivative holdings have basically tracked sideways since April 2nd, they remain very near modern era highs (if not all-time highs) which suggests investors are paying attention to the space. However, the platinum market was extensively overbought from a 7-day compacted rally and a normal retracement of that rally could allow for a setback to $889.20 in the July platinum contract today.

The path of least resistance in gold is up despite a lack of fresh and definitive fundamental fuel. Critical support to start today is $1305.10 and then a more important support/pivot point is seen at $1295.50. Initial resistance is close in at this week’s high of $1310.40 with short-term uptrend channel support seen at $1298.50. The silver market overnight re-damaged its charts with a range down extension but repaired part of that damage with a bounce from the low of roughly 9 cents.”

This latest post by Neils Christensen (Kitco) is worth the read – China Buys 360,000 Ounces Of Gold In March – “The race to accumulate gold continues as the central bank of the world’s second-largest economy added more ounces to its official reserves for the fourth consecutive month. According to the latest statistics from the People’s Bank of China, the central bank added 360,000 ounces of gold to its foreign reserves last month. Gold reserves totaled 60.62 million ounces as of the end of March.

Commodity analysts at ING said that since November, China has added 1.38 million ounces to its reserves. “This increased buying comes at a time when trade tensions between the U.S. and China continue to drag on,” the analysts said.

Analysts have noted that central-bank gold demand has provided an important support for the yellow metal as it continues to facing growing competition from rising equity markets and resilient strength in the U.S. dollar. Some analysts have also said that they don’t expect central banks to stop buying gold anytime soon as countries reduce their dependence on the U.S. dollar.

“One suspects China is like Russia, and probably some other nations too, in diversifying its reserves away from dependence on the U.S. dollar as a reserve currency,” Lawrie Williams, creator of Lawrieongold.com, said in a recent note. “The U.S. has been demonstrating its readiness to use the dollar, and its links to global trade, as a weapon to try and bring enemies and allies into line with its global foreign policy.”

Analysts at Bank of America Merrill Lynch also see global U.S. dollar deleveraging as a growing trend that will benefit gold prices. “We believe that de-dollarization could also lead to rising share of gold holdings in gold portfolios,” the analysts said in a report published last month.

Gold central-bank gold demand continued to attract more market attention following unprecedented demand last year. According to data from the World Gold Council, in 2018 central banks bought a total of total of 651.5 tonnes of the yellow metal, the most significant increase in roughly half a century.”

Silver closed up $0.03 at $15.20.

Platinum closed up $9.30 at $903.20 and while palladium closed up $0.60 at $1366.40, it moved up almost $26.00 in the aftermarket.   

We believe our four flat screens downstairs with live independent pricing are unique in the United States. The walk-in cash trade can see in an instant the current prices of all bullion products and a daily graph illustrates the range of the markets on any given day.

Yes – you can visit the store with cash and walk away with your product. Or you can bring product to the store and walk away with cash. We will also wire funds into your account that same day for a small service fee ($25.00) if you are in a hurry.

In addition to our freshly ground coffee we offer complimentary cold bottled water, Cokes and Snapple. We also provide fresh fruit in a transparent attempt to disguise our regular junk food habits as we sneak down the block for the best donuts in the world (Randy’s). 

Like us on Facebook and follow us on Twitter @CNI_golddealer – have some fun.

We appreciate your friendship and business. Blessings and thanks for reading.            

Disclaimer – The content in this newsletter and on the GoldDealer.com website is provided for informational purposes only and our employees are not registered financial advisors. The precious metals and rare coin market is random and highly volatile so it may not be suitable for some individuals. We suggest before deciding on a course of action that you talk with an independent financial professional. While due care has been exercised in development and dissemination of our web site, the Almost Famous Gold Newsletter, or other promotional material, there is no guarantee of correctness so this corporation and its employees shall be held harmless in all cases. GoldDealer.com (California Numismatic Investments, Inc.) and its employees do not render legal, tax, or investment advice.

Posted on

Gold Finishes a Quiet Week

Gold Finishes a Quiet Week

Commentary for Friday, April 5, 2019 – Gold closed up $1.40 at $1290.40. Gold still looks non-committal to me – Monday’s close was $1288.40 so on the week we are up a few dollars. The Dollar Index this week was also flat moving between 97.00 and 97.50 but it closed at the higher end of the range today. Gold opened choppy around $1288.00 sold off a few dollars then bounced higher ($1292.00) on some bargain hunting at least.

The 30 day pricing chart clearly shows the big buzz which began developing in early March has been swapped for a kind of ho-hum attitude – traders are receiving fresh news but gold seems distracted. The good news shorter term is that we seem to be holding around $1290.00 but this market needs to get its mojo back or we could be heading lower.

As we have pointed out in the past the “shelf” around $1280.00 goes back 5 months. Then gold bulls decided to get happy and pushed prices to $1340.00 but the rally just could not break higher. No big surprise – the $1350.00/$1400.00 wall has been in place since 2013.

I believe that physical demand at much above $1300.00 wavers because the typical Asian market simply pulls up and waits for better pricing.

And as mentioned before, as long as the “fear factor” remains absent – the US market yawns.

Why not, stocks are firm and perhaps trending higher, interest rates remain low, hawkish talk from the Fed has all but disappeared, and Europe has walked itself back from a ledge. Yet the President today claimed the FOMC should lower interest rates. 

I think at this point you might want to ask why gold has held up since the big sell-off in 2013.

One reason has to do with some sort of “valuation” understanding. Gold has not exactly reinvented itself from a financial standpoint but it has once again joined the “insurance party”. In other words it’s pretty clear that the dialogue has moved on from the overly pessimistic talk we heard in late 2015 to something more mainstream given the world’s current financial problems.    

Obviously this is pushed by underlying world angst. For now most are buying the political tack that everything is just fine. But I think an honest assessment of both the political and financial world leaves doubt. The English can’t even seem to close the Brexit deal with public support. The Chinese trade deal grinds on and immigration reform stalls. I’m not whining here but doesn’t it seem like it’s getting harder and harder to get anything done?  

Granted the “safe-haven” pot isn’t exactly boiling but our across the counter bullion action is steady. No real whales in either direction but solid interest in typical bullion products.

And premiums are holding up – this is a big inside plus indicating that dealers are not liquidating and looking for the door. So the underlying optimism this market developed over the past 4 or 5 months is still in place but the sideways price action in place since early February has taken some of the sizzle or immediacy out of the physical trade.            

This from Zaner (Chicago) – “We detect vulnerability in the gold market to start today as weakness in the dollar has had little impact, the charts favor the bear case and one can make a case that the dollar could manage to rally off notably weak and notably strong jobs data. We would suggest that some whisper numbers for the payrolls are for them to be soft as in the prior month, and therefore a major fundamental decision point could be seen in a number of markets today. In the end a number giving off strong positive economic signals could result in money flowing to the dollar because it offers the best relative growth prospects, while a very disappointing number, could see money flow toward the dollar in a safe haven move off increased economic uncertainty. However in a slight change of pace exchange traded gold funds saw an inflow of 54,771 ounces which brings the net purchases this year back up to 834,096 ounces. While the June gold contract managed to reject the brunt of the initial washout yesterday, the failure on the charts weakens the resolve of the bulls and emboldens the bear camp. The silver market did damage its charts yesterday and therefore the path of least resistance looked to remain down today, but early chart action today has improved and that suggests silver might be able to delink with gold this morning. In other words it is possible that silver could benefit from fresh physical demand hopes in the event payrolls are “strong” even if gold falters.

With yet another sharp range up extension in platinum overnight the market extends bullishness into another trading session. While some might suggest the market is becoming overbought with a six day $75 per ounce rally, the platinum market in February posted an even larger rally over nine days and it appears to have definitively taken over the leadership role in the PGM complex. However total derivative holdings of platinum notched back away from modern highs posted from earlier in the week and traders should expect a measure of macroeconomic impact from this morning’s jobs data. Obviously platinum has derived some lift this week from improving demand hopes and therefore the jobs number is a critical juncture especially with the platinum market on the weekly charts reaching back up to the highest level since June of last year. While we expected platinum to eventually play catch up to palladium, we are a little skeptical of projecting extended gains in platinum in the event that palladium prices diverge significantly on the downside. Under normal demand and restricted supply, with a mixture of improving investment demand, a return to a $900 to $1,000 range in platinum prices would not seem to be an extreme projection. As indicated, the palladium market appears to have rekindled a volatile trading condition and the market might have little in the way of support in the June contract until $1,292.50. As in many other physical commodity markets, traders should be on the lookout for major financial trend decisions from today’s US jobs figures.

It would appear as if today’s nonfarm payroll reading could set the tone for the rest of the quarter as the markets would be very concerned in the event that another overtly weak number is chained on to last month. As indicated already the charts favor the bear tilt with a series of lower highs in in gold place and yesterday’s downside breakout weakening the resolve of the bull camp. A critical pivot point this morning seen at $1289.50 and it could take a trade back above $1302 to effectively reverse initial bearish psychology.”

Silver closed unchanged at $15.04. This number is still “cheap” so I look for physical demand to continue steady – Monster Boxes and $1000 face Silver Bags are highly prized.  

Platinum closed up $1.00 at $901.00 and palladium closed up $13.60 at $1349.10.  

Our Patented Employee Survey – Gold’s Direction Next Week?

Of course it’s not really patented but we do have some fun along the way. This is what the GoldDealer.com employees think: 7 believe gold will be higher next week none think gold will be lower and 2 think it will be unchanged.

Our Patented Customer Survey – Gold’s Direction Next Week?

Like the employees our customers were given three choices – up – down – unchanged. We limited the survey to a random sampling of 100 transactions – unscientific but worth considering because these people took action: 46 people thought the price of gold would increase next week – 33 believe the price of gold will decrease next week and 21 think prices will remain the same.

Precious Metal Closes & Dollar Strength – April 1 – April 5

Gold Finishes a Quiet Week

We believe our four flat screens downstairs with live independent pricing are unique in the United States. The walk-in cash trade can see in an instant the current prices of all bullion products and a daily graph illustrates the range of the markets on any given day.

Yes – you can visit the store with cash and walk away with your product. Or you can bring product to the store and walk away with cash. We will also wire funds into your account that same day for a small service fee ($25.00) if you are in a hurry.

In addition to our freshly ground coffee we offer complimentary cold bottled water, Cokes and Snapple. We also provide fresh fruit in a transparent attempt to disguise our regular junk food habits as we sneak down the block for the best donuts in the world (Randy’s). 

Like us on Facebook and follow us on Twitter @CNI_golddealer – have some fun.

We appreciate your friendship and business. Blessings and thanks for reading.            

Disclaimer – The content in this newsletter and on the GoldDealer.com website is provided for informational purposes only and our employees are not registered financial advisors. The precious metals and rare coin market is random and highly volatile so it may not be suitable for some individuals. We suggest before deciding on a course of action that you talk with an independent financial professional. While due care has been exercised in development and dissemination of our web site, the Almost Famous Gold Newsletter, or other promotional material, there is no guarantee of correctness so this corporation and its employees shall be held harmless in all cases. GoldDealer.com (California Numismatic Investments, Inc.) and its employees do not render legal, tax, or investment advice.

Posted on

Gold Continues to Wander

Gold Continues to Wander  

Commentary for Monday, April 1, 2019 – Gold closed down $4.60 at $1288.40. I think the best you can say about gold at this point is that it is steady – even in the longer term. The 30 day price picture is about unchanged and the 1 year price picture is down about $30.00.

The more recent “feel” is that international markets are less strained which is good but this could change in a blink considering that any final deal with China is still a long way off.

Why this better frame of mind is not turning into higher safe haven demand is not clear. This could be the result of a stronger dollar – the Dollar Index has moved from 96.5 through 97.3 these past 5 trading days.  

Today’s gold close ($1288.40) compared to the moving averages looks like this: 50 DMA ($1308.00) 100 DMA ($1281.00) and 200 DMA ($1248.00). So the price of gold is below the 50 and above both the 100 and 200 – hanging in there for now. And while safe-haven demand seems perhaps soft – perhaps because stocks are rallying – most thinkers believe gold bullion will play a more central role in portfolio management this coming year.

More importantly I think this change in thinking will increase as time goes on and folks realize that government debt is not going to be checked and in fact will continue to grow even though many claim the number is already high enough to sink the boat.

This is not only true of the US but other countries across the board – no one wants to tell the tax payer that tax dollars are being dissipated through mismanagement and fraud. So the charade continues here in the US and both parties play a role which should be an embarrassment to all.

For now watch the $1280.00 support line and the dollar. If the greenback moves higher gold will soften but if the $1280.00 support is breached traders will play the “short” side and everyone will be looking for bargain hunting.   

This from Zaner (Chicago) – “While the gold market showed some recovery action last week after an aggressive four day washout, the bear camp looks to generally retain control. First and foremost, the track in the dollar generally looks to remain up despite disappointing data and repeated dovish Fed mumblings. As we indicated a number of times last week, we think gold, silver and platinum might become industrial/physical demand focused markets, not financial safe haven instruments. However, better than expected Chinese economic data over the weekend and higher global equities has not resulted in strength in gold and silver early this morning and that partially defeats the physical demand angle. However, the market was presented with bullish supply and demand forecast figures released in the press overnight with a private entity predicting gold demand this year will reach the highest levels in four years. Fortunately for the bull camp, the net spec long positioning in gold was very modest and clearly overstated given that prices following the report declined by $29 from the COT report mark off. The Commitments of Traders report for the week ending March 26th showed Gold Managed Money traders added 22,011 contracts to their already long position and are now net long 79,757. Non-Commercial & Non-Reportable traders net bought 28,242 contracts and are now net long 170,148 contracts. Like the gold market, the silver market severely damaged its charts but has in retrospect showed some potential value at the $15.00 level. With the silver market not showing open interest liquidation last week, (on the break down) that casts some doubt the argument that last week’s washout has balanced the charts. However, following the COT positioning report, May silver fell an additional $0.47 and the $15.00 level has been a key pivot point for the market on a very consistent basis since last August! However, we see silver as a classic industrial/physical demand focused market and therefore a measure of positive correlation to equities is likely this week. The March 26th Commitments of Traders report showed Silver Managed Money traders added 2,267 contracts to their already long position and are now net long 12,261. Non-Commercial & Non-Reportable traders are net long 49,000 contracts after net buying 5,558 contracts.

The palladium market suffered historical damage on its charts last week, and the declines were such that the multi-quarter bull market has been severely challenged. So far, open interest has liquidated but not significantly and volume last week was very high and that probably means some weak-handed longs have been pushed to the sidelines. However, the most recent positioning report in palladium showed a net spec long of only 12,000 contracts and that reading is certainly overstated given the decline of $212 an ounce since the report was compiled. The March 26th Commitments of Traders report showed Palladium Managed Money traders net sold 265 contracts and were net long 12,536 contracts. Non-Commercial & Non-Reportable traders were net long 12,336 contracts after decreasing their long position by 743 contracts. At least to start, the $1,308 level could be a key psychological point but without a definitive improvement in global economic psychology and perhaps positive trade headlines, we can’t rule out a temporary test of $1,276 in June palladium this week. In the end, expanded volatility could become a fixture. Platinum positioning in the Commitments of Traders for the week ending March 26th showed Managed Money traders are net long 11,445 contracts after net buying 8,351 contracts. Non-Commercial & Non-Reportable traders added 4,475 contracts to their already long position and are now net long 31,451.

While it is possible that gold, silver, platinum and palladium found temporary lows with last week’s sharp washouts it could take a definitive slide in the Dollar to avoid further downside work this week. Therefore, pushed into the market we leave the bear camp with an edge as the dollar generally looks to be upwardly biased on its charts and economic conditions are still a little suspect. Pivot point support in June gold is seen at $1,293.30 and then again down at $1,291.30.”

Silver closed down $0.01 at $15.05.

Platinum closed up $1.20 at $850.10 and palladium closed up $50.00 at $1395.00.

We believe our four flat screens downstairs with live independent pricing are unique in the United States. The walk-in cash trade can see in an instant the current prices of all bullion products and a daily graph illustrates the range of the markets on any given day.

Yes – you can visit the store with cash and walk away with your product. Or you can bring product to the store and walk away with cash. We will also wire funds into your account that same day for a small service fee ($25.00) if you are in a hurry.

In addition to our freshly ground coffee we offer complimentary cold bottled water, Cokes and Snapple. We also provide fresh fruit in a transparent attempt to disguise our regular junk food habits as we sneak down the block for the best donuts in the world (Randy’s). 

Like us on Facebook and follow us on Twitter @CNI_golddealer – have some fun.

We appreciate your friendship and business. Blessings and thanks for reading.           

Disclaimer – The content in this newsletter and on the GoldDealer.com website is provided for informational purposes only and our employees are not registered financial advisors. The precious metals and rare coin market is random and highly volatile so it may not be suitable for some individuals. We suggest before deciding on a course of action that you talk with an independent financial professional. While due care has been exercised in development and dissemination of our web site, the Almost Famous Gold Newsletter, or other promotional material, there is no guarantee of correctness so this corporation and its employees shall be held harmless in all cases. GoldDealer.com (California Numismatic Investments, Inc.) and its employees do not render legal, tax, or investment advice.

Posted on

Gold – Small Corrective Bounce

Gold – Small Corrective Bounce

Commentary for Friday, March 29, 2019 – Gold closed up $3.20 at $1293.00. So it closed a bit higher today and I will leave it up to the reader as to interpretation. Some will call this light bargain hunting but considering the bath gold took yesterday (down $20.60 at $1289.90) the bulls can’t be too happy – and will have to redeem themselves perhaps in next week’s trading.

I have already referenced the strong support gold enjoys around $1280.00 which has been in place since early 2019. But a break down there could turn into a route, the next big support line being $1200.00 which would negate the rather large gold bull leg which has been creating excitement since late last year.

I think the chances of such a plunge unlikely however, given the current almost universal acceptance that the FOMC is done with interest rate hikes for 2019.

But even the dovish governors concede that more interest rate hike might be necessary over time. The big question is whether the dollar will hold up given rising inflationary numbers (also very likely given enough time) and the always present possibility that the US could see recessionary headwinds perhaps as soon as late 2019.

This would place the FOMC in the unenviable position of having to soon lower interest rates to stimulate our economy and most think gold would go crazy under these circumstances. 

It’s also worth noting that while gold is settling probably the result of a nice round of profit taking in the paper market the basic underlying enthusiasm remains in place. Still gold remains a tale of two cities.

The bulls claiming a challenge of old highs is already baked into the cake given a dovish FOMC. The bears on the other hand are looking for a weakening technical picture – a place to get back on the “lower gold” bandwagon.

From a practical standpoint I think the “short” mentality is nowhere to be found at the present. But that does not mean it could not reappear at the drop of a hat – if there is one constant in the gold trade it is that sentiment can change with the wind.  

I remain mildly bullish – looking for confirmation because I can’t see the dollar remaining strong over the next year or two. And if the dollar trends lower it could easily lose 20% which could push gold to all-time highs. I certainly would not be “short” in this market because the next time gold roars it will really roar – if you get my meaning.  

This from Zaner (Chicago ) – “While the gold market is showing some capacity to reject prices below yesterday’s spike low close in the early going today, it is difficult to call for an end to the washout. However open interest in gold this week has already declined from 524,865 contracts to 457,650 contracts and the washout yesterday produced the most active trading volume since October 11th and that might signal a technical bottoming. The gold market might draft some support from overnight chatter pointing out the potential for ongoing Russian central bank buying of gold as some analysts think the country is working aggressively to diversify away from its exposure to the US dollar. According to the world Gold Council the Russian central bank bought 274 tons of gold last year and that represented 40% of all central bank buying of gold and 6% of total global demand! Furthermore gold now represents 19% of Russia’s foreign exchange reserves and that is the highest in 18 years. Gold derivative holdings forged a minimal gain of 2,500 ounces on 52.4 million ounces while silver derivative holdings increased by 483,082 ounces to stand at 531 million ounces. At least in the short term it could be difficult to alter overall market sentiment, so metals bears would seem to have an edge. However we think the markets are falling because of escalating economic uncertainty and clearly they are not benefiting from safe haven conditions, which is surprising to some. It is possible that a very significant washout in equities to end the week would rekindle flight to quality buying interest, but that could also ratchet-up deflationary selling of commodities in general, including metals. In other words gold might need a swing higher in economic sentiment to catch some short covering action or they might need a quasi-debacle in equities to ignite flight to quality buying.

The palladium market saw a $200/ounce break in just two trading sessions and has forged a very surprising and impressive $50 rally to start the Friday trade! We suspect the washout was a delayed reaction to several months of slowing global/Chinese physical demand expectations. Certainty big picture macro conditions have added to the washout in the PGM complex, and it should be noted that the talking heads are attempting to pile on overnight by labeling palladium a “Bubble” market and by dredging up stories touting a surge in re-cycled supply. For many weeks the palladium market seemed to be immune to the mounting evidence of slowing in China and therefore the fundamental foundation of the last $200-$300 in gains could have been very weak. Some longs indicated that suggestions from the White House that it might take weeks and perhaps months to get a US/China trade deal, stoked definitive deterioration of the bull case to the breaking point. However with June Palladium rejecting yesterday’s low, the $1308 level becomes some form of support/value today. Logical bounce potential is seen at $1,370 and then again up at $1,400 but it goes without saying that traders should expect fairly extensive two-sided volatility. While platinum has also recovered overnight it generally remains insulated from the wild action in palladium but it also appears to remain a fairly classically driven physical/industrial commodity condition where the bull camp remains in need of an improvement in economic conditions.

It is very difficult to throw off the bear track under current conditions, as there would appear to be a lack of alternatives to the dollar, economic conditions are more deflationary than panic-ridden, and many industrial commodities are simply out of favor because of slumping demand fears. In fact without news of some definitive trade talk progress, flows into the long side of the dollar look to continue, and that in turn could leave gold and silver under currency related pressure. Initial downside targeting in June gold is seen at $1287.50 (the March low) and then again down at $1280.00. With a key failure at the $15.00 level in May silver yesterday and again overnight, that level could be a major pivot point into the close today. In the event of more Dollar gains and Gold losses the next downside target in May silver is seen down at $14.88.”

Silver closed up $0.14 at $15.06. We still see steady buying at these lower levels.   

Platinum closed up $10.70 at $848.90 and palladium closed up $32.10 at $1345.00.

Our Patented Employee Survey – Gold’s Direction Next Week?

Of course it’s not really patented but we do have some fun along the way. This is what the GoldDealer.com employees think: 6 believe gold will be higher next week 2 think gold will be lower and 1 thinks it will be unchanged.

Our Patented Customer Survey – Gold’s Direction Next Week?

Like the employees our customers were given three choices – up – down – unchanged. We limited the survey to a random sampling of 100 transactions – unscientific but worth considering because these people took action: 50 people thought the price of gold would increase next week – 28 believe the price of gold will decrease next week and 22 think prices will remain the same.

Precious Metal Closes & Dollar Strength – March 25 – March 29

Gold – Small Corrective Bounce

We believe our four flat screens downstairs with live independent pricing are unique in the United States. The walk-in cash trade can see in an instant the current prices of all bullion products and a daily graph illustrates the range of the markets on any given day.

Yes – you can visit the store with cash and walk away with your product. Or you can bring product to the store and walk away with cash. We will also wire funds into your account that same day for a small service fee ($25.00) if you are in a hurry.

In addition to our freshly ground coffee we offer complimentary cold bottled water, Cokes and Snapple. We also provide fresh fruit in a transparent attempt to disguise our regular junk food habits as we sneak down the block for the best donuts in the world (Randy’s). 

Like us on Facebook and follow us on Twitter @CNI_golddealer – have some fun.

We appreciate your friendship and business. Blessings and thanks for reading.           

Disclaimer – The content in this newsletter and on the GoldDealer.com website is provided for informational purposes only and our employees are not registered financial advisors. The precious metals and rare coin market is random and highly volatile so it may not be suitable for some individuals. We suggest before deciding on a course of action that you talk with an independent financial professional. While due care has been exercised in development and dissemination of our web site, the Almost Famous Gold Newsletter, or other promotional material, there is no guarantee of correctness so this corporation and its employees shall be held harmless in all cases. GoldDealer.com (California Numismatic Investments, Inc.) and its employees do not render legal, tax, or investment advice.



Posted on

Gold Continues to Grind

Gold Continues to Grind

Commentary for Wednesday, March 27, 2019 – Gold closed down $3.90 at $1310.40. It closed a bit soft today against a choppy dollar. It would appear our shinny friend is meeting some headwind and might have to settle for a trading range between $1310.00 and $1320.00 on the short term. This is a bit of a disappointment for that upward bullish leg which began in early March just under $1290.00 but keep in mind that gold is simply in no-man’s land until the bulls can lead a convincing charge which pushes above $1330.00.

Not a big deal if traders sense an underlying buzz but I don’t see any lines in our parking lot so “patience” continues to be the word of the day. This is the type of market which could break either way – the 60 day price range being something between $1270.00 and $1340.00. You could also see some volatility in either direction but a big break-down in price appears unlikely as that $1280.00 support shelf has been in place since early 2019.

My best guess is that gold will remain choppy in nature – kind of feeling its way around waiting on the “the next big deal”. Why we have not seen more fireworks to the upside after the last FOMC “talk” is interesting. Central banks are buying gold, some insiders are thinking the Fed might even lower interest rates before year end and the mountain of US debt continues to grow.

We have all the ingredients necessary for a weaker dollar and higher gold – so where are all the customers? It’s not that we are not doing business it is just that this market should be hot and it’s not. Perhaps the US consumer is just behind the curve or it might be that they remain a big believer in this recovery. The rank and file are finally making more money and spending it on all kinds of stuff – which makes them happy and lays down the inflationary groundwork.  

This upbeat scenario is certainly not the kind of thinking we saw during the subprime mortgage crisis of 2008. It’s hard to believe that was more than a decade ago but it’s good that consumers have a short memory for those kinds of things.

That economic disaster was however the worst financial mess we have seen since the great depression. And our capitalistic system is always vulnerable because of the debt leverage – the bigger the recovery the bigger the debt and the bigger the potential danger.

I will leave it up to the reader as to when the next shoe will fall over a successful economic system which carries the seeds of its own demise as it moves forward and gathers steam – but it does worry me. I do not want future generations to wake up one day and wonder who was at the controls of our economic aircraft.

When more than one pilot can be responsible for flying an aircraft it’s important to have a procedure in place to make sure there is not confusion as to who is in control. It’s a dual verbal response which goes something like this – You have the flight controls – I have the flight controls – You have the flight controls. This process assures someone has the controls and knows it! I’m not sure anyone “has the controls” in Washington.

That’s why a little gold and silver bullion in a safe place is a good idea regardless of relative price. Like always – “buy weakness” makes sense today.      

This from Zaner (Chicago) – “Global equity markets were mixed overnight with the Russian market the biggest loser with a 1% decline and the CSI 300 posting the biggest gain of 1.16%. The Asian session was quiet data-wise. Overnight economic news from Europe was insignificant with French consumer confidence for March matching expectations with a one point improvement over the prior month. French producer prices for February came in up 0.4% which is above the prior month’s result. Also out from the euro zone were Italian business confidence readings for March which came in softer than expectations and softer than the prior month. Italy also released consumer confidence readings for March which fell from the prior reading and were softer than expectations. Even the Swiss contributed negative economic news overnight with the ZEW expectations index for March coming in at a whopping negative of -26.9 compared to a large negative reading in February of -16.6. The North American session will start out with a weekly private survey of mortgage applications. A January reading on the US international trade balance is expected to show a modest increase to the monthly deficit. There will also be readings on the January US goods trade balance and on January Canadian international merchandise trade.

While gold showed some reversal action yesterday it remains just above a failure point on the charts of $1318.60, the market remains within the very uniform March uptrend pattern. Fortunately for the bull camp gold derivative holdings overnight increased to 52.4 million ounces versus 52.3 million ounces in the prior trading session as Russian January gold output was found to have increased by roughly two tons from year ago levels. It should be noted that gold ETF’s manage their fifth straight increase in a row yesterday bringing their net purchases this year up to 1.2 million ounces. Similarly the silver market should derive a very minor benefit from the fact that Russian January silver production fell by 31 tons from the same period last year. The gold market could benefit over time from Indian government moves to establish “a gold board” to regulate spot exchanges, as that is a complete change of stance by the government which several years ago seemed to be working to discourage gold holdings and now might be facilitating gold ownership. In fact the Indian government indicated their goal of the exchanges is to make gold an “asset class”. While the gold market showed some reversal action yesterday, it is premature to suggest that its resiliency from the last four weeks has been lost. However, it would appear that the dollar is capable of tracking higher ahead despite slack US scheduled data, and that has to be discouraging to the bull camp in gold. In other words the dollar seems to have managed to spin soft US data into a positive by the argument that soft data is fostering economic uncertainty flow to the Dollar, but that argument did not result in safe haven buying of gold yesterday! Silver looks more vulnerable than gold over the last 24 hours, but UBS lent some support to silver with an upward revision in its six and twelve-month silver price forecasts. However, a failure to hold above $15.36 today in May silver would shift somewhat bullish charts into bearish charts.

Palladium has severely damaging its charts so far this week and is perhaps headed quickly down to the next key support level of $1455.60. However the platinum market has clearly rejected the weakness in palladium again this morning with a fresh three day high and 3rd straight day of higher highs. It does appear as if the palladium market is possibly seeing some selling interest from headlines touting the potential for “industrial rotation” from palladium to platinum because of the recent differential of $700 between the two metals. In our mind the deterioration of economic sentiment due to a series of soft data points, the apparent setback in trade talks last week and fears toward China has prompted the current correction in palladium. However those pressing the short side of the palladium market should be braced for a sudden reversal/recovery in palladium in the event anything positive flows from the trade talks in China. So far the palladium market has not seen liquidation of open interest, and that suggests to us that the bulls are attempting to “hang on” to their positions. Relatively speaking, the platinum market outperformed palladium yesterday and again this morning, and therefore it is possible that some traders have moved into long platinum/short palladium spread positions because of the technical chart vulnerability in palladium. Uptrend channel support in April platinum today is $859.05, and initial resistance is seen up at $878.20.

While the charts in gold are a bit vulnerable to start today, prices still sit just above a quasi-double low of $1318.60. There is an uptrend channel support line down at $1313.60 and we suspect gold will have a key trend decision in today’s trade! While we are not ready to call for an end to the March uptrend, it is certainly facing a near term challenge.”

Silver closed down $0.12 at $15.25.

Platinum closed down $2.40 at $856.50 and palladium closed down $111.60 at $1424.70.

This is our usual ETF information – All Gold Exchange Traded Funds: Total as of (3/20/2019) was 69,140,771. That number this week (3/27/2019) was 69,382,408 ounces so we gained 241,637 ounces of gold.

The all-time record high for all gold ETF’s was 85,108,867 ounces in 2013. The record high for Gold ETF’s in 2019 was 70,515,544 and the record low for 2019 was 68,726,046.

All Silver Exchange Traded Funds: Total as of (3/20/2019) was 613,487,733. That number this week (3/27/2019) was 612,285,841 ounces so we dropped 1,202,892 ounces of silver.

All Platinum Exchange Traded Funds: Total as of (3/20/2019) was 2,615,928. That number this week (3/27/2019) was 2,791,173 ounces so we gained 175,245 ounces of platinum.

All Palladium Exchange Traded Funds: Total as of (3/20/2019) was 780,535. That number this week (3/27/2019) was 780,201 ounces so we dropped 334 ounces of palladium.

When buying or selling you will receive an email confirmation. Your email will include a PDF File to confirm your invoice or purchase order and includes forms of payment and bank wire instructions. When doing business please check to see if your current email has been entered into the system correctly and that your computer will accept our email (no spam). Thanks for letting us know when you move or change your email.”

We believe our four flat screens downstairs with live independent pricing are unique in the United States. The walk-in cash trade can see in an instant the current prices of all bullion products and a daily graph illustrates the range of the markets on any given day.

Yes – you can visit the store with cash and walk away with your product. Or you can bring product to the store and walk away with cash. We will also wire funds into your account that same day for a small service fee ($25.00) if you are in a hurry.

In addition to our freshly ground coffee we offer complimentary cold bottled water, Cokes and Snapple. We also provide fresh fruit in a transparent attempt to disguise our regular junk food habits as we sneak down the block for the best donuts in the world (Randy’s). 

Like us on Facebook and follow us on Twitter @CNI_golddealer – have some fun.

We appreciate your friendship and business. Blessings and thanks for reading.            

Disclaimer – The content in this newsletter and on the GoldDealer.com website is provided for informational purposes only and our employees are not registered financial advisors. The precious metals and rare coin market is random and highly volatile so it may not be suitable for some individuals. We suggest before deciding on a course of action that you talk with an independent financial professional. While due care has been exercised in development and dissemination of our web site, the Almost Famous Gold Newsletter, or other promotional material, there is no guarantee of correctness so this corporation and its employees shall be held harmless in all cases. GoldDealer.com (California Numismatic Investments, Inc.) and its employees do not render legal, tax, or investment advice.

Posted on

Gold Settles – Again

Gold Settles – Again

Commentary for Tuesday, March 26, 2019 – Gold closed down $7.60 at $1314.30 today in quiet trading. Looks like a round of profit taking this morning as gold ignored a disappointing consumer confidence number. As far as soft Chinese demand it figures – this market never chases price and once again anything above $1300.00 is looked at with caution by the Asian market.

It does not mean they will not get in – it means they will look carefully for buzz and this market while managing to hold higher ground is not exactly smoking. They expect a profit taking round and are willing to wait for better prices. This sector does however have a generational fascination with gold – it is the only real money and the goal is always to increase their position.

The technical picture still favors the bulls short term – as seen in gold’s 30 day chart. This market bottomed just below $1290.00 and quickly moved through $1320.00.

This sharp move upward got everyone’s attention but the jury is still out as to whether this will turn out to be a real price challenge or simply demonstrate that gold seems stuck in the most recent 60 day price channel between $1280.00 and $1340.00.

The Dollar Index remains in neutral – these past 5 days we have seen one sell-off but it quickly recovered and remains steady around 96.5 – so no help for gold. 

The real bull case for the price of gold still centers on dollar weakness. There are plenty of commentators who claim the dollar is overpriced and sooner or later it will cave to a more realistic value – perhaps something around 80.00 on the index. An old story by now but one that I believe is inevitable given time so count this as a big plus which just has not happened – yet.

The reason this has not happened to date is that world markets have run to the dollar as a safe-haven in times of trouble. Until this habit is discredited gold will struggle against dollar strength.

Crude oil might be helping the price of gold somewhat in that it bottomed in late December around $42.00 and has been steadily higher since closing today around $60.00.

If you are looking for something outside the box which could push gold prices to much higher levels consider the “recession” scenario. Possible but not my favorite given the robust US economy – the idea being that the Fed and the rest of world are heading into a recession and will be forced to lower interest rates to stimulate. This would be a real winner for gold pricing. 

What is interesting about today’s lower close is that the public is not much of a physical seller at these higher levels at least across our counter. There has been some mild selling but I think today’s customer has been in this market for so long a time that most still around are strong holders and are willing to wait until gold breaks higher before making any decisions.

So like I have been saying keep your powder dry and see how these higher gold prices continue to develop. If you don’t have a core position – buy weakness. And consider some diversification into the Big Three – silver, platinum and rhodium – all of which remain cheap historically and look like value buys.        

This from Zaner (Chicago) – “While the gold market has consistently shown resiliency it is posting a bit of corrective action to start today and that weakness does not appear to be associated with currency market influences. Perhaps the gold trade is partially disappointed in news of a decline in Hong Kong net gold exports to mainland China. Apparently Chinese imports from Hong Kong fell by 13.6% in February versus January. However Morgan Stanley suggested overnight that central bank gold buying in the first quarter (thus far) has totaled 126 tons and a four quarter tally at that rate would represent the highest purchase rate since 2015. Seeing June gold reach above $1,325 and post a new high for the month yesterday suggests it can rally off safe haven interest associated with geopolitical developments as well as from increased economic uncertainty. We would also note gold has been able to forge gains despite periodic strength in the dollar and with the Dollar showing minor weakness this morning that should help to shore up support on the charts. While silver will continue to hold onto gold’s coattails, too much deterioration in macroeconomic sentiment and broad-based deflationary action in other commodities could result in silver negatively converging with gold. In the end Federal Reserve members are touting their dovish views through the end of the year, and that should, along with US political fighting, keep the dollar off balance.

The PGM complex is showing signs of classic corrective action after an attempt yesterday to recover off the morning washout. The highlight of the overnight news flow is the fact that platinum ETF holdings reached up to the highest level since the end of July 2014. ETF holdings of platinum reached 2.447 million ounces with the highest holdings of the last 10 years relatively close in at the 2.486 million ounce level. Unfortunately the platinum charts are not definitively supportive with a fair amount of two-sided volatility exhibited since the early March lows. Furthermore weakness in gold and palladium increases resistance in April platinum at the $860 level today. Certainly the overall global economic outlook creates some concern for PGM demand going forward and it goes without saying that the bull camp in the PGM markets need a positive iteration on US/Chinese trade talk headline flow. While the June palladium contract rejected a four day low and managed a bounce into yesterday’s close, the $23 chart damage from last week’s high is significant. However the bull camp in palladium has shown significant resiliency of late and the market has attracted buying interest following corrective action yesterday. Into the low Monday the June contract had corrected $75, which perhaps balanced the charts and tempered forward demand views. However, some chart levels were violated yesterday, and a critical pivot point is seen today at $1538.80. Unlike the palladium chart the platinum chart has shown a less uniform March rally but the correction from last week’s highs should provide some balance and potential respect of the $840 level. In fact given platinum’s ability to recover by $16 from the low yesterday and given its active trading volume over the previous five trading sessions, it is possible that the $850 level has become some form of closer-in value in the April contract.

While gold is showing significant downside work early today traders should remember the markets recent resiliency. However negative Chinese gold import news overnight, a lack of palatable anxiety from equities and modest gains in the dollar gives the bear camp an edge. However in the event that the June dollar index falls back below 95.89 (perhaps because of weak US housing data), that could serve to provide the basis for a near term bottom. Uptrend channel support in June gold comes in at $1311.75, and a logical upside target is seen at $1335. Even the silver market continues to show uniform uptrend-type trade, and some value appears to have been discovered at $15.40. Silver also appears to have quickly squelched a corrective action from last week’s high. The next logical resistance point is seen up at $15.65.”

Silver closed down $0.14 at $15.37. In my opinion this market is still trading at bargain prices and judging by the demand for $1000 face 90% silver bags and Monster Boxes the public agrees.

Platinum closed up $2.40 at $858.90 and palladium closed down $27.50 at $1536.30.  

When buying or selling you will receive an email confirmation. This includes a PDF File to confirm your invoice or purchase order and includes forms of payment and bank wire instructions. When doing business please check to see if your current email has been entered into the new system and that your computer will accept our email (no spam). Thanks for letting us know when you move or change your email.”

We believe our four flat screens downstairs with live independent pricing are unique in the United States. The walk-in cash trade can see in an instant the current prices of all bullion products and a daily graph illustrates the range of the markets on any given day.

Yes – you can visit the store with cash and walk away with your product. Or you can bring product to the store and walk away with cash. We will also wire funds into your account that same day for a small service fee ($25.00) if you are in a hurry.

In addition to our freshly ground coffee we offer complimentary cold bottled water, Cokes and Snapple. We also provide fresh fruit in a transparent attempt to disguise our regular junk food habits as we sneak down the block for the best donuts in the world (Randy’s). 

Like us on Facebook and follow us on Twitter @CNI_golddealer – have some fun.

We appreciate your friendship and business. Blessings and thanks for reading.           

Disclaimer – The content in this newsletter and on the GoldDealer.com website is provided for informational purposes only and our employees are not registered financial advisors. The precious metals and rare coin market is random and highly volatile so it may not be suitable for some individuals. We suggest before deciding on a course of action that you talk with an independent financial professional. While due care has been exercised in development and dissemination of our web site, the Almost Famous Gold Newsletter, or other promotional material, there is no guarantee of correctness so this corporation and its employees shall be held harmless in all cases. GoldDealer.com (California Numismatic Investments, Inc.) and its employees do not render legal, tax, or investment advice.