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Gold Settles Quietly into the Weekend

Gold Settles Quietly into the Weekend

Commentary for Friday, July 19, 2019 – Gold closed down $1.00 today at $1425.10. This past Monday we closed at $1411.40 so on the week we are up $13.70 – not much really considering all the drama. The price action was however worth a close look – on the open gold pushed to a 6 year high towards $1450.00. But could not sustain this upward momentum as paper traders took profits and gold finished about unchanged.

Still on the short-term momentum remains with the bulls as our shiny friend reacts to FOMC lose money comments, and problems between the US and Iran concerning gulf traffic. And this attempt at recent highs came, surprisingly amidst a rising dollar – the Dollar Index moving up a half point (97.00), another plus on gold’s side. 

The fact that prices have moved from $1300.00 through $1450.00 since early January makes this at least a powerful rally and the recent break above $1420.00 may suggest that the consolidation between $1400.00 and $1420.00, in place since mid-June has resolved itself in favor of the bulls.

All the happy news about gold should prompt caution – you know the trader’s admonition – beware of the herd mentality. Also consider that gold is up $80.00 in 30 days – it makes sense that we might be overbought and a round of profit taking is in order.

Still a bull market will climb that “wall of worry” so let’s be optimistic – especially in the longer term as central banks continue to buy gold (a really big overlooked plus) and the world continues to not only print too much fiat paper money but is actually getting ready to double down on a trend which has been in place for more than a decade.

Expect to see a lot of price chop in gold on the shorter term but “gold sentiment” is definitely moving towards optimistic. A few rounds of profit taking will stagger the bigger picture but in the longer run this recent activity could be the early beginning of much higher prices – look for the lost word “inflation” to reenter this conversation for confirmation.    

This from Zaner (Chicago) – “Global equity markets overnight were higher with gains around 1% in many markets. Overnight economic news included Japanese consumer price readings for June which were right on expectations and matched the similar reading last year. Also out from Japan overnight was the all industry activity index for May which came in at +0.3% versus expectations for a decline of 0.2%. From the euro zone German producer prices for June contracted by 0.4% and that reading was moderately weaker than expectations. UK public sector net borrowing for June came in at a much stronger reading than anticipated while euro zone current account readings showed a larger than expected surplus. The North American session will start out with May Canadian retail sales which are expected to have a modest uptick from April’s 0.1% reading. A private survey on July US consumer sentiment is forecast to have a modest uptick from the previous 98.2 reading. St. Louis Fed President Bullard will speak during morning US trading hours while Boston Fed President Rosengren will speak during the afternoon. Earnings announcements will include American Express, Schlumberger, Blackrock, State Street and Kansas City Southern before the Wall Street opening.

While the August gold contract raced to another higher high and pierced the $1450 level overnight, it has fallen back notably from that high in a fashion that could lessen bullish resolve. However the net take away from the Fed news this week has provided the brunt of the buying fuel with more Fed members reiterating the need for action. Furthermore global headlines are carrying the potential for other central bank rate cuts and that has created a very favorable environment for the last trading session of the week. In fact while the dollar is not falling precipitously this morning talk in the marketplace is that the US administration might be poised to allow or even pressure the dollar to bolster its trade stance and or to make American products cheaper to foreign buyers. Another issue coming down in favor of the bull camp are suggestions from a J.P. Morgan asset manager suggesting he was prepared to ride US treasury yields all the way down to zero as zero treasury yields could force even more money into alternatives like gold and silver. In fact there continues to be an avalanche of noted analysts, fund managers and even Australia’s Perth Mint Director projecting higher gold prices ahead. The silver market this morning has once again outperformed the gold market with another new high for the move, a new high for 2019 and the highest price since July 2018. We would also add that silver has managed to hold most of its overnight gains and perhaps most importantly silver fund SLV saw the biggest inflow in over 6 1/2 years earlier this week. Overnight total gold ETF holdings increased to 56.3 million ounces versus 55.9 the previous day. Another factor to consider with respect to silver is London bullion market Association figures pegging the turnover in spot gold each week of $200 billion while the amount of silver changing hands each week is much smaller at $34 billion. In short a smaller amount of money directed at silver might have a larger impact on prices. Certainly gold and silver prices are short-term overbought but a number of bullish fundamental themes are still in place. In fact the net spec and fund long might be building in silver but the most recent spec long of 43,872 contracts is a long way from noted overbought readings around 90,000 contracts.

Divergence within the PGM complex continued yesterday with the platinum market generally remaining in favor and palladium prices remaining under pressure. However the bull camp in palladium might suggest the $1,500 level is showing signs of potentially supporting prices with that level also producing a partial double low this week. With the September palladium contract posting declines of $26 since the last COT positioning report, it is possible that the market could become mostly liquidated if prices punch below the $1,500 level. On the other hand, the platinum market forged another higher high overnight and reached up to the highest level since May 15th and it also held a minimal net spec and fund long positioning last week. The gains in the platinum market yesterday were made more impressive by news from Anglo-American platinum of an increase in quarterly PGM production. It should be noted that total platinum ETF holdings remain near all-time highs with 2.596 million ounces. Current platinum derivative holdings are sitting roughly 111,000 ounces above the old all-time highs posted back in July 2014. Uptrend channel support in October platinum is seen at $843.85 today and resistance was taken out early this morning at $857.50. The bulls have an edge but this week’s low to high rally has been $29 already and it could take positive leadership from gold and silver and evidence of additional ETF inflows to target $874.

The path of least resistance is up in gold, silver and platinum, but we must caution traders of the potential for expanded two-sided volatility given this week’s gains and the large amount of bullish views flooding the headlines. In fact, the focus of the gold market appears to be shifting back and forth between rate cut hopes, the direction of the dollar and renewed expectations for US rates to “go to zero”. On the other hand, unlike gold, the silver market appears to be capable of discounting negative outside market forces (like favorable data) and therefore we can’t rule out a consistent trade above the February high of $16.47. Critical support in September silver is somewhat far down at $16.19 given the expanded ranges this week. Uptrend channel support in August gold today is seen at $1,428.70 with the next resistance level seen at $1,462.00.”

This from Allen Syjora (Kitco) – UBS Upbeat On Gold But Says ‘Caution Remains Warranted’ – UBS is upbeat on gold but nevertheless offers some caution for the short term. The metal hit a fresh six-year high this week on dovish Federal Reserve comments. UBS said that global economic policy uncertainty has increased since the financial crisis, likely a result of shifting politics, growth fears and populism. “Risks to the outlook include trade tensions, Brexit, the U.S. debt ceiling, among other things,” UBS said. “gold tends to do well in this type of environment; we think interest in gold as a diversifier, alternative asset and/or hedge against tail risks has room to extend and will be the key driver for higher gold prices ahead.” Still, UBS said that dovish Fed expectations are already factored into prices, so “some caution remains warranted in our view.” Gold could rally toward $1,485 an ounce if the outcome of a Federal Open Market Committee meeting this month is “sufficiently dovish,” yet could also fall below $1,400 and potentially test $1,380 if the Fed outcome is viewed to be hawkish relative to market expectations. “That said, we see a reasonable possibility that any dip ends up being shallow given the expectation that most market participants would likely view a pullback as an opportunity to build positions.”

This from Isabelle Strauss-Kahn – Central banks return to gold – Central banks bought more gold in 2018 than at any time since the early 1970s – and the trend has continued this year. Isabelle Strauss-Kahn, Member of the Advisory Board of the World Gold Council, former Director of Market Operations at the Banque de France and former Lead Financial Officer at the World Bank, explains why.

In the 1990s, gold was an unloved asset among central banks. Reserve managers lent or sold their gold, particularly in Europe, and the gold price fell to a low of US$250/oz. Years of persistent selling triggered the Central Bank Gold Agreement of 1999, under which signatories agreed to limit collective sales to 400 tonnes per annum, put a cap on gold leasing and take a disciplined approach to gold futures and options.

The Agreement delivered two clear benefits: it helped to stabilise the gold price and increased transparency around central bank gold sales. Today, however, sentiment towards gold has been transformed and gold has regained its status as a valuable and highly regarded reserve asset.

In 2018 alone, central banks bought 651 tonnes of gold, up 74% compared to 2017 and the highest level since 1971. A glance back over the past 20 years highlights some of the key changes in central bank behaviour. First, central banks have rapidly and consistently added to their foreign exchange reserves since the Asian crisis of 1998. Reserves are a crucial element in a country’s armoury, providing protection against both domestic and external shocks and acting as a show of confidence to the outside world. Emerging market economies led the charge in this respect, sending worldwide foreign exchange reserves from around US$3 trillion (tn) in 2000 to approximately US$13tn in 2014. Purchases have plateaued over the past five years but still stand at some US$13tn today.

The dollar is the most widely held reserve asset but, according to International Monetary Fund statistics, gold comes third, accounting for 11% of global reserves. Having been net sellers until 2000, central banks have been net buyers ever since. In 2018 alone, central banks bought 651 tonnes of gold, up 74% compared to 2017 and the highest level since 1971. Over the past decade, central banks have purchased more than 4,300 tonnes of gold, taking their total holdings to around 34,000 tonnes today. The trend has continued in 2019, with net purchases reaching 90 tonnes before the end of the first quarter. Notably too, central bank buying has been geographically diverse. Russia has been the most committed purchaser of gold – acquiring almost 275 tonnes in 2018, the largest amount ever purchased in a single year. China has been consistently adding to its reserves as well, but many other emerging market countries have been accumulating gold over the past year and more, including Hungary, Poland, Egypt, Kazakhstan and India.”

Silver closed unchanged at $16.12.

Platinum closed up $2.20 at $845.90 and palladium closed down $3.60 at $1504.80.

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 and 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: 48 people thought the price of gold would increase next week 41 believe the price of gold will decrease next week and 11 think prices will remain the same.

Precious Metal Closes & Dollar Strength – July 15 – July 19

Gold Settles Quietly into the Weekend

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 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.

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Gold – Breaking Higher or Lower?

Gold – Breaking Higher or Lower?

Commentary for Tuesday, July 16, 2019 (www.golddealer.com) – Gold closed down $2.20 today at $1409.20 in typical summer trading with typical “up and down” chop. Everyone is sweating gold’s technical picture these days – more so than usual because the sustained “back and forth” price action is looked upon as a kind of energy spring which will soon unwind – moving prices higher or lower depending on which faction (bulls or bears) is more successful in this latest shoot out.

Most bulls are citing lower interest rates as the primary reason gold might move higher.

But there is an overlooked option – Wall Street might join this party out of the blue. The DOW faces a similar possible technical unwinding which might result in larger safe haven demand.

For sure this theory is not new and I don’t have anything against stocks but there are many gold enthusiasts who claim that safe-haven demand will explode if the stock market swoons. A large drop in the DOW is not likely in that money is cheap and likely will remain so for the foreseeable future but at least consider this scenario if you are bullish on the metals. 

The technical DOW picture looks very much like a dreaded and bearish triple top. The first top reached in early 2018 around 26750 – the second top reached in 2018 around the same number and the third top which happened in May of this year. And there are two other factors which might encourage this scenario – an unwinding of trade in Europe (not so farfetched these days) and failed trade talks with China – Trump would not blink if he can’t get what he wants. You don’t want to bet the farm here but let’s at least consider that weak stocks is a plus for gold.

Now consider the technical picture in gold pricing. Also still dicey – you have an extended consolidation period which began in late June and is still intact with pricing moving between $1400.00 and $1420.00 – but consider that this higher region is new – gold pricing in early June was $1340.00 so you have to consider possible profit taking.

Will gold break higher or lower? Of course it’s a crap shoot – that is really my point here but during its latest consolidation you could also make this bullish case – we are looking at a rising bottom’s pattern. And, at the risk of information overload – the bearish case using the same technical pattern, traders have made 3 attempts at breaking higher – all failed at $1420.00.

So you have a bunch of powerful yet opposing forces here – any one of which could significantly change the pricing landscape. Good luck as they say, most informed commentary claims we will not have to wait long – in the meantime let’s hope for higher prices.       

This from Zaner (Chicago) – “Global equity markets overnight were mixed with Asian/Pacific rim markets mostly weaker and the rest of the world posting very minimal gains. Overnight economic data included New Zealand consumer prices which matched expectations and gained on prior results. From the euro zone Italian trade balance figures showed a larger surplus with the EU while their global trade balance surplus dramatically expanded. From the UK the claimant count in June came in at 3.2% versus 3.1% in May which in turn resulted in a claimant increase of 38,000 relative to expectations of 22,000. However UK average earnings came in above expectations. From Germany a private ZEW survey of economic sentiment for July showed a worsening with current situation readings within the report also deteriorating. Italy also released consumer prices for June that gained slightly less than expected on month over month and year-over-year comparisons. The euro zone trade balance in May showed a larger surplus than expected while a private euro zone ZEW economic sentiment report for July came in slightly less negative than expected. The North American session will start out with a weekly private survey of same-store sales, followed by June retail sales which are forecast to have a modest downtick from May’s 0.5% reading. The June import price index and June export price index are expected to have moderate downticks from their May readings. June industrial production is forecast to have a modest downtick from May’s 0.4% reading while June capacity utilization is expected to hold steady with May’s 78.1% reading. May business inventories are forecast to have a minimal downtick from April’s 0.5% reading. The July NAHB housing market index is expected to hold steady with June’s 64 reading. The latest Treasury International Capital (TIC) report will be released during afternoon US trading hours and will reflect any changes in Chinese and Japanese Treasury holdings. Fed Governor Bowman and Atlanta Fed President Bostic will speak during morning US trading hours while Fed Chair Powell, Dallas Fed President Kaplan and Chicago Fed President Evans will speak during the afternoon. Earnings announcements will include J.P. Morgan, Johnston & Johnston, Wells Fargo, Goldman Sachs and Prologis before the Wall Street opening while CSX reports after the close.

August gold continues to coil tightly in a formation that would seem to point to a breakout and a fresh trend signal ahead. Surprisingly gold is tracking higher early today in the face of news that Venezuela has been able to orchestrate 24 tons of gold sales to the United Arab Emirates and Turkey since the beginning of April. It is also somewhat impressive that gold has been able to track in positive ground this morning in the face of a hook up trade in the dollar on its charts. However the bull camp remains hopeful that today’s US retail sales report will be anemic and that will rekindle rate cut orientated buying again. Estimates for this morning’s US retail sales report call for a 0.1% gain compared to 0.5% last month. However those looking for potential guidance on a US rate cut “dot plot” should realize industrial production and capacity utilization figures will also be seen later today. In a bearish signal from yesterday, gold prices did not seem to benefit at all from news that Indian gold imports in June rose 13.2% as that suggests the market is not currently focused on bullish classic demand issues. Some traders think that favorable Chinese retail sales news earlier this week provided safe haven liquidation pressure to gold prices yesterday, but the scheduled data from China overall was somewhat offsetting with Chinese GDP readings some of the slowest growth in 27 years. Going forward we are concerned with the net spec and fund long in gold as the market has been holding close to the largest net spec long positioning since September 2016. While a Canadian bank raised its gold price targeting to $1,500 next year yesterday, it should be noted that the rally off last week’s low has been forged on declining trading volume and nearly flat open interest.

The divergence between platinum and palladium continues with the platinum market seemingly the current leadership market. So far word on the status of South African wage discussions has been virtually nonexistent in the headlines but reports that Amplats sees profits tripling due to a combination of favorable pricing and high stock holdings could be shaped into a positive as unions seeking a 48% wage increase could become unyielding in their wages requests because of the strong financial standing of at least one mining company. However Anglo-American platinum is also projecting an increase in first half earnings and that could also embolden union demands for higher wages. It should also be noted that the platinum market is probably benefiting from a favorable weekend article in Barron’s magazine suggesting it was platinum’s “turn” to lead the PGM markets higher. It should be noted that platinum yesterday closed above its 200 day moving average which comes in today at $842.20 but unfortunately platinum has seen softening trading volume on the last two weeks rally. Unfortunately for palladium traders the market has lost definitive direction for 10 trading sessions and has seen a decline in both open interest and trading volume in a fashion that would seem to favor the bear camp. Uptrend channel support in September palladium is raised to $1,542.60.

While the August gold contract continues to coil on its charts, the bull camp is holding out hope for an increase in economic uncertainty today following US retail sales figures. In fact, the dollar index has shown recovery action this morning and a soft retail sales reading might be needed just to keep the currency impact on gold and silver from becoming definitively more bearish. Uptrend channel support in August gold is seen today at $1,407.55 with very significant support/failure pricing seen at $1,397.90. As long as the lower high pattern remains in place, we think gold is vulnerable.”

Silver closed up $0.31 at $15.60. This jump in price is unexpected – still the rank and file continues to buy this market and there is a weird kind of optimism here based on the obvious fact that silver is cheap relative to even recent highs.

Platinum closed up $2.00 at $841.50 and palladium closed down $46.60 at $1512.80.

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 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 Reasonably Firm – For Now

Gold Reasonably Firm – For Now

Commentary for Friday, July 12, 2019 (www.golddealer.com) – Gold closed up $5.60 today at $1409.90. We closed Monday at $1397.00 so while the week offered a few surprises gold’s close today represented a rather modest gain of $12.00. It’s the surprise up a further $6.00 in the aftermarket that is worth noting going into next week’s trade. 

The overnight price of gold in Hong Kong and London was flat and the domestic market sold off a few dollars on the open but recovered quickly moving though $1409.00 before turning choppy on either side of unchanged.

This “buying the dip” in the price of gold is what the bulls want to see as the bears test recent support above $1400.00. This technical picture in my mind however remains tenuous short term – but supportive in the longer term.

The Federal Reserve is not going to change its dovish mind anytime soon – especially with pressure from President Trump to lower interest rates and troubles still developing in the European markets and the Middle East.     

While gold has recently seen a tight pricing range – something between $1390.00 and $1420.00 since late June – this market has since received a lot of clarification relative to shorter term interest rates – and that news supports the bullish scenario.

Still traders and the public are over-focused on day to day pricing and frankly neither the bulls nor the bears have much conviction – so I expect this to turn into a slug fest – both sides changing their minds on a dime.

And completely discounting the Trump/China/Mexico/EU tariff issues is a mistake. This remains a sleeping giant game changer. The reason it does not get much respect at the present is that there are a lot of misconceptions about tariffs.

It’s a common belief for example that if Trump levies tariffs against China that these will hurt the Chinese economy which is marginally true – but the real people who are hurt are the working folks of the levying country. A tariff is another hidden tax levied against workers of the issuing country – in this case the United States.

So do tariffs help or hurt the gold trade? They can help the gold trade only because they increase international tension and help encourage safe haven buying. So when Trump recently threated tariffs against Mexico – the world feared the resultant heat and reacted to the threat by using gold bullion as a hedge against an uncertain economic future.    

So as the international political sands shift expect the gold scenario to gain and lose momentum. And the trading range for gold to widen – something between $1340.00 and $1420.00.

Use the dips to add to your position if you are so inclined. If you still can’t make up your mind it’s probably a mistake to fixate on “cheaper prices” – look instead for that break above $1420.00. This will be the technical signal that something much larger is in the making – everything in between is simply the “huffing and puffing” of a rather large trading wolf.    

This from (Zaner) “Global equity markets were mixed in the early going with US stock measures showing some new all-time highs. Overnight Chinese trade balance figures for June saw a larger trade surplus but exports and imports were softer than expected. Inflation readings from the euro zone for June were on expectations with European industrial production in May coming in much stronger-than-expected on a month over month basis.

The North American session will be highlighted by the June producer price index which is forecast to have a modest downtick from May’s 1.8% year-over-year reading. The June core producer price index (ex food and energy) is expected to have a minimal downtick from May’s 2.3% year-over-year rate. Earnings announcements will include Infosys before the Wall Street open.

While the initial range up action in gold yesterday rekindled bullish optimism the disjointed two-sided volatility this week and the extension of the lower high a pattern from the June high leaves the bear camp with a slight technical edge. Gold was obviously undermined as a result of yesterday’s scheduled data as that data seemed to shift the needle slightly away from the dovish track entrenched from the first day of Fed testimony earlier this week. It would appear as if trade dialogue will end the week supportive of gold as the President has indicated China is not buying US agricultural products as requested when the next wave of tariffs were put on hold. The gold market also looks to get support from weakness in the dollar but the trend in the dollar could be set this morning following the PPI report as the CPI report yesterday provided a bit of inflation psychology. Another potential supportive force for gold into the end of the trading week is the fact that investors continue to push money into gold ETF’s. In fact ETF’s added 20,334 ounces yesterday to bring this year’s total purchases to 3.27 million ounces. Even silver saw positive investment inflow with a fourth straight day of inflows bringing this year’s net ETF purchases to 26.1 million ounces. It is also possible that gold will garner some buying interest from news that the London bullion market Association is requesting a new Basel liquidity rule to allow banks to trade more gold. In the end, it is clear that the gold bulls need soft PPI data to extend the initial rally straight away.

Apparently a portion of the trade took Goldman Sachs recommendations to take profits in palladium seriously, as the market ranged up above $1,600 and then fell back precipitously as if a top had been put in place. As of this writing, there has not been definitive news flow regarding the wage negotiations in South Africa, but news from that front might be expected before the close of business in South Africa today. While the palladium market has shown the capacity to maintain a uniform uptrend pattern on its charts, the last two days rally and reversal was forged on a noticeable expansion of volume and that could set the stage for a setback to support at $1,542.30.

While the gold market appears to have a slightly positive bias to start today the charts favor the bear tilt with this week’s rally seemingly hard-fought and potentially difficult to sustain. However the geopolitical front looks to be supportive as US/Chinese trade relations are heating up again following complaints from the US President that China was not purchasing enough US agricultural commodities. On the other hand the market trend today is likely to be set by the PPI report which is expected to be unchanged and that could provide a slight bid for gold. We see support at $1402.40 and a more significant support and a failure level at $1391.80. In order to shift the bias firmly to the upside probably requires a PPI report inspired rally above $1420.”

Silver closed up $0.09 at $15.16. Funny physical day today – both big buyers and sellers.

Platinum closed up $3.40 at $828.40 and palladium closed down $16.70 at $1538.90.

This is our usual ETF information – Gold Exchange Traded Funds: Total as of (6/26/2019) was 71,711,020. That number this week (7/10/2019) was 70,735,668 ounces so we dropped 975,352 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 70,971,710 and the record low for 2019 was 67,430,173

Silver Exchange Traded Funds: Total as of (6/26/2019) was 620,168,492. That number this week (7/10/2019) was 638,357,027 ounces so we gained 18,188,535 ounces of silver.

Platinum Exchange Traded Funds: Total as of (6/26/2019) was 2,828,826. That number this week (7/10/2019) was 2,919,087 ounces so we gained 90,261 ounces of platinum.

Palladium Exchange Traded Funds: Total as of (6/26/2019) was 664,029. That number this week (7/10/2019) was 642,399 ounces so we dropped 21,630 ounces of palladium.

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 and no one thinks 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: 60 people thought the price of gold would increase next week 25 believe the price of gold will decrease next week and 15 think prices will remain the same.

Precious Metal Closes & Dollar Strength – July 8 – July 12

Gold Reasonably Firm – For Now

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 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 Closes Virtually Unchanged

Gold Closes Virtually Unchanged

Commentary for Tuesday, July 9, 2019 – Gold closed up $0.50 today in quiet trading at $1397.50. It traded choppy overnight in Hong Kong and London and moved on both sides of unchanged in the domestic trade. Not too exciting as this market continues to sort out cross currents from the bulls and bears. Everyone is keen to read into the comments being made by Fed boss Jerome Powell but most expect a dovish statement from the FOMC.

Trump has already accused him of doing a “bad job” which means simply that the FOMC is not dovish enough. The President wants to see an interest rate cut – the sooner the better.

The next significant FOMC meeting will be held on September 17th and 18th and no one would be surprised at this point if the Fed cut rates a quarter point – to test the waters.

This from the World Gold Council – Gold-backed ETF AUM grew 15% in June, its largest monthly increase in seven years – “Holdings in global gold-backed ETFs and similar products rose sharply in June by 127 tonnes (t) to 2,548t – equivalent to US$5.5bn in inflows – as geopolitical uncertainty increased and central banks signalled a shift to a more accommodative policy over the coming months. This drove rates and the US dollar lower and shifted the momentum in gold as its price moved to a six-year high.”

While this information is encouraging keep in mind you are looking over your shoulder – meaning that these numbers are for June. Gold momentum remains a moving target and in some cases is simply the result of “hot” money looking for short term profits – in other words gold might be very interesting in June and yesterday’s newspaper in July.

Today that momentum has obviously stalled but there are enough moving parts to this price dynamic that you could see higher gold prices – depending on dollar strength and what the FOMC might have in mind this September.

Some are claiming gold may challenge $1500.00 but this assumes interest rates will soon move lower. The FOMC could just as easily leave rates unchanged this time around and wait until their last significant meeting – held December 10th and 11th before making up their mind.     

This from Zaner (Chicago) – “Global equity markets overnight remained under pressure with declines usually less than 0.5%. Overnight Swiss unemployment for June ticked down to 2.3% from 2.4%. From Japan machinery tool orders for June came in at -38% versus another massive decline in the prior month of 27%. Italian retail sales for May were also released and declined by 0.7% off estimates for a gain of 0.7%. The North American session will start out with a weekly private survey of same-store sales and a monthly private survey of small business optimism. The May job openings and labor turnover (JOLTS) survey is expected to have a minimal increase from April’s 7.449 million reading. Fed Chair Powell and St. Louis Fed President Bullard will speak during morning US trading hours while Atlanta Fed President Bostic and Fed Vice-Chair Quarles will speak during the afternoon. Earnings announcements will include Pepsico before the Wall Street opening while Levi Strauss report after the close.

We see August gold to be vulnerable to a downside breakout below critical support at $1384.70 with the dollar breaking out up early and the market seemingly expecting this week’s Fed testimony to present less dovish prospects for the month end meeting. However the market should garner some support from news that hedge fund managers increased their net holdings of gold derivative to the highest levels in 21 months. On the other hand the net spec and fund long positioning in gold futures and options has also reached the highest level since September 2016 and that could leave the market vulnerable to moderately aggressive stop loss selling if chart support levels are violated this morning. Gold positioning in the Commitments of Traders for the week ending July 2nd showed Managed Money traders were net long 241,163 contracts after increasing their already long position by 11,499 contracts. Non-Commercial & Non-Reportable traders are net long 324,758 contracts after net buying 21,849 contracts. Certainly a pattern of central bank buying is a longer-term underpin for gold but in the short term the ebb and flow of US rate cut expectations are likely to dominate. Therefore today’s sweep of scheduled data (most specifically the job openings report for May) will take on added importance with the report expected to show a slight notch higher. We see a $1350 August trade before we see a $1425 August gold trade. Silver ETF holdings increased by 2.03 million ounces yesterday, bringing this year’s total purchases to 19.7 million ounces. Fortunately for the bull camp in silver the net spec and fund long is in the lower half of the last two years positioning range and therefore a silver liquidation brought on by gold might be less severe. Silver positioning in the Commitments of Traders for the week ending July 2nd showed Managed Money traders reduced their net long position by 1,710 contracts to a net long 21,762 contracts. Non-Commercial & Non-Reportable traders are net long 50,992 contracts after net selling 2,153 contracts.

Overnight press coverage on palladium conflicts with the early soft price action. In other words glowing projections for significantly higher palladium prices ahead have failed to cushion prices against what appears to be a liquidation bias. In fact one might have expected palladium to have extended its June rally significantly in the face of this week’s South African wage talk kickoff especially given news that fund managers expect palladium to continue to be the “hottest precious metal”. In fact overnight press coverage predicts more record highs in palladium prices in the event that a strike results from this week’s talks. According to Bloomberg palladium mined in South Africa represents about 40% of all auto catalyst supply. The main union in South Africa the AMCU kicks off talks with Anglo American platinum LTD today followed by talks with Impala platinum Holdings LTD on Wednesday and then with Sibanye Gold Ltd on Thursday. While the palladium market has shown significant resiliency over the past 40 trading sessions chart action this morning favors the bear camp and the potential for spillover selling from gold should not be discounted. Soft global demand is likely to continue to plague platinum especially following news from Impala that their production over the past 12 months rose by 4% from the previous year. The Commitments of Traders report for the week ending July 2nd showed Palladium Managed Money traders added 1,198 contracts to their already long position and are now net long 12,594. Non-Commercial & Non-Reportable traders are net long 11,924 contracts after net buying 1,344 contracts. Platinum positioning in the Commitments of Traders for the week ending July 2nd showed Managed Money traders are net short 15,418 contracts after net buying 8,061 contracts. Non-Commercial & Non-Reportable traders added 6,470 contracts to their already long position and are now net long 17,386.

While gold and silver were able to put some brakes on their recent pullbacks, they remain vulnerable to further downside price action during today’s trading. With the latest upside breakout in the dollar and vulnerable charts this morning we think the path of least resistance is pointing down and the inability to hold above $1384.70 in August gold could set the stage for a decline below $1375. However gold could be saved in the event that this morning’s US scheduled data comes in softer than expected as that could shift the pendulum back toward a rate cut at the end of the month. Unfortunately today’s US scheduled data is mostly third tier data and might not have an impact unless the results are surprisingly weak. We would also note the net spec and fund long in gold of 324,758 contracts increases the potential of aggressive stop loss selling if it gets underway. Near-term resistance for August gold is at $1,405 with support down at $1,394. Near-term resistance for September silver is at $15.15. Aggressive traders may consider selling August gold on a rally back to $1,395.10 with an objective of a sub-$1,375 trade. Conservative traders may consider purchasing August gold bear put spreads like the $1,400/$1,375 combination.”

Silver closed up $0.10 at $15.07.

Platinum closed down $5.20 at $809.10 and palladium closed down $17.90 at $1534.60. 

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 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 Closes Firm – Again

Gold Closes Firm – Again

Commentary for Wednesday, July 3, 2019 – Gold closed up $13.10 – off its highs on the day but still solidly in the green at $1417.70. The theory being that gold spiked higher after ADP payroll numbers disappointed suggesting that the FOMC is more likely to lower interest rates in an effort to jump start our sputtering economic recovery.

I don’t get the “sputtering” part – the US economy is not in danger of recession. There are new job openings and a shortage of qualified workers while wages grow for those already employed.

President Trump is already stirring the FOMC pot with two new nominations – both dovish and accusing Jerome Powell of doing a “bad job” according to Reuters. Trump wants lower interest rates so he can better compete with China. And the Europeans are on the same page looking to replace Mario Draghi with someone even move dovish if that is possible. This new dovish “trend” in central bank thinking will be one of the primary drivers of higher gold for now and remember that the European’s have no problem using negative interest rates!

Still if you look at the 5 year gold chart – this market looks overbought to me. But gold’s recent price action is encouraging as weakness is overcome by bargain hunting.

I don’t see the US market on board yet but the “big three” central banks buying gold are China, Russia and India which is not surprising.

So does gold have to hold above $1400.00 to support this most recent rally?

Surprisingly – the answer may be no. Typical price chop in this “no-man’s land” above $1400.00 demonstrates that at these higher levels there is support. And this support could easily grow – as interest rates trend lower.

Tariff threats by President Trump and problems with Iran will help this “higher gold” scenario but I think these are transitory. It remains to be seen whether gold is “breaking out” or just “waking up”. But do not discount the notion that a new bullish dynamic is now in place.

Gold seems to be working to break above that “back and forth” base which has been in place since 2013 – this because uncertainty continues to grow. But like I have said before there is a lot of “blue sky” between $1400.00 and $1600.00. Meaning that finding a new footing in this region will be difficult and at times both the bulls and bears will claim the high ground. 

Gold will have to prove itself at these higher numbers before everyone joins the party. For now, I’m encouraged that we are looking at a gold bullion market which has wider appeal than was considered possible just a few months ago.        

We will be closed this Thursday and Friday for Independence Day. The domestic market will be closed Thursday but open Friday, normal hours – Globex will close early. And while the 4th is obviously an American holiday I think not much will be happening through this coming weekend – Europe will also go home early so look for some “peace and quiet”.        

This from Zaner (Chicago) – “Global equity markets overnight were mixed with Asian stocks lower and the rest of the world trading in positive territory. In what could be yet another trade battle front, the US announced it would impose duties on steel imports from Vietnam. Overnight the Chinese released a services PMI report for June that came in below expectations and below the prior month. Europe also saw a flurry of services PMI readings with Spain, Italy Germany and the overall Euro zone showing better than expected results. However French services PMI came in softer than expected, but above the prior months’ results. The UK also posted services PMI readings for June which came in softer than expected and softer than the prior month. The North American session will start out with a weekly private survey of mortgage applications, followed by the June Challenger job cuts survey. The June ADP employment survey is expected to have a sizable increase from May’s 27,000 reading. A weekly reading on initial jobless claims is forecast to have a modest downtick from the previous 227,000 reading. Ongoing jobless claims are expected to have a modest downtick from the previous 1.688 million reading. The May international trade balance is forecast to have a moderate increase from April’s $50.8 billion monthly deficit. May Canadian international merchandise trade is expected to have a modest increase from April’s monthly deficit. The June Markit US services PMI and June Markit US composite PMI are forecast to have modest downticks from their May readings. May factory orders are expected to have a modest uptick from April’s -0.8% reading. The June ISM non-manufacturing index is forecast to have a moderate decline from May’s 56.9 reading.

The gold market jumped sharply higher overnight extending yesterday’s surprise range up move and seemingly setting the stage for a retest of contract highs up at $1442.90. While press coverage overnight indicated the reason behind the rally was expanded hopes of easier money ahead, it is also possible that signs of yet another trade dispute (this time the US versus Vietnam because of steel infractions) increases the uncertainty in the world economy which in turn enhances gold holdings. Apparently the US commerce Department imposed duties of more than 400% on steel imports from Vietnam which means the US has ratcheted up trade tensions with both Europe and Vietnam this week. Gold is also probably feeding higher off news that President Trump has selected two Fed nominees who are generally seen as doves. Another lift for gold came from news that Indian June gold imports rose by 12.6% versus year ago levels and that news is accentuated further by Indian efforts to foster gold holdings in forms beyond physical. In fact the Times of India has touted holding gold on paper through gold bonds and or mutual funds that trade gold. Limiting the gold market this morning are efforts in Russia to increase gold exports, a decline in SPDR gold holdings yesterday and the dollar action which remains near nine day highs.

The upward grind in the palladium market continues today with gains this week very uniform and open interest continuing to climb along with prices. While other markets rekindled some doubt on progress in US/Chinese trade talks, the palladium market seems to be unconcerned with the ebb and flow of trade issues. In fact palladium has rallied overnight in the face of US duties on Vietnam steel and promises of counter tariffs on US goods destined for Europe. In fact, the palladium market also wasn’t concerned about further softening of US vehicle sales. Uptrend channel support in September palladium increases to $1,538.75 today and an upside target remains the March 21st high up at $1,563.70. The outlook for the platinum market is probably set to improve given the start of wage talks next week between unions and the 3 largest mining companies. Initial wage requests from the unions called for a 48% increase in wages which the companies say will result in job losses and shaft closures. However, with the platinum market failing to hold above the 200 day moving average for the third trading session in a row and trading below that average early this morning we see that level ($842.80) as initial resistance. The platinum market was probably undermined as a result of poor US vehicle sales yesterday and softer Chinese Services PMI readings overnight. Furthermore with the palladium market into the high on Monday $56 above the June lows the market was technically overbought. It should also be noted that platinum managed the recent rally with significant declines in both open interest and trading volume. Therefore, the path of least resistance in platinum is down and a trade back into the late June consolidation pattern is likely directly ahead.

The gold market seems to be fully embracing the prospect of a series of global interest rate cuts. In addition to an extending global pattern of soft manufacturing data the trade also sees the potential for a more dovish composition of the US Federal Reserve through presidential appointments. It is also likely that traders expect economic uncertainty to rise given the negative track of US/European and US/Vietnam trade developments and therefore gold has come into vogue from several angles. However a noted jump in Indian gold demand the last month adds a classic fundamental demand element to the bull’s case. We see support from a series of closes in the late June consolidation pattern around $1415.40 with an upside objective from the last 10 days trading range counting up to $1492.”

Silver closed up $0.10 at $15.25.

Platinum closed up $10.00 at $837.20 and palladium closed up $12.60 at $1559.80. 

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 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 Surprises to the Upside

Gold Surprises to the Upside

Commentary for Tuesday, July 2, 2019 – Gold closed up $19.00 today at $1404.60 – really out of nowhere – but enough “up” to refocus this market. And the icing on the cake came in the aftermarket – up another $45.00! To be honest I don’t know what to say at this point, but this latest bang in gold is in place without seeing the dollar fade – the Dollar Index being steady around 96.7 and that is impressive.

If you buy the current rhetoric over the gold coffee pot crowd you would be led to believe that the big Sunday/Monday drop of $24.00 was the result of traders seeing the G-20 meeting as dovish. Trump and China are now pals and any problems which may have raised their ugly head in the past are now forgiven and forgotten. Or not – look at that aftermarket number again – perhaps things are not as rosy as projected. 

And I always wonder about large drops in the price of gold like we saw earlier in the week – especially over a weekend and before our domestic market opens.

You might call me a Doubting Thomas here – guilty of pessimistic thinking especially when the following day (today) gold miraculously bounces higher and the trade claims that this latest pop to the upside is the result of bulls buying the dip.

I guess in the end it really does not matter much – gold is once again back above $1400.00 and the bulls are presenting a positive technical picture.

Whether someone in Hong Kong just decided that selling a bunch of paper gold in a thin market was a way to test weak hands will have to go unchallenged especially in light of today’s surge to the upside. But I wonder how much these large trades influence prices in a market which everyone knows is at best choppy and volatile – in both directions.   

Time will tell if gold remains solid above $1400.00. In other words we are still dealing with the reality of a market which has moved much higher in a short period of time. It remains to be seen if traders will continue to liquidate long positions and take profits – or again double down looking for continued deterioration – especially as Trump is now threatening the EU with tariffs and telling Iran he is just getting warmed up – so much for my under the table negotiation idea.

Still the bigger question remains – what will the dollar do and how will the price of gold react to a world that is more and more committed to plenty of cheap money.

No one seems to be concerned that the FOMC has reversed its long standing position that the US economic growth miracle would normally usher in higher interest rates.

Wall Street is now drunk – touting even higher numbers and more corporate profits.

If the old paradigm still holds water – recent growth should introduce monetary restraint. Lower interest rates have created new business and expansion but now it’s time to consider how we are going to pay back all the money. In reality – CNBC seems to be saying that “full speed ahead” makes sense and don’t miss the economic boat of goodies coming your way. I know this sounds crazy but our leaders both politically and financially should at least be on the same page.

Our across the counter sales are just as mixed up – they are hot, cold, hot and cold. I’m not kidding – the daily bullish/bearish joke in inventory control changes with the wind and general persuasion pushed by how the press spins the latest out of the White House. This really suggests that the public remains fixed on the short-term.

At this point I would be content to see a typically choppy market trying to settle itself. Just where the price of gold will get comfortable will sort itself out in short order. I’m hoping for some kind of middle ground which will continue to encourage the physical players and allow enough time for the dollar to unwind. Then you will see consistently higher gold prices and a real physical market moving back into the accumulation phase.

Discount recent news that US Mint gold eagle sales are in a slump – they are from a numbers standpoint – but keep in mind that this market has seen a lot of sellers. And premiums have not collapsed – which is a good sign. US Mint sales will pick up, perhaps dramatically when this market decides “up” is really “up” – if you know what I mean.

We will be closed this Thursday and Friday for Independence Day. The domestic market will be closed Thursday but open Friday, normal hours – Globex will close early. And while the 4th is obviously an American holiday I think not much will be happening through this coming weekend – Europe will also go home early. But keep your powder dry, if someone decides to place a fat thumb on the scale while our domestic market is closed it could re-refocus everyone.        

This from Zaner (Chicago) – “Obviously the gold market is under a liquidation rout because of the decision to restart US/Chinese trade talks over the weekend. Adding into the liquidation pressure is the fact that the dollar has forged a six day high and saw a lot of its mid-June selling off fears that the trade issue would pull down the US economy. Another element feeding into the liquidation action and could accentuate the selling directly ahead is the fact that the most recent positioning report showed an extensively overbought market. The most recent positioning report in gold showed a net long of 302,000 contracts which effectively puts the spec long at the highest level since the third quarter of 2016! It should also be noted that open interest in gold reached 321,953 contracts, and the violent new high for the move reversal on June 25th saw trading volume of 577,605 contracts in what now appears to be a blow off top. Therefore, the market is vulnerable to more classic stop loss selling particularly if it appears that the August contract is poised to close below the psychological retracement level at $1,383. While we doubt the President’s visit to the Korean demilitarized zone is a major cause to extract safe haven premium from gold, the situation might push some additional longs to the sidelines early this week. The Commitments of Traders report for the week ending June 25th showed Gold Managed Money traders added 39,983 contracts to their already long position and are now net long 229,664. Non-Commercial & Non-Reportable traders added 47,311 contracts to their already long position and are now net long 302,909. Unlike the gold market, the net spec and fund long in silver is minimal and therefore silver might not be facing as much stop loss selling pressure. On the other hand, the 200 day moving average in September silver was temporarily violated overnight and that average will be a critical pivot point today at $15.20. The Commitments of Traders report for the week ending June 25th showed Silver Managed Money traders added 18,724 contracts to their already long position and are now net long 23,472. Non-Commercial & Non-Reportable traders net bought 18,981 contracts and are now net long 53,145 contracts.

The palladium market impressed the trade last Friday with a massive $47 trading range at the end of last week. The market also appears to have forged a value zone with a series of lows around $1,508.60. On the other hand, open interest rose consistently throughout the month of June and some see that as a sign that a lot of buying fuel has been expended. However, the palladium market does not appear to be overbought from classic spec and fund long readings in the COT report as the net long remains at one-third of the record level. While palladium has not seen a tight rational correlation with the ebb and flow of Chinese economic prospects, the delay in tariffs should be a supportive element for palladium. Palladium positioning in the Commitments of Traders for the week ending June 25th showed Managed Money traders net bought 386 contracts and are now net long 11,396 contracts. Non-Commercial & Non-Reportable traders were net long 10,580 contracts after increasing their already long position by 67 contracts. The platinum market surprised the trade with a massive range up extension Friday and at times surpassed its 200 day moving average at $837.30. Therefore, the market starts out the new trading week with an edge and a spec and fund long positioning that is only one-sixth of its all-time record high. The June 25th Commitments of Traders report showed Platinum Managed Money traders added 2,420 contracts to their already short position and are now net short 23,479. Non-Commercial & Non-Reportable traders were net long 10,916 contracts after increasing their already long position by 107 contracts.

Clearly the gold market is facing a corrective track as the easing talk from the G20 meeting appears to have been less than significant and there was clearly a downtick in trade tensions between the US and China. Recently the dollar has been pressured as a result of fears that its trade battles would dramatically slow its economy and a tempering of those fears have the dollar rising this morning back above the critical 96.00 level and into the position of turning up the currency selling pressure on gold. Given gold’s history, it can see violent corrective action especially given exploding open interest and a large spec long. A 50% retracement of the high to low rally in June allows for a decline down to $1,383.25 without altering the trend, and yet another retracement point is seen down at $1,373.25.”

This from Allen Sykora (Kitco) – INTL FCStone: Gold To Hold In Higher Range during July – “Gold surged during June and likely will remain in a higher trading range during July, although the metal may not see the same explosiveness as last month, said INTL FCStone in a monthly commodities outlook. Much of the metal’s jump last month came from dovishness from the Federal Reserve, along with a decline in the U.S. dollar and Treasury yields, INTL FCStone noted. “We expect gold to trade in a higher range during July, but it will likely not see as dramatic a surge as we saw in June,” INTL FCStone said. “The recent trade accord has already had a negative impact, knocking gold back below the $1,400 mark, but we expect prices to regroup and test the June highs, with a $1,350-$1,450 range likely being in store for us. Silver and platinum – not pulled higher by the gold in June – could do a little better this month as some fund money could rotate into both these relative laggards.”

Silver closed up $0.04 at $15.15. Steady public buying here – not dramatic but steady. 

Platinum closed down $3.90 at $827.20 and palladium closed up $8.10 at $1547.20.

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 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 Steady – Watching the G-20

Gold Steady – Watching the G-20

Commentary for Friday, June 28, 2019 (www.golddealer.com) – Gold closed almost unchanged today up $1.30 at $1409.70. I think everyone is too focused on the outcome of the G-20 – it is important because it’s large. This Group of Twenty is an international forum of governments and central banks which include the European Union. There are a lot of moving parts. With that many different points of view and that many super-egos all in one place the chances of getting out the “bubbly” to celebrate progress is not good.

If Trump and the Chinese can’t get along the best they can do is promise a better tomorrow – and Trump has no problem with more tariffs if he does not get concessions – so what do you think will happen? The outcome will support gold prices. And the building angst is not the primary reason the future is looking up for gold. The European’s are not raising interest rates and most believe there is already one US rate cut baked into our cake by year end.

Gold was firm overnight in Hong Kong – it opened steady in domestic trade and then sold off testing $1406.00 before reversing just as quickly and moving back to unchanged and then up a few bucks. This pattern is typical in that the paper trade is back to testing “weak hands”.

It’s too soon to say this market is simply “consolidating” – so let’s look at the 30 day picture. This past month gold moved from $1280.00 through $1420.00 and then took a breather which figures. This $1400.00 top goes back to the summer of 2013 and there is nothing but blue sky between $1400.00 and $1600.00. Still some traders remain optimistic and shorting gold these days might turn out to be something like standing in front of a train.

The professional trade, for now is content with watching this market sort itself out. 

Most bullion products remain cheap (still plenty of sellers) but premiums on US Gold Eagles are moving higher. You might want to consider that the Europeans are paying more for this product but that is just speculation – although this has happened in the past (Germany).

At any rate I would describe the US market as surely “waking up” but still not totally convinced this latest rally is the “big deal” most were expecting. Don’t get me wrong, the latest rise in gold could well be predicting something unexpected – perhaps right around the corner.

This idea of gold bullion being the financial “canary in the coal mine” used to be accepted as gospel. But today there are so many derivative trades, sophisticated computer driven schemes and central banks fiddling with the numbers that it is hard to say who is holding the best hand.

The US dollar is a good example – today the Dollar Index is choppy around 96.00, the monthly chart trending down from 97.5 so generally supporting higher gold prices. Look at the index 10 years ago and a number around 75.00 made sense. So you could make a decent case that in the longer term, especially with interest rates trending lower that the index could easily drop 20%. And this would still remain within its historical norm. The consequences of such a drop are obvious – gold would make new highs and the physical market would go crazy. 

I don’t think you will have long to wait for gold to sort out the shorter term question. Whether this latest move above $1400.00 is just a flash in the pan or something more promising – the reason being that the international stakes could not be higher and Trump is not afraid to push the envelope. Let’s hope all this works out but if the central banks of the world have been buying gold for financial protection I think following their lead makes sense for the rank and file.    

This from Zaner (Chicago) – “Global equity markets overnight were mixed with Asian and Pacific Rim stocks weaker, European and US stocks showing minimal gains. Economic data released overnight included Japanese housing starts for May which were down by very significant 8.7%. Japanese construction orders were also off very sharply with a decline of 16.9%. From Germany import prices contracted but not as much as expected, French producer prices came in much weaker than expected while French consumer price index readings were a touch stronger than expected on a month over month basis. French consumer spending came in at 0.4% to beat expectations and the Spanish GDP for the first quarter on a year-over-year basis managed to match the previous reading. Also out from Spain overnight were retail sales figures for May which came in much stronger than expected with a 2.4% gain. Swiss KOF leading indicators for June came in below expectations and below the prior month. Other data points overnight had UK GDP matching previous readings of 0.5%, UK total business investment came in softer than expected with Italian prices coming in stronger than expected in a number of measures. Finally to complete the early overnight data flow euro zone consumer prices in June came in at 1.2% matching expectations and the previous month. The North American session will start out with May personal income which is expected to have a modest downtick from April’s 0.5% reading. May personal spending is forecast to have a minimal uptick from April’s 0.3% reading. April Canadian GDP is expected to have a moderate decline from March’s 0.5% reading. The June Chicago PMI is forecast to have a modest downtick from April’s 54.2 reading. A private survey of June consumer sentiment is expected to have a minimal uptick from the previous 97.9 reading. San Francisco Fed President Daly will speak during afternoon US trading hours. Earnings announcements will include Constellation Brands before the Wall Street opening.

Our take from the overnight headlines is that both the US and China are maintaining their hardline stances ahead of this weekend’s meeting and therefore the odds of anything more than a simple delay in tariffs are very low. In fact given the Chinese stories overnight suggesting the US President is facing political pressure and suggesting that China could hold out longer than the US would seem to discount progress and therefore increase the chance of dollar support for gold and further economic uncertainty buying of gold. In fact the Chinese President has complained again about the US bullying and President Trump finished his comments on the upcoming trade meeting with another promised to invoke another tranche of tariffs if he is disappointed with the “progress”. Another minor geopolitical support for gold came from the UK where there is talk of preparing an emergency budget for a no deal exit. Also helping gold overnight is an upward short-term price target adjustment by UBS with a net addition to that targeting of $50 and a target of $1430 (cash) which is effectively $50 above this morning’s price. According to Bloomberg Exchange Traded funds added 70,951 ounces of gold to their holdings yesterday bringing this year’s net purchases up to 2.96 million ounces and extending the chain of purchases to 12th trading session. We also suspect that the party line at from the G 20 meeting will be all about easing and stimulating the global economy and that should provide lift to gold. In perusing today’s US scheduled data it would not appear as if the numbers are set to drive gold and silver prices without some very surprising results. Traders should also watch the September dollar index as a decline in the dollar below 95.56 could be cause for gold to return to its overnight high up around $1427. While we suspect that volatility will remain low as the outcome of the trade meeting will remain unknown, we suspect that a fresh trend decision will be seen from the G20 meeting but that Sunday’s night action will be the main event as the results of the trade meeting will set mentality for the coming week.

Once again the palladium market showed its resiliency with a reversal from a two day corrective setback in a fashion that re-emboldens the bull camp and threatens the bears again. While some may suggest part of the gains were the result of hope for trade progress, that theme has not shown a tight correlation with daily price changes. Uptrend channel support in September palladium is moved up to $1,514.45 and targeting remains the March high up at $1,563.70. Perhaps the palladium market was lifted by upward stock price targeting for North American Palladium shares from a Bank on Thursday, and perhaps investors will begin to see the stellar gains in palladium futures as a signal to buy palladium ETF’s and palladium companies.

At least in the early going it would appear as if gold has thrown off the corrective track from the prior three trading sessions with hopes for dovish G20 promises providing strength to support levels on the charts. We would suggest that dialogue from Chinese and US leaders heading into the G20 meeting also favor the bull camp as both were hardline posturing again. The recent pattern has been negative iterations from the trade battle which pressures the dollar and in turn supports gold. We see close in support at $1423.40 and then a more important support point at $1412.70. Pushed into the market today the bull camp should have an edge with the biggest risk to fresh longs an unreactive market.”

Silver closed up $0.04 at $15.25. Silver bullion buyers are the “steady Eddie” in this bullion market. Most are quietly buying physical day in and day out – nothing big, buyers range from a few thousand to several hundred thousand – but they keep showing up in this range. 

Platinum closed up $22.90 at $835.50 and palladium closed up $0.20 at $1532.40.

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: 8 believe gold will be higher next week 1 thinks 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: 53 people thought the price of gold would increase next week – 28 believe the price of gold will decrease next week and 19 think prices will remain the same.

Precious Metal Closes & Dollar Strength – June 24 – June 28

Gold Steady – Watching the G-20

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 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 Settles – Somewhat

Gold Settles – Somewhat

Commentary for Wednesday, June 26, 2019 – Gold closed down $3.40 today at $1411.50. With gold up $130.00 this month the bulls are happy – but like I have been saying let’s not assume everyone is on this present bus. The Russians certainly like this forward movement – they have been steady buyers at lower levels, and the momentum players like this market because sudden movement in any direction gets attention and creates business, especially those with enough “hot” money to get in and out quickly.

And it’s not like gold’s basic dynamic has not changed – the precious metals scenario has basically changed from the days when gold was trading sideways. This change can be measured by new and well defined problems with Chinese trade and renewed talk of upcoming recession.

And the old dynamic was amplified through bellicose rhetoric between Iran and Trump – making the world very uneasy. I understand why the US is trying to force a regime change within Iran but these kinds of situations mostly turn out badly especially in dictatorships. And I can’t imagine our allies supporting any military action in a region which is already over armed.

At any rate these factors – which could easily unwind themselves support higher gold prices. Still lower interest rates for the foreseeable future help support the more bullish scenario. The pricing chop we saw above $1400.00 today was expected – but it is impressive that today’s market recovered nicely from these expected bouts of weakness.

Still those in the know remain optimistic – this from Allen Sykora (Kitco) is typical. Standard Chartered Sees $1,450 Gold Price In Fourth Quarter – “Standard Chartered figures gold was due for a correction lower, but nevertheless sees prices rising to an average of $1,450 an ounce in the fourth quarter. “Gold prices have rallied to test levels last seen six years ago, and we believe the combination of dovish central banks, continued trade tensions, falling yields, geopolitical tensions and central-bank buying poses further upside risk to prices,” Standard Chartered said. However, In the near term, “speculative investor positioning and technical indicators suggest gold may face a short and shallow correction.” Speculators in the futures market have increased their bullish positioning sharply over the last month, and investors have also been buying gold-backed exchange-traded products.  On the flip side, Standard Chartered added, retail demand has “lagged” and thus could be the key factor to sustain a move higher. “We therefore revise our gold forecast higher and, barring near-term corrections, expect prices to average $1,450/oz in Q4 – 2019 from $1,325/oz previously.”

And what is our across the counter action doing? We are still getting a great deal of selling but there are also more buyers – not whales in any sense but respectable players in the 100 thousand dollar range. And this is big – relative to what we were seeing before gold broke to the upside.

Much is being made of the notion that silver is lagging gold – so what?

To me this only enforces the notion that silver bullion is cheap and if gold pushes higher it’s only a matter of time before the silver traders realize that even $20.00 silver is cheap. Now for those who are less enthusiastic about silver bullion consider that not too long ago the idea that gold would push above $1400.00 before year end was considered silly. So I think a jump of $5.00 or even $10.00 in silver is not only easy it’s a good bet considering the action in gold.

It’s not a bad idea for everyone to rethink the role of gold and silver bullion should play in their own finances. Especially now that central banks around the world are content with a cheap money policy even though there is little official inflation.

Recent gains in gold may be trying to tell us that a dramatic change in the financial landscape is right around the corner. Or not but even if this market settles down – it should be clear that holding gold and silver bullion for a rainy day is a good idea – no matter where you think prices are going on the shorter term.    

This from Zaner (Chicago) – “Global equity markets overnight were mixed with weakness in Asia, mixed action in Europe and signs of minor gains in the early US trade. Overnight Germany released a private consumer confidence survey which came in softer than expected and below the prior month. Also released early today were French consumer confidence readings which came in better than expectations. Another private survey from Switzerland (ZEW) showed expectations for June collapsing to minus 30.0 from -14.3 in May! From the UK the market saw British mortgage approvals for May fall off moderately. The North American session will start out with a weekly private survey of mortgage applications. May durable goods are expected to have a moderate uptick from April’s -2.1% reading. The May durable goods ex-transportation reading is forecast to have a minimal uptick from April’s unchanged reading. The May goods trade balance is expected to have a modest decrease from April’s $72.1 billion monthly deficit. April wholesale inventories are forecast to have a modest downtick from March’s 0.8% reading. Earnings announcements will include General Mills and Paychex before the Wall Street opening.

As we predicted volatility in gold has become two-sided with prices recently becoming overbought from both a fundamental and technical perspective. While the take away from last week’s Fed meeting fueled gold sharply higher it appeared as if Fed dialogue yesterday took some air out of the bull case. Seeing the gold market decline following comments from the Fed’s Bullard that he didn’t see current market conditions requiring a 50 basis point cut clearly suggests gold was “overdone” on the aggressiveness of upcoming rate reductions. In fact some analysts overnight are pulling out historical gold performance following what the trade is labeling the “first cut” in a cycle and have come away with mixed projections. Apparently there have been five “first cut” events since 1989 and in two of those cases gold actually declined in the month following the move. However in the most recent “first cut” gold managed a 7% rally in the month following the reduction. On the other hand Goldman Sachs has raised its 12 month price forecast for gold apparently off the idea that concerted rate cuts and equity market gains will result in what they call a positive wealth effect for gold. A minor negative adding to the corrective tilt this morning is a story predicting a softening of Indian demand due to the sharp move in prices to six year highs. In a shorter term context rumors that the US might delay some tariffs could be causing some safe haven selling this morning. While the dollar index should find some temporary lift from the tempering of aggressive Fed expectations, US scheduled data this week has been very soft and that should provide headwinds for the Dollar and leave some macro-economic uncertainty in place. In a longer-term supportive development yesterday, Russia indicated it may eliminate a value-added tax on gold investments next year and that could increase Russian demand for gold bullion, gold coins and gold stocks. As we have indicated several times recently, traders should expect ongoing volatility with yesterday’s action potentially setting up a normal retracement of the June rally which would allow for a setback down to $1,397.30 without technically reversing the uptrend. On the other hand in the event that gold trades back above the Tuesday close early today that could result in a fresh wave of bargain-hunting buyers jumping into the fray.

While the PGM complex has not consistently tracked the ebb and flow of global economic sentiment, it did appear as if the events yesterday served to prompt some selling. Obviously palladium and platinum are undermined slightly because of less supportive Fed accommodation timing, but also because US data softened significantly and trade conditions are obviously deteriorating. While palladium might be correlating with the ebb and flow of a dovish Fed, we get the impression the market is mostly marching to its own drummer. In the end, the technical picture remains supportive with higher lows and higher highs extending, $1,500 seemingly building as support and open interest rising along with prices. Unfortunately, trading volume has not risen with prices this month but the bulls might suggest that means the market isn’t poised to forge a blow-off top yet. Uptrend channel support is seen at $1,505.50 and that support line is raised to $1,519.20 on Thursday.

In the coming trading sessions, it could get a little more it difficult for the bull camp as the reversal from the highs yesterday weakens the bull camp and gives the bear camp fresh confidence. Obviously the reduced potential of a straightaway 50 basis point US rate hike in the next Fed meeting was disappointing to gold, and given that August gold is now trading $36 off its Tuesday high there is likely to be some ongoing stop loss selling. An additional burden for the bull camp today would be seen if the dollar index regains the 96.00 level and stocks see noted risk-on gains. We see a critical pivot point in August gold down at $1,403.60 and then again down at $1397.30.”

Silver closed unchanged at $15.29.

Platinum closed up $6.30 at $816.60 and palladium closed down $2.00 at $1519.80.

This is our usual ETF information – Gold Exchange Traded Funds: Total as of (6/19/2019) was 69,421,340. That number this week (6/26/2019) was 70,711,020 ounces so we gained 2,289,680 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 70,711,020 and the record low for 2019 was 67,430,173

Silver Exchange Traded Funds: Total as of (6/19/2019) was 618,441,706. That number this week (6/26/2019) was 620,168,492 ounces so we gained 1,726,786 ounces of silver.

Platinum Exchange Traded Funds: Total as of (6/19/2019) was 2,815,414. That number this week (6/26/2019) was 2,828,826 ounces so we gained 13,412 ounces of platinum.

Palladium Exchange Traded Funds: Total as of (6/19/2019) was 664,363. That number this week (6/26/2019) was 664,029 ounces so we dropped 334 ounces of palladium.

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 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 Firm into the Weekend

Gold Firm into the Weekend

Commentary for Friday, June 21, 2019 – Gold closed up $3.30 at $1396.20. Gold sold off in the overnight Hong Kong market and was relatively flat in London. It pushed higher in early domestic trade – sold off testing $1388.00 and quickly moved higher, approaching daily highs. So there is enough action to bolster the bulls and bears in the surprising move to the upside we have seen this week. To keep things in perspective compare where gold closed last Monday ($1338.70) to where it closed today ($1396.20).

Now consider the following from Allen Sykora (Kitco) – BMO: ‘We Expect Continued Inflows Into Gold’ – Gold prices are having their best week in three years as the world’s major central banks all sounded dovish tones, with holdings in exchange-traded funds on the rise, said BMO Capital Markets. Prices traded up to around $1,411 an ounce overnight, their highest level in more than five years. Dovish commentary from the Federal Open Market Committee, European Central Bank and Bank of Japan, coupled with rising geopolitical tensions in the Middle East, have contributed to the upside momentum, BMO said. Meanwhile, U.S. dollar weakness offered additional support to the precious metal. Global exchange-traded-fund holdings of gold are up 2.85% for the month to date to 72.65 million ounces, climbing back towards the January peak of 73.3 million, BMO said. Analysts added that “we expect continued inflows into gold and gold-backed ETFs in the run-up to the July FOMC meeting.”

Like I said there is enough price action in both directions to create the expected and typical conversation between the bulls and bears relative to short term pricing. So a few more points to consider – looking at the short term here is probably the wrong move. And I think that the longer term stage is set for higher prices if the central banks of the world continue to print more fiat currency. But keep in mind that we have already printed oceans of unbacked currency and the expected results relative to the price of gold have been disappointing.

So what now? Look backwards and remember that gold has moved higher by $120.00 in the last month – those that bought weakness these past few months appreciate this strategy.

And we are now flirting with $1400.00 – which has been an overhead cap going back to 2013. The short-term technical picture belongs to the bulls – but everyone will be looking for short-term paper profit taking – the old adage “too much – too soon” – especially because inflation numbers are still missing in action.

For sure the current price of gold has everyone’s attention – but what is happening with the physical market across our counter? Monday through Wednesday we have seen public selling. Late Wednesday through Friday this selling trend slowed and may have reversed itself.

Whether this is significant remains to be seen but for sure some big boys are now buying this market – granted these are experienced old timers – we have not seen fresh new money enter this market but growing enthusiasm could quickly change this mindset.

Look for continued chop in this market and remember the $1400.00 overhead resistance is formidable but sooner or later gold will make new highs – so patience is still required.

Finally, watch the dollar – the Dollar Index this week has moved from 97.64 through 96.22. With no chance of higher interest rates anytime soon this downward trend may continue – helping to either support or push gold prices even higher. 

This from Zaner – “Global equity markets overnight were mixed with Shanghai and European markets higher with US markets showing some minor corrective action early. Overnight Japan released manufacturing PMI for June which showed weaker than expected readings. From Europe the market saw French and German manufacturing and services PMI readings that were better than expectations. The euro zone overall showed better-than-expected services PMI readings while manufacturing PMI readings for the euro zone came in a touch softer than expectations. Also out overnight were UK public sector net borrowing figures for May showing the government borrowing less money than expected and less money than in the prior month. The North American session will start out with April Canadian retail sales which are expected to have a moderate decline from March’s 1.1% reading. The June Markit “flash” US manufacturing PMI is forecast to have a minimal downtick from the previous 50.5 reading. May existing home sales are expected to have a modest uptick from April’s 5.19 million annualized rate. A busy day of Fed commentary will begin during the European session with Boston Fed President Rosengren, but there may be added attention paid to Fed Vice Chair Clarida’s remarks during early morning US trading hours given the market’s reaction to FOMC meeting results and post-meeting comments by Fed Chair Powell. Fed Governor Brainard, Cleveland Fed President Mester and San Francisco Fed President Daly will speak during afternoon US trading hours. Earnings announcements will include CarMax before the Wall Street opening.

While a long list of bullish factors remain in place and the charts in gold are projecting even higher prices ahead, the magnitude and quick nature of the rally yesterday gives some pause to those thinking about “chasing the market with buys”. However, tensions between the US and Iran are still running very hot and have a track record of escalating before cooler heads prevail. Reports that the US actually had planes in the air for a strike before calling them back, clearly means the situation is set to remain in the front windshield of gold. It would also appear as if the dollar trend has turned down and that should revive currency related buying interest in gold and that impact could be accentuated by fresh five year highs in gold which are likely to trigger long-term technical trading program buys. Obviously the gold and silver markets are set to benefit further from the easing argument, and initial signs from India and Asia indicate that buyers are rushing into play despite the narrowing of discounts and significantly higher flat pricing than was present last month at this time. In fact, August gold from last month has added roughly $125 an ounce with the most recent positioning report in gold showing a net long of 224,405 contracts the net long has probably spiked above 250,000 contracts. On the other hand, until the net spec and fund long approaches 300,000 contracts, we aren’t ready to suggest the market is mostly bought out. The bias is up but traders should expect a dramatic expansion of daily trading ranges and increased frequency of two-sided action.

While the palladium market initially soared in sync with the gold market, the ultimate outcome from yesterday’s action suggests the potential for an intermediate top in prices. In fact the thrust above $1,500 and a close $45 below the high on the highest volume since May 31st facilitates the blow off top argument. Furthermore, the palladium contract since the last positioning report forged an upside extension of $136 and that should have dramatically boosted the net spec and fund long. On the other hand, classic fundamental justification for the June rally in palladium appeared to be lacking but one could now make the argument that developments this week actually stoked the potential for improving palladium demand. Critical pivot point support is seen at $1,448.90 and a more significant support/failure level is seen at $1,435.50. The range up reversal action in the platinum market yesterday has to be very disheartening to the bull camp. In fact, with a $17 trading range reversal engineered on the highest volume since early April, the bear camp has to feel confident from a technical perspective. Near term downside support in July platinum is seen down at $797.20.

While the headlines are rife with bullish arguments for even higher gold prices ahead, a measure of back and fill is to be expected after the explosive rally yesterday. However gold prices extended roughly $18 above yesterday’s close overnight off reports that the US actually launched an airstrike against Iran before calling back those planes and that shows geopolitical tensions are still running hot. In short, we see very little threat to a widely diverse set of bullish driving forces, but we also think the compacted explosion in prices yesterday sets the stage for a very choppy two sided trade today. However, the sharp range up extension to 6 year highs were engineered with rising open interest and strong trading volumes. Nonetheless, traders should expect significant expanded two-sided trade directly ahead with support seen at $1,386 and resistance seen at $1,397 and $1,401. With the silver market regaining its 200 day moving average earlier this week and the net spec long at very modest levels before the recent rally, follow-through gains are possible but only if gold provides very consistent leadership. The 200 day moving average in September Silver today is seen at $15.18.”

Silver closed down $0.20 at $15.27. Saw some light silver bullion selling this week.

Platinum closed up $6.90 at $811.50 and palladium closed up $19.20 at $1491.30.

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 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: 52 people thought the price of gold would increase next week – 30 believe the price of gold will decrease next week and 18 think prices will remain the same.

Precious Metal Closes & Dollar Strength – June 17 – June 21

Gold Firm into the Weekend

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 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 Higher in the Aftermarket – Post FOMC

Gold Higher in the Aftermarket – Post FOMC

Commentary for Wednesday, June 19, 2019 – Gold closed down $2.00 at $1344.60 today. It opened flat this morning trading in a tight range – waiting for the Fed’s latest reading on interest rates.

The Europeans are equally focused on interest rate changes as ECB President Draghi promised to restart the bank’s bond buying program if growth and inflation continue to slow.

I think most would agree that regardless of interest rate movement the physical market remains in a liquidation phase as higher prices bring out more sellers who have been waiting on the sidelines. This can be verified by watching premiums which continue to decrease.

At the same time optimism for higher prices grows and this buzz almost always finally results in more public buying. And the newer expected higher prices are not small change – some informed players are talking about $1400.00 gold and $18.00 silver in the short term.

This developing bullishness is supported by the notion that trade wars and safe-haven buying will grow as economic and military tension increase. This belief is supported by the old school notion that at today’s prices both gold and silver are cheap – cheap being defined as trading at a relatively large percentage discount off established highs.

If you think about this growing tension within the framework of today’s hyper-liquid monetary expansion it is easy to see why folks are rethinking the role of gold and silver bullion as a defensive tool in financial planning.

This growing trend however is still not even close to mainstream – US stocks are holding up – even approaching all-time highs – fueled by cheap money and enthusiastic investors who see even higher prices in the near future.

I’m not knocking stocks but if you look more closely at stocks and dollar strength in a slowing economy this enthusiasm seems misplaced. Especially because the FOMC is considering an interest rate cut before year end.

As expected our central bank left its short-term fed funds rate unchanged today and said it “will closely monitor” the economy in light of growing “uncertainties.” This is certainly dovish as growing numbers of observers expect a rate cut before year end. Trump in typical fashion suggesting that Powell’s job depends on his willingness to cut rates.  

What exactly this means remains a question mark. There are two major FOMC meetings between now and year end – September 17th and 18th and December 10th and 11th. It’s unlikely we will see two rate cuts but if the economy begins to tank (unlikely) one is a certainly and this alone will push gold prices higher.

Gold prices was up $6.00 in the early aftermarket and moved to up $16.00 before we closed – so traders are looking for higher numbers but with so many cross currents expect increased volatility – one way or the other.

This from Zaner (Chicago) – “Global equity markets were mixed with Asian/Pacific Rim markets generally higher while European and U.S. markets started off weaker. Economic data released overnight included Japanese imports and exports both of which contracted for the month of May. The Japanese trade report showed its trade deficit narrowed slightly. From Europe, German producer prices came in slightly softer than the prior month despite a somewhat normal year-over-year gain. From Italy its global trade balance remained a surplus but that surplus contracted from the prior month. From the UK retail prices showed a slightly stronger than expected reading as did producer prices. In a final reading from the euro zone construction output for April declined 0.8 off expectations for a gain 1.1%. The North American session will start out with a weekly private survey of mortgage applications, followed by May Canadian CPI which is forecast to have a modest uptick from April’s 2.0% year-over-year rate. The highlight for global markets will come during afternoon US trading hours with the results of the latest Federal Open Market Committee monetary policy meeting. While the market is not expecting any changes to rates or policy, the market will focus first on the latest FOMC economic projections and then on Fed Chair Powell’s post-meeting comments for clues on potential upcoming policy moves. Earnings announcements will include Oracle after the Wall Street close.

All things considered, the performance in gold prices yesterday was pretty impressive as the market managed to spend almost the entire trade in positive territory, it maintained positive traction in the face of negative outside market influences like a stronger dollar and most importantly it held gains in the face of a noted downshift in geopolitical tensions. However the market is showing some retrenchment this morning perhaps because some longs are banking profits rather than face the prospect of a steady Fed inspired volatility event. In other words some portion of the late May and June rally of $75 factored in a dovish Fed and the lack of distinct dialogue that sets the table for cuts later this year will obviously result in a setback in prices. However, gold prices remained positive in the face of news yesterday that Russian gold production last month increased by 11.5% relative to year ago levels, and that shows the market isn’t overly vulnerable to bearish internal fundamentals. While the gold trade appeared to be skeptical of the sudden and significant improvement in US/Chinese trade relations trade headlines overnight generally remained positive and that justifies part of the setback to start today. However, as we have already noted this week, a number of well-known financial market participants have come out bullish toward gold and the trade also sees upbeat news for gold from news of a possible takeover of Canadian miner Acacia by Barrick Gold as that suggests industry officials think gold assets are undervalued. In the end the near term trend in gold is likely to be set this afternoon but pushed into the market we think the Fed will not fully live up to the hype calling for a series of rate cuts this year.

The upward track in palladium prices was extended again overnight and the uniformity of the gains has probably kept the market from becoming short-term technically overbought. Furthermore, with the market not yet deep into the late February and March trading range bound by $1,442.20 and $1,563.70, we would not suggest the market is overvalued yet. In fact, the palladium market managed gains in the face of slackening global economic fears (most specifically off slowing evidence from China) and therefore prices should be boosted even further by the potential removable of global economic headwinds from an improvement in US/Chinese trade relations. We would also suggest that a very definitive risk on move in US equities yesterday and a $2.00 per barrel pulse up move in crude oil helps to facilitate the bullish environment toward palladium. The platinum market appears to have forged a temporary low with a quasi-double bottom around $791.20 and is probably justified in that action because of a moderation of global economic slowing fears. We suspect that platinum is drafting some support from reports that 55% of South African platinum mining operations are running production at a loss. In fact, shorts were probably wise to cover their positions into today’s US Federal Reserve meeting especially if other industrial commodities continue to show strength.

While the path of least resistance from technical and fundamental perspectives is pointing upward in gold, we are skeptical of the near term bull case given the pattern of US dollar strength this week, the potential for a decline in safe haven/uncertainty off trade headlines and more specifically because of the potential for disappointment on the amount of definitively dovish dialogue from the Fed later today. Therefore, we see an extremely critical pivot point down at $1,336.60 and would suggest that the coming 8 hours could present the most significant trend decision in gold since February 20th. In a Traders suggestion: Buy August golds put for a temporary Fed inspired setback.”

This from Neils Christensen (Kitco) – Market’s Gold Fever Is Bigger Than Just Fed Monetary Policy – Vanguard – “Markets are balanced on a knife’s edge waiting for Wednesday’s Federal Reserve monetary policy decision, but the gold market has moved beyond just the scope of U.S. monetary policy, according to one analyst.

Stephen Innes, head of trading and market strategy at Vanguard Markets, wrote in a commentary for FX Street that he expects gold prices to continue to push higher regardless of what the U.S. central bank says.

“While the prospect of lower U.S. rates and dovish Fed expectations remain supportive, gold’s  appeal goes well beyond that and is moving higher on its own accord as a safe and inexpensive hedge against the abundance of tail risks rapidly wagging,” he said in the commentary.

Innes said the threat of escalating trade tariffs remains the biggest threat to the U.S. and global economies and will continue to support gold prices ahead of Group of 20 meeting on the weekend.

“We remain unsure how the Fed will react this week, but we do know that if tariffs escalate, it will be a potent threat to U.S. growth and so the likelihood of an aggressive Fed cut will also rise. Gold represents insurance against those risks,” he said.

He added that growing geopolitical risks in the Middle East will also be supportive for gold prices in the near-term. The third bullish factor for gold is continued central bank demand, Innes said, adding that this sector is a consistent pillar of support.

“Given the move to de-dollarize reserve, this demand will likely continue especially with trade war and the geopolitical risk abound,” he said.

Although there is some investor disappointment that gold has not pushed higher after Friday’s initial break above $1,350, Innes said that the yellow metal’s performance was still solid.

While down from Friday’s 14-month high, the gold market is holding on to most of its gains since the start of the month. August gold futures last traded at $1,344.40 an ounce, relatively unchanged on the day.

“We view any pause or pullback–even as shallow as they may be–as an opportunity to buy,” he said. “I remain unwaveringly bullish on gold and continue to buy as it remains one of my highest conviction trades into 2020.”

Silver closed down $0.03 at $14.95 today.

Platinum closed down $3.70 at $805.10 and palladium closed up $19.70 at $1484.10.

This is our usual ETF information – Gold Exchange Traded Funds: Total as of (6/12/2019) was 68,317,590. That number this week (6/19/2019) was 69,421,340 ounces so we gained 1,103,750 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 67,430,173

Silver Exchange Traded Funds: Total as of (6/12/2019) was 614,241,286. That number this week (6/19/2019) was 618,441,706 ounces so we gained 4,200,420 ounces of silver.

Platinum Exchange Traded Funds: Total as of (6/12/2019) was 2,816,343. That number this week (6/19/2019) was 2,815,414 ounces so we dropped 929 ounces of platinum.

Palladium Exchange Traded Funds: Total as of (6/12/2019) was 670,487. That number this week (6/19/2019) was 664,363 ounces so we dropped 6,124 ounces of palladium.

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