Gold Turning Choppy at $1500.00

Gold Turning Choppy at $1500.00

Commentary for Tuesday, August 20, 2019 – Gold closed up a modest $4.20 today at $1504.60 – surprising really in light of the bad press the US got from both Russia and China after testing a version of the nuclear-capable Tomahawk cruise missile in California. Gold did however move solidly higher in the overnight Hong Kong market but seemed to lose some of that buzz in London and the domestic play.

The pricing on the 30 day gold chart has also been rather flat around $1500.00 since early August. But I think everyone should be committed to this physical market regardless of price given the number of stubborn and still developing problems worldwide.

I would not worry too much about pricing at this point – you could wait and see if this market shakes out somewhat but keep the bigger picture in mind.

The storyline is typical for our times and one you have heard before, but be wary about indifference. There are great monetary crimes being accomplished in plain sight – all in the name of the common good.

Central banks around the world – including ours are or will be cutting interest rates – perhaps significantly to forestall what is really government’s most worrisome problem – recession.

It was not too long ago that the gold community was talking about whether gold would hold $1400.00 – now we are looking at $1500.00 and some are quietly thinking $1600.00.

Granted there is an underlying nervousness in the gold trade as prices move higher. This is the natural progression of a new and fundamentally bullish market. Questions about profit taking are real and a big round of profit taking would throw cold water on this market.

But it would recover just as quickly in my opinion because the thinkers of the world are worried. Why has the typically huge creation of fiat paper money not accomplished its goal?

It’s not like nothing happened – there was improvement – but not enough to take the next usual step. As the economy improved the US and Europe did not call in at least some of their “markers” – they did not pay back the borrowed money.

Why? First, the “recovery” was not worldwide – it was poky for lack of a better word.

Second, even though things were considerably better in the US – the FOMC could not raise interest rates as promised because the rest of world kept their rates near zero or in some cases introduced negative rates – hoping to jump start old and debt ridden economies.

In other words the problem world bankers now keep to themselves is the question as to whether the “old system” of paper financing which worked well since World War II has finally become “too tired” to produce another round of prosperity through cheap money and more red ink.

Don’t be afraid to buy weakness here – in my opinion we are looking at the beginning of what might be a fundamental change in both the gold and silver bullion markets – a change which will not come and go but will push prices higher over a number of years.   

This from Zaner (Chicago) – “Global markets have been relatively subdued, but have maintained a mildly positive tone coming into this morning’s action. Monday’s news that the US will delay banning Huawei was seen as a positive sign for US/Chinese trade talks, while the first reading for China’s new loan prime rate showed a slight decline in rates. Asian shares were generally higher and were led by gains in the Japanese Nikkei and South Korean Kospi indices. The latest reading for German PPI was in-line with forecasts, while Swiss trade balance figures showed a decline for exports and imports. European shares were showing mixed results early in the day as the Italian MIB was under pressure due to fresh political turmoil. The North American session will start out with a private weekly survey of same-store sales, and will be highlighted by a June reading on Canadian manufacturing sales that are expected to have a moderate decline from May’s 1.6% reading. Fed Vice Chair Quarles will speak during late afternoon US trading hours. Earnings announcements will include Home Depot, Medtronic and TJX before the Wall Street opening while Alcoa reports after the close.

Gold and silver were higher overnight as they continued to consolidate inside the extremely wide ranges from August 13th. This follows a two-day setback in which a “risk on” mood developed in the markets following supportive measures by the Peoples Bank of China and the German government and hints of a moved by the ECB next month. The long term trend still seems to favor gold and silver, especially if we are moving to an era of lower rates. An argument that was made by fund manager Mark Mobius late yesterday, who cited prospects for easier monetary policy from the Federal Reserve and other central banks to support growth that’s been impacted by the trade war between the US and China. He also suggested that the increasing use of crypto currencies will boost demand for hard assets like gold. This week is light on scheduled data, so the market will be looking to the FOMC minutes release on Wednesday and the Fed’s Jackson Hole symposium on Thursday for direction. The question on everyone’s mind is whether Fed Chairman Powell will pave the way for a 25-basis point cut (or more) in September. The Bundesbank has warned that Brexit could put the German economy into recession this fall, and that only increases the pressure for the ECB to cut rates. Another supportive factor to gold is central bank buying, and data released overnight showed several countries increasing their gold reserves in July: Kazakhstan raised gold holdings by 150,000 ounces, Russia +390,000, Mongolia +40,000, Argentina +220,000. Other countries increasing in June included Qatar at +250,000 ounces and Belarus +50,000. Indian jewelry merchants are worried about much slower gold sales this year due to high prices, high taxes and an uncertain economy. One analyst stated that Indian gold demand usually reaches 400 tonnes in the second half of the year, but this year it could be closer to 300 tonnes. Exchange-traded funds added 79,918 troy ounces of gold to their holdings in the last trading session, bringing this year’s net purchases to 6.58 million ounces, according to data compiled by Bloomberg. This was the fourth straight day of growth.

Palladium continued to work higher overnight following yesterday’s gains, but platinum eased back. Both markets benefited from the boost in risk attitudes yesterday because of the potential for stronger demand. September palladium has broken out of a two-week trading range and traded to its highest levels since August 1st. The market closed above the 21-day moving average for the first time since July 29th on Monday and held above there overnight. Look for resistance in the $1,495.50-$1,500 area, with a gap at $1,521.30-$1,524.40 as a convenient upside target. October platinum followed through on Friday’s outside reversal higher with further gains on Monday and it consolidated those gains overnight. Key resistance could be $863.70, which is the top of the downward sloping channel drawn off the July highs.

Long term factor are supportive to gold and silver, but the technical setup looks bearish. Stochastics in both markets recently crossed negative from an overbought condition, and the markets also saw some divergence with open interest at their recent highs. In addition, recent COT reports showed speculators hovering around record net long positions with the trend-following funds losing interest. From a fundamental standpoint, we expect the precious metals to take their lead from the Fed, garnering support from suggestions of a rate cut but prone to disappointment if it is not as strong as hoped. Look for support in October gold at $1,483 and $1,470, with resistance at $1,539.50. Support for September silver comes in at $16.72 and $16.51, with resistance at $17.50.”

Silver closed up $0.21 at $17.12.

Platinum closed down $4.00 at $850.10 and palladium closed up $14.50 at $1487.80.

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.

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Gold Remains Steady – Looking for Fresh News

Gold Remains Steady – Looking for Fresh News

Commentary for Friday, August 16, 2019 – Gold closed down $7.10 today at $1512.50 and was up a few dollars in a quiet aftermarket. It was choppy in the overnight Hong Kong market and sold off in early London trading – the price spread being $1503.00 – $1515.00 – this is typical in that we are still trying to find new footing but the important part of this pattern is gold’s recovery after the London dip. Domestic New York traders once again bought weakness. Gold closed this past Monday at $1505.30 so on the week we are higher by $7.20. I would “read” that as oddly quiet in a market with many cross-currents.

A more-sure Wall Street stock trade this morning did not help gold going into the weekend and the weekly Dollar Index is solidly higher – moving from 97.30 through 98.20 so further settling of gold prices might be in the cards shorter term.

But I don’t see enough bearish news to rain on this current up-trend. The 30 day gold price chart remains bullish as gold has moved from $1420.00 through $1520.00 over a number of fundamental changes in trade and interest rate options. And the 60 day pricing chart reinforces this uptrend – we have moved from $1350.00 through $1520.00. So even the pessimist should concede that something new is afoot and driving these prices higher.

Still gold’s push toward $1600.00 is testing unchartered waters – the last time traders had to deal with such prices was the middle of 2013. So I suspect the bulls are in for a “testing” period.

The bears have been content with a sideways trading range which remained in place through early 2019. And there are traders who believe that without inflation gold’s recent strong move into new higher ground will fade – eventually drifting back into that old sideways channel.

As usual our old friend “optimism” comes and goes. Stocks drop 400 points – gold is “hot” – the DOW recovers the following day and bullish traders are “disappointed”.

I love this kind of pricing because it creates “buzz”. We are seeing fresh liquidation from long term players – but not much. This suggests the physical market has plenty of “strong hands”.

And what’s better – our phones are busy with questions about gold bullion – the American public is not overactive but they are looking for the “right” price to join the party. This is a fundamental change from our typical slow and boring summer action.     

The Hong Kong problem continues to create tension as the world wonders just how long China will put up with what they see as rebellion. It may be that their leaders are not worried about Hong Kong but rather do not want the rest of the country to think that totalitarian rule is going soft as China reinvents itself into a manufacturing giant and world leader. At any rate a flare up is possible any time with that many people waving flags and the police in riot gear so until this is settled the possibility of something going wrong will underpin the price of gold.    

This from Zaner (Chicago) – “Global equities overnight were higher with gains ranging from 0.5% to as high as 1%. Following the US session on Thursday, the US Treasury released international capital flows data which showed foreign interest adding the most US treasuries since last August. While Japan overtook China as the largest holder of US debt, both countries increase their holdings with the Chinese inflow the first since February. As of June the Chinese held $1.1 trillion of US treasuries! From New Zealand a business PMI index came in much weaker than expected and three points below the prior month. In Japan foreign investment in Japanese stocks declined while foreign investment in Japanese bonds increased. From Europe, the European trade balance matched expectations but narrowed. From the US, housing starts for July are expected to gain slightly, and building permits are expected to jump moderately. The markets will also see Canadian portfolio investments in foreign securities and foreign portfolio investments in Canadian securities. Other information from the US includes Michigan consumer sentiment for August, which is expected to show a decline. Key corporate earnings will include Nordic American tanker, Deere and Company and a Chinese real estate company before the US opening.

The gold market disappointed some bulls with its lack of a significant upward thrust yesterday following the latest anxiety wave from another lower low for the move in US equities yesterday afternoon. Furthermore seeing the market reversed chart direction this morning and seeing the prospect of a risk-on day in equities gives the bear camp the edge to start today. It is also clear that reduced trade anxiety is set to prompt profit classic taking in gold and silver as the media is suggesting the two leaders are actually talking directly. While the gold market hasn’t been limited by the recent uptrend in the dollar index a move above 98.00 this morning in the Index should thicken currency related resistance for gold and silver prices. We also think macro-economic uncertainty was deflated slightly yesterday by a sprinkling of positive US data points as that questions the all-out recession expectation in the marketplace. Cushioning the gold and silver markets this morning is the news that inflows to ETF holdings continued with gold yesterday adding 103,571 ounces and silver ETF’s adding 4.9 million ounces to their holdings. Year to date inflows to gold ETF’s are now 6.43 million ounces and 98.8 million ounces in silver with the fifth straight day of inflows. Therefore investors continue to show interest in gold despite two-sided volatility. While the initial path in gold prices today is pointing downward and some chart points have been violated already the market should be supported by bullish news from Goldman Sachs which indicated increased central bank gold buying will continue from “De-dollarization”. In conclusion the bullish forces remain in place in gold but a short-term corrective track is underway because of the tempering of trade fears and from initial gains in US equities. Technical traders will point to the fact that gold did find bargain-hunting buyers around $1520 but the initial failure of that level early this morning opens up the potential for a week ending setback to $1,500 if early equity gains and news that Trump is speaking to Xi extend into the close. However given the spec and fund net long, traders should consider buying protective puts against futures, as the market could easily see another $62 range, as it did on Tuesday.

While the palladium market showed some recovery action on Thursday, the ever-present threat of physical commodity demand destruction remains. September palladium has been able to stand up to negative outside market forces this week with a pattern of higher lows, and that suggests it is less enamored with the prospects of lost physical demand. Unfortunately the market has not seen the type of inflows into ETFs as in gold and silver, with holdings sitting near their lowest levels since their inception back in 2009. The platinum market on the other hand has failed on its charts again and continues to trade below the 200-day moving average in a fashion that projects a slide down $830 and perhaps $820 if it were to appear that the week will end with a big picture, macro economically-driven washout in equities. Apparently the platinum market is not garnering any support from news that platinum ETF holdings saw an inflow yesterday of 16,878 ounces.

With the latest iteration of US/Chinese trade headlines soothing tensions, with US reports of conversations between the leaders, and equities showing a noted relief rally to start today, the initial corrective action in gold and silver is fully deserved. Furthermore both silver and gold were holding significant long spec and fund positions at the beginning of last week and should have built those positions even further into the overnight high. Therefore both markets are vulnerable to long profit-taking but we think fresh selling will be limited to a small group of well-capitalized/aggressive traders. As indicated already we see the $1520 level in December gold as an initial pivot point with the next lower support point seen at $1514 and again down at $1504. The big question is will equity market gains hold/extend throughout the session and will bargain-hunting buyers step back into gold again? Initial pivot point pricing in September silver is seen at $17.49 and then again down at $16.93.”

Silver closed down $0.09 at $17.10. This trade also remains steady and I think the public is looking for $20.00 silver sooner than later.

Platinum closed up $9.50 at $848.80 and palladium closed up $0.30 at $1439.30. 

This is our usual ETF information – Gold Exchange Traded Funds: Total as of (8/7/2019) was 72,873,734. That number this week (8/14/2019) was 72,873,734 ounces so we gained 73,453,056 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 73,772,152 and the record low for 2019 was 67,430,173

Silver Exchange Traded Funds: Total as of (8/7/2019) was 687,252,080. That number this week (8/14/2019) was 697,689,874 ounces so we gained 10,437,794 ounces of silver.

Platinum Exchange Traded Funds: Total as of (8/7/2019) was 2,938,729. That number this week (8/14/2019) was 2,922,733 ounces so we dropped 15,996 ounces of platinum.

Palladium Exchange Traded Funds: Total as of (8/7/2019) was 625,315. That number this week (8/14/2019) was 624,416 ounces so we dropped 899 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: 8 believe gold will be higher next week and one 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: 47 people thought the price of gold would increase next week 32 believe the price of gold will decrease next week and 21 think prices will remain the same.

 Precious Metal Closes & Dollar Strength – Aug 12 – Aug 16

Gold Remains Steady - Looking for Fresh News

 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 Steady and Interesting

Gold Steady and Interesting

Commentary for Thursday, August 15, 2019 – Gold closed up $3.70 today in choppy trading at $1519.60. The overnight market in both Hong Kong and London was firm to higher – most likely because of increased safe haven demand created over a number of factors but underpinned by continuing civil problems in Hong Kong.

The reasons for owning gold bullion remain strong and include real safe haven buying even at these escalated levels because of stock market uncertainty reacting to escalating trade problems between China and the US.

As counterintuitive as this might seem both parties are intransigent – now couple this with what amounts to world financial jitters within an overleveraged financial environment which in some EU cases makes no business sense and you get this kind of woeful uncertainty. A kind of doubt which favors gold ownership and yet has not escalated into a stampede.  

I can’t say this case of jitters extends to the US market – there are still large bullion positions being sold into this rally across our counter – but at the same time some “big boy” players have reinvented themselves both in gold and silver bullion – numbers in the hundreds of thousands of dollars so it’s kind of a mixed bag.

You would expect the dollar to move higher – it is still the financial safe haven weapon of choice. The Dollar Index this past week has moved from 97.5 through 98.00 so stronger but not crushing if you know what I mean.

And yet the price of gold has been steadily higher since late July moving from $1420.00 through $1500.00 and for now at least creating some buzz ($1520.00). 

I’m hoping China will show restraint in Hong Kong – what good does it do to escalate that fight and by the same token Trump will lighten up with tough talk and tariffs. Both of these moves make sense from a business standpoint.

Each side has made its point why cook the goose that lays the golden eggs? Still there is some who think the trade war rhetoric is getting out of hand and could lead us all into darker waters.

Look for continued interest in the precious metals but expect reasonable chop in prices as paper players take profits. With the number of positive gold variables here I would buy any weakness if you are looking to increase your bullion position and would not be much of a seller even as gold gets comfortable with 6 year highs.

In the longer term the direction of gold will still depend on what the FOMC does with interest rates. Some believe they are now “stuck” with a decade long financial model which is broken. This might suggest that extremely low interest rates have now become the “new normal” – if this is the case look for gold to make new all-time highs probably not this year but certainly in 2020.       

This from Reuters – Aug 15 (Reuters) – Gold prices rose on Thursday as lingering fears over a global economic downturn and lack of clarity on the U.S.-China trade front kept the safe haven precious metal comfortably above the key $1,500 per ounce mark.

However, bullion’s gains were limited as investors took stock of mixed economic data from the United States, with strong U.S. retail sales offering respite to battered risk appetite.

At the day’s peak of $1,523.91 per ounce, gold was back to within $11 of Tuesday’s six-year high, which was followed by a 1% jump on Wednesday, due to fears of a recession as investors fretted over the trade war, unrest in Hong Kong and a slide in emerging-market assets.

“But with the U.S. retail sales data coming out as strong as they did, that’s seeing some market participants rethink their bets,” said Daniel Ghali, commodity strategist at TD Securities.

However, the elevated levels of safe haven interest in gold fueled by factors such as the Hong Kong unrest and fears of an Argentine debt default “is not likely to change in a single day,” Ghali added.

U.S. stocks moved higher, driven by a surge in July retail sales that soothed some nerves frayed by an inversion in the government bond yield curve, historically a reliable signal of a coming recession.

On the flip side, U.S. manufacturing output ended a two-month run of growth in July, while initial weekly jobless claims data was weaker than expected.

Considered a safe store of value during times of political and economic uncertainty, gold has gained more than $100 per ounce since the beginning of the month.

“Although gold prices look like they are overshooting, it has not been a good idea in the past to bet that the runaway train is going to come to a halt,” TD Securities’ Ghali said.

Investors digested conflicting signals on the trade front as well.

China’s finance ministry initially said it would take counter-measures against the latest U.S. tariffs on Chinese goods, but this was followed by a separate statement that Beijing hoped the United States would meet China halfway for a consensus.

“The overall uncertainty from the trade dispute is high and we also expect some central bank action for recession-fighting to come over the next weeks and months,” said Norbert Ruecker, head of economics and next-generation research at Julius Baer.”

Silver closed down $0.06 at $17.19.

Platinum closed down $6.00 at $839.30 and palladium closed up $23.00 at $1439.00. 

This is worth noting from Anna Golubova (Kitco) – De-Dollarization to Boost Gold Price Rally: SP Angel – Gold prices are likely to receive a boost from de-dollarization, say SP Angel analysts. “The recent increase in gold prices may be set to continue on the strength of a global push for de-dollarization,” according to the analysts. More specifically, countries like Russia and China are looking to move away from the U.S. dollar. “Countries increasingly hostile to the U.S. and dollar hegemony, such as Russia and China, are searching for alternatives to the dollar including gold,” the analysts add. “According to the World Gold Council, central banks purchased 70% more gold in Q1 of this year than during the same period last year, the most gold bought since Q1 2013.”

The above is not new or even surprising but is really worth reviewing from time to time because it tends to get lost in all the rhetoric. Trump is clearly not friendly, at times with Russia and China and they dish it out just as well.

And while I used to think this was political gamesmanship on both sides. I’m not so sure anymore. Sooner or later dollar hegemony will be challenged as big developing countries compete not just in manufacturing but in selling their political agenda. Everyone who thinks the US has too much power has been looking for a dollar alternative for years. No luck so far but as the political stakes increase this unlikely possibility should be more seriously considered.

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 Remains in a Solid Uptrend

Gold Remains in a Solid Uptrend

Commentary for Friday, August 9, 2019 – Gold closed down $1.10 today at $1496.60. Gold sold off a few dollars in the overnightHong Kong market and traders bought the dip in London and the follow through domestic market also traded somewhat higher. So going into the weekend I would describe pricing as choppy with enthusiasm as the technical picture supports the current uptrend. On the week gold was also happy – we closed at $1464.60 this past Monday so we are looking at a rise of $32.00 this past 5 days. So this shorter term uptrend remains in place and Wednesday’s close of down $9.60 indicates a healthy round of short term profit taking which was followed by a stronger aftermarket.

So what do you think? Is gold moving higher because the end of the world is nigh?

Such predictions have been around since the biblical apocalypse – Revelation but there are better places to look for reasons why gold is now very active. 

The primary one being that for the first time in a decade the talk of higher interest rates around the world has been replaced with a no inflation scenario which simply supports more quantitative easing. There is of course a hitch in this scenario.

As long as economic growth continues the FOMC will, sooner or later raise rates. This will reserve their cheap money stance and allow them to move back into traditional Keynesian “tinkering” – but for now this option is on the back burner.

Interest rates are moving lower and the free money party is on in spades, and that is what is pushing gold higher. This fundamental change in central bank policy is amplified as the relation between the US and China continues to deteriorate. It would seem that both sides are now hunkering down for a long economic winter’s night as each side refuses to appreciate they need each other. And amazingly for now at least the economic numbers seem to support this contention – so tariffs continue and bellicose behavior increases. 

I think calmer heads should at least consider why gold remains strong when there is no inflation?

The answer of course is that a technically sound gold market always gathers steam – rising prices always moves the buying needle. 

But there is also an interesting if not new dynamic added to this still developing story.

Don’t laugh but I believe the recently launched round of paranoia is turning heads. Really – there are some who claim this dysfunction between world powers will eventually lead to a Nostradamus size calamity and so the fear factor is rising.

Before you dismiss this speculation consider that in fact we have customers who are already on board. We have sold a giant amount of small bullion gold coins – 1/10th US Eagles, ¼ US Eagles and ½ US Eagles this past month. More than we sold all last year!

Traditionally the public always buys the larger 1 ounce gold eagle because is it a more economical way to own bullion – you pay a bit more for the smaller gold coins but they are popular with the survivalists because they believe they will be handy for “barter” in times of emergency. Granted this type of rhetoric has always been around but it’s worth another look as the world descends further into unquestioned acceptance of imaginary paper money. Before you dismiss this latest renewed interest in gold consider that more than 97% of all world paper currency is backed by countries who are technically bankrupt.           

This from Zaner (Chicago) – “Global equity markets overnight were lower with the Australian market one of the few markets treading in positive territory. Overnight the Chinese officially lowered their currency peg and official Chinese think tank economists think the value of the currency will fall further. Overnight economic news included Japanese gross domestic product which came in stronger than expected but softer than the prior result. From China consumer price index readings showed minimal gains while the producer price index in July on a year-over-year basis contracted rather significantly. Also out overnight were Swiss unemployment rate figures which were unchanged, German exports which contracted, German imports which rose slightly and French industrial output which contracted significantly. From Italy there trade balance surplus expanded while the trade balance with the EU narrowed. From the UK gross domestic product came in softer than expected while UK manufacturing production readings contracted by 1.4% and total UK business investment declined. The North American session will start out with July Canadian housing starts which are expected to have a sizable downtick from June’s reading. July Canadian jobs data is forecast to have a steady unemployment rate at 5.5% with a moderate increase in net employment. The July producer price index is expected to hold steady with June’s 1.7% year-over-year rate, while the July core producer price index (excluding food and energy) is forecast to have a minimal uptick from June’s 2.3% year-over-year rate.

Like all markets that go up aggressively in a compacted period of time, the gold and silver markets were in need of both technical and fundamental corrective price action following a series of multi-year highs posted earlier this week. However, prices should be underpinned this morning in the face of a lower peg in the Chinese currency but also because of the idea that the Chinese economy might be standing up better (strong commodity import news) than expected in the face of tariffs, as that might suggest the Chinese are capable of standing toe to toe with the US for a long time. The bulls should also continue to benefit from swirling expectations for a number of global central bank rate cuts ahead especially with another bank cutting rates overnight. While the gold market has not paid that much attention to classical supply-side developments lately seeing Chinese first half gold output fall by 5% should certainly provide a measure of fresh support for prices today. In the short term the ebb and flow of ETF investment interest will be a critical measure of bullish resolve. Overnight Gold ETF holdings expanded for the 9th straight session with the addition of 151,959 ounces bringing the total year to date purchases to 6.05 million ounces. While the markets aren’t making a big deal out of the lower Chinese currency peg, that issue is capable of prompting a tweet/threat from the White House. Lastly Dollar action below the 97.00 level this morning gives the bear camp an assist from the currency front.

Divergence within the PGM markets was palatable yesterday and again this morning with palladium in favor over platinum. However, neither platinum nor palladium have been able to consistently retain bullish vibes, the charts suggest more sideways consolidation and/or weakness and it would also appear as if a return to slightly optimistic market conditions are of little definitive benefit to either market. Pushed into the market, we favor the platinum market as the best bull play with an extending pattern of higher lows and frequent higher highs over the past two weeks. However, the platinum market has still not participated in the positive flow of money toward ETF instruments which suggest bullish sentiment toward the market is clearly lacking.

While it is extremely difficult predicting the direction of gold in the short term (given the fickle nature of trade relations) we give the bull camp the edge this morning because of general weakness in global equities, a lower Chinese currency peg and residual signs of Dollar weakness. Critical support in December gold is (unfortunately for the bull camp) a long way down at $1,486.80 due to the massive quick range up move on Tuesday. However, one could suggest the psychological $1,500 level is a closer in support point with resistance today seen at $1,529.60. On the other hand, silver yesterday seemed to show more significant corrective action on its charts than gold as if a more definitive setback is ahead. Initial support is seen at $16.81 and then again down at an old double high at $16.68.”

Silver closed unchanged at $16.90. This market should experience some backing and filling but, in my opinion buying any dip makes sense. The public is still buying a lot more than they are selling and silver remains cheap relative to old highs.  

Platinum closed down $3.70 at $861.10 and palladium closed up $5.80 at $1414.10.

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

Of course it’s not really patented but we do have some fun along the way. This is what the GoldDealer.com employees think: 9 believe gold will be higher next week and no one 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: 61 people thought the price of gold would increase next week 21 believe the price of gold will decrease next week and 18 think prices will remain the same.

Precious Metal Closes & Dollar Strength – Aug 5 – Aug 9

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 Powers to 6 Year High

Gold Powers to 6 Year High

Commentary for Monday, August 5, 2019 Gold Powers to 6 Year High – Gold closed up $19.00 today at $1464.60! Wow! Exactly what you might expect when one seems happy – gold moves to 6 year highs. At the center of what should have been just another food fight is the Chinese yuan – it would appear that China, at least for now will let their currency weaken – reacting to Trump’s continued attempt at punishing them for not playing the trade game properly, or at least not playing it the way we would had hoped.

The usual finger pointing began early and in my opinion is just beginning to heat up. This behavior is foolish actually on both sides – each believing that their political position is the gospel. At any rate the bad news was out early – the overnight gold market in both Hong Kong and London moved higher and the domestic followed as safe-haven demand pushed the price dynamic. The US market moved from $1458.00 through $1470.00 – then profit taking set in as the market moved back to unchanged. Traders then bought the dip moving prices back into the $1465.00 range. And gold for the second time this month moved above $1440.00 breaking above the $1420.00 / $1430.00 short-term consolidation range. At that point many traders were optimistic that a test of $1500.00 was in the making. As usual there is nothing better than a good old “scare” to wake everyone up and look to gold for some safe-haven protection.

And what about the dollar? The Dollar Index – reached a weekly high of 99.00 last Thursday but decided today that 97.5 was a more comfortable number. Still that much of a drop in a short time is a warning that things are just not right in River City.

And consider crude oil – another market which might make your head spin. This past week we have moved from $58.00 through $55.00 as Trump imposes further sanctions on Iran and our good friends in China suggest that doing oil business with Iran might be a great idea!

What a mess but for now gold holds all the technical cards. This latest scare has redefined the shorter term picture, but believe it or not gold still has work to do. We have definitely broke above $1400.00 and more importantly have developed significant trading buzz in the bargain.

But there is a lot of blue sky up here and the next really big price test looks like $1600.00 – a level we have not seen since mid-year 2012. Expect perhaps significant backing and filling – this would be constructive and might continue through year end but once the genie is out of the bottle it’s difficult to figure because shorter term profit taking makes everyone fidgety and nervous.

I can’t say the US gold market is hot – yet. But one thing is sure – if world and US stocks continue to move lower it will attract a lot of attention – more fresh speculative money and perhaps turn this latest flash in pan into a classic momentum play.    

This from Zaner (Chicago) – “Not surprisingly a massive washout in global equities overnight from last week’s trade actions resulted in a sharp range up move in gold to start the trading week. In fact gold reached a six year high and is being boosted further by additional weakness in the US dollar anxiety and speculation is rampant on the probable next moves from the US and or China with some press outlets now predicting a currency war. In our opinion the currency war would likely result in a severe washout in the dollar and that could leave a large amount of global capital with some hesitancy in flowing toward US treasuries. Therefore the gold market might win out with very little competition throughout the marketplace. Psychologically the gold market should see added lift from news that Gold ETF funds have now added holdings for 5 straight days with net purchases this year at 4.87 million ounces gold ETF holdings are now at the highest level in over a year. Unfortunately for silver bulls Silver ETF’s reduced their holdings in the last trading session but purchases for the year still total 74.7 million ounces. Clearly the gold market is unfazed by news overnight from India where July imports were said to have dropped by 69% versus year ago levels. The path of least resistance is pointing up with the next resistance point derived from the monthly charts up at $1500. While the news of a bullish gold survey on Wall Street could indicate the market is closing in on overdone status, gold has seen the “list” of bullish fundamental themes present early last month return and therefore the prospects of another leg up appear to be strong. The latest positioning report in gold did show gold to have the largest net long since September 2016, but the market also showed a significantly larger net spec and fund long reading for weeks ahead of that peak and that might indicate the potential for additional buying fuel on the sidelines now. The July 30th Commitments of Traders report showed Gold Managed Money traders added 13,848 contracts to their already long position and are now net long 231,365. Non-Commercial & Non-Reportable traders added 9,002 contracts to their already long position and are now net long 327,423. While the silver market has recovered from significant declines last week, its charts are much less bullish and silver appears to be diverging somewhat with gold and we think that is because of its physical commodity status and the threat of renewed global economic headwinds. Furthermore, the silver market has the largest net spec and fund long position since April 2017 and the market also has significant overhead consolidation resistance from the past two weeks around the $16.50 level. While silver could benefit from safe haven lift, we suggest gold is a better play for economic anxiety. Silver positioning in the Commitments of Traders for the week ending July 30th showed Managed Money traders were net long 65,327 contracts after increasing their already long position by 11,166 contracts. Non-Commercial & Non-Reportable traders were net long 88,744 contracts after increasing their already long position by 7,197 contracts.

Like other industrial commodities, the PGM markets were smashed last week as a result of the sudden deterioration in global economic prospects arising from the latest US tariff threat. Fortunately for the bull camp in palladium, the market has returned to what has been a key pivot point/support level at the psychological $1,400 level. Furthermore, the net spec and fund long positioning (prior to the large washout last week) was already within the range of the last 18 months and has probably drifted down to the lowest levels since September of last year if adjusted for recent declines. Palladium positioning in the Commitments of Traders for the week ending July 30th showed Managed Money traders added 242 contracts to their already long position and are now net long 14,329. Non-Commercial & Non-Reportable traders added 516 contracts to their already long position and are now net long 12,811. Like the palladium market, the platinum market has also returned to a level that has been critical pivot/support for nearly 10 months and its net spec and fund long positioning has fallen to very modest levels. It is also possible that the liquidation last week below $850 (which was rejected) balanced the market as the major range down day was forged on significant trading volume. Platinum positioning in the Commitments of Traders for the week ending July 30th showed Managed Money traders were net long 10,441 contracts after increasing their already long position by 9,526 contracts. Non-Commercial & Non-Reportable traders net bought 6,027 contracts and are now net long 34,174 contracts.

The path of least resistance is pointing upward in gold to start the trading week, but we are a little skeptical of the bull case in silver. While we acknowledge the shift toward economic anxiety at the end of last week, that line of thinking has been stoked by noted declines in global equities to start the trading week. With some media outlets this morning even touting the prospect of a currency war an additive measure of anxiety buying is added to the equation. Some will suggest the upside breakout from a 40 day sideways consolidation projects gold prices to the $1,500 level as that uses the 40 day range measurement of $50 above the markets recent consolidation highs which were situated around $1,450. Unfortunately significant volatility at the end of last week leaves uptrend channel support fairly far down at $1,417.60 but we would peg closer in and more critical support at $1,446.50. As indicated silver might have some upside capacity but thick resistance on the charts is seen at $16.55 and the fundamental case might be limiting.”

Silver closed up $0.13 at $16.35 – still plenty of upside here especially if gold runs. Keep in mind this market is still trading at a huge discount to old highs.  

Platinum closed up $5.00 at $855.20 and palladium closed up $12.10 $1411.10. 

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 – Bought the Rumor and Sold the News

Gold – Bought the Rumor and Sold the News

Commentary for Wednesday, July 31, 2019 – Gold closed down $3.60 today at $1426.10. It held the line overnight in Hong Kong but weakened somewhat in the late London trade. And the domestic trade was steady to weaker but not anything drastic.

My bet is that traders were just reacting to the usual “buy the rumor sell the news” theory that always develops when everyone gets on the same page early. In this case most believe the FOMC would cut rates – either a quarter or half point today but would not know exactly because the FOMC would not, as usual show their hand before the market close.

What happened was expected – the Fed cut rates a quarter point – the aftermarket moved up a few bucks and then settled into unchanged then moved down $12.00 – so no fireworks because traders priced in this rate cut weeks ago and the rest as they say was a wet blanket. 

Of course everyone and their brother has an opinion here – a rate cut is good, a rate cut is bad and B of A Merrill Lynch (MarketWarch) throws its hat in the ring. Markets are warning that “monetary policy will not work” – “First, if central banks have failed to meet their inflation target in the last 20 years, in a market that is pricing low inflation forever and expects even more policy loosening, arguing that they should allow inflation to overshoot when inflation increases above the target is almost irrelevant,” they said. “Second, given for how long central banks have been missing their inflation target, covering the lost ground is impossible, in our view.”

Now consider that in the last month – certainly within the time frame of the expected FOMC rate cut the Dollar Index has been more than strong – moving from 96.77 through 98.17 as gold has moved from $1390.00 through $1440.00 before settling in the $1420.00 – $1430.00 range.

Now what do you make of that? Most will say that rate cut uncertainty pushed the safe-haven crowd toward the dollar (typical) and they would be right.

So the expected cut did not produce a big bang – most likely because the associated Fed talk was upbeat – our economic future in their view is progressing nicely – consumers are spending and perhaps the inference is that further rate cuts will not be necessary. That is why gold is a bit glum – the anticipation of the rate cut was a bigger deal than the rate cut itself.

All of this works for me in that gold still remains above $1400.00 but I would say that it’s premature to assume the Fed will not cut rates before the end of the year. Especially if recessionary talk creeps in around the corners – now this is unlikely but who knows what this picture will look like in 5 months.

Reuters posted a warning about consumer spending and savings claiming that growth continues flat. A warning that which went largely unnoticed – the Canadian’s are drowning in debt – “it took us 30 years to get in this fix and it might take another 30 years to climb out of this hole”. This is significant and should sound familiar – we are heading in the same direction. There are consequences here relative to a prolonged, perhaps indefinite cheap money policy. The “fix” (cheaper rates) becomes less and less effective and more inflationary over time. 

If you are looking for the latest tea leaf guess – keep an eye on the dollar – it will be tough for gold to push higher if the dollar continues strong.

Also keep in mind that the 60 day gold pricing chart is technically strong – this is a two edged sword. It’s great that prices have moved from $1300.00 though $1440.00 but it’s not good that gold has flattened out in June. It might suggest that this bullish leg is getting tired. But who knows gold could just be resting which is good for business and typical of a bullish uptrend.

For now however gold must get reenergized for the bulls to stay in control. That means showing continued strength above $1400.00. And like I have pointed out there is a lot of blue sky between $1400.00 and $1600.00 – the next big overhead resistance on our way to record highs.

So expect rounds (plural) of profit taking and bullish optimism to fade like a cheap suit – keeping in mind that sooner or later (my bet being sooner) gold bullion will shine because it always does when up against a paper dollar. All you need for this inflation receipt is time.    

This from Zaner (Chicago) – “So far this week the gold market has performed impressively in the face of signs of strength in the dollar and with the dollar falling back slightly to start today that gives gold a slightly positive start. With the US/Chinese trade talks concluding in Shanghai and the President yesterday seemingly claiming the Chinese were ripping off the US, it would seem unlikely that government communiques later today will conclude progress was made and that could provide gold with some minimal support. In fact, given chatter in the media predicting a continuation of US/Chinese trade tensions into next year, it could be difficult to fully remove trade as a safe haven force for gold prices. Other minimal support for gold overnight came from news that Kazakhstan increased its gold holdings in June by roughly $2 billion and news of a 4.8 ton inflow into gold backed ETF’s. In the end with Gold seeing spillover support from strength in gold mining stocks yesterday that action should probably continue ahead the Fed decision later today. On the other hand, precious metals markets are somewhat hopeful of a 50 basis point rate cut and therefore some portion of the bull camp might be disappointed today. However, it is difficult to make a 25 basis point rate cut a lingering bearish development for gold and silver prices, but a conservative move today could certainly result in a wave of dollar-orientated selling. Unfortunately for the bull camp, the gold market rally over the prior three trading sessions saw declining volume and open interest figures and that either suggests bulls are unwilling to commit ahead of a key macro events or that bullish sentiment is indeed waning. In the end, the gold market in particular faces a significantly important juncture today as the gold market rally from the May lows was built on a “list” of bullish fundamental forces and today will be a test of several of those elements. While silver traders continued to tout a veritable explosion in silver options trading volumes, trading volumes in silver futures have consistently fallen from the July 19th high which suggests buyers might be balking at prices above $16.25.

After showing some early strength yesterday, the PGM markets fell back with the palladium market in particular forging severe damage on its charts. However, the PGM markets still have some measure of bullish tinge to their charts unless October platinum falls below uptrend channel support at $862.50 and September palladium falls below the psychologically important $1,500 level on a close basis. If it were not for the string of very important big picture events over the coming three trading sessions, we would be inclined to suggest purchasing platinum and palladium as they near what has been credible chart support levels recently. On the other hand, the benefit from the US Fed could be unimportant to the PGM trade and the primary focus of the markets might settle on US/Chinese trade relations which might be considered bearish. In our opinion, the trade impact on PGM prices is likely to be more negative than positive for the rest of this week. There continues to be surprisingly little information flow on the South African wage talks, which as we indicated yesterday might mean the two parties are generally getting along and perhaps that is responsible for the weakness in prices from the middle of last week.

While predicting significant volatility around potential major fundamental events tends to result in less than surprising amounts of gyrations, it is possible that gold could shake off any post Fed weakness today and eventually become happy with a 25 basis point rate cut. Certainly the lack of a 50 basis point hike will be disappointing to some gold and silver bulls initially but a 25 point cut and dovish promises from the Fed would also be negative to the US dollar and supportive of gold. Uptrend channel support in the December gold contract today is seen at $1,435.90 and resistance is seen at $1,447 and again at $1,452.60. The trend technically remains up but a temporary test of the bull’s resolve will probably be seen today. Fortunately for the bull camp the silver market has coiled sideways for the last two and half weeks and has probably balanced the overbought technical condition from the sharp July rally. Like gold a temporary disappointment from the Fed might be seen today but we see support down at $16.36 holding.”

Silver closed down $0.15 at $16.35. Think this market is over extended? I don’t, the public continues to buy and silver bullion for now remains “steady Eddie” – the future here is bright and the only reason there is not a line in our parking lot is because everyone has forgotten recent silver highs and the not so long ago picture of little new product available. If you are a long term player and have available funds this market in my opinion is still too cheap.   

Platinum closed up $6.30 at $876.10 and palladium closed up $15.30 at $1519.20.

This is our usual ETF information – Gold Exchange Traded Funds: Total as of (7/24/2019) was 71,735,309. That number this week (7/31/2019) was 71,894,088 ounces so we gained 158,779 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 71,894,088 and the record low for 2019 was 67,430,173

Silver Exchange Traded Funds: Total as of (7/24/2019) was 668,474,967. That number this week (7/31/2019) was 668,870,007 ounces so we gained 395,040 ounces of silver.

Platinum Exchange Traded Funds: Total as of (7/24/2019) was 2,927,148. That number this week (7/31/2019) was 2,945,675 ounces so we gained 18,527 ounces of platinum.

Palladium Exchange Traded Funds: Total as of (7/24/2019) was 632,441. That number this week (7/31/2019) was 628,596 ounces so we dropped 3,845 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 Continues to Consolidate

Gold Continues to Consolidate

Commentary for Friday, July 26, 2019 – Gold closed up $4.60 today at $1418.50. Monday gold closed at $1425.30 so on the week we are down $6.80 in typical quiet summer trading. Gold prices were firm in the overnight market both in Hong Kong and London pushing towards $1225.00 but sold off in the domestic trade on the open reaching $1414.00 before traders decided to buy the weakness. They then pushed to a daily high ($1425.00) and settled for a weekly close mid-range.

So a typical week with typical pricing “chop” but technically the longer this consolidation pattern remains in place the greater likelihood of a significant break – either higher or lower. 

The more fundamental traders are mulling over the coming FOMC decision on interest rates. The meetings which will be most scrutinized are held on July 30th and 31st and September 17th and 18th. I originally thought they would not act at the earliest convenience but everyone seems to think an interest rate cut is in the cards by next week.

The rate cut will be either a quarter or half point – either choice will support gold prices because this will confirm that the Federal Open Market Committee has abandoned any hawkish notion that an improving economy equals higher interest rates.

The theory that you created cheap money to encourage business when things slowed down and payed the money back when things improved used to be mainstream thinking in modern central banking. And probably still is but the Fed has decided to drag its feet – anything to keep Wall Street numbers up and the current business cycle intact.

With little inflation I’m sure they feel there is no need to raise interest rates and rain on our economic parade because Europe is still struggling and there are trade problems with China.

So the path of least resistance is to stay with a cheap money policy and watch carefully to see if this financial pot boils. We could keep banging on much like the Japanese have done for more than a decade but there is always a price to pay – in their case real growth came to a standstill.  

The problem being that as we tread lightly with interest rates – we continue to not only create more debt but fail to recognize that some debt on our balance sheet is toxic and will create unforeseen consequences.  

So will this continued loose money policy create the right environment for record gold prices? Well it sounds good but I think this FOMC move from “hawkish” to “dovish” is – to some degree already baked into this cake. It is one of the reasons we remain above $1400.00.

Of course there is more to it than that – this new economic machine has plenty of moving parts. And everyone is not optimistic – some claim that gold’s latest run to higher ground will turn into another bull trap, but I wonder? Is gold finally getting ready to roar – it has been in a long price channel for more than 6 years.

And during that time the Fed left the money flood gates wide open promising this temporary “fix” would change when things got better. But now they seem to have changed their mind – based on either a new sight picture or they are just punching around in the dark.  

So at least consider that something new might be afoot as are our friend Sherlock might say.

Gold has broken higher – a technical plus but we still need longer term confirmation.

Worth noting – inexplicable the dollar is getting stronger. The Dollar Index this morning trading above 98.00 – under normal circumstances this would be enough to send the bulls to the sidelines – rising gold prices here indicates underlying strength. And if the Fed announces a rate cut next week the dollar will move lower further supporting higher gold prices.

Finally all talk of shorting gold has disappeared. This is also significant.

And surprisingly our usual sleepy summer trade across the counter has turned active indeed. No buying whales as yet but there is enough action to keep everyone busy.

Could those crazy hard asset freaks who claimed gold would be $2000.00 before year end actually be right? I would not bet a lot of money on this outcome, but on the other hand I would not be too surprised if prices are heading much higher.             

This from the Zaner Group – John Miles (Chicago) – “Global equity markets overnight were mixed with the markets somewhat undermined as a result of Amazon results but sentiment was saved by other favorable US corporate earnings reports. Overnight economic news included CPI from Tokyo which came in slightly under expectations but at a fairly healthy clip of +0.9%. From Europe German import and export prices for June fell by more than expected while French consumer confidence in July came in slightly better than expected. Also from France producer prices for June contracted by more than expected with Italian business confidence readings for July down and Italian consumer confidence for July jumping moderately. The North American session will be highlighted by the first preliminary reading for second quarter gross domestic product which is expected to have a moderate decline from the first quarter’s 3.1% annualized rate. Earnings announcement will include AbbVie, McDonald’s, Colgate-Palmolive, Illinois Tool Works, Phillips 66 and Weyerhaeuser before the Wall Street opening.

As in the equity markets where “good economic news is bad for prices”, positive US scheduled data yesterday was bad news for gold, silver and platinum prices. Therefore today’s US GDP report could present a very significant juncture for gold prices. In retrospect, good US data yesterday reduced the prospect of a 50 basis point US rate cut next week and provided the dollar with fresh buying interest. Given the broad based economic nature of the GDP report today any surprise result should prompt significant volatility. After a decline in gold and silver ETF holdings earlier in the week, a decline of 80,148 ounces in gold holdings and a 1.1 million ounce decline in silver holdings yesterday could cause speculative sentiment toward the metals to soften and that in turn could increase selling today in the event of a positive US GDP reading. Furthermore a softening of speculative inflows to gold and silver ETF’s could also limit the amount of futures buying in the event of a soft GDP report. However we think the whisper number for GDP is for a slightly soft reading and an as expected or above expectation reading could result in a poor end to the trading week for gold. In the event of a good GDP reading we suspect that silver will diverge positively with gold. With the last Gold COT positioning report posting a net spec and fund long of 313,072 contracts and the gold contract from the COT report mark off date into the July high posting additional gains of $43, the net spec and fund long in gold was probably at the highest level since September 2016. Therefore we see risk to longs escalating today in the event prices come out of the GDP reaction lower. While we think silver will also exhibit some corrective action if gold dips early, silver has been very resilient and gains this week have been accompanied by rising open interest. On the other hand, silver since the last positioning report into the recent high managed a rally of $1.10 and that has likely put the spec long at the highest level since February.

Despite seeing an inflow of 14,153 ounces into platinum ETF holdings overnight and with those holdings on the year up by 572,992 ounces, the platinum market has extended its corrective reversal from yesterday. Obviously the market was overbought and there appears to be a rotation out of long platinum short palladium spreads. In other words, platinum appears to be vulnerable to more corrective action and it also appears to be poised to outperform palladium on the downside. Certainly a three day low to high rally of $42 overextended platinum, and it would now appear as if prices that coincided with a series of highs (on five separate occasions since last November) halted the platinum rally yesterday. We continue to be very surprised with the lack of news and headlines flowing from the South African wage negotiations and that might mean the parties are generally getting along and or making some progress toward a deal. However, as in all negotiations relations can suddenly breakdown even at the last minute. While the palladium market might be dragged down by corrective action in other precious metals markets, the last two weeks have built fairly solid consolidation support at the $1,500 level.

Traders should expect a moderate measure of two-sided volatility today as the adage that bad economic news is good news for gold prices will be tested following GDP. However, the bear camp would seem to have a slight edge from the charts today which have worked lower since last week and sentiment was clearly damaged further by yesterday’s large-range-lower close. We do suspect that silver will diverge with gold in the event of a positive GDP reading. Critical support and a probable failure level is $1411.10 in gold with close in silver support seen at $16.345. In the end we doubt the uptrend patterns will end today but increased volatility and some further temporary liquidation could be difficult to avoid in the wake of another new high for the move in the dollar. In conclusion the bull camp badly needs a GDP headline reading below 1.9%.”

Silver closed down $0.01 at $16.33.

Platinum closed down $5.70 at $862.70 and palladium closed down $2.90 at $1527.50.

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: 9 believe gold will be higher next week and no one 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 27 believe the price of gold will decrease next week and 20 think prices will remain the same.

Precious Metal Closes & Dollar Strength – July 22 – July 26

Gold Continues to Consolidate

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 Holds its Ground – For Now

Gold Holds its Ground – For Now

Commentary for Wednesday, July 24, 2019 – Gold closed up $2.70 at $1422.80 – the market was lower on the open pushed into the $1428.00 range and then sold off to almost unchanged. This is the usual chop we have seen – the 30 day picture moving between $1390.00 and $1440.00. Gold may seem like it has turned sleepy but there is enough going on to keep both the bulls and the bears more than interested.

If there is a short-term bias it may be mildly down and this past week we have seen more sellers than buyers in gold bullion. But I just don’t think there is much future in being short gold these days, especially as the central banks continue to ante up and there is not much appetite anywhere in government to spend less or even worry about balancing the books.

Folks they are not even considering a plan to pay back some of the money borrowed this past decade and the US red ink continues to mount. According to CNN the US budget deficit jumped 23% so far this year and we are still counting and still spending like drunken sailors.

And while gold is certainly not zooming higher it remains in the fight even though the Dollar Index has moved from 96.71 through 97.74 since last Friday – that amounts to a full point higher which could have easily rained on bullish sentiment. Yet gold has held its ground. 

The “feel” of this market is still optimistic, even if you are not an optimist. But this prolonged “back and forth” over the last month suggests that this latest bull leg, which began in early June above $1300.00 and pushed to $1450.00, might be getting tired.

Keep in mind however that the $1400.00 “cap” goes back to mid-2013 – and we have broken to the upside – so further confirmation here might bring in a truck load of new buyers.

Still it’s good that many remain cautious – especially because inflation numbers are subdued and crude oil has turned choppy around $60.00. For now I would assume today’s pricing is simply encouragement and gold remains in a long consolidation channel which began 6 years ago.

If you are looking to add to your bullion position this “rest” in pricing could change quickly. Silver is a good example. Prices remained steady in the $14.00 to $15.00 range but the public remained a steady buyer – nothing huge just general prolonged interest. Then all of a sudden we move higher by more than a dollar and folks are talking about $20.00 silver.

This kind of renewed enthusiasm is just what the gold market now needs. Like I said there is enough going on to quickly tip the pretty even balance between the bears and bulls.

So could this market sell off and get cheaper? Sure in fact that would probably be healthy – especially if the gold market caught a bid around $1390.00. This alone would encourage the rank and file. And if prices pushed towards $1600.00 even the American public would join the party.     

This from Zaner (Chicago) – “Global equity markets overnight were mixed with the biggest losing market down less than 1% and the strongest market gaining less than 1%. Apparently news that US trade negotiators will travel to Shanghai for meetings next week, has lost its capacity to lift equities. Overnight the market was presented with Japanese Nikkei manufacturing PMI for July which came in a touch weaker than expectations but above the prior month. Also from Japan leading economic index for May came in softer than expectations and a full point below the prior month. Lastly from Japan coincident indicators for May bested expectations and came in 1.3 points above the prior reading. From the euro zone French business climate, manufacturing PMI services and PMI composite readings all came in softer than expected and softer than prior month’s readings. German PMI composite and manufacturing PMI came in much weaker than expected while German services PMI came in slightly above expectations but below the prior month. From the UK a mortgage approval report for June showed a slight pickup in loans approved. The North American session will start out with a weekly private survey of mortgage applications, followed by the July Markit “flash” US manufacturing PMI which is forecast to have a modest uptick from the previous 50.6 reading. June new home sales are expected to show a moderate increase from May’s 620,000 annualized rate. A busy day of earnings announcements will include AT&T, Boeing, Thermo Fisher Scientific, UPS, Caterpillar and Norfolk Southern before the Wall Street opening while Facebook and PayPal report after the close.

The gold market continues to fight off a three day high to low washout of $40, with a bounce of $13 and has forged part of the bounce in the face of dollar adversity. It does seem as if the gold market was pressured while silver prices were held back yesterday because of the chain reaction of a resumption of trade talks which in turn lifted the dollar. In our opinion, the dollar ultimately was lifted because of the trade news as US scheduled data in the same timeframe should have pressured the greenback. In looking forward the gold market should draft support from news that the Russian central bank bought 18.6 tons of gold in June bringing the year to date purchases to 96 tons for the first six months of 2019. The Russian central bank has reportedly 2208 tons of gold as per a recent Russian central bank report. The gold market continues to be supported while silver continues to be lifted by rate cut hopes but both markets continue to see ongoing inflows into ETF’s. Apparently the world’s second-largest gold backed ETF on Monday saw its biggest inflow in more than a year while the smaller silver I-shares trust on Monday pulled in 146.5 million ounces which is the most since 2013. However total Gold ETF holdings yesterday declined by roughly 80,000 ounces. Yesterday silver back ETF’s jumped the most ever and extended their inflow pattern to a 12th straight session. Yet another supportive element for gold came from bullish comments from the Commonwealth Bank of Australia and Sprott-Asset-Management. Minimally countervailing the upward track in gold prices this morning is news of a 19% second quarter gold production gain from Polymetal. On the other hand Russia’s Polymetal pegged its silver production to have declined by 11% in the first six months of this year relative to year ago levels. Early today gold was given a lift by higher gold closes in Hong Kong and Shanghai. In the end the path of least resistance remains up in both gold and silver. It should be noted that one metals fund manager overnight indicated that gains in gold prices should result in even larger gains in silver prices. Not surprisingly, silver continues to see a series of bullish price forecasts with another fund manager projection yesterday calling for $17.00 silver pricing late this year and $18.75 pricing at the end of next year. Yet another fund manager projected silver to have another 40% of upside capacity.

The PGM markets are both higher this morning with October platinum ranging up and forging another higher high for the move and seemingly on track for a trade above $875. Overnight platinum ETF holdings actually declined by 5,000 ounces with palladium ETF holdings virtually unchanged. However platinum derivative holdings year to date have seen an inflow of 558,850 ounces while annual palladium ETF holdings year to date have declined by 118,507 ounces. In short there is evidence of speculative rotation toward platinum and away from palladium with total palladium ETF holdings the lowest since February 2010 and total platinum ETF holdings at the highest levels ever! In short, the platinum up-trend looks to remain in place with any evidence of a South African mining strike potentially propelling the October platinum contract quickly up to $900.

Gold and silver prices start out on a modest positive footing this morning and more hard-fought gains are likely but dollar action could limit gains. Uptrend channel support in August gold today is $1412.80 with a steep uptrend channel support line in September silver seen at $16.37. Initial resistance in silver today is $16.64 and then $16.93 from the weekly charts. However sensitivity to bull items has been moderated in the wake of very noted strength in the dollar. Therefore, traders should focus their attention on the long side of silver which is showing very impressive chart action, it is supported by ongoing investment in derivative instruments and it remains very cheap relative to gold. Traders should consider bull call spreads in silver and/or being long silver against gold.”

Silver closed up $0.14 at $16.55.

Platinum closed up $19.40 at $875.20. Just as an aside – if you are even lukewarm about gold bullion you should consider a value buy of platinum bullion at these levels. Palladium moved higher by $19.90 at $1535.00 today. 

This is our usual ETF information – Gold Exchange Traded Funds: Total as of (7/17/2019) was 70,953,130. That number this week (7/24/2019) was 71,735,309 ounces so we gained 782,179 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 71,817,034 and the record low for 2019 was 67,430,173

Silver Exchange Traded Funds: Total as of (7/17/2019) was 641,046,536. That number this week (7/24/2019) was 668,474,431 ounces so we gained 27,428,967 ounces of silver.

Platinum Exchange Traded Funds: Total as of (7/17/2019) was 2,932,894. That number this week (7/24/2019) was 2,927,148 ounces so we dropped 5,746 ounces of platinum.

Palladium Exchange Traded Funds: Total as of (7/17/2019) was 638,874. That number this week (7/24/2019) was 632,441 ounces so we dropped 6,433 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 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.

Posted on

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). 

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

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