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Gold Heats Up?

Gold Heats Up?

Commentary for Friday, June 14, 2019 – Gold closed up a disappointing $0.90 at $1340.10 today. Itopened flat but quickly moved immediately higher breaking above $1350.00 but short term profit taking quelled the rally – bears held sway and the trade settled for almost a draw as the market closed. This is however a nice progressive pattern which will encourage the technical picture but leaves the door open to short-term profit taking. How gold recovers from this type of choppy trade will paint a telling picture.

Most of the buzz created these past few days has been over the escalation of tension in the Gulf as oil tankers were attacked supposedly by Iran. Frankly this area has always scared me – it has traditionally been an ignored tinder box – which says a lot about the world’s ambivalence today.

It’s impossible to say how this problematical situation will develop as relations between President Trump and Iran deteriorate, but historically everyone knows the danger so I expect diplomatic connections will prevail even if they are done under the table.

Still the price tension builds – looking at the 30 day gold chart. We have moved from $1280.00 through the challenging $1350.00 top before settling lower.

While this is encouraging technically I have to wonder if this will turn out to be “too much too soon” – in other words is gold now over bought? Perhaps but the choir singing for higher prices is getting louder so it will be interesting to see how today’s mild rebuke plays out next week.

It is worth noting that our across the counter gold bullion business has suddenly woke up – really out of nowhere – as more than a few major bullion buyers have shown up. This is not 10 or 20 grand action but legitimate “big boy” buying from the public. A public I want to point out which has been a complete seller this past month.

So I’m hedging a bit here but this is a great reminder that there are plenty of buyers who have been sitting on the sidelines since early January – watching gold move higher then lower then higher – some waiting for a breakout some for a breakdown, hoping for cheaper prices.

Still, gold is trading at 14 month highs and so the profit taking scenario has to be part of everyone’s thinking.

On the other hand the reasons supporting higher gold prices create more conviction. Trade tension between the US and China, the talk of rate cuts of the Federal Reserve before year end, troubles in the Gulf which threaten oil.

But all of this also encourages safe-haven buying in the dollar – look at the Dollar Index today moving from 97.00 through 97.50. And if any really dangerous developments happen over the weekend my bet would be that the dollar would easily move above 98.00.

This could slow gold’s progress and encourage more profit taking because recent gains have happened over such a short time. So there are plenty of things for the gold bullion community to keep track of these days.

One thing is sure – the old “ho-hum” physical marketplace is definitely a thing of the past. The gold and silver market has once again become a great topic of conversation.

And make no mistake about this; the American public is once again ready to jump in with both feet if any of these bullish trends gain further momentum. The key here however especially in the short term is pricing – gold must show strength above $1350.00 and be able to push higher – not an easy task but well within reach under the circumstances.    

This from Zaner (Chicago) – “Global equity markets overnight were mostly lower with Chinese stocks down by almost 1%. Economic readings released overnight included Chinese Industrial output which declined to the lowest level in 17 years while Chinese retail sales came in better-than-expected. Other reports included Italian industrial orders and industrial sales which contracted and Italian consumer prices which continued to climb but at a slower than expected pace. The North American session will start out with May retail sales which is expected to have a moderate uptick from April’s -0.2% reading. May industrial production is forecast to have a moderate uptick from April’s -0.5% reading. May capacity utilization is expected to have a minimal uptick from April’s 77.9% reading. April business inventories are forecast to have a modest uptick from March’s unchanged reading. A private survey of June consumer sentiment is expected to have a modest downtick from the previous 100 reading.

Despite a short term overbought condition the path of least resistance looks to remain up into the last trading session of the week. Clearly the list of supportive geopolitical flashpoints has expanded from the beginning of the week with the Iranian situation the foremost on the list. On the other hand geopolitical tensions between the US and China were stoked by US pressure on the Chinese President to meet at the G20 “or else tariffs will be raised”. The potential support for gold from the Middle East events this week was given added impetus by US State Department claims yesterday that Iran was responsible for the attacks and the mining of Gulf of Oman shipping lanes. In another fresh bullish development for gold, famed investor/trader Paul Tudor Jones has turned bullish toward gold with a price projection of $1,700. We would also suggest that the potential for further rate cut inspired gains in gold prices have been improved by low price/inflation data from a number of US economic data points this week. Furthermore, one could argue gold has continued to see a slow increase in economic uncertainty because of numbers showing deceleration in the US and the markets will be looking closely at US retail sales today to render a final economic judgment on the week. While the gold market has not paid that much attention to the long term pattern of declining South African gold production, South Africa again this week posted significant (-19.5% year-over-year decline) production losses. It should also be noted that a prior month of declines in South African gold production was revised down. In conclusion without a very definitive risk on environment to end the trading week, significant gains in the dollar and or stronger-than-expected US retail sales/industrial production results the path of least resistance looks to remain up.

While one might have expected platinum to lead the PGM complex higher this week because of the potential for strikes over wages, it was the palladium market that ranged up impressively and has extended a very uniform June rally pattern again today. Perhaps the palladium market is benefiting from bullish Paul Tudor Jones views toward gold as many see palladium as a cheaper alternative investment than gold. The bull camp in palladium could also suggest that a lot of the same bullish fundamentals present in gold apply to palladium particularly the benefit of any US rate cut action. The palladium market might also be catching a lift from favorable coverage on a strong performing palladium ETF which has reportedly gained more than 11% this year as that suggests stellar 2018 gains in that ETF are extending straight away and that creates bullish buzz for palladium. It is also possible that long palladium/short platinum spread interest has returned, thereby giving palladium some fresh additional buying. We continue to think near term upside targeting in September palladium is seen at $1,459.10, and we would remain bullish toward the metal as long as it maintains closes above $1,398.

As indicated already, the bullish forces from the beginning of the week in gold remain in place and there are signs that investors/money managers are now turning more bullish toward gold. From our perspective economic uncertainty has been expanded this week because of slack data but also because of US claims that Iran is behind the shipping attacks. While many still doubt the Fed will cut rates next week the probability of a US rate cut in the coming months continues to climb. However, the dollar action has become somewhat limiting but perhaps unimportant given the growing list of other bullish forces. Critical pivot point support moves up to $1,345.90, resistance is obviously $1,362.20 but the bull camp probably needs to close above the $1,350.00 level to avoid another failure at that psychological level.”

Silver closed down $0.09 at $14.78. Steady eddy here – the public likes this cheap price range and remains a steady buyers of the usual bullion products.   

Platinum closed down $4.70 at $803.30 and palladium closed up $23.10 at $1452.70.  

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 1 thinks gold will be lower and none think it will be unchanged.

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

Like the employees our customers were given three choices – up – down – unchanged. We limited the survey to a random sampling of 100 transactions – unscientific but worth considering because these people took action: 58 people thought the price of gold would increase next week – 22 believe the price of gold will decrease next week and 20 think prices will remain the same.

Precious Metal Closes & Dollar Strength – June 10 – June 14

Gold Heats Up?

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 Remains Steady

Gold Remains Steady

Commentary for Wednesday, June 12, 2019 – Gold closed up $5.50 at $1331.90. To me gold continues to look choppy with a positive bias – today’s market opened higher, sold off and recovered in short order and then sold off again finishing the day midrange. World stock markets continue to worry some but I don’t see anything out there to suggest investors should be hiding under the bed.

Still there is a lot of uncertainty which obviously helps the gold bullion market. It is worth noting that gold is moving higher despite a stronger Dollar Index – which today moved from 96.6 through 96.9. No big deal but this is one of those small details which creates more intrigue.

Chris Mathews (MarketWatch) cites billionaire investor Paul Tudor Jones who wants everyone to remember “rate cuts 101”. Jones expects the Fed to cut interest rates before year end which will help the gold market. So this notion of lower interest rates is moving into mainstream thinking. This at a time when inflation numbers remain subdued but lower rates will push the dollar lower and gold higher. Chuck Butler (creator and editor of A Pfennig for Your Thoughts) thinks the dollar is in big trouble and he has been studying currencies for years.

I can’t believe the US will continue to escalate the notion of trade wars but you never know these days especially with a President who does not seem to blink in the face of political heat.

I do worry about posturing – if it gets out of hand the precious metals will benefit. 

So you might ask – if things are looking cloudy out there why is gold not roaring higher? Actually – the rule of late has been in times of uncertainty – park your funds in the dollar. This strategy has held up pretty well but gold enthusiasts believe that dollar strength will not last forever. And once this exit begins these funds will pour into gold bullion.

On the shorter term gold bulls still have an advantage but gold must show strength above $1350.00 to hold investors’ attention. We are not seeing a great deal of buying across our counters at current levels – mostly sellers. But these past few days there have been some big boys asking questions – which is an encouraging sign.     

This from Zaner (Chicago) – “Global equity markets overnight were weaker with the exceptions the Australian and Russian markets. Violent the protests in Hong Kong against an extradition treaty has some traders suggesting that the situation in Hong Kong in some way turns up the pressure on China in the trade negotiations. More importantly Chinese producer inflation slowed overnight and Chinese auto sales plunged in a sign that the Chinese economy is under duress. In fact despite factory gate price weakness the Chinese are apparently seeing food prices explode from African swine fever and adverse weather in fruit producing areas. Economic data released overnight included French nonfarm payrolls which on a quarterly basis posted more gains than expected, Spanish consumer prices which matched expectations and Chinese new loans for the month of May which came in below expectations but above the prior month. The North American session will start out with a weekly private survey of mortgage applications. The May consumer price index is expected to have a minimal downtick from April’s 2.0% year-over-year rate. The May core consumer price index (ex food and energy) is forecast to hold steady with April’s 2.1% year-over-year rate. The Atlanta Fed’s business inflation expectations survey will be released during mid-morning US trading hours. Earnings announcements will lululemon athletica after the Wall Street close.

In addition to comments yesterday from President Trump suggesting that “he” was holding up any trade deal the markets have picked up on the fact that no preparations for a meeting between the two leaders at the G20 are being made and that suggests a lack of fresh progress. Apparently the US has also indicated that its terms for a deal have not changed which in turn would seem to require Chinese concessions to make a deal. It should also be noted that the US and China both appear to be taking strategic steps to cushion their economies against trade actions with China providing fresh stimulus and the US reportedly turning to non-Chinese rare earth producing countries with efforts to develop their supply flow. Therefore it is not surprising to see gold tracking moderately higher this morning especially after two straight days of rather significant compacted selling. Even the dollar is providing support for gold and silver today as the charts appear to have reversed in favor of the bear camp even if the magnitude of the declines this morning are insignificant. Yet another supportive element for gold today is the developing pattern of weakness in global equity markets especially with the US market showing signs of forging second lower session. While hope for a Fed rate cut has been present consistently in the marketplace since the nonfarm payroll disappointment last week, the gold trade is beginning to look forward to next week’s Fed meeting as a possible junction for the Fed to acknowledge slowing concerns specifically because of the appearance that trade tensions are set to become a fixture.

Surprisingly the platinum market has forged a five day high in the early going today despite a story suggesting Toyota is planning to cut platinum use in new fuel-cell vehicles. It should also be noted that the PGM markets are managing gains despite a significant contraction in Chinese auto sales and a mild risk off condition flowing from equities. From a technical perspective the rally in platinum from the late May low has been accompanied by a consistent rise in open interest in a sign that investors/traders might be viewing the sub $800 level as value. While the charts in palladium are not impressive they are bullish with a very uniform pattern of higher highs and higher lows. However the market has moved within striking distance of the $1,400 level again but seemed to fall back from a test of that general area yesterday. Uptrend channel support today in September palladium is seen at $1362.40 with support in July platinum seen at $810.80.

With the moderately aggressive bounce to start today it appears as if safe haven interest in gold has been rekindled off the protests in Hong Kong, from press interactions between US and Chinese officials and also from signs of economic slowing in both the US and China. Because of the slowing and the unyielding stances in the trade talks the gold market has apparently rekindled support from expectations of a supportive Fed next week. In retrospect the $1325 level is given fresh credence as solid value and another trade back above 1350 is seemingly ahead. However the bull case could be thwarted in the event that August gold fails to hold above $1330. Unfortunately for silver bulls the charts are not as strong as gold and silver will see some headwinds from fears of global slowing. While we can’t rule out a retest of levels above $15.00 the failure to hold above $14.76 could signal an end to this week’s recovery attempt.”

Silver closed up $0.01 at $14.72.

Platinum closed down $3.70 at $809.10 and palladium closed up $15.90 at $1397.40.

This is our usual ETF information – Gold Exchange Traded Funds: Total as of (6/5/2019) was 68,536,947. That number this week (6/12/2019) was 68,317,590 ounces so we dropped 219,357 ounces of gold.

The all-time record high for all gold ETF’s was 85,108,867 ounces in 2013. The record high for Gold ETF’s in 2019 was 70,515,544 and the record low for 2019 was 67,430,173

Silver Exchange Traded Funds: Total as of (6/5/2019) was 611,170,344. That number this week (6/12/2019) was 614,241,286 ounces so we gained 3,070,942 ounces of silver.

Platinum Exchange Traded Funds: Total as of (6/5/2019) was 2,789,080. That number this week (6/12/2019) was 2,816,343 ounces so we gained 27,263 ounces of platinum.

Palladium Exchange Traded Funds: Total as of (6/5/2019) was 683,751. That number this week (6/12/2019) was 670,487 ounces so we dropped 13,264 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.

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Gold Weakens

Gold Weakens

Commentary for Monday, June 10, 2019 – Gold closed down $16.50 at $1324.70 today. Expected actually – gold has been predictably weak for years when approaching $1350.00.

There was an aftermarket surge in prices initially but even this settled down to a few dollars higher as traders consider gold’s stubborn overhead resistance at these levels.

The DOW roars so this is not helping safe haven demand as risk appetite moves higher.

I would say this looks like a healthy corrective pull back but as usual some caution is warranted.

The technical picture for gold still looks bullish but keep in mind we have seen an unusually strong rise in prices which has been in place since late May ($1280.00). This alone sets up the possibility of further profit taking but I think traders are looking for more of a choppy market as the paper players feel their way around.

The Dollar Index today was steady moving on both sides of 96.00 and crude oil this past week has been somewhat higher moving from $51.00 through $54.00 a barrel but the 30 day trend has been a drag on gold prices moving from $62.00 through $51.00.

This from Phillip Streible (Kitco) is interesting. “Just a couple weeks ago gold was on the edge and hugging the 200 DMA at $1274 where cautious bulls were carefully monitoring any potential break below this level before getting defensive. However, at that time we saw an uncommon phenomenon occur in treasury yields and this is what started this recent bull market and could keep it alive for months to come.

Ten-year treasury yields which move in the opposite direction from price have pushed down to 2.09% while short term rates like the 3-month treasury have held steady at 2.26% creating an inverted yield curve. This phenomenon has predicted the last four recessions and generally we see that recession occur within 7 to 24 months after the inverted yield curve has lasted for more than a quarter. Looking at the CME FedWatch Tool there is a 24.5% chance of a 25-basis point cut predicted at the June 19th meeting and an 87.4% chance at the July 31st meeting. This combination should continue to lend support to precious metals markets.”

I don’t see anything close to a recession in the near term but the financial markets both here and in Europe may not be as healthy as traders perceive.

Both us and the Europeans have embraced a very long term period of monetary expansion – debt is all over the place. I would not be worrying too much at this point but this kind of mismanagement builds in all sorts of unforeseen problems which might appear out of nowhere. 

This from Zaner (Chicago) – “Global equity markets overnight were all higher following a softening of tensions between the US and Mexico. It is a little surprising that the markets discounted suggestions from the US Treasury Secretary that the US would be perfectly OK with even higher tariffs on Chinese goods. In fact with the US trade deficit with China expanding again in the most recent data, a partial easing of US/Mexican tensions and a massive protest in Hong Kong regarding new extradition rules that would seem to favor the US over China in the trade conflict situation. The Asian session saw a first quarter reading for Japanese GDP revised upward to 2.2%. As suggested the May Chinese trade balance figures showed China’s trade surplus with the US increased to $26.89 billion versus a prior reading of $21.01 billion! Economic data released early this morning included the UK trade balance which saw a narrowing of its deficit, UK industrial production which declined by 2.7% and UK manufacturing production which also fell sharply. The North American session will start out with May Canadian housing starts which are expected to show a moderate decline from April’s annualized rate. April Canadian building permits are forecast to have a moderate downtick from March’s 2.0% reading. The April job opening and labor turnover (JOLTS) survey is expected to have a moderate decline from March’s 7.488 million reading.

Clearly the slight tempering of US/Mexican tensions has prompted an aggressive liquidation of gold with the additive pressure on gold seen from a bounce in the dollar. Suggestions from US officials that the US would be perfectly ok with increased tariffs on Chinese goods have been given little credence in the early gold trade this morning. Surprisingly the gold market has discounted news that Chines central bank gold reserves were 61.61 million ounces at the end of May versus 61.1 million ounces at the end of April. In fact the increase in Chinese gold reserves is the sixth straight increase in a row leading some traders to assume that China is in a gold reserve building mode. In our opinion, the soft nonfarm payroll reading last Friday probably increases the resolve of the Chinese in trade negotiations, but part of that potential windfall for Chinese trade negotiators is countervailed by the fact that US equities have recovered aggressively off the hope of Fed support of the US economy. While ETF holdings showed some noted inflows at the beginning of June holdings are still under the level seen on April 29th. While recent patterns have shown Chinese gold premiums to have expanded gold prices in Hong Kong closed lower today and that helped US gold to start the week out with a noted setback. With the most recent positioning report showing hedge funds and money managers increased their net longs it is not surprising to see increased volatility and a noted setback off a tempering of one of the key geopolitical conflicts. Speculative traders added significantly to their net long last week with the June 4th Commitments of Traders report showing Gold Managed Money traders are net long 117,915 contracts after net buying 84,781 contracts. Non-Commercial & Non-Reportable traders are net long 192,695 contracts after net buying 83,963 contracts. The June 4th Commitments of Traders report showed Silver Managed Money traders reduced their net short position by 19,111 contracts to a net short 19,931 contracts. Non-Commercial & Non-Reportable traders went from a net short to a net long position of 11,346 contracts after net buying 15,111 contracts.

Clearly the PGM complex did not participating in the influx of buying interest in gold and silver last week as PGM prices barely nudged upward. In fact, seeing much weaker than expected US scheduled jobs data last Friday, stories indicating lost PGM demand because of electric cars this morning, no improvement in US/Chinese relations and very low trading volume in palladium recently, it is clear that the bear camp holds an edge. It should also be noted that open interest in palladium has continued to erode from the March high in a fashion that suggests to us that it has lost the bullish buzz in place for most of last year. Palladium positioning in the Commitments of Traders for the week ending June 4th showed Managed Money traders net bought 216 contracts and are now net long 9,396 contracts. Non-Commercial & Non-Reportable traders were net long 8,903 contracts after increasing their already long position by 119 contracts. Despite the flare in prices, increasing open interest and higher trading volume last week the platinum market lacks a definitive bullish fundamental argument. In fact, platinum prices should remain very limited due to the deteriorating expectations for global auto sales. The June 4th Commitments of Traders report showed Platinum Managed Money traders are net short 12,714 contracts after net selling 2,586 contracts. Non-Commercial & Non-Reportable traders are net long 15,178 contracts after net buying 416 contracts.

With a downshift in one major geopolitical conflict the gold market has shown significant negative volatility overnight with a four day low and more two-sided volatility should be expected given an early higher dollar trade. However the August gold contract has seemingly found some support around the $1329 level and that level should be seen as a key pivot point today. On the other hand the $1325 level should be seen as a very important support level as we doubt that the markets will be presented with a straight line solution to US/Mexican tensions. On the other hand we expect US/Chinese relations deteriorating following news that Chinese trade surplus readings with US expanded again.”

Silver closed down $0.38 at $14.61.

Platinum closed down $0.90 at $803.70 and palladium closed up $29.10 at $1378.60. 

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

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

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

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

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

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

Posted on

Gold Firm into the Weekend

Gold Firm into the Weekend

Commentary for Friday, June 7, 2019 – Gold closed up $3.60 today at $1341.20. It opened rather flat, woke up and pushed nicely to session highs on a weak jobs report and settled lower for a modest gain. Short term technical territory belongs to the bulls but a wider view might suggest some caution here. We were at this level in late February when gold broke lower and eventually threatening $1270.00.

Granted Trump’s tariff policy has created tension and the fact that the Europeans seem to be as dovish as ever on interest rates – they will not rock their financial boat and continue to embrace cheap money. Now consider the notion that the US might lower interest rates, if necessary before year end and it’s easy to see why gold is well bid.

Still – higher gold prices, at least on our end have not created a fresh wave of gold bullion buyers. There have been some but not anything which would suggest we are at 3 or 4 month highs in gold. There is certainly more interest but public is still kicking the tires.

We are seeing smaller to mid-sized public sales into these rallies and premiums on US gold Eagles have moved considerably lower – this is an important dynamic to be watched.

These lower premiums are typical of most large dealers today, indicating that the public is selling into these rallies. Which makes sense if you look at the wider historical view – as I have pointed out gold has challenged the formidable $1350.00 level many times in the past 5 years and in each case has failed to break into new higher ground.

Consequently – I’m not overly excited over this latest rally but it sure beats worrying whether gold is going to hold up at $1270.00 which was the scenario just a few months ago.

Each time however that gold threatens $1350.00 you have to wonder if this time around things will be different. Really, it has been a long time since gold roared and everyone knows that sooner or later gold will make new highs and the dollar will make new lows.

This from Boris Mikanikrezaiboris (London Metal Bulletin) “Central bank gold buying sentiment remained strong in April, judging by the central bank gold reserves published by the International Monetary Fund (IMF) and reported by the World Gold Council (WGC).

 Net purchases by central banks totaled 43 tonnes in April, up 8% from March. Net purchases in the first four months of 2019 amounted to 207 tonnes, the highest year-to-date central bank buying since central banks became net buyers in 2019.

In April, the largest central bank buyer was Russia (15.1 tonnes), followed by China (14.9 tonnes), Uzbekistan (7.8 tonnes), Kazakhstan (4.9 tonnes) and Turkey (3.8 tonnes). In the year to date, central bank gold buying was driven by Russia (70.4 tonnes), China (47.9 tonnes), Turkey (42.7 tonnes), Kazakhstan (16.1 tonnes) and India (12.1 tonnes).”

Stocks are holding up – which is a wonder to me but here is the logic. The DOW pushed higher today on a disappointing jobs report because this fuels the hopes of a Fed rate cut. Wall Street still loves cheap money over prudent fiscal policy.

The Dollar Index has a cold this morning – down a half point obviously helping the gold bulls. And there is certainly a more optimistic view about higher gold prices, perhaps even shorter term. Which gives me some pause – I always worry when the majority of folks are either too bullish or too bearish.

One thing is sure going into this weekend – few have the sand to short gold.      

This from Zaner (Chicago) – “Global equity market were mostly higher overnight with the exceptions again weakness in Chinese markets. Economic news released overnight included Japanese leading indicators which came in slightly softer than expected with coincident indicators coming in much better-than-expected. Swiss unemployment rate was unchanged but a number of German economic readings were all indicative of slowing. In fact German industrial production on a month over month basis fell by nearly 2%! The North American session will start out with a highlight for global markets, the May US employment situation report. May non-farm payrolls are expected to come in around 180,000 to 190,000 versus 263,000 in April. May unemployment is forecast to hold steady at 3.6% while May average hourly earnings are expected to hold steady with April’s 3.2% year-over-year rate. May Canadian unemployment is forecast to hold steady at 5.7% along with a modest net increase in their employment. April wholesale inventories are expected to hold steady with March’s 0.7% reading. April consumer credit is forecast to have a moderate increase from March’s $10.3 billion reading. San Francisco Fed President Daly will speak during early morning US trading hours.

The bull camp was already disappointed with the magnitude of the rally in gold on Thursday and therefore another day of modest risk-on sentiment combined with a Dollar bounce has shifted the tables slightly on the bull camp. While the gold market does not have as large of a slate of different bullish themes as was seen at the beginning of the week several bull themes remain most importantly the prospect of economic uncertainty and that issue will be focused on this morning following the payroll report. News from the jobs sector this week suggests a weak number today especially after the ADP reading fell sharply! In fact some numbers within the ADP report showed massive slowing and therefore traders should be poised for a trend decision following payrolls. However, the Dollar recovery this morning is problematic for the bull camp and August gold sits just above a critical pivot point of $1,331.20 and we think a key trend decision is upon the market this morning. Traders might consider the purchase of July gold $1,335/$1,360 call spreads.

While the PGM markets not consistently benefiting from strength in gold this week the action in gold today will initially be very important. However even a stock market rally today might not serve to lift the PGM complex straight away as we think the markets are lacking specific bullish fundamental forces. In the short term we see the platinum market as the most vulnerable market with risk off negative views toward commodities in general leaving the prospects of a retest of the May low down at $788.30 very high. While all the metals markets showed an in-sync rally yesterday, the complex doesn’t appear to be in a position this morning to suddenly garner steady inflows because of surging safe haven optimism from a soft payroll result. In other words, we continue to think the PGM markets are classic physical commodity markets in need of a “much” better demand outlook just to shake off the sideways action of the last several weeks.

Even with a slight decline to start the trade today it is difficult to take control away from the bull camp in the gold market as a number of bullish storylines have drifted in and out of the markets focus this week and they largely remain in place behind the scenes this morning. Certainly it took a very concerted wave of bullish factors to lift gold to its initial test of $1,350 but with open interest levels well below the highs of the last month it would not appear as if the market has exhausted its buying fuel yet. Obviously a critical pivot point is seen at $1,324.70 and the $1,350 level is resistance and a target but we think a soft payroll reading has a chance of igniting another wave higher. The big risk to the bulls is an as expected or higher payroll reading as that shows the US economy is still holding up despite fears of tariff disaster.”

Silver closed up $0.12 at $14.99. A small pop in silver bullion sales – nothing big but steady.  

Platinum closed up $2.40 at $804.60 and palladium closed up $6.90 at $1349.50.

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: 7 believe gold will be higher next week 1 thinks gold will be lower and 1 thinks it will be unchanged.

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

Like the employees our customers were given three choices – up – down – unchanged. We limited the survey to a random sampling of 100 transactions – unscientific but worth considering because these people took action: 53 people thought the price of gold would increase next week – 30 believe the price of gold will decrease next week and 17 think prices will remain the same.

Precious Metal Closes & Dollar Strength – June 3 – June 7

Gold Firm into the Weekend

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

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

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

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

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

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

Posted on

Gold Develops Buzz

Gold Develops Buzz

Commentary for Wednesday, June 5, 2019 – Gold closed up $4.90 today at $1328.30. It actually moved aggressively higher on the open but quickly reversed itself settling for a modest “middle” range close after yesterday’s big $16.90 move. So today looks like a simple momentum play but make no mistake the bulls are in control for the present. This market is developing a nice buzz which we have not seen in sometime.

Like I said yesterday I’m not going to get too excited until gold moves convincingly above $1350.00 – a big challenge number which has been in place for years.

Still the landscape for gold bullion continues to improve as President Trump continues to rattle the financial markets. It’s also worth noting we are seeing follow through strength in gold even though the DOW powered up yesterday.

There is safe-haven going on even at these elevated prices – Commerzbank claims that India imports were strong in May. But the big undercurrent here can be found in Brainard’s comments yesterday that the Fed is “prepared to adjust policy to sustain the expansion”.

Wow! This notion that the Fed might actually lower interest rates has been talked about since early January but has not been taken seriously until now. There is credible commentary which claims that at least one rate cut is a certainty before year end, perhaps even more!

Neils Christensen (Kitco) also makes an interesting case this morning. A Loss of Faith in the USD Is Propelling Gold to $1400.00 – ABN AMRO “While many investors are turning to gold because of its safe-haven allure, one international bank says that a weak U.S. dollar is what will continue to drive gold prices higher. Georgette Boele, coordinator of F.X. and precious metals strategy at ABN AMRO, wrote in a report Wednesday that she remained positive on gold and reiterated her bank’s forecast for prices to push to $1,400 an ounce by the end of the year.

She added that she is paying more attention to gold’s negative correlation with the U.S. dollar than its safe-haven appeal. “Gold has moved up in an environment of higher equity market volatility and more uncertainty on financial markets, giving the appearance of a classic safe haven reaction,” she said. “However, we strongly believe that the surge in gold prices has happened because of broad dollar weakness rather than safe-haven demand for gold.”

Boele’s comments come after gold prices surged to a more than 3-month high. Although off its session highs, gold prices are still holding substantial gains; August gold futures last traded at $1,334.80 an ounce, up 0.45% on the day. Looking at the U.S. dollar, Boele said that the currency is suffering because of growing geopolitical uncertainty and President Donald Trump’s “erratic” trade policies. Last week Trump spooked markets by threatening a 5% tariffs on all Mexican imports in an attempt to curve illegal immigration south of the border. If the immigration issues aren’t resolved, tariffs could rise to 25% by October.

“The U.S. dollar is likely also being punished because the U.S.’s longer-term credibility is weakening. This may not be visible in EUR/USD, because the euro has its own challenges, but it is visible versus the Japanese yen, the Swiss franc and gold prices,” Boele said.

The U.S. dollar Index last traded at 97.05 points, relatively unchanged on the day, bouncing off a 2.5-month low. However, gold’s strength is more than just U.S. dollar weakness, Boele said that the metal showed resilient technical strength even before its latest rally as prices held support above the 200-day moving average. The Dutch bank is also bullish on gold as it expects both the Federal Reserve and the European Central Bank to loosen monetary policy.

“We have adjusted our base case scenario, and now expect the Fed to start cutting the Fed funds rate by 75bp by Q1 2020 (this is currently priced into financial markets). Moreover, we expect the ECB to restart Q.E., and other central banks to become less hawkish – postponing the start of the tightening cycle, or even cutting rates,” said Boele. “An environment of easier monetary policy is in general supportive for gold prices because the interest rate difference – between the currency and gold – declines, making gold as a non-interest paying asset more attractive.”

Boele’s comments reflect aggressive expectations growing in financial markets. The CME FedWatch Tool shows that markets are pricing in a more than 75% chance of a rate cut as early as July. For the year, markets see the possibility of three rate hikes.”

A rate cut (cuts?) is the new elephant in the gold living room. If the Fed does get aggressively loose with money before year end gold will soar ($1400.00).

This will present a completely new conversation as to whether our shinny friend can reestablish a base between $1400.00 and $1600.00. Just the conversation will reignite a US market which has been complacent for years.    

This from Zaner (Chicago) – “Global equity markets overnight were mixed with Chinese markets trading minimally lower and most other markets trading less than 1% higher. Overnight economic data included French PMI composite readings for May which came in stronger than the prior month but softer than expectations. However German and Euro zone PMI readings (composite and services) were all better than expected. Even UK services PMI readings for May came in better than expectations and modestly above the prior month. Finally European retail sales for April declined on a month over month basis and the year-over-year growth readings matched expectations but were softer than in the prior month. Producer prices from the euro zone came in much softer than expected in a fashion that hints at deflation. From the North American report slate the trade will be presented with weekly mortgage applications, ADP employment figures (which are expected to decline from last month’s reading) and Canadian labor productivity for the first quarter. Also due out from the US are composite and services PMI for May with both readings expected to come in unchanged. Other developments of note include a morning speech from the vice chair of the Fed, ISM nonmanufacturing PMI from the US and the Fed Beige book in the early afternoon action. Earnings reports before the opening today include American Eagle, Campbell Soup and SecureWorks while ABM Industries, Five Below, United Natural Foods and Mitcham industries reporting after the close.

The gold market has flared sharply higher to start this morning and it has managed that rally without the typical forces of anxiety from equities and the economy and also without significant weakness in the dollar! However the dollar has forged a fresh lower low and appears poised to test the lowest levels in the last 40 days and therefore currency related buying interest for gold is present in some fashion. Certainly the bull camp is basking in the interpretation that the US Fed stands ready to come to the aid of the US economy if needed but in retrospect the Fed was not definitively dovish yesterday. It is possible that gold is drafting some support from news that Venezuela is poised to default on a gold swap with the Deutsche bank as that could signal the beginning of a financial end game for the beleaguered nation. Some traders think gold is benefiting from news that an Iranian oil tanker might have docked in Hong Kong, as that would be a clear violation of sanctions which in turn would in a sense escalate US/Chinese tensions. In the end seeing gold manage a slight gain in the face of a sharp rally in US equities, suggests that the gold market can rally without safe haven conditions. While some market pundits have suggested the economic anxiety event has passed for now, we see no such evidence from the geopolitical front to suggest anything but more trade conflict ahead. In fact, it would appear as if both sides of the trade equation are into marketing efforts by dredging up anecdotal statistics showing the importance of their trade with the other party and therefore there is little sign that negotiation or compromise is taking place.

While the platinum market lagged behind the palladium market yesterday the market has taken over leadership today with a definitive range up extension. In our opinion, the PGM markets fail to present definitively bullish fundamentals and therefore any benefit from a dovish Fed yesterday might be short-lived. A private forecast for palladium projected prices to climb only modestly from current levels and with consolidation resistance from the last month fairly close in at $1,349, the September palladium contract would not appear to have much upside capacity without something surprising from the headlines. The platinum market on the other hand is showing signs of forging a noted upside move early today, but the justification for the rally doesn’t appear to be fundamentally apparent in the early going today. Nonetheless platinum might not have significant resistance until $833 and then again at $836.

While safe haven conditions seem to have moderated over the last 36 hours, the base foundation of uncertainty remains in place and a worsening of US/Chinese trade relations is still an ongoing trend. Furthermore with the Fed generally leaning toward defending the US economy, the dollar also looks to remain under pressure and that should leave control with the bull camp in gold. Critical pivot point support in August gold is seen at $1,336.70 and resistance and targeting moves up to $1,350.70. However, we continue to be conflicted on our silver price opinion as the metal continues to waffle between a spillover safe haven benefactor from gold and a physical commodity market fearful of slowing demand. Critical pivot point support in September silver is raised to $14.77 and the next resistance/targeting is seen up at $14.935.”

Silver closed up $0.02 at $14.75.

Platinum closed down $16.30 at $801.10 and palladium closed down $14.60 at $1322.50. 

This is our usual ETF information – Gold Exchange Traded Funds: Total as of (5/29/2019) was 67,561,256. That number this week (6/5/2019) was 68,536,947 ounces so we gained 975,691 ounces of gold.

The all-time record high for all gold ETF’s was 85,108,867 ounces in 2013. The record high for Gold ETF’s in 2019 was 70,515,544 and the record low for 2019 was 67,430,173

Silver Exchange Traded Funds: Total as of (5/29/2019) was 610,922,441. That number this week (6/5/2019) was 611,170,344 ounces so we gained 247,903 ounces of silver.

Platinum Exchange Traded Funds: Total as of (5/29/2019) was 2,782,373. That number this week (6/5/2019) was 2,789,080 ounces so we gained 6,707 ounces of platinum.

Palladium Exchange Traded Funds: Total as of (5/29/2019) was 690,462. That number this week (6/5/2019) was 683,751 ounces so we dropped 6,711 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 Higher – Safe Haven

Gold Continues Higher – Safe Haven

Commentary for Monday, June 3, 2019 – Gold closed up $16.90 at $1322.70 today. It’s pretty clear the world markets are getting nervous and gold has broken higher. Not long ago I said these markets could break either way – and just because gold moved higher still does not mean our wait and gold’s long price consolidation is over.

Keep your eye on the dollar – the index today moved from 97.8 through 97.5 enough weakness to also encourage gold prices. But remember the index was around 95.00 the beginning of this year and for gold to catch fire we are going to have to see that massive three point gain – melt.

The reason traders are a bit ahead of the learning curve here is because of the growing recession talk. There are so many different tariff scenarios to play with here that the conspiracy advocates will get drunk on the speculation.

But keep in mind that some of this tuff tariff talk (maybe more than some) is an old Trump tactic to gain leverage. So why is this time around particularly stressful? First the Chinese are retaliating (suspending rare earth minerals to the US for example). Second, he is threatening tariffs against our friends in Mexico in a new and innovative way. Stop the deplorable caravan situation or face the economic consequences of tariffs. This will likely be challenged in the courts – does the president have the legal right to use tariffs to correct social issues? Way above my paygrade but it is easy to see that the “troubles” list is growing.     

So am I bullish? Well I am a lot more bullish if gold stays above $1300.00 but that is a big if. 

And some news in the gold sector is bearish – look at crude oil. After hitting an inflationary high of 66.00 in April we are now looking at a technically weak market approaching $50.00 even with trouble in the Middle East relative to Iran.

So the old question as to whether gold can now approach and move above $1350.00 remains unanswered. This most recent bullish scenario has been presented to the world 4 times in the past 5 years – which brings to mind one of my favorite aphorisms.

Lincoln – January, 1863 – “The hen is the wisest of all the animal creation because she never cackles until after the egg has been laid.”

My opinion remains the same – it makes sense to buy weakness – it was not long ago that gold was defensive and the question was asked whether gold would hold up at $1200.00? Those who took advantage of these lower prices are feeling pretty good about their decision regardless of whether they decide to double down today or feel the market is getting pricy.

The bigger question for long term gold holders is whether our financial friend can manage above $1350.00? If the answer is yes, hold on to your hat because your patience will be rewarded. If on the other hand we are stuck in that predictable sideways market which has been in place for years – keep your power dry and buy weakness. You still have time to join this party and sooner or later the world will realize this still in place and bogus fiat currency printing plan has a shelf life. Once that realization comes home to the still trusting masses I believe gold will really sparkle.  

This from Zaner (Chicago) – “Most global equity markets started the new week out on a weaker footing while the CSI 300 and the Russian market showed some positive traction. Economic information released overnight from China showed unchanged manufacturing PMI readings for May. From Japan the Nikkei manufacturing PMI for May came in a touch better than expected while Swiss Consumer prices edged higher by 0.3% on a month over month basis. From Italy manufacturing PMI for May came in moderately better-than-expected. However German manufacturing PMI for May was a touch weaker than the prior month but on expectations. Overall EU manufacturing PMI readings for May down ticked by.2 relative to the prior month while UK manufacturing PMI came in much weaker than expected. Over the weekend, a Chinese government white paper on trade negotiations said that the US should remove all additional tariffs and that China’s purchases of US goods should be “realistic”. The North American session will start out with May Markit manufacturing PMI readings from the US and Canada, both of which are forecast to hold steady with their previous readings. The May ISM manufacturing index is expected to have a moderate uptick from April’s 52.8 reading. April construction spending is forecast to have a moderate increase from March’s -0.9% reading. St. Louis Fed President Bullard and San Francisco Fed President Daly will speak during afternoon US trading hours.

With the Treasury bond market literally on fire it is clear that fears of recession are burning brightly in the headlines and consequently gold is a direct benefactor. Obviously another US trade war front with Mexico combined with suggestions from a Chinese “white paper” indicating Chinese purchases of US goods should be “realistic” shows that tensions remain in place and therefore safe haven buying is coming from a number of storylines. Furthermore some trade sources have interpreted recent Fed comments to be shifting “toward” cutting interest rates. Not surprisingly a number of gold analysts have turned very bullish toward the metal after last Friday’s rise above $1300 as that move fostered targeting up around $1335. Obviously the growing list of geopolitical safe haven issues have created a favorable environment for gold, but a certain amount of direction for gold will be determined by the action in equities. In other words, the need for safe haven in the presence of anxiety will be signaled by the equity markets which finished the month of May with massive declines on the month. We would suggest the classic physical demand side of the equation is also supportive given the latest World Gold Council demand figures. Another potentially supportive development came from India at the end of last week with expectations for the new government to take steps to develop gold as an asset class. The policy initiatives are also expected to suggest a reduction in the import duty on gold from 10% to 3%. In the end, unless the US relents on the Mexican tariffs or there are signs of renewed US/Chinese trade talks, an environment of anxiety and weakness in equities should keep gold on an upward track. Gold positioning in the Commitments of Traders for the week ending May 28th showed Managed Money traders added 8,756 contracts to their already long position and are now net long 33,134. Non-Commercial & Non-Reportable traders were net long 108,732 contracts after increasing their already long position by 7,548 contracts. While the silver market has shown some positive correlation with gold and it managed to climb above a four month old downtrend channel resistance line last week, we are suspicious of the bull case. However, the latest positioning report showed silver to be net “short” and therefore the potential for stop loss selling should be reduced. Silver positioning in the Commitments of Traders for the week ending May 28th showed Managed Money traders were net short 39,042 contracts after increasing their already short position by 8,182 contracts. Non-Commercial & Non-Reportable traders net sold 4,427 contracts which moved them from a net long to a net short position of 3,765 contracts.

While the palladium market attempted an upside breakout extension last week, it closed poorly last week and would appear to be poised to test the bottom of the May consolidation. In fact, even though the palladium market showed the capacity to rally last week (in the face of the deteriorating global economic condition) it is difficult for us to discount the potential negative impact on demand for PGM’s in the event the global equity market washout continues. In fact, the market has seen definitive signs of weakening of auto sales figures and the “rare earth” situation only appears to be an indirect impact on platinum and palladium. However, both platinum and palladium have mostly liquidated their spec and fund long positioning with platinum’s May decline bringing the spec long positioning closer to the lowest levels of the year. The Commitments of Traders report for the week ending May 28th showed Platinum Managed Money traders went from a net long to a net short position of 10,128 contracts after net selling 10,247 contracts. Non-Commercial & Non-Reportable traders reduced their net long position by 7,089 contracts to a net long 14,762 contracts. The Commitments of Traders report for the week ending May 28th showed Palladium Managed Money traders are net long 9,180 contracts after net buying 897 contracts. Non-Commercial & Non-Reportable traders added 686 contracts to their already long position and are now net long 8,784.

The path of least resistance is pointing up in gold and to a lesser degree in silver. In fact, given that equities ranged down sharply and closed right on their lows last Friday and are starting off under pressure this morning, that suggests August gold should continue to work higher toward the next resistance level of $1,335.80. In fact in the event that global equity markets start the week off with declines in excess of 1% it might be possible for August gold this week to streak above $1,335. Unfortunately given the sharp range up move last Friday credible support in August gold isn’t seen until $1,311.20.”

Silver closed up $0.17 at $14.70.

Platinum closed up $26.60 at $819.20 and palladium closed down $20.20 at $1313.70. I don’t want to bang on about the difference between platinum and gold but this is worth considering. Platinum is trading at a $500.00 discount to gold – at least consider a small value buy here.  

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 Drifts Higher

Gold Drifts Higher

Commentary for Wednesday, May 29, 2019 – Gold closed up $4.50 at $1281.00 today is another round of quiet trading. I can’t say I’m dancing about gold these days and informed commentary is again mixed.

There is unwarranted bullish sentiment and at the same time Wells Fargo has turned bearish. Looking at the 30 day pricing chart I see a basically back and forth market trading on either side of $1280.00 with lows around $1270.00 and highs around $1300.00.

So I think this market could break in either direction depending on the US dollar assuming the world markets remain calm and collected.  

Today the Dollar Index is modestly higher moving from 97.9 through 98.20. The higher number is a yearly high which on the one hand is not good for gold. On the other hand a year ago the index was trading at 94.00.

Now consider that China is playing hardball and Muller is moving on – his talk this morning pushed most stocks into the red. Why?

This is the old question of “being careful what you ask for”. Yes he is gone, but this could simply unleash another form of political attack against Trump, who already has his hands full with a myriad of problems.   

So you would make the case that with international and trade strife the dollar is now in overbought territory and might trade significantly lower pushing gold above $1300.00.

From our viewpoint there is also a mixed picture – we are seeing some mid-sized selling from people we have done business with for decades. And to be fair there have also been some big boy purchases as gold dipped below $1300.00.

So as usual gold pricing remains a matter of perception – if you look at the Asian market for example – they lose interest in my opinion as gold moves to and above $1300.00 but historically are very interested in the $1250.00 through 1270.00. The US market actually develops buzz as gold moved above $1300.00 because they remember all-time highs ($1800.00).     

What we still do not see is substantial and fresh money coming into gold and silver bullion representing safe-haven buying. Granted our picture is limited to the US and gold thankfully enjoys a much wider world audience. Today’s push to higher ground might be the result of a selloff in world equities according to Kitco but whether you are bullish or bearish it remains clear to me that gold is still very much in the bigger world game. 

This from Zaner (Chicago) – “In addition to threats to withhold rare earth materials from the US, Chinese newspapers overnight have suggested that China has been pulled into actual wars in the past because foreign powers have withheld things needed by Chinese people! Clearly anxiety toward trade tensions have escalated especially with polls now anticipating a very dramatic escalation of the trade flap before any deal is achieved. In fact the headlines overnight have started to use the term “weaponize” to describe China’s potential withholding of rare earth materials and that clearly accentuates anxieties. Yet another flight to quality catalyst for gold is the fact that US Treasury bonds are showing dramatic safe haven buying interest with prices overnight reaching up to the highest levels since early 2018. Strength in the gold market this morning is made even more impressive by the fact that the dollar has forged a fresh four day high and appears to be on track to return to the May highs and yet that hasn’t discouraged gold buyers. In other words classic safe haven sentiment is lifting gold and the impact of currency on prices has been relegated to a backseat. In fact one could also suggest that equity market declines have become so significant and extended that anxiety is also being stoked from that sector. While gold initially discounted positive classical physical demand news over the prior five trading sessions those bullish developments might now add to the upward track.

Clearly the PGM complex is not poised to benefit from spillover buying from gold and silver, as prices this morning are tracking lower. In fact one might’ve expected the PGM markets to have garnered some sympathy buying from Chinese threats to withhold rare earth materials, but clearly that news story is slightly off the mark for PGM supply concerns. In fact escalation of the US/Chinese trade war might simply be seen as a fresh negative demand influence for PGM’s as significant headwinds for the Chinese economy could clearly pull down auto catalyst demand in the near future. With the platinum market overnight damaging its charts and breaking out to the lowest level since February, the technical and fundamental edge sits with the bear camp and a near term slide down to $791.80 is possible. However the palladium market has avoided distinctly negative chart action and continues to show the capacity to respect the $1,300 level.

Clearly the bias has shifted up in gold and silver today as safe haven angst has finally surfaced for the bull camp. In fact the safe haven flow toward gold and Treasuries is very definitive and might be facilitated further by an exodus of capital from equities today. Furthermore seeing gold trade six dollars higher this morning in the face of a fresh upside breakout in the dollar is a testament to the bullish edge in the marketplace. However to extend the rally straightaway and breakout up to a seven day high probably requires retaliatory threats from the White House toward China this morning. To start today initial but thin resistance is seen at $1,293 and support moves up to $1283.80. In our opinion further escalation of the trade spat by the US this morning should easily throw gold prices back above $1300 on this pulse up move.”

Silver closed up $0.10 at $14.38.

Platinum closed down $4.40 at $790.60 and palladium closed up $4.40 at $1348.60.

This is our usual ETF information – Gold Exchange Traded Funds: Total as of (5/22/2019) was 67,695,991. That number this week (5/29/2019) was 67,561,256 ounces so we dropped 134,735 ounces of gold.

The all-time record high for all gold ETF’s was 85,108,867 ounces in 2013. The record high for Gold ETF’s in 2019 was 70,515,544 and the record low for 2019 was 67,430,173

Silver Exchange Traded Funds: Total as of (5/22/2019) was 610,853,702. That number this week (5/29/2019) was 610,922,441 ounces so we gained 68,739 ounces of silver.

Platinum Exchange Traded Funds: Total as of (5/22/2019) was 2,756,046. That number this week (5/29/2019) was 2,782,373 ounces so we gained 26,327 ounces of platinum.

Palladium Exchange Traded Funds: Total as of (5/22/2019) was 692,345. That number this week (5/29/2019) was 690,462 ounces so we dropped 1,883 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.

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Gold Higher over World Tension

Gold Higher over World Tension

Commentary for Thursday, May 23, 2019 – Gold closed up $11.20 at $1284.80 today. It was steady overnight in both Hong Kong and London but broke higher in the domestic trade – pushing through $1285.00 most likely on a case of the jitters. I watched House Speaker Pelosi this morning over coffee and am getting more worried than I was yesterday over the situation between the Democrats and Republicans.

The problem with this food fight is that it is getting serious and more toxic so less will be accomplished in Congress. The big thing both sides seemed to agree on was infrastructure funding and now that is held hostage. No one needs to be reminded there are serious issues facing Congress – not that there is a magic bullet for any of this but the world gets more concerned if both sides even refuse to talk.

World financial markets today are also jittery over the increased tension between the US and Iran. This is another mess escalated for no apparent reason and Trump’s comments claiming a fight with the US will be the official end of Iran is scary.

The world is not as sophisticated as war staff military who claim that this US reaction is justified under the Powell plan – which is basically “warn them to be good while reviewing all options”. Trump’s comments are especially worrisome because of US troop deployment in the area.     

These newly developing threats are creating safe haven buying in the metals and providing more conviction at least on the short term that the scary $1270.00 shelve for gold continues to hold up. The Dollar Index was strong today around 98.2 – pushed to 98.4 and then quickly sold off to below 97.8. This obviously helped gold.

And the DOW moved lower by 400 points – reinforcing world tension over what appears to be a protracted US – China standoff.

This is another reason gold remains firm – the world is beginning to think that both the Chinese and Americans are not just saber rattling and looking for a better deal. It’s hard to believe we are in this situation because both sides have a goose that lays golden eggs.

And it appears that both sides instead of feeding and caring for the goose have decided to have it for dinner. Don’t laugh at this symbolism it happens all the time when you deal with gigantic egos. This factor alone is enough to support gold and also helped push prices higher.

If you think this disruption is US/China relations is just a ship passing in the night you might be wrong. Nomura said this morning that trade tension could well last into the 2020 US election.

Todd “Bubba” Horwitz (Kitco) makes an interesting point. If equities are being hammered why isn’t gold reacting? He claims there is no correlation between gold and stocks and he is right as long as people still have faith in the stock market. But if stocks even come close to moving back to pre-Trump days gold would shine not just because of safe haven demand but because this move would likely also mirror a dramatic drop in the dollar.

So there is plenty of background noise in the gold market. Still I would not get too excited over today’s pop in prices. If you look at the 30 day pricing chart we have once again bounced off the $1270.00 support and have moved back to more bullish support between $1280.00 and $1285.00. Not a big deal but something to at least build the possibility of gold pushing higher perhaps even challenging $1300.00 but that is a story for another day.

Remember this coming Monday is Memorial Day – presenting a long weekend which might suggest a calmer gold market through next Tuesday – or not.     

This from Zaner (Chicago) – “Gold is higher this morning despite the nearby dollar index reaching its highest level in two years overnight, as sharply lower equity markets are contributing to safe-haven inflows into the precious metals. Having tested the 200-day moving average three times in the past month, gold looks vulnerable to a selloff. It showed little reaction to the Fed minutes release on Wednesday, as they suggested that the Fed is in no hurry to adjust monetary policy. It also conveyed a slightly optimistic tone towards the US economy, and that is bearish for gold. We would argue that until some there is some bad news for the economy, the gold market is likely to stay under pressure. Treasury Secretary Mnuchin stated that the United States is at least a month from enacting its proposed tariffs on $300 billion in Chinese imports, which could be interpreted as an opportunity to achieve some sort of trade agreement with China. The US and China seemed to have underestimated each other’s resolve when regarding these trade talks, and it gets more difficult for them to come to an agreement the further we go down this road of tariffs and retribution. That could be a long-term supportive factor for gold but probably not until the trade issues start to show a more widespread effect on the economy. In the meantime, gold is subject to a selloff if it takes out the May low.

July platinum has closed lower in six of the past seven sessions, and it pushed lower again overnight. The trade dispute is bearish for auto catalyst consumption. This is particularly bearish for palladium, but platinum is already dealing with an oversupply. Palladium supplies are tighter, and even though the market tested the low of its recent trading range on Wednesday, it is starting from a better position fundamentally. Look for support in June palladium at $1,291.70 and $1,256.50, with resistance at $1,339 and $1,388. Look for support in July platinum at $786.20, with resistance at $825 and $837.50.

June gold has tested the 200-day moving average three times in the last month, and we do not have much faith that it will hold this time. It is also approaching the bottom of a month-long consolidation at $1,267.30. A break below there (just below the 200-day moving average at $1,270.00) could spark a heavy round of liquidation that could send the market down to and perhaps below the next retracement target at $1,260.80. Like gold, July silver was higher overnight. The market is oversold and due for a correction. There is no technical sign of a low, but it could rally 24 cents and still be in a downtrend. Look for with support at $14.30 and $14.175, with resistance at $14.57 and $14.75.”

Silver closed up $0.17 at $14.58.

Platinum closed down $5.60 at $797.20 and palladium closed down $5.70 at $1312.50.

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 Sleepy

Gold Remains Sleepy

Commentary for Wednesday, May 22, 2019 – Gold closed up $1.60 today at $1273.60 in another round of quiet trading. I don’t think anyone has a solid idea of gold’s direction at the moment. The general feel is probably somewhat negative simply because technically gold looks weak.

The FOMC minutes, as usual were released after market close today. This created no volatility in the aftermarket – gold was virtually unchanged so there were no surprises.

Still there are undercurrents developing – combine the totally toxic mood between the Democrats and the Republicans with what looks like the end of any tariff progress between the US and China and you have a situation which equals less business for both parties and rising inflation fears as competition takes a back seat to politics.

Don’t think the notion that Trump has halted talks with the Democrats over continued investigations is no big deal. The longer this impasse continues – the worse the situation becomes. The infrastructure funding, a place where both parties have common ground moves to the back burner. And what is Congress going to do with important negotiations over the debt ceiling and a possible funding default?

It seems like we are heading down a few dark roads here if common sense does not prevail.   

Still it is difficult to make a safe-haven agreement for gold as the dollar is strong as lye soap.

The Dollar Index this past week has moved from 97.50 through 98.00 most likely because of the US trade problems with China and there is no reason to believe we will see weaker index numbers on the short term.

There is some sentiment longer term which might come to gold’s rescue before the end of this year. Some folks are talking about an interest rate cut if our economy slows down. This would create a weaker dollar and help support gold prices but that sounds like a stretch to me.

So we are back to what the technical tea leafs have to say and that picture is also foggy. These past 5 years gold has struggled with the $1350.00 overhead resistance 5 times and as we have pointed out it has failed on each attempt.

At that point the bears moved in and gold sold off pushing lower – the worst sell off being in late 2015 when we approached $1050.00. On every other sell-off the market got on its feet around $1200.00. The current shelf for gold looks like $1250.00 and $1260.00 so today’s close creates some downside tension.

But here is the thing – an old question which has been around forever and is still not answered. Will gold going to break-down or is it just going to continue in this lengthy back and forth pattern which has been in place since early 2014?

The last time gold moved to $1200.00 was in November of 2018 and we did not see much in the way of selling. But this latest breakdown at $1350.00 earlier this year has produced some larger selling of gold bullion across our counter. So it’s possible the public is just getting worn out with this back and forth action.

At the same time however consider that while there is not much up-side satisfaction in gold at the present there is plenty going on which might reinvent safe haven buying. And in all of these back and forth years the central banks have been pretty steady buyers.

There are plenty of buyers still sitting on the sidelines and it’s clear that the physical market while quiet will heat up dramatically if prices dip lower. Real interest should show up around $1250.00 for world buyers.

With the current ruckus it’s amazing to me that the US market remains very quiet.

For sure the US dollar is responsible for gold’s lethargic performance but keep in mind that with the down and out talk about gold – pricing is still persistent relative to all-time highs. In 2011 gold moved above $1800.00 and today we are looking at roughly a 30% discount. Not a bad place to at least begin longer term planning.

Silver bullion remains a shining star in an otherwise ho-hum market.  Today’s close $14.41 represents a huge discount considering all-time highs were around $48.00 in 2011. It’s easy to forget that during these highs you could not get silver bullion easily – the old favorites were often sold out and the public had to settle for what was available. Today there is more new and beautiful product available than I can remember at any time in the past. And with silver being ridiculously cheap I would not hesitate to suggest this market remains a real sleeper.

This from Zaner (Chicago) – “Gold and silver were near unchanged overnight as they consolidated their losses of the past several sessions. With money flowing towards the dollar, gold has been losing out on safe-haven interest despite a negative turn in trade relations between the US and China over the past couple of weeks. The gold market is in a precarious position technically after trading down to the 200-day moving average for the third time in a month on Tuesday. The US postponing its restrictions on Huawei was bearish for gold yesterday, but new talk that the US may blacklist five Chinese technology firms could lend some support today. The June dollar index traded to its highest level since putting in a contract high on April 26th yesterday, and this left gold languishing. The dollar eased a bit overnight, as it too seemed to be consolidating, but if makes a move to take out the April high, it could spark another wave of selling in gold. Strong economic data sparked heavy selling in gold last week, as it suggested that the Fed would not need to lower rates, despite the trade war concerns. The trade war and Iran seem to have faded into the background as far as gold is concerned, but that could change. It would probably require a series of disappointing economic data to spark some buying in gold, as that could rekindle ideas of the Fed lowering rates. In the meantime, June gold is threatening to take out the 200-day moving average, and if that happens, it could spark some heavy selling. The trade will have the opportunity to see the recent Fed meeting notes today, which in the absence of other news could spark a move if it comes in overly hawkish. The Chinese Ambassador to the US stated that Beijing was ready to resume talks with Washington but blamed Washington for changing its mind on tentative deals. Gold ETF holdings rose yesterday on what could have been bargain hunting. It is also worth considering that central bank buying could reemerge on the recent break in gold. Secretary of State Pompeo is going to Capitol Hill today to talk about Iran, which could elevate risk concerns.

The strength in the dollar has been weighing on the PGM sector as well, but the key drivers to these markets appear to be supply and demand. June palladium was lower on Tuesday and continued that way overnight as it tested the bottom of the consolidation pattern of the last nine sessions. The supply setup is still tight, but the trade dispute between the US and China and uncertainty about China’s economy have raised concerns about auto sales. July platinum extended its recent selloff to trade to its lowest level since Feb 15th on Tuesday, and it barely held that low overnight. This market is facing ample supply for some time to come. Momentum indicators are deeply oversold, but there is no sign of a bottom. Look for support at $800-$786, with resistance at $825 and $838. Support for June palladium comes in at $1,283 and $1,256.50, with resistance at $1,346 and $1,391.

June gold is approaching the bottom of a month-long consolidation at $1,267.30, and it is testing the 200-day moving average at $1,269.80 this morning after briefly trading below that level yesterday. A break below these areas could spark a heavy round of liquidation and send the market down to and perhaps below the next retracement target at $1,260.80. The trend is still down in July silver, with support at $14.30 and $14.175 and resistance at $14.57 and $14.76.”

Silver closed up $0.04 at $14.41.

Platinum closed down $9.90 at $802.80 and palladium closed up $1.00 at $1318.20.

This is our usual ETF information – Gold Exchange Traded Funds: Total as of (5/15/2019) was 67,640,895. That number this week (5/22/2019) was 67,695,991 ounces so we gained 55,096 ounces of gold.

The all-time record high for all gold ETF’s was 85,108,867 ounces in 2013. The record high for Gold ETF’s in 2019 was 70,515,544 and the record low for 2019 was 67,430,173.

Silver Exchange Traded Funds: Total as of (5/15/2019) was 616,186,068. That number this week (5/22/2019) was 610,853,702 ounces so we dropped 5,332,366 ounces of silver.

Platinum Exchange Traded Funds: Total as of (5/15/2019) was 2,771,728. That number this week (5/22/2019) was 2,756,046 ounces so we dropped 15,682 ounces of platinum.

Palladium Exchange Traded Funds: Total as of (5/15/2019) was 694,306. That number this week (5/22/2019) was 692,345 ounces so we dropped 1,961 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 Weakens

Gold Weakens

Commentary for Friday, May 17, 2019 – Gold closed down $10.50 today at $1274.50. It was pretty steady in overnight Hong Kong and London trading but moved quickly lower in the early domestic trade. So we may be looking at continued momentum selling from Thursday’s big $11.30 drop in gold as the trade dispute between the US and China continues to deteriorate.

One also has to question why gold did not benefit as world tensions mount and tariff talks collapse. These growing concerns have pushed investors towards the dollar as folks choose it over gold as a short-term haven in the middle of stormy world seas.

The Dollar Index moved up a full point this past week closing in on 98.00. A year ago it was trading around 94.00 so dollar strength continues to present challenges to the gold community.

Still the world will eventually look to gold in times of trouble – it always has. And waning physical demand will eventually roar – it’s only a matter of price.

With gold’s latest price weakness the technicians will again raise the paper trading argument which centers on price support – will that $1270.00/$1280.00 shelf which has been in place 12 months hold up? During that period it has been tested many times and each time the short paper money has not been able to break down resistance. In other words this support remains stubborn.

Which leads to my current assessment that gold is still working out a long consolidation waiting for either the return of inflation or real financial fear. Both are overdue and everyone knows that today’s leverage created with continued cheap money is dangerous. 

Still the feeling that gold will break down grows when this market is technically weak and we are below gold’s 100 day moving average.

If this turns out to be the case the next big price support was created last September around $1200.00. Of course this would negate all the energy gold created in this latest bullish leg which pushed impressively through $1350.00 before turning sideways and losing momentum.

It is still a bit early however to suggest gold will simply drift lower.

Most are looking for a common theme to appear, namely value buyers will soon enter the physical market. This would create the scenario we have been dealing with for years. Gold remains in that long and drawn out 6 year consolidation which began in 2013. And continues to move on both sides of $1200.00 as world banks continue to reflate and world debt skyrockets.

While all of this sounds rather dreary I can promise one thing for sure – when this newfangled financial cabal blows up there will be plenty of people who will claim all the signs of failure were plain to see but were ignored. Actually there is nothing insightful about it – in a way it’s almost biblical as history repeats itself. Make sure your house is built solid rock and not sand.            

This from Zaner (Chicago) – “Global markets have followed through on Thursday’s late pullback with a negative tone early in today’s action. There were comments from official media that China had “little interest” in trade talks with the US right now, there was “little sincerity” in the US’s recent approach and that a trade war “would never bring China down”. Asian shares had mixed results as heavy losses in the Shanghai Composite and moderate losses in the South Korean Kospi and Hong Kong Hang Seng indices were balanced against gains in the Japanese Nikkei, India Nifty 50 and Australian All Ordinaries indices. There are reports that Brexit negotiations between the 2 major UK political parties are about to collapse, while an April reading for Euro zone CPI was in-line with forecasts. European shares are finding moderate early pressure this morning and are being led to the downside by losses in the German DAX and French CAC-40 indices. The North American session will start out with a private survey of May consumer sentiment that is forecast to have a modest uptick from the previous 97.2 reading. The Conference Board’s April reading on leading indicators is expected to have a minimal downtick from March’s 0.4% reading. Fed Vice Chair Clarida and New York Fed President Williams will speak during morning US trading hours.

Gold prices were mostly steady overnight following the steep selloff on Thursday. Chinese state media has gotten more bellicose, talking about how China may have to dig in for a long trade war and suggesting that the nation may have no interest in continuing US trade talks for now. The tone of commentary from the US and China seems to be fluctuating between conciliatory and provocative this week after reaching a peak of hostility over the weekend. Strong US economic data yesterday introduced a confident, risk-on attitude to the markets that sent gold prices to their lowest level since Monday. US housing starts, initial jobless claims and the Philly Fed survey all came in higher than expected. On top of that, Walmart had better than expected earnings results, including their highest first quarter same-store sales growth in nine years. This sent equity prices and the dollar sharply higher and pulled safe haven support from gold and silver. Trade concerns were pushed to the sidelines, despite news of a US ban on using Huawei equipment and a subsequent response from China that they will never make concessions on important matters of principle. Pointing to low inflation expectations that are sapping the Federal Reserve’s ability to respond to a future downturn, Minneapolis Fed President Neel Kashkari called for the Fed to allow inflation to rise above 2% to bring the economy back to full strength. Kashkari is a prominent dove, but the prospect of higher inflation would be supportive to gold in the long term. Good news on the economy has been bearish for gold, but there are still a number of items out that that could lend support, namely the trade dispute and the heightened tensions with Iran. The People’s Bank of China increased its gold reserves to 61.1 million ounces in April, the biggest monthly increase since 2016. This was the fifth straight month their holdings have increased. July silver took out its May lows on the selloff on Thursday and continued to work lower overnight. Silver has had a tendency to lead on selloffs recently, while gold has led on rallies.

July platinum led the PGM complex lower on Thursday and continued to do so overnight, trading to its lowest level since March 11th. Palladium was only moderately lower and managed to hold within its recent consolidation. The PGM complex appears to still be under the shadow of “dieselgate,” with platinum losing a main source of demand (autocatalyst for diesel engines) and while palladium demand expands (autocatalyst for internal combustion engines). Another problem is that for many South African mines, their ore produces twice as much platinum as palladium, which makes it hard for the market to fix the tight palladium supply without making the burdensome platinum supply situation worse. There was a mixed set of opinions in the press this week regarding the outlook for PGM supply and demand, but one takeaway was that the palladium market should remain in a deficit situation for quite some time, while the platinum surplus is likely to continue, if not expand. July platinum closed solidly below the 200-day moving average yesterday and drove down further overnight. It is deep into oversold territory and is subject to a bounce ahead of the weekend, but there is not technical indicator that the low is in. A near term target might be the gap from March at $822.10, with additional support at $814.80; initial resistance is at $838.30. June palladium has held support in the face of the selloff in platinum, as its fundamental setup is on firmer ground, but it may find itself under pressure if platinum continues to weaken. Look for support at $1,300 and $1,256.50, with resistance at $1,356 and $1,398.

The strong dollar and positive economic news sent gold sharply lower yesterday, but trade war threats, Persian Gulf worries and aggressive central bank buying of gold could keep a bid under gold on breaks. Look for support at $1,283.90 and $1,269.30, with resistance at $1,295.20 and $1,294.30. July silver is once again flirting with the contract lows down at $14.175, and this weakness can be a hindrance to gold. Interim support for July silver comes in at $14.30.”

Silver closed down $0.13 at $14.35. Great deals here folks for long term planning!

Platinum closed down $12.50 at $818.40 and palladium closed down $18.90 at $1310.50.

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: 7 believe gold will be higher next week 1 thinks gold will be lower and 1 thinks it will be unchanged.

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

Like the employees our customers were given three choices – up – down – unchanged. We limited the survey to a random sampling of 100 transactions – unscientific but worth considering because these people took action: 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 – May 13 – May 18

Gold Weakens

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.