Category: Daily Gold Newsletter

Gold Continues to Grind

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

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

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

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

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

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

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

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

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

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

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

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

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

Silver closed down $0.12 at $15.25.

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

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

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

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

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

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

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

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

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

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

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

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

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

Gold Settles – Again

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Gold Quietly Higher

Commentary for Friday, March 22, 2019 – Gold closed up $5.50 at $1311.60. Gold closed this past Monday at $1300.30 so on the week we are up $11.30 – higher but not much bang really considering the political and economic drama. Gold opened choppy to higher today – so pricing is firm but I think the jury is still out as to whether the price of gold is getting ready to surge higher.

Of course the expected dovish position the FOMC has taken on new interest rate hikes in 2019 is welcomed but gold enthusiasts should be looking for further price confirmation at higher levels.

Focus on the 30 day pricing pattern. A month ago gold broke down at $1340.00 and moved quickly lower to just under $1290.00 – the market then creeped back – trying to reestablish itself above $1300.00. So the shorter term technical picture in my mind favors the bullish scenario. But gold might also just be in no-man’s land – happy for the present but still trying to find its footing in the wider financial scheme of things.

Yes, there is interest in smaller central bank gold acquisition which is plus.

But remember at these higher levels the Asian demand usually wilts – this market knows how to wait for bargain prices.

There could also be new safe-haven buying if Wall Street really begins to worry about a slowdown bother here and in Europe. This scenario has been around for some time but the fact that the Fed will most likely not raise interest rates this year will lead some to believe there really is economic trouble in River City. This happens when interest rates get too cheap (Germany today is a prime example). This creates “worry” and physical gold ownership may benefit.  

For now however I’m sticking with a middle position – waiting until gold once again asserts itself with the intention to once again take a shot at that long-standing $1350.00 overhead resistance. For now that first hurdle is $1330.00 – that will get everyone’s attention.

Will we see this anytime soon? Let’s keep our powder dry and see first if gold can continue to build a base in the $1290.00 through $1330.00. If this is in the cards I would be more optimistic that our shinny friend is at least getting ready to break higher.

If gold stumbles we are likely to see the same old back and forth market – grinding away. Worth noting – the longer gold fights to hold this higher ground the better and stronger the base and the greater the possibility of higher prices.      

This from Zaner (Chicago) – “Once again the gold and silver bulls are standing up to the strength in the dollar with the dollar forging a new high for the week and the highest price since March 13th this morning! In short the gold market is showing a bullish resiliency even if the benefits of the Fed appear to be waning. While many longer-term traders are suggesting that gold and silver have turned into classic long-term bull markets, near term currency market influences could make straightaway gains difficult. In fact, seeing the June dollar index forge a trade back above 96.25 could press June gold prices below critical uptrend channel support at $1,307.20. The gold market also appears to be attracted to the 50 day moving average with prices waffling around both sides of that level ($1,314.60) in each of the last four trading sessions. However it should be noted that June gold spent the majority of this morning’s session above the 50 day moving average pivot point and well above uptrend channel support which sits down at $1308.05. Overnight gold and silver derivative holdings were virtually unchanged, but strong trading volume over the prior two trading sessions would seem to indicate ongoing bullish interest in gold despite the market sitting $31 an ounce above this month’s lows. May silver spiked higher yesterday and stopped almost exactly on its 50 day moving average at $15.65 and May silver’s low yesterday nearly coincided with a 200 day moving average down at $15.36 and therefore silver appears to be facing a key pivot point decision today. In the end, silver looks to remain fixed to the coattails of gold and is generally uninterested in Dollar action!

The press overnight is once again touting a “top” in palladium, the market saw a $16 an ounce setback from the high yesterday, and uptrend channel support is fairly far down on the charts at $1,524.10 due to this week’s aggressive gains. The PGM markets were justifiably knocked backward as the latest shift in trade talk headlines indicated some form of fresh tension between the two parties. However, June Palladium did forge yet another new all-time high yesterday, but those gains were forged on fairly low trading volume. However, the net spec and fund long in palladium is probably not extensively overdone yet as the last net long was only 13,203 contracts versus an all-time record long of 30,209 contracts all the way back in 2013. On the other hand, since the last positioning report was measured, June Palladium into the high added $86 an ounce and the market is indeed burning a moderate amount of buying fuel. Like the palladium market, the platinum market ranged sharply higher yesterday and reversed in a fashion that should put the bull camp on edge going into the last trading session of the week. Also like the palladium market, the platinum market net spec and fund long is building but not yet at a significantly overdone standing yet. Unlike the palladium market, the platinum market has seen this week’s gains on strong trading volume, with this week’s trading volume potentially the strongest since mid-December. In the end, we can’t rule out a temporary slide back below $850, but we see a near term trading range of $838 and $879!

While the trend remains up in gold, silver, platinum and palladium, we sense a vulnerability to normal corrective back and fill action especially if prices can’t extend early gains through a heavy slate of US economic data this morning. In fact, we are unwilling to discount the recovery in the dollar index this week, particularly since the recovery has taken place in the wake of news from the Fed that should have put the dollar under sustained pressure. Pushed into gold and silver today, we would be a purchaser of at the money bear put spreads against existing long futures positions.”

Silver closed down $0.02 at $15.35. The public is still interested in buying physical bullion at these lower levels.

Platinum closed down $12.50 at $847.20 and palladium closed down $42.40 at $1535.90. We are still seeing trades of palladium bullion for gold, silver and platinum bullion.

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

Of course it’s not really patented but we do have some fun along the way. This is what the GoldDealer.com employees think: 7 believe gold will be higher next week none think gold will be lower and 3 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: 59 people thought the price of gold would increase next week – 25 believe the price of gold will decrease next week and 16 think prices will remain the same.

Precious Metal Closes & Dollar Strength – March 18 – March 22

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

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

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

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

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

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

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

Gold After-Market Jumps – Powell’s Comments

Commentary for Wednesday, March 20, 2019 – Gold closed down $4.50 at $1300.50. No doubt because as zerohege.com points out a big paper seller decided a large sale in the late European market would upset the applecart. They were right and gold traded for an instant below $1300.00 but recovered just as quickly. This is another one of those goofy electronic trades everyone can’t make sense of and finally ignores.

The active domestic market was choppy and supportive; yes it closed down but it quickly recovered in the after-market to show a big $15.00 increase moving gold back into the $1312.00 range. What happened to encourage the bulls was actually expected, but as usual with the government was not a cinch. Everyone wanted to hear what the big chief (Powell) had to say after the FOMC closed up shop at the end of its two day meeting.

So not much of his usual talk was a surprise – the Fed Chair confirmed that the FOMC will remain in “neutral” relative to interest rates the rest of this year. And they are rethinking their balance sheet reduction program – an interesting but important side bar.

These two points are a pretty big deal because it confirms that the Fed now believes the economy both here and in Europe may be slowing and does not want to accelerate the process.

So is this the elixir that gold traders have been waiting for? Well it sure does not hurt but the bullish trade will also need something more substantial to kick start the safe-haven interest. So while I think the technical picture still favors higher prices gold might remain defensive and choppy while making up its mind at these higher levels. With this usual provision – the game will be definitely on if gold breaks above $1350.00. And my feel is that if this market claws its way higher the volatility factor will increase substantially – so buckle your seat belts.       

And just about the time everyone is wondering what might be around the next corner – gold once-again may be inventing itself as described by Scotiabank and Anna Golubova (Kitco) – Gold’s $1,300 Is The New $1,200 As Central Banks Embrace De-Dollarization – Scotiabank – Gold is giving new diversification opportunities to central banks (CB) from emerging markets (EM), including the ability to de-dollarize, according to Scotiabank.

Central banks from emerging markets have stepped up gold purchases last year — a trend that is not letting up this year as well, said Scotiabank’s commodity strategist Nicky Shiels, adding that increased buying has coincided with a dovish tilt on behalf of most of the major central banks.

“EM CBs switched into easing mode in February, post the Feds dovish tilt in January, earmarked & kicked off most notably by RBI unexpectedly cutting rates in the beginning of February,” wrote Shiels in a report. “Theres a negative correlation between EM CB rate cuts and Global CB Gold purchases … During the EM hiking cycle of 2010-2011, Global CBs bought on average around 7.5m oz of Gold, compared to the 2012- 2015 ultra-loosening cycle in which Global CBs bought on average significantly more (12.8m oz).”

But, rate cuts are not the reason why central banks are buying more gold these days, the strategist pointed out, highlighting a slate of old and new attributes that make gold attractive.

Some of the traditional and well-tested positives that gold offers are being: “a safe haven, reserve asset, fiat currency hedge, a geopolitical hedge, a $ hedge, and a diversification tool for portfolios,” the report described.

What’s more important to highlight, however, are the new positives that the emerging market central banks are seeing in the yellow metal.

Scotiabank listed a number of new buying trends, including viewing gold as a liquidity hedge against negative yielding assets, a hedge against protectionism, and a hedge against geopolitics and a recession.

Fed’s dovish shift during the last three months have raised concerns around tightening liquidity, dollar shortage and equity market volatility, explained Shiels. “Gold’s a liquidity (inflation) hedge—albeit a poor one when yielding real assets outperform— against the newly adopted dovish reaction function by Global CBs. This has created a rally in bonds forcing the pool of negative yielding assets to swell to almost $10bn,” he said.

Also, rising trade-war rhetoric has been forcing central banks to look into how to protect themselves from a protectionist U.S. administration, added the strategist. “Gold becomes a hedge against growing protectionism and polarizing world politics that began with Brexit and U.S. 2016 elections and the new buying trends could be a (delayed) reaction to these major past geopolitical events,” he said.

This newfound love for gold is great for prices long-term, noted Shiels. “[It] reinforces the new higher foundation gold is in; $1300 is the new $1200,” he said.

The current playing field is quite diverse with some traditional central-bank buyers like China, Turkey, India, Russia and Kazakhstan continuing to accumulate gold and some brand new players like Colombia, Mongolia, Hungary and Poland entering the field.

In some cases, such as China’s most recent purchases, the move towards the yellow metal points to the country’s “commitment to de-dollarizing,” the commodity strategist added.

“China bought about 32 tonnes of Gold the past three months (December through February); if it keeps purchasing at that rate, they would surpass Russia and Kazakhstan … This subtle statement perhaps matters more than the fact that the total amount accumulated the past 3months is ~1/6th of the persistent buying seen over 2015-2016 (of a total of ~6m oz),” Shiels said.

This from Zaner (Chicago) – “It’s all about the dollar for gold and silver, with the dollar managing a minor early bounce and precious metals coming under moderate pressure as a result. Apparently some traders are banking profits and moving to the sidelines ahead of this afternoon’s Fed meeting perhaps because they fear the markets might have overstated the prospect of definitively dovish views from the Fed. In other words with the dollar down significantly over the prior three weeks and gold prices up modestly over the prior three weeks, some position leveling/profit-taking is to be expected. In fact it is likely that the Fed will attempt to be “balanced” with a desire to support psychology without fostering fears of noted slowing. Overnight gold derivative holdings declined while silver derivative holdings increased, which mirrors fundamental news flow overnight between the two markets. Apparently Indian silver demand is set to reach a four year high because of government support for its large agrarian sector and that provides silver with a badly needed demand source. The private forecast pegged silver purchases to increase by 6,590 tons this year which in turn would be a fresh five year high! Apparently silver demand from farmers from government handouts will expand more than gold demand because of silver’s cheaper pricing. It should be noted that June gold has seemingly paused at the 50 day moving average over the prior three trading sessions and has waffled around both sides of that moving average for the past five trading sessions and that could make the $1,303.95 level a critical resistance point through the Fed window today. In our opinion, the gold contract has seen gains of roughly $10 per ounce off the expectation for a “mostly” dovish stance from the Fed a definitively supportive result is needed to avoid some measure of temporary back and fill following the Fed today. However, given that US economic data (and in particular the last nonfarm payroll reading) US data has been very disappointing, and therefore it is likely that the end result of this week’s Fed meeting will ultimately leave both gold and silver prices in upward trajectories.

While both platinum and palladium are trading higher and palladium sits right on all-time highs early today, the flow of bullish fundamental news favors platinum to start today. In addition to an increase in platinum derivative holdings (inflows are seemingly accelerating) platinum continues to see predictions that some buyers are showing interest in the “cheapest” PGM metal. One should also note that the charts in platinum have turned upward definitively and there might be little in the way of resistance until the $875 level in April platinum. Another minor support for platinum was seen yesterday from Ford Motor Company plans to expand the production of large SUVs like the Ford Expedition, as those vehicles require more platinum for catalytic converters than regular vehicles. Unfortunately Citigroup has played down the prospect of a manufacturing shift from palladium to platinum by suggesting it could take “years” to shift feedstocks. On the other hand Citigroup does feel that platinum is in the process of playing catch-up. Perhaps the platinum market is beginning to draft support from the “REAL POTENTIAL” for a loss of South African platinum production in the event of a collapse of the primary South African electric generating company. Apparently Eskom officials are suggesting the current power problems in South Africa are the result of aging power plants, while others suggest mismanagement and a lack of maintenance are causing the outages. The South African official responsible for the power sector has indicated that rolling blackouts will continue and that capacity utilization is just barely above 50%. It should be noted that platinum ETF holdings reached 2.298 million ounces yesterday and that tally is the highest since August 2017! Support in April platinum moves up to $853.10 and the next key resistance point is seen up at $866.40. Uptrend channel support in June Palladium today moves up to $1,535.98.

While the overall trend in gold and silver remains up, a measure of corrective action is underway early today and that in turn could mitigate any negative reaction to the Fed meeting statement later today. On the other hand, the PGM complex looks to remain in an upward track with both platinum and palladium working higher on the back of individual supply-side threats. However, Fed expectations should continue to be supportive until late in the Wednesday US trading session and it would not be surprising to see both gold and silver recover sharply in the event that the Fed acknowledges a deceleration in US growth. As mentioned already, June gold has a critical pivot point today at $1,303.95 while May silver has a critical pivot point down at $15.22.”

Silver closed down $0.05 at $15.25.

Platinum closed up $7.00 at 858.20 and palladium closed up $11.10 at $1580.80.

This is our usual ETF information – All Gold Exchange Traded Funds: Total as of (3/6/2019) was 69,071,077. That number this week (3/20/2019) was 69,140,771 ounces so we gained 69,694 ounces of gold.

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

All Silver Exchange Traded Funds: Total as of (3/6/2019) was 611,593,611. That number this week (3/20/2019) was 613,487,733 ounces so we gained 1,894,122 ounces of silver.

All Platinum Exchange Traded Funds: Total as of (3/6/2019) was 2,578,173. That number this week (3/20/2019) was 2,615,928 ounces so we gained 37,755 ounces of platinum.

All Palladium Exchange Traded Funds: Total as of (3/6/2019) was 772,982. That number this week (3/20/2019) was 780,535 ounces so we gained 7,553 ounces of palladium.

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

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

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

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

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

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

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

Gold Remains Steady

Commentary for Tuesday, March 19, 2019 – Gold closed up $4.70 at $1305.00 today in another round of quiet trading. It would seem the FOMC using the word “patience” has indeed charmed everyone. Actually I think this is a kind of “lulling” but no matter, the metals only care about today.

And for now the dovish FOMC is turning into extremely dovish. The March 19^th and 20^th meeting is of course under way but no one really expects any surprises. The usual “talk” by the boss will happen most likely after markets close on Wednesday. But I think “the no interest rate increase” has been factored in for some time now and contributes greatly to gold’s ability to hold this higher trading range.

The most current upward price channel remains firm but not dramatically so as gold seems to have gotten its footing just below $1290.00. But the jury is still out as to whether gold will make another attempt at the overhead resistance established in mid-February around $1340.00.

So for now everyone is stuck with this kind of “anticipation” supported by the fact that the FOMC will not turn aggressive with interest rates.  

The latest from the World Gold Council helps this narrative: The impact of monetary policy on gold – “The upcoming Federal Reserve Open Markets Committee (FOMC) meeting on 20 March is expected to confirm market expectations that the Federal Reserve (Fed) will remain on hold for the rest of the year. This, in turn, will likely influence gold’s performance. Our historical analysis shows that when the Fed has shifted from a tightening to a neutral stance, gold prices have increased, even if this effect has not always been immediate. In our view, the combination of rangebound US interest rates, a slowdown in the appreciation of the US dollar and continued market risks will continue to make gold attractive to investors.”

Finally the dollar has helped the gold bullish scenario. The Dollar Index these 5 past trading days has moved from 97.00 through 96.35. And there is a case to be made that the index could trend lower based on its 3 month performance which has seen several lows around 95.20.

It still remains to be seen whether this bullish gold scenario develops further or just continues to churn in a rather tight trading range. The Brexit turmoil might help but while English politics is getting a bit messy their economic recovery seems to be doing just fine which does not help the safe haven scenario relative to gold.

So once again it looks like we will “tarry” here – looking for something that will either break up this developing optimistic scenario or add further energy to gold pricing. A break above $1350.00 – that pesky 5 year cap is what the technical folks will be looking for and is exactly the kind of fireworks this market now needs.   

This from Zaner (Chicago) – “While the action in gold was ultimately nondescript yesterday, the market did make initial gains in a fashion that seemed to rekindle last week’s recovery mentality. The gold market continues to claw its way higher this morning with another higher high for the move and a three day high early. While the declines in the US dollar are not significant overnight, the dollar charts read negative and appear to be projecting further downside work. The Indian government has promised to reform the gold trade into a more formal system with policies to spur physical gold trade, facilitating gold as a financial asset, establishing a gold regulator and those moves might increase the countries clout by concentrating gold activity. Certainly the policy changes won’t translate into stronger near term gold demand but the net result could eventually reform the world’s second-largest gold market into a more important demand force. Overnight holdings gold derivative holdings increased by 280,000 ounces while silver holdings increased by only 116,000 ounces. In another supportive development overnight the IMF has indicated five central banks have increased holdings of gold while Turkey and Mexico actually cut their gold reserves in recent statistics. Gold might draft some support from higher Swiss gold exports especially with exports to India jumping by 137% on a month over month basis. However countervailing the jump in Indian Swiss gold imports from Switzerland is a 57% decline in the Swiss gold exports to China. From a technical perspective, the gold market has continued to respect a classic uptrend lines on its charts for most of March (following the initial washout earlier in the month) and the upward motion in prices has been accompanied by a steady buildup of open interest. Seeing open interest rise on a rally should suggest the bull camp is maintaining a technical edge.

In a change of pace overnight the platinum market appears to have received more bullish fundamental headlines support than the palladium market. Apparently Citigroup has suggested that platinum will be the “next leg” of the PGM boom! The analyst suggested the platinum market is extremely cheap in its ratio to palladium and that buyers of platinum might see a less volatile investment action than investments in palladium. However the palladium market continues to get support from the prospect of Russian sanctions limiting palladium exports. Obviously the charts continue to project even higher prices with the spot palladium market climbing above the psychological $1600 level on the back of the Russian supply disruption potentials. Yet another supportive element for the PGM complex is the looming FOMC meeting results on Wednesday. At least in the near term we see April platinum prices retesting the $850 level but that will require persistent leadership from palladium and gains in the rest of the precious metals markets. Three month uptrend channel support in palladium today is seen at $1,503.55 and that support level rises to $1,524.10 on Friday. In platinum the $825 level has been a critical pivot point in the marketplace for 8 1/2 months and that appears to be some form of strong value from which prices should climb back toward the late February high.

Like the palladium market, the gold market remains in a three week uptrend pattern and should be supported going forward by further weakness in the dollar, spillover lift from palladium, hope for a dovish Fed and news that a series of global central banks have increased their gold holdings. Uptrend channel support in June gold today is seen at $1,304.30 and that uptrend channel support line climbs to $1,310.60 on Friday. Unfortunately for silver bulls, the May contract remains mired within what continues to be a large sideways consolidation pattern as tight supply continues to be discounted and industrial demand continues to be running just above demand levels.”

Silver closed up $0.05 at $15.30.

Platinum closed up $18.60 at $851.20 and palladium closed up $12.90 at $1569.70.

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

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

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

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

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

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

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

Gold Flirts with $1300.00 Again

Commentary for Friday, March 15, 2019 – Gold closed up $8.40 today at $1301.80. Monday gold closed at $1288.80 so on the week we are looking at a gain of $13.00 – pretty flat really although the rhetoric heated up a few times and “choppy” probably best describes this pricing action. What is interesting however is that the Dollar Index has been generally lower these past 5 trading days – moving from 97.5 through 96.5.

This full point loss should have more than supported the price of gold but this has not been the case. When gold was weaker the most likely reason was simply selling pressure. The price of gold hit a 2 week high and traders began to sell into rallies. As the market recovered I think traders bought the dip but whether that was bargain hunting remains to be seen.

It may seem quiet, across our counters at least but there is a great deal going on internationally. The Brexit vote is being postponed – I guess because they can’t get their act together and a delay in this decision is a takeaway from safe haven gold demand.

At the same time heavyweights like Commerzbank see $1400.00 gold by year-end and just the threat of a slowdown as seen in the drop of the New York Manufacturing Survey yesterday may have been enough to push gold prices back above $1300.00 – the thought here being that a slowdown would push the Fed further into inaction or even a rate cut later this year.

For now the shorter term technical picture for gold while sometimes encouraging remains somewhat defensive. These past 12 months we have moved from $1350.00 through $1200.00 back to $1350.00 and are once again seeing that this overhead resistance remains formidable. So live with “choppy” for now and see what the next FOMC meeting has in mind.

The Federal Open Market Committee will remain the major driving force for gold throughout 2019 as folks ponder the fate of shorter term interest rates. The Fed raised interest rates to 2.5% last year and early on promised that we would see 3% in 2019.

But this “probability” is all over the place. Some are saying there is zero chance of further rate hikes in 2019 and rather the Fed will reduce rates by year end as recession fears are realized – gold would obviously benefit.  

Others claim that the DOW reclaiming 25,000 is a great opportunity and business will be smoking by year end. This line of thought reintroduces the notion that the Fed will move rates higher to “cool” inflationary forces and gold will move lower.  

So take your choice – my bet is that the first option makes more sense because of the gigantic US and world debt which has been created this past decade. Rising interest rates have no place around that much borrowed money – that house of cards simply could not take the heat.

For now Powell’s “patient” approach to higher interest rates rules – and if this gentler approach remains the soupe-du jour (the “e” being intentional) gold will ultimately push the dollar lower and gold higher.

Actually investors have kept the dollar stronger because many have chosen the Green Back over the gold as a hedge in a world of uncertainties. That is the primary reason gold is not looking at much higher prices to date. This preference however is easily forgotten in a world of monstrous debt. Now I’m not suggesting the dollar will crash anytime soon but given enough time this option will become a reality and gold will benefit.         

This from Zaner (Chicago) – “Global equity markets overnight were higher with the exception the Australian market. Overnight Chinese house price readings for February came in slightly above expectations while Chinese foreign direct investment came in stronger than expected for the month of February. The Bank of Japan monetary policy meeting yielded a reduction in economic views but no change in rates. From Europe the markets were presented with German and Italian car registrations which were in positive ground but significantly slower than in the prior month. UK car registrations for February showed a significant off the charts decline while French car registrations were in positive territory but showing minimal momentum. German wholesale prices on a month over month and year-over-year basis increased slightly. Italian industrial orders for January came in positive. The North American session will start out with the New York Fed’s March Empire State manufacturing survey that is forecast to have a modest uptick from February’s 8.8 reading. January Canadian manufacturing sales are expected to have a moderate uptick from December’s -1.3% reading. February industrial production is forecast to have a moderate uptick from January’s -0.6% reading. February capacity utilization is expected to have a minimal uptick from January’s 78.2 reading. The January job openings and labor turnover (JOLTS) survey is forecast to have a moderate decline from December’s 7.335 million reading. A private survey of March consumer sentiment is expected to have a moderate uptick from February’s 93.8 reading. The January Treasury International Capital (TIC) report will be released during afternoon US trading hours.

After a significant washout in the prior trading session, the gold market has rebounded noticeably and has managed gains in spite of little direction flowing from the dollar. However the bias in the dollar looks to be pointing downward and that combined with a generally positive metals sector overnight bounce should put the bear camp slightly off balance to start today. The market might be drafting support from what appears to be another delay in US/Chinese trade meetings with both sides suggesting a push back to “at least” April. Gold should be deriving some support from overnight news from an Indian gold Association prediction that 2019 Gold Dore imports would be 280 tons versus only 260 tons in 2018. However that news is partially counter veiled by Indian industry predictions of a slightly soft April & May import period. The gold market should derive some support from ideas that the PBOC is expected to continue to provide support to its economy especially if the Chinese government provides specifics on the timing of recently announced tax cuts. The gold market might also draft some support from yet another delay in the exit vote but the temporary avoidance of a hard exit takes some safe haven support away. While the silver market managed to rise above its 200 day moving average earlier this week, it failed significantly at that level yesterday and remains just under that key pivot point of $15.39 early today and that could signal a key trend decision.

Like gold and silver, platinum sold off sharply on Thursday. Zimbabwean miners, including Anglo Platinum, Impala Platinum and Caledonia Mining have agreed to an 80% wage hike. While this raises the cost of production, it may also ease supply concerns if it reduces the chance of strike activity. Apparently the PGM markets are drafting some support from initial weakness in the dollar but also from hopes that the Chinese will continue to provide stimulus for their struggling economy. Another issue that might lend support to PGM prices came from overnight reports that Anglo American Platinum would indeed yield physical PGM or producing properties to South African communities, following African National Congress efforts to implement Constitutional changes that would allow them to seize private property without compensation. In other words future supply of platinum might be called into question as some mining efforts will be undertaken by private citizens and the government! June palladium pushed through last week’s high of $1,516.80 on Thursday, leaving the next resistance level up at the all-time high of $1,525.80.

While the bull camp looks to control the early action in gold today dollar weakness is minimal and prices appear to have resistance left over from this week’s new high for the move reversal. Initial resistance in April gold is seen at the 50 day moving average of $1307.20 with initial resistance in May silver seen at $15.47. However we do give the bull camp a slight early edge but critical support in April gold must hold at $1295.60 early today to set the stage for a retest of this week’s highs up at $1311.60. Similarly May silver probably needs to hold above $15.27 in the early going to pave the way for a late afternoon test of the $15.55 level.”

Silver closed up $0.15 at $15.25.

Platinum closed up $4.70 at $830.30 and palladium closed up $3.90 at $1535.60.

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

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

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

Like the employees our customers were given three choices – up – down – unchanged. We limited the survey to a random sampling of 100 transactions – unscientific but worth considering because these people took action: 47 people thought the price of gold would increase next week – 41 believe the price of gold will decrease next week and 12 think prices will remain the same.

Precious Metal Closes & Dollar Strength – March 11 – March 15

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

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

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

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

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

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

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