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Gold Approaches Two Year Lows

Gold Approaches Two Year Lows

Commentary for Wednesday, Aug 15, 2018 – Gold closed down $15.50 at $1177.50. Obviously the bears are still having their way – as both gold and silver approach 2 year lows. Still, lower prices across the board should not surprise and the lack of fresh speculative money or some bargain hunting along the way will reinforce the bearish scenario.

And what happened to the traditional “safe-haven” buying as the political rhetoric rises over President Trump tweets, Wall Street in the red and the contentious tariff dialogue? The CNBC boys developed an interesting thought this morning – “are traders beginning to worry that the “best” in the latest US economic growth cycle is behind us?”

This is possible and the implications for the dollar are obvious. But is the dollar worried? Look at the Dollar Index, since July it has moved from 94.32 to 96.76 – strong as lye soap – encouraged by higher interest rates and less stable currencies pushing the bullish dollar scenario.

The words for today might be “a small global contagion”. Suddenly the world is considering whether the still developing situation between the US and Turkey could escalate into a similar situation between the US and the world.

China a big copper buyer might see manufacturing damage created by tariff problems – copper prices moved to new one year lows today.

The dollar has become the safe haven of choice and with US retail sales up 0.5% future prospects seem bright. Foreign currencies have seen recent devaluations in countries like Turkey, South Africa and China. Even the euro is off balance most likely because of tariff fear.

Like it or not the gold’s breakdown in mid-July at $1240.00 continues to encourage the bears. Its most recent break through $1200.00 will bring out the technical guys who are now considering first support at $1150.00 and then $1050.00, gold’s most recent low seen in 2016.

I think the $1050.00 number is too extreme but it is important because this is where gold began this latest bullish leg which took prices to $1350.00. At this most recent high traders decided the market was played out after multiple attempts to break into higher ground failed.

So where are we now? Between the rock and hard spot – the psychology of today’s market is simple – “lower today, lower tomorrow”. This always happens when we are talking about large sell-off numbers. The fact that gold is up considerably since its late 2016 bottom at $1050.00 is a washed out argument and the notion that sooner or later these “lower” prices will create that blow out bottom everyone is looking for sounds too self-serving.

With this type of negative thinking it won’t be long before the “gold is useless” argument shows up in all its glory and the traditional paper investment folks try once again to relegate gold and silver bullion to a dusty historical shelf visited by academics.

Don’t laugh this is exactly what happened as the American public yawned when given the opportunity to own gold legally in 1975. Pricing faltered at $200.00 and began falling – at something around $130.00 most commentators were bearish. The idea that gold would be 6 or 7 times that number in 5 years was never even a consideration.

So again my advice is to hold tight – think prices are moving even lower – stand aside.

But don’t lose your historical perspective – unbacked paper money just does not have much of a long term track record. There are literally thousands of examples where the government printing press has led to financial disaster.

I’m not suggesting this is our fate – but as I have said many times before I don’t want all my eggs in one basket. And while adding to your nest egg (outside the traditional financial system) in a falling market is uncomfortable it is exactly the time when the best deals are made.

A few final thoughts, first trying to “catch” that perfect bottom is impossible even for professionals. Keep your eye on the longer term and keep a core position of bullion because you never know when it will come in handy – crisis or not.

Second, watch “premiums” like a hawk – we all have been spoiled by cheap premiums – US Gold Eagles selling for $25.00 over spot were ridiculously cheap. Typically premiums on these popular bullion coins are usually twice that amount. Lesson learned – premiums are subject to change at any time and for any reason.

The dealer does not control premium – it is a function of either the production cycle or demand.

Finally, when premiums are extraordinarily cheap it means that the public is not interested – when premiums are moving higher it a good indicator that demand is heating up.

Premiums on bullion products are moving higher now because cheaper prices are stimulating consumer interest.

This from Zaner (Chicago) – “With the dollar posting yet another higher high to start, risk off action flowing from global equities and a sea of red throughout commodity markets the latest plunge in gold and silver prices is well-deserved. As we suggested yesterday, a 19.2% decline in South African gold production in June compared to year ago levels is virtually ignored in the sagging physical demand environment and few expect supply losses to tighten a market that is seeing investment and physical demand dry up. In fact it would seem as if the bull camp will need a full blown global financial/economic contagion to have any chance of reigniting safe haven buying of gold. However, the gold market from the last COT positioning report to the low this week saw another $24 decline and that should bring the net spec and fund long down to what we label a “liquidated” level and perhaps soon to be “net short” positioning. Unfortunately for the bull camp, gold and silver are commodities facing soft demand and the lack of a definitive bullish technical or fundamental storyline.

The PGM sector was clearly a beneficiary of calmer global risk concerns and while palladium and platinum finished Tuesday in positive territory, they did not climb very far from their recent lows. As if spillover pressure from the soaring Dollar and cratering gold prices weren’t enough, the PGM complex saw news yesterday that July South African PGM production came in more than 28% above last year’s total. Furthermore lukewarm readings for Chinese industrial production and retail sales may point towards eroding auto catalyst demand from China as well. Platinum saw a reversal from a 3 1/2 week low and came within $1.40 of a key reversal yesterday, but that action is completely lost and the attempt to recover yesterday might have balanced the technical condition enough to facilitate more aggressive selling today. Near-term support for October platinum is now $779.00 while near-term support for September palladium is at $868.50.”

Silver closed down $0.61 at $14.42. Gold Approaches Two Year Lows

Platinum closed down $29.80 at $786.70 and palladium closed down $52.80 at $845.20.

This is our usual ETF information – All Gold Exchange Traded Funds: Total as of (8/8/2018) was 66,684,125.  That number this week (8/15/2018) was 66,218,982 ounces so over the last week we dropped 465,143 ounces of gold.

The record high for gold ETF’s was 85,112,855 ounces in 2013. The record high for Gold ETF’s in 2018 was 70,763,846 and the record low for 2018 was 66,218,982.

All Silver Exchange Traded Funds: Total as of (8/8/18) was 656,860,249.  That number this week (8/15/18) was 649,722,425 ounces so this last week we dropped 7,137,824 ounces of silver.

All Platinum Exchange Traded Funds: Total as of (8/8/18) was 2,324,928.  That number this week (8/15/18) was 2,366,532 ounces so this last week we dropped 41,604 ounces.

All Palladium Exchange Traded Funds: Total as of (8/8/18) was 989,315.  That number this week (8/15/18) was 1,004,934 ounces so last week we gained 15,619 ounces of palladium.

The GoldDealer.com Unscientific Activity Scale is a “7” for Wednesday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Thursday – 4) (last Friday – 2) (Monday – 3) (Tuesday – 2). The scale (1 through 10) is a reliable way to understand our volume numbers. The Activity Scale is weighted and is not necessarily real time – meaning we could be busy and see a low number – or be slow and see a high number. This is true because of the way our computer runs what we call the “book”. Our “activity” is better understood from a wider point of view. If the numbers are increasing – it would indicate things are busier – decreasing numbers over a longer period would indicate volume is moving lower.

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.

Thanks for reading. As always we appreciate your business and enjoy your evening.

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 Continues Weaker and Contrary

Gold Continues Weaker and Contrary

Commentary for Monday, Aug 13, 2018 – Gold closed down $19.80 at $1191.30. The bullish contingent is getting thinner and their hope had been that while gold broke down at $1250.00 in early July the price curve flattened out around $1210.00. So perhaps the important $1200.00 support would hold and going into this past weekend there was talk that the crises in Turkey would help support this optimistic view as the lira imploded and safe-haven buying increased. All of this turned into wishful thinking as the price of gold broke down in Hong Kong and London and was confirmed in the domestic market. The world decided that the dollar was a better bet short term – not gold – most likely because the technical picture for gold has been bearish since late March as gold broke down from $1340.00.

And trying to guess a “bottom” here is impossible – but fun. It allows everyone to get into the act – big player, small player or no player.

Some observations – weaker prices seem likely in this “pile on” game because the momentum players can’t believe their luck – there was virtually no bargain hunting even when the informed thought gold was oversold just a few short weeks ago.

That means pay day continues for the “short contingent” encouraged by the absence of the usual Asian contingent, a still ragingly hawkish FOMC and the curios lack of trader concern over President Trump’s continuing attack on lopsided tariff policy.

Today it was the Canadians and the car industry – this is no longer rhetoric – it’s turning ugly. Tariffs cost everyone and push prices higher (inflation). Playing around with this balance in the tariff trade is dangerous – those recently imposed on Turkish steel being a good example.

It’s also no secret that geopolitical events have not moved the gold needle much recently. In a normal market something as big as the Trump Canadian assault would push gold prices up $50.00 and create a lot of buzz. The fact that this did not happen is troubling – the disconnect in the safe haven market is a big deal, like it or not.

There are a few more things which should also be noted. Yes the price of gold is lower but so is the price of silver and in fact it is approaching that “cheap” zone closing today at $14.95. This price area has always created physical action – so where are the physical silver bullion buyers?

I’m one for consistency between gold and silver bullion – the fact that silver buyers are staying home even when prices are this cheap helps develop the bearish scenario in gold.

So that is some of the bad news – but for you bulls this picture finally sets up a reasonable scenario for market stabilization and yes even higher prices as inflation returns. The continued weakness in gold prices pulls gold out of the “summer – ho hum doldrums” and creates interest. And keep in mind that gold is always in demand – strong dollar or not – it is just a matter of price and the lower the price higher the interest level.

For now we have everyone’s attention. This is not simply rhetoric we are looking for gold’s “blow-off” pricing base. Usually difficult to spot yet easily identified in the rear view mirror.

Staying bullish in the face of lower prices takes a special talent and historical insight. If you belong to this group protecting your financial house remains a primary objective and cost averaging is the primary planning tool.

This approach suggests adding to your core holdings in smaller increments if prices continue to move lower. Still think this market has downside? You are probably not alone so just stand aside and watch – sooner or later the notion of “cheap” gold and silver bullion will reenter the speculative dialogue – it always does.

Finally who is left in this fight? The usual’s of course – the Chinese are buying, first half purchases up 7% year on year for jewelry. Indian July imports up 42% year on year and I suspect these numbers will continue higher if gold prices continue lower. Some things never change.

This from Zaneer (Chicago) – “While the situation in Turkey has probably fostered some safe-haven flows toward gold, the market just hasn’t received enough anxiety buying to offset the ongoing currency selling tide. In short continued strength in the Dollar (which posted another higher high and the highest level in over a year early on today) continues to sit right on the backs of gold, silver, platinum, palladium and other commodities. Unfortunately for the bull camp, strength in the dollar does not look to be ending anytime soon and that strength could actually accelerate given growing talk that the situation in Turkey is prompting talk of a currency contagion. In the end, the addition of Turkey to the growing list of geopolitical flashpoints looks to leave gold and silver facing a deflationary commodity selling theme. On the other hand, the net spec and fund long in gold came down by a very significant 23,504 contracts in the latest weekly positioning report and it now stands at a mostly liquidated (in our opinion) net long of only 8,234 contracts! Unfortunately for the bull camp in silver, the net spec and fund long positioning remains vulnerable to further stop loss selling with the net long still sitting roughly 18,000 contracts above the all-time low net long positioning. The Commitments of Traders Futures and Options report as of August 7th for Silver showed Non-Commercial and Non-reportable combined traders held a net long position of 23,385 contracts.

While the PGM complex last week held up fairly well against the strong dollar/falling gold situation, prices this morning have succumbed to the wave of selling in physical commodities. As in many other physical commodity markets today the PGM complex is obviously factoring in the potential of a currency contagion inspired headwind for the global economy and little safe haven interest is surfacing so far. It is clear that the platinum market could be poised to take a downside leadership role as it ranged down sharply this morning and forged a seven day low in the process while palladium remains within the last three days trading range early this morning. In conclusion, with a risk off continuation in global markets this week and further tensions between the US and China, we have to remain bearish toward both platinum and palladium. Fortunately for the bull camp, both platinum and palladium have seen their net spec and fund long positions washed out and that should begin to make it difficult for the bears to press prices. The Commitments of Traders Futures and Options report as of August 7th for Palladium showed Non-Commercial and Non-reportable combined traders held a net long position of only 3,162 contracts. This represents a decrease of 1,569 contracts in the net long position held by these traders. The Commitments of Traders Futures and Options report as of August 7th for Platinum showed Non-Commercial and Non-reportable combined traders held a net “short” position of 619 contracts. This represents an increase of 356 contracts in the net short position held by these traders.”

This from Zandi Shabalala (Reuters) – “Gold hits 17-month low as investors seek refuge in dollar – “Gold prices sank below $1,200 per ounce for the first time in 17 months on Monday, losing out to U.S. Treasuries and a stronger dollar as investors sought refuge from a financial market rout triggered by a crashing Turkish lira.

Investors traditionally use gold as a means of preserving the value of their assets during times of political and economic uncertainty and inflation. But it has this year failed to benefit as investors made a beeline for U.S. Treasuries, seen as the ultimate safe haven, which meant they had to buy dollars.

A higher U.S. currency also makes dollar-denominated assets more expensive for holders of other currencies, which subdues demand – a relationship used by funds to generate buy and sell signals from numerical models.

The lira has tumbled on worries over Turkish President Tayyip Erdogan’s increasing control over the economy and deteriorating relations with the United States.

“Gold is not doing what a lot of investors had hoped it would do,” said Andrew Cole, multi asset manager at Pictet Asset Management, referring to gold losing its safe-haven appeal.

“The longer it doesn’t behave as a risk-off hedge the more likely it is that it won’t.”

Bearish sentiment can be seen in data from U.S. Commodity Futures Trading Commission showing gold speculators added 22,195 contracts to their net short position in the week to Aug. 7, bringing it to 63,282 contracts, the largest since records became publicly available in 2006.

Holdings of the largest gold-backed exchange-traded fund (ETF), New York’s SPDR Gold Trust, at 25.3 million ounces have dropped about 10 percent from their April peak and are at their lowest since Feb 2016.

Meanwhile, platinum prices headed towards the 10-year lows below $800 an ounce seen last month, due to a glut of metal. Platinum is heavily used in catalysts in diesel vehicles that have fallen out of favor since 2015’s Volkswagen emissions-rigging scandal.

The world’s top producer of platinum is South Africa, which saw its rand currency hit a two-year low due to contagion. “Supply is holding up well as a weaker rand provides support to South Africa’s mining industry,” Julius Baer analyst Carsten Menke said in a recent note, adding this was because it would lower rand-based costs when expressed in dollars.”

Silver closed down $0.32 at $14.95. Gold Continues Weaker and Contrary

Platinum closed down $30.20 at $794.60 and palladium closed down $20.20 at $888.90.

The GoldDealer.com Unscientific Activity Scale is a “3” for Monday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Tuesday – 4) (last Wednesday – 3) (last Thursday – 4) (last Friday – 2). The scale (1 through 10) is a reliable way to understand our volume numbers. The Activity Scale is weighted and is not necessarily real time – meaning we could be busy and see a low number – or be slow and see a high number. This is true because of the way our computer runs what we call the “book”. Our “activity” is better understood from a wider point of view. If the numbers are increasing – it would indicate things are busier – decreasing numbers over a longer period would indicate volume is moving lower.

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.

Thanks for reading. As always we appreciate your business and enjoy your evening.

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 Yawns into a Hot Summer Weekend

Gold Yawns into a Hot Summer Weekend

Commentary for Friday, Aug 10, 2018 – Gold closed down $0.80 at $1211.10 – so another slow day at the ranch. It closed this past Monday at $1208.60 so on the week we all fell asleep over $2.50. As gold gets cheaper I can’t say the US trade gets more interested. We have seen some bargain hunting across our counter but the action remains sluggish and typical of what old school traders used to expect during the summer months.

There is some fresh talk about a bottom for gold from Kitco’s Peter Hug (maybe) which helps but with Chicago Federal Bank President Charles Evan touting one or two more interest rate hikes before the end of the year I think gold breaking down at $1200.00 is more likely.

But it’s worth noting that gold did close higher today even as the Dollar Index pushed higher (96.14) so the question of further weakness in gold remains clouded.

Exactly how this will all play out is difficult as inflation moves up to 2% and trade uncertainty continue to pressure world markets according to Reuters. Cheaper prices in the metals have the obvious positive aspect of creating new interest but at this point the US market remains fragmented with new investment money looking at Wall Street not a growing inflation problem.

So the talk of a “bottom” for gold is beginning around the edges but the bears are still running in the woods as the “safe haven” appetite remains soft.

There are hot spots which should suggest at least some financial caution in the paper markets but these however dangerous do not carry enough weight to infuse excitement into the gold trade. You would think that runaway inflation and civil unrest in Venezuela or safe haven gold buying in Iran as that country struggles against sanctions and fiat paper currency would create some buzz. But it has not – most likely because the drop in prices this past month from $1260.00 through a challenge of the $1200.00 support line has created a rather large yawn.

So China, Venezuela or Iran do not move the interest needle today – amazing really. The complacency factor pays tribute to just how numb the entire world has become over big business which provides little to the middle class and big government which provides colossal mismanagement in the bargain.

I have always been a big fan of Ronald Reagan’s dictum “Trust but verify”. Actually he coopted this suggestion from a Russian proverb but it holds up as well today as during his administration. I’m not suggesting we in the 21st Century should fear our own government but have always thought putting all my eggs in one basket sets up a scenario I would like to avoid. And since I can’t really “verify” I can be suspicious and this leads me to the gold and silver bullion insurance.

Spending during the Trump administration is a good place to be suspicious. Off the charts by any measure and yet as our economy is coming back into focus Pence is detailing a plan for the creation of Space Force which would become the 6th branch of the military. That kind of talk makes Regan look like small change as I continue to wonder who is going to pay back all this leveraged borrowing? At the very time when everyone should be asking more questions and buying more gold privately it remains unclear whether gold will hold $1200.00? It is kind of like our monetary compass is not working so for now if your financial sense of balance is making your head spin don’t feel bad – you are not alone.

As for customers in this market – there are several types – buyers trying to catch that near term bottom number just in case this market quickly turns around. Those still very interested but patient – waiting for that blow-out bottom number.

And overseeing all of this is the traditional Asian market – still not engaged so they anticipate lower numbers. Finally there are virtually no large sellers at these yearly lows for gold.

This mix is a potent brew for the physical market and promises fireworks when that monetary compass starts working again and everyone gets on the same page.

This from Zaner (Chicago) – “So far the gold and silver markets have not benefited from the potential for financial crises developing around the sharp declines in Turkish and Russian currencies. In fact Russian dialogue to the US overnight, that the tariffs are essentially a declaration of war on them is certainly creating the potential for a situation where money looking for safe haven might venture beyond US Treasuries. However a fresh upside breakout extension in the dollar to the highest level since July 2017 this morning rekindles pressure on all metals and commodities. At least to start today gold and silver look to behave like a classic physical demand driven commodities fearful of slowing demand from a number of geopolitical battles. It is possible that gold, silver, platinum and palladium might draft minimal support from the recent gains in Chinese equity markets, but further signs that the Chinese currency is recovering (not just stabilizing) might be needed to create hope that gold purchasing power of Chinese buyers will improve enough to stoke gold buying. Unfortunately for the bull camp in gold and silver, the fresh bullish action in the dollar trade is fanned further by Fed predictions of two additional US rate hikes this year, and that combined with the trade war orientated safe haven flow leaves the greenback with upside momentum. Following recent patterns, gold and silver look to remain under pressure until the ever-expanding list of global flashpoints suddenly provides safe haven buying interest for precious metals.

We suspect that platinum and palladium will continue to draft minimal support from the recent pattern pf recovery in Chinese stocks and also from any stabilization of the Chinese currency. Given the outperformance of palladium over platinum on the bounce yesterday, it is a good bet that technical short covering fed the bounce in Palladium yesterday. In other words, the palladium market was clearly the most oversold market and therefore palladium’s strong bounce was a logical balancing reaction to the sharp slide earlier this week. As in the gold market, it is extremely difficult to call for an end to the slide in the palladium market with further lower lows expected without a sudden improvement in US/Chinese relations. Weak support in September palladium is seen at a quasi-double-low around $885. On the other hand, the platinum market continues to build a solid base of support off an extending consolidation pattern and that should offer support at $823.30.”

Silver closed down $0.15 at $15.27.

Platinum closed down $4.50 at $824.80 and palladium closed up $2.70 at $909.10.

This is our usual ETF information – All Gold Exchange Traded Funds: Total as of (8/1/2018) was 67,055,115.  That number this week (8/8/2018) was 66,684,125 ounces so last week we dropped 370,990 ounces of gold.

The all-time record high for all gold ETF’s was 85,112,855 ounces in 2013. The record high for Gold ETF’s in 2018 was 70,763,846 and the record low for 2018 was 66,684,125.

All Silver Exchange Traded Funds: Total as of (8/1/18) was 651,702,585.  That number this week (8/8/18) was 656,860,249 ounces so last week we gained 5,157,664 ounces of silver.

All Platinum Exchange Traded Funds: Total as of (8/1/18) was 2,325,049.  That number this week (8/8/18) was 2,324,928 ounces so over the last week we dropped 121 ounces of platinum.

All Palladium Exchange Traded Funds: Total as of (8/1/18) was 962,289.  That number this week (8/8/18) was 989,315 ounces so over the last week we gained 27,026 ounces of palladium.

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

Of course, it’s not really patented but we do have some fun along the way. This is what the GoldDealer.com employees think: 8 believe gold will be higher next week 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: 56 people thought the price of gold would increase next week 30 believe the price of gold will decrease next week and 14 think gold prices will remain the same.

Precious Metal Closes & Dollar Strength – Aug 6 – Aug 10

Gold Yawns into a Hot Summer Weekend

The GoldDealer.com Unscientific Activity Scale is a “2” for Friday. The CNI Activity Scale takes into consideration volume and the hedge book: (Monday – 4) (Tuesday – 4) (Wednesday – 3) (Thursday – 4). The scale (1 through 10) is a reliable way to understand our volume numbers. The Activity Scale is weighted and is not necessarily real time – meaning we could be busy and see a low number – or be slow and see a high number. This is true because of the way our computer runs what we call the “book”. Our “activity” is better understood from a wider point of view. If the numbers are increasing – it would indicate things are busier – decreasing numbers over a longer period would indicate volume is moving lower.

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.

Thanks for reading. As always we appreciate your business and enjoy your evening.

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 Threatens $1200.00 Again

Gold Threatens $1200.00 Again

Commentary for Monday, Aug 6, 2018 – Gold closed down $5.60 today at $1208.60 continuing to encourage the bears. The Dollar Index has crept high since last Tuesday moving from 94.33 through 95.37 so a stronger dollar continues to weigh on the price of gold. And frankly this market is looking more and more like a “pile on” typical of momentum players looking for short term paper profits. But I’m surprised that we have seen little in the way of bargain hunting considering gold has lost $50.00 this past month. The big question remains in place now that the bears are feeling good – will gold hold the important $1200.00 support which goes back early 2015. Professional paper traders are sometimes “short minded” and considering that gold traded as low $1050.00 in 2016 I suspect they figure gold will break down between now and the next FOMC meeting as the Fed promises to raise interest rates.

But this view is subject to change overnight because of two points – the first is that gold is oversold in my view – normal physical buyers are looking carefully at this latest selloff for an entry point and we are beginning to see some public interest. And second regardless of what the Fed promises they will not get crazy with these interest rate hikes – there is no need. The logic being that other central banks are sitting on their hands so “pushing” interest rates higher derails a nice US recovery. And if they see a “need” – perhaps they fear the return of rising inflation. In this case there will be no shortage of fresh gold buyers.

Whether prices will get cheaper is just a short-term observation – we are approaching a bottom and in the wider view ask yourself how much gold will be when inflation returns. This is not a Pollyanna approach – it just makes good practical sense.

If you think the market will trade lower stand aside and be patient – if not beginning to test these lower prices simply allows cost averaging. Finally everyone will make a big deal out of hedge funds jumping on these lower prices by increasing their short position. The more this happens the bigger the snap-back process – these traders get in and out fast. Once prices settle these funds will cover their positions pushing gold prices higher so look for increased volatility.

This from Reuters – “Gold prices fell on Monday under pressure as a firmer dollar and expectations for further interest rate hikes by the U.S. Federal Reserve offset U.S. ‘snapback’ sanctions targeting the purchase of precious metals.

“Overall the bears remain in control and they continue to increase their short positions – both the net and gross are hitting records,” said Ole Hansen of Saxo Bank. Hedge funds and money managers added 13,931 contracts to their net short position in the week to July 31, bringing it to 41,087 contracts, the biggest since records became publicly available in 2006.

The Trump administration will aggressively enforce economic sanctions that it is reimposing on Iran this week and expects the measures to have a significant impact on the Iranian economy, senior U.S. administration officials said. Those sanctions include precious metals, U.S. bank notes, steel and coal.

People in Iran are buying gold to shore up their currency, said George Gero, managing director of RBC Wealth Management.

“But that demand in Iran has not offset the selling of gold in the Western countries because of the higher (U.S.) interest rates and the higher U.S. dollar,” Gero explained.

New York Fed Markets Chief Simon Potter on Friday reiterated the U.S. central bank’s intention to raise interest rates. Gold is sensitive to higher U.S. interest rates, because it costs to store and does not draw interest payments.

The dollar rose against a basket of currencies, building on two consecutive weeks of gains, as investors bet that trade war rhetoric and a strong U.S. economy would continue to drive the currency higher.

Investors have largely been buying the dollar as a safe haven asset rather than gold as the U.S.-China trade dispute escalates. China proposed retaliatory tariffs on $60 billion of U.S. goods on Friday, after U.S. President Donald Trump’s administration proposed a higher, 25 percent tariff on $200 billion of Chinese imports.

This from Zaner (Chicago) – “While the gold market did manage to reject the latest contract low and recovered by $9.00 off the low on Friday, the lack of positive price action in the wake of a series of supportive fundamental stories suggests it is still too early to call for a low. While the reversal in the dollar at the end of last week took the heat off gold and silver the Dollar starts the trading week right on the recent highs and that force hangs over precious metals prices. Clearly the gold trade has discounted positive demand talk from India overnight where the World Gold Council suggests jewelers are restocking ahead of looming festivals. In fact there has been some talk that recently deflated pricing is attracting interest and that interest is partially confirmed by stronger premiums in both India and Hong Kong. However even with the World Gold Council last week suggesting Indian demand in the second half would rise due to the potential for better conditions for the farm sector we don’t get the sense that demand will be able to stop a proverbial falling knife in gold. Other supportive developments that are being “discounted” this morning include significant Iranian economic protests, signs of significant liquidation of gold and silver spec longs in the COT report, higher Iranian gold demand, minor supply concerns due to gold mining wage negotiations in South Africa and tensions between Venezuelan & Colombia. However, the market just hasn’t benefited from safe haven and minor supply side forces and the mostly likely source of a low might have to be technically orientated. With the range down washout last week and the gold market sitting $18 an ounce below the level where the most recent COT positioning report was measured, the spec and fund long positioning of only 31,738 in gold is overstated. The Commitments of Traders Futures and Options report as of July 31st for Gold showed Non-Commercial and Non-reportable combined traders held a net long position of 31,738 contracts. This represents a decrease of 18,082 contracts in the net long position held by these traders. The Commitments of Traders Futures and Options report as of July 31st for Silver showed Non-Commercial and Non-reportable combined traders held a net long position of 25,387 contracts. This represents an increase of 4,014 contracts in the net long position held by these traders.

The platinum market ended last week much better form than the palladium market, which appears to be poised to breakout down below the $900 level. Certainly the PGM complex remains under a demand orientated liquidation watch, which is partially thought to be the result of ongoing concern of slackening Chinese demand from the impact of trade tensions. As in the gold market, there does not appear to be a current reason to call for an end to the erosive price action that has prevailed since the early June high. However, in the most recent positioning report the platinum market has seen a net spec short positioning remain in place without extending dramatically, and that could suggest the market is beginning to see the extended consolidation around $825 as some form of value. On the other hand, in the palladium market retains a net spec and fund long positioning of 4,731 contracts and the September contract does appear to be attempting to build consolidation support/value above the $900 level. Unfortunately pushed into the market the path of least resistance remains down unless a wave of macroeconomic optimism is seen from any of a number of trade conflicts.”

Silver closed down $0.12 at $15.29.Gold Threatens $1200.00 Again

Platinum closed down $10.60 at $821.50 and palladium closed down $4.30 at $911.60.

The GoldDealer.com Unscientific Activity Scale is a “4” for Monday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Tuesday – 4) (last Wednesday – 3) (last Thursday – 4) (last Friday – 4). The scale (1 through 10) is a reliable way to understand our volume numbers. The Activity Scale is weighted and is not necessarily real time – meaning we could be busy and see a low number – or be slow and see a high number. This is true because of the way our computer runs what we call the “book”. Our “activity” is better understood from a wider point of view. If the numbers are increasing – it would indicate things are busier – decreasing numbers over a longer period would indicate volume is moving lower.

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.

Thanks for reading. As always we appreciate your business and enjoy your evening.

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 Technically Weak

Gold Remains Technically Weak

Commentary for Friday, Aug 3, 2018 – Gold closed up $3.60 at $1214.20 off its highs but in the green. It opened on Monday at $1221.30 and closed today at $1214.20 a loss of $7.10 on the week. The pricing action for gold today looked more promising in early trading some indicating that the long awaited bargain hunting is waking up but its tepid finish is a reminder that the bears are still in control.

Yet today’s finish might portend a change in the wind in that gold is trading at yearly lows – setting the state for bargain hunters and the dollar has played along to a small degree.

The Dollar Index opened steady then sold off – supporting early gains in gold. It then recovered moving back into the 95.2 range muting early gains; still this softening helps the developing bullish thought which has recently been missing in action.

Could the “dollar is too strong” narrative curb the generally more popular opinion that higher interest rates will continue to club the price of gold?

A stubbornly hawkish FOMC makes this unlikely. This week Powell claimed that while they left rates unchanged – expect higher rates as soon as late September.

So a lot of cross currents here – but gold does hold a few cards. Even though the US/North American audience is looking in the wrong direction.

Increasing tariff problems should not be ignored. In theory at least higher tariffs should create a weaker dollar and higher inflation – both a potentially big plus for gold. Yet the bears remain resolute – claiming wishful thinking. And there are still plenty of bears in these woods.

Another plus for gold short term might be the new heat created over new and contentious political conversation between the US and Iran. The Middle East is always a potential hot spot for gold pricing but of late the geopolitical scene has been in cold storage.

Not much in the headlines these days has encouraged safe haven buying. This may be changing as the US moves ahead with sanctions and Iran claims there will be consequences.

For now everyone is watching closely $1200.00 gold – holding or not will be a big deal either way. The technical picture remains weak but not much more is obvious when it comes to its price direction in this oversold position.

At the same time I’m not suggesting that gold is getting ready to explode to the upside. Not likely – the US is still intent on interest rate “normalization”. And the hoped for return of a weaker dollar for the sake of US enterprise could turn into a pipe dream.

I would be happy with something like pricing “normalization” at the present which supports Cramer’s longer view that gold technically is looking at a bullish triple bottom of sorts. Trying to actually pick a bottom here is not in the cards but a consolidation would not surprise.

I will be more enthusiastic when solid safe haven buying returns. In the meantime the drop from $1340.00 to $1214.00 presents cheaper prices. And for the record we still do not see large sellers at these levels – it’s very possible this price curve simply oscillates itself into a prolonged and tight trading range.

This from Zaner (Chicago) – “The gold market remains under pressure as a result of an ongoing list of bearish factors. Clearly the thrust higher in the dollar this week leaves liquidation selling pressure in place again today, but news of soft second quarter global gold demand from the World Gold Council earlier this week adds a more permanent element of internal fundamental pressure to the outside market pressures. If the outside market conditions weren’t so persuasively negative, the potential supply threat from a South African gold producer/union wage negotiation might have offered some support to prices but fresh lows for 2018 hardly stirs buying interest this morning. The South African mining companies have offered a wage increase of 3.2% for the first year of the coming contract, and there has apparently been limited progress in the talks. It would be our opinion that the gold mining companies will have little room to negotiate given that gold prices from the high this year down sharply and are at the lowest levels in a year. As if the bear camp needs any more ammunition, it is likely that today’s US nonfarm payroll readings will add even further strength to the dollar which in turn should facilitate an extremely poor finish to the trading week in both gold and silver.

The ability to reject the new lows for the move in the PGM complex yesterday and the ability to hold up against a rising dollar and the washout in gold this morning is impressive. However, with a South African mining minister suggesting that Impala Platinum acted in bad faith with the announcement earlier this week to eliminate over 13,000 jobs, it is possible that the unions and/or the government might be set to enter into a battle that could eventually threaten supply. In the past, mining unions have shown solidarity and have walked off the job to support workers likely to lose their jobs, but we don’t think supply fears will be significant enough to cushion prices against more declines. Unfortunately for the bull camp, the outside market negatives weighing on the PGM complex are still pervasive and demand concerns remain on the lips of market participants in the wake of soft Chinese Services PMI readings overnight. Given the market setup a quick improvement in conditions seems unlikely and the bias looks to remain down. However, given the new low rejection yesterday in September palladium and the respect of the $900 chart level, a pulse back up to the top of the recent range at $934.30 is possible. In the end we are not ready to call for an end to the last two weeks liquidation pattern. While the platinum market also rejected a lower low for the move, it sits closer to overhead consolidation resistance on the charts and a bounce could be limited to $842.”

This from Reuters – “I think gold is close to bottoming out. Whether its $1,200, $1,210 or $1,190, it’s impossible to tell,” said Georgette Boele, commodity strategist at ABN AMRO in Amsterdam, adding that speculators will probably want to test the $1,200 level.

“Gold is getting cheap and positioning wise, that should be a reason for bottoming out. The shorts are relatively big.”

Spot gold may fall towards the next support at $1,194, as it has resumed its downtrend from $1,309.30, according to Reuters technical analyst Wang Tao. Weighing on the market was a report by the World Gold Council showing that global demand fell 6 percent in the first half of the year to the lowest level for the period since 2009.

“As long as the dollar remains strong – we believe another couple of months – demand should stay soft and prices should trade rather range-bound,” Julius Baer analyst Carsten Menke said in a note.

Silver closed up $0.08 at $15.41.

Platinum closed up $8.70 at $832.10 and palladium closed down $7.60 at $915.90.  Platinum was up $6.00 on the week on news that Impala would cut platinum production by 30% because of lower prices and you might expect similar actions by other producers. This cut at Impala is enough to move a platinum world surplus of 125k ounces to a deficit around 100k ounces and even with lower prices it becomes increasingly difficult to put larger platinum bullion deals together – there is just not enough product available in today’s marketplace.

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

Of course, it’s not really patented but we do have some fun along the way. This is what the GoldDealer.com employees think: 8 believe gold will be higher next week 1 thinks gold will be lower and 1 thinks it will be unchanged.

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

Like the employees, our customers were given three choices – up – down – unchanged. We limited the survey to a random sampling of 100 transactions – unscientific but worth considering because these people took action: 68 people thought the price of gold would increase next week 20 believe the price of gold will decrease next week and 12 think prices will remain the same.

Precious Metal Closes & Dollar Strength – July 30 – Aug 3

Gold Remains Technically Weak

The GoldDealer.com Unscientific Activity Scale is a “4” for Friday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Thursday – 3) (last Friday – 3) (Monday – 3) (Tuesday – 4). The scale (1 through 10) is a reliable way to understand our volume numbers. The Activity Scale is weighted and is not necessarily real time – meaning we could be busy and see a low number – or be slow and see a high number. This is true because of the way our computer runs what we call the “book”. Our “activity” is better understood from a wider point of view. If the numbers are increasing – it would indicate things are busier – decreasing numbers over a longer period would indicate volume is moving lower.

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.

Thanks for reading. As always we appreciate your business and enjoy your weekend.

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 – Cramer Likes It!

Gold – Cramer Likes It!

Commentary for Wednesday, Aug 1, 2018 – Gold closed down $5.80 at $1217.90 in another round of quiet summer trading. I think everyone suspected that today’s FOMC information release was going to be a non-event because this particular meeting is considered “minor” (if there is such a thing).

The next “major” meeting is coming up – September 25th and 26th and most expect the Fed will raise interest rates at that time. That is what most got out of this just finished FOMC get-together – “steady as she goes but expect a rate hike”.

Not that Fed Chair Powell gives a hoot but Washington does not want to see “generally higher interest rates” – it’s just bad for business. The latest from the EU and English central banks suggest they are not raising interest rates anytime soon. And a disparity between our interest rate (going higher) and their interest rate (staying lower) provides a big trading advantage to them.

Because the FOMC news release contained no surprises gold showed little reaction even in the after-market. The bears however are still at the controls and we are not seeing much in the way of fresh bargain hunting which is typical in this stage of a market still settling.

So with a hawkish FOMC is gold doomed? Will prices simply dribble lower as fresh money looks elsewhere? The answer might not be as simple as it appears. Changing trends have a tendency to creep closer and not announce themselves.

To be sure – bearish talk continues to plague our shinny friend. But I would not jump out of the window just yet – gold’s pricing model has just been in a funk. Traders (and investors) can’t quite figure out what central banks are doing because the grand 2008 monetary experiment is still a work in progress – it’s really that simple.

Prices have moved from $1400.00 (2013) through $1050.00 (2016) and jumped higher ($1350.00) last summer. Since that time we moved between $1150.00 and $1350.00 in a bullish move which fizzled and turned into a bearish dialogue. Will gold hold the line at $1200.00 or continue weak perhaps testing $1150.00.

If this pricing frenzy sounds confusing don’t worry – it is indicative of a worried (or not) market in a worried (or not) world which has gotten used to main-lining cheap money.

Why Jim Cramer likes it! Now before you laugh too much this reference should not be dismissed out of hand. Gold needs this kind of publicity – not for the warriors who have stuck with it for years waiting for that generally sideways price pattern to break to the upside and roar – objecting to government policy mismanagement.

Gold needs more Jim Cramer type of messengers – suggesting a truth which most of the rank and file learn and then need to relearn. Trends change and the process of change is usually not obvious until after the fact. Cramer makes a few observations in the midst of the gold firefight. First inflation numbers are beginning to creep higher. I think the real reason bullish gold talk has moved to the back burner is because inflation has been tame in the extreme. Not to belabor the point but how long can this continue? The price we all pay for a “lose money policy” must eventually be higher inflation and as yet gold has not reacted to this reality. He also points out that gold has not reacted to the current trade war or our exploding budget.

This from Tom Bemis (TheStreet) : “Cramer and Garner started with a chart of the normal seasonal patterns in the gold market from Moore Research Center, Inc. According to their data, going long a December gold futures contract on July 24 and holding it through September 6 has produced a profit in 13 of the past 15 years. And typically, these gains tend to be large. In short, we’ve just entered the best time of year to bet on gold.     While past performance does not guarantee future results, Cramer argued it’s better to have these seasonal patterns on your side than to fight against them.

From a technical perspective, Wall Street has gotten extremely pessimistic about the precious metal. Garner, a contrarian, likes to go bullish when everybody else is bearish, because that’s how you spot major opportunities. According to the Consensus Bullish Sentiment Index, just 28% of the industry insiders that they polled were positive on gold.

According to Garner, the rule of thumb when you’re looking for a contrarian trade is that you want 25% or less bullish. Gold is very close to that level, which makes her think that sentiment here could be ripe for a shift. Basically, there simply aren’t that many people left who can be convinced to abandon the precious metal. Cramer and Garner next looked at a weekly chart of gold futures, which includes the Commodity Futures Trading Commission’s Commitments of Traders Report. That data shows exactly how large speculators, small speculators and commercial hedgers are positioned. The group Garner really cares about are the large speculators, the big institutional money managers. While these large speculators haven’t yet built up a net short position, they have reduced their gold futures to the lowest levels in years.   This is a very pessimistic reading because gold speculators are almost always long the market. You rarely see a net short position here. So, when it comes to gold, simply having a very small net long position is a sign that sentiment has gotten incredibly negative. Crucially, the last time the numbers got this low was in December, right before gold rallied strongly. This pervasive negativity is one reason why Garner thinks that a bottom in the precious metal might be imminent.”

This from Zaner (Chicago) – “While there was fresh damage on the gold chart yesterday, prices in the end were able to reject the pressure and recover to the highest close in three trading sessions in a manner that should have put off the bear camp slightly. Unfortunately for the bull camp in the metals markets the dollar index has added to the recovery move overnight from yesterday afternoon and it would appear to be headed back toward the last two weeks highs into the US FOMC result this afternoon. However the gold market should draft minor support from news of higher mainland Chinese gold imports from Hong Kong and from Switzerland in the first half of 2018! Apparently Chinese gold imports in the first half of 2018 from Hong Kong and Switzerland combined were 7% higher than in 2017. On the other hand the Chinese gold import news is not new news it has simply been enhanced by half year figures. Looking forward, with the dollar index once again rejecting sub 94.00 pricing and doing so in the face of mixed to slightly soft US scheduled data yesterday, it would appear as if the lead up to the Fed decision later today will keep currency related pressure hanging over precious metals markets. In fact, given the looming central bank meetings (the trade attaches a 90% probability of a Bank of England rate hike Thursday) the big picture environment for metals is highly suspect. However the net spec and fund long positioning in gold is reaching what we think is a “mostly liquidated” level below 50,000 contracts, and therefore it is possible that some of the gains on Tuesday were classic month ending position squaring. Expect a flurry of volatility through the Fed window as an acknowledgment of the threat of trade headwinds and minimally dovish dialogue could send gold back up to the last three weeks consolidation highs around $1236, while a stay the course with the intention to raise rates gradually view supports the dollar and ultimately leaves the gold and silver trend down.

As indicated in gold and silver coverage, the PGM complex performed impressively early yesterday in the face of dollar strength and slack international data (particularly from China) and that could point to some value down around $823 in October platinum and around $912.80 in September palladium. In fact, the palladium market managed to trade in positive territory yesterday despite news that a Russian mining company raised its quarterly palladium production by 4% over year ago levels. As in the gold and silver markets, we also suspect that part of the recovery action in platinum and palladium yesterday was classic month end short covering/profit-taking, and perhaps not renewed hope of improvement in physical demand. While the trade did see talk yesterday that the US and China might be planning to resume trade talks yesterday that news was clearly dashed overnight with China threatening retaliation if the latest US threat of $200 billion in tariffs on Chinese goods is implemented. The Chinese also indicated that “blackmail” would not work in the talks and that is a negative to a complex that has creeped back to the upper end of the last 3 weeks trading range and is therefore vulnerable.”

Silver closed down $0.11 at $15.39Gold – Cramer Likes It!

Platinum closed down $28.50 at $812.40 and palladium closed down $20.00 at $919.90.

The GoldDealer.com Unscientific Activity Scale is a “3” for Wednesday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Thursday – 3) (last Friday – 3) (Monday – 3) (Tuesday – 4). The scale (1 through 10) is a reliable way to understand our volume numbers. The Activity Scale is weighted and is not necessarily real time – meaning we could be busy and see a low number – or be slow and see a high number. This is true because of the way our computer runs what we call the “book”. Our “activity” is better understood from a wider point of view. If the numbers are increasing – it would indicate things are busier – decreasing numbers over a longer period would indicate volume is moving lower.

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.

Thanks for reading. As always we appreciate your business and enjoy your evening.

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 Falls Asleep 

Gold Falls Asleep 

Commentary for Tuesday, July 24, 2018 – Gold closed down $0.10 at $1223.90 today. Actually traders were talking about a mild short-covering rally early in the trading day but that “rally” looks a bit overstated on this quiet summer close. The obvious problem gold has at the moment is that it continues to struggle with the large drop in pricing which began in mid-June around $1300.00 and continued lower challenging $1220.00 currently.

So that’s the bad news – the good news is that we are looking at least at some interest these first few days of the trading week as the price line flattens out. And there is some bargain hunting beginning to show here in the physical world – lower pricing always moves the downstairs cash and walk in trade.

And we are looking at a traditionally slow summer – hot and uninteresting with the FOMC threat of another interest rate hike getting closer. Their next meeting will be at the end of this month but this is a “minor” get together – the next rate hike will likely come at the end of September a “major” powwow associated with a Summary of Economic Projections and press conference.

They have talked a great deal about “more” interest rate hikes this year and claimed that President Trump’s comments about a higher dollar not being good for business will not dissuade. With this fanfare they better “raise” because if they don’t, for any reason gold will “pop” higher.

For now traders might consider gold “tired” in the “wilderness” – not committed in a meaningful way and trying to get on its feet from the last bear lashing.

But keep in mind that the short paper trade will cut and run at the drop of a hat so most expect a kind of “bouncing around” at the lower end of this minor support. I would not call today’s price firmness a short covering rally – it’s more like a lack luster “bounce” that ran out of gas.

The question at this point is whether the “missing in action” Asian physical business will get back into the act. Hard to say – they and technical traders may be waiting to see if gold continues to break down as it approaches the $1200.00 support line which goes back to 2014.

Another reason no one is waving flags is that the rising bottoms pattern in place since early 2017 has broken down.

So like I said – we are in no-man’s land, most likely for a while waiting for a new dynamic. I’m not so worried about the steep decline ($50.00) this month – that always creates action in the physical world. What bothers me is that this market may turn into a long run of boring days in which prices move up or down in a narrow range.

If you are looking for some speculation consider that equities took the stage today with positive earnings up a whopping 20 percent. And this Friday we will see Q2 GDP. Reports say that number could be above 4%. That would be construed as a negative for metals because of implications for interest rates. However if gold or silver prices don’t come down significantly look for a short covering rally which seems to have lost its way.

The fact that gold is cheap relative to old highs is not enough to create fireworks in the physical trade. Old timers pick up bullion on a regular basis when prices trend lower but the public loses interest quickly because it’s human nature to think the market will continue to trend lower.

I believe gold is already oversold, but at the same time the lack of leveraged financial fear has to make you wonder if Wall Street learned anything from the 2008 meltdown. Taking advantage of cheaper prices always makes sense but don’t let today’s boring “white noise” distract you.  There are more endemic factors which make the precious metals an important stopgap measure against financial calamity than at any time in my career.

Over the last 5 years the price of gold has been choppy – moving on either side of $1250.00. When things heat up it moves to $1400.00 and when things get quiet we drift towards $1100.00. That is not much of a spread considering how important physical gold should be to a financial world still experimenting with large amounts of unbacked paper currency.

Finally even considering this bearish assault on pricing gold is considerably higher than it was a decade ago ($800.00). So longer term planning makes more sense now than ever before.

This from Zaner (Chicago) – “While the gold market forged a four day high early in the trade yesterday it recoiled from that high and drifting back toward a recent pivot point of $1,225 and therefore the bull case remains unimpressive. Unfortunately the gold market overnight spent almost the entire trade under the $1,225 pivot point in a fashion that would seem to give the bear camp the initial edge. The silver market also managed a two day high and fell back from the highs with a slide below a key pivot point of $15.50 in a fashion that also leaves the bear camp with a technical edge. With press reports this week still suggesting a lack of bargain-hunting gold buying interest by Asian customers (despite flat price declines) it is clear that currency adjusted purchasing power of Indian and Chinese consumers has declined so much that the windfall from the last two months flat price slide has been largely mitigated. While the gold market has not paid much attention to classic supply side fundamentals lately, Russian POLYUS released a second quarter gold production jump of 19% to 602,000 ounces from the prior quarter but that news was offset by news of a minimal central bank gold purchase by Mongolia. In short, gold and silver look to be fixated on the action in the dollar and without another slide back below 94.00 in the September Dollar Index, the bull camp might have difficulty lifting prices. Furthermore, gold and silver showed little if any positive traction from a sharp exchange of threats between Iran and the US and the markets also haven’t benefited from talk of Chinese stimulus and that confirms a lack of interest in bullish themes.

With the PGM complex trading higher in the face of noted weakness in gold and silver prices yesterday and the markets extending the positive action again this morning, the bull case is starting to gain respect. In fact, the PGM markets completely discounted a bearish Reuters’ poll suggesting that prices in 2018 will continue to be extremely low and that prices might only recover minimally next year. The Reuters’ poll also suggested that extremely poor demand would continue and given the trade war threat hanging over the global economy, it is tough to argue against that view. However with the Chinese promising fiscal stimulus support for their economy this week, Asian equity markets leading global markets higher and optimism flowing from strong earnings from Google, the environment for the PGM complex today is supportive of the three day bounce off the lows. Furthermore with positioning reports confirming the platinum trade to have built in an excessively bearish condition and the Swiss recently noting a sharp jump in PGM exports to Hong Kong, perhaps the sagging demand threat has been overplayed. On the other hand, on the recent bounce in platinum open interest has declined which might suggest some shorts are banking profits and heading to the sidelines instead of fresh buyers entering the fray. While we don’t find it difficult to believe that a major bottom has occurred, we are a little doubtful that prices are set for anything more than a standard technical bounce. If there is a strong range up extension today that might go a long way in highlighting the importance of the Chinese fiscal stimulus news to the PGM complex.”

Silver closed up $0.09 at $15.46. Physical silver bullion remains well bid in this range and cheap $1000 face 90% bags are attracting attention.   Gold Falls Asleep

Platinum closed up $3.80 at $829.60 and palladium closed up $6.00 at $916.00.

The GoldDealer.com Unscientific Activity Scale is a “2” for Tuesday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Wednesday – 4) (last Thursday – 5) (last Friday – 4) (Monday – 4). The scale (1 through 10) is a reliable way to understand our volume numbers. The Activity Scale is weighted and is not necessarily real time – meaning we could be busy and see a low number – or be slow and see a high number. This is true because of the way our computer runs what we call the “book”. Our “activity” is better understood from a wider point of view. If the numbers are increasing – it would indicate things are busier – decreasing numbers over a longer period would indicate volume is moving lower.

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.

Thanks for reading. As always we appreciate your business and enjoy your evening.

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 Tweets Higher

Gold Tweets Higher 

Commentary for Friday, July 20, 2018 – Gold closed up $7.10 at $1229.50 – a nice weekend surprise. Gold moved higher today as the dollar weakened considerably. The Dollar Index moved from 95.25 through 94.60 in early Friday trading – this drop is the result of President Trump’s comments about currency manipulation by China and the European Union.

The President is complaining that while the US is raising interest rates China and the EU are doing nothing to balance this picture and so are gaining another unfair trading advantage. This concern is really an old dilemma that really does not have any good answer. All countries want a “strong” currency but this is a political statement more than an economic one.

Raising interest rates in the US will make the dollar stronger obviously but it will also make our goods more expensive to foreign competition so it makes Wall Street nervous. I would not get too excited over another Trump tweet but that was all it took to stop the bears in their gold tracts.

The Dollar Index could easily move even lower by 5% if the President’s comments sway FOMC policy and regardless of FOMC protestations there is precedent.

In actuality this is unlikely – but his comments do come at a time when the price of gold is weak both seasonally (summer doldrums) and from a safe haven standpoint. This apparent new lack of interest caught everyone by surprise – where did the buyers go?

Still gold has been down for 4 of the past 5 weeks for a total decline of $45.00. Today we traded as low as $1215.00 before the $14.00 rebound over the tweet. This sudden attention might encourage that short covering rally that we have been expecting for some time.

You could also make the case that today’s higher prices while being helped by a weaker dollar were also encouraged in an oversold market.

Everyone is going to have to wait until next week to see if any of this amounts to much. Generally speaking the dollar is still king as long as the FOMC does not blink under White House pressure.

They of course are independent but they also understand that raising interest rates too high will become the proverbial wet blanket for Wall Street and the President – a very difficult agenda to sell even if their intentions are designed to hold inflation in check.

If you want to dig back into the old FOMC archives you will find that for most of the last decade of cheap money policy they have claimed that getting interest rates back to “normal” would take a long time. It has only been recently that they have become enamored with the US economy enough to push this time table forward. If they decide – for whatever reason to delay or stretch out the promised interest rate hikes all the now common bearish news will disappear overnight.

And keep in mind that this market is generally considered “cheap” relative to old highs. The steady decline in prices and lack of fresh bullish news has created a kind of fog even in the committed ranks. At the same time there has been in my mind a steady increase in pent up demand for gold bullion created by many traditional buyers simply looking for better prices. This “accumulated demand” will further accelerate prices once the bulls get back on their feet.

Finally – still no blowback over the ongoing tariff problems and the US is again raising the stakes ($500 billion) today. Don’t make the mistake of thinking this was just a flash in the pan for gold fans – this tariff dynamic could lay the foundation for new highs in gold.

This from Zaner (Chicago) – “While the gold market did manage to reject the latest big range down washout with a recovery yesterday afternoon, prices overnight have spent the majority of the early trade back in negative territory in a fashion that leaves the technical picture pointing downward. Clearly the dollar action this week has been the dominating force for gold and silver prices and we would expect that influence to continue again today. Fortunately for the bull camp the dollar is waffling around both sides of unchanged after falling back yesterday in a fashion that hints at a temporary blow off top. However seeing the September dollar index rise back above 95.09 could reignite the selling wave and send gold and silver quickly back toward this week’s lows. However the bull camp might draft some support from news late yesterday that the world Gold Council expects gold demand to rise in the second half of this year. The WGC thinks that higher inflation and a global trade war will impact currencies which in turn would have to mean a weaker dollar and increased gold demand. The World Gold Council also pointed to the potential for safe haven demand because of geopolitical turmoil but so far gold has not responded to the prospect of economic/financial uncertainty. In fact we think economic/financial uncertainty from trade might have to become very severe for gold to transition away from a classic physical commodity market fearful of slowing demand. For second half demand to rise might be very difficult with the Indian Rupee making a multi decade low and the Chinese Yuan making a 11 1/2 month low this week, as that means purchasing power by very key gold demand markets will continue to be suspect. An element that might provide some support going forward in gold is news that a South African gold mining companies wage offer is reportedly significantly below what the unions had demanded and that could increase the odds of supply disruption. The fundamental track in gold does not appear to have shifted away from the bear case and the technical situation also favors the bears.

The palladium market has obviously rushed to factor in slower Chinese physical demand from this week’s talk of a long-term US/Chinese trade battle. With the September palladium into the low Thursday sitting $80 an ounce below the level where the last COT positioning report was measured, it is possible that the net spec and fund long has been reduced dramatically. On the other hand, the platinum market since the last COT report to the low yesterday has declined by $52 per ounce and it has probably reached notable “net spec short” standing. Clearly palladium is seen as a more definitively Chinese demand-impacted PGM market than the platinum market, as palladium has outdistanced platinum on the downside in the wake of the latest trade war escalation. While the markets might be showing technical recovery action from an oversold condition the threat of softer global demand from trade barriers remains firmly entrenched and given news of an increase in second quarter PGM production from Anglo American platinum LTD the trade is also presented with bearish supply-side news. A normal retracement of the July wash in palladium allows for a trade back up to $895.10 with a similar retracement targeting in platinum seen at $820.30.”

Silver closed up $0.15 at $15.49. While the price of gold got the headlines the physical action across our counter was on silver bullion. This market always heats up as we approach $15.00 and keep in mind that silver bullion players are always interested – it is just a matter of price.

Platinum closed up $23.00 at $823.60 and palladium closed up $22.70 at $896.30.

This is our usual ETF information – All Gold Exchange Traded Funds: Total as of (7/10/2018) was 67,630,006.  That number this week (7/18/2018) was 67,362,841 ounces so over the last week we dropped 267,165 ounces of gold.

The all-time record high for all gold ETF’s was 85,112,855 ounces in 2013. The record high for Gold ETF’s in 2018 was 70,763,846 and the record low for 2018 was 67,171,275.

All Silver Exchange Traded Funds: Total as of (7/10/2018) was 647,811,465.  That number this week (7/18/18) was 650,492,161 ounces so last week we gained 2,680,696 ounces of silver.

All Platinum Exchange Traded Funds: Total as of (7/10/18) was 2,257,226.  That number this week (7/18/18) was 2,299,169 ounces so this last week we gained 41,943 ounces of platinum.

All Palladium Exchange Traded Funds: Total as of (7/10/18) was 982,915.  That number this week (7/18/18) was 973,488 ounces so this last week we dropped 9,427 ounces of palladium.

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

Of course, it’s not really patented but we do have some fun along the way. This is what the GoldDealer.com employees think: 7 believe gold will be higher next week 1 thinks gold will be lower and 2 think it will be unchanged.

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

Like the employees, our customers were given three choices – up – down – unchanged. We limited the survey to a random sampling of 100 transactions – unscientific but worth considering because these people took action: 51 people thought the price of gold would increase next week 38 believe the price of gold will decrease next week and 11 think prices will remain the same.

Precious Metal Closes & Dollar Strength – July 16 – July 20

Gold Tweets Higher

The GoldDealer.com Unscientific Activity Scale is a “4” for Friday. The CNI Activity Scale takes into consideration volume and the hedge book: (Monday – 3) (Tuesday – 4) (Wednesday – 4) (Thursday – 5). The scale (1 through 10) is a reliable way to understand our volume numbers. The Activity Scale is weighted and is not necessarily real time – meaning we could be busy and see a low number – or be slow and see a high number. This is true because of the way our computer runs what we call the “book”. Our “activity” is better understood from a wider point of view. If the numbers are increasing – it would indicate things are busier – decreasing numbers over a longer period would indicate volume is moving lower.

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.

Thanks for reading. As always we appreciate your business and enjoy your weekend.

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 Defensive Plus

Gold Defensive Plus

Commentary for Tuesday, July 17, 2018 – Gold closed down $12.40 today at $1225.70 – still feeling around (mostly in the dark) trying to find short-term support. So those who were hoping that the bearish short money was getting tired may have to rethink that position. In general the price of gold remains off balance and trying to find its way in this upside down world of a highly leveraged Wall Street.

Weaker pricing today was most likely the combination of a number of factors – the stronger dollar heading the list. The dollar pushed the price of gold still lower as traders listened to an upbeat FOMC Chair Powell and once again adopted his optimism about a growing US economy and higher interest rates. The Dollar Index today moved from 94.31 through 95.00 but in the longer weekly view this index looks choppy at the higher end of its current range – this perhaps will support the gold price later in the week.

Still gold’s investment plate is full of junk food. The price of crude oil has sold off and looks more comfortable around $65.00 than $75.00 a barrel not a plus for our shinny friend. And everyone is waiting for that “safe haven” demand to produce fireworks in Asia. Pricing is certainly cheap enough but this particular market has the patience of Job.

And let’s hope that a theoretical problem does not mature into something more serious – the economic numbers from China may be turning soft – helped only in part by the real and rhetorical tariff problems still swirling around Beijing and the US.

Whether China’s potential growth problem goes anywhere remains to be seen. World mischief at the same time is creating some “safe haven” demand but surprisingly not for gold – the dollar is benefiting and remains strong at the higher end of its current trading range.

As can be seen the gold technical picture remains weak – it blew through $1250.00 support going back to early 2018 and today’s close ($1225.70) looks like it wants to test $1200.00.

Normally you would have seen an oversold position developing as gold moved down from $1350.00 through $1250.00. I’m surprised this initial move did not produce more physical action. It did not and the paper short play will be emboldened with today’s price action.

It’s amazing that gold yawned over the recent Trump/Putin meeting – under any other circumstance such an interchange would have provided solid gold support. The no-problem result underscores the fact that the world is not worried about political or economic fallout. So gold languishes looking for fresh, meaningful news to rally its base.

To newcomers keep in mind that gold and silver bullion are the only real reserve money the world truly believes in, everything else is a surrogate – coming in and out of favor. If the bottom were really following out both would be making new highs and price would make no difference as everyone rushed to convert paper money into real gold or silver.

The problem today is that because the “fear” factor is virtually non-existent the precious metals are acting like commodities and not reserve financial assets. This situation will turn in time if history has taught us anything.

Today’s lower pricing has produced some bargain hunting – we were pretty busy downstairs through the early afternoon. But the plain fact remains that gold is struggling with this psychological dimension – will it get cheaper? This is natural reaction in a declining market and a trend that disappears quickly as the public realizes sale prices will not last and having some “insurance” against unbacked paper money makes sense.

In the meantime the momentum remains with the bears. So look for cheaper entry points – a down market provides opportunity if you believe that Uncle Sam cannot just continue to print paper money with no consequence. And like I said in the last letter it pays to use the precious metals as a kind of secret piggy bank in times like these – you will look like a genius when this tide turns and inflation works its way back into this paper equation.

This from Zaner (Chicago) – “While gold and silver are showing some early positive action the charts remain negative and the fear of global slowing off trade headwinds and geopolitical anxiety leaves a general pressure on many physical commodities. However gold and silver are somewhat helped to start today given another lower low in the dollar and signs of a near term downtrend in that currency index. It is possible that gold and silver might be seeing short covering/light speculative buying off the idea that the Fed testimony later today will offer up some dovish policy indications as the Fed acknowledges the potential drag from US trade policies. However if the Fed chairman stays the course and leaves the gradual monetary tightening stance in place that could be seen as a fresh negative to precious metals prices. The most recent market dialogue on the Fed’s probable course of action for the rest of the year projected only one more rate hike and while that is perhaps an outlier forecast, seeing that number notched higher in testimony could strengthen in the dollar and undermine gold and silver. With the gold market not embracing or displaying a positive reaction to news yesterday of a strike at a Rand Gold facility, it is clear that sentiment in the marketplace is favoring the bear track. The gold market could see news of lower central bank holdings by Turkey and Kazakhstan from yesterday as another minor negative.

Relatively speaking, the PGM complex and in particular palladium saw aggressive selling when compared to gold on Monday and that seems to confirm the market’s excessive interest in the prospects for the Chinese economy. In other words, the somewhat disappointing Chinese economic data seemed to translate into a sharp downward reduction in demand hope, or it simply prompted another layer of long traders to run for the exits. With the sharp washout and the lowest price since early April, the residual spec and fund long positioning in platinum is probably being brought down but probably not significantly short yet. It is also possible that news of a merger/buyout within the platinum mining sector is seen as a development that could insure, expand or add consistency to production in the future. Wheaton Precious Metals Corp. also expected production to increase in the second half of the year which clearly adds to a concerning demand environment. In the end, the combination of bearish supply and demand factors would seem to justify a return to the 2018 lows in both palladium and platinum. However, we now see the platinum market to be less vulnerable to further liquidation than the palladium market.”

Silver closed down $0.19 at $15.55. We are now entering that “sweet spot” pricing as traders close in on $15.00. The only reason physical buying has not picked up to a bigger degree is because the bearish gold trade is pushing the silver side of the ledger.

Platinum closed down $6.50 at $815.80 and palladium closed down $4.30 at $916.60.

The GoldDealer.com Unscientific Activity Scale is a “4” for Tuesday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Wednesday – 3) (last Thursday – 4) (last Friday – 4) (Monday – 3). The scale (1 through 10) is a reliable way to understand our volume numbers. The Activity Scale is weighted and is not necessarily real time – meaning we could be busy and see a low number – or be slow and see a high number. This is true because of the way our computer runs what we call the “book”. Our “activity” is better understood from a wider point of view. If the numbers are increasing – it would indicate things are busier – decreasing numbers over a longer period would indicate volume is moving lower.

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.

Thanks for reading. As always we appreciate your business and enjoy your evening.

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 Prices Remain Soft

Gold Prices Remain Soft

Commentary for Friday, July 13, 2018 – Gold closed down $5.40 at $1239.60 today in another round of typical summer trading. As gold drifts lower the 5 day Dollar Index pushes higher – moving from 93.77 on Monday through 95.19 at the close today. The “higher dollar” trend of course continues to weigh on the price of gold as bullish traders lament and the bearish traders eye a possible break-down in prices at $1240.00.

Across our counters we see a few bargain hunters as the usual summer doldrums continue.

There is business to be done usually with old time customers who are taking advantage of lower prices but enthusiastic fresh interest is still lacking. What happened to all the fireworks which should have been created over trade wars? Why is gold not reacting to real higher inflation numbers? How long can the dollar remain in nose-bleed country without changing the Wall Street dynamic?

All good questions and unfortunately all overshadowed by a hawkish FOMC, higher interest rates and a definite lack of positive gold buzz.

The week sets up another round of soft pricing as traders anticipate fresh news which might stir the bullish pot. This week gold closed at $1258.10 on Monday and $1239.60 on Friday. Not much of a difference ($18.50) but this set of numbers will encourage the technical bears and suggest gold continues to struggle. If gold continues to break down there is not much support between here and $1150.00 but it’s premature to speculate at this point because we are well into oversold territory in my opinion and can expect a short-covering rally.

Why? Because I still don’t see any big physical sellers and sooner or later the Asian demand will bolster already cheap prices. This market is lethargic for sure but I don’t see a route because I don’t see a forever rising dollar. Since April the Dollar Index has moved from 90.00 through 95.00 – to keep that pace would be ruinous to Wall Street and our economic recovery.

I still look for returning Asian interest in the physical market and expect our government to “talk down” dollar strength ala President Trump.

Also keep in mind that the FOMC can talk all they want about higher interest rates – all central banks are committed to cheap paper currency over the longer term. This basic truth has always underpinned the price of precious metals and is worth remembering in these choppy waters.

At this point enjoy the cheaper prices. At the same time look for this now oversold market to rebound into steady numbers helped by fresh bullish news generated over the still ignored trade war disaster still developing. At the same time remember the US economy can easily overheat at this point and reintroduce higher inflation numbers – a sure winner for gold and silver.

Finally remember some Mark Twain humor. “The report of my death was an exaggeration”. This quote came from a letter Train wrote in 1897 in response to a reporter who asked him about rumors that he was on his deathbed in London. I have used it many times since I was in college to clear the air when the dialogue of any pending disaster moves toward the extreme.

The investing picture for gold or any other “opportunity” is never as bad or as good as pundits would have you believe. Gold and silver bullion have withstood the test of time for good reason – they are real money. Taking advantage of better prices always makes sense. Both gold and silver bullion are still one of the best ways to “put away” a little savings for a rainy day.

This from Zaner (Chicago) – “With a six day low yesterday, fresh downside damage this morning and higher high action in the dollar seemingly entrenching, it is difficult to take control away from the bear camp in gold and silver. In fact, given positive economic data from the US and slightly hawkish US inflation readings this week, one might expect the dollar to rise further and that combined with unfolding weakness in crude oil will probably keep would be metals buyers off balance. It should also be noted that further dollar strength will likely reduce the purchasing power of Indian and Chinese gold buyers ahead, and that should mean bargain-hunting buying in the cash/retail markets might not be forthcoming soon. However, while anxiety from the trade war has moderated somewhat over the prior 36 hours the record US trade deficit news with China is likely to result in US hints at more retaliation. In short we don’t see gold or silver managing to hold above consolidation support (from the July lows).”

Silver closed down $0.16 at $15.74.

Platinum closed down $16.10 at $826.20 and palladium closed down $16.00 at $940.20.

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 2 think it will be unchanged.

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

Like the employees, our customers were given three choices – up – down – unchanged. We limited the survey to a random sampling of 100 transactions – unscientific but worth considering because these people took action: 55 people thought the price of gold would increase next week 32 believe the price of gold will decrease next week and 13 think prices will remain the same.

Precious Metal Closes & Dollar Strength – July 9 – July 13

Gold Prices Remain Soft

This is our Chicago Mercantile Exchange report covering the last 5 trading days – so we are looking at the trading volume numbers for the “July” Gold contract: Thursday 7/5 (311985) – Friday 7/6 (312777) – Monday 7/9 (299870) – Tuesday 7/10 (287412) – Wednesday 7/11 (275674) and the trading volume numbers for the “July” Silver contract: Thursday 7/5 (159705) – Friday 7/6 (158215) – Monday 7/9 (158580) – Tuesday 7/10 (156774) – Wednesday 7/11 (155745).

The GoldDealer.com Unscientific Activity Scale is a “3” for Friday. The CNI Activity Scale takes into consideration volume and the hedge book: (Monday – 2) (Tuesday – 2) (Wednesday – 3) (Thursday – 4). The scale (1 through 10) is a reliable way to understand our volume numbers. The Activity Scale is weighted and is not necessarily real time – meaning we could be busy and see a low number – or be slow and see a high number. This is true because of the way our computer runs what we call the “book”. Our “activity” is better understood from a wider point of view. If the numbers are increasing – it would indicate things are busier – decreasing numbers over a longer period would indicate volume is moving lower.

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.

Thanks for reading. As always we appreciate your business and enjoy your weekend.

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.