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Posted on January 30, 2019 January 30, 2019 by Richard

Gold Firm as the FOMC Ducks

Commentary for Wednesday, Jan 30, 2019 – Gold closed up $1.00 today at $1309.90 but the aftermarket was up $8.60 most likely because of the dovish Federal Reserve comments. You have to like today’s close in gold in that this latest push above $1300.00 is a nice break to the upside from a pricing market which has been encouraging since late November but rather flat between $1280.00 and $1290.00 since late December. In the last 3 months the dollar has generally supported higher gold moving from 97.00 through 95.00 and settling around 96.00 but higher prices are mostly safe haven buying in my opinion. This because of our government shutdown, troubles in Europe and more troubles in the Middle East. All of this angst helped by a still sagging DOW and worries within Wall Street that the better part of this recovery might be in the rear view mirror.

The latest Fed pronouncement today, before the markets closed was decidedly dovish. They did not raise interest rates (no big deal it was not expected) and Fed Chair Jerome Powell held the first of eight press conferences this year instead of the usual quarterly format. The Fed will concentrate on reducing its balance sheet which has ballooned to $4.5 trillion dollars. And lost in this rather mild conversation was the hawkish talk about interest rate hikes which was pressed in the 2018 agenda. So this will certainly help the price of gold in 2019 if they stay away from further interest rate hikes.

Still gold must push through and hold overhead resistance now at $1350.00 for all of this recent activity to prove rewarding to physical holders. I don’t see a big rush across our counter at these higher prices which is disappointing but keep in mind that gold still retains its “all in or not in” attraction with the American public. World demand – as real as it now is remains far away and ill-defined. There still is no panic in the US to protect wealth with physical metals although the idea that gold and silver bullion is a good idea has more than regained its footing. So time will tell if gold can continue to climb this “wall of worry” – my bet is simple. We will see days of complete bullish conviction coupled with bouts of “what me worry” – so pretty much the same set of trading parameters which has been in place since 2008.

In the process one of my continuing themes – who is going to eventually pay for the enormous amount of money which has been borrowed or leveraged? I’m fairly experienced with large numbers and even I can’t get my head around just how large the federal deficit has become. And I have been watching it for years. So let me offer hard money legend Gary North’s Tip of the Week – Back in the good old days, when the U.S. government’s budget was a tight-fisted $3.5 trillion, a young man made a video. It is one of the great instructional videos of all time. It lasts 97 seconds. President Obama was promising to cut $100,000,000 from the budget. We cannot get our minds around this number. We need help. This video offers help. The help is visual. This is what we need to handle big numbers. https://www.garynorth.com/snip/1364.htm For graphic images of the federal debt — stacks of $100 bills — go here. https://www.garynorth.com/snip/1365.htm

Just for the record and only if you are new to the gold business Gary North was warning people of government excess and building financial danger in the 1970’s when I first decided that having some gold and silver bullion made sense. He was and still is ahead of the curve.

I thought Allen Sykora (Kitco) latest was interesting. Refinitiv GFMS: Gold To Avg. $1,292 In 2019; Physical Demand To Limit Gains Refinitiv GFMS looks for gold to average $1,292 an ounce in 2019, calling for increased investment demand but saying physical markets – such as jewelry – may be “subdued” due to high prices. In addition to the outlook, analysts also provided an overview of the fourth quarter, reporting that investment demand and central-bank buying both picked up.

“We expect gold prices to continue to benefit from continued economic uncertainty and a slowdown in the U.S. economy,” said GFMS analysts at Refinitiv. “As we approach the end of the economic-growth cycle, demand for defensive assets is likely to pick up as concerns deepen about the widening U.S. budget deficit and as the tariff-driven trade war starts to damage the country’s economy.”

The potential for rising inflation, an end to the cycle of rising interest rates and potential for a correction in the stock market are all factors that could boost interest in gold but hurt the U.S. dollar, analysts said.

“While ETF [exchange-traded-fund] and bar and coin demand is expected to see a return to growth, physical markets are likely to be subdued due to the higher price level,” analysts said in their report. “We therefore forecast gold to average $1,292/oz in 2019.”

Meanwhile, during the fourth quarter, investor interest perked up and speculators bought to cover short positions, or bearish bets, on Comex, the GFMS analysts reported. ETFs recorded inflows of 114 tonnes of gold, taking global ETF holdings to 2,321 tonnes, the highest level since June. However, retail investment in the form of coin and bar demand eased in the fourth quarter, with North American buying hurt by a strong U.S. dollar and optimism about the U.S. economy, analysts reported. Official-sector purchases during the fourth quarter totaled 196 tonnes, the most so far this century, according to the GFMS report. This brought total estimated net purchases for the year to 571 tonnes.

“A shift in central-bank behavior, in which further EM [emerging-market] countries are seeking to build their gold reserves, has resulted in some countries reporting their first transaction in 2018 since the turn of the century,” GFMS said. “China, which has not reported a change in its gold holdings since October 2016, reported for the first time in December a 10-tonne increase in its holdings, with weakness in the Asian equity market driven by trade tensions with the U.S. a key influencer.”

However, jewelry consumption fell globally in the fourth quarter by 3% to 560 tonnes, according to the report. Demand in Asia, which accounts for more than 80% of total global jewelry fabrication and consumption, was down following an economic slowdown, analysts said.

GFMS reported that global mine output increased by 27.7 tonnes, or by 1.2% year-on-year, during the first nine months of 2018. Indonesian output surged 32.4%, helped by higher grades, while Australian production was up 8.3% and Canada’s climbed 9.6%. The largest decreases were posted in China, South Africa and the United States, with a combined fall of 56.7 tonnes. Average all-in sustaining costs increased 4.5% year-on-year to $924 an ounce. The GFMS gold survey has been published since 1967.”

This from Zaner (Chicago) – “Global equity markets were mixed once again with a slight pattern of weakness in Asia and generally positive European/US early action. The Asian session presented a December reading on Japanese retail sales which rose more than expected, with consumers spending on appliances and clothing. The European trade brought news of a jump in UK M4 money supply growth, a rise in UK mortgage approvals, softer than expected consumer credit and net lending to individuals actually coming in stronger than expected. Also from the euro zone, industrial confidence matched expectations, but the business climate for January, economic sentiment, services sentiment and consumer confidence all came in soft. The North American session will start out with a weekly private survey on mortgage applications, followed by the January ADP employment survey which is forecast to have a sizable decline from December’s 271,000 reading. December pending home sales are expected to have a moderate uptick from November’s -0.7% reading. A round of trade talks between the US and Chinese are scheduled to begin today. The highlight for global markets will come during early afternoon US trading hours with the results of the latest FOMC meeting. While the market expects no changes to rates or policy, Fed Chair Powell will now have post-meeting press conferences after every meeting so his comments will be scrutinized for clues to upcoming policy moves. Earnings announcements will include AT&T, Boeing, McDonald’s and Thermo Fisher Scientific before the Wall Street opening tech bellwethers Microsoft and Facebook posting earnings today. Other earnings include Mondelez and Tesla report after the close.

The April gold contract has forged another higher high extension and reached up to the highest level since June 15th in a move this morning that would appear to have legs. It is a little surprising to see gold continue to rise in the face of bearish Indian gold demand/import news from Gold Fields Mineral Services overnight and that highlights the strength on the bull camp. Another bearish gold story that is being ignored by the gold trade today came from Australia where Newcrest mining posted a year-over-year quarterly gold production increase of 42,000 ounces. On the other hand the GFMS report might be seen as a fresh bullish development for silver, as the consultancy group is suggesting that Indian demand is starting to shift toward silver and away from gold. Understandably consumers are giving silver a fresh look at the expense of gold with Indian gold prices in terms of the Rupee near all-time highs while silver is being viewed as “cheaper”. Clearly the bull camp has a number of bull arguments that might be expected to become even more powerful in the day ahead. In particular, we see the Fed decision later today as a potential major bearish development for the dollar which in turn would be a significant bullish development for gold and silver prices. In our opinion, the Fed should acknowledge the vast amount of global slowing evidence, the obvious drag from the US government shutdown and the unresolved US/Chinese trade war. It is possible that the Fed might utter some hawkish words regarding ongoing strength in the US jobs market but if that strength is found to be fading, the Dollar index could quickly fall below 95.00. A decline below 95.00 in the Dollar index could project an April gold rally up above $1,335.00. On the other hand, the April gold contract from last week’s lows has already rallied roughly $36 an ounce and the FOMC result could prompt significant price volatility. There is an old gap area that starts up at $1,337.20 in April gold and that gap will not be filled until $1,345.60, and for some that could be a near term technical objective.

The palladium market appears to be coiling this week as if another major trend decision is in the offing. While the palladium market should have been undermined by a Reuters’ poll yesterday suggesting palladium prices will fall back to a discount versus gold in the coming year, palladium should get a lift later today if the net take away from the FOMC meeting is “dovish” as we expect it to be. Unfortunately, global macroeconomic views are generally limiting of commodities but a weak Dollar is providing some cushion to prices. A Reuters’ poll released yesterday pegged palladium prices this year to average only $1,200 an ounce and that is bearish given recent futures prices above $1,300. It should also be noted that Russian palladium miner Nornickel overnight forecasted an increase in their output of palladium this year with production expected to rise by 50,000 to 60,000 ounces. That same Reuters poll pegged average platinum prices this year to be $856 an ounce, and that is bullish considering that prices are currently trading $815. In a slightly supportive story, Swiss platinum and palladium imports for all of 2018 were reportedly higher than in the prior year. Historically, Switzerland has been a key wholesale delivery merchant for the world platinum group metals markets. A Russian platinum miner overnight indicated their 2019 platinum production could fall slightly or increase by a very modest and insignificant 17,000 ounces.

While the dollar is trading softer this morning it has not made a fresh low for the move which would have given gold and silver an even bigger lift. Furthermore global equity markets are generally calm and the gold trade might avoid early positions because of news from the Fed in the early afternoon and possible trade news late in the day. However, the path of least resistance remains up throughout the precious metals markets, even though short-term technical conditions are leaning toward overbought status. However, in our opinion it is likely that the Fed outcome later today will result in a “buy the rumor” extension and perhaps even a “buy the fact” extension if the Fed is more dovish than hawkish. If one were to be exclusively data dependent, the Fed should give a nod to slowing especially if they consider geopolitical headwinds and the US government shutdown. Key support in April gold is seen at $1,305 and near term upside counts provides a retracement target up at $1,329.90. It should be noted that the silver rally has yet to reach a 50% retracement of the 2018 slide at $16.07, but the $16 level is obviously some form of psychological resistance to start today, especially with the market failing to take out that level on its first attempt today.”

Silver closed up $0.09 at $15.88.

Platinum closed up $0.30 at $812.00 and palladium closed up $12.80 at $1354.80.

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Posted on January 25, 2019 January 25, 2019 by Richard

Gold Bulls Remain Hopeful

Commentary for Friday, Jan 25, 2019 – Gold closed up $18.30 at $1297.40, close but no cigar. Gold opened flat and then decided, once again to be contrary – pushing towards the vaulted $1300.00 mark. This “flash” weekly finish is encouraging but considering the Washington mess and the fact that gold closed Tuesday at $1282.50 it may be another tempest in a teapot.

This sudden jump in price began as the dollar tanked – the Dollar Index moved from 96.4 through 95.9 most likely on a combination of political woes and economic news. The government shutdown continues but the clock ticking (maybe), the China-US trade talks drag on and there is another Federal Reserve meeting next week.

I also suspect the arrest of Trump’s friend Roger Stone brings joy to the Democrats and adds further froth to the rumors of problems in the Trump White House.

All of this continuing angst supports higher gold prices. But is this latest “inside info” just another version of a Keystone Cops short film. I used to love these when I was a kid, everyone running around in circles. I’m sorry to say that this funny nonsense eventually replaced the sober reckoning I used to have of politics when I was in college. At any rate I will leave it up to the reader as to whether or how serious anyone should take these latest political revelations.

In the meantime, keep your eye on the shorter term 60 day pricing chart. Today’s “pop” to the upside certainly helps the bullish position and more importantly reinvigorates an upward trend which was looking pretty worn out. But a look at the 5 year pricing chart requires some caution. I’m always suspicious when everyone is getting out the champagne and party hats.

The longer view of gold clearly shows a market struggling at the well-established $1350.00 overhead resistance. And like I have pointed out before gold must move and stay above $1350.00 before all these recent fireworks will be justified.

If gold cannot brush off the remaining cobwebs we remain stuck in a range which has been in place for 6 years – with plenty of political intrigue but no inflation to spark and enflame prices.

So keep your powder dry – if gold runs however this market will be transformed quickly because there are plenty of watchers and plenty of punters who will turn into buyers if the world financial structure begins to crack – even a little bit. Finally worth noting – Alex is cleaning out the safes – he has a flash sale on today and Monday if you are so inclined listen to the quote line.

This from Zaner (Chicago) – “While the charts remain vulnerable with another lower low probe for the week yesterday, the bull camp has to be cheered slightly because the gold market posted another rejection of the $1,275 level and prices are showing some strength to start today. Fortunately for the bull camp the Dollar has faltered from the very definitive upward thrust yesterday and therefore currency related pressure is missing to start today. Apparently gold continues to draft some safe haven support from the realization yesterday that US/Chinese trade talks were not as close to resolution as was hoped for last week. However, the market is comforted by news that China was found to be adding to its central bank reserves! The Chinese addition to reserves was reported to be the first “add” to reserves in two years, but we think the “add” is simply the first time the Chinese have allowed the inflow to be known. In the current environment the Chinese can shape the gold reserve investment as a sign they are re-allocating capital away from US Treasuries. Another development overnight that might add to the initial bull tilt is word from Asia of increased Wedding season buying in India. A slightly negative impact on gold was seen yesterday following an EU parliament vote to reject a proposal to would have allowed greater liquidity rules for banks trading gold in the euro zone. However we don’t think the gold market rallied off the hope of more European gold trading liquidity. Another tempering development facing the trade today is bearish comments from Mark Mobius who cautioned gold buyers that the Fed could still hike rates this year. In the end the bias is up but the bull case doesn’t dominate unless the Dollar falls back below 96.00. Total gold derivative holdings overnight fell minimally to 56.5 million ounces.

The palladium market broke down on the charts again overnight and that leaves the market in a negative technical condition into the last trading session of the week. Since we had difficulty justifying and at times explaining the massive run up in palladium prices over the last 2 months, we are a little hesitant to label the source of the current washout. However, we suspect that weakness in the Chinese economy is at least partially behind the slump from the January highs. In fact with hope for a US/Chinese trade deal dashed yesterday and prices sliding sharply yesterday, the Chinese situation is a weight hanging over the PGM trade. With the platinum market rallying in the face of a breakdown in palladium prices again overnight, we suspect some spread liquidation is taking place. While it would appear as if platinum found a solid value at this week’s lows, we have difficulty projecting platinum prices sharply higher in the current environment. Near term downside targeting in March palladium is seen at $1260.80 with support in April platinum moving up to $796.40.

With a strong upward thrust in the dollar this week, several probes down to $1,275 in February gold and weakness in a wide mix of physical commodity markets the bear camp retains a trend edge. While we give the bull camp a slight early edge to start the odds of a narrow trading range appear to be high. However the dollar has reversed from the spike up yesterday and a trade back below 96.00 in the Dollar could wake up a wave of gold buyers. On the other hand inability to hold above $1,275.30 could project a weekending washout in the February gold down to $1,269.10. In the silver market, a two day corrective bounce probably balanced the oversold condition into the low Tuesday and that could now set the stage for a failure down to $15.195.”

This insight from Gary Wagner (Kitco) is interesting and adds to the drama. Golden Cross Identified in Gold – “Market technicians use a multitude of moving averages in terms of’ the time cycles. These can vary from extremely short averages of three, seven or 10 minutes in length. Daily moving averages analyze long-term cycles and look at market momentum in terms of the big picture and long sustained moves.

In the case of looking for long sustained moves, the standards include a 50-day moving average, which indicates the intermediate or short-term trend of a stock or commodity. A 200-day moving average to indicate the long-term trend of a stock or commodity.

One of the more important technical patterns which market technicians are constantly looking for is when a cross occurs between two different length moving averages. When a longer-term moving average crosses below a shorter-term moving average it is called a “death cross”. This pattern is considered a bearish breakout which indicates that the market has been in a defined downtrend and has now broken with more momentum indicating a further decline in price.

When a shorter-term moving average crosses above a longer-term moving average it is labeled as a “golden cross”. This bullish breakout pattern can be created when any two different length moving averages have the shorter-term average crossing above the longer-term average. Most importantly this pattern indicates bullish market momentum.

Obviously, one of the most significant golden cross’s is when the 50 day, average, crosses above the 200-day moving average. Because markets do not trade straight up or straight down, technicians use a single moving average to determine the current trend. However, the cross (bullish or bearish) determines not only trend but more importantly indicates strong momentum is occurring in terms of the current trend visible in any given market.

Which takes us to our current scenario in gold. Over the last two days, we have identified a golden cross occurring on the daily charts in which the 50-day moving average is now crossed above the longest term 200-day moving average. This could indicate stronger momentum in terms of the bullish trend, which would result in higher pricing for gold.”

Silver closed up $0.40 at $15.64.

Platinum closed up $14.50 at $813.50 and palladium closed up $39.10 at $1358.80.

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

Of course it’s not really patented but we do have some fun along the way. This is what the GoldDealer.com employees think: 8 believe gold will be higher next week – none thinks gold will be lower and 3 think it will be unchanged.

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

Like the employees our customers were given three choices – up – down – unchanged. We limited the survey to a random sampling of 100 transactions – unscientific but worth considering because these people took action: 48 people thought the price of gold would increase next week – 29 believe the price of gold will decrease next week and 23 think prices will remain the same.

Precious Metal Closes & Dollar Strength – Jan. 21 – Jan. 25

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Posted on January 22, 2019 January 25, 2019 by Richard

Gold Sill Choppy after MLK

Commentary for Tuesday, Jan 22, 2019 – Hello again and thanks for stopping by for a short visit in your busy day. Gold opened higher today after the MLK holiday sold off and then recovered somewhat settling up $1.20 on the day at $1282.50. You could make a case that today’s interest came as a result of weakness in stocks or last minute weakness in the dollar – the Dollar Index moved from 96.46 through 96.23. If you are a technical type watcher you won’t like the breakdown of the current trading range which began in early January around $1290.00 and over the past few weeks has trended lower towards $1280.00. But this is just another sign of consolidation, the big question remains will gold hold higher ground?

At the same time the general political and trade discontent both here and in Europe seems to suggest that today’s dollar has a short shelve life. I’m not on board yet but eventually this has to be true and will be one of the primary reasons gold will hold up and move higher. Kitco heavyweight Peter Hug suggests that “higher” is closer than you think with 2019 presenting us with $1500.00 gold.

In the meantime this choppy and somewhat nervous market is just part of a precious metals market trying to reinvent itself in the new world of leveraged and fiat paper money. For the record I would ignore the day to day – unless you just like the rhetoric. The bigger picture for gold today is that the latest move from $1200.00 through $1300.00 is being watched carefully. It’s possible that gold could once again fail but like I’m fond of saying I really don’t think there is big downside at these numbers and the upside could be surprisingly good if the politicians and bankers find out that they have released the inflation genie.

This from Zaner (Chicago) – “The gold market has rebounded impressively from the overnight low with a rally of eight dollars. While there is some anxiety from global equity market declines, in the wake of pessimistic IMF world growth projections, the magnitude of the declines in equities isn’t large enough to justify such a noted bounce in gold prices. In fact with the US dollar basically unchanged this morning, the magnitude of the gold bounce must be partially attributable to the oversold condition into the overnight low following the big range down washout last Friday. With the US apparently seeking extradition of a Chinese tech sector executive and the Chinese government lashing back at that news, a certain measure of geopolitical safe haven buying interest is to be expected. It is also likely that the slowest Chinese economic growth pace in 28 years overnight has fostered some macroeconomic safe haven interest in gold. While the strike at a Sibanye mine in South Africa is taking place at platinum facilities it is possible that some minor spillover buying is being seen in gold from that news. Unfortunately for the bull camp exchange traded funds reduced their holdings by 87,020 ounces in the most recent readings but the net purchases this year still stand at 1.29 million ounces. According to Bloomberg the decline in ETF holdings was the biggest one day decline since December 3rd. Barrick gold 2018 full year gold production was pegged at 4.53 million ounces and that might be seen as slightly supportive of gold as the company’s guidance on output was for output of 4.5 to 5.00 million ounces.

The palladium market is in an early freefall with prices into the low this morning reaching $108 an ounce below last week’s spike high. With the psychological $1400 level not taken out last week and press coverage on the bull case last week some of the most active flow we have seen on the market in years, it is possible that the market reached a temporary bullish zenith in prices. Even more surprising is the fact that the AMCU union has heightened its strike pressure on a Sibanye mine in South Africa with “no workers” reporting for work (according to union officials) and yet that has not cushioned platinum prices which broke out down this morning and have reached the lowest level since January 2nd. On the other hand ETF holdings in both platinum and palladium increased in the most recent report with platinum holdings building for the sixth straight session. Given the technical damage and momentum in March Palladium, a further decline to a recent consolidation low down at $1,274.10 is likely. Critical support in April platinum is now seen down at $787.90.

While the bias in gold looks to be up the presence of slowing economic activity from the Chinese and from the IMF that news also leaves a measure of deflationary concern hanging over the metals markets. Furthermore the dollar charts generally remain bullish and without disappointing economic news from the US later today the evidence of international slowing overnight might leave the dollar underpinned. Obviously the overnight spike low down at $1276 was rejected leaving that level as some form of value. However closer in support is seen at $1280.10 but the market might be limited on the upside by the underside of the early January consolidation which begins at $1286.50. The silver market also ranged sharply lower overnight and rejected that washout and is trading a somewhat impressive 12 cents above its early low in a fashion that suggests the market found some value. However given slower global growth projections and a very negative chart pattern since early January, we have to leave the edge with the bear camp.”

Silver closed down $0.07 at $15.26.

Platinum closed down $11.30 at $786.50 and palladium closed down $28.60 at $1345.50.

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Posted on January 18, 2019 January 18, 2019 by Richard

Gold Settles into the Long Weekend

Commentary for Friday, Jan 18, 2019 – Gold closed down $9.70 at $1281.30. So if you are like me this market has you scratching your head – your generally upbeat but can’t quiet figure out why gold is struggling mightily with that $1300.00 level. Especially since the democratic vote of the people cannot be consummated either here or in England.

The Brits don’t like anyone telling them what to do so it was inevitable that a break from the European Union was in the cards. And while Theresa May survived a no confidence vote she can’t work out the politics necessary to carry out the popular Brexit vote.

The same is true of Trump – a government shutdown drags on as the Democrats and Republicans argue over funding and the wall.

I would not argue the sense in either of these apparently voter approved (the Wall or Brexit) but I would say that with so much confusion on both sides of the ocean gold should be moving higher.

Today is a good example, however of why this is not the case. China places an offer on the table to perhaps cool the trade war inclination and even though politics remain a mess – Wall Street trading moves into the green and gold’s safe haven value is questioned.

And of course the dollar remains primary factor. The Dollar Index has moved from 95.00 through 96.00 this past week raining on the gold bulls.

There will likely be no new FOMC information until late March and even this meeting might be the confirmation that the Fed is turning dovish enough as to suggest they will not take further action until summer – much to the delight of the gold bullion community.

Or will they change their minds again? If Wall Street roars and confidence in the economy is once again promised the FOMC might just revert to its old rhetoric – more interest rates in store.

In the meantime what are the technicians looking for? The near term trading range has everyone’s attention. It will be used to determine if gold is just resting, ready for that next leg up or breaking down looking to test new recent lows.

The key level gold must hold is something between $1280.00 and $1290.00. A break in these numbers which have been in place since early January and we all could be looking at $1240.00 or perhaps in a worst case scenario $1220.00.

While all of this is working itself out look for gold to keep churning – we are up something like $70.00 since December. A churning market might imply gold is having trouble moving higher just because in the past 5 years it has lost momentum at least 3 times at $1350.00. This defines a kind of background tension which could develop into profit taking.

It is interesting that Wells Fargo recently turned bullish on the metals but added that if gold moved above $1350.00 it would change its mind.

If gold moved above $1350.00 I would move all in – a break to the upside at those levels would confirm, at least in my mind that things in financial River City are in real disarray and this latest push to higher ground is just the beginning of a potential large comeback in gold.

So once again gold faces a critical juncture in this long consolidation pattern.

Don’t look for certainty in this current gold market. It is plain that gold remains a critical part of financial planning as the world tries to figure out its financial future. But the amount of fiat paper money continues to build in dramatic fashion. Lots of free money creates a sense of security in the financial world – as long as the top keeps spinning.

We will be closed this Monday (Jan 21^st) for Martin Luther King Day – the commodity markets, the banks and the post office will also be closed.

This from Zaner (Chicago) – “After gold and silver tightened their coiling patterns earlier this week a failure this morning in the gold market sets a decidedly bearish tone for the last trading session of the week. While dollar gains are modest this morning and the Dollar is probably contributing to the weakness in gold it is likely that gains throughout global equity markets from trade rumors have pulled a wave of safe haven longs from gold and silver. While the markets were tossing around the idea that the US might be poised to remove tariffs as a show of good faith in the negotiations administration officials have failed to confirm that prospect. Certainly some of the selling in gold this morning is fresh outright selling considering the failure to hold what had become a fairly solid consolidation low zone on the charts. However the gold market ends this week with total gold derivative holdings reaching up to the highest level since June of last year, while silver derivative holdings have dipped down to the lowest level since December of 2016. It is possible that the gold market is seeing some liquidation off reports that recent gold price gains have deterred Indian and Chinese buyers and that is partially confirmed by anemic buying in Indian in the face of an expanding gold price discount. Not surprisingly Chinese gold prices continue to register a premium of six dollars to nine dollars but regional sources suggest that demand has been soft. In fact some Chinese dealers have indicated that buying head of the lunar New Year celebrations has already taken place.

While the sharp range up explosion in palladium prices yesterday saw prices close nearly $50 an ounce below the high the market has flashed higher again today as if the upward track remains in place. In the end the palladium market yesterday forged a very expansive range of $76 which should be pushing the market toward an exhausted technical condition. This week we have seen more market coverage of the reason behind the rally in palladium than we have seen in many years. Most of the coverage focused on strong auto catalyst demand, a 1.1 million ounce world deficit and the inability to expand supply. With the expanded press coverage of the massive rally and wide swings in prices that could suggest that the bull story is becoming saturated. Certainly there are minor supply-side threats from ongoing labor developments in South Africa, but the trade hasn’t focused intensely on that situation. In the month of January alone, palladium has forged a low to high rally of $210 (or 17%) and we suspect two-sided volatility will expand dramatically and a top could follow further near term blow-off gains. However, given thin conditions and a lack of a clear credible fundamental driving force, a top could be $1,400, $1,450 or even $1,500. If there were actively traded put options on palladium futures, we would be looking to purchase puts.

Clearly the initial damage today on the gold chart has resulted in a downside breakout of a recent consolidation range and that should foster added stop loss selling. Perhaps the trade rumors have severely punctured the safe haven argument. In our opinion longs should be exiting because of trade hope, soothing US Fed news, generally favorable US economic news and equity market gains as conditions that have clearly lowered economic uncertainty. In retrospect the equity markets have traversed the latest UK exit debacle without anxiety, China has stepped forward to cushion its economy and equity action is fostered optimism. The failure below $1286.50 would seem to set a near term target down at $1280.90. However we don’t get the impression that gold prices are set for a massive wholesale liquidation. The silver market has also forged another lower low for the move but is clearly within an extremely uniform lower high and lower low downtrend channel pattern that projects near term downside targeting in March silver at $15.40.”

Silver closed down $0.14 at $15.33.

Platinum closed down $10.00 at $797.80 and palladium closed up $28.40 at $1374.10.

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

Of course, it’s not really patented but we do have some fun along the way. This is what the GoldDealer.com employees think: 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: 45 people thought the price of gold would increase next week 20 believe the price of gold will decrease next week and 35 think prices will remain the same.

Precious Metal Closes & Dollar Strength – Jan. 14 – Jan. 18

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Posted on January 15, 2019 January 15, 2019 by Richard

Gold – Now Optimistic or Tired?

Commentary for Tuesday, Jan 15, 2019 – Gold closed down $2.90 today at $1286.20. Looks pretty quiet out there folks – as gold continues to move in a tight trading range. I think the trade remains somewhat positive given recent history but remember anyone associated with the physical gold market has a short memory. It is always what have you done for me lately and frankly, considering all that is going on I would not have expected gold to be so quiet.

The British are still fighting over Brexit, the US government shutdown is getting pathetic and world trade remains worried about the Chinese numbers. The DOW moving above 24,000 does not help safe-haven demand. Still gold remains in the fight as the dollar drifts higher – the Dollar Index moved from 95.47 through 96.25 enough to put a halt to gold’s upward early trading bias around $1294.00.

So you tell me – is this market getting ready to move higher?

Is the bullish trend established in late November, which suggested gold would soon trade above $1300.00 enough to satisfy its base? Or does its recent loss of momentum suggest that this latest move to higher numbers is tired? And the follow through needed to challenge the real gold Mount Everest ($1350.00) is simply wishful thinking.

The answer to this question, even with all the political noise we have to put up with these days centers again around the FOMC. They will meet on January 29^th and 30^th and the learned among us claim this meeting will be no big deal – a steady as she goes clambake.

The next FOMC meeting (March 19^th and 20^th) is another matter – if the DOW roars back the governors will consider another interest rate hike and even this consideration would hurt gold given inflation numbers remains calm. I appreciate the fact that some in the gold community believe that gold could move higher as interest rates push higher and this may be true – but I’m not on board yet.

A bullish gold argument which has been around forever but has been lost in all this white noise was again cited by Neils Christensen (Kitco). John Hathaway, chairman of gold fund heavyweight Tocqueville Management Corp claims that burgeoning US debt relative to its gross national product will swamp our financial ship – pushing the dollar dramatically lower and gold dramatically higher.

The idea that our growing cumulative national debt is now larger than our gross national product should make your head spin but for some reason has lost its resonance. This is true because while this situation is not unheard of internationally it does not seem to create financial fear and lead to a downgrade of the county’s creditworthiness.

Just how long everyone can get away with this hat trick remains to be seen but the argument is sound and does in the longer term support the price of gold.

This from Zaner (Chicago) – “We continue to think that the gold market is in the process of losing upside momentum with the $1,300 level becoming more significant resistance with every day spent trading under that level. In a continuing trend South African gold output for November (the latest figures available) showed another decline of 14% on a year-over-year basis and output also declined by 14.8% on a month over month basis. While the dollar showed some weakness yesterday, it has forged a 4 day upside breakout early today and that should spark some currency related selling of gold today. While a buyout within the gold mining sector yesterday might hint at some value of gold assets, hints of progress on a US/Chinese trade deal from the President yesterday could force gold to shift its bullish focus from safe haven buying to weak Dollar buying. In the meantime, it will probably take significant declines in equities and/or a series of softer than expected US data points to see gold test and take out the $1,300 level. There does appear to be a number of bullish annual forecasts for gold surfacing in the media. With many of those bullish 2019 predictions based on strong physical demand from China and India, strengthening central bank purchases and significant losses in the Dollar, it could be a tall order to get all of those forces operating in concert.

With significant divergence between platinum and palladium seen again yesterday, some weakness in physical commodities and definitive slowing evidence from China, palladium hasn’t been deterred. In fact evidence of slowing Chinese car sales, slowing Chinese economic data and weakness in the rest of the metals complex is simply being ignored as palladium this morning appears to be poised for more all-time high action. In fact, March palladium did carve out a minor new all-time high Monday which defeats the argument of lost momentum. It should be noted that palladium prices on Monday saw a higher high than gold, and that headline might serve to pull further speculative interest into palladium in the days ahead. So far, total palladium and platinum derivative holdings have not shown any discernable trend of inflows and that might mean the bull case for palladium has yet to reach the small investor and that could mean that the bullish condition has not reached a blown-out condition yet. Obviously the $1,300 level in March palladium is psychological resistance but until there is a fundamental of significance to justify a top, the trend remains up. On the other hand, platinum suffered significant chart damage yesterday and it seems to be catching the brunt of slowing fears along with other industrial commodities.

We remain skeptical of the bull case in gold and think the market will have to shift its focus away from classic safe haven support and toward weak Dollar support to rekindle the upward track seen prior to the initial foray to $1,300. In fact, the sideways consolidation has extended to eight days and that is longer than the mid December setback wave. However, open interest has expanded consistently and one could point out a “general pattern” of higher lows on the February gold chart, as a partially bullish chart interpretation.”

Silver closed down $0.06 at $15.55.

Platinum closed down $3.20 at $795.60 and palladium closed down $4.90 at $1274.60.

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We appreciate your friendship and business. Enjoy the evening and thanks for reading.

Posted on January 11, 2019 January 11, 2019 by Richard

Gold – Quiet yet Attentive

Commentary for Friday, Jan 11, 2019 – Gold closed up a modest $2.20 today at $1287.10 so on the week we are virtually unchanged. Still this is a great time to be in the gold market – not because I think you will make a fortune but because gold is the singular asset which protects and defends – no matter what.

Since last summer trade talk within the gold community has moved from negative to somewhat positive but more importantly the financial community has become more aligned with the idea that holding gold bullion – interest rate increase or not is a good idea.

And this kind of change in thinking has gathered steam recently. Even BlackRock, the first to suggest gold was heading to $1000.00 in early 2016 has now switched sides claiming our shinny friend will do well in 2019.

Neils Christensen (Kitco) also cites a positive view from Goldman Sachs – “Thursday in a note to clients, Jeff Currie, global head of commodities research at the bank, said he was raising his gold price forecast for 2019 as growing recession fears continue to ripple through financial markets.

He added that central-bank gold demand, which saw strong growth throughout 2018, will continue to be a dominate theme in the marketplace.

“Going forward gold will be supported primarily by growing demand for defensive assets. The same is also true of central-bank buying, with rising geopolitical tensions incentivizing more central banks to re-enter the gold market,” he said.

In its updated forecast, Goldman Sachs now sees gold prices pushing to $1,325 an ounce within three months, rising to $1,375 in six months and pushing to $1,425 an ounce by the end of the year. The new outlook is an upgrade from its previous three-month, six-month and 12-month forecasts of $1,250, $1,300, and $1,325 respectively.”

So does this bullish realigning make you nervous? Let me hack up the old contrarian adage “when everyone is looking for higher numbers all the buyers have bought”. Maybe “nervous” is the wrong word, after all gold has been working hard to stay above $1200.00 these past 5 years and at the same time has challenged $1350.00 on three occasions as world events heated up.

So even those with a bearish view can’t dismiss gold’s pent up potential as politics gets more contentious and the excessive production of fiat paper money raises concern with academics.

But I’m still not convinced that gold will roar in 2019. The dollar is too strong and it’s easy for the FOMC to keep interest rates firm. There is the possibility that stocks might become unstable but that bullish gold scenario does not make sense within the current business climate. Corporations are still making money and while optimism is not growing in my mind, no one is expecting a recession anytime soon.

So the assessment of 2019 will remain unchanged. Positive sentiment for gold is a welcome surprise but until pricing shows strength above $1350.00 we are still dealing with a sideways market which has been in place for years. And I think “in place for years” should be underlined.

This continuing support suggests that gold is still doing what it does best – protecting and defending. If this were not the case that old Black Rock claim of $1000.00 gold would already be on the books. Let’s remember to listen to that quiet pricing voice which suggests that troubles in River City will always be with us in one form or another and gold bullion is always at the ready in keeping everyone honest. Let’s hope this country will never really need this ironclad protection but let’s prepare for these possible problems in advance.

This from Zaner (Chicago) – “The extent to which the gold market’s fortunes are tied to the dollar is evident by the action over the past few days, as gold sold off on Thursday as the dollar recovered, and then it gained overnight as the dollar eased. The dollar has not fully rejected it recent lows and could be ready to resume its downtrend, which suggests that gold and silver could stand ready to resume their bullish tracks. The markets are awaiting “resolution” on a number of issues, such as US/China trade negotiations, the US Government shutdown, and even Brexit. Signs of progress on any of these issues could pull safe-haven interest away from the dollar and support the metals. The shutdown could be coming to a head, as it seems the President is moving towards declaring a “National Emergency,” which could at least reopen the government. In the meantime, investment interest in gold continues to grow. Gold ETFs added 37,174 ounces to their holdings on Thursday, bringing their net purchases so far this year to 762,975 ounces. Holdings have reached their highest level since May 18th. Gold could be on track for its fourth straight weekly increase if it closes above $1285.80.

Palladium traded to another new contract high overnight, as the trade looks for demand to outstrip supply this year. Palladium traded lower on the day for a while on Thursday, after some disappointing inflation data out of China raised new alarm bells about their economy, but it managed to close higher on the day, and it continued to make gains overnight. On Wednesday, in a Chinese official stated that the government was looking at ways to boost domestic auto sales in the face of economic uncertainty, and this is supportive to palladium consumption. The market may be overbought, but there is no sign of a top. April platinum seems capable of following palladium higher, but it needs to break out above $863.50, its spike high from earlier this week.

The fate of the gold market seems to rest with the dollar, and if the dollar resumes it downtrend, February gold should be in a position to retest the recent high at $1,300.40. Look for support at $1,280.20 and $1,278.10. March silver may have critical support at the 200-day moving average, which comes in at $15.60 on Friday. Silver has probed below that average a couple of times this week, and a close below it could spark a more substantial correction. Additional support comes in at $15.56, with resistance at $15.83 and $16.00.”

Silver closed up $0.02 at $15.58.

Platinum closed down $8.30 at $813.00 and palladium closed up $5.50 at $1276.20.

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 none think 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: 52 people thought the price of gold would increase next week 33 believe the price of gold will decrease next week and 15 think prices will remain the same.

Precious Metal Closes & Dollar Strength – Jan. 7 – Jan. 11

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

We appreciate your friendship and business. Enjoy the evening and thanks for reading.

Posted on January 9, 2019 January 9, 2019 by Richard

Gold – Resting or Not?

Commentary for Wednesday, Jan 9, 2019 – Gold closed up $6.10 at $1289.30 in another quiet day of trading. So what’s happening to further encourage those interested in accumulating more gold bullion? The run from $1200.00 through $1300.00 is intact so the technical picture at least suggests the possibility of higher prices. Shorter term this trend is supported by the dollar – the Dollar Index these past 5 trading days has moved from 96.5 through 95.5, crude oil is bouncing higher and the Chinese physical trade is becoming more active.

But this brighter future for gold should be taken with a grain of salt.

Even if gold pushes above $1300.00 and manages to challenge the recent highs we saw last January we are still struggling with less buzz if the stock market settles down and perhaps a deal with China is in the making.

Recent world safe-haven demand could wilt at these rather lofty prices if profit taking sets in – driven by the paper trade. So have I turned negative – nope, just a bit cautious.

Gold has done nicely even with the precipitous drop in crude oil and the World Gold Council cites higher gold ETF numbers for last month. And pricing is basically still cheap compared with all-time highs.

But a few world mints have seen gold bullion coin orders fade with these higher prices. And US dealer buzz needs to be rekindled – I would not say that US dealers are sitting on their hands but they are not skipping lunch waiting on lines of customers either.

It is interesting that even with recently higher prices in silver certain bullion products are in short supply. This is curious in that consumers do not know that the metals industry has been expanding manufacturing capacity – including adding a few new players for two years.

Still even with this manufacturing shift dealers can’t for example buy, for immediate delivery 5000 or even 500 ounce positions in the common 1 oz silver round. Yes your dealer can sell you 1 oz rounds today but you won’t see delivery until late February.

You could make the case that manufactures are behind the production curve over the holidays but a two month lag time is hard to figure considering the larger manufacturing capability.

The best deal we can get these days – buy a truck load and wait for delivery – no crying. My added comment is a typical admonition which comes from a manufacturer directed to a distributor when they really don’t care whether you place the order or not – they can’t make the stuff fast enough – so take it or leave it.

Now I’m not saying there is a big shortage of silver bullion – there is not – but when prices dip too low it’s amazing how the public shows up with cash. People we have not seen for years are standing by the coffee machine telling stories.

So what does this mean relative to pricing in 2019?

Not much really. The gold market still has to prove itself above $1350.00 before any real steam will appear and a hobbled gold market will hamper big moves in silver prices.

And there is the typical headwind created by higher prices and a possible profit taking round. But this small angst could be erased overnight if the FOMC decides higher interest rates might create that feared recession.

In the meantime I think it’s worth remembering that the established production link between manufactures and consumers is not the bulwarks most people believe it to be.

Production of bullion products is at best thin relative to possible demand. And a real breach in the system could appear – overnight. Refiners will be caught behind the power-curve and delays in many products will appear overnight once gold pushes into new high ground.

I believe the next real rush into the metals will create a dialogue which centers not on premiums but on when your dealer will be able to restock. Now stop for a moment and compare that mindset with today’s easy attitude that there is plenty of bullion to go around.

This from Zaner (Chicago) – “All things considered, the gold market has managed to avoid wholesale liquidation despite a rise in the dollar, fresh hope of trade progress and negative physical demand news. Apparently Gold Fields Mineral Services pegged Indian gold demand for all of 2018 to have declined by 14.5% to stand at only 759 tonnes. In the past, China and India have matched each other for the world’s largest consumer with roughly 1000 tonnes of annual physical demand, and therefore it is clear that classic demand is still a liability for the bull camp. On the other hand, the gold market at times in 2018 was pressured from actions by the Indian government to reduce their current account deficit and with the net outflow from gold purchases dropping by 13.4% that might keep the Indian government off the back of the gold market (no duties) this year. In the short term, there would appear to be the potential for further risk on safe haven premium extraction from gold and that in turn should keep a moderate amount of pressure on silver prices. A slightly supportive development from the overnight newswires came from word that global Gold backed ETF funds in 2018 saw net inflows. It should also be noted that the gold exchange traded fund holdings increased for the eighth straight session yesterday. Apparently discounts in India and the recent correction in prices from last week’s highs has sparked some measure of wedding season gold buying and that could help February gold respect a critical pivot point just under the market this morning at $1280.

The platinum group metals complex continues to see a significant amount of divergence with the palladium market exploding to yet another round of new all-time highs this morning and the platinum market barely clawing out gains. The palladium market might be attracting widening appeal because its flat price is tracking closer to the price of gold and many make the argument that palladium is a better safe haven instrument than gold (because of tighter supply) and it is clearly a better physical precious metal than gold because of growing industrial demand for auto catalyst demand in the Asia and SEA. Certainly PGM prices are being lifted by surging hope of progress in US/Chinese trade talks, but we continue to think that something else is feeding the historic upward track in palladium prices. Interestingly enough, total palladium derivative holdings have continued to erode and currently stand at only 742,223 ounces and therefore one has to wonder when the futures gains will begin to attract a wave of arbitrage buying of derivatives. Critical support in March Palladium is now at $1,261.10 and a measuring objective is seen up at $1,290. Clearly the platinum market has seen its bullish vibe from the first days of January dissipate, as it isn’t rising at the same rate as palladium again this morning. With palladium stretching its historical premium to $500 over platinum, one would think that spillover/substitution buying would surface soon. However, analysts are still suggesting rotation in manufacturing is not being detected yet. Furthermore, platinum ETF holdings have declined back to the lowest levels since December 20th after mounting a four-week inflow of 100,000 ounces. Unfortunately for platinum bulls, there might be little in the way of solid support until an old high down at $814.50.”

Silver closed up $0.02 at $15.65.

Platinum closed up $3.50 at $820.00 and palladium moved higher by $8.00 at $1326.10.

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

We appreciate your friendship and business. Enjoy the evening and thanks for reading.

Posted on January 7, 2019 January 7, 2019 by Richard

Gold Remains Firm

Commentary for Monday, Jan 7, 2019 – Gold closed up $4.10 today at $1286.80. The move is just modest but the fact that we remain at the higher end of the current range suggests perhaps another try at $1300.00. I guess the big question for 2019 will revolve around whether higher gold prices are dependent on higher inflation. An ingredient that is still missing in the government’s numbers but one that provides the FOMC with a great deal of discretion relative to higher near term interest rate decisions.

The safe haven demand in 2019 will take care of itself in that it will either reassert itself if government malfeasance continues – the most probable case – or Wall Street will come back into focus and the DOW will stabilize – hurting shorter term pricing for gold.

The media cannot make up its mind as to whether the DOW wilt is the real deal driven by Trump or just an overreaction to the government shutdown in an otherwise booming economy. Neither can I or anyone for that matter without a bias. This is dicey – the DOW should settle down in 2019 and this will subtract from the safe haven aspects in the bullion community.

And I would not hold my breath looking for further downside in the dollar to support higher gold prices. The dialogue about a dollar crash does not make sense in the current scenario of higher interest rate environment still being touted by the FOMC.

Will the dollar hold up in the longer term – no chance in my mind – dollar strength must decrease to keep the US competitive but when is the big question. Trying to figure out whether a “short” here makes sense even as a gold surrogate is goofy.

So you can see that this cabal is a process of complicated interaction. Considering that it does not take long to establish gold bullion positions there is no need to rush any of these scenarios – once you have your basic gold position in place. Note the caveat – it’s not a good idea to have no precious metals position – waiting for that “perfect” time to enter the market.

Gold’s latest rise in value from $1200.00 through $1300.00 is a relatively old market with traders looking for confirmation at these higher levels. They will disappear as quickly as they appeared if that overhead “lid” on prices between $1300.00 and $1350.00 cannot be overcome.

The better news for now is that gold still appears well bid so let’s count our blessings and hope the coming confusion factor for 2019 not only supports prices but provides enough buzz to excite the base and push prices through what looks like very tough overhead resistance.

This from Zaner (Chicago) – “The gold market has rejected the noted weakness from last Friday and has managed the recovery without definitive safe haven conditions emanating from the equity markets. Certainly weakness in the dollar is providing the latest wave of buying interest in gold and that highlights the markets capacity to rotate and find a fresh bullish theme. Apparently the markets think the Fed is on hold now and seeing the dollar index fall below the January 2nd low of 95.37 could spark yet another wave of gold and to a lesser degree silver buying. The gold market might be gathering some support from positive BlackRock gold views which were supposedly the result of slowing global growth and equity market volatility. It should also be noted that last week ETF’s increased their gold holdings by 665,516 ounces with SPDR Gold shares seeing 94,530 ounces flow in the Friday session alone. Yet another supportive development for gold over the weekend came from China where their gold reserves posted the first monthly increase since October 2016. However we suspect that Chinese gold reserves have been rising and have been masked by China’s expanded import network (historically China imported nearly all of its gold through Hong Kong alone). The silver market has also rebounded from Friday’s wild two-sided session and could be poised to benefit from improved physical demand conditions, spillover lift from gold and classic technical buying.

The PGM markets continue to soar in a move that would seem to be fully attributable to the newfound optimism/relief toward the US economy. However, it is also possible that speculators were moving into the long side of the PGM markets in anticipation of something positive from US/Chinese trade talks. Some traders are suggesting that global supplies in the PGM’s remain so tight that supply used to back ETF holdings are being tapped into for physical use! It should also be noted that platinum derivative holdings last week increased by only 699 ounces while Palladium ETF holdings increased by only 2,007 ounces. While the reasoning and probability of that potential is suspect, that type of action would seem to confirm “significant” tightness of available physical supply. However, to make the supply situation something that propels palladium significantly above all-time highs and pulls platinum back toward the November highs probably requires ongoing favorable “risk on” psychology. However, given the massive rallies in both platinum and palladium at the end of last week, there would appear to be something fresh in the bulls’ camp and the strong performance of palladium should be catching the eye of global investors. Our opinion is that the palladium market gains have been so significant that it might catch capital that might have flowed toward gold but it is also possible that the sharp gains in palladium are now beginning to attract capital to platinum which has failed to rise in sync with palladium. With the April platinum contract rising above the $825 pivot point of the July through December trading range, the island bottom from the December consolidation appears to be left behind. A simple move to the upper portion of the second half 2018 range allows for a rise above $850 and perhaps a probe of the $875 level. If one were to use a measuring objective from the December sideways track in palladium that would project the next interim top up at $1,300. It should be noted that spot palladium last week moved above $1,300 for a new all-time high in that measure.

The bull camp in gold saw a test of its resolve at the end of last week and has apparently come away with renewed strength. Certainly the safe haven theme was dashed following the payrolls and seeing the equity markets weave through the events Friday to post massive gains, could have been disastrous for the gold bulls. However the gold market appears to have shifted its focus toward weakness in the dollar and perhaps because of the view that the Fed is poised to be more dovish than was expected prior to last week’s developments. In other words the world might expect more growth to be allowed in the US before the Fed takes its next action and that in the near term benefits physical commodities. Other residual support for gold is seen from China’s central bank maneuvering last week on its RRR and strangely enough from hopes that US/Chinese trade talks will yield something positive. Uptrend channel support in February gold today is seen at $1281.65 and resistance is obviously at the even number/psychological level of $1300. Beyond $1300 the next target is seen up at $1304.50. In the silver market uptrend channel support today is seen at $15.72 with initial resistance seen at $15.95 and then again up at $16.04.”

Silver closed down $0.03 at $15.67.

Platinum closed down $3.60 at $818.40 and palladium closed up $5.80 at $1296.90.

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

As always we appreciate your business and friendship. Enjoy your evening and thanks for reading.

Posted on January 4, 2019 January 7, 2019 by Richard

Gold Takes a Breather

Commentary for Friday, Jan 4, 2019 – Gold closed down $9.10 at $1282.70 today but the action across the counter has not slowed considerably. We were closed Monday and Tuesday of this week for the New Year so considering gold closed at $1281.00 this past Wednesday – on the week we have gained $1.70. Not much considering the big jump in across the counter and phone activity and a great start to the New Year.

With gold’s steady climb from $1240.00 through $1300.00 this past month the technical bulls remain encouraged but today’s sell-off was expected. It would be tough for gold to ignore both the steaming job’s report, the possibility of further interest rate increases in 2019 and the rebounding DOW after yesterday’s drubbing.

Underlying this more bullish sense and safe-haven support for gold is of course world uncertainty. Everyone is nervous – the Europeans are worried about Trump and the continued rumors about China’s economic slowdown are growing. Wall Street fears a recession one day and the next sells the precipitous drop as a buying opportunity.

In the middle of all this noise FOMC Chief Powell claims he will not resign if asked and tries logically to point out why he and the rest of the FOMC governors are never married to what they might have implied in the recent past. This past year they have moved from claiming 3 rate hikes in 2019 is a certainty to – we are watching this situation carefully and will stay in touch. Is it any wonder that gold under these changing circumstances continues to climb that wall of worry.

But that 30 day $60.00 paper profit in gold is also hard to ignore. This situation is very liquid and underlying motivation changes like the wind. No one is exactly sure of what Trump, the Chinese, the Russians or the Europeans are up to as everyone’s red ink pile continues to grow. So where this continuing monetary experiment will end is difficult to pin down.

There remains some safe haven demand for gold but not much from the US side. Gold bullion sales across our counter are active but considering all the hoopla of late, especially with significant weakness in the DOW I would say this latest challenge of $1300.00 is just a modest response.

The possibility of real financial instability is small at this point. Take another look at that whopping job’s number. Still gold bulls are quick to point out that something is amiss, and they are right but we might be looking in the wrong direction.

Job’s numbers are typically seen as a lagging indicator – meaning they point to what has happened while the DOW is more seen as a forward looking soothsayer. Meaning menacing stock behavior of late may foretell bigger trouble on the horizon.

So interest is growing in the metals. But consider that in the past five years gold has challenged $1350.00 three times and fell back in each time. So while the pot is once again heating up gold may still be just trading at the higher end of an in place range. In the meantime look for prices to consolidate somewhat in the first quarter of 2019 with underlying support staying in place.

This from Zaner (Chicago) – “Global equity markets overnight were higher with the exceptions the TOPEX Index and the All Ordinaries. The highlight of the overnight session came from China where they cut their reserve rate requirement by 100 basis points. The Chinese Premier also indicated the prospect of more banking system liquidity if needed to support small and private companies. Economic data released overnight included Japanese manufacturing PMI which matched the prior month, UK nationwide home prices which were barely able to post a gain, euro zone consumer price index readings which notched lower than the prior month and euro zone services PMI which notched below the prior month by.1%, Also out overnight were euro zone employment readings which showed a touch of softening. Other economic data released overnight included the euro zone PMI composite which matched the prior month, UK consumer credit which ticked higher, UK mortgage approvals which came in lower than the prior month and euro zone producer prices which actually contracted 0.2%. The North American session will start out with the highlight for global markets, the December US employment situation report. December non-farm payrolls are forecast to come in around 175,000 to 180,000 which compares with November’s 155,000 reading. December unemployment is expected to hold steady at 3.7% while December average hourly earnings are forecast to have a minimal downtick from November’s 3.1% year-over-year rate. Canadian jobs data will be released at the same time with their unemployment rate expected to have a minimal uptick from November’s 5.6% rate. Fed Chair Powell, Atlanta Fed President Bostic and previous Fed Chairs Yellen and Bernanke will speak during morning US trading hours. Earnings announcements will include Lamb-Weston and Cal-Maine Foods before the Wall Street opening.

Certainly the gold market is moderately overbought and has clearly fed higher off sharp declines in equities and rising macroeconomic anxiety. Therefore it is not surprising to see a bit of corrective action to start today but traders should not underestimate the potential for a wild reaction to the US nonfarm payroll reading. In fact payrolls & wage readings should have significant ramifications for gold, the Dollar, equities and many other commodities this morning. Some of the initial weakness in gold prices this morning can be attributed to headlines touting soft Indian demand which some sources claim is the result of the $100 rally over the past two months. In our opinion, anything soft from the US payroll reading will provide gold with a fresh combination of safe haven and currency related buying interest and that could produce the largest upside extension since October. In fact, if the payrolls are below the prior month’s 155,000 tally that could whip up recession talk, neuter the Fed and result in the biggest decline in equities this week. In short, a major trend decision would appear to be in the offing and further declines in global equities ahead of the US payroll could easily throw February gold up toward $1,309. Another issue that has not gained as much attention as it should have this week in the metals markets is the prospect of another week of US government shutdown with some analysts predicting each week reduces US growth by 0.1%.

The PGM markets held up rather impressively yesterday in the face of several negative physical demand headlines. In addition to the largest monthly decline in the US ISM manufacturing index since the Lehman crisis, the markets were also presented with a downtick in US December auto sales and a number of downgrades for the Chinese economy. However, the palladium chart remains positive with a pattern of higher highs seen in six out of the last seven trading sessions, and the platinum market surprising this morning with an upside breakout and the highest trade since December 13th. However, palladium trading volume over the last month has declined significantly and is the lowest since early 2018 in a fashion that might suggest fewer buyers are willing to pay up for palladium above the $1,175 level. On the other hand, the PGM markets have shown the capacity to “stand up to” the significant deterioration in economic sentiment this week and Palladium remains within striking distance of the contract highs. In our opinion, the trend remains up but the risk/volatility to the longs remains unattractive. Uptrend channel support in March Palladium today is seen at $1,193.35 with resistance initially seen at $1,205.30. The platinum market technically broke out of its sideways coil this morning and has also managed to reject broad commodity market weakness correlated the week’s equity market declines. The PGM complex needs an as expected or slightly above expectation (+178,000) gain in payrolls to claw out more gains.”

Silver closed down $0.01 at $15.70. Even at these higher recent levels the public is still buying silver bullion – we had a flash sale on $1000 Silver Bags and sold half our position in a few hours. Call Alex if you are interested.

Platinum closed up $27.50 at $822.00 and palladium closed up $34.10 at $1291.10. The platinum market could also turn hot – there is just not enough physical product out there and folks continue to sell palladium and buy platinum bullion.

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

Of course, it’s not really patented but we do have some fun along the way. This is what the GoldDealer.com employees think: 8 believe gold will be higher next week none think 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: 54 people thought the price of gold would increase next week 22 believe the price of gold will decrease next week and 24 think prices will remain the same.

Precious Metal Closes & Dollar Strength – Dec. 31 – Jan. 4

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As always we appreciate your business and friendship. Enjoy your weekend and thanks for reading.

Posted on January 2, 2019 January 7, 2019 by Richard

Gold in the New Year – Up and Down Makes Sense

Commentary for Wednesday, Jan 2, 2019 – Gold closed up $2.70 at $1281.00 today showing modest but continued pressure to the upside. But 2019 presents challenges for both the bulls and bears.

The White House continues to be controversial while the big government shut-down remains in place. But a special closed door meeting might prove helpful (or not).

Wall Street DOW numbers are back and forth between red and green but things seem steadier if there is such an applicable word. Real estate might be slowing down and world markets are getting more worried about the economics of China.

Still the bulls are happy as today’s close ($1281.00) is above gold’s 50 Day Moving Average ($1237.00) – its 100 Day Moving Average ($1220.00) and its 200 Day Moving Average ($1250.00). And there is enough general angst worldwide to not only push gold to 6 month highs but to keep it there for the time being.

Whether all of these worries are worth the effort or a simple overreaction remains to be seen and you could get a few clues by just watching the DOW.

Its performance this past year has been off but I think a few Wall Street players believe the bigger picture is now not being given enough credit. A perhaps renewed and more optimistic stock market view coupled with higher interest rates should weigh on the price of gold.

Then there is the typical profit taking round one would expect with the nice gain which has been building since last summer. But this for sure could be short-lived as no one I talk with wants to short this gold market at the present.

So will gold continue higher? Like I said there are enough reasons to believe so but it’s not a good idea to mix the longer term with the shorter term. Not to sound perplexing but my point is that even if gold continues higher in the shorter term it must challenge and then push above $1350.00 with conviction to get real attention. This overhead resistance has been in place since 2012 so gold will need renewed safe-haven demand and a higher fear factor.

Finally keep in mind that the American side of the gold and silver demand formula while active is not impressive. US Mint production numbers for 2017 and 2018 remain disappointing.

So my feeling is still that the gold trade has everyone’s attention but there are several factors which could trigger a profit taking round and the longer term overhead resistance remains formidable. So keep your powder dry.

This from Zaner (Chicago) – “Gold is starting off 2019 on a strong note, trading to its highest level since June. This came after the disappointing economic data out of China and concerns about Italy’s banking sector sent global equity markets lower and sent the Dollar Index to its lowest level since November 8th. The strong start seems to set the gold market up to continue its gains during the course of the week. Both gold and silver finished the month of December with action that would seem to set the stage for further strength directly ahead. There are both technical and fundamental signs that the “trend” in the dollar is pointing downward. With the added benefit of dovish Fed psychology returning to the market and lingering safe haven anxiety from equities, the bull camp into the end of 2018 had a number of themes working in its favor. India is looking into an “integrated gold policy” that would promote their domestic gold jewelry industry and promote exports of same, including cutting the gold import duty from 10% to 4%. This would be fundamentally supportive to gold, as it would encourage consumption. The trade may try to parse any statements from Fed Chair Powell when he participates in a joint discussion with former Chairs Janet Yellen and Ben Bernanke today, but it seems likely he would try to avoid dropping any hints about policy.

Unlike gold, the PGMs are finding little support from the selloff in equity markets overnight. With palladium usage so closely tied to the automobile industry, the disappointing economic data from China overnight poses a threat to demand. Barron’s over the weekend touted platinum as a potential bull market for 2019, but that would seem to require a rotation towards using platinum (as opposed to palladium) in automobile catalytic converters, which may take a more sustained and substantial differential in prices. Comments from automakers in late 2018 suggested that this is not a simple maneuver. Platinum seems to need a sustained risk-on attitude in the market just to trade back to the top of the recent coiling action, and it is not getting that this morning. Look for support in April Platinum at $785, with resistance at $809.30. March palladium is holding up surprisingly well in the face of the stock market weakness, but in order to avoid a significant selloff, it may need to hold above the 21-day moving average at $1180.80. Look for resistance at $1205.30 and $1210.20.

The gold market continues to build strength on market anxiety, and with no solution in sight to the government shutdown/border wall impasse, that anxiety could continue to build. February gold could a gap up at $1292.80 today that dates back to June 20th. Additional resistance comes in at $1296.50 and $1300, with support at $1279.70 and key support down at the 200-day moving average at $1268.20. March silver may be following gold higher but could be held back by equity market anxiety, which threatens industrial consumption. A key resistance point comes in at the 200-day moving average at $15.645.”

Silver closed up $0.11 at $15.54. This area remains interesting in that while the silver bullion market is not as active there is still plenty of buying so the public feels comfortable at these price levels – I would imagine simply because in the longer term silver bullion remains cheap.

Platinum closed up $3.20 at $799.10 and palladium closed up $1.60 at $1255.50.

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