Gold Moves Higher on Trump Comments?

Commentary for Wed Jan 11, 2017 ( – Gold up $11.10 at $1196.60 as the Dollar Index rose from 102.00 through 103.00 and then reversed direction bouncing off the 101.50 and settling in at 101.81. An interesting price pattern in gold today – the overnight markets in Hong Kong and London were flat and initially the domestic market sold off looking at $1175.00 but dramatically recovered and held the gain before market close. Some claim this was the result of the Trump speech which gave little new information on the economy. This is a bit iffy and could be true but I would look closer at the confirmation hearing of Secretary of State Tillerson. He is currently chairman of Exxon-Mobil and has no military background but he looks and talks like a general and they talked about Putin, Crimea, Russian expansion and NATO. This is a no nonsense fellow that would not be wishy-washy – in a position like Secretary of State a person who will tell another person or country to pound it might create a sensation in the gold market and seems suitable to Trump’s way of thinking.

You might also remember that this time last year gold moved from $1100.00 to $1350.00 between January and June so recent strength could easily hold up if provided some encouragement in the interest rate area. Let me also note that while many academics believe our recovery is real and will soon lead to further interest rate hikes there is still a chorus out there that believe this recovery is done with mirrors. Chuck Butler (Daily Pfennig) thinks the recession ship has already been launched. It remains to be seen if he is right but if correct this could sink further interest rate hikes in 2017 and the price of gold might even make all-time highs.

Silver closed down $0.02 at $16.83.

Platinum closed down $6.40 at $976.40 and palladium closed down $11.35 at $753.90.      

Does gold have seasonality? This question has always been debated. And discounting the obvious gold festival seasons in China and India I never bought the idea. In the 1970’s for example US dealers all claimed that the price of gold would move higher because of Christmas demand for gold jewelry. This type of logic was used all over the place and in most cases my experience across the counter showed that it did not hold much water – besides there was no way to prove the case back then. Today with super computers and virtually unlimited historical data seasonality and statistical probability are common place in stocks. Not that all this real science is infallible – it’s not. But I’m saying the numbers don’t lie and with new algorithms showing up all the time we are light years ahead and the conversation is getting more interesting.   

This from Allen Sykora (Kitco) – MKS: January Once Again A Golden Month for Gold – January has been a good month for gold over the last decade, and this year has not been an exception, says MKS (Switzerland) S.A. Comex December gold was trading up $2.90 to $1,188.40 around 8:10 a.m. EST, which was a 0.2% gain for the day but leaves the metal up 3.2% so far in 2017. “So far this month, gold has behaved in line with historical trends,” says Alex Thorndike, senior precious-metals dealer with MKS. “Over the past 10 years January has offered the best monthly average return of plus 4.4%, with only three negative Januarys over that period. With the impending inauguration of President-elect Donald Trump and possible safe-haven flows related to that, seasonal Chinese demand and a stalling equity rally and bond sell-off, January so far is poised to be another good month for the yellow metal.” He puts the area around $1198 to $1200 an ounce as the next major resistance for gold, while pegging support $1,175-80 and $1,155.

This is our usual ETF informationGold Exchange Traded Funds: Total as of (1-4-17) was 62,852,534. That number this week (1-11-17) was 62,505,266 ounces so over the last week we dropped 347,268 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 2016 was 69,967,028 and the record low for 2016 was 47,568,082.                                                                        
All Silver Exchange Traded Funds: Total as of (1-4-17) was 650,378,935. That number this week (1-11-17) was 650,144,970 ounces so over the last week we dropped 233,965 ounces of silver.

All Platinum Exchange Traded Funds: Total as of (1-4-17) was 2,339,800. That number this week (1-11-17) was 2,362,641 ounces so over the last week we gained 22,841 ounces of platinum.

All Palladium Exchange Traded Funds: Total as of (1-4-17) was 1,715,367. That number this week (1-11-17) was 1,715,728 ounces so over the last week we gained 361 ounces of palladium.

The walk in cash trade was usual and the phones were on the quiet side but the Activity Scale is in the 6 range which means volume numbers are solid.  

The Unscientific Activity Scale is a “6” for Wednesday.

The CNI Activity Scale takes into consideration volume and the hedge book: (last Thursday – 5) (last Friday – 6) (Monday – 4) (Tuesday – 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.

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