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    Gold Firms in Continued Quiet Markets

    Last updated 1 day 21 hours ago

    Commentary for Friday, Dec 19, 2014 (www.golddealer.com) – Gold closed up $1.20 at $1195.90 is what looks like another round of holiday trading.

    The US gold market remains quiet but there are rumors of brisk sales overseas because of fears of monetary instability. I don’t know what to make of these but Degussa (a big German refiner) reports very active sales to German citizens in November.

    Let’s look at Gold’s Moving Averages: 50 DMA ($1201.00) – 100 DMA ($1229.00) – 200 DMA ($1263.00). Now consider that gold closed today at $1195.90 and it’s easy to see we are trading under all three averages. Not particularly encouraging.

    The Dollar Index range today was 89.18 (low) through 89.65 (high) and it now stands at 89.61 so we do have some dollar strength and we are trading at the higher end of its range. Not a huge range relative to recent strong moves but enough to keep a lid on the price of gold if there was any big action.

    WTI Crude Oil seems stable around $54.00 today which is saying something when you consider oil has moved from $75.00 to $54.00 in 30 days.

    Silver closed up a sleepy $0.10 at $15.99. Let’s also look at Silver’s Moving Averages: 50 DMA ($16.48) – 100 DMA ($17.61) – 200 DMA ($18.81). With today’s close at $15.99 we are trading under all three averages so not encouraging even though prices seem cheap and physical demand is reasonable.

    Platinum closed unchanged at $1197.00 and palladium was higher by $12.00 at $805.00. Platinum is now trading very close to the price of gold – there is only $1.10 difference. To be honest we have not seen much in the way of trading gold bullion for platinum bullion or simply outright purchase of platinum bullion instead of gold bullion for diversification. But this dynamic should soon push platinum sales.

            Precious Metal Closes - Dollar Strength & Oil Prices - Dec 15 - 19

                   Gold               Silver               Platinum                Dollar Index    

    Mon     $1,207.00         $16.52             $1214.00                     88.46

    Tues     $1,193.90        $15.71             $1196.00                     87.92

    Wed      $1,194.30        $15.89             $1199.00                     89.06    

    Thurs    $1,194.70        $15.89             $1197.00                     89.21     

    Fri         $1,195.90        $15.99             $1197.00                     89.61               

               Palladium       Rhodium                Oil                 Gold to Silver Ratio

    Mon      $802.00           $1175.00         $55.67                         73.06

    Tues     $784.00           $1175.00         $55.33                         75.99

    Wed      $779.00           $1200.00         $56.68                         75.16

    Thurs    $793.00           $1225.00         $55.10                         75.18

    Fri         $805.00           $1225.00         $56.72                         74.79     

    Our Patented Employee Survey - Gold's Direction Next Week?

    Of course it’s not really patented but we do have some fun along the way. This is what the GoldDealer.com employees think – 6 believe gold will be higher next week – 3 think gold will be lower and 3 believe 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 sampling of 100 transactions – unscientific, yes, but worth considering because these people actually took action: 42 people thought the price of gold would increase next week – 39 believe the price of gold will decrease next week and 19 think prices will remain the same.

    This from FX Empire Analyst - Barry Norman - Janet Yellen “Person Of The Year” & “Santa” To Investors – Janet Yellen was named “Person of the Year” just hours before she took the stage to host the last FOMC press conference of 2014 and she wowed her audience. The greenback soared on Yellen’s comments soaring well over the 89 range and is trading at 89.18 this morning.  With less than one year in office, U.S. Federal Reserve Chair Janet Yellen received the most votes as the person who, for better or worse, had the greatest impact on global capital markets in 2014.

    The dollar extended gains after Yellen said that the shift in guidance means “the committee considers it unlikely to begin the normalization process for at least the next couple of meetings.” The FOMC next scheduled decisions are Jan. 28, March 18 and April 29. “The committee judges that it can be patient in beginning to normalize the stance of monetary policy,” the Federal Open Market Committee said today in a statement in Washington, removing a calendar-based phrase with language that gives it more flexibility to respond to economic data. “The committee sees this guidance as consistent with its previous statement that” rates are likely to stay near zero for a “considerable time.” A comment from Fed Chair Janet Yellen at a press conference that the Fed’s policymaking committee considered it unlikely to begin the normalization process for “at least the next couple of meetings” was viewed as a sign the central bank could hike rates sooner. The comment suggested the possibility of a hike by as soon as April 2015.

    The euro fell 0.8% on the day and is trading at 1.2346 after trading above 1.25 just 24 hours ago. The euro has weakened substantially since May as the ECB has adopted easing measures, including lowering interest rates and purchasing asset-backed securities. ECB President Mario Draghi has said that the central bank should start buying government bonds, also known as quantitative easing, if inflation continues to fall well below its 2% target. Mr. Coeure’s comments move the possibility of sovereign QE closer for the market.

    The above comments by FX Empire define the upcoming 2015 price structure for gold. Everyone likes to estimate where we will be next year but with such different possible outcomes prepare for volatility. Yellen represents the “considerable” time component claiming interest rates will remain low. This of course supports gold into 2015. If the Fed however decides that raising rates will work the price of gold could suffer and we could see a continuation leg to the downside AKA my $1050.00 to $1150.00 price range if current support breaks down.

    Many knowledgeable writers claim that higher interest rates are inevitable perhaps as soon as the first quarter of 2015. But I have my doubts – read this latest commentary from Chris Gaffney, CFAVice President (EverBank World Markets) – “Moving on to other data, we also had an early gauge of the US service sector by way of the Markit PMI report. Markit is the name of the financial data company who provides the index, and the results follow the logic of many other such reports where 50 is the dividing line between contraction and expansion. The 53.6 reading was much lower than expected and was the lowest since Feb as the employment and new business components showed weakness. The deterioration in this employment component contradicts what we've seen in other jobs reports, but the labor market still appears to be holding its head above water.

    After the report was released, Chris Williamson who is the chief economist at Markit, said that a sharp slowing in service sector activity alongside a similar easing in the manufacturing sector takes the overall rate of economic expansion down to the weakest since Oct 2013. He went on to say the extent of the slowdown suggests that economic growth in the 4th quarter would come in below 2% which, with the exception of the downturn caused by adverse weather in the first quarter, would be the worst performance for two years. By the tone of his comments, it doesn't sound like he's one of the many feeling confident about the economy.”

    On the other hand the Europeans, Japan and Russia are sweating bullets over deflation and so Draghi will almost certainly begin some sort of bond buying program. This will support the price of gold because of its inflationary consequences.

    See what I mean? There are powerful economic forces pushing and pulling gold into 2015 – so let’s keep our options open.   

    The walk-in cash trade was steady – no crowds, but the public seems to like these price levels. We see little selling and buying is still small to midsize. There were a number of large size order questions today but these folks want to see what is going to happen next week. This is typical in a relatively flat market.  

    The GoldDealer.com Unscientific Activity Scale is a “4” for Friday. The CNI Activity Scale takes into consideration volume and the hedge book: (Monday – 2) (Tuesday – 4) (Wednesday – 2) (Thursday - 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 generally increasing – it would indicate things are busier – decreasing numbers over a longer period would indicate volume is moving lower.  

    You should now be getting email confirmations which include a PDF File when buying or selling so you can confirm your invoice or purchase order. This information also includes the various forms of payment and bank wire instructions. So when you buy or sell please check to see if we have your current email and that your computer will accept our email (no spam).

    About shipping information – when buying or selling your rep will walk you through your current mailing information. Thanks for keeping us up to date if you have moved.

    Our four flat screens downstairs with live independent pricing (BullionDesk.com) are a big hit with the cash trade. Live pricing moves all the buy/sell product prices on a real time basis. 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. When buying from us remember if you exceed $10,000 in cash (the real green kind) a Federal Form is necessary.

    In addition to our freshly ground organic coffee offered visitors throughout the day we have added cold bottled water, cokes and Snapple. We have also added fresh fruit in a transparent attempt to disguise our regular junk food habits.

    Like us on Facebook and follow us on Twitter @CNI_golddealer.

    Our holiday schedule this year – Christmas (Closed Thursday the 25th and Friday the 26th) – New Year’s (Closed Jan 1st and 2nd).

    A gentle reminder – each year during this holiday season the packages delivered to all 50 states slow down because Santa has control of the air traffic.

    We appreciate your business - thanks for reading 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 advisers. 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.

    Kenny & Sal Are Great To Work With At GoldDealer

    Last updated 2 days 1 hour ago

    • on GoldDealer.com
    • The site is great.  Kenny Edwards does a wonderful job of explaining the various aspects of buying the bullion products offered.  Takes the concern away from a first time buyer like myself.  Sal was great to work with.  Look forward to purchasing more coins in the future.  No Pressure, Just Patience towards a new guy... More

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    Gold Remains Quiet

    Last updated 2 days 22 hours ago

    Commentary for Thursday, Dec 18, 2014 (www.golddealer.com) – Gold closed up $0.40 at $1194.70 in quiet trading but the contract volume numbers remain high.

    Janet Yellan has once again called for patience – which means interest rates will remain low and there will be no sudden changes in the Federal Reserve policy. That is why gold is so quiet but the Federal Reserve is in a pickle – they already have a strong dollar – and they definitely want to avoid making it even stronger by raising interest rates. 

    So for now they are buying time – hoping perhaps that Europe will improve (an old story) and oil will stabilize – paving the way normalizing (raising) the cost of money in the US.

    The Dollar Index was higher today (89.29) and WTI crude oil seems to be flattening out around $56.47 a barrel.

    It is interesting that while the world continues to buy gold bullion some US media stations have stopped quoting the daily price of gold. The US media keeps a close eye on consumer sentiment and always does active testing relative to airtime. I wonder if they believe the American audience for gold has diminished to the point that daily price reminders are no longer necessary.

    Silver closed unchanged today at $15.89. The new 2014 Mexican Libertad 1 oz is now available and we have posted a live link on the site under Silver Bullion. Mexico being the largest silver producer in the world – this new silver bullion coin should be popular. The new Libertad design looks very similar in size and finish to the American Silver Eagle.

    Platinum closed down $2.00 at $1197.00 and palladium closed up $13.00 at $793.00.

    Chicago Mercantile Exchange reports for the last 5 trading days – so we are looking at the trading volume numbers for the February Gold contract: Thursday 12/11 (233,726) - Friday 12/12 (229,702) - Monday 12/15 (231,692) - Tuesday 12/16 (231,650) and Wednesday 12/17 (226,492). These numbers are on the high side especially for the holiday season.

    This is our usual ETF Wednesday information but we missed the deadline - Gold Exchange Traded Funds: Total as of 12-10-14 was 51,902,253. That number this week (12-17-14) was 51,809,210 ounces so over the last week we dropped 93,043 ounces of gold.

    Also note that in 2013 the record high for all gold ETF’s was 85,112,855 ounces. In 2014 the record high was 56,456,599 and another record low was set last month – 51,809,210 ounces. (Before that the record low for 2014 was – 51,833,518 ounces.)

    All Silver Exchange Traded Funds: Total as of 12-10-2014 was 635,313,357. That number this week (12-17-14) was 630,543,519 ounces so over the last week we dropped 4,769,838 ounces of silver.

    All Platinum Exchange Traded Funds: Total as of 12-10-14 was 2,640,735 ounces. That number this week (12-17-14) was 2,643,976 ounces so over the last week we gained 3,241 ounces of platinum.

    All Palladium Exchange Traded Funds: Total as of 12-10-14 was 3,070,433 ounces. That number this week (12-17-14) was 3,079,958 ounces so over the last week we gained 9,525 ounces of palladium.

    Too quiet for me – sounds funny to say that but the fact is yesterday’s FOMC meeting was somewhat of a bust – providing very little to help writers figure out what is in store for gold between now and the end of the year.

    There is plenty of commentary about the longer term – especially into 2015. Honest commentators are not hopeful – all the enthusiasm for a big push to the upside left the market between Dec 9th and Dec 15th. Too bad really because everyone is looking for that key which would indicate gold has bottomed.

    Most reasonable large bullion sellers will admit that volume numbers this past week are disappointing. It is not that there is nothing going on – consider the consequences of the collapse in the Russian ruble or the continued weakness within the EU. As I pointed out a few days ago the technical picture for gold in the longer term is not encouraging.

    Deflation in Europe and Japan alone should have pushed gold prices lower. 

    That is why the lead up to yesterday’s FOMC meeting was encouraging – it was not as if anyone knew what was going to happen but at least this ongoing malaise might be broken one way or the other. And then – everyone sifted through Janet Yellan’s words and gold remained unresponsive.

    Even Mitsubishi ducked – “The combination of open microphones, prying reporters trying to make a name for themselves, and the recent reduction to rubble of the Russian ruble is way too fraught with peril for those of us with more delicate constitutions to hold a position. Let those with a more adventurous bent duke it out after the announcements and stay alive for the holidays and year end.”

    With little variation gold – in the last 30 days has broken to the downside then reversed itself and then moved higher and once again reversed settling almost unchanged in the $1200.00 range. 

    Some might claim that the holiday markets are in place – with traders mostly on vacation. There is some wisdom here but like I said – this is too quiet for me.

    The public has become accustomed to price action in gold which reflects daily news events. As the price of oil drops the metals move in the same direction or as the dollar becomes weaker gold moves higher. But this 30 day dry patch has produced little movement when world events should have created more action. If this trading pattern continues through year end gold will have closed out 2014 about unchanged.

    So what about 2015? Have we weathered the financial storm with no consequences? Forget about oil – the ruble – the Europeans and the dollar. Yellan’s lulling will soon be forgotten as she claims things aren’t that bad and the champagne corks begin to pop. Even the stock market seems to signal everything is returning to normal.

    What really worries me about 2015 is our debt load. Listen to what David Stockman (Contra Corner) recently said: First comes production. Then comes income. Spending and savings follow. All the rest is debt…….unless you believe in a magic Keynesian ether called “aggregate demand” and a blatant stab-in-the-dark called “potential GDP”.

    I don’t.  So let’s start with a pretty startling contrast between two bellwether data trends since the pre-crisis peak in late 2007—debt versus production.

    Not surprisingly, we have racked up a lot more debt—notwithstanding all the phony palaver about “deleveraging”.  In fact, total credit market debt outstanding—-government, business, household and finance—-is up by 16% since the last peak—from $50 trillion to $58 trillion. And that 2007 peak, in turn, was up 80% from the previous peak (2001); and that was up 103% from the business cycle peak before that (July 1990).

    Yes, the debt mountain just keeps on growing. It now stands 4.2X higher than the $13.6 trillion outstanding just 24 years ago.

    This from Kitco is interesting - Banks See Wide Range For Gold In 2015 As Prices Search For A Bottom - Since early November, financial institutions have been busy revising and updating their gold forecasts for 2015.

    Capital Economics: Gold Has Long-Term Potential

    Commodity analysts at Capital Economics said that gold still has plenty of upside as they expect prices to end 2015 around $1,300 an ounce. Their forecast has remained unchanged since they announced their initial forecast in October. Not only is Capital Economics expecting to see a strong performance in 2015, but they are also expecting that strength to push into 2015. They expect prices to end the year around $1,400 an ounce, also a reaffirmation from their October outlook. “Indeed, given the unfavorable market conditions this year, gold has actually held up remarkably well,” said Julian Jessop, head of commodity research at the research firm. “The downside for the gold price from current levels is surely now limited.”

    CIBC: Gold Prices To Average $1,200 an Ounce In 2015

    Analysts at CIBC are expecting to see high volatility in the gold market and won’t rule out prices dropping to $1,000 an ounce in 2015. However, any significant drop would probably be short-lived, the bank said. They are expecting gold prices to average the year around $1,200 an ounce, down from their previous forecast of $1,300 an ounce.

    Citigroup: U.S. Dollar and Oil to Hurt Gold, But Downside Limited

    Analysts from Citigroup said that the gold market still has some considerable hurdles, namely a stronger U.S. dollar and weaker oil prices, and they remain neutral on the yellow metal. The bank said that they expect gold prices to average about $1,220 an ounce in 2015. Although prices might be weaker in the New Year, they added “there are increasing reasons to think that further downside moves will be limited.” The analysts also said they expect to see increased physical demand in Indian and China in 2015.

    Commerzbank: Fed Rate Hikes Will Signal Bottom for Gold

    The gold market will start 2015 weak but should rebound in the second half of the year, said analysts at Commerzbank, as they expect prices to average $1,200 an ounce next year. They said that gold prices will suffer as markets expect the Federal Reserve to raise interest rates in the second half of the year. The eventual hike, and the start of a rising interest rate cycle, should help the gold market. “We envisage the price falling to $1,125 per troy ounce on average in the second quarter, though a gold price of below $1,100 is also conceivable for a time. Once the interest rate hikes are under way, the pressure on the gold price is likely to abate, as was the case during the Fed’s last series of interest rate hikes between 2004 and 2006,” they said.

    Goldman Sachs: Gold Prices To Drop to $1,050 an Ounce

    Once again the financial behemoth, Goldman Sachs, is one of the most bearish on gold prices in 2015. According to Bloomberg, on Dec. 9 Jeffrey Currie, head of global commodity research at Goldman Sachs, reaffirmed his call that gold will fall to $1,050 by the end of 2015. Currie hasn’t changed his call since he made it in January of this year; he provided the forecast in an interview with CNBC that gold would end 2014 at $1,050 an ounce. In the interview he said that gold prices will fall as the U.S. economy reaches “escape velocity.”

    Natixis: Gold Prices Will Struggle In 2015

    Natixis appears to have one of the more bearish outlooks on gold, compared to some of the other financial institutions. They are expecting gold prices to average about $1,140 an ounce in 2015. They said that an improving U.S. economy, a strong U.S. dollar and rising interest rates will be the biggest hurdles for gold next year. “Higher yields will increase the opportunity cost of holding gold. Investors will be incentivized to enter yield-earning investments rather than holding gold which actually incurs a cost. Natixis expects the U.S. Fed (Federal Reserve) to start raising rates in June 2015.”

    Standard Chartered: Tide Will Turn for Gold In 2015

    The analysts at Standard Chartered are more bullish on gold in 2015 as they have raised their gold forecast for 2015. They now expect gold prices to average $1,245 an ounce, up from their previous forecast of $1,160.  “The current backdrop for gold prices is one the weakest ever because of the multiplicity of factors supporting a bearish view, overlaid with the current dominance of the long U.S. dollar trade. However, we see the tide turning. We have become more positive on the prospects for gold in 2015, most particularly in the second half of the year when dollar bullishness will likely fade,” they said. The bank also raised their 2016 forecast to $1,330 an ounce, from their precious estimate of $1,220 an ounce.

    TD Securities: Improving U.S. Economy Will Pressure Gold Prices

    A weak start for the gold market will cause prices to average around $1,175 an ounce in 2015, said analysts at TD Securities. However, although prices are expected to be lower at the start of the year, they should finish higher averaging $1,225 an ounce by the fourth quarter of next year. “While we see the precious metals market strengthening materially in the latter half of 2015, it is still very likely that there will be more weakness through much of the early part of 2015,” they said. The analysts added that an improving U.S. economy, coupled with interest rate hikes by the Federal Reserve, will keep pressure on the gold market.

    The walk-in cash trade was upbeat today – not overly crowded but picking up from earlier in the week. The phones were also active – plenty of questions from newcomers about silver bullion. The order size and volume numbers are not big but it feels like a new audience is once again considering silver bullion.    

    The GoldDealer.com Unscientific Activity Scale is a “3” for Thursday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Friday – 3) (Monday – 2) (Tuesday – 4) (Wednesday – 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 generally increasing – it would indicate things are busier – decreasing numbers over a longer period would indicate volume is moving lower.  

    You should now be getting email confirmations which include a PDF File when buying or selling so you can confirm your invoice or purchase order. This information also includes the various forms of payment and bank wire instructions. So when you buy or sell please check to see if we have your current email and that your computer will accept our email (no spam).

    About shipping information – when buying or selling your rep will walk you through your current mailing information. Thanks for keeping us up to date if you have moved.

    Our four flat screens downstairs with live independent pricing (BullionDesk.com) are a big hit with the cash trade. Live pricing moves all the buy/sell product prices on a real time basis. 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. When buying from us remember if you exceed $10,000 in cash (the real green kind) a Federal Form is necessary.

    In addition to our freshly ground organic coffee offered visitors throughout the day we have added cold bottled water, cokes and Snapple. We have also added fresh fruit in a transparent attempt to disguise our regular junk food habits.

    Like us on Facebook and follow us on Twitter @CNI_golddealer.

    Our holiday schedule this year – Christmas (Closed Thursday the 25th and Friday the 26th) – New Year’s (Closed Jan 1st and 2nd).

    A gentle reminder – each year during this holiday season the packages delivered to all 50 states slow down because Santa has control of the air traffic.

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

    Gold Remains Steady as the FOMC Stands Pat

    Last updated 3 days ago

    Commentary for Wednesday, Dec 17, 2014 (www.golddealer.com) – Gold closed down $0.40 to close at $1194.30 and the aftermarket was quiet as the much anticipated meeting of the Federal Open Market Committee seemed to indicate that it would not change its time table relative to raising interest rates.

    Believe it or not there has been a great deal of commentary as to what the Federal Reserve meant by the phrase “considerable time” when referring to the normalization of interest rates. Some writers claimed they might eliminate this phrase in future news releases but for now it appears Janet Yellen will not be doing anything which could signal a sudden change in monetary policy.

    That’s the reason gold remained steady into the aftermarket. If the Federal Reserve signaled that its long standing easy money policy was coming to an end - gold would have weakened.

    Still with thin holiday markets you could see a down draft in trading tomorrow.

    There were other numbers out today which got little attention. The Consumer Price Index was down 0.3% in Nov - the result of falling energy prices but this was its biggest monthly decline since 2008. Fears of inflation have been completely erased from market expectation.

    Most of the camera time today was centered not on the Federal Reserve or the CPI – it was President Obama’s announcement of the first steps toward trade normalization with Cuba which captured all the attention. It’s amazing that sanctions have been in place for 53 years.

    This from The Wall Street Journal – US Stocks Jump as Fed Signal Patience - U.S. stocks extended gains Wednesday after the Federal Reserve retained its pledge to keep interest rates low for a “considerable time.”

    The Dow Jones Industrial Average was recently up 270 points, or 1.6%, to 17341, gaining nearly 100 points in the minutes after the 2 p.m. ET release of the Fed’s policy committee’s latest statement. The S&P 500 index advanced 35 points, or 1.8%, to 2007 and the Nasdaq Composite added 78 points, or 1.7%, to 4626.

    “The market doesn’t like surprises and we didn’t get one today,” said Rex Macey, chief allocation officer at Wilmington Trust. “We still have what I would call a supportive Fed—they’re watching things but they’re not going to act too quickly. I think the market is happy with a slow-moving, gentle adjustment period, and that’s what the Fed seems to be telegraphing.”

    Bond prices fell slightly following the statement, with the yield on the benchmark 10-year Treasury note rising to 2.115% from 2.104% in the minutes immediately ahead of the statement. When bond yields rise, prices fall.

    Some investors said they found the Fed’s tweaked message confusing. On one hand, the Fed reiterated that economic growth is on track. But on the other hand, it emphasized it was going to be “patient” in raising rates. Traders saw this as an excuse to take profits from the latest rally in Treasurys. The 10-year yield on Tuesday sank to its lowest level since May 2013.

    Silver closed up $0.18 at $15.89 – and once again we are seeing steady accumulation by the small to mid-size public buyer.

    Platinum closed up $3.00 at $1199.00 and palladium was off $4.00 at $779.00.

    With all the talk about the strong dollar versus the price of gold you would think the usual inverse correlation is working well – but in the wider view the actual results might be surprising. Let’s begin with the generally accepted tenant that a strong dollar is antithetical to a rising price in gold.

    Consider the 1 year chart of both the Dollar Index and the price of gold.

    The Dollar Index one year ago was trading around 78.91 and 12 months later had reached a high of 89.55. Today the Dollar Index is 88.07 – still trading at the higher end of its range. And technically it looks like 2015 will be more of the same – especially if the Fed manages to raise interest rates in reaction to an improving US economy.

    No doubt the dollar has been successfully strong – defying really the traditional economic wisdom that huge quantitative easing created an ocean of paper dollars which in turn must push its value lower.

    This logical assumption had been the anthem of gold bullion buyers for decades and the fact that gold had not reacted properly – by moving up because the dollar was supposed to move lower was at first puzzling to the physical world and then discouraging.

    Using the same 12 month time frame the price of gold began around $1200.00 and today is still trading close to that number with Wednesday’s closing being $1194.30.

    If there was a one to one inverse correlation to these markets consider that a 10% increase in the dollar should equate to a 10% decrease in gold – if that were true gold should be trading around $1100.00.

    I’m not claiming science – there are many other variables like the time span considered – the geopolitical situation – oil and physical demand from central banks. But it is interesting that with all the negative news concerning gold this past year – and with a Dollar Index that is considerably stronger one would think that collateral damage relative to the price of gold should have been greater.

    If you are a pessimist relative to gold you might conclude that the price of gold has somehow dodged the strong dollar bullet and must move considerably lower. If on the other hand you are a confirmed optimist about gold bullion you might say that even under a deteriorating technical picture driven by lower oil – gold has not fared too badly.

    Granted confirmed gold optimists are getting rare today. But contrarian investors are always moving against traditional theory and while it does take some sand – taking an aggressive stand in weak markets can be very rewarding.

    According to a recent Bloomberg story traders believe Russia’s next move to bolster the ruble will be to sell gold. The world sanctions coupled with the fall in oil have created major grief for the Russians and while it makes sense they may have to sell gold – it does not follow that such sales will further pressure the price of gold short-term.

    Bloomberg also claims Russia has tripled its gold reserves since 2005 so they are certainly in a position to sell if they needed cash but considering they have been aggressive buyers why now sell into a weak market? The amount of gold they hold should – if anything be raised and thus encourage the world that these current Putin problems are part of the bigger cyclical trend. It also follows that Russia does not sell gold because the amount of money raised would be small relative to their economy and word-wide commitments. Selling gold now would also look like a capitulation to the Western powers – it will never happen in my book.

    The walk-in cash trade was slow and so were the phones – again typical of the holiday season.  

    The GoldDealer.com Unscientific Activity Scale is a “2” for Wednesday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Thursday – 3) (last Friday – 3) (Monday – 2) (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 generally increasing – it would indicate things are busier – decreasing numbers over a longer period would indicate volume is moving lower.  

    You should now be getting email confirmations which include a PDF File when buying or selling so you can confirm your invoice or purchase order. This information also includes the various forms of payment and bank wire instructions. So when you buy or sell please check to see if we have your current email and that your computer will accept our email (no spam).

    About shipping information – when buying or selling your rep will walk you through your current mailing information. Thanks for keeping us up to date if you have moved.

    Our four flat screens downstairs with live independent pricing (BullionDesk.com) are a big hit with the cash trade. Live pricing moves all the buy/sell product prices on a real time basis. 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. When buying from us remember if you exceed $10,000 in cash (the real green kind) a Federal Form is necessary.

    In addition to our freshly ground organic coffee offered visitors throughout the day we have added cold bottled water, cokes and Snapple. We have also added fresh fruit in a transparent attempt to disguise our regular junk food habits.

    Like us on Facebook and follow us on Twitter @CNI_golddealer.

    Our holiday schedule this year – Christmas (Closed Thursday the 25th and Friday the 26th) – New Year’s (Closed Jan 1st and 2nd).

    A gentle reminder – each year during this holiday season the packages delivered to all 50 states slow down because Santa has control of the air traffic.

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

    Gold Continues Technically Weak - Markets Nervous

    Last updated 4 days ago

    Commentary for Tuesday, Dec 16, 2014 (www.golddealer.com) – Gold closed down $13.30 at $1193.90 confirming yesterday’s weak aftermarket. Actually I was surprised today’s loss was not worse considering the collapse in the ruble which traded at 80 to the dollar.

    The talk about revolution in Russia is nonsense – Putin will do just fine even with the collapse in oil and the sanctions. But the world should be careful about punishing what is seen as errant foreign policy.

    Sanctions are a bit like quantitative easing – you may think you know what is going to happen – and then one day you wake up to the unexpected consequences.

    Gold lower in spite of a weakening Dollar Index – as of this writing the Dollar Index is trading at 87.95 versus yesterday’s close of 88.43.

    And WTI crude oil is now trading at $55.91 a barrel as opposed to $57.81 this time yesterday. This is one of the reasons I thought gold would be much lower today. Perhaps this downward move was muted because the dollar trended lower.

    The following is also making everyone nervous. European stocks, Bund yields fall after weak German PMI - Dec 16 (Reuters) – “European stocks fell and German Bund yields hit a record low on Tuesday after data showed Germany's private sector grew at the slowest pace in 18 months in December.

    Markit's flash composite Purchasing Managers' Index (PMI), which tracks activity in the manufacturing and services sectors that account for more than two-thirds of the economy, fell to 51.4 in December from a final reading of 51.7 in November.

    That was above the 50 line denoting growth for the 20th month running, but it was the lowest reading since June 2013 and far below levels seen earlier this year.”

    And there is other data creating heat - China industrial activity shrinks in December, calls grow for more stimulus - Japan flash December manufacturing PMI rises to 52.1 from final 52.0 in November - China Dec flash PMI falls to 49.5, first contraction in 7 months.

    Silver closed down $0.81 at $15.71. Public buying has picked up so the confirmed sweet spot for silver these days is less than $16.00.

    Platinum closed down $18.00 at $1196.00 and palladium also closed down $18.00 at $784.00

    This commentary by Peter Hug (Kitco) is typical of an experienced trader - Drift Ahead of Fed Meeting – “With most of the squaring probably done before the New Year, the metals have softened overnight on a slightly stronger dollar as investors again focus on the macro picture for 2015. The Fed meeting, beginning tomorrow and carrying through Wednesday, will again be the focus to determine any signs on when U.S. rates will begin to rise. I suspect the Fed may leave any change in language alone, before the holiday season, to maintain some relative calm. Keeping equity values buoyant to encourage the “feel good” spend is probably more important than re-adjusting Fed language to provide clarity for any tightening action. That said, volatility, as volumes thin daily, will continue to be the landscape for the next seven trading sessions. $1,202-$1,218 looks like a probable range for gold today.”

    The notion that the Federal Reserve will soon raise interest rates is the next ghost in the long line of ghosts which plague the price of gold. By now everyone knows the theory – rising interest rates create a stronger dollar and push the price of gold lower.

    The Big Four when it comes to the price of gold today are the dollar, oil, geopolitical uncertainty and economic stress. So any hints as to what the Federal Reserve may do between now and Wednesday is important. Like always they will release information after the COMEX close on Wednesday so expect some turbulence in the gold aftermarket tomorrow.

    The real conundrum the Fed faces however is whether they can get away with raising interest rates without derailing our economy. Any financial stall here at home might also create trouble in Europe. So what to do? Like I said it’s dicey – and even a hint at higher interest rates will drive gold to the lower end of its trading range. At the present that means we could test $1150.00 once again – but even Santelli on CNBC this morning quipped that the window for raising interest rates by the Federal Reserve may have passed given the present state of uncertainty relative to Russia and Europe. We will have to be patient – my bet – no big change but enough talk to calm the already jittery stock market.  

    In March of 2014 gold looked good above $1350.00 but since that time the bigger technical picture has not been encouraging. In fact that picture has not looked good since the summer of 2012 – but gold bullion advocates have been looking for a bottom during this long unwinding phase and have as yet not gotten traction.

    To the real physical gold market (India – China – Central Banks) gold is cheap enough to increase their physical stake. Read this Dec 16th commentary by FXEmpire - “In India data showed that gold imports surged by over six-fold to USD 5.61 billion in November primarily due to a spike in demand during the marriage and festival season, raising fresh concerns of widening current account deficit. Imports of the precious metal stood at USD 835.83 million in the same month in 2013. Both Reserve Bank and government have been saying that CAD levels are comfortable despite an upward trend, but the huge jump in gold imports may cause fresh worries to them. Gold prices traded positive last week on account of technical buying after the metal crossed the $1200 mark. In the mid-week, gold prices rose by 2.29 percent to $1230.4 last Tuesday, hitting its highest since late October as cautious comments from U.S. Federal Reserve policymakers prompted a sharp pullback in the dollar. Weakness in the dollar index coupled with bad economic data from China and Japan lifted the safe haven appeal of the yellow metal. China’s imports dropped and Japan’s economy shrank more than initially reported in the third quarter on declines in business investment. Falling stock markets have prompted some investors to buy the metal as an alternative asset, while a drop in the greenback made dollar-priced bullion cheaper for holders of other currencies.”

    But the American bullion buyer is more of a momentum player - not like the people in countries which are dedicated to physical gold. Americans want to see higher prices because ownership is strictly a matter of profit and until we can get that “bottoming” price traction the action here in the states will remain unconvincing.

    Do I think gold will move dramatically lower? I’m sticking with my original trading range proffered some months ago $1050.00 to $1150.00. Those levels should bring plenty of worldwide physical buying regardless of what US speculators believe.

    But this latest weakness also has an element of the short paper trade so I don’t expect the Fed’s news release this Wednesday will create much of a slam. Some perhaps but the short players will cover and lock in profits.

    The walk-in cash trade was slow today as the rain continues to pound away at LA. The phones were also less than average – but typical for the holiday season.  

    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 – 3) (last Friday – 3) (Monday – 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 generally increasing – it would indicate things are busier – decreasing numbers over a longer period would indicate volume is moving lower.  

    You should now be getting email confirmations which include a PDF File when buying or selling so you can confirm your invoice or purchase order. This information also includes the various forms of payment and bank wire instructions. So when you buy or sell please check to see if we have your current email and that your computer will accept our email (no spam).

    About shipping information – when buying or selling your rep will walk you through your current mailing information. Thanks for keeping us up to date if you have moved.

    Our four flat screens downstairs with live independent pricing (BullionDesk.com) are a big hit with the cash trade. Live pricing moves all the buy/sell product prices on a real time basis. 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. When buying from us remember if you exceed $10,000 in cash (the real green kind) a Federal Form is necessary.

    In addition to our freshly ground organic coffee offered visitors throughout the day we have added cold bottled water, cokes and Snapple. We have also added fresh fruit in a transparent attempt to disguise our regular junk food habits.

    Like us on Facebook and follow us on Twitter @CNI_golddealer.

    Our holiday schedule this year – Christmas (Closed Thursday the 25th and Friday the 26th) – New Year’s (Closed Jan 1st and 2nd).

    A gentle reminder – each year during this holiday season the packages delivered to all 50 states slow down because Santa has control of the air traffic.

    We appreciate your business - thanks for reading 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 advisers. 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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