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Gold Settles and the Dollar Weakens

Commentary for Tuesday Feb 9, 2016 (www.golddealer.com) – Gold closed down $1.00 on the Comex today at $1195.50 and the quiet in the air is almost palpable.

After yesterday’s big jump to the upside ($38.70) gold opened today rather flat – sold off to the $1188.00 level and then turned around trending slightly lower but firm. The overnight Hong Kong and London markets were also steady and held less than a $10.00 trading range. So all in all gold is steady – no fireworks and resting.

Uneasiness in the financial market supports gold and is the result of lower oil prices - down $2.00 today to $28.06. The problem is that companies in the oil business will likely be affected financially and the banks who lent them money are worried. This one dynamic is pushing the world markets and continues to create the fear that things could be worse. This underpins the price of gold and is partly responsible for bringing back some of gold’s safe-haven luster.

The DOW also looks steady – and if you watch the 3 day chart you will see we have moved down from 16400.00 – we are around 15940.00 this morning and this area looks like a solid bottom so some of the US stock fear factor has abated. The DOW over the last year however has not fared so well moving down from 18000.00 so expect a continued correction. A steady or at least not terrible domestic stock performance will not help gold.

The dollar remains off balance – we closed yesterday at 96.68 and traded today between 95.74 and 96.83 – we are currently around 95.80 with a negative bias – and gold is not doing much. This is important – the dollar is weaker but gold is simply watching and waiting.

I’m still of the opinion we are a bit out of balance here in the gold trade – but activity is picking up in the ETF trade and there is no arguing with gold’s recent strength. In the last month we are up around $90.00 and the technicians have negated gold’s longer term downward trend. Still these kind of metrics can turn on a dime so let’s say I’m cautiously optimistic – it would make me feel better if gold pulled back but did not stall – a kind of back and fill pattern.

It’s also worrisome that China is out of the picture this week for their New Year celebration. Remember problems in China are what jump-started this train so not hearing from them for an extended period of time could percolate trouble when they open again for business.

As usual there are opposing forces working for and against gold. The biggest “plus” we have to date is the increasing number of central banks willing to try “negative interest rates”.

On the short term tomorrow’s Yellen commentary will be watched carefully and could push gold either way. Europe wants to hear that the US will not raise interest rates but the FOMC is kind of between a rock and hard place. Janet Yellen will have to walk a fine line here – if she is hawkish gold will move lower – dovish and gold will bust through the $1200.00 level.

The worst thing that can happen by the end of her testimony on Thursday is nothing - with no reassurance one way or the other relative to interest rate hikes. If she sticks to the old story that any rate increase will be “data dependent” everyone will be over a barrel – waiting perhaps into the second quarter for a rate hike – this will be a great gold distractor.

On the other hand if she admits the FOMC has stumbled into a worldwide financial mess and further rate hikes should be avoided (unlikely) because of some sort of stability factor the gold market would go crazy. For now the best play is to wait and see what happens between now and the after-market close on Thursday.

Like I have been saying this market looks goofy to me – Goldman remains bearish claiming $1000.00 by year end and UBS suggests investors buy any weakness. Las Vegas anyone?

Silver closed down $0.05 at $15.36.

Platinum closed up $8.00 at $938.00 and palladium was down $1.00 at $518.00.

The walk-in cash business again picked up in early trading but slowed considerably after the market close – ditto for the phones.

The GoldDealer.com Unscientific Activity Scale is a “ 5” for Tuesday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Wednesday – 4) (last Thursday – 7) (last Friday – 5) (Monday – 4). The scale (1 through 10) is a reliable way to understand our volume numbers. The Activity Scale is weighted and is not necessarily real time – meaning we could be busy and see a low number – or be slow and see a high number. This is true because of the way our computer runs what we call the “book”. Our “activity” is better understood from a wider point of view. If the numbers are generally increasing – it would indicate things are busier – decreasing numbers over a longer period would indicate volume is moving lower.

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

Thanks for letting us know when you move or change your email.

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

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

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

Like us on Facebook and follow us on Twitter @CNI_golddealer. Sal is now in charge of our Facebook page and he is a self-proclaimed expert on gold conspiracy theory. He would be happy to respond to even the most ridiculous conspiracy assertion on our Facebook page so why not join the fun?

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

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

Gold Closes up $38.70 and Threatens the Important $1200.00 Level

Commentary for Monday Feb 8, 2016 (www.golddealer.com) – Gold closed up $38.70 on the Comex today at $1196.50. This will get everyone’s attention because during the trading day gold actually moved above $1200.00 before settling lower.

Still the peak for gold last year was $1302.00 and at that time silver was in the $18.00 range so there is some imbalance which is worth noting but the bigger picture in gold should keep everyone from getting too carried away with these higher prices.

The dollar is partly responsible – look at the Dollar Index – previous close 97.04 – trading range today has been 96.66 through 97.48 – we are currently around 96.66 – a low on the day.

And crude oil helped on the short term – today we have been as high as $31.00 and are now trading at $29.69 a barrel. But this is in line with what we have been seeing – crude oil is cheap and it has shaken international markets but something around $30.00 has been typical.

The general oil weakness is one factor in the miserable world economic mess – which has also pushed US stocks into 2 year lows. This paper tension is also helping gold move higher.

This semi-house of cards was begun when China looked like it would not be able to keep up its amazing growth story. But remember we are talking about not meeting expectations – she is still growing at break-neck speed and continuing to add to her gold bullion position.

But this latest push to the upside is not China either – trading is closed due to the Chinese New Year which began today – the Year of the Monkey I believe and this is a big deal worldwide.

So what is pushing gold higher? Safe haven demand for sure – and it’s fair to say that has redefined itself since the beginning of 2016. But if safe haven demand was the only factor in play I would expect the dollar to be stronger – it is not – so some of this might be computer related.

The short term trend line is now in gold’s favor – in other words the technical traders have called a “bottom”. This is always good for the paper business – it blows out any remaining short paper and the trading universe is reordered for now – the word is out – gold is moving higher.

Of course all this can’t happen just because of the paper trade – there has to be some fundamentals to support the structure. This is certainly safe-haven buying – there is nothing like a little fear in the world markets to wake up everyone to the benefits of owning gold as a hedge against paper volatility – but when was the last time you heard that argument?

Today’s gold market opened choppy around $1182.00 but soon got on its feet and moved steadily higher – finally seeing overhead resistance around $1198.00 and settling somewhat lover today at the close ($1196.50) – this is threatening the psychologically important $1200.00 level.

But the close above $1180.00 is big – it takes out the 6 month trend but introduces an entirely new set of overhead resistance numbers. To make this work we will need to look at the 1 year chart – and if gold can manage anything above $1200.00 the technical picture will continue to improve. This is like building a cake – first the base (everyone will agree that a bottom was put in around $1050.00). Now what overhead resistance levels are we looking at?

For gold the $1200.00 to $1400.00 trading range is complicated and goes back to August of 2013 so there is still plenty of heavy lifting that gold must accomplish before it can redeem itself from this multi-year slump. But the picture continues to improve – the big wild card at this point is no longer the technical picture short-term but whether the physical demand can step up to the plate.

Is it likely that real physical demand will come roaring back? It really depends on the world market – remember things in the states are not that bad so your attention should be overseas. If we continue to see more red in stocks both here and in Europe the fear factor will increase and there is a place for gold bullion in everyone’s pile. This is a key concept – for now gold still remains a niche play – interesting to a small group - we are still looking for a wider audience.

If the situation stabilizes and this is another false alarm – gold is up a $100.00 these past 30 days – and remains skittish so expect some profit taking as the long paper runs again to the sidelines. I don’t know how much money plain old gold bullion holders are making in this market – my guess is that it is not much – but the paper traders might soon be considering new cars.

If this market sounds confusing I don’t blame you - and in times like these a look at what is actually happening across the counter is fun. First of all there is some fresh gold bullion buying but not from the ethnic trade (this is not good). Second, there are plenty of regular folks who are trading gold bullion for silver bullion which is not surprising. And third, with the discount of platinum to gold being $266.00 there is trading of gold bullion for platinum bullion.

I wish I could claim that a few gold whales have come up on the radar but this is not the case as yet – another small trend that makes me wonder what all the fuss is about.

Silver followed gold higher – up $0.65 at $15.41. See what I mean about waiting for further discounts in silver bullion when you are already at a steep discount to previous highs – the market snap-back can surprise.

Platinum closed up $28.00 at $930.00 and palladium was higher by $19.00 at $519.00.

The walk-in cash business was active today but no-big deal considering the pop in the price of gold. The phones were off to a hot beginning in early trading but stopped in their tracks after normal noon rush.

The GoldDealer.com Unscientific Activity Scale is a “ 4” for Monday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Tuesday – 3) (last Wednesday – 4) (last Thursday – 7) (last Friday – 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 generally increasing – it would indicate things are busier – decreasing numbers over a longer period would indicate volume is moving lower.

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

Thanks for letting us know when you move or change your email.

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

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

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

Like us on Facebook and follow us on Twitter @CNI_golddealer. Sal is now in charge of our Facebook page and he is a self-proclaimed expert on gold conspiracy theory. He would be happy to respond to even the most ridiculous conspiracy assertion on our Facebook page so why not join the fun?

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

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

Gold Shows a Small Gain as the Dollar Moves Higher

Commentary for Friday Feb 5, 2016 (www.golddealer.com) – Gold closed up $2.50 today on the Comex at $1157.80 but it was a bumpy ride. The markets opened calm in the $1158.00 range and quickly moved down to $1146.00 before gaining traction – and then reversed direction and moved steadily higher – managing to gain a few dollars on the day.

Today’s job’s report created all the trouble – better than expected in many areas led to the notion that the expected Fed rate hike was not so dead after all. The DOW dropped 200 points and the dollar moved higher immediately. The Dollar Index closed yesterday at 96.56 – today it has traded between 96.32 and 97.27 – we are now around 97.12.

The dollar may well have topped in relation to other world currencies. Because these relationships are “relative” meaning when you say the dollar is weaker it is compared with other stronger currencies – this does not mean that the dollar will fall out of bed. It will stay in the game simply because the yen for example is moving lower (faster) than dollar. But my point is that some who watch dollar strength think the party may be getting old. We could see a 10% or even 20% drop from current levels which would be great for gold.

At any rate a few good job numbers and many brought back to the interest rate hike “ghost”. And considering the immediate push to the upside in dollar strength I’m surprised gold managed a small move into the green. This actually supports the notion that something “different” is happening in the gold market - but let’s not get carried away.

Gold was higher this week by $41.00 and this marks the 4th week in the past five that prices have been higher so gold is up more than $100.00 from its most recent low. This equates to a powerful statement – physical gold is back on the financial radar.

I have had a few conversations with readers about my “New Year’s Surprise” relative to gold. Who knew? And a few that claim my outlook is a bit gloomy considering we are up $75.00 in the past 30 days and gold is trading above its 50 DMA – its 100 DMA and its 200 DMA.

Actually my outlook is not gloomy – it’s realistic. I am not big on making price direction a primary factor in my decision to own gold. Physical gold bullion (regardless of price) has been part of my life since before it was made legal in the US (1975).

From a philosophical standpoint gold cannot be beat or replaced but dealers should be obliged to tell consumers that gold bullion is volatile. And physical dealers must have a business perspective – they understand that because gold bullion is volatile it must be hedged.

Large dealers who neglect this cardinal rule pay the price – which is usually bankruptcy or jail or both and the public is always surprised when they hear the names.

Gold volatility has to be part of your plan – today is a great example. Yesterday the mood on the gold trading floor was optimistic – prices are heading higher - the Fed is not raising rates and there is trouble in China.

This morning we saw a positive jobs report and the floor mood changed into “the rate hikes are back on the table”. You would have to be Houdini to figure out if the Fed will continue with its interest rate hike plan at this point but my point this entire week was that there are significant headwinds still on the table for gold so don’t be surprised – one way or the other.

A couple of other points – the relative direction in price of gold does not matter to dealers. They would like the markets to rise because it makes for better business – but because professional dealer inventory is properly hedged they also buy in a falling market and make expenses.

So what about today’s job’s report? My personal position remains unchanged – I think the market has moved too high too fast and I’m concerned that US dealers have become large buyers and the general public does not seem to be onboard in relative proportion.

This should cause concern but you never read about it in commentary because the average dealer would not be that honest. That is not to say they are dishonest – most are just hard working people trying to make a living. But like most business people they want to put a shiny face on everything that happens.

My overall impression of today’s world financial situation is worrisome. I’m not much on the doom and gloom scenario, we have managed to wiggle our way out of the 2008 bank tragedy and have printed enough fiat paper money to float a battleship in the process.

This situation remains dangerous and the big question is still on the table. Will the Fed be able to bring interest rates higher, more into the “normal” range without upsetting the apple cart.

Also keep in mind the US is not the only one on board this “experimental” financial ship. Everyone who crossed this interest rate line will be faced with the same interest rate challenge. The Bank of Japan has now resorted to negative interest rates and so has the European Union. Stop and think about that, Casey Research brought up this point recently and the way they phased the notion was fantastic – instead of the borrower paying the bank interest the bank now pays the borrower interest – borrow $100,000.00 pay back $95,000.00!

This is lunacy and at some point may prove fatal to the system so gold bullion is an absolute necessity regardless of price. My lesson for today is that while the gold market may be a bit overpriced in a relative sense it is still a bargain relative to old highs.

Gold bullion is the premier investment when it comes to protecting against the fiat paper system. It is one of the few places left to park some insurance money that is not subject to either government or banking control – there are no third parties to contend with if something goes wrong. If this worldwide experiment blows up gold will present the owner with value regardless of the chaos created in the world or domestic markets.

If you already have a core gold bullion position – good for you and your family. If you don’t and are looking for a better price – you may get one. But don’t delay much – make putting a small amount of your extra capital in gold bullion a part of your financial planning. And let’s hope we won’t need it.

Silver closed down $0.07 at $14.76. We finish the week up $0.53 so we continue to get a firm bid. I don’t think this is just a knee-jerk reaction to gold moving higher. Silver is still cheap in its current trading range so there is plenty of upside.

Platinum closed down $2.00 at $902.00 and palladium closed down $16.00 at $500.00. Platinum is trading for $255.00 less than gold.

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 – 4 think gold will be lower and none 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: 56 people thought the price of gold would increase next week – 27 believe the price of gold will decrease next week and 17 think prices will remain the same.

Precious Metal Closes & Dollar StrengthFeb.1 – Feb. 5

This from Sarah Benali (Kitco) - Nouriel 'Dr. Doom' Roubini Is Grim Again; Could He Be Positive on Gold? - Dr. Doom is back, and so is his grim outlook on the global economy. But, could this mean he is finally positive on gold?

Famed economist Nouriel Roubini says the signs cannot be ignored anymore; the global economy is weak and has been in a “new abnormal” state, which doesn’t look to fade anytime soon.

“Welcome to the New Abnormal for growth, inflation, monetary policies, and asset prices, and make yourself at home,” he said in a post on Project Syndicate Thursday.

Since the start of the year, Roubini continued, the economy has been rattled by volatile financial markets, concerns over China, low global growth, emerging market turmoil, geopolitical tensions, Europe’s “identity crisis,” and deflation, to name a few.

This is the new normal – or abnormal – he is talking about. And, over this time frame, gold has shined. The New Year has ushered in a positive gold market, with prices rallying to multi-month highs on the back of financial market volatility. Investors are concerned about the state of the global economy, with tumbling equity and oil prices pushing them towards safe-haven assets such as gold.

This week, gold futures even pushed back above the 200-day moving average. April Comex gold futures managed to hit an intraday high of $1,164 overnight Friday, a level last seen in late October.

Market conditions so far in 2016 have proven to be gold positive, and Roubini said he expects this environment to stay. “It looks like we’ll be here for a while,” he said.

According to the NYU professor, one of the main reasons for this is the divergence between what’s happening on Wall Street versus what is actually happening in the economy.

“The real economy in most advanced and emerging economies is seriously ill, and yet, until recently, financial markets soared to greater highs, supported by central banks’ additional easing,” he said. “In fact, this divergence is one aspect of the final abnormality.”

As an example, Roubini highlighted the fact that financial markets haven’t reacted much as usual to growing geopolitical risks in the Middle East, Europe, Asia and Russia.

“Again, how long can this state of affairs – in which markets not only ignore the real economy, but also discount political risk – be sustained?” he questioned.

Another main contributing factor to this new normal, Roubini noted, is the fact that central-bank monetary policies have become increasingly unconventional.

“But now these unconventional monetary-policy tools are the norm in most advanced economies – and even in some emerging-market ones,” he said. “And recent actions and signals from the European Central Bank and the Bank of Japan reinforce the view that more unconventional policies are to come.”

These policies, many thought, would bring about hyper-inflation as central banks continued to balloon their balance sheets. Instead, policymakers are now focused on tackling the exact opposite – deflation. Another anomaly, Roubini emphasized.

One of the reasons for “ultra-low inflation,” according to Roubini, is “that banks are hoarding the additional money supply in the form of excess reserves, rather than lending it (in economic terms, the velocity of money has collapsed).”

“Moreover, unemployment rates remain high, giving workers little bargaining power,” he added. As long as current market conditions and the divergence between markets and real life remains, Roubini’s new abnormal – which has so far proven to be gold’s friend – seems to be likely to stay.

The walk-in cash business was hectic until about noon and then the customer stream dropped off – it’s funny – almost like a bus dropped off 50 people and then “quiet”. The phones were pretty steady all day – still experimenting with that new phone system – the techs always claim “it’s no problem” but let me know if you are having a problem.

The GoldDealer.com Unscientific Activity Scale is a “ 5” for Friday. The CNI Activity Scale takes into consideration volume and the hedge book: (Monday – 3) (Tuesday – 3) (Wednesday – 4) (Thursday – 7). 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.

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

Thanks for letting us know when you move or change your email.

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

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

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

Like us on Facebook and follow us on Twitter @CNI_golddealer. Sal is now in charge of our Facebook page and he is a self-proclaimed expert on gold conspiracy theory. He would be happy to respond to even the most ridiculous conspiracy assertion on our Facebook page so why not join the fun?

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

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

Gold Continues Higher on a Weaker Dollar

Commentary for Thursday Feb 4, 2016 (www.golddealer.com) – Gold closed up $11.00 at $1155.30 on the Comex today in what appears to be a momentum push to higher ground supported by a weaker dollar. The Dollar Index closed yesterday at 97.30 and traded between 96.26 and 97.47 today – we are now around 96.53. This is significant, in the past three days the dollar has lost almost 3% of its value.

Today’s trading range was consistent – we moved higher from the beginning of trading and pushed toward the $1160.00 range which is well above the big 200 DMA ($1131.00). But note the sell off at these lofty levels – this is a great trader’s market but long-term holders should be cautious there will be profit taking rounds on the way to the office.

So I guess I’m looking a gift horse in the mouth relative to gold these days, after all we are moving higher in a less than ideal financial environment. Virtually no inflation (still), higher interest rates and a stable US banking system. Jim Wycoff’s commentary yesterday mentioned there was a rumor that some European banks might be in trouble, which is interesting.

You can make a case that since the first of the year a potential real slowdown in China has created trouble for world markets and this downturn has given Wall Street the flu and created physical demand in the form of safe-haven buying.

Our ETF totals posted yesterday show a gain in the exchange traded funds this week of 709,859 ounces – that’s not exactly chicken feed. The all-time record ETF high was seen in 2013 at 85,112,855 ounces. And today that number looks more like 49,871,605 ounces so the public has been a seller for 3 years – the big question now is whether that trend is about to reverse itself.

On the other hand our domestic gold market has failed to develop any buzz and worse we have purchased several whale-like positions in gold bullion way north of a million dollars each. On the silver front we have seen little in the way of very large buyers and virtually no large sellers. This price updraft has generating interest – the public is asking more questions and the website hits have increased 15% but everyone is still kicking the tires.

A more interesting question might be – does our domestic physical market really matter? Actually it does not but it does provide a kind of surrogate function. It’s kind of like a plane, you don’t want to hear anything that does not look right – so when prices are moving higher (like now, we are at 3.5 month highs) I want to walk downstairs and see a line of people. The buying or selling mix is not important but without soldiers standing in line I wonder if the world markets are just caught up in another “up” round in a range-bound market – which will eventually move lower as the fundamentals play out.

A look at gold’s 6 month chart will put all this in perspective – for now the bulls are in control and we have put in a short-term bottom in the $1060.00 range – that’s good. We have moved steadily from $1060.00 into the $1120.00 / $1140.00 range and shown the ability to hold these figures – that’s also good. We are trading above the important and longer term $1120.00 number which we saw in August of 2015 – that is also good.

But we are now in the killer overhead range of between $1120.00 and $1180.00. This will require gold to rewrite the current playbook. Let’s be hopeful but not get carried away in the moment – it took gold years to unwind into the $1050.00 range and without a big game changer (inflation – banking crisis – fill in the blank) it will take some time to restore its ultimate safe-haven status to those who have abandoned ship for the fiat paper parade.

Silver closed up $0.11 at $14.83. Across the counter action continues to slow – there is still interest but no buzz.

Platinum closed up $25.00 at $904.00 and palladium was unchanged at $516.00.

This is our usual Thursday Chicago Mercantile Exchange report covering the last 5 trading days – so we are looking at the trading volume numbers for the “April” Gold contract: Thursday 1/28 (257,860) – Friday 1/29 (261,834) – Monday 2/01 (267,790) – Tuesday 2/02 (269,012) – Wednesday 2/03 (276,338).

We have introduced silver to our CME rundown – so we are looking at the trading volume numbers for the “April” Silver contract: Thursday 1/28 (107,193) – Friday 1/29 (107,319) – Monday 2/01 (104,561) – Tuesday 2/02 (102,251) – Wednesday 2/03 (105,519).

The walk-in cash business came to life today, for a short time. The phones were hit or miss most of the day but our Activity Scale (7) moved higher – this does not indicate increased traffic but does point to a rather large group of gold sellers.

The GoldDealer.com Unscientific Activity Scale is a “ 7” for Thursday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Friday – 4) (Monday – 3) (Tuesday – 3) (Wednesday – 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.

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

Thanks for letting us know when you move or change your email.

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

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

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

Like us on Facebook and follow us on Twitter @CNI_golddealer. Sal is now in charge of our Facebook page and he is a self-proclaimed expert on gold conspiracy theory. He would be happy to respond to even the most ridiculous conspiracy assertion on our Facebook page so why not join the fun?

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

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

Gold Moves to 15 Week Highs - Closing Above its 200 DMA

Commentary for Wednesday, Feb 3, 2016 (www.golddealer.com) – Gold closed up $17.30 on the Comex today at $1144.60. A big move which came later in the trading session after gold had traded in the $1130.00 range for half the trading day.

Gold continues to catch a good bid – for a number of reasons. The short-term technical picture continues to improve so the computer models are in the green. With today’s close $1144.60 we are above the 50 DMA ($1084.00) the 100 DMA ($1107.00) and the 200 DMA ($1131.00).

The downbeat report from Reuters this morning again casts doubt as to whether the US economy is as robust as the government claims. This is probably an overreaction but it adds fuel to the fire which claims further rate hikes in 2016 might be out the window.

The ADP report today was also a disappointment – 205,000 jobs created in January – December was 267,000 jobs created but today 205,000 was in line with expectations. All of these numbers are watched carefully for signs about our economy – but the dynamics can change on a dime and will push gold one way or the other overnight.

This from Reuters - US January ISM nonmanufacturing at 53.5 vs 55.1 expected – “The U.S. economy's service sector expanded in January but at a slower pace than the previous month, according to an industry report released Wednesday.

The Institute for Supply Management (ISM) said its index of non-manufacturing activity fell to 53.5 from 55.8 the month before. The reading was below expectations of 55.1 from a Reuters poll of 73 economists.

A reading above 50 indicates expansion in the service sector and a reading below 50 indicates contraction. The business activity index fell to 53.9 from 59.5 the month before. That was below expectations of 58.5. The employment index fell to 52.1 from 56.3 a month earlier.

New orders dropped to 56.5 from 58.9. The prices paid index fell to 46.4 from 51.0. The U.S. economy's manufacturing sector contracted in January but was slightly improved from the previous month, according to an earlier ISM report.”

Stocks are in the red for the third day helped along by the above information and the dollar too is moving lower. The Dollar Index closed yesterday at 98.81 – its trading range today has been 97.46 through 98.94 and we are now around 97.22. So a weaker dollar continues to benefit gold.

Crude oil works against this equation – the weekly chart is miserable – we have moved from $34.00 a barrel to $29.00 a barrel – that is the real picture although today’s numbers are somewhat higher – around $31.00.

So is this recent upbeat activity the real thing or just another bear trap? Well, it’s real in the sense that international tension supports current pricing and the technical picture is getting better but the time frame is still bothering me – in late December of 2015 gold was testing the old $1050.00 level and the markets were ignoring gold. So in slightly more than a month we have moved to solid overhead resistance in the $1150.00 range and the floor talk has moved from “testing new lows” to perhaps gold has bottomed and the prospects are looking up in 2016. I’m naturally suspicious so I would look for a profit taking round – if I am wrong so much the better.

Another perspective – I was talking with Ken Edwards this morning about our volume numbers – disappointing considering gold is making new highs for 2016. I said it feels pretty slow – where is all the action? His reply was simple “there was a great deal of buying and selling when markets were cheaper because those people are value buyers – they never disappear. Gold moved higher and scared the cheap buyers away – and the general public is still on the sidelines. But higher prices always attracts new buyers – there is just a delay in the process.”

Silver closed up $0.45 at $14.72. Another big pop to the upside – this is guaranteed to create attention. Today silver bullion buyers may be spoiled as prices got cheaper and cheaper – our volume numbers actually moved lower when the market stalled above $14.00. Somewhere in this process the fundamental reality sets in – falling production and continued consumption dictate that eventually the trend will reserve.

Platinum closed up $25.00 at $879.00 and palladium closed up $23.00 at $516.00. Platinum is trading at a $265.00 discount to gold – still a great value and we should get a great deal of traction here considering gold may be turning the price corner.

This is our usual ETF information - Gold Exchange Traded Funds: Total as of (1-27-16) was 49,871,605. That number this week (2-03-16) was 50,581,464 ounces so over the last week we gained 709,859 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 2015 is 53,901,867 and the record low for 2015 is 47,394,412.

All Silver Exchange Traded Funds: Total as of (1-27-16) was 595,841,872. That number this week (2-03-16) was 594,047,367 ounces so over the last week we dropped 1,794,505 ounces of silver.

All Platinum Exchange Traded Funds: Total as of (1-27-16) was 2,345,547. That number this week (2-03-16) was 2,330,379 ounces so over the last week we dropped 15,168 ounces of platinum.

All Palladium Exchange Traded Funds: Total as of (1-27-16) was 2,326,651. That number this week (2-03-16) was 2,329,031 ounces so over the last week we gained 2,380 ounces of palladium.

This from Sarah Benali (Kitco) - Precious Metals Recap: Gold & Silver To Shine – Capital Economics - Despite oil’s downward pressure on commodity prices since the start of the year, with Bloomberg’s Commodity index falling to levels last seen in 1991, analysts from one U.K.-based research firm note that gold has managed to shine; and, say precious metals should continue to benefit from market uncertainty.

“Gold prices rose by more than any other commodity on the back of safe-haven demand generated by the turmoil in global financial markets [in January],” said analysts from Capital Economics in a research note Monday afternoon.

A major factor expected to weigh on gold prices this year is further U.S. monetary tightening, they noted. However, given current market volatility, markets are now expecting the Federal Reserve to delay its next rate hike until later in the year, which should help gold.

“Indeed, combined gold imports by China and India surged in December, up by 116% y/y, as low prices stimulated buying in the two biggest consumers. Meanwhile, preliminary data show that buying of gold by global central banks remained strong in December, with Russia and China adding 22 and 19 tonnes of gold to their reserves, respectively,” the analysts noted as other supportive factors for the yellow metal.

In a Capital Economics report released earlier this year, the analysts said they even expect gold prices to end the year at around $1,250 an ounce, nearly 11 % higher from where prices are today.

January saw investors flock to gold in search of a safe-haven amid weaker global equity markets and oil prices. The metal has pushed back above $1,100 an ounce and April Comex gold futures were last quoted 0.07% down at $1,127.20 an ounce.

Silver has also managed to benefit so far this year, despite the industrial component to its price, as gold pushed it higher. Prices are up 3.4% so far this year with March Comex silver futures last quoted down 0.37% at $14.29 an ounce.

“Indeed, the latest data released by the USGS suggest that U.S. demand for silver in electronics fell sharply in 2015. However, low prices have already stimulated retail investment, with demand for U.S. silver coins reaching the highest level in three years in January,” they said.

In fact, the latest U.S. Mint data showed that American Eagle silver coins sales were up 7.68% year-over-year at over 5.95 million ounces in January, its highest level since January 2013.

Precious metals as a whole diverged in January, the analysts continued, with palladium posting the most losses.

“Palladium was the biggest loser, as abundant above-ground stocks and the latest financial market turmoil in China weighed on prices,” they said. “However, the price of palladium appears to have now fallen beyond what could be expected based on China’s unofficial manufacturing index and car production alone.”

Palladium futures had a rough start to the year but have managed to steadily rise since mid-January. March Comex palladium futures were last down$9.90 at $492.45 an ounce. Meanwhile, platinum futures were last quoted down $12.90 at $857.20 an ounce.

Well – the above report from Capital Economics is optimistic – don’t see these too often. The precious metals are benefiting from that early 2016 surprise I have been talking about and perhaps the good news will continue – perhaps.

Gold began to really lose its luster in the summer of 2012 ($1800.00) as it became apparent that the world banking institutions were not going to shut their doors. During the intervening 4 years it also lost its safe-haven status as the mighty dollar moved much higher in value.

Why this happened is counterintuitive – no one believed the US could create that much fiat currency and not pay the piper but in fact that is exactly what happened – at least to date. It remains to be seen if the Fed can normalize rates without causing the other shoe (inflation) to fall. But in the meantime it’s nice to see that gold is once again being considered as a way to diversify your investments.

It’s also much nicer that gold is down 35% from its highs so there may be some monetary upside besides its simple insurance value against the entire system going off the rails.

The walk-in cash business was active today and so were the phones – the markets were a bit slow in the beginning but the downstairs was full by noon and there is some buzz in the air – usual old customers and a few new faces.

The GoldDealer.com Unscientific Activity Scale is a “ 4” for Wednesday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Thursday – 4) (last Friday – 4) (Monday – 3) (Tuesday – 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.

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

Thanks for letting us know when you move or change your email.

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

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

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

Like us on Facebook and follow us on Twitter @CNI_golddealer. Sal is now in charge of our Facebook page and he is a self-proclaimed expert on gold conspiracy theory. He would be happy to respond to even the most ridiculous conspiracy assertion on our Facebook page so why not join the fun?

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

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

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