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Gold Virtually Unchanged - Capped by Dollar Strength

Commentary for Friday, May 22, 2015 ( www.golddealer.com) – Gold closed down $0.10 on the Comex today at $1204.30 as Fed Chair Yellen looks for an interest rate rise before year end – if the economy continues to improve.

Gold popped higher in overnight activity (Hong Kong) but domestic trading on the Comex reversed this strength.

The euro of late has reversed direction moving off a low around 1.10 to an overnight high around 1.12 probably a result of Draghi’s front-load QE strategy launched earlier this week. The ECB quantitative easing program should have supplied 60 billion euros monthly in fresh asset purchase cash but got off to a bang when that number was increased to 100 billion euros.

This should have pushed the dollar lower – which was the case in overnight trading but early domestic trading presented a different scenario. According to CNBC - The Labor Department said on Friday its Consumer Price Index rose 0.1 percent last month, with the core figure discounting food and energy costs up 0.3 percent, for the largest gain since January 2013.

I don’t read this as an inflation scare but that core number of .3 percent was a surprise and it stopped the overnight move to higher ground in its tracts. The theory being that if the Federal Reserve moves above its 2% inflation guideline it will be forced to raise interest rates this summer.

The Dollar Index which looked like it was topping out earlier this week around 95.00 or less soared on this reversal of sentiment regarding what the FOMC will do with interest rates. Earlier this week they were dovish – now they might turn hawkish. The Dollar Index as of this writing is trading hot – at 96.23. And this obviously reversed any overnight gain and pushed domestic prices back to almost unchanged.

Fed Chair Yellen spoke at a luncheon in Providence, Rhode Island today. And she was typically positive about the improving economy. She claimed that if these numbers continue to improve we will see a rate hike this year – but it will take several years before we are back to what some consider “normal” rates of interest. She also claimed that recent off-beat economic numbers are transitory – also a familiar position the Fed has adopted to deal with any number which does not support an improving case.

Trying to figure out what the Federal Reserve has on its mind is impossible. This past Wednesday the FOMC release convinced most that a rate hike this year was off the table. Now it appears it is back and a certainty if the economic improvement numbers do no flatten out. If anything can be gleaned from this latest Fed information it’s that a rate hike may not materialize by summer but will be seen perhaps by year end.

Over the past 30 days gold has traded back and forth between $1180.00 and $1220.00 – testing the lower range on three different occasions. The bear trade has not been able to create a significant break to the downside but at the same time gold sees heavy overhead resistance at $1230.00.

Trading on the exchanges for the rest of the day should remain quiet going into the long weekend. Markets both here and in Europe will be closed on Monday for Memorial Day.

Silver closed down $0.05 at $17.06.

Platinum closed down $3.00 at $1148.00 and palladium was higher by $8.00 at $784.

GoldDealer.com will be closed this Monday – Memorial Day as we salute our men and women of the armed forces and remember their sacrifice. We are proud to say our staff includes members who have served in the Army, Marines, Air Force and Navy – two of which saw action in Vietnam.

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 2 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 random sampling of 100 transactions – unscientific but worth considering because these people took action: 38 people thought the price of gold would increase next week – 43 believe the price of gold will decrease next week and 19 think prices will remain the same.

Precious Metal Closes & Dollar Strength – May 18 – May 22

This from Kitco - Gold To Bottom In 3Q, Fed Rate Hike To Be Pivot – Macquarie - The minutes of the Federal Open Market Committee meeting indicated that it is “unlikely” interest rates will rise in June but that still leaves a September hike on the table and that will weigh on gold, according to one firm.

Commodity analysts from Macquarie said, in their latest research report published Wednesday, they are expecting gold to continue to suffer as markets wait for an eventual rate hike.

“But the waiting will be worse than the reality and we think lower-for-longer global interest rates and still-robust emerging-market demand should allow the gold price to make steady gains in 2H 2015 and 2016,” they said.

Although the Australian-based bank is optimistic on gold prices in the medium and long term, they warned that prices could fall in the near-term. Because of delayed rate hikes, the bank is now expecting gold to bottom out in the third quarter.

“The pivot, for us, remains when the market has finally priced-in a Fed rate hike,” they said.

“We now believe September is the most likely data for this, though that is at the latest and we would expect the data to have improved sufficiently in 2Q to finally make investors accept it is going to happen. As we write this it has not happened so far, indeed some data has been very poor and given gold another run higher. But such sentiment is fickle and could change almost overnight, certainly we expect more robust U.S. data in the next few months,” they added.

Macquarie also said they remain optimistic on the gold market as investors embrace the idea that equilibrium in interest rates will be lower than historical norms.

The analysts note that a strong positive for the gold market has been relatively stability as prices have hovered around $1,200 an ounce, despite high volatility in currency markets. Although it lost ground against the U.S. dollar, it gained against other currencies like the euro. At the same time, when the U.S. dollar lost steam mid-April, gold rallied but lost against other currencies.

“The conclusion is perhaps exchange rates don’t matter quite as much as we thought they did though short-term we think they still exert an important influence,” they said.”

Turning to investment demand, Macquarie said they don’t expect to see major redemptions in gold-backed exchange-traded funds (ETF) any more “…with most of the large-scale institutional fund money no longer in gold.” However, ETF gold reserves could be volatile as they will now be driven by short-term price moves.

This from Ole Hansen (Head of Commodity Strategy / Saxo Bank, Denmark) - Gold stuck in a band 2.5% to either side of $1200 - Bullish bets in Comex gold down at 2013 levels - The yellow metal is in need of a clear driver – “Gold has traded within a relatively tight range for the past two months. During this time the average price has been just below $1200 with the price staying within a 2.5% range either side of that.

The current lack of direction has resulted in volatility and investment holdings in exchange-traded products both coming lower while bullish bets in Comex gold held by money managers have fallen to levels last seen when the price collapsed back in 2013.

The current range-bound nature of the market is also a clear indication of how the yellow metal currently need a clear driver and it has left the market very split on where we go from here. Gold has been in a rut and the market is divided on where it goes from here:

Spot Gold - Increased volatility in secure European government bonds and speculation that the US Federal Reserve is in no hurry to raise interest rates anytime soon, combined with a weaker dollar, were the key drivers behind the recent run to the top of the current range. The subsequent recovery of the dollar, verbal intervention from the European Central Bank with regard to its current bond buying program and stronger than expected US data have once again sent the metal back to the starting point. On the surface the options market reflects this lack of direction with the implied volatility easing towards an eight month low.

Gold volatility - While the sell-off during the past week has resulted in a downshift in volatility as we are once again back to the center of the current range, the volatility skew or smile has remained intact. This is both an expression of the current uncertainty regarding where we go next but also an indication that traders prefer to express a view through options.

Gold volatility skew - The top ten most traded options strikes during the past week are almost evenly split between Puts and Calls. The most popular has been the 1200 Put which expires next Tuesday, last traded at $3.5/oz.

Investment demand through exchange-traded products has slowed further this month as investors used the uptick during the early part of May to reduce exposure. With total holdings once again close to a six-year low it can be argued that most of the reduction has taken place by now given the resilience among existing investors the last time this level of participation was seen back in January.

Gold ETP holdings - Money managers who are often the trendsetters have also found little to cheer about and they are currently holding a net-long futures position close to the lowest since 2013 – the year of the big sell-off. A relatively large short position, last at 75,000 lots is not far from the 80,000 level. On several occasions since 2013 we have seen the number of short positions contract sharply every time this level was reached.

Speculative positioning in COMEX Gold futures - On balance, gold is desperately looking for a driver or an event to give it a new lease of life. Several attempts in either direction have failed over the last couple of months as uncertainty with regards to the timing of the first rate hike in the US, the movements of the dollar and gyrations in bond markets have all left gold going nowhere.

The speculative position is very light, especially to the upside, which leaves money managers with plenty of room to engage should we see a change in sentiment. So far, however, many are happy to sit on the fence and wait for the break and in the meantime play such a potential break through the options market.”

The walk-in cash trade today was quiet and so were the phones.

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

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).

We always appreciate keeping us up to date when moving or changing 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 – we appreciate your business and enjoy a long weekend. We will be back to work this coming Tuesday after Memorial Day.

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 Closes Quietly Lower - But Not Much

Commentary for Thursday, May 21, 2015 ( www.golddealer.com) – Gold closed down $4.50 at $1204.40 on the Comex today in lackluster trading. The overnight market in both Hong Kong and London was slightly weaker and this downward bias carried over into domestic trading. All in all though there was little attention paid to gold today and little follow-through from yesterday’s FOMC dovish interest rate guess.

Gold’s close today ($1204.40) remains above its 50 Day Moving Average ($1189.00) but below its 100 Day Moving Average ($1211.00) and below its 200 Day Moving Average ($1217.00) - so momentum continues to slow.

We remain however above the important $1200.00 mark and the longer the Fed delays that interest rate hike the better support we will see for this narrow trading range going back to October of last year between $1150.00 and $1300.00.

The feel of the physical markets across the counter is lethargic. It reminds me of typical and boring summer months when in the old days dealers would schedule vacation time. It is not that there is nothing going on – there is business but there is no buzz. And larger dealers are once again complaining to each other – that is always a good sign for a slow market.

The recent gains by ISIS in Syria was never mentioned and created no buzz on the trading floor. They now control half of Syria in a crippling civil war which threatens stability in the Middle East. And gold drifts gently lower, amazing.

Silver closed up $0.02 at $17.11.

Platinum closed down $5.00 at $1151.00 and palladium closed down $1.00 at $776.00.

London, 18th May 2015: The World Platinum Investment Council (WPIC) today announces the publication of its third Platinum Quarterly - the first independent, freely-available, quarterly analysis of the global platinum market. The report incorporates analysis of platinum supply and demand during the first quarter of 2015. Platinum Quarterly is a WPIC publication. It is based upon research and detailed analysis commissioned with, and conducted by, SFA (Oxford), an independent authority on the platinum group metals market.

Overview of key data presented in Platinum Quarterly:

The global platinum market remained in deficit during the first three months of 2015 with an estimated shortfall of 160 koz. Today’s report highlights a number of key drivers behind the continued deficit including:

• Increased jewelry demand as fabricators in China restocked following the Chinese New Year period and a decline in jewelry recycling levels in a weaker price environment.

• Total mining supply remained largely flat compared to the final quarter of 2014 as increased output in South Africa and Zimbabwe was offset by declines in other regions.

• Lower recycle supply as the fall in jewelry recycling exceeded the slight increase in auto catalyst recycling.

• Over the remaining quarters of 2015 supply is forecast to closely match demand. Total global supply of platinum was 1,835 koz during the first quarter of 2015, with total mining supply estimated at 1,385 koz.

• South African refined production continued to recover from the 2014 strike rising to 995 koz, up 2% from the final quarter of 2014.

• While supply from Zimbabwe increased 16% to 110 koz, supply from non-Southern African regions collectively declined 10% to 310 koz, both compared to the final quarter of 2014.

• Supply from recycling decreased 6% quarter-on-quarter to 450 koz and included a 3% increase in supply from spent auto catalysts from a weak final quarter of 2014. Supply was also impacted by a 23% fall in jewelry recycling following lower retail sales in China. Total global demand of platinum was 1,995 koz during the first quarter of 2015, up 75 koz compared to the final quarter of 2014.

• The first quarter of 2015 saw auto catalyst demand increase by 5% quarter-on-quarter to 825 koz, buoyed by increased European car sales and the roll-out of Euro 6-compliant catalysts.

• Platinum jewelry demand for the first quarter is estimated at 750 koz, as jewelry manufacturers increased inventory levels after the Chinese New Year.

• India continues to be a standout growth market for platinum jewelry with retail sales continuing to climb in the first quarter of 2015.

• ETF sales exceeded purchases in all the major investment regions in the first quarter of 2015 and reduced ETF holdings by 50 koz compared to the 30 koz reduction in the final quarter of 2014.

• Bar and coin purchases amounted to 35 koz in the first quarter of 2015, a similar level to the previous quarter. Today the WPIC also revises down its full year 2015 global platinum market deficit forecast to 190 koz from the 235 koz forecast at the end of 2014.

• The total supply forecast remains unchanged at 7,965 koz as higher projected mining supply is offset by a reduction in secondary supply from higher levels of auto catalyst recycling.

• The reduction in the demand forecast is primarily due to a downward revision to industrial demand in China based on lower predicted economic growth in 2015.

Paul Wilson, chief executive officer of WPIC commented: “Today we publish the third edition of Platinum Quarterly, which shows that demand growth in the first quarter of 2015 exceeded supply growth, increasing the deficit when compared to the last quarter of 2014. Demand from the automotive, jewelry and industrial segments are all expected to rise in 2015 when compared to 2014, with an increase in investment anticipated for the balance of 2015.”

To me the dollar is beginning to look flat – the Dollar Index over the past 3 days has been on a tear moving from 93.00 to 95.00. As of this writing it is 95.32 but it looks like it again wants to move sideways at least for now which takes some pressure off gold. Recent dollar strength has been helped because of the Greek debt crisis – if they default the euro will weaken thus further strengthening the dollar and capping any short-term runs in the price of gold.

I still believe we could see a significantly lower Dollar Index if the Federal Reserve does not raise rates this summer. But this position is now in the minority – most believe some type of token rate hike (0.025%) will be thrown into the pot – if for no other reason other than to test the waters. There are benefits – the stock market will survive they have made a ton of money in this zero interest rate environment. And when the Fed raises rates it will be in a better position to lower them should recession talks gain steam. The FOMC are smart but don’t forget they are working with a model which has never been tried before – and results could be unexpected.

So keep your guard up (gold bullion) and remain suspicious. Finally keep in mind that there is not near as much gold available to investors as the fiat money group would have you believe. I referenced that yesterday as some leaders in the physical world of gold claim even central bank holdings may be pledged and therefore not available. The world trade system relies on your faith in paper currency – which is fine but I like to remind everyone not to bet your complete financial future on un-backed paper currency.

This is our usual Chicago Mercantile Exchange report for Thursday, covering the last 5 trading days – so today, May 21, 2015 we are looking at the trading volume numbers for the “June” Gold contract: Thursday 5/14 (194,620) - Friday 5/15 (192,836) - Monday 5/18 (187,705) - Tuesday 5/19 (175,921) - Wednesday 5/20 (163,115). These numbers remain relatively high and we continue to trend lower.

A look at Reuters overnight – Clara Denina - Gold steadies as dollar falls, June rate rise prospects dim - LONDON, May 21 (Reuters) – “Gold steadied on Thursday as the dollar fell following minutes from the Federal Reserve's policy meeting showing the U.S. central bank was unlikely to raise interest rates in June.

Spot gold was unchanged on the day at $1,209.04 an ounce by 1146 GMT, while U.S. gold futures for June delivery were up 0.1 percent at $1,209.60 an ounce.

"There is now good psychological support around $1,200, the chart picture looks promising after relatively unsurprising Fed minutes and I think the market is looking at what is going to come out later in the day including jobless claims," MKS SA senior vice president Bernard Sin said.

Minutes of the Fed's April meeting, released on Wednesday, showed policymakers believed it would be premature to raise interest rates in June. That view was widely held in the market following disappointing U.S. economic data over the past few weeks that weighed on the dollar, in turn helping gold hit a three-month high of $1,232.20 on May 14.

The minutes showed Fed officials pushing the prospect of a rate increase later into the year, further dampening appetite for the dollar, which fell 0.3 percent versus a basket of leading currencies.

"Gold will benefit from the Fed's decision to postpone its rate hike and the bar for gold's support level looks to be raised from here," said Phillip Futures analyst Howie Lee.

Higher rates would increase the opportunity cost of holding non-yielding bullion.

Gold prices have struggled to break out of a $1,170-$1,230 an ounce range since mid-March, hamstrung by uncertainty over the timing of a U.S. rate rise.

"If gold manages to break above $1,220 decisively, we think a sustained rally in prices would probably materialize," Lee said. The market was awaiting the release of weekly U.S. jobless claims and April home sales data, due later in the day. However, investor sentiment has turned bearish in recent days as prices have fallen from the three-month highs reached earlier this week.

Outflows in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, continue to undermine investor sentiment. Holdings of the fund fell 0.41 percent to 715.26 tonnes on Wednesday, the lowest in four months.”

The walk-in cash trade today was average to slow and we had to check to see if accounting paid the telephone bill. Things in general remain very quiet.

The GoldDealer.com Unscientific Activity Scale is a “ 2” for Thursday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Thursday – 4) (last Friday – 5) (Monday – 5) (Tuesday – 5) (Wednesday – 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).

We always appreciate keeping us up to date when moving or changing 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 – 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 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.

A Look at the American Eagle Platinum Coins

The American Eagle Platinum Coin is America’s official platinum bullion coin and the only official investment-grade platinum coin from the U.S. Government. This means the weight, content, and 0.9995 purity of the American Eagle Platinum Coin is guaranteed by the United States. The coin itself was authorized by Congress in 1996 and first issued in 1997 with the highest face value to ever appear on a U.S. coin ($100).

Whether you are a serious coin collector or a savvy investor, California Numismatic Investments is your source for American Eagle Platinum Bullion Coins. Visit our website to see our current buy and sell prices for platinum bullion coins and bars, or call us toll-free at (800) 225-7531 to speak with one of our precious metal experts.

Gold Closes Mildly Higher - To Raise or Not to Raise?

Commentary for Wednesday, May 20, 2015 ( www.golddealer.com) – Gold closed relatively firm but uninterested today on the Comex up $2.00 at $1208.90. This was in advance of the FOMC minutes release. And the aftermarket in gold after the release was another non-event so traders apparently did not garner much from the information.

WASHINGTON (MarketWatch) – “There was less enthusiasm for a June rate hike among Federal Reserve officials than had been the case in March, according to minutes from the April meeting released Wednesday. The minutes show that only a "few" Fed officials thought that the economic data would improve enough to trigger a rate hike at the Fed's next meeting on June 16-17. In March, "several" Fed officials had supported a June move. The minutes of the April 29-30 meeting show that "many" on the Fed thought that June was likely too soon for a rate hike was warranted, although they generally did not rule one out. Overall, "most" Fed officials thought the weakness in first quarter growth was transitory and the economy would resume at a moderate pace, suggesting a rate hike sometime later in the year.”

Gold got some encouragement in early trading before any FOMC information was released. Last night gold was steady in Hong Kong and London but the range was tight ($5.00). Trading in the domestic market was also firm but capped by dollar strength.

The Dollar Index has been strong since Monday – we have moved from slightly above 93.00 to 95.62 as of this writing – and it’s difficult for gold to move higher against a rising dollar.

Frankly I am surprised we saw any green number today considering yesterday’s close ($1206.90) fell below gold’s 200 Day Moving Average ($1217.00) and the positive sentiment we saw in early May evaporated when gold could not move above $1230.00. And I still look for some weakness in gold moving into the long weekend – the US markets being closed for Memorial Day.

I would not say that the short paper players are back in force – there is still too much indecision in the current trading pattern but they will appear like an avalanche if the Federal Reserve goes back to the old idea of an interest rate hike this summer.

Silver closed up a tepid $0.04 at $17.09.

Platinum closed up $6.00 at $1156.00 and palladium was higher by $2.00 at $777.00.

For those who believe the 2008 financial fiasco will not repeat - consider that four banks plead guilty to currency market rigging today. This is more important than the press will allow because the banks involved are not of the country bumpkin variety – they are Citicorp, JPMorgan Chase & Co, Barclays, and Royal Bank of Scotland. These big boys are supposed to be pillars of transparency and a public bastion of trust. And they pleaded guilty to criminal charges – so let’s not put all our financial assets into one basket even though they look like the Boy Scouts from the other side of the teller window.

I read Peter Hug (Kitco) all the time because he understands traders. His latest comment crystallizes the single biggest gold question on the table today. And provides the central clue as to why these markets cannot make up their mind. “The “million dollar question”: is the U.S. economy recovering? Data indicates that it is tepid at best, and with no signs of inflation suggests the Fed doesn’t fire until 2016, which we opined late last year. But, what if the “recovery” actually softens into a recession; does the Fed accept the reality or does Yellen join the ECB party. It’s a low risk that she steps up to the punch bowl in the short term, but if she picks up the ladle or even suggests that the bowl is an option, there won’t be a discussion on the direction of gold. The global economic scenario strongly suggests that your core positions in hard assets need to be maintained.” Great insight into how the paper world works!

This is our usual ETF Wednesday information – these metrics are important to individual physical investors because they provide clues as to whether the physical market is enthusiastic and adding metals or is disappointed and selling metals.

All Gold Exchange Traded Funds: Total as of 5-13-15 was 51,926,827. That number this week (5-20-15) was 51,572,558 ounces so over the last week we dropped 354,269 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 51,057,082.

All Silver Exchange Traded Funds: Total as of 5-13-15 was 617,637,749. That number this week (5-20-15) was 612,963,128 ounces so over the last week we dropped 4,674,621 ounces of silver.

All Platinum Exchange Traded Funds: Total as of 5-13-15 was 2,575,222 ounces. That number this week (5-20-15) was 2,575,156 ounces so over the last week we dropped 66 ounces of platinum.

All Palladium Exchange Traded Funds: Total as of 5-13-15 was 2,958,188 ounces. That number this week (5-20-15) was 2,969,809 ounces so over the last week we gained 11,621 ounces of palladium.

Last night I was watching the History Channel H2 and its latest presentation – America’s Book of Secrets – The Gold Conspiracy. This is one of a few gold bullion programs now airing. The better of the two that I have seen details Sprott’s investigation into what actually happens to much of the gold reserves held in different countries.

We know for example that Venezuela recently asked for its pledged gold reserves to be returned to its own bank vaults. Germany also made such a request and while the press made a big deal about whether this gold actually existed and when it would be returned – the rumors died down and little on the subject has since been made public.

These gold related programs are interesting because they bring into focus the kind of shadowy world of international gold trading. And in the process reveal how important gold reserves are to world powers - even though today they tend to push this reality into the background because it facilitates the printing of fiat paper money.

And real facts of course create interest in gold. I did not know for example that England secretly shipped all of the gold bullion reserves out of the country for protection during World War II. And they asked France to do the same with their reserves in an effort to raise money for the war effort. Charles de Gaulle refused claiming France would need the money after the war.

All of this of course raises questions about gold reserves. And questions bring out the conspiracy buffs who claim the gold reserves of the world are now just shadow statistics – even the gold reserves kept at the United States Bullion Depository in Fort Knox, Kentucky are questioned.

The last audit of the gold bullion held in Fort Knox was in 1953 and according to Wall Street Daily only 5% of the gold was actually tested at that time. I remember a kind of dog and pony show was conducted in the 1970’s when the vaults were opened to a few politicians and public cameras after rumors surfaced that perhaps there was a problem with our gold reserves – but this was not an independent audit.

Sprott, a respected leader in the world of physical gold ownership was asked if he thought the world’s gold reserves were unencumbered, meaning they were not in some way hypothecated. All he did was smile and suggested that this was an interesting question.

Now - gold bullion (a non-interest paying liquid asset) is often loaned to another party willing to pay interest for a fixed amount of time. And because these transactions are often secret they lead to more conspiracy speculation.

And gold conspiracy thinking encourages some to believe the price of gold is manipulated. This theory was actually made public when secret documents were released by Snowden. A document authored by China claimed that the US was manipulating the price of gold to support and reinforce faith in the US dollar. The notion that somehow the price of gold is manipulated was offered as “proof” when its price actually decreased after the massive quantitative easing program authored by the Federal Reserve.

Finally the conclusion of sorts drawn by many conspiracy advocates is that there could be a problem with the world’s gold reserves. And in the extreme a portion of the gold reserves may not be available as publicized.

Whether you buy this argument or not I found the History Channel presentation interesting in the extreme. Especially realizing that gold bullion is moving from the old money Western powers to the new money manufacturing giants like China and India.

This type is presentation, especially now with the press on gold being negative is worth viewing so check it out for yourself - and let me know what you think. One thing is for sure – if even a portion of this is true it could have extraordinary consequences for the physical gold world.

The walk-in cash trade today was slow and so were the national phones.

The GoldDealer.com Unscientific Activity Scale is a “ 3” for Wednesday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Thursday – 4) (last Friday – 5) (Monday – 5) (Tuesday – 5). The scale (1 through 10) is a reliable way to understand our volume numbers. The Activity Scale is weighted and is not necessarily real time – meaning we could be busy and see a low number – or be slow and see a high number. This is true because of the way our computer runs what we call the “book”.

Our “activity” is better understood from a wider point of view. If the numbers are 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).

We always appreciate keeping us up to date when moving or changing 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 – 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 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 Catches a Cold - the Dollar Roars Reacting to EU Front-Load

Commentary for Tuesday, May 19, 2015 ( www.golddealer.com) – Gold closed down $20.90 at $1206.90 putting the brakes on its most recent move to the upside within its current trading range. So gold came down with a case of the sniffles today for two reasons. The first is related to a very strong dollar – the Dollar Index closed yesterday at 94.16 – today it has traded between 94.09 and 95.47 and as of this writing is 95.28! Today’s strength is actually against the most recent weaker trend which has supported gold.

And it’s the result of a much weaker euro created because the European Central Bank will front load its stimulus – meaning instead of parceling it out over a longer period of time it will allocate more money up front. This really does not change the program because they will simply have less available later – but it does get things rolling with a big bang.

The second reason gold reversed direction is simple - expected profit taking. It was too easy for paper traders to close their long positions and run for cover because most believed that recent strength would not lead to a break-out move and gold remained range-bound.

Still today’s close in gold of $1206.90 moves below its 200 Day Moving Average ($1216.00) and its 100 Day Moving Average ($1212.00). We are still above its 50 Day Moving average ($1192.00) but momentum is slowing which is not good if you’re considering a possible break-out to the upside in a market which has been channeled for some time.

Still it is important to realize that we have never had near zero rates of interest for years. My point being that the outcome of both our monetary easing and that of our European cousins still remains to be seen. And watching the price of gold is a good way of keeping track of who is on first base.

Look for more cues as to gold’s short term direction from the FOMC (Federal Open Market Committee) this week. Here is the schedule – May 20 (FOMC Minutes from April 28-29 @ 2 PM) – May 21 Speech from Vice Chairman Stanley Fischer – May 22 Chair Janet Yellen talks about the US Economic Outlook. Information release from the FOMC is always important but we are entering into a critical period in which no amount of opining will provide clues as to the possible interest rate rise. They will either be in or out because the summer months are approaching – and this decision will be critical relative to the price of gold.

Silver followed gold lower – down $0.66 at $17.05. The close today of $17.05 is still above silver’s important moving averages. The 50 Day Silver Moving Average ($16.46) – the 100 Day Silver Moving Average ($16.65) and the 200 Day Silver Moving Average ($16.98).

Platinum closed down $27.00 at $1150.00 and palladium closed down $18.00 at $775.00.

This from the Wall Street Journal (Josie Cox) – Euro Slumps After Official Says ECB Will Front-Load Stimulus - European Central Bank could launch greater-than-expected stimulus in May and June – “The euro fell hard against the U.S. dollar Tuesday, while European stocks and bonds surged on the prospect of the European Central Bank ramping up its asset-purchase program in May and June.

By midafternoon, the euro was down 1.5% against the buck on the day at just over $1.11, after the ECB published comments delivered by board member Benoît Coeuré saying the central bank would moderately front-load purchases in its bond-buying program in anticipation of less market liquidity in the summer.

The central bank would be able to keep its monthly average of €60 billion ($68.35 billion) in purchases, “while having to buy less in the holiday period,” Mr. Coeuré said.

Benoit Coeuré attends a session during the World Economic Forum annual meeting in January. Markets moved after he said the ECB would front-load purchases in its bond-buying program.

“Even though this is just front-loading, it is effectively an increase in the size of quantitative easing, even if just for a short period of time,” said Simon Derrick, a currency strategist at BNY Mellon.

“It shows that within the existing framework, the ECB is willing and able to be incredibly flexible,” Mr. Derrick said.

The ECB’s asset purchases have driven up the price of bonds this year. Under the program, the central bank effectively prints fresh euros to buy government debt, which has driven down the value of the currency. Lower bond yields have pushed investors into riskier asset classes such as stocks in pursuit of higher returns. Yields fall as prices rise.

Tuesday’s market reaction echoes some of the moves seen after the ECB first announced QE in January, and when bond-buying began in March.

By midafternoon, the yield on the 10-year German bond was 0.025 percentage point lower on the day at just above 0.62%. The yields on Spanish and Italian 10-year bonds were 0.07 and 0.08 percentage point lower at 1.78% and 1.84%, respectively.

Separately on Tuesday, Christian Noyer, the head of France’s central bank and a member of the ECB governing council, said the ECB was ready to go further if needed to meet its inflation target.

“The purchase program will continue until the end of September 2016 and beyond if we do not see a sustained adjustment in the path of inflation,” he said.

Iain Stealey, a fixed-income portfolio manager at J.P. Morgan Asset Management, which has around $1.7 trillion in funds globally, said that the comments would “push back against any suspicions that the ECB might think about tapering its asset-purchase program early” in light of encouraging eurozone economic data.

In equity markets, the euro’s slump sent the Stoxx Europe 600 up by close to 1.4% by midafternoon, with Germany’s DAX—packed full of major exporters that benefit from a weak euro—leading the pack for a second consecutive day with a 1.7% rise. On Wall Street, the S&P 500 index edged marginally lower.

London’s FTSE was 0.3% higher even though data showed Tuesday that consumer prices in the U.K. fell in April compared with a year earlier for the first time in more than half a century.

Ian Stewart, chief economist at Deloitte, said that the move would likely prove short-lived and would actually be positive for growth.

“Falling prices raise consumer spending power and help keep interest rates low,” he said. Sterling was trading roughly 1.3% lower against the dollar by early afternoon.

This from FX Empire - EUR/USD Spikes – Lone Fed Wolf Looks for Inflation Above 2% - “The EUR/USD has risen 9.1% since the European Central Bank started its quantitative easing program in March, hitting a 3-month high of 1.1451 this morning. Over the same period, the US dollar has lost more than 10% of its value. The USD decline has accelerated over the last several weeks as the second quarter economic upturn predicted by US Federal Reserve Chairperson Janet Yellen has failed to materialize.

Concomitantly, Federal Open Market Committee members have gone silent on the date of a proposed rate hike, initially expected in June and then pushed to September. An FOMC member has finally spoken out this morning on the lingering zero US federal funds rate and changed course dramatically, although his view is far from the consensus view.

Speaking in Stockholm this morning, Federal Reserve Bank of Chicago President Charles Evans has put more wind behind the sails of a low dollar by pushing the possibility of US quantitative easing into 2016. In a reversal of the Federal Reserve line on inflation in recent years, Evans has suggested letting inflation run past the 2% target. The inflation rate has been negative in 2015. The idea is to loosen the reign on monetary intervention and give the economy more room to grow.

High Volume - Volatility in the EUR/USD has remained high since disappointing US retail sales were reported on May 13th. A smooth ride up today to 1.15, though, is not likely to happen. Evans is known as a lone wolf on his inflation position but in the absence of chatty Fed colleagues, his inflation views are receiving more attention.

Instead, the prospect of more dollar weakness has sent more shorts covering long positions. As US traders come online, expect more volatility at least until lunch time. Notably, the short covering is creating only minor resistance under 1.140.

Just before the US market open, the 50-day moving average is touching the upper Bollinger Band. This could signal a sharp move downwards, or a move higher on low resistance, but it is early in the day for a bold move. The price should fall below the upper Bollinger Band as the US market becomes active. More short covering on the day’s news is likely, but then a resistance level of 1.15 is on the horizon, a level not reached since January.

The Chicago Fed chairman has hinted that inflation targets are now a psychological game. Failure to lift inflation to 2% levels will undermine the public’s confidence in the Fed, he says. Indeed, EUR/USD traders are now indicating a loss of confidence in a strong second quarter recovery. The current growth lag aside, Evans expects the US economy to grow 2.5%-3% over the next few years.”

The walk-in cash trade today was slow to steady and the phones were the same – typical action really on a down day.

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 – 5) (last Thursday – 4) (last Friday – 5) (Monday – 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).

We always appreciate keeping us up to date when moving or changing 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 – 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 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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