Commentary for Thursday, Nov 20, 2014 – Gold closed down $2.90 at $1190.70 in what looks like a consolidation pattern to me…still within striking distance of the important $1200.00 mark but forming a kind of fizzle pattern – there is no such thing but the word describes the action – gold seems uncommitted.
So what will provide that added investor interest to push above the $1200.00 mark and more importantly – keep the rally going above the huge overhead resistance seen at $1240.00? This is an excellent question – it’s certainly not inflation which recent numbers claim is around 1.7% yearly. There is some commentary which claims that once inflation begins to move higher it is not that easy to control – true enough but not a particularly moving argument for domestic investors to buy gold.
Outside of the Russian/Ukraine problem the only prime mover of gold to higher ground is the much talked about Swiss Gold Referendum – new rules and regulations regarding what the Swiss government must buy – hold and not hypothecate. Now that would have been interesting but contrary to my bet the Swiss citizens seem swayed by the argument that such stringent rules when it came to their central bank gold holding would hamper their ability to move with world financial markets. At any rate this new referendum looks like it will not pass.
If you look at the 30 day gold chart it would seem gold is happy between $1160.00 and $1200.00 but considering the large contingent of short paper players I would bet on seeing a push to lower ground especially during next week’s thin Thanksgiving trading week. And by the way we will be closed next Thursday and Friday for Thanksgiving. We can now eat all we want and hope no one notices when we return to work on Monday.
The last 4 days the Dollar Index has been flat around 87.64 – so neutral relative to gold. And WTI Crude oil while down from $82.50 to $74.58 these past 30 days – now seems stable around $75.00 – which is a push for gold shorter term.
As far as long term projections relative to the price of oil – I think this is a pipe dream. Sure, right now oil is cheap and this keeps inflation numbers subdued. You can even make a case that because gas is cheaper consumer spending will improve. But in the longer term – expect higher oil which will support gold prices.
In the longer term continued government spending worldwide will cushion gold which in my opinion is at the lower end of its trading range – it’s cheap but still searching for legs in a world of central bankers committed to continued quantitative easing.
This from Chuck Butler (EverBank) – I think the WSJ came closest to my thoughts let’s listen in to what the WSJ had to say about the FOMC. “Federal Reserve officials were preoccupied at an October policy meeting with tumult in financial markets, weak conditions abroad and risks that low inflation could drift lower, but they forged ahead with a decision to end their bond-buying program because the U.S. economy and labor market appeared to be on course for further improvement. Participants at the Oct. 28-29 meeting “pointed to a somewhat weaker economic outlook and increased downside risks in Europe, China, and Japan, as well as to the strengthening of the dollar over the period,” according to minutes of the session. “However, many participants saw the effects of recent developments on the domestic economy as likely to be quite limited.”
Chicago Mercantile Exchange reports for the last 5 trading days – so in fact we are looking at the trading volume numbers for the December Gold Contract: Thursday 11/13 (187,699) – Friday 11/14 (293,650) – Monday 11/17 (199,521) – Tuesday 11/18 (170,800) and Wednesday 11/19 (265,864) – so volume numbers remain on the high side.
Silver closed down $0.15 at $16.13 and physical action here has slowed even though we have plenty of silver bullion Eagles, Phillies, 1 – 10 – 100 ounce bars, $1000 face 90% and 40% silver bags. We also have plenty of bullion Crocodiles – Falcons – Bald Eagles – Kilo Goats and Pandas – that’s right folks – no waiting here just step right up.
This from Paul Gilkes (Coin World) – United States Mint resumes silver American Eagle sales Nov. 17 to satisfy voracious investor demand – Authorized purchasers buy 1,012,000 coins from 1,525,000 allotted – “Silver American Eagle bullion coin sales by the U.S. Mint resumed Nov. 17, with authorized purchasers immediately buying 1,012,000 of the 1,525,000 coins allocated. Sales by the United States Mint to its authorized purchasers (APs) of 2014 American Eagle 1-ounce silver bullion dollar coins resumed Nov. 17, 12 days after being suspended because of a depleted inventory.
Sales resumed after the U.S. Mint was able to replenish its stockpile of coins. The U.S. Mint had 1,525,000 of the 2014 American Eagles silver dollars available Nov. 17 for APs to purchase on an allocation basis, and those purchasers bought 1,012,000 coins from the total allotted.
The U.S. Mint has experienced significantly increased investment demand over the past several weeks. Through the close of business Nov. 17, the Mint recorded cumulative sales of 40,393,000 of the silver American Eagles. Sales of the coins in 2014 are on track to break the 2013 sales record of 42,675,000 coins. (Cumulative sales may include coins minted in more than one year, so are not the same as yearly mintages.)
The bullion coins like the Pamp Suisse Gold Bar are not sold directly to the public, but through a series of authorized purchasers who buy the coins for the closing spot price of the metal per troy ounce on a given day plus a premium of $2 per coin. The coins may be sold to the public and other dealers for a small markup.”
Platinum closed up $6.00 at $1204.00 and palladium moved lower by $3.00 at $767.00.
The walk-in cash trade today was on the slow side and so were the phones – perhaps just gearing up for the upcoming Turkey Day.
The GoldDealer.com Unscientific Activity Scale is a “4” for Thursday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Friday – 8) (Monday – 4) (Tuesday – 4) (Wednesday – 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.
Email confirmation using a PDF File when buying or selling is functional. It also includes the various forms of payment and includes bank wire instructions. And you can now see your actual invoice or purchase order on your computer screen.
When you buy or sell please check to see if we have your current email on file and that your computer will accept our email (no spam).
About shipping information – when buying or selling your rep will walk you through your current mailing information. Thanks for keeping us up to date if you have moved.
Our four flat screens downstairs with live independent pricing (BullionDesk.com) are a big hit with the cash trade. Live pricing moves all the buy/sell product prices on a real time basis. Yes – you can visit the store with cash and walk away with your product. Or you can bring product to the store and walk away with cash. When buying from us remember if you exceed $10,000 in cash (the real green kind) a Federal Form is necessary.
In addition to our freshly ground organic coffee offered visitors throughout the day we have added cold bottled water, cokes and Snapple. We have also added fresh fruit in a transparent attempt to disguise our regular junk food habits.
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We will be closed Thursday and Friday (Nov 27th and 28th) for Thanksgiving.
Thanks for reading – your friends at GoldDealer.com. Enjoy your evening and we appreciate your business.
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