Commentary for Friday, Feb 21, 2014 (www.golddealer.com) – Gold closed up $6.80 at $1323.90 making for the 3rd weekly advance moving an additional $79.00 over the previous two weeks. There are cross-currents however but it was encouraging to see recent advances sustain themselves. Of course higher prices encourage follow-through buying especially on the physical side and so customer traffic has increased and the “order size” is moving up considerably.
Silver was up a modest $0.10 at $21.77 in quiet trading. No buzz here although silver does seem happy above $20.00 and we see virtually no big sellers. This most recent 9 day push to higher ground for silver saw prices up about 12%.
Platinum closed up $16.00 at $1427.00 and palladium was up $4.00 at $740.00. According to JD Powers this morning auto sales are greatly improved so perhaps this will mean higher prices for both platinum and palladium.
Crude oil is coming off a four month high but is still over $100.00/barrel up about 8% on the month. This will help support gold prices near term. The Dollar Index is trending higher on the week but at slightly over 80 today it is about the same as it was a year ago. A year ago gold was $1600.00 and today we are hovering around $1300.00 so the wider view of dollar versus gold does not suggest a direct link at the present. This of course will not remain true as common theory suggests that as the dollar moves lower gold will move higher. But there are a number of cross currents to consider in the new world view of gold as a safe haven asset. Look at today’s release of Existing Home Sales year over year down 5% and this scenario supports continued quantitative easing. So it’s easy to see the bulls and bears continue to wrestle and the ultimate short term winner is not clear but the technical short-term momentum belongs to the bulls as long as gold holds the important $1300.00 level.
In the Kitco News Gold Survey, out of 33 participants, 23 responded this week. Nineteen see prices up, while two see prices down and two see prices trading sideways or are neutral. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts. Last week participants were bullish. As of noon EST, Comex April gold prices were up about $2 an ounce on the week. “Several technical events have confirmed the bullish nature of the recent upturn in gold after last year’s precipitous price decline,” said Ralph Preston, principal, Heritage West Financial. Those technical-chart points include the double bottom lows from July and December 2013, gold moving over $1,280 and breaking the downward sloping trend line drawn over the peaks of August at $1,430 and October at $1,375, and the yellow metal moving over the 200-day moving average, which comes in Friday at $1,308.80, he said. Another factor in gold’s favor, said Adrian Day, president and chief executive officer at Adrian Day Asset Management, is the change in sentiment for gold, which caused formerly bearish participants to scramble. Kevin Grady, owner of Phoenix Futures and Options, said there are some fundamental reasons supporting gold, which is why he is bullish on prices for next week. “We continue to see tightness in the forward markets which I feel will spill over into the futures. Although the jewelers do not appear to be buying at these levels, there continues to be a bid under the market. This leads me to believe that we may be seeing some central-bank buying. “A key factor for gold this week was the release of the Federal Reserve minutes. Although the verbiage led us to believe that the current tapering plan would continue, the gold price held up under immediate pressure. The 200-day moving average comes in around $1,305. We need to hold this area for gold to attract new buyers,” Grady said. Few survey participants are neutral or bearish. The couple of participants who see weaker prices said given the sharp rally gold has experienced in February, it is due for a pullback in the short term.
The walk-in cash trade was hot today. Big to relatively big deals were common. The phone call in business was busy mostly modest buying but another gold whale showed up (previous customer) so remember my comments about whales yesterday. We purchased a very large gold position Wednesday and it was gone in three hours…we did not even have time to hedge the deal.
The GoldDealer.com Activity Scale is a “5” for Friday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Tuesday – 4) (last Wednesday – 4) (last Thursday – 5) (Friday – 5). The scale is 1 through 10 and a reliable way to understand our volume numbers.
On the new GoldDealer.com site: Comex closing prices are posted on the home page and individual product landing pages. Live pricing on the site moves all bullion products up or down during the day. The change number included next to the live pricing uses yesterday’s Comex closing prices as a reference. So if the change number is green and shows up $3.00 this is in reference to yesterday’s close. You now don’t have to visit several sites to find the Comex close relative to live trading numbers which are independently verified.
We reworked the All Bullion Products link on the home page. It now includes our Bid (blue) and Ask (green) prices. When you hover over it with your cursor the text is highlighted.
Premium quotes vary with product and look like this – “spot plus $15.00” or “spot plus $50.00” and bullion products list them under the live prices on their respective landing pages. This makes product comparison easy and GoldDealer.com is the only site on the net with this transparency. For example click on the link American Gold Eagle and under Our Live Buy Price and Our Live Sell Price you will see: our Buy Premium Spot + $15.00 and our Sell Premium Spot + $50.00 – Easy.
Live Chat is doing well and new customers like setting up their own encrypted accounts. Improvements will continue through the 1st quarter of 2014. Let us know what you want. We recommend upgrading old browsers to Google Chrome (free/secure) especially as our site becomes more advanced.
Sign up for our daily Gold Newsletter on the Gold Newsletter page if you are so inclined and remember this is now live for you too so why not sound off? Reader insight is interesting and varied.
Email confirmation when you are buying works and further details are being added including wiring instructions. Email confirmation when you sell to us is still a work in progress.
The four flat screens downstairs with live independent pricing (BullionDesk.com) is a big hit with the cash trade. This live stream moves all the buy/sell prices on each product so the cash buying public can see the markets move on a real time basis. Our site uses the same pricing model so no more guessing.
Our best price guarantee (buying or selling) remains famous so call Kenny at 1-800-225-7531. And for more than 30 years we have guaranteed your complete satisfaction. Like us on Facebook and follow us on Twitter @CNI_golddealer. Thanks for reading and enjoy your weekend.