Commentary for Thursday, June 27, 2013 – Gold moved down another $18.53 in selling seen late in the session closing at $1211.40. Even the Fed is beginning to downplay how the markets interpreted recent comments by Chairman Bernanke but the genie is out of the bottle so expect continued consolidation. Not all in one day but some technical analysts are now considering what used to be unthinkable: $1000.00.
Will it happen? Who knows but the marketplace sentiment has been negative for sometime which might also mean we are approaching a bottom. One thing is sure: gold is much cheaper than it was not too long ago so adding gold bullion to your holdings is recommended. The talk lately that gold has lost the battle against quantitative easing and government assault on paper money is nonsense. Oil prices moved higher today and so did the dollar. In a sea of pessimists Gold Sacks said today that gold was near a bottom so the contrarian view is still alive and well.
Silver closed down $0.06 at $18.53 and the public is buying physical product with both hands.
Platinum bucked the trend up $21.00 at $1326.00 and palladium was also higher up $18.00 at $649.00. Continued strong car sales support these two metals and physical sales are once again becoming stronger.
Allen Sykora (Kitco News) -Nomura suggested Thursday that gold could slip some more in the short term but also said that the market “is closer to the end of the fall in gold prices than the beginning.” Gold fell over the last week as Treasury yields rose in the aftermath of a meeting of the Federal Open Market Committee, Nomura said. Markets were factoring in potential for tapering of U.S. quantitative easing. Liquidation of gold exchange-traded-fund holdings has accelerated lately, suggesting further weakness in the short term, Nomura said. “For gold’s decline to ease, this will need to turn, which we have yet to see,” Nomura said. Further, any further move higher in Treasury yields may hurt gold more in the short term, Nomura said. However, the firm also adds, gold is already pricing in some measure of the FOMC normalizing policy, perhaps more-so than other markets. “On a longer-term basis, we think that gold is in the later stages of a fall and indeed, it is edging towards the mining cost of gold,” Nomura said. “We think that Asian buyers are likely to come into the market at some point as well, when the dip in gold prices becomes sufficiently large. This should eventually offer support as well. However, because of the change in market dynamics following the FOMC meeting, longer term we think that the size of any recovery in gold prices once flows turn is likely to be comparatively small.”
The physical market is acting like a light switch meaning we go from extremely busy to very little happening in an instant. The walk in cash trade was steady today but the phones were light so I would assume that public continues to watch but is expecting further weakness. I talked with a very large player on the East Coast this morning and he claims things are heating up in the physical trade and while we are busy I would not call the West Coast action “heated”.
Jane Wells and CNBC showed up in our parking lot at 7:00 in the morning and eventually filmed three segments on gold and silver one of which was live. She questioned Ken Edwards and the interesting point that was brought out is that even someone as savvy as Wells does not make a big distinction between the paper market which is crushing gold and silver and the physical market which goes along for the ride.
We run CNBC on one of the large flat screens downstairs to keep up with the latest events so it was fun to see Kenny talking to a live Wells in a lighted corner and the delayed film being presented live. Thanks for reading and enjoy your evening. These markets are volatile and involve risk: Please Read Before Investing
Written by California Numismatic Investments (www.golddealer.com).