Commentary for Thursday, March 6, 2014 (www.golddealer.com) – Gold closed higher today up $11.50 at $1351.70 regaining some Mojo as the dollar moved lower. This most recent push in gold surpasses highs seen Monday on news of Russian troop movement. It is a stretch to see a continued weaker dollar based on the year over year numbers but if the dollar does continue lower this becomes very inflationary as imports become more expensive.
Barron’s (Conway) (Ed Steer/Casey Research) – Gold is Heading Back to a Bull Cycle, Normura – Analysts at Nomura Securities this morning upgraded their view of precious-metals prices, and the gist of the argument is that the conditions which sent gold’s price tumbling 28% last year appear to have vanished. It’s a familiar theme to close watchers of the niche. “Like a phoenix regenerating from its ashes, cyclical gold appears set to recover,” write Tyler Broda and six co-authors. The shift comes with notable increases to gold and silver price forecasts: Nomura now expects gold to sell for $1,335 this year and $1,460 next, up from $1,138 and $1,200, respectively. The firm’s silver view went to $21.52, from $16.25. So why now? In short, ETF outflows have abated. Hedge funds are no longer panicking. Gold producers reacted to last year’s sell off by curtailing new projects. And real-interest rates don’t seem to be heading anywhere at the moment.
So the news about gold is not all bad and there are a few credible charting sources which claim that gold will bottom this summer but hedge their call with a large spread top to bottom ($1150.00 to $1250.00) and calls for much volatility in the process. Still today’s frame is more positive than negative and many believe that gold’s double $1200.00 bottom is too cheap to ignore. All of this of course does not help the bullion reader when faced with what to do today. All gold commentators are hanging their short term hat on Friday’s jobs number which places the Federal Reserve quantitative easing program in the middle of the picture. Strongly favoring gold is higher oil, cheap money and a weakening dollar.
And talking about cheap money, how about this from Chuck Butler (Everbank): So, back to the ECB meeting for a minute before we go on. I see where the research boys and girls at RBC think the ECB will cut interest rates today. See? I told you about the pressure the markets were putting on the ECB and Draghi. I certainly hope that Draghi sees things the way that Chuck sees them, and not with the markets. I’ve said this before, but cutting rates when they are already so ridiculously low has no effect on the economy. Just ask the U.S. or Japan, how long have these two run out zero interest rates, and how are their respective economies?
I think it’s also important to raise the issue of the potential damage created by extended loose money policy. Bubbles are created because the borrowing party is not held responsible and cheap money allows business to take chances they would avoid normally. The 2008 financial collapse is a good example of investment theory gone off the cliff. And the capitalistic system lives to create these vacuums in a zero interest rate environment.
But all of these are cyclical and then there is that giant money vacuum – the stock market. A disconnect here but no one seems to care in that the US economy is primarily driven by people who want stuff. Most would have you believe that buying that stuff has only been stalled by weather. But even if that is true it does not supply a reason as to why the vast majority of Americas are not participating in the recovery. The middle class is melting as the rich pile up more money and working poor become the norm. So how can the rosy stock market picture continue if the working man is left on the side of the road?
The gold telemarketers are once again selling certified American Gold Eagle Proofs for stupid numbers. If you want the proof in your IRA account the going price is about $350.00 over spot. I have two emails from folks checking prices which come in at a ridiculous $650.00 over spot so let’s be careful out there unless you want to spend what is left of your retirement money in the poorhouse.
Silver closed up $0.30 today at $21.54 seemingly happy above $20.00 with new talk now that claims silver in the longer term will be a better money play than gold. I don’t know about that and if push comes to shove I would favor the platinum, rhodium bullion market over possible gains in silver. The big thing silver has going for it however is that it trumps both gold, platinum, palladium and rhodium for sheer numbers and there are legitimate shortage issues.
Platinum closed up $10.00 at $1486.00 and palladium was $8.00 higher at $780.00. Platinum still looks solid as the strike in South Africa seems hopeless and new problems with electricity have developed in South Africa. The US Mint has begun minting new platinum eagles! This is the first regular issue platinum eagles since 2008 and like all new issues the Mint will spend a bundle promoting them which will help the physical market. We are now taking orders on coins to be delivered after the mint delivers (after March 19th) and are currently selling them for $90 per ounce over spot delivered. Recent premiums on platinum eagles have been as high as $150.00 so the price is right.
Our Activity Scale for Thursday only comes in at a 3 but things were definitely busier than yesterday. The walk-in cash trade was a bit crazy and the phones were busy.
The GoldDealer.com Activity Scale is a “3” for Thursday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Friday – 3) (last Monday – 4) (last Tuesday – 4) (last Wednesday – 3). Our scale (1 through 10) is a reliable way to understand 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. The Canadian Silver maple Leaf Box sold very well today!
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 precious metal 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 or selling is functional. A PDF file will be added which will create a picture invoice identical to the store invoice. This invoice will include information like wiring instructions.
The four flat screens downstairs with live independent pricing (BullionDesk.com) are 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 toll free (1-800-225-7531). We have guaranteed complete satisfaction for 30 years, same place, same people, no changes in management, immediate delivery and no nonsense. Like us on Facebook and follow us on Twitter @CNI_golddealer. Thanks for reading and enjoy your evening.