Commentary for Thursday Oct 10, 2013 – Gold like Congress was all over the place today. It finally closed down $10.30 at $1296.60 under the important $1300.00 level. Yesterday’s low was $1295.00 and we are range trading so this close is not critical but a break below $1285.00 would not be good technically and it’s important to remember gold is not currently trading on fundamentals but is technically driven.
Silver closed unchanged at $21.85 and remains lackluster.
Platinum was up $12.00 at $1394.00 and we are seeing some trades of gold bullion for platinum bullion. Palladium was up $8.00 at $712.00. Also note that the PGM’s and silver benefit from a positive economy and so a solution to the budget impasse would be very helpful.
Peter Hug (Kitco) is usually right on the trading money so consider this: Surprise Risk Remains With The Bears – “Markets continue to find support until a solution on the debt ceiling issue is resolved. Some chatter overnight, that a short term extension is in the works, contributed to some softness in the markets overnight but traders were quick to cover their shorts. You cannot commit to this market within a reasonable risk/reward scenario. The Bank of England kept rates unchanged which again reinforces accommodation from across the pond and Janet Yellen’s nomination suggests a continued bias in the US towards accommodative monetary policy. Putting everything on the table, with the caveat that physical demand has dropped off (bearish), you would expect this market to be closer to the $1,370 range, rather than testing the $1,300 level. The market is priced with a 90% bias towards reconciliation in Washington. Therefore the surprise risk continues to remain on the books of the bears.”
This is surprising to me because Peter is a paper trader and the obvious short term direction for gold is lower as the Washington debt debate unwinds and the stock market continues to gain strength.
Or is it? Does this savvy trader sense a change in the wind? Remember I said that most real gold owners think the big move from the $1900.00 range and looking higher to the $1300.00 range and looking lower has about played out and are now considering any bottoming pattern. I usually get a few disgruntled emails when I talk about “lower” prices in gold and have warned about dealers who will not stop “beating the drum” regarding new records.
The charge to $2000.00 gold has failed and today’s market is more nuanced looking for value relative to the dollar. Items like the $20 Liberty Gold Piece did really well though.
With more than 30 years in this trade I have advocated gold bullion ownership but there were times during those 3 decades which I suggested caution and also asked what is the hurry? If you can buy product cheaper why not be patient?
So does Hug’s comment suggest a turnaround or is he just fearful of a short position in a market which might have already given up its biggest percentage loss to the downside? This is worth thinking about especially if you are a value buyer.
Both our walk in cash trade and national phone business was busy today but the action was mostly on the smaller side (some exceptions). Mostly buyers and mostly gold bullion but there were a few large gold bullion sellers. By the looks of the bullion tubes in these large sales this stuff has been around for a very long time. Seeing really old holders might be an indication that some long termers are finally selling.
Of course who knows and I would not draw any big conclusions here but for holders to turn yellow they have been hidden for more than 20 years.
My almost famous LA Physical Business Number is as follows (note the change to a running weekly tally): Mon: 6 / Tues: 6 / Wed: 2 / Thurs: 2 / Fri: _. My totally ignored scale is based on combined computer volume numbers (over “5” is busy) and is worth a peek because it is the only real physical gauge showed by a large dealer which points toward “buzz” (or not).
Phase One of our new golddealer.com web site will soon be complete and includes a new look along with live pricing. It will also include Live Chat, you will be able to set up your own customer account, and you will receive automatic email confirmation on buying or selling. Look for further interface improvements before year end which makes accounting, shipping and tracking easier (check to see if we have your email in the new system).
We now offer the choice of USPS or FedEx Ground. If you visit CNI in person look for the new flat screens with live feed and graphs (gold, silver, platinum and palladium). This will drive all our bullion products and we have programmed the premium spreads on each line to make your choices easier. As usual cash is always available. There is nothing like this on the West Coast and offers visitors complete transparency before purchase or sale.
Like us on Facebook and follow us on Twitter @CNI_golddealer. Notice our Daily Gold Newsletter archive has been moved and enlarged (30 days) to our Facebook page. For those asking the new website will also include a direct daily newsletter.
Remember we are very aggressive buyers and sellers and guarantee the best prices so let’s do some business. 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).