Commentary for Thursday, Feb 13, 2014 (www.golddealer.com) – Gold closed up $5.10 at $1300.40 finally regaining the important $1300.00 level in a long and drawn-out upward swoop which began in December of 2013. This is the seventh day in a row gold has moved higher and this above $1300.00 level is the 1st time since November 7th, 2013.
US retail sales for January were down 0.4% although many attributed this sluggishness to the horrible weather the dollar actually lost ½% which benefited gold. Amazingly the Senate passage of the House bill which puts the debt limit on hiatus goes unnoticed. Perhaps another example of how out of control the US monetary system has become and gold is now approaching its 200 day moving average ($1312.00). Kenny is having a sale on King British Sovereigns minted before 1933 – buy 20 or more and save $6.00 a coin. This is the quintessential small barter gold bullion coin some believe cannot be confiscated.
Silver closed up $0.05 at $20.38 and remains quiet although physical action is steady.
Platinum followed gold up $9.00 at $1416.00 and palladium was up $2.00 at $731.00. Platinum is now trading at less than a 10% premium to gold if you are a value buyer.
This from William Watts (MarketWatch) – The Commerce Department on Thursday said retail sales saw a seasonally-adjusted drop of 0.4% in January. Excluding autos, sales were flat. Economists polled by MarketWatch had forecast retail sales to fall 0.1% overall and to come in flat excluding autos. Gold slightly trimmed its decline after the data, but economists said the figures probably won’t alter the U.S. Federal Reserve’s plan to continue scaling back its bond purchases. Gold tumbled sharply in 2013 as the Fed prepared to scale back the purchases. The Fed’s aggressive monetary easing had been seen as a major driver of gold’s post-financial crisis rally on ideas the measures would undercut the U.S. dollar. Economists said the weak retail sales data was likely attributable to below-normal temperatures in January. The extreme cold and heavy winter storms “clearly disrupted retailers activities and deterred consumers from going out to shop,” said James Knightley, economist at ING. “Given confidence remains robust and employment is rising we expect to see a rebound in the next couple of months and as such today’s outcome shouldn’t impact on the prospects for further asset tapering at the March [Federal Open Market Committee] meeting,” he said, in a note.
So it should be obvious that the continued taper of quantitative easing by the Federal Reserve will have a negative impact on gold. The reason gold has moved significantly higher (up a $100.00 since December) is because the trading floor still questions the slowdown in economic numbers. At best economics is a mix of science and art and that is why even scholars on the subject can disagree. This indecision as far as the real economic picture is also responsible for gold’s lack of conviction even at these higher levels. If the trading floor firmly believed Wall Street was in a swoon and the “recovery” was actually slowing down gold would be significantly higher say in the $1350.00 range with plenty of takers. So both sides of the bull and bear question relative to gold are at odds with each other and still the overriding sentiment remains negative. Just look at the money being poured into stocks even as the S & P approaches all time highs. So for now look at gold’s $100.00 push into higher ground as an insurance bet and not the big comeback gold bugs want to see which would be driven by inflation or a big renewal in physical demand.
If you are a value buyer of gold bullion also keep in mind that the “weather” excuse for the slowing economy is probably the most popular reason Wall Street is brushing aside lack luck growth but not everyone is on board. This from Chuck Butler (EverBank) – “OK, you all know where I stand on the Tapering thing, right? I believe that by June or July (maybe even later as the Fed Heads sometimes have blinders on) the Fed Heads will realize that the economy was not as strong as they thought, and will have to stop their Tapering, and eventually have to come back to the bond buying table. This scenario, I feel, will be good for Gold, as the Fed credibility will be shredded, the faith in the dollar will crumble, and gold will be there to pick up the pieces.”
The walk-in cash trade today was again below average and the phones were only moderate to slow. Again not dead but the entire day lacked any buzz which is puzzling considering we are again looking at the important $1300.00 and the stock market has regained it footing.
The GoldDealer.com Activity Scale is a “3” for Thursday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Friday – 4) (last Monday – 5) (last Tuesday – 4) (last Wednesday – 4). 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.
The All Bullion Products link on the home page lists all products and includes our Bid (blue) and Ask (green) prices. Visitors overlook the All Bullion Products so we reworked the link. 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 evening.