Commentary for Wednesday, March 5, 2014 (www.golddealer.com) – Gold closed up $2.40 at $1340.20 in a very quiet trading session. And it’s really amazing how the gold market is now ignoring recent Russian aggression.
The ADP payroll results disappointed, probably because of poor weather but there are some who believe this adds to the evidence that continued tapering might slow.
This market has definitely lost its Mojo amid the now many cross currents still pushing and pulling gold.
According to Reuters Hong Kong shares sank on Wednesday, led by cyclical counters, as China set a lower target for growth in fixed asset investment this year and a mainland listed company said it expects to default on bond payments. In what would be the country’s first domestic bond default, loss-making Chinese solar equipment producer Chaori Solar said it will not be able to meet interest payments on bonds due on Friday.
Any Chinese default which could change their projected 7% plus growth rate would pressure gold lower. It’s no secret the Chinese have been big gold bullion buyers for sometime but that said a slowdown in their buying program would be a drag on gold prices.
This from Jim Wyckoff (Kitco) should be read: “In other news Wednesday, the Euro zone showed stronger economic strength to start 2014, according to the Markit purchasing managers index, which rose to 53.3 in February from 52.9 in January. This particular reading was the highest since June of 2011. Also, European Union retail sales data rose by 1.6% in January from December, which is the best month-on-month growth rate in over a dozen years. These reports fall into the camp of those not looking for any further European Central Bank monetary policy stimulus forthcoming. The ECB holds its monthly monetary policy meeting on Thursday.”
It is still difficult to get a longer term read on what is happening in Europe and contrary to the above quote some believe the EU is beginning to struggle against a deflationary trend similar to that of Japan. But continued stronger economic growth in Europe would dispel recent thinking which points to continued loose monetary policy and would not support higher gold prices.
Still the Russian threat relative to the Ukraine is troubling so discounting gold’s safe haven qualities does not make any sense.
Silver closed up $0.06 at $21.24 as bullion premiums move lower in a physical environment which appears to be slowing.
Platinum closed up $12.00 at $1476.00 and palladium closed up $9.00 at $772.00. Talks are still not going well in South Africa and the strike which began Jan 23rd continues. Lonmin announced they would not hit their 750,000 ounce production goal of platinum this year. Talk in the market centers around the fact that stockpiles put away before the strike are running out. Producers have offered a 9% wage hike, but mineworkers want a pay structure that doubles entry level wages.
Add to the South African problems concerns about Russian sanctions. The Russians are the world’s largest producer of palladium so sanctions would cripple Russian supplies and drive prices higher. Also note that palladium was expected to be in deficit even before all this commotion.
It was so quiet today I am seriously thinking about bringing back the popcorn machine idea. The walk in cash trade was nonexistent and I looked out the second story security widows to see if the automated gate was closed by accident. The phones sounded like we did not pay the bill. Really it was quiet today.
The GoldDealer.com Activity Scale is a “3” for Wednesday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Thursday – 3) (last Friday – 3) (last Monday – 4) (last Tuesday – 4). 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.
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.
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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) 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.
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