Commentary for Friday, June 6, 2014 – Gold closed down $0.90 at $1252.10 and with no follow through pricing action after yesterday’s Draghi enlightenment I would say floor traders are now falling asleep. This type of price action is always blamed on “lack of fresh news” – but in this case there is a great deal going on but the gold market seems like it has disconnected on the short term. New jobs created last month (217,000) was slightly higher than expected but I don’t see what all the fuss is about because it will take a much higher number to break out of this stagnation. So in the meantime we will have to settle for the usual – this is not bad and improvement continues.
Silver closed down $0.09 at $18.96 and we did see a few larger buyers this afternoon but again considering the discount from highs this is not surprising.
Platinum was up $8.00 at $1453.00 and palladium is up $5.00 at $844.00. Platinum, palladium and rhodium continue to be the big bright spot – but the combined total of these is still only a small fraction of the gold and silver action. This dynamic alone should be encouraging because as PGM news spreads the depth of this market will move higher so the water is fine if you have been considering a diversification. We have amazing american platinum eagles for sale.
This commentary is from Chuck Butler (EverBank) as he quotes gold analyst Lawrence Williams – “Gold may have found something of a temporary range in the $1240s over the past week. Sentiment has moved against it and barring some unforeseen event it may continue to fall through the early northern summer – traditionally a weak time for precious metals. But there is a huge dichotomy in its performance in that supply/demand fundamentals continue to look ever more positive, yet gold, and other precious metals, have been continuing to fall. Now whether this is, as some suggest, due to the machinations of the bullion banks suppressing the gold price on behalf some central banks (notably the U.S. Fed and the ECB), or just a collapse in pro-gold sentiment in the general investment arena remains to be seen, but if the latter some turnaround trigger could see gold positive sentiment return and the price soar – but when might this happen? Jeff Nichols, one of the more down to earth of the normally pro-gold commentators, in his latest missive to clients, picks up strongly on the ever-improving fundamentals point. Despite a 5% fall in the gold price over the past couple of weeks he feels there is no reason for gold investors to despair. Easy to say as a commentator, but tough for those who may have seen their gold investments dive over the past two years. Is there no end to the decline?”
Why this is important at this particular stage of the physical gold world is that we have digressed from the more happy periods earlier this year. The run gold had from $1200.00 to over $1350.00 from December through February should be called the “happy time” for gold. The Russians where acting up, prices were moving higher and the psychology behind the physical market was much improved.
This has happened twice in recent memory as gold has slugged its way through the trading range between $1200.00 and $1400.00. In each case as prices moved higher the mood in the store was upbeat. It was not that everything was just peachy – there were many sellers along the way – but most of the real day to day action was contained meaning we bought plenty of product of had no trouble selling to the next customer.
Today even with yesterday’s pop in prices because of confirmed ECB lose money programs the mood for gold bullion is subdued. We make less fresh coffee during the day for the public and there is little in the way of buzz even though most major governments are inflating their currency.
The reasoning behind this is of course that bullion dealers can only sell the sizzle for so long – sooner or later the buying public must see higher prices or sustained interest moves on except for the most devoted.
So what to do? Like always the best advice is to avoid the anxiety – and wait this market out. You don’t need a professional to tell you when this lethargic market is going to come to life because all they have to offer is another opinion.
Trust your own instincts – avoid the telemarketing hype which is easy to spot – when you call the “pretend” bullion dealer (there are at least 4 majors) the last thing they want to sell you is real bullion and this is immediately obvious in their conversation.
The next big test for gold will be support above $1200.00 and if that holds we will have seen a triple bottom and most commentators will move from negative to neutral if they are honest. Believe it or not there are signs of inflation beginning to show around the edges.
And remember there has never been a currency expansion like we have seen since 2008. Sooner or later that reality will move gold to new highs and if it takes longer than you thought – be content with the notion that you stayed in the game – holding an insurance policy against government fiat currency.
(Kitco News) – Participants in the weekly Kitco News Gold Survey are bearish on gold prices for next week, looking for a retest of recent lows. Out of 33 participants, 22 responded this week. Of those, 12 see prices lower, seven see prices higher and three see prices trading sideways or are neutral. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts.
Last week, survey participants were slightly bearish for this week. As of 11:30 a.m. EDT, Comex Augustgold was up about $5 for the week.
Those who see weaker prices said the downtrend in gold continues despite a rally Thursday, following the European Central Bank meeting.
“I think we’re going to go back down. We had a little bit of a retracement here, a bounce off support. But I don’t see it holding. I think we go back to test support. The downtrend continues,” said Daniel Pavilonis, senior commodities broker with RJO Futures.
Participants who look for higher prices said gold values in the short-term became oversold and the market is due for a bounce.
President Barack “Obama’s rhetoric against Russia is heating up again, even as the violence in Ukraine is getting worse. That’s obviously positive for gold. And the ECB’s tepid stimulative measures are also positive since they demonstrate the lack of resolve on the part of the ECB; so far, it’s been all talk and very little action. These two developments against a gold price that had become short-term oversold, suggests a positive week or two,” said Adrian Day, chairman and chief executive officer of Adrian Day Asset Management.
Those who see prices holding sideways said with the two major news events out of the way, the ECB meeting and the May nonfarm payrolls report, there’s little to stir the market.
“Gold is suffering from a lack of interest as most speculators look elsewhere for trading opportunities,” said Frank Lesh, broker and futures analyst with FuturePath Trading. “Physical demand isn’t that strong right now either. Traders were set up short gold and the euro for the ECB meeting and when the announcement of policy came out they all covered, so now gold just hangs around in a range. This market is oversold and could rebound at any time, or maybe it just continues sideways to relieve the overbought status, but for right now it is only a short-term trade. Most participants will just wait for this market to make a decisive move before becoming involved again. I am neutral on gold for now.”
The walk in cash trade today was active most of the day and there was no clear favorite – some were buying and some were selling. Most of the action was modest to medium with really no whales. The phones were medium to quiet but there was activity all day in the store because commentator David England (The Trader’s Eye) travelled from Illinois to see the operation in person – and record his national radio show from the CNI Building. David is a very nice fellow and even bought us all lunch.
The GoldDealer.com Activity Scale is an “6” for Friday. The CNI Activity Scale takes into consideration volume and the hedge book: (Monday – 7) (Tuesday – 6) (Wednesday – 6) (Thursday – 8). The scale (1 through 10) is a reliable way to understand our volume numbers.
Live pricing on the site moves all bullion products up or down during the day. The Bullion Products link on the home page now includes our Bid (blue) and Ask (green) prices. 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 simple and GoldDealer.com is the only precious metal site on the internet with this transparency. Live Chat is doing well and new customers like setting up their own encrypted accounts. 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. Also note that our old Specials Email list is not compatible with the new format so we have cleared all data.
If you want to be notified about specials please check the Special Offers box under All Bullion Products. Also note that the email list for the Gold Newsletter and our Special Offers are separate.
Email confirmation using a PDF File when buying or selling is functional. It also includes the various forms of payment and includes bank wire instructions. And you can now see your actual invoice or purchase order on your computer screen.
When you buy or sell please check to see if we have your current email on file and that your computer will accept our email (no spam).
Also a reminder about shipping information – when buying or selling your rep will walk you through our most current mailing information. Please keep us up to date if you have moved.
The new USPS server is installed with the upgraded post office software! Look for better national tracking and faster service in a few days from Uncle Sam.
Our four flat screens downstairs with live independent pricing (BullionDesk.com) are a big hit with the cash trade. This live stream moves all buy/sell prices so the cash buying or selling public can see the markets move on a real time basis. Our site uses the same pricing model so no more guessing and we guarantee your satisfaction.
Like us on Facebook and follow us on Twitter @CNI_golddealer. Thanks for reading and enjoy your summer weekend.