Commentary for Wednesday, July 9, 2014 (www.golddealer.com) – Gold closed up $7.80 at $1323.90 as escalating tensions in Israel added to problems in Ukraine and Iraq. The overnight Hong Kong and London markets were narrowly traded and quiet.
The Dollar Index is only slightly lower around 80 for the last few trading days – this is gold neutral.
And crude oil at about 103 dollars a barrel (actually down a few dollars over the last month but analysts predict higher oil because of Middle East turmoil) this will encourage the gold bulls.
The prime mover for gold in the short term will be the release of the Federal Reserve minutes for June. Due out later today this may provide clues as to shorter term policy decisions. Most expect they will stay the course which means continued tapering of their quantitative easing program.
Many believe this massive bond buying program will come to a close by year’s end. But there are still those who think the economy – especially relative to a slow jobs recovery – will mandate a continued low interest rate policy which will support gold.
The recent strength in the price of gold has been the result of Middle East problems and the expectation that inflation will soon become a factor for hard asset investors.
We expect small sudden moves either up or down because of thin trading conditions – a stronger close today would help the now mixed technical picture.
All Gold Exchange Traded Funds: Total as of 7-2-14 was 55,267,911. That number this week (7-9-14) was 55,226,307 ounces so over the last week we dropped 41,604 ounces of gold.
It might also be interesting to note that in 2013 the record high holdings for all gold ETF’s was 85,112,855 ounces. In 2014 the record low was 54,773,273 ounces.
All Silver Exchange Traded Funds: Total as of 7-2-14 was 625,467,493. That number this week (7-9-14) was 626,241,710 ounces so over the last week we gained 774,217 ounces of silver.
All Platinum Exchange Traded Funds: Total as of 7-2-14 was 2,850,144 ounces. That number this week (7-9-14) was 2,848,765 ounces so over the last week we dropped 1,379 ounces of platinum.
All Palladium Exchange Traded Funds: Total as of 7-2-14 was 3,020,756 ounces. That number this week (7-9-14) was 3,068,007 ounces so over the last week we gained 47,251 ounces of palladium.
Silver closed up $0.06 at $21.02 and there continues to be no silver buzz.
Platinum closed up $10.00 at $1505.00 and palladium was unchanged at $871.00
From Chuck Butler (Everbank) – “China is expected to announce their latest report on Currency Reserves. I expect the total to come in around $4 Trillion worth. So, that puts China with $4 Trillion in reserves, and the U.S. Fed with a $4 Trillion Balance Sheet of debt holdings. And there are still people out there that don’t believe in the “China story”. I had a dear reader send me a long note about how I’m so wrong about the dollar weakening beyond recognition. And that’s fine, he did it nicely, and with lots of facts, so he did his homework. But, didn’t mention debt. Hmmm. I wonder what the U.S. is going to do with all that debt? Rising interest rates will make the debt servicing even more expensive and eat away tax receipts. But don’t worry about that debt, right? Oh, and one more thing when I talk about the dollar collapsing, I’m not talking about it going away forever. I’m talking about in price and value. But then one can’t ever forget that no fiat currency has ever lasted forever.”
The “China story” (they build stuff and buy gold) and the “weaker dollar story” (we print too much money and debt is no problem) make up the grand plan of why over time gold will rise in value. And today both are getting no respect because the stories have been around for some time and the immediate rise in the price of gold remains elusive. I could add a few more reasons for acquiring bullion on the lower end of its recent trading range but “selling the idea” becomes moot after a year or two of flat pricing. What gold really needs now is a big run above $1400.00 – not an impossibility given recent technical improvement – and legions of re-believers will appear overnight.
The walk-in cash trade was again quiet and summer like. The national phones were below average so recent inflation talk has not done much to attract the American buyer.
The GoldDealer.com Activity Scale is a “2” for Wednesday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Thursday – 4) (Monday – 3) (Tuesday – 3). The scale (1 through 10) is a reliable way to understand our volume numbers.
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).
About shipping information – when buying or selling your rep will walk you through your current mailing information. Thanks for keeping us up to date if you have moved.
Our four flat screens downstairs with live independent pricing (BullionDesk.com) are a big hit with the cash trade. Live pricing moves all the buy/sell product prices on a real time basis. Yes – you can visit the store with cash and walk away with your product. Or you can bring product to the store and walk away with cash. When buying from us remember if you exceed $10,000 in cash (the real green kind) a Federal Form is necessary.
Like us on Facebook and follow us on Twitter @CNI_golddealer.
Thanks for reading from your friends at GoldDealer.com and enjoy your evening.
Disclaimer – The content in this newsletter and on the GoldDealer.com website is provided for informational purposes only. The precious metals and rare coin market is highly volatile and may not be suitable for some individuals. We suggest before deciding on a course of action that you first talk with an independent financial professional. While due care has been exercised in development and dissemination of our web site, the Almost Famous Gold Newsletter, or other promotional material, there is no guarantee of correctness so this corporation and its employees shall be held harmless in all cases. Our employees are not registered financial advisers but most have years of experience in the gold business. GoldDealer.com (California Numismatic Investments, Inc.) and its employees do not render legal, tax, or investment advice.