Commentary for Thursday, Jan 2, 2014 – Gold closed up $23.10 at $1225.00 which is encouraging as we all wonder what price levels we will see in 2014. Last year gold took a drubbing down 28% and silver was down 35% so everyone is looking for more positive news. With such discounts however the contrarian investor contemplates equally solid gains. This is especially true if investors begin to look for value in 2014.
There are those who think inflation is dead and this really accounted for the big sell off in the Exchange Traded Funds. But consider at the same time China and India were not dissuaded. And even as 2014 begins the expectation remains that both these developing countries want more gold and further that China is making noises that paper currency needs gold backing.
Silver was up $0.77 at $20.10 and this physical market remains quiet.
Platinum was up $34.00 at $1404.00 and palladium was up $1.00 at $730.00.
From Allen Sykora (Kitco): Adrian Day: ‘Gold Could Stabilize In the Near Term’ Gold may stabilize and start rebuilding in 2014, says Adrian Day, president of Adrian Day Asset Management. Equities soared in 2013, while gold fell sharply. “In my view, the risk for 2014 is a reversal in both markets; we are positioning ourselves, albeit early, for those turns,” he says in a portfolio review. He cites potential positives for gold, starting with global monetary policy that remains accommodative, with low interest rates. “Now that tapering (of Federal Reserve quantitative easing) is under way, and the uncertainty partly removed, perhaps gold can finally stabilize,” Day says. “As importantly, debt levels in major economies—the U.S., Europe, and Japan—remain extremely high and continue to rise.” He comments that the pace of selling from exchange-traded funds has slowed, physical demand in China remains strong and India’s currency is recovering, making gold more attractively priced in that market. “And sentiment for gold is at record lows, a positive sign for a contrarian,” Day says. He later concludes: “Though we should not expect a dramatic price reversal after such an extended decline, gold could stabilize in the near term, and slowly begin a recovery, albeit in fits and starts, over the next several months. A dramatic increase could come later in 2014 or 2015.”
The above is worth a peek because it brings out something that has been lacking in real gold commentary. The physical gold community especially in America suffers from two problems: (1) it is thin and therefore subject to being pushed around and influenced easily. (2) There does not seem to be a middle ground when it comes to enthusiasm. I have mentioned this before but this point is important.
When news is good (prices are moving higher) the excitement level is like 4th of July and the business itself draws in every kind of yahoo to exploit rising prices for personal gain. The newbie is sold a pile of “junk” and told he will soon make a fortune. The “We Buy Gold” places spring up on every corner and suddenly there are a hundred “experts” touting gold prices. Most explain that gold will soon be $5000.00.
The real experts in this business understand that gold is a commodity not a cult. Sometimes it moves up and sometimes it moves down. Real devotees are either extraordinarily private or they use gold as an insurance blanket. It is not something that should be sold because apocalypse is around the corner.
Conversely when news is bad all of the new jokers to the trade move on and sell aluminum siding in Florida. And when the news plays out over a year or two (like now) even the committed within this trade get discouraged. Today’s good news is that the wave of bad news might be passing into something more comfortable.
I think most informed bullion players have had low expectation for sometime even though there have been runs at higher levels. The reason being is that regardless of your gold optimism the technical picture for both gold and silver has been a disaster.
So do I smell something in the 2014 air that might mean gold will at least forgo another hammering?
Adrian Day is a respected trader and perhaps he has the same feeling. It is not a big game changer in that the gold bull is still in the hospital but such commentary does foresee better times ahead. You would have to assume that if this is the case then we are at or close to a bottom for gold and continued base building throughout 2014 might be the order of the day.
I hope so because with even a little encouragement the precious metals could easily gain a foothold and leave that “off balance” feeling behind. Will the metals do exceptionally well in 2014? It is hard to say but even fighting to a draw under the current technical price picture is not bad. And there is something to be said about more time to accumulate at lower prices. This is the time honored approach followed by our friends in China and India. Perhaps we all can relearn this simple lesson: wait longer enough and paper currency will devalue.
The walk-in cash trade was busy most of the day but the telephone action was on and off again. Still an up day like today creates its own action as higher prices gets everyone’s attention.
The GoldDealer.com Activity Scale being “4” for Thursday. The CNI Activity Scale takes into consideration volume and the hedge book: (Friday – 6) (Monday – 5) (Closed Tuesday and Wednesday) (Thursday – 4). The scale is 1 through 10 and we believe this is a reliable way to “sense” real bullion business.
Live pricing and the Comex closes are still need work but we are gaining ground. The Bullion link (upper left hand corner of the site) is being modified with traditional sort (all gold, all silver, all platinum, all palladium) we will then add our buy price next to our sell price for comparison and post closings.
We have two great pages called What Are My Coins Worth and Ask An Expert where you can get answers to any questions you may have.
Keep in mind this site is a work in progress which will not be completed until the first quarter of 2014. We have added new buy and sell premiums: Example – American Gold Eagle 1 oz – Buy Premium: Spot + $15.00 Sell Premium: Spot + $50.00
The new system still requires a call to a live person to confirm and receive an order number. Live Chat is doing well and new customers can set up their own encrypted accounts. The automatic email confirmation (buying or selling) needs work.
Thanks for your patience and if you have other ideas your email is appreciated.
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?
The live flat screens within the CNI Building are operational and include premiums so calculators are no longer needed figure the cheapest bullion product. Our best price guarantee (buying or selling) is famous so call Kenny at 1-800-225-7531.
Like us on Facebook and follow us on Twitter @CNI_golddealer.
Thanks for reading and enjoy your evening.
The big seller today was the American Silver Eagle
