Commentary for Monday, Feb 3, 2014 (www.golddealer.com) – Gold closed stronger today up $20.60 at $1260.40 helped by weaker equities and a weaker dollar. The ISM (Institute of Supply Management) index of manufacturing moved from 56.50 to 51.30. This move was a big surprise and fanned discussion by the bulls that the Federal taper might slow or even be eliminated. The bears cite the cold weather snap and claim the data is sketchy but employment numbers due later this week may add more wood to the fire. Any move to the upside in gold is good but I would not get too excited because today’s rally almost made up for last week’s losses of $25.00. Gold has however been bouncing toward its 100 day moving average which stands at $1275.00 and a break above this number would be very bullish especially if the emerging markets continue to falter and gold is seen as a safe haven.
Silver closed up $0.29 at $19.39 with really no buzz at all, failing to show any technical improvement and trading below its 50, 100 and 200 day moving averages. This is hard to figure because the first of the year produces a number of new bullion offerings which are sent to the grading services. These are then promoted on television and the Internet for silly prices but the underlying promotion should draw attention to silver bullion. Keep in mind there is a big value play in silver now because it could double in price and still be well below recent highs. The public continues to like cheap silver bullion as our sales of 1 oz rounds are about the same as US Silver Eagle sales.
Platinum was higher today by $10.00 at $1386.00 and palladium was down $1.00 at $702.00. The strike continues in South Africa but steady supplies are still available and few expect the strike to last for any extended period of time. I still like the trade of gold bullion for platinum bullion.
So when is a pull back in stocks good for metals? It depends on the size of the pullback and while stocks continue weak most stock analysts claim buying this weakness is a good idea because 2014 is promising. I am not a big stock guy but think the problem needs a bit more pondering because of the continued emerging market weakness. If smaller currencies continue to tank we would be setting the stage for a serious round of fear which is always good for gold.
But for the time being let’s wait and see what happens. A break to the upside from current gold levels would be very bullish but remember gold must show strength above $1300.00 before it will be taken seriously. Think you might miss the boat? You won’t as this market continues range bound and subject to further tapering pressure. But CNBC commentators this morning were saying that if the Fed can choose to taper it can reverse its decision on the short-term just as easily. This is true and Yellen would have no trouble pulling that trigger. But such a draconian move after all this conservative talk would be worth a jump of $50.00 or more in gold and place you above the important $1300.00 level.
The walk-in cash trade was solid today and the phones were busy so the public is getting more interested. A familiar theme especially in a rising market but follow through will be necessary to keep things moving so this week of important economic data will be interesting.
The GoldDealer.com Activity Scale is a “6” for Monday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Tuesday – 6) (last Wednesday – 5) (last Thursday – 6) (last Friday – 6) (Monday – 6). The scale is 1 through 10 and we believe this is a reliable way to “sense” real bullion business.
On the new GoldDealer.com site: Comex closing prices are posted (upper right hand corner of the home page) and are included on individual landing pages. Live pricing and the change function works: you can now compare the Comex close with live product pricing for a true value picture. The All Bullion Products link lists all products and includes all Bid (red) and Ask (green) prices. For some reason visitors overlook the heading All Bullion Products and move to the sub-categories under it like Gold, Silver, Platinum and Palladium. We are reworking All Bullion Products so when you hover over it with your cursor the text is highlighted.
For those who have asked premium quotes look like this – “spot plus $50.00” or “spot plus $3.00” and bullion products have them listed under the live prices. 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.
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