Commentary for Wed, May 14, 2014 – Gold closed up $11.10 at $1305.70 so we are once again holding onto the reassuring $1300.00 mark but reasons for the push to higher prices are not obvious. Some claim inflation fears in the US but a check on the annual US inflation rate will show all three years come in at about 1.5% if you buy the traditional way we track inflation today. Some writers claim the Ukraine tension is the culprit but I see this Russian game of dangerous chess as more of an underpinning that something which might push gold higher unless things get out of hand.
The Europeans are doing a good job at talking down the euro and gold did move higher overnight on news of French Consumer Price Index being unchanged and Germany’s number moving lower. This creates more expectation that the European Central Bank will come up with additional plans to stimulate via a continued lose money policy. Draghi has done a masterful job by just by suggesting they will do something this summer and as the euro moves lower the dollar especially this week has been stronger (rising above 80 on the index) which holds gold’s forward movement in check. Gold’s 50 day moving average ($1311.00) is now being watched carefully because a move above this level would encourage all sorts of computer trading.
This from Tom Jennemann (FastMarkets) also offers reasons for a stronger gold price today – Comex rises on expectation of opposition party victory in India – Orlando , Florida 14/05/2014 – Gold futures crept above $1,300 an ounce Wednesday on the hopes that elections in India could usher in less onerous restrictions on gold imports. Gold for June delivery on the Comex division of the New York Mercantile Exchange was last up $9.40, or 0.78 percent, at $1,304.20 an ounce. Trade has ranged from $1,291.60 to $1,306.10. The gold market is awaiting the results of elections in India – a victory by the Bharatiya Janata Party-led National Democratic Alliance (NDA) would probably bring positive news for the metal in the form of lower import restrictions, analysts said. “The Congress Party has put into effect tariffs that have made gold imports anathema and we would not be surprised to see a [Narendra] Modi government move quickly to end those tariffs, believing that free markets are better markets and believing too in the efficacy and supremacy of the individual relative to the government,” Dennis Gartman, editor of the Gartman Letter, said. UBS analyst Edel Tully said that the election might create some short-term noise for the gold price but ultimately the important factor for gold is not just who wins the election, but what announcements on gold will be made in the weeks and months to come. “While there could be some pent-up demand initially, keep in mind that the next couple of months are not seasonally strong in terms of physical demand in India. The period from August through to November would be much more interesting given seasonality, and especially if more changes would be announced at that point,” Tully said. Elsewhere on the economic front, today is relatively light, with the US April producer price index due this afternoon. Yesterday’s weaker-than-expected retail sales report on Tuesday did little to dispel the perception that economic growth justifies the Federal Reserve to continue to pare stimulus. In the wider-markets, the euro was 0.12 percent stronger at 1.3720 against the dollar, while Germany’s DAX and France’s CAC-40 were off 0.09 percent and 0.12 percent respectively. In Asia, the Nikkei finished down 0.14 percent and the Hang Seng up 1.03 percent. As for the other precious metals, Comex silver for July delivery was up 30.3 cents at $19.850 an ounce. Trade has ranged from $19.510 to $19.895. Platinum futures for July delivery on the Nymex were last up $20.30 at $1,476.30 an ounce, while the most-actively traded palladium contract was at $825.60 an ounce, up $8.30. Platinum producers at the South Africa platinum belt and were preparing for receptive workers to return to work today but, faced with of death threats and physical intimidation, few returned to their posts. Hundreds of miners blocked roads near Lonmin’s South African platinum mine in an attempt to block fellow strikers from breaking rank and returning to work. “This will doubtless make it impossible for production to be resumed and for the time being will continue to drive up platinum and palladium prices,” said Commerzbank, which noted that platinum has risen to a four-week high, while palladium has managed to achieve its highest price since August 2011.
These are the changes in the largest gold Exchange Traded Fund (GLD – SPDR Trust) since our last reported numbers: we moved from 25,169,478 gold ounces on deposit (May 7th, 2014) to the current holdings of 25,092,435 gold ounces on deposit (May 14th, 2014). This means the fund has moved lower by 77,043 over the last 8 days. We will track this number on a weekly basis which will provide a better short-term feel of which way speculators are moving in this exchange traded gold fund.
Silver closed up $0.23 at $19.73. The physical market here at GoldDealer.com was on the subdued side.
These are the changes in the largest silver Exchange Traded Fund (SLV – BlackRock iShares) since our last reported numbers: we moved from 321,804,055 silver ounces on deposit (May 7th, 2014) to the current holdings of 331,804,055 (May 14th, 2014 ). This means that the fund has moved higher by 10,000 over the last 8 days. We will track this number on a weekly basis which will provide a better short-term feel of which way speculators are moving in this exchange traded silver fund.
From the Wall Street Journal (MarketWatch) – Total Physical Silver Demand Achieves Record Level in 2013 – Coin Demand Realizes New High Along With Strong Growth in Global Jewelry and Silverware Demand – NEW YORK, NY, May 14, 2014 (Marketwired via COMTEX) — Total physical silver demand rose by 13 percent in 2013 to an all-time high, according to World Silver Survey 2014, released today by the Silver Institute. This was primarily driven by the 76 percent increase in retail investment in bars and coins coupled with a sturdy recovery in jewelry and silverware fabrication. On the supply side, silver scrap fell by 24 percent, experiencing the largest drop on record to reach its lowest level since 2001. The silver price averaged $23.79 in 2013, the third highest nominal average price on record, in a particularly volatile year for the entire precious metals complex. – Silver Fabrication Demand – Total physical demand for silver stood at a record 1,081 million ounces (Moz) last year. The largest component of physical silver demand, industrial applications, dipped by less than 1 percent to 586.6 Moz, to account for 54 percent of total physical silver demand. Asia, however, experienced a 3 percent increase in silver industrial demand, led by China, where a continued recovery in the electrical and electronics sector, along with gains in the Chinese ethylene oxide industry, took total Asian industrial offtake to a new high. Japan also experienced gains in silver industrial demand. Last year’s recovery in jewelry fabrication was a reflection of the improved economic outlook in the industrialized world, which lifted consumer confidence and retail sales for a 10 percent increase in jewelry demand. Global silverware fabrication rose 12 percent to a three-year high, due to strong gains in India and China, while photography demand slipped by 7 percent in 2013, posting the slowest percentage decline in nine years. – Silver Mine Supply and Costs – Silver mine production grew by 3.4 percent to reach 819 Moz. A large portion of the growth is attributable to the primary silver mining sector, which experienced strong growth from the start, along with the ramp-up of operations that entered production in recent years. Primary silver mine production grew 6 percent, and accounted for 29 percent of global silver mine supply. Mexico was the world’s leading silver producer, followed by Peru, China, Australia and Russia. Primary silver mine cash costs stood at US$9.27 an ounce, increasing 1 percent in dollar terms. The producer silver hedge book was aggressively reduced last year to stand at 15 Moz on a delta-adjusted basis. – Above-Ground Silver Stocks – Supply from above-ground stocks dropped by 23.2 percent to 199.7 Moz. Scrap supply to the market in 2013 experienced the largest year-on-year reduction since the 1980s and was due to a combination of softer silver prices and an exhaustion of “distressed” coin and jewelry recycling. As a proportion of total silver supply, scrap dropped to under 20 percent, after averaging 25 percent in total supply the previous two years, and this served as a substantial contributor to the physical market deficit posted in 2013. Government sales increased only slightly to 7.9 Moz, an extremely low level considering government disposals averaged 43 Moz per year from 2002-2011. – Silver Investment – Total identifiable investment demand, which includes physical bar investment, coins and exchange traded funds (ETF) inventories, rose by 27 percent to a three-year high at 247.2 Moz last year. The growth was driven principally by a strong rise in retail purchases of silver bars and coins. Demand for physical bullion bars more than doubled last year to reach a high of 127.2 Moz, while purchases of silver coins and medals rose 38 percent to a record 118.5 Moz. ETF holdings showed only modest growth in 2013. – About the World Silver Survey, the Silver Institute – The 2014 edition of the World Silver Survey was independently researched and compiled by the GFMS team at Thomson Reuters. The Silver Institute has published this annual report on the global silver market since 1990, to bring reliable supply and demand statistics to market participants and the general public. World Silver Survey 2014 was sponsored by 22 companies and organizations from North and South America, Europe and Asia. These firms are involved in most aspects of the global silver industry, from mining and refining to trading and manufacturing. Founded in 1971, the Silver Institute is an international industry association. Its members include leading silver producers, refiners, manufacturers and dealers. For more information, please visit the Silver Institute’s web site at www.silverinstitute.org.
Platinum closed up $30.00 at $1485.00 and palladium was up $11.00 at $828.00. PGM’s higher today unfortunately because of violence in South Africa and palladium made new highs once again.
If your interested in investing in precious metals the Austrian Silver Philharmonic 1 oz and the PAMP Suisse Gold Bar Kilo have very low premiums.
Walk-in cash traffic was moderate today and so were phones but for some reason there was a big jump in the sale of 1/10 American Gold Eagles. The premium on these smaller gold coins is higher than the 1 oz American Gold Eagle but they are very popular with folks who want “barter” money in case things go over the cliff here in the US. Not my favorite scenario but there really is a core of physical owners who belong to this school.
The GoldDealer.com Activity Scale is a “5” for Wednesday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Thurs – 4) (last Fri – 6) (Monday – 4) (Tues – 4). The scale (1 through 10) is a reliable way to understand our volume numbers.
An update on the In and Out Hamburger Wagon in our parking lot idea. Everyone loves a good hamburger and we thought it would be a nice way of saying “thanks” for the business. Anyone with a tax free invoice ($1500.00) can get a free Double/Double on the way out. The truck would be in the parking lot about 2 hours and we would have tables in one corner. The upside to this idea is getting a great hamburger when you make a purchase in person. The downside is that while we have a large lot this idea might create a parking problem. Please opine at RSchwary@aol.com and thanks for the input.
The initial reaction is mixed. Some love the idea and some claim the parking lot can be crowded at times and this idea will create more problems for those who are in a hurry.
So the jury is still out but the most creative answer to our free hamburger dilemma has to go to this reader: First Prize (there really was no prize giveaway but we needed some sort of drum roll) – LOVE the idea of burgers in the parking lot. I can buy bullion to protect against hyperinflation, whilst hyper-inflating my waistline.
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 and includes payment instructions. You can now see the 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).
Our four flat screens downstairs with live independent pricing (BullionDesk) 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.
Our Price Beating Guarantee (buying or selling) remains famous so call Kenny (1-800-225-7531) and get more money in your pocket. We guarantee your satisfaction and include our No-Nonsense Policy (NNP) which clients consider a welcomed extra. Like us on Facebook and follow us on Twitter @CNI_golddealer. Thanks for reading and enjoy your evening.
