Commentary for Wednesday, Aug 13, 2014 – Gold closed up $4.00 at $1312.80 and some claim this move was prompted by weaker than expected retail sales. I believe gold was stronger in reaction to China’s 9% annualized growth rate in industrial production which was coupled with their 12.4% retail sales number.
And while every dealer in the US is groaning over physical sales – claiming a boring summer market is killing business – gold has reached its highest level since July 21st even though the dollar is now trading at a 9 month high.
So physical sales might be flagging but prices are actually holding up well considering again this is the typical summer days of slow and slower.
Silver closed down $0.06 at $19.81.
Platinum was down $2.00 at $1470.00 and palladium was up $3.00 at $881.00. Rhodium continues strong – the cash market was up another $55.00 at $1425.00 and is still very cheap relative to old highs.
Curious about what the Chinese are up to with gold and want more than an opinion from an old coin dealer? Why not attend the China Gold Congress (September 10-12)?
Of course we are having a bit of fun but consider this event in the greater picture – the Chinese are not sitting on their hands. From www.china-gold.org – As the global gold industry’s main Chinese platform, China Gold takes gold mining, along with investment in and consumption of gold, as its main focus. We concentrate on gold, silver, platinum, and other precious metals. The activities of China Gold cover the entire mineral value chain. That includes gold mining, smelting and processing, market trend forecasting for gold investment, gold consumer products, particularly jewelry, design and technology. China Gold is committed to rapidly promoting the international cooperation and rapid growth of the Chinese gold industry. Our long-term aim is to help build China into one of the world’s gold industry powerhouses.
The China Gold Congress and Expo consists of three parts: Summit Conference, Exhibition, and Featured Events. The Summit Conference is subdivided into several forums based on specific themes. The forums will give companies the chance to promote their new products and technology. The Exhibition provides gold companies a unique opportunity to showcase their brands and serves as a conduit for communication and cooperation among key players in the domestic and international gold industry.
Here is our usual Wednesday report on the movement of all physical Exchange Traded Funds –
Gold Exchange Traded Funds: Total as of 8-06-14 was 55,422,125. That number this week (8-13-14) was 55,307,986 ounces so over the last week we dropped 114,139 ounces of gold.
It might also be interesting to note that in 2013 the record high 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 8-06-14 was 624,533,508. That number this week (8-13-14) was 626,673,177 ounces so over the last week we gained 2,139,669 ounces of silver.
All Platinum Exchange Traded Funds: Total as of 8-06-14 was 2,864,157 ounces. That number this week (8-13-14) was 2,817,655 ounces so over the last week we dropped 46,502 ounces of platinum.
All Palladium Exchange Traded Funds: Total as of 8-06-14 was 3,090,827 ounces. That number this week (8-13-14) was 3,087,387 ounces so over the last week we dropped 3,440 ounces of palladium.
From Fox Business – Week Ahead: Lots of Inflation-Related Data
The focus next week is on economic data such as retail sales and consumer sentiment that could impact inflation, a primary indicator being watched by the Federal Reserve as it determines future monetary policy.
Retail sales data for July will be released Wednesday and analysts believe spending will rise by a modest 0.2%. Weak demand for consumer goods will keep prices low but also keep inflation below the Fed’s target rate of 2%, which doesn’t help the overall economy.
“Retail sales likely advanced at a below-average 0.2% pace in July, as auto sales slid from a recent peak. Excluding autos, however, sales likely expanded 0.4%,” according to economists at IHS Global Insight.
The Fed wants to see prices rising at or near that 2% target because it means consumer demand for goods is strong. Inflation had been running at about 1% through much of early-2014, but has ticked higher in recent months.
Central bank policy makers have said they won’t raise interest rates until inflation hits that 2% rate. A growing faction of economists would like to see interest rates raised sooner rather than later because they fear keeping rates too low for too long will invite runaway inflation.
Also on tap next week is the Reuters/University of Michigan Consumer Sentiment Index due out Friday. Analysts believe the index likely added half a point to 82.3 in early-August, a result of falling gasoline prices and continued momentum in U.S. labor markets.
The U.S. added 209,000 jobs in July, the sixth month in a row with gains of more than 200,000, and the unemployment rate ticked higher to 6.2%, a sign that more people are returning to the workforce.
Consumer sentiment is often based on consumers’ optimism for the stability of their job and their ability to find another job if necessary. If labor markets are gradually strengthening, as they appear to be, then consumer sentiment will rise accordingly.
And if consumer sentiment is rising demand for goods will rise with it, which could help push prices higher and lift the inflation rate closer to that 2% target rate.
The Producer Price Index, a widely used measure of inflation which gauges the costs to manufacturers before finished goods are passed along to consumers, is also due Friday. The final-demand Producer Price Index likely increased by just 0.2% in July, which means inflation didn’t move higher in that sector.
Data on import and export prices is out Thursday and both are used to determine inflationary trends in products traded overseas by U.S. manufacturers. Analysts believe data on industrial production, also due Friday, will show that production grew by 0.3% in July, helped by “an unusually strong month for auto production (that) more than counteracted a drop in utilities output,” said the economists at IHS Global Research.
The walk-in cash trade today was better than average although there were a few people who just wanted to raise cash – something we do nicely all the time. The phones were mostly quiet but again there were IRA questions so the public is at least kicking the tires.
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.
In addition to our freshly ground organic coffee offered visitors throughout the day we have added cold bottled water, cokes and Snapple. We have also added fresh fruit in a transparent attempt to disguise our regular junk food habits – which seem to grow when things get this quiet. And it does not help that the world famous Randy’s Donuts is just down the street.
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Thanks for reading from your friends at GoldDealer.com and enjoy your evening.
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