Commentary for Thursday, Feb 20, 2014 – Gold closed down $3.50 at $1317.10 is another round of mild profit taking. A loss for sure but it could have been worse against a stronger dollar and a round of positive economic news. The Flash PMI (Purchasing Managers Index) moved from 53.7 to 56.7 the highest level in 4 years. The CPI (Consumer Price Index) came in at a 0.1% increase further indicating inflation is still lost at sea. And the LEI (Leading Economic Indicators) was up 0.3% from unchanged in December. All of this helped the dollar and reinforces the notion that the Federal Reserve will continue to curb its monetary policy. The PAMP Suisse Gold Bar Kilo was a good selling item today
The key here might be that both gold and silver held their 200 day moving averages ($1308.20 and $21.11). And evidence of support has created increased buying as the public wonders if we have indeed bottomed. There is some evidence the public is once again interested in small gold bullion coins. But it’s important to compare premiums on smaller units: the British Gold Sovereign for example is a great choice with a premium of $80.00 over spot when compared to say the French 20 Franc Rooster (+ $102.00 premium) or the Swiss 20 Franc (+ $102.00 premium). All of these smaller bullion coins are a better buy than the US Gold Eagle ¼ oz (+ $123.00 premium) so premium comparison will save you money.
Silver closed down $0.17 at $21.67 in quiet trading. We sold a few 90% SIlver Bags but not many
Platinum closed down $12.00 at $1411.00 and palladium was unchanged at $736.00.
Gold is softer for a number of factors including yesterday’s decision by the Federal Open Market Committee to stay the course with tapering its bond buying program. I think also that a weak opening in the Asian stock sector places pressure on gold because it again raises the question of Chinese growth. Slow the industrial capability of China and it follows that all sectors of the commodity index will move lower including gold. I think this reasoning is wrong for a number of reasons including the notion that the Western world just does not get the Chinese commitment to the physical gold market.
There are other considerations which will create headwinds for gold this week. Wyckoff (Kitco) – “There is a heavy slate of U.S. economic data due for release Thursday, including the weekly jobless claims report, real earnings, the consumer price index, leading economic indicators, the flash manufacturing PMI, the Philadelphia Fed business outlook survey, and the weekly DOE energy stocks report.”
In the end however little of the above will have much impact on gold short-term and all should be considered small potatoes. The gold market is still dealing with lack of interest and lack of momentum even though it appears comfortable at the higher end of its recent trading range. This is not good and the lack of buzz is concerning. Even the escalating fighting in Kiev is not creating any concern. If the floor traders decide the short term party is up there could be further profit taking.
But if you are a gold optimist short-term and believe recent strength is just the opening act consider the following. A few gold bullion whales have reentered this market. In my book a gold whale must invest $1 million or more in bullion at one time. Of course this number is subject to revision and when it’s slow like now perhaps half that amount qualifies. But a few old and large customers have shown renewed interest at current levels and a large bet against the lower trend is worth a closer look.
Also worth noting is the big jump in our site traffic. This has translated into somewhat higher volume numbers but nothing close to proportional. A lot more people seem interested in GoldDealer.com and whether that is because of the new design or more new interest in gold remains to be seen.
The walk-in cash trade was steady but not rushed. The phones were either quiet or steady most of the day. I guess the question should be are we resting or has the physical gold market run out of gas? My best guess is that things will remain steady but range bound as the bulls and bears continue to wrestle. Also keep an eye on Europe – any gas leak over there could lead to higher prices in gold.
The GoldDealer.com Activity Scale is a “5” for Thursday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Friday – 4) (last Tuesday – 4) (last Wednesday – 4) (Thursday – 5). The scale is 1 through 10 and a reliable way to understand our volume numbers.
On the new GoldDealer.com site: Comex closing prices are posted on the home page and individual product landing pages. Live pricing on the site moves all bullion products up or down during the day. The change number included next to the live pricing uses yesterday’s Comex closing prices as a reference. So if the change number is green and shows up $3.00 this is in reference to yesterday’s close. You now don’t have to visit several sites to find the Comex close relative to live trading numbers which are independently verified.
We reworked the All Bullion Products link on the home page. It now includes our Bid (blue) and Ask (green) prices. When you hover over it with your cursor the text is highlighted.
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 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.
Live Chat is doing well and new customers like setting up their own encrypted accounts. Improvements will continue through the 1st quarter of 2014. Let us know what you want. 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 and remember this is now live for you too so why not sound off? Reader insight is interesting and varied.
Email confirmation when you are buying works and further details are being added including wiring instructions. Email confirmation when you sell to us is still a work in progress.
The four flat screens downstairs with live independent pricing (BullionDesk.com) is a big hit with the cash trade. This live stream moves all the buy/sell prices on each product so the cash buying public can see the markets move on a real time basis. Our site uses the same pricing model so no more guessing.
Our best price guarantee (buying or selling) remains famous so call Kenny at 1-800-225-7531. And for more than 30 years we have guaranteed your complete satisfaction. Like us on Facebook and follow us on Twitter @CNI_golddealer. Thanks for reading and enjoy your evening.
