Commentary for Tuesday, March 4, 2014 (www.golddealer.com) – Gold closed down $12.30 today at $1337.80 so my original assessment about the Russian troop problem was correct and yesterday’s gains based on an improbable outcome. Putin did say however that he reserves the right to use force in the Ukraine so it’s no telling what is going on in that oil rich part of the world.
Still gold was on a 4 week run to higher ground before the Russian intervention and it still must deal with a great deal of overhead resistance around $1360.00. The dollar remains flat which is puzzling considering the problems in Europe are not going away. And who cares about debt anyway as the latest numbers show Americans are borrowing more even though they are making less. On CNBC this morning the finance people were crowing about paying more for cars and trucks as the consumer extends the time for repayment. All of this goes into making sure inflation will once again be visiting but not while President Obama is in the White House.
Silver closed down $00.26 at $21.18 and there remains no buzz in this market. Buying is pretty steady but all the stories about getting rich with silver having left the theatre. If this non-story continues it might be just the right time to begin accumulating again. Today’s pricing looks good and so does inventory choices. I say this all the time but today’s consumer is visited with the “golden age” of silver choices. Most of the bullion products are new, shinny, innovative and cheap. The South African Silver Krugerrand is a great example. Also consider that silver could still go up 50% in price and only be 2/3 of the way back to its closing recent peak. It really does not get much better than that when you consider relative upside to relative downside and I am not a big silver player.
Platinum was higher by $3.00 at $1464.00 and palladium was up $14.00 at $763.00. Most large dealers have plenty of platinum bullion products available (Eagles, Koala, Nobles, Bars) but for some reason there is not much action with the public. The number of people trading gold bullion for platinum bullion has moved lower and even the sale of Rhodium Bars ($1225.00 delivered/today) has stalled. Why? I can’t figure it out and consider this area of the physical market very undervalued. It is possible that the public still has not made the connection between gold and platinum. This was always the case in the old days because when you mentioned diversification into platinum bullion most people did not appreciate the relative value ratios.
I got this from Chuck Butler (EverBank) and he is quoting the latest from Koos Jansen who apparently stays up nights looking carefully at the Shanghai Gold Exchange (China’s biggest spot gold market). “The Shanghai Gold Exchange (SGE) is back on schedule publishing their trade reports on Friday that cover the previous trading week. Last Friday’s report covered the trading week February 17 – 21. For me the most important numbers is always the amount of physical gold withdrawn from the vaults as this equals Chinese wholesale demand. Withdrawals in week 8 (February 17 – 21) accounted for 49 tonnes, year to date there have been 369 tonnes withdrawn from the vaults. If we divide the later by the number of days of the corresponding period (52) we come up with an average demand of 7.09 tonnes per day – this includes weekends and the one week holiday at Lunar year when the SGE was closed. I got a few request regarding demand compared to last year and daily moving averages. Great ideas which I have carried out (request are always welcome, we’re doing this together). Compared to last year demand is up 51 % over the same period. Of course we had the shocker in April 2013 when withdrawals exploded to 117 tonnes in week 17. I don’t expect any spikes that big this year so probably this year’s growth compared to 2013 in percentages will be decreasing when we’ll pass April. Nevertheless, the daily average of 2013 was (2197/365) 6.02 tonnes, while this year we’re up to 7.09 tonnes. China is on schedule to establish a new record, if the world can supply any more gold. The longer this insatiable demand continues, the more I start to ask myself where this gold is coming from. We know form Swiss refineries they’re having a very hard time to source this much gold for China.”
And what about rumors that India will curb import restrictions on gold? This from Reuters: “India has started to make physical checks on gold stocks held by wholesalers to ensure inventories match the amount imported by banks and state-run traders, an industry association said, as the country steps up efforts to halt smuggling.”
The walk-in trade was active today and the number of trades seems to be moving higher. Which brings me to a point we don’t often mention – we do trades all the time – you just don’t see them on the web site. Investors buy something and then decide they want something else, or are tired of waiting for the market to move higher. If this sounds familiar consider trading by emailing Ken Edwards or Richard Schwary and asking for terms. Either of us will make a smaller spread to facilitate your trade. It’s easy and sometimes can be fun and profitable. The phones were just average today.
The GoldDealer.com Activity Scale is a “4” for Tuesday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Wednesday – 3) (Thursday – 3) (last Friday – 3) (Monday – 4). Our scale (1 through 10) is a reliable way to understand 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 precious metal 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 or selling is functional. A PDF file will be added which will create a picture invoice identical to the store invoice. This invoice will include information like wiring instructions.
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.
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