Commentary for Friday, Dec 13, 2013 GoldDealer – Gold closed up $9.70 at $1235.70 so we did not get the follow through selling I talked about Thursday. Interesting, as it seems traders want to walk right up to that $1200.00 line in the sand and then…no conviction because the jury is still out on what will be done with quantitative easing. Gold was actually up on the week ($5.40) but the key is that we avoided new lows.
The dominant opinion remains the same: the Fed will taper perhaps soon but this has been talked about for so long now the resultant price move one way or the other might turn out to be small potatoes. So be patient and if this turns out to be true it could mark a big turning point in what still looks like a very long unwinding process.
Silver was up $0.16 at $19.56 and across the counter action was subdued and holiday like as everyone gets ready for Santa Claus. The Marine Toys for Tots commercial is classic as the wide eyed little boy thinks the Marine in dress blues is Santa.
Platinum was quiet down $1.00 at $1363.00 as platinum mining news continues troubled. Palladium was down $4.00 at $716.00.
Next week should be interesting but I think the majority will once again be wrong about tapering. Why? Because employment numbers while improving still look soft and why would the government take the chance of a derailment when interest rates are low and things look like they are on the mend? It’s like my Mom used to say: “You drank the whole ocean another drop is not going to hurt you.”
(Kitco News) – With the Federal Open Market Committee meeting slated for Tuesday and Wednesday, market participants are split on how gold prices will trade next week, although there is a nominal higher number who see weaker prices. In the Kitco News Gold Survey, out of 34 participants, 23 responded this week. Of these, eight see prices up, while nine see prices down and six see prices sideways or are neutral. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts. Last week, survey participants were evenly divided over gold’s direction. As of noon EST Friday, February gold on the Comex division of the New York Mercantile Exchange was up about $6 an ounce for the week. Those who see weaker prices said gold’s inability to build on this week’s earlier gains is a bearish sign. Ralph Preston, principal at Heritage West Financial, is one participant who said he sees lower prices next week. “Fundamentally market psychology is dominated by a race to the bottom in interest rates between the Federal Reserve and the European Central Bank – at the moment it appears as if the ECB is winning that race. That gives the U.S. dollar a yield advantage that continues to threaten gold’s bleak technical outlook, which is poised for a drop down to this year’s low of (around) $1,170,” he said. Participants who see higher prices said they expect gold to bounce back to retest this week’s high as prices ping-pong in a range. Richard Baker, editor, Eureka Miner, said gold prices could rise slightly. “I believe this morning’s weaker-than-expected PPI (producer price index) will not be enough to convince the Federal Reserve to begin a taper of their bond buying program at next week’s FOMC meeting. This will probably give some boost to gold prices even though the PPI may be followed by a weak CPI (consumer price index) report. A pullback in monetary stimulus is taken to be bearish for gold price; rising inflation expectations, bullish – neither is likely,” he said. Several participants said they’re on the sidelines in gold until after the FOMC meeting and others said they expect the back-and-forth trading gold experienced lately to continue. Adrian Day, chairman and chief executive officer of Adrian Day Asset Management, said while he’s neutral next week, he believes the gold market is “grossly overreacting” to the tapering concerns and the new U.S. budget deal. “An as-yet undetermined $23 billion cut in spending over 10 years in a $17 trillion deficit is meaningless. And spending goes up over $60 billion next year against the previously determined budget, and down $23 billion sometime later. It’s a farce. Yet the market thinks this provides cover for the Fed to cut back on bond buying. Even with a budget, there is still the possibility of a fight over raising the debt ceiling in February. So a gross overreaction to eventual tightening….But for now, it’s ‘me against the market,’”
The walk-in cash trade and phones were very holiday like today. The GoldDealer.com Activity Scale was a “4” and I am surprised more are not selling to either raise Christmas cash or establish a tax loss for 2013. The CNI Activity Scale takes into consideration volume and the hedge book: (last Monday – 6) (last Tuesday – 4) (last Wednesday – 4) (last Thursday – 5) (Friday – 4). The scale is 1 through 10 and we believe this is a reliable way to “sense” real bullion business.
The new GoldDealer.com site is up and running and we continue to make changes and adjustments to various pages. Some pages on the old site were not carried forward so while the site ID has not changed a particular landing page might need adjustment. This new approach will show you live buy and sell bullion prices but you must talk with a live person to confirm and receive an order number. It now includes Live Chat, new customers can set up their own encrypted accounts in advance, automatic email confirmation (buying or selling) is working and the graphs are back. You might also note we brought back the Gold Newsletter 1 week archive.
Phase Two will make accounting, shipping and tracking easier. We now offer the choice of USPS or FedEx Ground. Our new flat screens within the CNI Building are operational, the feed and graphs are live, premiums defined and cash available. Like us on Facebook and follow us on Twitter @CNI_golddealer.
Our best price guarantee (buying or selling) is famous so call Kenny at 1-800-225-7531. The CNI Holiday Schedule: We will be closed Tuesday, Wednesday and Thursday (Dec 24th, 25th and 26th) for Christmas. For New Year’s we will be closed Tuesday and Wednesday (Dec 31st and Jan 1st): a reminder that shipping during the holiday season slows so your patience is appreciated. Thanks for reading and enjoy your weekend.
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