Commentary for Tuesday Oct 29, 2013 (www.golddealer.com) – Gold closed down $6.80 today at $1345.70 in lackluster trading. Economic news still disappoints as retail sales and consumer confidence move lower with September showing the single largest drop in signed home sales in 40 months.
Producer prices are also heading in the wrong direction so there is not much chance the Federal Reserve will change the monetary easing policy and there are some who believe this “stimulus” will remain in place for the foreseeable future because the US economy remains “stuck”.
Europe also has its problems and Japan continues to print hoping to break the possibility of more deflation. I don’t know what to make of all this on the short term but gold seems to be unconcerned as the stock market makes new highs.
This from Reuters: Precious-Gold below 5-week high as dollar firms ahead of Fed – So the headline is mixed and they finish with: “Though a prolonged period of easy money could support gold, physical demand could take a hit because of the higher prices. Demand in Asia has been subdued for a while. “We continue to view gold as precariously placed, while physical demand for the metal remains soft,” ANZ analysts said in a note. “We viewed the metal as overbought above $1340 on the back of weak demand from China and continued ETF selling.” Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Shares, remained unchanged at 872.02 tonnes on Monday after falling 4.5 tonnes on Friday.
Gold sentiment continues hopeful by those permanently bullish and supported by continued QE but without either fresh speculative money (not likely) or renewed physical demand I think expectation on the trading floor will remain short-term only. This market still looks like it wants to be range-bound until the Fed makes up its mind about further paper debasement or the natural demand from Asia and China picks up in the press. At some point in the shorter term gold must make a technical drive above $1350.00 to recapture short term momentum or you can expect a continued yawn.
Silver was down $0.05 at $22.45 which leads me to a reader comment which points out a flaw in my delivery but allows me a small expansion on my current silver thinking: “Read your blog every morning with my coffee. It’s a great read, thank you. What do you mean when you say “Silver moved down a big dime today closing at $22.50 and judging by recent silver bullion activity at the CNI Building ice is beginning to form on the wing”. Sales are slow and you believe we will see lower prices, or activity is brisk and prices heading up? I did not follow, sorry. Enjoy the day, Bill.”
My reply was thanks for reading…sometimes I need more clarity. It means silver moved lower by $0.10 so not much in the way of daily trading movement and the “ice” comment related to the danger of ice forming on the wing of an airplane: it could lead to trouble – so with little movement and little physical trading silver seems stuck at the upper end of its recent trading range.
Stuck for long in the physical business is usually met first with lower silver premiums (already happening) and then lower prices. Hope this helps and thanks for the comments. By the way the premiums on silver dollars (1878-1935) in all grades are once again moving higher for reasons which are beyond my pay grade.
Platinum was lower by $12.00 today at $1460.00 and for those who asked I still like the trade of gold bullion for platinum bullion. Palladium was down $3.00 at $746.00.
The CNI Activity Scale came in at a modest 3 for Tuesday as our cash walk in business was average (a few big gold bullion sellers) and so were the phones. Customers still favor gold bullion by a wide margin. Our new CNI Activity Scale will take into consideration volume, open and closed orders (buying and selling), the cash trade, and the hedge book: (last Wednesday – 5) (last Thursday – 3) (last Friday – 3) (last Monday – 4) (Tuesday – 3). The scale is 1 through 10 (5 being relatively busy and this approach considers today’s business so it will be more intuitive). We believe this is a reliable way to give you an idea of what a real bullion business is doing without the sales pitch.
Phase One of our new golddealer.com website has been delayed a week (November 4th) and includes a new look along with live pricing. It will also include Live Chat, you will be able to set up your own customer account, and you will receive automatic email confirmation on buying or selling. Look for further improvements before year end which makes accounting, shipping and tracking easier (check to see if we have your email address in the new system).
We now offer the choice of USPS or FedEx Ground. Our new flat screens within the CNI Building are up and operational and the cash trade loves this idea. The feed and graphs are live and bullion products are programmed with premium spreads so your choices are easier. There is nothing like this on the West Coast and visitors enjoy complete transparency when buying or selling.
Like us on Facebook and follow us on Twitter @CNI_golddealer. Our Daily Gold Newsletter archive has been moved and enlarged (30 days) to our Facebook page and the new website will include a direct daily newsletter.
Remember our best price guarantee (call Kenny 1-800-225-7531 and save money). Thanks for reading and enjoy your evening. These markets are volatile and involve risk: Please Read Before Investing
Written by California Numismatic Investments (www.golddealer.com).