Commentary for Friday, Nov 14, 2014 – Gold closed up $23.90 today at $1185.00 waking everyone up – after initially moving lower ($1146.00) in early trading. Why the big one day reversal in a market which has been plagued by short sellers?
The Dollar Index – now 87.46 had a previous close of 87.77 but traded as high as 88.25 in early going – then something sent it dramatically lower – perhaps the better than expected French Gross Domestic Product number which calls into question the certainty that Europe is tanking.
This dollar weakness encouraged gold which also saw significant short covering going into the weekend. Remember there is still plenty of profit in the bear’s pocket and paper traders don’t like being short over the weekend unless they are really convinced everything is good on the geopolitical front.
I think the real prime-mover behind this latest push however is the Russians.
BRISBANE, Australia (AP) – Russia to G-20: We’re here. So are our warships – Vladimir Putin is underlining his presence at a major summit of world leaders in Australia by stationing warships in waters off the country’s northeastern coast, prompting the Australian prime minister to angrily accuse Russia of trying to reclaim the “lost glories” of the Soviet Union.
The diplomatic drama, which has been simmering since a Malaysia Airlines plane was shot down over an area of Ukraine controlled by Russian-backed separatists in July, threatened to overshadow Australian Prime Minister Tony Abbott’s goal of keeping this weekend’s G-20 summit focused on economic growth.
But Abbott, who had previously said he would physically confront the Russian president over the Flight 17 disaster that killed 298 people, including 38 Australian citizens and residents, did little to dampen tensions with his latest critique of Putin’s Russia. In recent days, four Russian warships have entered international waters off the northeast Australian coast to coincide with Putin’s visit to Australia for the summit that brings together the leaders of the world’s 20 biggest industrialized and developing economies. Australia, in turn, sent three warships of its own to monitor them.
Silver closed up $0.70 at $16.31 and these lower prices continue to encourage the silver Exchange Traded Funds – which now total 638 million ounces – a five year high. Physical silver bullion activity in US Silver Eagles, rounds and $1000 face 90% bags is solid – not crazy but solid.
This from Paul Gilkes (Coin World) – U.S. Mint plans resumption of sales Nov. 17 for American Eagle silver bullion coins – More than 1 million coins expected to be available – Sales of 1-ounce silver American Eagle bullion coins will resume Nov. 17 after the U.S. Mint restocked its depleted inventory.
The United States Mint expects to have more than 1 million 2014 American Eagle silver bullion coins available Nov. 17 when it resumes sales to authorized purchasers on an allocation basis.
The authorized purchasers were notified by Mint officials Nov. 10 concerning the sales resumption.
Mint officials announced Nov. 5 that sales were suspended because the available inventory was depleted. The U.S. Mint has experienced significantly increased investment demand over the past several weeks. Through Nov. 10, the Mint recorded cumulative sales of 39,381,000 of the 1-ounce, .999 fine silver bullion Eagles.
U.S. Mint officials did not disclose whether all of the production to be available Nov. 17 will be from West Point Mint output or include production from the San Francisco Mint, which has been augmenting West Point production. U.S. Mint officials still anticipate offering 2015 American Eagle silver bullion coins beginning in early January as planned.
Platinum closed up $14.00 at $1212.00 and palladium closed unchanged at $771.00.
Chicago Mercantile Exchange reports for the last 5 trading days – so we are looking at the trading volume numbers for the December Gold contract: Thursday 11/06 (168,560) – Friday 11/07 (298,006) – Monday 11/10 (198,954) – Tuesday 11/11 (187,308) and Wednesday 11/12 (183,582). These numbers are relatively large so the traders have been busy – trading volume is not thin so no “pushing” of prices.
Precious Metal Closes & Dollar Strength – Nov. 10 through Nov. 14 – 2014
Gold Silver Platinum Dollar Index
Mon $1159.60 $15.65 $1206.00 $87.91
Tues $1162.80 $15.66 $1206.00 $87.72
Wed $1158.90 $15.61 $1205.00 $87.91
Thurs $1161.10 $15.15 $1198.00 $87.75
Fri $1185.00 $16.31 $1212.00 $87.50
Palladium Rhodium
Mon $766.00 $1230.00
Tues $772.00 $1230.00
Wed $773.00 $1230.00
Thurs $771.00 $1230.00
Fri $771.00 $1230.00
Our Patented Employee Survey – Gold’s Direction Next Week?
Of course it’s not really patented but we do have some fun along the way. This is what the GoldDealer.com employees think – 5 believe gold will be higher next week – 5 think gold will be lower and 1 believes it will be unchanged.
Our Patented Customer Survey – Gold’s Direction Next Week?
Like the employees our actual customers were given three choices – up – down – unchanged. We limited the survey to a random sampling of 100 transactions – unscientific yes but worth considering because these people actually took action: 33 people thought the price of gold would increase next week – 51 believe the price of gold will decrease next week and 16 think prices will remain the same.
All large bullion dealers do the majority of their business out of state because of the internet. And recently there has been concern that this nexus issue might put dealers in the position of being forced to collect sales tax on bullion products. This of course would kill interstate dealing for the precious metals business and force consumers into paying another counterproductive tax.
This from our friends at ICTA (Industry Council for Tangible Assets – Boehner Kills Marketplace Fairness Act – The Industry Council for Tangible Assets Legislative Counsel Jimmy Hayes has reported that House Speaker John Boehner has killed any chance of the Marketplace Fairness Act of 2013 being enacted this year.
“The Speaker has made clear in the past he has significant concerns about the bill, and it won’t move forward this year,” Boehner spokesman Kevin Smith said.
This is good news for merchants who would have been forced to collect sales taxes for thousands of state revenue departments. Hayes will let us know about any last minute efforts by Senate Majority Leader Harry Reid to meld this legislation with any separate measures to get it passed. Otherwise, the prognosis is that at least for the rest of this year merchants are safe from the burden of collecting sales-tax.
Yahoo Finance – India Regains Top Bullion Consumer Title, Support Gold ETFs – According to the World Gold Council, the diminished gold prices, a new Narendra Modi administration and improved economic outlook are providing an “encouraging backdrop” for gold demand, with India regaining its title as the world’s top gold consumer, outpacing China over the third quarter, reports Henry Sanderson for the Financial Times.
“Although Indian consumers are typically wary of buying gold while the price is still moving, preferring to wait until it settles at a more stable level, the opportunity to buy at cheaper prices proved, for some, hard to resist,” the World Gold Council said in a report.
India gold demand hit 225 tons over the third quarter, compared to 194.1 tons from China and Taiwan. Notably, Indian jewellery demand jumped 60% to 182.9 tons in the months through September, the second highest third-quarter rise on record.
“We see really positive momentum in the Indian market – Modi has engendered a sense of optimism about economic growth,” Alistair Hewitt, head of market intelligence at the WGC, said in the article. “Jewellery demand is looking good and that will feed through to the fundamentals and continue to support the global gold market.”
Additionally, the looser import restrictions may have also helped bolster India’s gold demand. Imports rose to 150 tons in October, compared to 24.5 tons for the same month last year.
India implemented strict duties and quantitative restrictions on gold imports last year to cut down its current account deficit in response to a quickly depreciating rupee currency. The action subsequently helped China supplant India as the world’s largest gold consumer last year.
Indian consumers were also purchasing gold during the Diwali festival in October and demand is rising ahead of the traditional wedding season.
Nevertheless, the World Gold Council added that global demand was still 2% lower over Q3 and hovered around its lowest level in almost five years.
The walk-in cash trade today was curiously on the slow side early in the day but picked up dramatically around the close. The national phone business was just modest to slow.
The GoldDealer.com Unscientific Activity Scale is an “8” for Friday. The CNI Activity Scale takes into consideration volume and the hedge book: (Monday – 7) (Tuesday – 7) (Wednesday – 4) (Thursday – 4). The scale (1 through 10) is a reliable way to understand our volume numbers. The Activity Scale is weighted and is not necessarily real time – meaning we could be very busy and see a low number – or be very slow and see a high number. This is true because of the way our computer runs what we call the “book”. Our “activity” is better understood from a wider point of view. If the numbers are generally increasing – it would indicate things are busier – decreasing numbers over a longer period would indicate volume is moving lower.
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.
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We will be closed Thursday and Friday (Nov 27th and 28th) for Thanksgiving.
Thanks for reading – your friends at GoldDealer.com. Enjoy your weekend and we appreciate your business.
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