Commentary for Wednesday, April 16, 2014 – Gold closed today up $3.10 at $1303.10 in a modest rebound from yesterday’s loss of $27.20.
The overnight Hong Kong and London market for gold remains stable around $1300.00. There was also some follow through buying which appeared from $1290.00 lows so some short-term bounce but the recovery should be looked at with suspicion. The established upturn trend which put the bulls in control from early January through March has broken down and gold’s fall from grace began when it failed the $1400.00 test mid-March. The reason I am cautious is that $100.00 loss should have produced more buzz in the physical ranks and the recent bounce back is a bit on the feeble side.
The problems with the Russian/Ukraine situation should be worth $50.00 easy in the price of gold but traders continue to ignore a situation which could deteriorate overnight. The CPI numbers steadily move higher – no gold reaction – even the stock market watches bond prices expecting recession and gold continues to sleep.
NATO announced an increased presence in Ukraine and the Baltic this in response to the 40,000 Russian troops on the eastern border of Ukraine. NATO will have planes and ships in the area. US industrial production up 2.7% which is another plus for US economy. The CPI up 0.2% in March with a year on year increase of 1.5% but so far the inflationary fears have not been fanned.
A number of Federal Reserve dignitaries will be speaking today so perhaps some buzz could develop in the QE guessing game but for now gold remains sleepy. Fed Chair Yellen is steady in her views and cautious – “Expectations for a pick-up in growth have been dashed several times.” And she reiterates the Fed’s commitment to the talked about 2% inflation rate. She also seems willing to deal with inequality in the labor force and deflects any predetermined course in quantitative easing. This reinforces the status quo and allows breathing room for gold.
Watch gold for short-term direction but don’t expect a monster move either way – there is too much news which might produce more gold collateral damage. Like I said yesterday markets will be dominated by the paper trade looking for short-term profits so volatility will prevail but nothing big.
Of course there is the always handy “blow-up” scenario which seems to be popular with physical gold writers today. Nothing is going to blow up in the short-term so this kind of commentary is just theater created by telemarketers who take advantage of the uninformed. The biggest profit center in the bullion production business today is the “so-called” limited production coins. These can be good because they create new interest but premiums must remain low. Avoid “special production” runs of silver coins which trade for big premiums and are sold as rare. These obscure silver coins sometimes with odd silver weights (1.5 oz) are made to order by the phone clowns who live to make sure the money in your bank account moves to their bank account. Always figure weight and be stingy when it comes to premiums.
Allen Sykora (Kitco) – UBS: Physical Gold Buyers Perk Up But Still ‘Tentative’ At Lower Prices – Lower gold prices have “caught the attention” of participants in physical markets, but buyers “seem tentative to participate in size for now” despite recent dips below $1,300 an ounce, says UBS. “In India, lower gold prices over the next two weeks come at an opportune time in light of the approaching important Akshaya Tritiya festival, but any pick-up there would remain subject to the current supply constraints,” UBS says. Indian authorities last year imposed restrictions on Indian gold imports due to the current account deficit. “In China, it would take a larger dip in global gold prices for physical buyers to become fully interested – at current price levels, gold priced in CNY is still around end-February levels, when demand started to tail off and SGE (Shanghai Gold Exchange) prices moved into a discount. With the help of a weaker currency, local gold prices in China are still more than 10% more expensive than price levels at the beginning of the year.” Stronger-than-expected buying in January and February followed by slower demand in March could mean that the Chinese market still has ample stocks to work through, UBS adds.
The walk-in cash trade was better than average today and the phones were busy most of the day. But the most amazing metric for us today is the Activity Scale. We came in at a whopping 9 the largest number since we began keeping score. It does not seem that busy so I checked and sure enough the number came up 9.
What caused this oversized jump is also interesting: (1) a big jump in silver sales including whale like buys of JM 100 oz silver bars by known silver players. (2) More silver bullion sales including multiple 90% silver bags. (3) Multiple 50 oz or larger gold bullion sales. (4) Multiple Monster Box sales of the new Canadian Silver Falcon 1 oz.
What might be more interesting is the number we see for Thursday. If we drop back this was just a one day occurrence based on cheaper prices, but if the number remains high it will mean the public is back.
The GoldDealer.com Activity Scale is a “9” for Wednesday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Thursday – 3) (last Friday – 3) (Monday – 5) (Tuesday – 5). The scale (1 through 10) is 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.
We reworked the All Bullion Products link on the home page. It now includes our Bid (blue) and Ask (green) prices. 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 simple and GoldDealer.com is the only precious metal site on the internet with this transparency. Live Chat is doing well and new customers like setting up their own encrypted accounts. 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. Also note that our old Specials Email list is not compatible with the new format so we have cleared all data.
If you want to be notified about specials please check the appropriate box on the site. Also note that the email list for the Gold Newsletter and our Specials List are separate.
Email confirmation using a PDF File when buying or selling is functional and includes payment instructions. You can now see the 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).
Our four flat screens downstairs with live independent pricing (BullionDesk) are a big hit with the cash trade. This live stream moves all buy/sell prices so the cash buying or selling 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 precious metals or selling precious metals) remains famous so call Kenny (1-800-225-7531) and get more money in your pocket. We guarantee your satisfaction and include our No-Nonsense Policy (NNP) which clients consider a welcomed extra. Like us on Facebook and follow us on Twitter @CNI_golddealer. Thanks for reading and enjoy your evening.
