Gold Sees a Soft Technical Rebound

Gold Sees a Soft Technical Rebound

Commentary for Tuesday, Aug 26, 2014 (www.golddealer.com) – Gold closed up $6.50 at $1283.80 in what looks like a simple technical rebound. Traders may be covering short positions and taking a profit but this does not look like bargain hunting to me. Gold is coming off a $26.00 dollar loss last week so some squaring of the books is expected.

The world situation remains liquid in that support for gold comes in form of the Gaza and Ukraine misery. The public has placed this trouble on the back burner but talk from the White House now centers on the ISIS treat – and jihad talk always frightens even if it is sometimes misplaced.

With Consumer Confidence up to 92.4 from 90.9 things look brighter – higher stocks, a strong dollar and improving mental attitude among Americans caps gold in the short term.

And the summer remains with us and this usually means that business is subdued. Actually this summer is pretty typical of summers in general relative to the coin business. Summer when the market was hot does not count because everyone was busy.

So for now expect more of the same until the kids go back to school.

Silver closed up $0.04 at $19.37 – some smaller action today but virtually no big buyers or sellers.

Platinum was up $1.00 at $1421.00 and palladium was down $1.00 at $888.00. Rhodium was down $25.00 at $1350.00.

We should sell a great deal of palladium 1 oz bars today because of the closing number ($888.00). The number 8 represents good luck to the Chinese – really – and the more 8’s the more luck. You would be surprised at what some investors do before buying or selling metal.

We have a very large gold bullion player who has done business with us for years who will not make a move before first checking the stars. That’s right astrology is big for some – and don’t laugh this individual is worth a ton so something is working.

Keep an eye on Russia if you are thinking about platinum, palladium or rhodium. Russian sanctions have been driving the palladium market – the Russians will sandbag this market in a minute if sanctions fall too close to home.

The dollar is strong relative to the euro – this hinders gold. But keep in mind that ECB President Draghi is amazing – all he had to do is talk about quantitative easing and Europe settled down. This does not mean the EU is out of the woods – they still have unsustainable debt problems and they could still develop a bond buying program like the US. But the EU is complicated with some 28 member countries, not all of which have the same goals.      

You would think that with all the financial peril around these days someone would have learned a thing or two about leveraged credit – especially since the 2008 real estate blowup and subsequent meltdown in Wall Street. I am not saying the world is coming to an end but at least temper some of the recently found exuberance in stocks with a small offsetting bet in the gold bullion market. But I guess in the capitalistic world – regardless of government edict – financial boys will be boys and sooner or later the devil will appear.  

I got this from reading Chuck Butler (Everbank World Markets) – This is When the US Gov’t Goes Broke (Bonner & Partners) – Bill Bonner seems like a practical guy and funny too.

Dear Diary,

First, we check in with the markets.

What’s new?

Not much. The Dow crossed the 17,000 mark yesterday.

Janet Yellen is supposed to address the world today from Jackson Hole, Wyoming. It is hard to imagine that she will say anything surprising… or even meaningful. Commentators all over the planet are waiting to analyze each word… hoping for a hint of what is coming.

They want to know when we will be leaving this wacky world of price fixing by central banks. They want to know when we will get back to more normal interest rates and a more neutral monetary policy.

We think we have the answer already: Only when we have no other choice.

The world’s largest economy, and its capital markets, depend on cheap credit. Take it away, and asset prices will collapse…and the economy will go into a recession/depression.

Yellen can’t allow that. It goes against all her training, her convictions, and her most treasured delusions. She will fight the inevitable downturn with more liquidity and more free credit… until the whole sha-bang blows up.

Then, and only then, will things go back to normal.

The walk-in cash trade was less than average but steady. The phones were about average for the last week even though the activity level is not bad (4).   

The GoldDealer.com Unscientific Activity Scale is a “4” for Tuesday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Tuesday – 3) (last Wed – 4) (last Thursday – 4) (last Friday – 3) (Monday – 2). The scale (1 through 10) is a reliable way to understand our volume numbers.

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 – which seem to grow when things get this quiet. And it does not help that the world famous Randy’s Donuts is just down the street. 

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Thanks for reading from your friends at GoldDealer.com and enjoy your evening.

Disclaimer – The content in this newsletter and on the GoldDealer.com website is provided for informational purposes only and our employees are not registered financial advisers. The precious metals and rare coin market is random and highly volatile so it may not be suitable for some individuals. We suggest before deciding on a course of action that you talk with an independent financial professional. While due care has been exercised in development and dissemination of our web site, the Almost Famous Gold Newsletter, or other promotional material, there is no guarantee of correctness so this corporation and its employees shall be held harmless in all cases. GoldDealer.com (California Numismatic Investments, Inc.) and its employees do not render legal, tax, or investment advice.

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