Commentary for Tuesday, Jan 7, 2014 – Gold closed down $8.40 at $1229.40 so we are seeing profit taking and more technical correction. Metals saw some selling pressure during the day as the November trade deficit fell to the lowest level in 4 years ($34.3 billion).
The improving trade deficit was helped by increasing exports and increasing imports of oil. The dollar rallied slightly (0.2%) and that helped create further negative sentiment in the metals.
Still there are signs that the Asian trade continues to buy gold as premiums in China have doubled. One of the world’s largest gold holding funds (GLD) fell to 794 tons which is significant when you consider the same fund held 1200 tons at the beginning of last year.
The activity at GoldDealer.com is either frantic or there is nothing happening so the physical business continues to be dyslexic. Note the activity number today (9) a whopper and the highest in months but there was virtually noone in the store during our typically busiest time.
Silver closed down $0.31 at $19.76 and activity remains steady. My big silver friend stopped in today (his first visit in sometime actually) and so I asked what he was doing. Just small stuff really but he did feel there was something in the wind relative to dollar strength. He also is amazed there is still no repercussion from the massive growth in currency supply.
Platinum was down $1.00 at $1415.00 and palladium was up $3.00 at $741.00. For the record there have been some very large palladium purchases lately and a few large gold sales.
This from Allen Sykora (Kitco) – Mixed Factors Occurring For Gold – optionsXpress – The fundamental outlook for gold can be described as mixed, says optionsXpress. “On one hand, the U.S. economy is recovering sufficiently enough to warrant the Federal Reserve to scale back its asset purchases. This suggests that demand for gold jewelry and industrial consumption of the metal could be on the upswing. Smaller speculators are not giving up on the metal either,” optionsXpress says, noting that U.S. Mint sales of American Gold Eagle coins in December was the most since June. “On the flip side, the Fed weaning the banking system off of asset purchases suggests that the cheap money era may be nearing an end,” optionsXpress says. “This may decrease gold’s value as an inflation hedge.” Yet, many traders are not convinced that the economy is on as solid of footing as the Federal Reserve would like to believe, optionsXpress adds. “Decreasing liquidity could be detrimental and derail the recovery, according to skeptics.”
The above is a perfect explanation as to why there is so much confusion in the price of gold: some good news some bad news and plenty of who cares. The continued stellar moves in stocks and better than expected news in real estate continue to hurt gold.
The walk-in cash trade was slow to very busy and the phones were just average. Most of the sales people where more interested in lunch (never a good sign) and there is absolutely no buzz in the air.
So even with all that the GoldDealer.com Activity Scale is a surprising “9” for Tuesday. The CNI Activity Scale takes into consideration volume and the hedge book: (Closed last Tuesday and Wednesday) (last Thursday – 4) (last Friday – 3) (last Monday – 7) (Tuesday – 9). The scale is 1 through 10 and we believe this is a reliable way to “sense” real bullion business.
Comex closing prices are working and posted (upper right hand corner of the home page) and now are included on individual landing pages.
Live pricing works and the change function is also working (halleluiah). The consumer can now use a perfect pricing model to choose the right bullion product anytime we are open.
The Bullion link (upper left hand corner of the site) has been modified with the traditional sort everyone wants from the old site (all gold, all silver, all platinum and all palladium). Next week an All button will be added so you can see all products for comparison. Finally both our buy and sell prices will be included (similar to the old bullion page).
This site is a work in progress and some of the improvements are pushing the envelope so your patience is appreciated. We have added new buy and sell premiums: Example – 10 oz Silver Bar – Buy Premium: Spot – $00.10 Sell Premium: Spot + $00.90
The new system still requires a live person for pricing confirmation.
Live Chat is doing well and new customers can set up their own encrypted accounts. The automatic email confirmation (buying or selling) should be working next week.
Thanks for your patience and if you have other ideas your email is appreciated.
Sign up for our daily Gold Newsletter on the Gold Newsletter page if you are so inclined and remember this is now live for you too so why not sound off?
The live flat screens within the CNI Building are operational and include premiums so calculators are no longer needed to figure the cheapest bullion product.
Our best price guarantee (buying or selling) is famous so call Kenny at 1-800-225-7531.
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Thanks for reading and enjoy your evening.
The Canadian Silver Maple Leaf is a great way to expand your bullion collection.
