Gold Steady Watching Ukraine into the Weekend

Gold Steady Watching Ukraine into the Weekend

Commentary for Friday, March 28, 2014 (www.golddealer.com) – Gold moved down $0.90 today at $1293.80 closing at the higher end of its trading range with the overnight action in Hong Kong and London being relatively flat. This stall closely matches last week’s decline of $42.00 and while the bears are in the technical driving seat gold is up 7.3% on the year.

The recent charting pattern for gold is not encouraging short-term but the Chinese remain committed to the physical market, Exchange Traded Funds are accumulating and Iraq bought 36 tons last week.

Still the short-term action will be dictated by events in the Ukraine with little other news able to push these markets at present especially because US stocks are getting attention.

There is a relatively strong move which places US Eagles in Proof Condition into IRA accounts. Check premiums over spot before writing the deal. Fair pricing would be about $330.00 over spot but large telemarketers charge up to $600.00 over spot for uncertified proofs and as much as $800.00 over spot for certified gold proofs. Paying these high prices is what we call “nonsense investing” and it’s guaranteed to make you mad when you find out – so check prices carefully when placing precious metals into your IRA.  

Silver closed up $0.08 at $19.77 and this market has been quiet all week with no rumors. This is unusual considering we are under $20.00 which has been a past sweet spot and its low this year was $19.10.   

Platinum closed up $8.00 at $1405.00 and palladium finished up $12.00 at $773.00.

From Sharps Pixley – Physical Demand Support Also Looking Stronger – As the Indian general elections loom near and the wedding seasons arrive, the jewellers are expecting that the government will relax the ten percent import duty on gold in order to help the local jewellery industry to recover. As a result, India’s import demand should exceed that in 2013. According to a study on China’s physical demand in “In Gold We Trust”, China has withdrawn 488 metric tons of gold year-to-date from the vaults of the Shanghai Gold Exchange (SGE), a 29% increase versus the same period last year. Various studies have supported that the gold withdrawal from the SGE is the best gauge of China’s physical demand. With the Chinese looking to quicken the pace of the Renminbi internationalization, the government will continue to increase its gold reserves, albeit secretly, to back up its currency.”

I have come to appreciate the way India does business. If the government imposes a 10% duty of gold the smuggling trade moves higher. It is impossible to gauge just how much gold is smuggled into India but this number is much larger than estimates.

From Reuters: "Despite all the curbs, demand has come in at 975 tonnes. The question obviously is where the supplies came from," said Somasundaram PR, WGC’s managing director for India. "We have seen anecdotal evidence of smuggling. Our estimate is 150-200 tonnes, more towards the upper end." Smuggling could have been even higher as Indian gold imports have sagged in recent months to 20-30 tonnes a month, compared with a record 162 tonnes in May. Scrap gold is also being used to meet demand. India’s official gold imports in the first 11 months of 2013 totaled about 655 tonnes. "If supply restrictions continue, then we will see a much higher figure for smuggling," Somasundaram said, declining to provide an estimate. Indian gold smugglers are adopting the methods of drug couriers, stashing gold in imported vehicles and using mules who swallow nuggets to try to get them past airport security. Customs officials have said that though they have increased the number of seizures, they have been able to catch only a fraction of the illegal shipments into India. The Indian finance ministry and the central bank have acknowledged that smuggling has increased considerably but have said they will not ease the rules until they have a better grip on the trade deficit.

(Kitco News) – Gold prices may continue to exhibit weakness following two weeks of softer values, said a majority of participants in the weekly Kitco News Gold Survey. In the Kitco News Gold Survey, out of 33 participants, 22 responded this week. Six see prices up, while 12 see prices down and four see prices trading sideways or neutral. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts. Last week, a nominal number of participants were bearish. As of noon EDT, Comex June gold prices were down about $43 an ounce on the week. Those who see weaker prices said there are few bullish catalysts to propel gold higher. “Gold futures should remain under pressure as long as the issues with Russia and the Ukraine fade and investors remain focused on the thoughts of tapering (stimulus) and rising interest rates,” said Phillip Streible, senior market strategist at RJO Futures. Participants who see higher prices next week said they expect gold to hold this week’s lows that as of 11:45 a.m. EDT were around $1,286.10 for the June Comex contract. Kevin Grady, owner of Phoenix Gold Futures and Options, said he expects buyers will enter the market at these lower levels. “I still believe that the physical market is directing our underlying price…. In the gold forward rates we noticed that the physical tightness dropped off as we approached the $1,400 level. This situation put the shorts in control. We have noted that the rates have gotten tighter as we broke the $1,300 level. It appears that the price-sensitive buyers are back. We need to hold our major support level of $1,270 for gold to rebound,” Grady said. Darin Newsom, senior analyst at Telvent DTN, said he expects prices to trade in a sideways pattern next week after the recent price fall. “The June contract (is) testing support at $1,289.50. This price marks the 50% retracement level of the previous rally from $1,186.70 through last week’s high of $1,392.20. Next week could see the contract consolidate,” he said.

I touched on this Thursday but want to repeat that consumers need to be heads up before doing business on the internet. In the old days you could just walk into a good dealership and put down cash and walk away with product. This is still true with us and a few others but most of the volume business is done nationally using the internet.

The gold and silver market is not regulated like stocks so the consumer must do some homework before spending their hard earned money.

To avoid problem dealers – non-delivery or steering and generally poor telemarketing behavior – look for precious metal dealers who belong to ICTA (Industry Council for Tangible Assets) and the PNG (Professional Numismatists Guild). Dealers who are members of both organizations insure a happy consumer face because they are held to a higher ethical, financial and professional standard. Look for membership in ICTA and the PNG from any national dealer and avoid headaches.

The walk-in cash trade was busy all day with solid “both way” action but the national phones were a mixed bag. Sometime busy then falling to just average then quiet. Perhaps everyone just needs a rest.  

The GoldDealer.com Activity Scale is a “5” for Friday. The CNI Activity Scale takes into consideration volume and the hedge book: (Monday – 4) (Tuesday – 5) (Wednesday – 4) (Thursday – 3). The scale (1 through 10) is a reliable way to understand our volume numbers. Average for the week: 4.2.

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 net 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.

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.com) 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 or selling) remains famous so call Kenny (1-800-225-7531) and get more money in your pocket with guaranteed satisfaction.

And we include our No-Nonsense Policy (NNP) as a welcomed extra. Steering is not allowed. Steering is the trade term used to talk you out of what you want (low cost bullion) and into stuff with big telemarketing commissions. Like us on Facebook and follow us on Twitter @CNI_golddealer. Thanks for reading and enjoy your weekend.  

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