Commentary for Friday Sept 6, 2013 – Gold closed up $13.60 at $1386.70 into the weekend. The street expected better employment numbers and so gold was encouraged because of the link between employment and quantitative easing. Still gold appears stalled showing a weekly decline of $9.60.
Silver was higher by $0.64 at $23.84 once again following gold and while physical bullion action is steady there does not seem to be much excitement. The US Mint has sold 33.75 million Silver Eagles so far this year which is an astounding rate the record year being 2011 (39.80 million coins).
Platinum was up $13.00 at $1496.00 and palladium was higher by $10.00 at $696.00. The strike problem in South Africa has been settled but I am amazed at how violent the unions have become.
So not surprising today gold was stronger because the jobs number was slightly under predictions and so the quantitative easing “taper” is once again in question. I think this is overplayed because the bigger picture clearly shows the US economy is improving and so the Fed will begin tapering its bond program. Probably just a little taper to see how cold the water is but something nonetheless. The real problem with the improving jobs number is that the majority of these “new” jobs are on the lower end of the scale. I actually think the pop in gold is driven by the on again off again Syrian strike which the American people are against but the President seems convinced is a good idea. And dispatched Russian war ships to the general area is a sick reminder of the old Vietnam struggle. President Obama is so hawkish on this subject that it reminds me of President Bush and it is my hope that Obama’s progressive social ideas are not thrown under the bus over a mistake in the Middle East.
The two big factors still pushing gold one way or the other however are the taper and a recovering US economy so my best bet on the short term direction of gold remains the same: flat to lower based on better numbers out of Washington and less bellicose talk coupled with inaction waiting for Congress to pass (hopefully).
So what does the famous weekly survey have to say? (Kitco News) – Gold prices could rise next week, supported by the potential for U.S. military strikes against Syria and on ideas that the tapering of the Federal Reserve’s bond-buying program is not a done deal, according to a majority of survey participants in the weekly Kitco News Gold Survey – In the Kitco News Gold Survey, out of 36 participants, 20 responded this week. Of those 20 participants, 13 see prices up, while six see prices down and one is neutral. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts. Last week, slightly more than half of the market participants were bullish. As of noon EDT Friday, prices were down about $9 on the week. As of Aug. 23, survey participants have been correct three of the past five weeks. Many survey participants said they turned bullish gold following a surprisingly weak U.S. August nonfarm payrolls report. Others said gold prices are finding support from concerns about Syria. At the very least, they said, the simmering tensions are keeping prices from falling. Kevin Grady, owner, Phoenix Futures, said he’s expecting stronger gold prices next week. “The horrible miss on the jobs number along with the July revisions are bullish. If you throw in the situation in Syria you could have a late day pop today. I would not want to go home short with embassies being evacuated,” he said. Those who see prices weaker said they were disappointed gold didn’t get back to about $1,400 an ounce on Friday. Adam Klopfeinstein, market strategist with Archer Financial Services, said while gold could rally next week, he doesn’t see gains holding as traders use the rally as a selling opportunity. “By the end of next week I think prices close lower than here,” he said.
Walk in cash trade and phones were quiet today with a few big orders (primarily gold) thrown into a generally boring early Friday. If the general public thinks the metals are cheap at these levels or the “war” atmosphere in the Middle East will escalate they are not voting with their wallets: so football for them.
But let me make a point about real believers in the precious metals: they are taking advantage of lower prices. The mid-size deal ($50,000.00 to $100,000.00) is solid with new investors who are price conscious and want immediate delivery.
The CNI computers place my almost famous LA Physical Trade Business Number again at a sluggish “2” but the phone action did come alive in the later afternoon. Like us on Facebook and follow us on Twitter @CNI_golddealer. Thanks for reading and enjoy your weekend.These markets are volatile and involve risk: Please Read Before Investing
Written by California Numismatic Investments (www.golddealer.com).