Commentary for Thursday, June 6, 2013– Gold closed up $17.30 today at $1415.70 so once again showing some strength above the important $1400.00 level. But this most recent strength is just a technical adjustment based on the dollar moving lower by several points this week.
The weaker dollar short-term trend was reinforced as the ECB (European Central Bank) stood pat on interest rates and the yen soared in value. I would not get too excited here and ask if the dollar is moving lower or the yen higher? Comments by ECB President Mario Draghi should be illustrative however of the approach which will be taken by our own Fed regarding bond tapering.
The Europeans are not any more interested in raising interest rates than we are in the midst of sputtering economic news. And the talk that somehow Europe has pulled itself out of economic mishap is nonsense and probably even dangerous relative to similar Cypress like bank closings which will continue when the real debt count is presented.
Gold remains in a relative close trading range ($1360.00 to $1460.00) and I believe this will continue until the fate of quantitative easing is decided later this year. Remember my prediction yesterday…expect continued higher short-term prices in gold reacting to a weaker dollar. But this too will pass as we continue to bounce first up and then down feeling our way through this latest consolidation. Those pesky citizens of India continue to buy gold even as the government raised duty on imports recently from 6% to 8%.
Silver was higher by $0.24 today at $22.70 and physical bullion sales remain subdued…surprising really. I would have expected more action at these lower levels. I suspect silver will have to once again move toward $30.00 with shortage rumors before the specs get interested but I prefer to add a few small purchases to my stack at the low end of this current trading range.
Platinum closed higher by $18.00 at $1530.00 and palladium was also up $6.00 at $761.00 both still supported by mining problems in South Africa.
June 5, 2013 (Reuters/ Josephine Mason) – U.S. bullion coin demand still at ‘unprecedented’ levels: Mint demand for U.S. gold and silver bullion coins is still at “unprecedented” high levels almost two months after an historic sell-off in gold released years of pent-up demand from retail investors, the head of the U.S. Mint said on Wednesday. His comments are likely to allay concerns among some traders that frenzied buying by mom-and-pop investors since mid-April after prices plunged to two-year lows had started to fade. Their interest has helped prices recover to above $1,400 an ounce, providing key support to prices after institutional investors fled the futures market and exchange-traded funds. “Demand right now is unprecedented. We are buying all the coin (blanks) they can make,” Richard Peterson, acting director of the U.S. Mint, said in an interview referring to the Mint’s suppliers. The Mint, one of the world’s largest gold and silver coin producers, may resume making platinum bullion coins after receiving requests from dealers, he said. It stopped making the coins in 2008 due to low demand.
I thought the above was interesting because it illustrates how much credibility US bullion products bring to the table even with prices heading south. My hands down gold bullion choice is the US Eagle which is cheap relative to gold content and stores beautifully in those hard plastic tubes.
And the same goes for silver bullion as the big Green Monster Boxes (500 coin count) can’t be beat. I first heard the term “Monster Box” on those corny TV infomercials which you see late at night when you can’t sleep. The pitch man was always too loud and too sure of what he was saying and his straight counterpart just nodded his head as the pair quoted prices which were twice that of a local coin dealer.
Still they were interesting to watch and when the monster term was first used I laughed and never would have believed it would someday become common usage and even quaint. Look for continued short-term strength in gold and flat silver. Like us on Facebook and follow us on Twitter @CNI_golddealer. Thanks for reading and enjoy your evening. These markets are volatile and involve risk: Please Read Before Investing