Commentary for Monday, Jan 6, 2014 – Gold closed virtually unchanged today down $0.60 at $1237.60.
There was a severe dip in early gold trading but the markets quickly recovered. Here is what Wyckoff (Kitco) made of what looks like an aberration: “An erroneous, or so-called “fat-fingered” trade in Comex gold futures is likely responsible for the February gold contract dropping sharply–by over $30.00 an ounce–in a very short period of time and reportedly briefly halting trading action at the Comex at mid-morning Monday. Reports said very heavy volume at the time of the price drop was recorded in gold futures. The trading volume was reportedly around 11,000 contracts in one minute’s time, which could have been a keyboard error by a trader at a trading firm.”
Market Watch also comments on the dip in prices: According to Nanex, a trade of about 4,200 contracts sent February gold tumbling by $30 on heavy volume at around 10:14 a.m. Eastern and triggered a 10-second trading halt. It fell from around $1,245 to around $1,215. The crash came about 14 minutes after the release of U.S. factory orders and ISM services index data. It looked like a “fat finger” trade, said Phil Flynn, a senior analyst at Price Futures Group. Ross Norman, chief executive officer at Sharps Pixley the move “looks to be shorts defending their substantial positions.”
I post these two because it was either one (a mistake) or the other (shorts protecting their positions). The “shorts protecting their positions” comment is troublesome. Could recent strength just turn out to be another bear market trap?
If you look at the 30 day gold chart things are beginning to improve in that we have once again bounced higher from the $1190.00 low in December but the technical picture needs more time to develop. A few commentators see a second $1200.00 bottom here but I will remain skeptical because we are talking about after holiday trading. Any thoughts would be appreciated.
Silver closed down $0.11 at $20.07 and trading remains quiet even though questions about the 2014 American Silver Eagle Monster Boxes are beginning to roll in. My advice is always the same: do not pay a big premium on these new coins as there will be plenty around by late January. We are taking orders (no increase in price) but remember delivery will be spotty until the US Mint gears up so be ready to wait about 3 weeks. The store was busy today and people were buying a lot of our 90% Silver Bags.
Platinum closed up $2.00 at $1446.00 and palladium closed higher by $7.00 at $738.00. Both platinum and palladium have generated physical interest lately with news of consistent positive car sales.
The walk-in cash trade was just moderate today nothing to write home about and the phone sales were the same but the computer activity level was high so something is happening. The precious metals don’t feel heavy in this current trading range although we have seen a few whales unload gold (a million or more in both cases) after the holiday.
The GoldDealer Activity Scale being “7” for Monday. The CNI Activity Scale takes into consideration volume and the hedge book: (Closed last Tuesday and Wednesday) (last Thursday – 4) (last Friday – 3) (Monday – 7). 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 should be in place Monday or Tuesday.
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 – 1 oz Silver Round – Buy Premium: Spot + $15.00 Sell Premium: Spot + $50.00
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.
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Thanks for reading and enjoy your evening.
