Commentary for Wednesday, Dec 18, 2013 Gold finally closed up $4.90 at $1236.10 but the paper and physical market activity both before and after the close were surprisingly quiet. The Federal Reserve move concerning tapering was small moving its current largess from $85 billion a month to $75 billion a month but nonetheless Wall Street was right in the assessment that the economic news was just good enough to change the quantitative easing formula.
After the announcement I watched Fed Chairman Bernanke’s commentary and he went out of his way to infer the Federal Reserve will stay highly accommodative still watching employment carefully.
This less than aggressive stance coupled with an equally accommodative Janet Yellan replacement next year is the reason gold was not more volatile.
But just because we did not see any sparks flying around this announcement on Day 1 after Taper does not mean you won’t see more weakness on Day 2 or Day 3 after Taper.
On the economic side home sales and permits look very strong and Bernanke also went out of his way to say interest rates would remain low for the foreseeable future so it would appear this decision has something positive for everyone.
Finally read this comment into your gold playbook: the Fed calls this not a contraction in policy just a slowdown in the expansion.
Think about that too long and your head might spin but you have to give credit where credit is due: Bernanke’s highly accommodative monetary policy has produced results and if you call them lukewarm, well that is better than financial catastrophe.
Silver closed up $0.22 at $20.01 and very quiet as gold got all the attention.
The same was true of Platinum which closed down $1.00 at $1344.00 and palladium also down $1.00 at $700.00.
Even with the induced tension over what the Federal Reserve will do the walk-in cash trade was slow but the phones were active. The GoldDealer Activity Scale was a “3” for Wednesday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Thursday – 5) (last Friday – 4) (last Monday – 3) (last Tuesday – 4) (Wednesday – 3). The scale is 1 through 10 and we believe this is a reliable way to “sense” real bullion business. You can check this setting monday through friday on my Gold Newsletter page.
The GoldDealer site now shows live buy and sell bullion prices throughout the day but you must still talk with a live person to confirm and receive an order number. It includes Live Chat and new customers can set up their own encrypted accounts. The new automatic email confirmation (buying or selling) is down but I am told the problem will soon be fixed (famous last words). You can now sign up for the Gold Newsletter and this seems to be working. Phase Two will make general accounting and money confirmation a snap. We now offer the choice of USPS or FedEx Ground. Our new flat screens within the CNI Building are operational, the feed and graphs are live, premiums defined and cash available. Like us on Facebook and follow us on Twitter @CNI_golddealer. Our best price guarantee (buying or selling) is famous so call Kenny at 1-800-225-7531.
The CNI Holiday Schedule: We will be closed Tuesday, Wednesday and Thursday (Dec 24th, 25th and 26th) for Christmas. For New Year’s we will be closed Tuesday and Wednesday (Dec 31st and Jan 1st): a reminder that shipping during the holiday season slows so your patience is appreciated. Thanks for reading and enjoy your evening.
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