Morning Gold & Silver Market Report – 6/13/2013

GOLD PLAYS THE WAITING GAME   

The Gold market, along with most other financial markets, is waiting on news from the U.S. Federal Reserve next week regarding their stimulus program. “The sentiment is still very divided over whether the Fed will taper or not,” Joyce Liu, an investment analyst at Phillip Futures in Singapore, said. “Due to the lack of major market-moving events, people are just trading on technicals until some senior Fed officials say something before the FOMC meeting next week,” she said, referring to the Federal Open Market Committee.  There is one major item of interest in the Gold market today.  China has been on a three-day holiday that ended today, and since they are the second largest buyers of Gold in the world, the global demand should pick up.

There is growing concern among investors around the world regarding uncertainty of the economic outlook. “The storm clouds are building: the [Dow Jones Industrial Average] has just suffered its first three-day losing streak for the year, the Chicago VIX [volatility] index has climbed further Europe is sliding off its highs China is slowing down faster than expected, and the BOJ [Bank of Japan] is holding the line on additional stimulus action,” wrote Evan Lucas, market strategist at trading firm IG Markets. The global stimulus programs have been unprecedented and the idea of closing those programs has brought more questions than answers to the discussion. “We've been living in an environment where economically speaking, bad news was good news because bad news meant more monetary stimulus. The rally that we have had over the past one-and-a-half years has been mainly driven by central banks and now the punch bowl is about to be taken away,” Hans Goetti, chief investment officer Asia at wealth management firm Finaport, said.

At 8:00 am (EDT), the APMEX precious metals spot prices were:

• Gold, $1380.60, Down $13.40.
• Silver, $21.84, Down $0.08.

Closing Gold & Silver Market Report – 6/12/2013

• Gold, $1,389.70, Up $10.70.
• Silver, $21.81, Up $0.04.

Morning Gold & Silver Market Report – 6/12/2013

• Gold, $1,377.60, Down $1.40.
• Silver, $21.81, Up $0.04.

Gold Low of Day Registered Just Below Key Level

Weekly

Chart  Prepared by Jamie Saettele, CMT 

Commodity  Analysis: To review, “Gold didn’t quite trade to new lows but silver did last week. Non-confirmations (divergences) of price extremes between related assets often mark market turns or at least the beginning of a reversal pattern. Gold’s low was also at a downward sloping trend channel. Recent chop could be the beginning of gold forming a bullish base.” Near term, watch for resistance from the ‘meridian’ line that has proved important on numerous occasions. The line is at about 1440 this week. 1367 is still estimated support (low today was 1365). Failure to hold that level on a daily closing basis would be worrisome.

Commodity Trading Strategy: Flat

LEVELS: 1307 1321 1367 1414 1440 1470

Closing Gold & Silver Market Report – 6/11/2013

GOLD PRICE ENDS THE DAY LOWER 

As the day winds down, so does the cost of Gold. There are many factors weighing on the Gold market including one major reason from India.  As the world’s largest buyer of Gold, India’s new measures to curb Gold imports has dragged on the market.  Before the new import rules took effect on May 20, India was averaging $135 million (USD) a day in imports. After May 20, those numbers fell to $36 million (USD) a day. The main reasoning for the actions is to help close the country’s massive Current Account Deficit (CAD). The government added they will take more action if needed. “Going forward the government will undertake measures to ensure that CAD is safely financed,” Raghuram Rajan, Chief Economic Advisor in the Finance Ministry, said.

There was a major sell-off in stocks and commodities today based on the fears that major central banks may be slowing down their stimulus programs. “Central banks have pushed many assets beyond the fundamentals and created a great deal of volatility,” Michael O'Rourke, chief market strategist at Jones Trading, said. “Nobody really has an idea where the unwinding stops.” This speculation has led to choppy markets in the past, and today has been no different.

At 5 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1379.60, Down $8.40.
• Silver, $21.71, Down $0.34.

Morning Gold & Silver Market Report – 6/11/2013

BANK OF JAPAN’S POLICY DECISION PULLS DOWN MARKETS

Precious Metals are trading lower this morning after the Bank of Japan’s announcement  that it would not extend its stimulus program.  Whether the U.S. Federal Reserve will follow suit with tapering its quantitative easing program remains to be seen.  Credit Agricole analyst Robin Bhar said, “The market is coming around to the view that the Fed will taper quantitative easing.  The fact that the economy seems to be creating jobs, as we saw with the payrolls report on Friday, makes Fed tapering more likely than not.”

The impact of the Bank of Japan’s decision  was also felt by markets around the world.  Tracking global stocks, U.S. stock futures fell.  Mike McCudden of Interactive Investor said, “Equity markets continue to push lower amid a wide range of disappointing factors.  The Fed will call time on bond buying at some point, Chinese economic data is showing further signs of a slowdown, and the Bank of Japan continues to — in the mind of many traders — punch below its potential.”  Henrik Drusebjerg of Nordea Bank added, “If we really should believe in equity markets going up from now, it’s extremely important that we see global growth…”

At 9 a.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,370.90, Down $17.10.
• Silver, $21.65, Down $0.40.

Inside Story: Gold, Trust, And The Federal Reserve - The Video Documentary

From the inside of the Federal Reserve's gold vault (where we are told one quarter of the world's bullion resides) to NYC's diamond district and the gold-dealers on the streets, this NatGeo documentary is a fascinating walk through the reality of trust, money, and gold. As the narrator notes, " the Fed's discretion is so trusted that few depositors have ever asked to see if their gold is still here," except of course Germany now that is, adding (from the exact opposite perspective to the man that runs the building) that, " for thousands of years people used gold as money... it's the perfect recyclable money...." The must-watch video then progresses to the reality of our financial world where he explains, the trillions in money that is transacted every day " used to be backed gold, but is now supported by the promise of our government... The fact that it all works based on trust alone is simply taken for granted," leaving the ominous question of " who is in charge" of that 'trust'? Cue Ben Bernanke - who answers the question of what the world would look like without a Fed... bank runs, stock market crashes, and financial chaos.

https://www.youtube.com/watch?v=_1NNEgmNc8k

Closing Gold & Silver Market Report – 6/10/2013

LITTLE MOVEMENT WITH METAL PRICES FRENCH PRESIDENT CLAIMS END OF EURO CRISIS

There has been no real movement with Precious Metal prices today. All metals reacted quietly after news broke that credit rating agency Standard & Poor’s raised the U.S. credit outlook from negative to stable. This announcement will likely create commotion in the market place as the U.S. has recently seen improved labor-market conditions, which could lead the Federal Reserve to cut back or discontinue further quantitative easing. “Any good news for the economy is not so good for Gold. The debate about when the Fed will taper or end stimulus continues to pressure,” Walter Hellwig of BB& T Wealth Management said. 

French President Francois Hollande proclaimed this weekend that the eurozone debt crisis is over. “What you need to understand here in Japan is that the crisis in Europe is over,” Hollande said to business leaders organized by the Nikkei media group in Japan on Saturday. Hollande added, “We have used various measures to address weaker nations. Member nations have tried to restore fiscal health. We have also established a banking federation. Due to these efforts, yields in the eurozone have dropped dramatically and we have been able to restore confidence among investors.” The Eurozone has been the focal point for world-wide financial markets for many years as their fiscal crisis has negatively affected major countries in Europe. Analysts continue to follow accurate data to determine whether the eurozone is in fact heading towards a healthy recovery. With euro nations’ unemployment rate surpassing 12.2 percent in April, it is hard to believe that fact is true.

At 5:07 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,387.90, Up $2.70.
• Silver, $21.98, Up $0.13.

Gold 1367 an Important Closing Level for Gold

Daily

Chart  Prepared by Jamie Saettele, CMT

Commodity  Analysis: To review, “Gold didn’t quite trade to new lows but silver did last week. Non-confirmations (divergences) of price extremes between related assets often mark market turns or at least the beginning of a reversal pattern. Gold’s low was also at a downward sloping trend channel. Recent chop could be the beginning of gold forming a bullish base.” Near term, watch for resistance from the ‘meridian’ line that has proved important on numerous occasions. The line is at about 1440 this week. 1367 is estimated support. Failure to hold that level on a daily closing basis would be worrisome.

Commodity Trading Strategy: Flat

LEVELS: 1307 1321 1367 1414 1440 1470