Morning Gold & Silver Market Report ? 8/21/2013

GOLD DOWN AHEAD OF FED MINUTES

Minutes from the Federal Reserve?s July meeting will be released at 2 p.m. (ET) today, and the U.S. dollar is on the rise. In turn, stock futures and Precious Metals prices are slightly lower in early morning trading.  Investors will be dissecting the minutes  for any clues on the internal Fed debate regarding tapering of its quantitative easing program. Ole Hansen of Saxo Bank said, ?Our consensus is (for stimulus to be reduced by) $20 billion (a month) at the beginning of September. Any deviation from that could have an impact on the price.?

Contrary to Mr. Hansen?s thoughts, Craig Erlam of Alpari Ltd. wrote, ?We?ve heard from a number of Fed members since the meeting and the camp seems split pretty evenly on the matter, which again, to me, suggests  tapering in September is unlikely.? Existing home sales data is due later this morning, but is not expected to have much of an impact on prices today.

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

• Gold, $1,366.90, Down $7.70.
• Silver, $23.09, Down $0.06.

Gold Test of Huge Resistance area Coming on FOMC?

Daily

Chart  Prepared by Jamie Saettele, CMT 

Commodity  Analysis:  Gold  broke through the July high and has entered a zone of consolidation that took place in mid-June. The consolidation stretches from 1365 to 1395. The top of this zone is a confluence of trendlines. The trade above July?s high makes August the first month since October 2012 for price to exceed the prior month?s high.

Commodity Trading Strategy: Flat

LEVELS: 1339 1347 1357 1384 1395 1424

Closing Gold & Silver Market Report ? 8/20/2013

GOLD MOMENTUM CONTINUES MARKET HOPES FED MINUTES PROVIDE CLARITY

Gold, better known as an alternative investment for some, continued to trend upwards for the fourth time in five sessions due to a weaker dollar. The market is patiently waiting for the Federal Reserve?s Federal Open Market Committee meeting minutes, which will be released Wednesday and could possibly provide more insight into the Fed?s plans to taper fiscal policy. The speculation of when the Fed will cut back its monthly bond buying program has been a key topic, and the majority of investors believe it may be as soon as September. Many expect the minutes to confirm the forecasted date.

Precious Metals are not the only commodity looking forward to the release of the minutes from the Fed?s July meeting.  The financial market will be watching for any key clues that indicate a timeframe of when to expect the cut-back of monetary easing. Avery Shenfeld, chief economist at CIBC World Markets, believes that the Fed presidents from Chicago, St. Louis and Atlanta provided insight into the internal debate at the central bank over whether fiscal policy is ready to be tapered. ?We know a lot about what they think individually. I can?t see how the minutes are going to add clarity,? he said.

At 5:12 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,372.40, Up $4.70.
• Silver, $23.08, Down $0.17.

Morning Gold & Silver Market Report ? 8/20/2013

GOLD, SILVER RECOVER AS INVESTORS AWAIT FED MINUTES

Gold and Silver prices recovered from early losses this morning as  investors await the release of minutes from the Federal Reserve?s July meeting, which will be released Wednesday.  Peter Fertig of Quantitative Commodity Research explained, however, that the minutes will likely not shed much light on the situation.  He said, ?I don't think the minutes will provide a clear signal about the September taper. If they could have, they would already have done so in the FOMC statement.  We will just get a reflection of the discussion, and we already know that some members would vote to start the tapering, and others would like to wait and see. It will be further waiting and further speculating.?

ETX Capital?s Ishaq Siddiqi believes that investors attempting to preempt the Fed?s decision  will be a common occurrence until the September Federal Open Market Committee meeting.  He said, ?With around two weeks or so to go before the Federal Reserve?s September policy meeting and press conference, traders are re-weighting their asset portfolios just to get ahead of the Fed.  Market participants do not want to get caught out on the wrong side if tapering does indeed start in September ? that?s why we are seeing many in the market tinkering their portfolios to react favorably to tapering.?

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

• Gold, $1,368.60, Up $1.00.
• Silver, $23.18, Down $0.07.

Gold Nears Major Confluence of Resistance

Daily

Chart  Prepared by Jamie Saettele, CMT 

Commodity  Analysis:  Gold  broke through the July high and has entered a zone of consolidation that took place in mid-June. The consolidation stretches from 1365 to 1395. The top of this zone is a confluence of trendlines. The trade above July?s high makes August the first month since October 2012 for price to exceed the prior month?s high.

Commodity Trading Strategy: Flat

LEVELS: 1339 1347 1358 1384 1395 1424

Closing Gold & Silver Market Report ? 8/19/2013

ANALYST RECOMMENDS GOLD IN YOUR PORTFOLIO

Gold was flat for the majority of the day after the superb bounce it received last week from weak U.S. economic data. Investors are beginning to return to Gold as analysts predict a very optimistic outlook for the metal. JPMorgan analyst, John Bridges, stays true to the yellow metal and suggests that Gold should be part of a portfolio, especially if someone is not confident in their currency. ?We feel that there's at least a technical bounce here,? he said, adding that Gold was also a hedge against an economic decline. ?If you're still uncertain about whether the financial crisis is truly over, then having some Gold in the portfolio makes a lot of sense.? Bridges added, ?Gold is not an investment. Gold is a wealth-protection device. Gold does not increase in value over the long term. It holds its value over the very, very long term."

Precious Metals performed at their best last week  with Silver rising 14.3 percent and Gold increasing by 4.5 percent. ?We obviously had a very good run last week I think the markets really just wanted to test the strength of that break we had above $1,350, and that has basically allowed it to drift a bit lower today,? Ole Hansen, head of commodities strategy at Saxo Bank, said. ?You would imagine if there's one metal that really needs the correction now it's Silver.? Last week?s heavy price movement came from a weaker dollar and speculation the U.S. Federal Reserve will announce its plan to taper fiscal policy in September.

At 5:15 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,366.80, Down $6.20.
• Silver, $23.22, Down $0.18.

Morning Gold & Silver Market Report ? 8/19/2013

GOLD, STOCK FUTURES LEVEL FOLLOWING LIVELY WEEK FOR MARKETS

Precious Metals prices are trading flat this morning following a week that saw substantial gains for Gold and Silver due to  monetary policy concerns, technical buying and further inflows to bullion-backed ETFs. The Gold price has jumped 8 percent over the last nine sessions while Silver had its strongest week since September 2008, rising roughly 13 percent. This week, many investors will be closely scrutinizing the release of the Fed minutes from July?s policy meeting to gain further insight into possible plans for the future of quantitative easing (QE). ?Our economists expect the minutes to reveal that the committee members viewed the improvement in labour markets and reduced downside risk as sufficient to signal that should the current trends continue, many on the committee stand ready to reduce the pace of asset purchases in September,? Barclays said in a note.

U.S. stock futures are also trading at even levels on Monday following last week?s hefty sell-off. Tapering continues to cause anxiety among investors, causing the Dow Jones Industrial Average to rack up its largest weekly loss of 2013 by end of trading Friday. ?The tapering story has caused some notable damage to markets even if risk assets have recovered from the June lows and overall volatility remains subdued,? Anthony Ip, strategist at Deutsche Bank, said.  A majority of analysts believe the reduced stimulus measures will commence in September. Steen Jakobsen, chief economist at Saxo Bank, estimates cut backs of $20 billion per month. Traders and investors will anxiously await any tapering news to see its possible short-term impact on equities and Precious Metals markets alike.

At 8:21 a.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,372.80, Down $0.10.
• Silver, $23.32, Down $0.09.

Weekly Gold & Silver Market Recap ? 8/16/2013

GOLD RISES ON ASIAN ECONOMIC NEWS

Precious Metals experienced an extraordinary week as prices trended upward from the factors supporting them.  Beginning Monday, Gold futures traded higher as SPDR Gold Trust Fund, theworld?s largest Gold exchange traded fund (ETF), substantially increased its holdings  by 1.8 metric tons, marking its first growth since early June.  ?The higher-than-expected import growth indicates a Chinese domestic-demand recovery, which will bode well for Gold demand,? Sharps Pixley director Austin Kiddle said. While the desire for Gold ETFs in the U.S. has waned over the last several months, electronic Gold holdings from Eastern nations like China and Japan have stayed constant despite the yellow metal being down nearly 21 percent this year. According to Kiddle, this data indicates ?that Asia and emerging markets will help shape the future Gold demand.?

PHYSICAL DEMAND CAUSES BACKWARDATION

Gold caused some uproar Monday as analysts began suggesting the yellow metal has gone into backwardation, meaning the current spot price is higher than the future contract price. The COMEX division of the New York Mercantile Exchange showed December delivery for Gold rose by $22 to $1,334.20 an ounce, while October?s contract reported $1,334.30 an ounce and the spot price was $6.87 higher. " [This jump in Gold] is the backwardation of the near-buy," RBC Capital Markets Precious Metals strategist George Gero said. " There seems to be demand for the physical." Typically when backwardation occurs, supply begins to see pressure, which can cause a price increase. According to Commerzbank AG, the China Gold Association reported the physical Gold demand for the first half of 2013 is 706.3 tons, nearly topping the 2012 amount of 832.2 tons.

FED ECONOMISTS SPEAK

The U.S. Federal Reserve?s future plans are unknown but are keeping everyone on their toes to see what may happen if fiscal policy is tapered or ended. The real question is whether or not quantitative easing (QE) has been effective for the U.S. economy. ?Modest" boost to economic growth and inflation  is how two Fed economists described QE2?s performance. " [E]stimates from a macroeconomic model suggest that such interest rate forward guidance probably has greater effects than signals about the amount of assets purchased," the economists wrote in a paper released by the San Francisco Federal Reserve.

SEASONAL GOLD DEMAND COULD BOOST THIRD QUARTER PRICE

Gold fell Tuesday for the first time in four days after a strong dollar and optimistic U.S. economic outlook increased the likelihood the U.S. Federal Reserve will soon rein in its monetary easing program. Strong economic data has outweighed negative data in 2013, which Jim Russell, senior equity strategist at U.S. Bank?s Private Client Reserve, said is ?consistent with the Federal Reserve moving ahead with the first step of tapering purchases of both Treasury and mortgage-backed securities in the open market over the next few weeks.? Though the Gold price has taken a beating this year, worldwide demand for Gold is historically boosted in post-summer months as industrialized nations manufacture jewelry ahead of the various holidays. Along with figures that show China overtaking India as the number one buyer of physical Gold, the  third quarter could be a robust period for the yellow metal.

GOLD REGAINS LOST GROUND

Gold held on to early gains Wednesday as the metal was able to recover from Tuesday?s losses. While Gold rose moderately, Silver rallied for the fifth straight session, reaching its highest level since mid-June. Analysts were anticipating Gold to break through its next resistance level of $1,350 per ounce following Thursday?s release of the July Consumer Price Index (CPI). Economists polled by Market Watch  expected the CPI figures to be lower than June?s numbers, which had many predicting a rise in metals that could surpass the next technical barrier in the short-term.

STOCKS SLIDE AGAIN

U.S. stocks fell once again at the end of trading Wednesday due to impending stimulus tapering concerns. The S& P 500, which briefly broke through 1,700 for the first time, fell to roughly 1,685. The Dow Jones Industrial Average dropped more than 113 points at the close of trading. Though trading volume was 20 percent below its 100-day moving average, the ubiquitous  anxiety surrounding a reduction of quantitative easing  measures currently had traders and investors in somewhat bearish territory. ?The market is scope-locked on [U.S. Federal Reserve] tapering in September,? ING U.S. Investment Management chief market strategist Douglas Cote said. ?Quantitative easing is creating some excess in the financial system. The last thing [Fed Chairman Ben] Bernanke wants when he finishes his term is to be responsible for the next bubble.?

BIG DAY FOR METALS ON TECHNICAL BUYING

Following a slow start to Thursday?s trading session, Precious Metals prices were lifted substantially as  Gold broke through key technical levels  and continued unrest in the Middle East boosted the safe haven appeal of metals. " Today's move was mostly driven by technicals, and that spooked the bearish bets out of the Gold market," Axel Merk, chief investment officer of California-based Merk Funds, said. Gold had recently tried to surpass the $1,350 per ounce mark, with no success. However, once the barrier was breached, Gold quickly rose to roughly $1,365 per ounce, bringing other Precious Metals with it.  Silver was the top performing metal, as it headed toward its seventh straight session of gains with a 6 percent rise for the day. 

CONSUMERS HAVE GLOOMY OUTLOOK FOR ECONOMY

Precious Metals prices continued to slowly climb throughout Friday.  A report showing U.S. consumers are not as optimistic about the economy as forecasted prompted investors to turn to alternative investments. Saxo Bank general manager Ole Hansen explained, ?Investors are so concentrated on the whole talk about tapering that any disappointing U.S. data can bolster prices. People are pricing in the fact that the Fed will keep interest rates low for quite a long time and that's positive for Gold.?  Historically, an environment supportive of low interest rates  pushes investors toward non-interest bearing assets like Precious Metals.

At 5:35 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,377.00, Up $14.10.
• Silver, $23.27, Up $0.25.

GOLD SET FOR BEST WEEK IN A MONTH

Precious Metals prices continued their slow climb through mid-day trading.    A report showing U.S. consumers are not as optimistic about the economy as forecasted has prompted investors to turn to alternative investments.  Saxo Bank general manager Ole Hansen explained, ?Investors are so concentrated on the whole talk about tapering that any disappointing U.S. data can bolster prices.  People are pricing in the fact that the Fed will keep interest rates low for quite a long time and that's positive for Gold.?  Historically, an environment supportive of low interest rates  pushes investors toward non-interest bearing assets like  Precious Metals.

The U.S. dollar rallied today against foreign currencies like the euro and yen.  However,  many traders and investors are concerned the economy is not strong enough  for the Federal Reserve to begin tapering its quantitative easing program.  Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington, said, ?Yesterday's data spooked investors into concern about a wholesale abandonment of U.S. assets.  If Treasury prices continue to fall, potential tapering may not be as broadly positive for the dollar as first thought.?

At 1:12 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,368.70, Up $5.80.
• Silver, $23.33, Up $0.32.

Morning Gold & Silver Market Report ? 8/16/2013

IS THE GOLD SELLOFF OVER? STOCKS LOOK TO REBOUND ON ECONOMIC REPORTS

Gold and Silver futures are trading flat this morning while investors wait to see if Precious Metals can hang on to a strong week of gains.  Gold is up roughly 4 percent while Silver has out-performed all other metals with the price rising over 12 percent so far this week.  As silver surges to achieve its greatest weekly gain in almost two years, some analysts accredit continued  physical demand and improvement in the global economy as catalysts for silvers breakout performance this month.  With SEC filings for highly renowned hedge funds becoming public on Wednesday, some clarity was brought to investors as several Wall Street moguls heavily decreased or eliminated positions in Gold during the second quarter.  The large cut back in Gold holdings for these entities help ?explain why we saw so much selling from the ETF?s over the last few months and give hope that this selling may now be done,? wrote London commodities broker Marex Spectron. ?This should prove fairly bullish to the market in the long run if this liquidation is mostly over.?

U.S. stocks will look to rebound from sharp declines they experienced on Thursday as investors hope new economic reports will buoy the validity of year-to-date gains in the S& P 500 and Dow Jones Industrial Average.  ?Of course the market has been extended in terms of sentiment and expectations, and of course there are corrections and pullbacks. We are pro risk assets, and volatility is part of the game,? said Mourtaza Asad-Syed, head of strategy at Societe General Wealth Management.  Traders and investors now hope that equities markets can rebound today as positive announcements surrounding housing markets and consumer confidence are expectedfollowing a session that saw its largest trading volume in two months. 

At 8:52 a.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,365.60, Up $2.60.
• Silver, $23.15, Up $0.14.

Closing Gold & Silver Market Report ? 8/15/2013

• Gold, $1,367.60, Up $32.20.
• Silver, $23.06, Up $1.19.

Mid-Day Gold & Silver Market Report ? 8/15/2013

• Gold, $1,362.60, Up $27.20.
• Silver, $22.98, Up $1.11.