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

GOLD ETF BUYING RESUMES GOLD MAY HAVE REACHED BOTTOM

Precious Metals prices remain flat this morning as Gold holds at its highest level in three weeks on investor hopes that the U.S. Federal Reserve might delay monetary stimulus tapering. Additionally, exchange-traded fund (ETF) holdings for SPDR Gold Trust, the world?s largest Gold-backed ETF, rose for a second week in a row.    Outflows of ETF holdings  have caused the Gold price to plunge more than 20 percent this year with exit positions totaling close to 20 million ounces, or $27 billion.  However, recent additions to Gold ETF holdings could signal higher prices as such indicators often boost market sentiment. 

Aggressive selloffs of Gold ETFs forced the metal to its lowest point in three years in late June.  Panic selling took hold of investors as large hedge funds led by Wall Street heavyweights like George Soros, Daniel Loeb and renowned Gold bug John Paulson  cut their Gold holdings during the second quarter.  Though some view the mass departure from Gold positions by hedge funders as a sign that Gold?s safe haven appeal has diminished, many believe the onslaught of selling has brought the yellow metal near the bottom.  " There is a large possibility the washout needed after the big decline occurred in Q2. That could signal a short-term low was in place for Gold," Sarhan Capital chief executive officer Adam Sarhan said.  Now that Gold backed ETF buying has resumed and physical demand remains high, investors could see the resurgence of Gold in the near future.   

At 9:29 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,326.70, Down $8.70.
• Silver, $21.90, Up $0.04.

Gold Back and Fill Typifies August Market

Daily

Chart  Prepared by Jamie Saettele, CMT 

Commodity  Analysis: No change - ?Keep in mind that  gold  is in a long term downtrend. Chasing is never a good idea but if you are going to do it at least do it in the direction of the bigger move! Monday?s advance is impressive and may set the stage for an eventual run on 1390-1400 (confluence of trendlines).?

Commodity Trading Strategy: Flat

LEVELS: 1267 1287 1316 1348 1365 1390

Closing Gold & Silver Market Report ? 8/14/2013

GOLD REGAINS LOST GROUND AS STOCKS SLIDE AGAIN

Gold held on to early gains Wednesday as the metal was able to recover from yesterday?s losses.  While Gold rose moderately, Silver has rallied for the fifth straight session, reaching its highest level since mid-June.  Analysts are now waiting to see if Gold can break through its next resistance level of $1,350 per ounce following tomorrow?s release of the July Consumer Price Index (CPI).  Economists polled by MarketWatch  expect the CPI figures to be lower than June?s numbers, which have many predicting a rise in metals that could surpass the next technical barrier in the short-term. 

U.S. stocks fell again on 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 today?s close.  Though trading volume is 20 percent below its 100-day moving average, the ubiquitous  anxiety surrounding a reduction of quantitative easingmeasures has 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.?

At 5:01 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,337.50, Up $15.00.
• Silver, $21.94, Up $0.52.

Mid-Day Gold & Silver Market Report ? 8/14/2013

ECONOMIC SIGNS MAY BE TOO UNSTEADY TO REDUCE QE

Gold is up slightly today despite the ever-present concern over the possibility of the U.S. Federal Reserve reducing their asset purchases in the very near future.  Many analysts and investors view the reduction as bearish for Precious Metals since the inflationary fears so integral to boosting metals prices would be reduced along with monthly injections of ?new money? into the economy.  Though many experts have pointed to September as the time to expect an announcement about the initial tapering, others like Atlanta Fed President Dennis Lockhart believe  recent economic data to be far too mixed  for the Fed to decide on any clear-cut plan of action by next month. 

U.S. stocks are down today as many investors remain sidelined awaiting clarity from the Federal Reserve regarding quantitative easing.  " Investors are still trying to assess the Fed and what it will do next, leaving us to bounce around on a daily basis but essentially go nowhere," Dearborn Partners managing director Paul Nolte said.  While domestic equities struggle to gain direction on Fed concerns and slow seasonal trading volume, European stocks realized gains for the fifth straight day as  data revealed the eurozone emerging from recession.   

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

• Gold, $1,334.70, Up $12.20.
• Silver, $21.83, Up $0.41.

Morning Gold & Silver Market Report ? 8/14/2013

GOLD COULD HIT $1,600 AN OUNCE EUROZONE EXITING LONGEST RECESSION

Gold is flat this morning due to a stronger U.S. dollar and Treasury yields, but analysts continue to be optimistic for the yellow metal. Adrian Day, president of Adrian Day Asset Management, believes Gold will rally to $1,600 an ounce by the end of 2013, due mainly to the U.S. Federal Reserve?s mixed messages of tapering quantitative easing.  ?All the Federal Reserve is talking about is cutting back on the additional stimulus put in place,? he said. ?No one is talking of tightening or reducing the Fed?s balance sheet.? Day continued, ?At some point we?ll break through the $1,400 level and then the shorts will panic to cover, and Gold will accelerate. We could easily be at $1,600 [per ounce] by the end of the year. Certainly by 2015 we?ll be seeing $2,000 [per ounce].?

The eurozone reported better-than-expected growth figures for the second quarter  with 0.3 percent development, which is exactly what Europe needs right now to exit its 40 year recession.  ?We've had a signal that the worst in terms of economic activity is behind us, we're entering a new period which is likely to be extended, which is likely to be a long period of sluggish recovery, very slow growth but still very weak," Standard & Poor managing director Jean-Michel Six said.  The unemployment rate remains a concern, reported at 12.1 percent in June. 

At 10:27 a.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,333.20, Up $10.80.
• Silver, $21.76, Up $0.34.

Closing Gold & Silver Market Report ? 8/13/2013

SEASONAL GOLD DEMAND COULD BOOST THIRD QUARTER PRICE

Following a four day rally, Gold ended the day down after a strong dollar and an 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.

U.S. stocks rebounded from early losses Tuesday as a two-day losing streak was halted following mixed retail sales reports indicating modest domestic expansion.  ?I don?t know that we?re going to have a roaring recovery anytime soon, but the economy does seem to be advancing, slowly but certainly advancing, and that I think has sunk in finally,? Pioneer Investment Management Inc. fund manager John Carey said.  As economic numbers continue to show improvement, many  analysts are confident the Fed will announce their intentions to begin a reduction  of monetary easing during September, and traders and investors await the potential impact on both Precious Metals and equities markets.

At 5:24 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,322.20, Down $14.00.
• Silver, $21.51, Up $0.08.

Gold Backs off after Run Towards July High

Daily

Chart  Prepared by Jamie Saettele, CMT 

Commodity  Analysis: No change - ?Keep in mind that  gold  is in a long term downtrend. Chasing is never a good idea but if you are going to do it at least do it in the direction of the bigger move! Monday?s advance is impressive and may set the stage for an eventual run on 1390-1400 (confluence of trendlines). Daily RSI ended Thursday at 58. In downtrends, price tops often form when RSI recovers into 60.?

Commodity Trading Strategy: Flat

LEVELS: 1267 1287 1317 1348 1365 1390

Morning Gold & Silver Market Report ? 8/13/2013

CHINA TO OVERTAKE INDIA AS LARGEST GOLD CONSUMER

The fall of the Japanese yen, along with the latest China Gold Association data released Monday, influenced Gold prices in overnight trading.  After ending Monday up, the price for the yellow metal is down slightly in morning trading.  However, Barry Dawes, head of resources at Paradigm Securities, stated, ?The physical demand for Gold is robust and we're seeing premiums in Asia that you don't see in other parts of the world.  The physical market for Gold is now really tightening up  and the shenanigans being played by hedge funds and bullion and investment banks may just be coming to an end.? According to the World Gold Council, China is expected to overtake India this year as the world?s largest consumer of Gold, with their consumption rising 54 percent in the first half of 2013 as compared to 2012.

Investors will be looking for market signs today after the release of U.S. consumer spending reports.  With the U.S. Federal Reserve still planning to begin reducing its asset purchases, these upcoming reports could play a major role in the decision making process. BK Asset Management managing director Kathy Lien wrote that last month?s increase in retail sales ?plays a particularly important role in the Federal Reserve?s monetary-policy plans.  With only five weeks to go before the September [Fed policy] meeting, every piece of data counts.?

At 9:29 a.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,331.20, Down $5.00.
• Silver, $21.56, Up $0.13.

Gold Shoots Higher Resistance Likely Near 1400

Daily

Chart  Prepared by Jamie Saettele, CMT 

Commodity  Analysis: Keep in mind that  gold  is in a long term downtrend. Chasing is never a good idea but if you are going to do it at least do it in the direction of the bigger move! Today?s advance is impressive and may set the stage for an eventual run on 1390-1400 (confluence of trendlines). Daily RSI ended Thursday at 58. In downtrends, price tops often form when RSI recovers into 60.

Commodity Trading Strategy: Flat

LEVELS: 1267 1287 1317 1348 1365 1390

Closing Gold & Silver Market Report ? 8/12/2013

PHYSICAL DEMAND CAUSES BACKWARDATION FED ECONOMISTS SPEAK

Gold is causing some uproar as analysts suggest the yellow metal has gone into backwardation, meaning the current spot price is higher than the future contract price.  Today, 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.

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 Federal Reserve 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.

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

• Gold, $1,337.80, Up $23.60.
• Silver, $21.46, Up $0.97.

GOLD RISES ON ASIAN ECONOMIC NEWS

Gold futures are trading higher this morning as SPDR Gold Trust Fund, the  world?s largest Gold exchange traded fund (ETF), substantially increased its holdings  by 1.8 metric tons, marking its first growth since early June.  Boosted by today?s news, Gold could realize a four session winning streak initially prompted by last week?s strong import and industrial output data from China. ?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.?

As Gold breaks for modest gains Monday,  U.S. stock futures are down following their worst weekly close since June.  Weighing down equities today was the release of poor gross domestic product data from Japan.  After a week in which it appeared that China?s economy was finally rebounding, the Nikkei, Japan?s benchmark stock index, has fallen to its lowest level in six weeks.  With western nations currently digesting reports from Asia, eyes will turn to domestic news to gain a foothold on the market?s next movement as the release of U.S. budget deficit details are set for this afternoon.     

At 8:41 a.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,342.50, Up $28.30.
• Silver, $21.36, Up $0.86.

Weekly Gold & Silver Market Report ? 8/9/2013

GOLD BATTLES OPTIMISTIC U.S. ECONOMIC NEWS

At the beginning of the week, Gold was struggling to stay above its support level of $1,300 an ounce alongside positive economic data. On Monday, the Commerce Department reported that U.S. manufacturing grew in July at its quickest rate in more than two years. ?The economy is healing, and if the economy is healing then it doesn't require the assistance of the Fed,? said John Stephenson, who helps oversee about $2.7 billion (CAD) at First Asset Investment Management Inc. in Toronto. ?Whether tapering happens tomorrow or next year, it?s coming, and the market knows it.? The U.S. Federal Reserve?s plan to cutback fiscal policy has been the focal point for investors. The announcement created more confusion in the market as mixed economic data continues to be reported, and investors have no sense of direction the Fed may decide to take.

IS PLATINUM THE NEW GOLD?

Platinum has been making headlines, however, as holdings in exchange-traded funds are at record highs. Commerzbank analysts believe that rising U.S. automobile sales have played a major factor in this, along with supply issues out of South Africa. In 2013, the Platinum price has outperformed the Gold price by approximately 15 percent.

GOLD LOSES MOMENTUM FOR ONLY A SHORT PERIOD

Gold?s price fell below $1,300 an ounce in overnight trading on Monday into Tuesday. Economic data from the U.S. and Europe were the main factors for pulling the Gold price down. Sharps Pixley CEO Ross Norman said, ?We fell through the psychological support level of $1,300 last night, and it does feel as the prevailing dollar strength is curtailing Gold momentum. [However,] it is hard to read too much into moves during the summer months as the market can fluctuate widely on very small trades.? Automatic electronic sale orders were activated when the Gold price fell below $1,300, which furthered the impact of the losses.

Wednesday, investors watched Gold fall to the lowest it had been in three weeks as speculation abounded that the U.S. Federal Reserve will start to reduce bond purchases as early as next month. This is the much debated and much speculated topic of tapering. It is inevitable that the Fed will taper their bond buying as the economy has shown signs of improvement the exact timing is what is unknown.  Michael Lewis, head of commodities research at Deutsche Bank, said, ?We expect the Fed will taper its asset program from September onwards.?

GOLD RALLIES FROM WEAK ECONOMIC DATA AND DOLLAR

Thursday, Precious Metals received a much needed bounce after the  release of the weekly jobless claims report. The report showed that 5,000 new claims were filed, and new claims from two weeks ago were revised upwards. Continuing jobless claims increased by 67,000. The U.S. dollar fell after the report to a seven-week low, leading the way for Gold and Silver to continue their climb. We would have to look back to mid-June to see the last time the dollar was that low. The dip in the dollar was blamed on the current Fed policy and a rise in new jobless claims. The inverse correlation between Gold and the dollar was highlighted on Thursday as the price of Gold rose to the occasion and surged back above $1,300.  However, of the Precious Metals complex, the real winner was Platinum. The premium of Platinum, which is used in automobile catalytic converters, rose to a high of $172 per ounce over the price of Gold. The price has been supported by supply threats out of South Africa and a new Platinum ETF in Johannesburg. The new ETF added half a million ounces to its holdings in less than three months.

GOLD REMAINS ATTRACTIVE STOCK MARKET HAS  LOSING STREAK

While Precious Metals saw a day of positive gains Thursday, the stock market faced the first four day losing streak this year. Strong trade data out of China didn?t seem to be enough to push the markets up following a poor weekly jobless report. The Dow may actually see its first losing week in nearly two months.  Paul Hogan, manager of the FAM Equity-Income Fund, said, ?For a significant move, we need to have some clarity on what the Fed is going to be doing ? we need to get to the point where we know when the Fed will be tapering and see that things will be fine economically.? Short of a crystal ball, continued volatility can be expected.

PRECIOUS METALS REMAIN CALM AHEAD  OF WEEKEND

The Gold price is fairly level headed into the weekend as a  lack of noteworthy economic headlines  kept trading volumes low during the traditionally slow summer months. ?All in all, traders are not willing to push in either direction, at least before we get more clarity about what the Fed will do,? Credit Suisse analyst Karim Cherif said. As speculation abounds over the timeframe for the Fed to begin scaling back its monthly asset purchases, all interested parties ponder the potential impact the reduction will have on stocks and Precious Metals markets alike.

At 5:22 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,315.50, Up $3.60.
• Silver, $20.60, Up $0.32.

Mid-Day Gold & Silver Market Report ? 8/9/2013

STOCKS, GOLD SET TO END WEEK LOWER

U.S. stocks have fallen Friday leaving equities markets set to end the week lower, effectively ending a six week rally (the longest in one year).  With trading volume at its lowest level in 12 months, investors are still attempting to position themselves based on their outlook for the future of the Federal Reserve?s monetary easing program. ?We certainly came into a week we knew was wanting for catalysts. Last week we had a plethora of economic data and a preponderance of quarterly reports this week we have neither,? Art Hogan, market strategist at Lazard Capital Markets, said. ?We?ve tried to make the stories fit the market action, and that?s a dangerous game, especially in low volume.? As the S& P 500 breached 1,700 for the first time last week, slight corrections like markets are experiencing today are to be expected. Investors and traders will await more jarring news to revitalize markets in coming weeks.

The Gold price is fairly level headed into the weekend as a  lack of noteworthy economic headlines  has kept trading volumes low during the traditionally slow summer months. ?All in all, traders are not willing to push in either direction, at least before we get more clarity about what the Fed will do,? Credit Suisse analyst Karim Cherif said. As speculation abounds over the timeframe for the Fed to begin scaling back its monthly asset purchases, all interested parties ponder the potential impact the reduction will have on stocks and Precious Metals markets alike. 

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

• Gold, $1,314.40, Up $2.50.
• Silver, $20.49, Up $0.21.

Morning Gold & Silver Market Report ? 8/9/2013

• Gold, $1,311.30, Down $0.60.
• Silver, $20.37, Up $0.09.