Gold Bleeding Lower Focus is on 1282

4Hour

Chart  Prepared by Jamie Saettele, CMT 

Commodity  Analysis: No change – “Gold’s rally reversed gains after running into former lows and channel resistance. Gold’s advance is better than silver’s, which remains extremely depressed. Daily RSI on the metal has recovered to 60, a common area for the indicator to stop in a bear market.”

Commodity Trading Strategy: Order to short at 1312 with 1355 stop, targets 1283 and 1250

LEVELS: 1267 1282 1306 1315 1350 1395

Closing Gold & Silver Market Report – 8/1/2013

GOLD STEADIES AS S& P BREACHES KEY LEVEL

Despite guarded comments from the U.S. Federal Reserve Wednesday giving no indication of plans to deviate from the current stimulus platform, investors remain concerned about a potential reduction in monetary easing.  Due to a  lack of commitment from both buyers and sellers, Gold and Silver remained flat throughout Thursday’s trading session.  However, Precious Metals prices could experience more action tomorrow as investors await the release of U.S. non-farm payroll data.  “If we see a very strong recovery in the employment situation, that will unsettle the markets,” said one Hong Kong-based Precious Metals dealer.  Economic reports have remained largely optimistic this week and investors will continue to scrutinize data to gain insight into the future of Precious Metals and the U.S. economy as a whole. 

As the Gold price held steady today, stocks soared to another session of gains following strong economic numbers that helped the  S& P 500 settle above 1,700 for the first time.  As all ten sectors of the S& P finished in positive territory today, some analysts view the breach of 1,700 as an ominous sign.  Many market experts, like Wells Fargo regional chief investment officer Marc Doss, view the much anticipatedtapering of quantitative easing measures as the potential impetus for a massive correction.  “It’s ironic, in that 1,700 is our year-end target. This has been faster and stronger than we expected. It’s been so far and so long since we had a full correction,” Doss said.

At 5:18 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,310.00, Down $5.00.
• Silver, $19.68, Up $0.04.

Morning Gold & Silver Market Report – 8/1/2013

ONE WEIGHT ON GOLD’S PRICE DISSIPATING

Precious Metals and U.S. stock futures are both  trading higher this morning  after yesterday’s U.S. Federal Reserve statement and the overnight release of China’s purchasing managers index. Peter Garnry of Saxo Bank said, “The drivers are both the more dovish tune from the Fed and better-than-expected PMI figures from China overnight. If you take those two events and combine it with a good earnings season with few profit warnings, then you have the right mix for a positive market.”

Precious Metals held onto gains after the  release of the weekly jobless claims report, which unexpectedly fell by 19,000. For Gold, one major factor of this year’s decline was exchange-traded funds (ETFs) being sold at record rates. For the fifth day in a row, however,  the largest of those funds, New York’s SPDR Gold Shares, saw no outflows. Commerzbank said in a note, “On balance, no more Gold has been withdrawn from the ETFs in the past six days of trading. If the ETF outflows were to come to an end, one key factor weighing on the Gold price would be eliminated.”

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

• Gold, $1,324.60, Up $9.60.
• Silver, $19.86, Up $0.15.

Gold Bounces after Test of Channel Support

Daily

Chart  Prepared by Jamie Saettele, CMT 

Commodity  Analysis: No change – “Gold’s rally reversed gains after running into former lows and channel resistance. Gold’s advance is better than silver’s, which remains extremely depressed. Daily RSI on the metal has recovered to 60, a common area for the indicator to stop in a bear market.”

Commodity Trading Strategy: The response at channel support makes me wary of being short. Moving to flat.

LEVELS: 1267 1282 1306 1332 1350 1395

Closing Gold & Silver Market Report – 7/31/2013

FED ANNOUNCEMENT SUPPORTS METALS EUROZONE MAY EXIT RECESSION SOON

Precious Metal prices rebounded from morning losses after the U.S. Federal Reserve announced interest rates would remain unchanged as long as the economy continues to improve at its current modest pace. “There is nothing in the latest [Federal Open Market Committee] statement released today to suggest that Fed officials have changed their minds about starting to taper the monthly asset purchases in September,” Capital Economics chief U.S. economist Paul Ashworth said. The key difference from the last meeting is that Fed chairman Ben Bernanke’s economic growth outlook went from moderate to modest. This adjustment may indicate the Fed is concerned about unexpected economic changes in the near future. 

A drop in the eurozone’s unemployment rate was positive news today from the area that has been in financial and economic crisis for some time now.  The drop was relatively small however, keeping unemployment at 12.1 percent for the fourth consecutive month.  “It's no secret that domestic demand remains very weak because spending is massively impaired by unemployment and austerity,” Deutsche Bank economist Gilles Moec said.    A Commerzbank research note from last week stated that the eurozone recession is likely over, providing the market reassurance for the future of European stocks. 

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

• Gold, $1,326.50, Down $0.30.
• Silver, $19.91, Up $0.15.

Morning Gold & Silver Market Report – 7/31/2013

MARKETS PLAY WAITING GAME

U.S. stock futures are holding on to fractional movements this morning as investors await today’s stack of economic data. Second quarter GDP, private-sector payrolls and the outcome of the U.S. Federal Reserve meeting will add fuel to the fire and move the needle one way or the other. It’s no surprise that investors are cautious after the selloff in May when the Fed commented on the future of quantitative easing.  Alpari U.K market analyst Craig Erlam said,  “If we get a strong [GDP] figure, we’ll probably see a lot of choppiness as traders try to guess how the Fed will react to it this evening. I’d say there would still be more buyers than sellers on good news, as some people have just accepted that tapering will occur later this year and are solely focused on fundamentals. However, that could all change later if the Fed indicates in any way that tapering will be delayed at all.”

Precious Metals, especially Gold, have felt the shifting winds of change as the Federal Reserve debates the time frame of tapering. The upcoming announcement from the Fed will undoubtedly push prices one way or the other. There seems to be a sentiment with Gold investors that the tapering process will make the yellow metal, which pays no dividend or interest, particularly sensitive to rising interest rates. However, emerging markets account for about three quarters of Precious Metal purchases worldwide.  Juan Carlos Artigas, the World Gold Council’s head of investment research, said, “Gold is not only a store of wealth but it is also bought around the world in periods of higher income growth as we have seen in emerging markets.”

At 9:01 a.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,325.50, Down $0.90.
• Silver, $19.80, Up $0.03.

Gold Could Collapse from Near Current Levels

Hourly

Chart  Prepared by Jamie Saettele, CMT 

Commodity  Analysis: No change – “Gold’s rally reversed gains after running into former lows and channel resistance. Gold’s advance is better than silver’s, which remains extremely depressed. Daily RSI on the metal has recovered to 60, a common area for the indicator to stop in a bear market.”

Commodity Trading Strategy: Short, stop 1350, targets 1283 and 1250

LEVELS: 1267 1282 1309 1332 1350 1395

Closing Gold & Silver Market Report – 7/30/2013

QUIET DAY FOR EQUITIES, GOLD

Wednesday is setting itself up as a big news day with the release of the second-quarter gross domestic product (GDP) report and the ever-important meeting of the U.S. Federal Reserve. The economy is measured by the GDP and a decline down to 1 percent is expected. In the first quarter of 2013, the economy grew to 1.8 percent the country’s long term average is 3.2 percent. In short, the economy is growing, just not as fast as the current administration would like. The report can sometimes be at odds with other market indicators, such as the jobs report. In addition, the Labor Department will periodically change the way the GDP is measured.  Richard Moody, chief economist at Regions Financial Corp, said, “We look for growth over recent quarters to be revised higher — the data on employment and income have been at odds with the GDP data so something has to give, and our money is on an upward revision to GDP growth over recent quarters.”

The Gold price retreated slightly as today was a low volume trading day. On days like this, many investors sit on the sidelines and wait for news, such as the Fed’s policy statement, before making a move. Much of Gold’s pricing is affected by the Federal Reserve.  Jeffrey Sica, chief investment officer at Sica Wealth, summarized it by saying, “If [U.S. Federal Reserve Chairman Ben] Bernanke comes out and specifically indicates that there is underlying weakness in the jobs market, then I think Gold is going to go much higher.” Gold moved above the $1,300 per ounce mark on Bernanke’s comments that the Fed would support quantitative easing until the economy showed the appropriate strength.

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

• Gold, $1,327.90, Down $3.70.
• Silver, $19.77, Down $0.18.

Morning Gold & Silver Market Report – 7/30/2013

GOLD DEMAND, PREMIUMS SWELL IN INDIA

Precious Metals prices are slightly lower this morning on anticipation of economic data and the Federal Open Market Committee (FOMC) meeting later this week.Physical demand for Gold in India, the world’s largest consumer of the metal, increased this week as the country’s central bank instituted new rules in an attempt to reign in its swelling trade deficit. Due to new restrictions, Bachhraj Bamalwa of All India Gems and Jewellery Trade Federation explained, “Premiums are increasing as there is no Gold available. No one in India is able to import for now, due to the new regulations and a lack of clarity on the operational procedures.” Demand is still very high in India and will only grow with supply issues for citizens.

U.S. stock futures gained in morning trading, following the lead from European stocks overnight. Ishaq Siddiqi of ETX Capital said, “[U.S. Federal Reserve Chairman Ben] Bernanke’s testimony to U.S. Congress earlier this month cleared up much confusion over tapering for investors, so  little is expected from the Fed  other than perhaps some updated projections of the U.S. economy, which should reaffirm that a recovery remains in train.” Economic data to be released today is expected to have little impact on markets, with housing and consumer-confidence data on tap.

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

• Gold, $1,327.50, Down $4.10.
• Silver, $19.85, Down $0.10.

Nouriel Roubini sees gold falling toward $1,000 by 2015: IndexUniverse.com ....

Closing Gold & Silver Market Report – 7/29/2013

GOLD ON THE RISE AHEAD OF FED MEETING SILVER DEMAND INCREASING IN ASIA

Gold is on the rise as investors wait for this week’s two-day U.S. Federal Reserve meeting for further news on the future of fiscal policy.    I think people want to stay on the sidelines until the Fed Meeting and this will generate a lot of two-way business in the next couple of sessions," MKS SA senior vice president Bernard Sin said. " Overall, traders will keep taking profits rather than trying to build long positions until the uncertainty around the timing of the Fed tapering [of quantitative easing] dissolves."   The market also expects movement in prices from the European Central Bank and the Bank of England who meet this week, though they are likely to reiterate previous economic strategies.

A Silver vault that can hold 200 metric tons is opening in Singapore this week.    In 2012, the Singapore government made the decision to support the buying of Precious Metals and removed a seven percent sales tax on investment-grade purchases.  Singapore’s goal is to grasp 15 percent of the world’s Gold demand with a current average of two percent.  Data from the World Gold Council and the Silver Institute shows that about 50 percent of Silver is used in industry, primarily for photography and electronics.

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

• Gold, $1,329.30, Up $5.40.
• Silver, $19.91, Up $0.05.

Morning Gold & Silver Market Report – 7/29/2013

IMPORTANT WEEK FOR STOCKS GOLD STARTING STRONG

While summer tends to be a slower time of the year for trading stocks, this week promises to be a bit more interesting.  The Federal Reserve once again is meeting this week to pick up the popular topic of tapering the economic stimulus program.  In addition, a large percentage of the S& P 500 companies report earnings and big oil like BP, Exxon, and Chevron all report second quarter earnings this week.  And as per usual, the GDP is released on Wednesday and the jobs report comes out on Friday.  Ward McCarthy, chief financial economist at Jefferies said,  " Given there's no chance the Fed's going to do anything at all...I think you have to look at the GDP data and jobs data as more telling about the Fed than this [Federal Open Market Committee] meeting."

The Gold price started overnight trading with a dip but has since rebounded and is posting gains,  building on a three week positive run.  The same factors that are giving equity investors a reason to doubt, and therefore are driving markets lower, are supporting Gold prices.  As the U.S. dollar suffers, dollar priced commodities like gold, become easier to afford.  Likewise, as the dollar strengthens the opportunity cost for buying gold increases, making it more expensive to buy the Precious Metal.  Saxo Bank senior manager Ole Hansen said, " This week offers several opportunities to test whether the rally can be sustained with the central banks' meetings and the U.S. non-farm payrolls on Friday."

At 9:17 a.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,330.70, Up $6.80.
• Silver, $19.97, Up $0.11.

Weekly Gold & Silver Market Recap – 7/26/2013

GOLD SOARS PAST $1,300 FOR FIRST TIME IN ONE MONTH

Gold began the week on a high note after breaking through the  key resistance level of $1,300 an ounce, a level that the Precious Metal had tested, but failed to beat in the past month. Gold prices reached as high as $1,322.50 on Monday morning before relaxing back down only to spike again before the U.S. stock market open. Throughout the day on Monday the Gold price continued its climb and closed above $1,300 per ounce for the first time in more than one month. After the National Association of Realtors said that  home sales in the U.S. fell by 1.2 percent, the U.S. Dollar fell against other currencies, leading to further increases to Gold’s price. Analysts also pointed to a move in China which made it easier to borrow money, while not rewarding savers. The analysts said, “That spells ‘buy Gold’ in Mandarin just as it does in all other languages.” The major story for Gold has been the potential end of quantitative easing (QE). Federal Reserve Chairman Ben Bernanke’s reassurances that the withdraw of the QE program would depend on economic conditions, which ultimately initiated a strong week of gains for the yellow metal. 

INVESTORS MOVE ON OPPORTUNITY TO TAKE PROFITS

On Tuesday, prices fell a bit and many analysts believe the fall was simply short covering and profit taking. For clues on the future of Gold’s price, EverBank’s Mike Meyer wrote, “The next couple of Fed meetings should have a significant impact as to the near-term direction of metals, as any hints of procrastinating plans to taper should act as a springboard, but anything to the contrary would tend to keep it suppressed.” 

Equities indexes wavered, leaving stocks relatively flat midway through Tuesday’s trading session. Following a day that saw the S& P 500 continue its winning streak to end the day at a new record high, markets continue to assess some disappointing corporate earnings data. As the market rally endures the perpetuation of loose monetary stimulus measures, many analysts are still bullish as the  S& P 500 is up 151 percent from its March 2009 low. “The momentum is slowing a bit, but the trend is still up,” John Fox, fund manager and director of research at Fenimore Asset Management Inc., said. 

WORLD-WIDE ECONOMIC DATA PRESSURES PRECIOUS METALS

News out of China and other economic data  came out mid-way through the week, which continued to affect prices as investors look for clues as to what will happen next. Andy McLevey of Interactive Investor said, “Arguably, so long as we have the promise of cheap money on the table, then there’s scope on the upside. But that disappointing Chinese PMI [which fell to an 11-month low] should also be acting as a cautionary note to the market.”

POSITIVE OUTLOOK FOR GOLD TO REACH $3,000

MarketWatch’s Andy Xie has high hopes for Gold as he forecasted the metal to reach $3,000 per ounce in the next five years, citing the case that the East will be taking over Gold’s mantle from the West in that time period. He said, “China and India account for roughly two-thirds of global demand for Gold. … The tension between where Gold is priced and where demand is located is manifesting itself in two ways: first, Gold shops in Asia have no physical Gold to meet demand and second, the price of Gold set in Shanghai is consistently higher than in London or New York. Physical Gold is likely to flow from the West to the East due to the pricing gap. It is only a matter of time before the warehouses of London and New York are emptied. When the stock is all shifted to the East, the price fixed in Shanghai will become the real price.”

APMEX CEO MICHAEL HAYNES FOCUSES ON ECONOMIC NEWS IN RESPONSE TO QE3 BEING TAPERED

Gold jumped toward the end of the week, reacting to the state of the U.S. dollar as speculation over the tapering of domestic stimulus and macroeconomic data influence currency movement. As it has become more apparent that the Federal Reserve will inevitably reduce the level of bond purchases in the near future,investors look to other factors that historically impact world currency and the Gold price. “The market seems to be responding to recent weakness in the dollar coupled with today’s weakness in the jobless report,” Michael Haynes, chief executive officer APMEX, Inc., said. “Generally, it seems that Fed tapering is really becoming less of an issue as the world economic data begins to weigh on various currencies.” Look for traders and investors alike to pay close attention in the coming weeks to U.S. and global economic news that could influence metals including word from Fed Chairman Ben Bernanke concerning the future of quantitative easing (QE).

Precious Metal prices were down during morning trading Friday and then bounced back by end of day. With prices depressed to multi-year lows and the future scale of quantitative easing (QE) still in question, many experts view current Precious Metals prices as an excellent buying opportunity for investors. The massive sell-off of Silver futures contracts in the first half of 2013, which reduced the price by nearly 34 percent year-to-date, has diminished the  Silver price to a level that has analysts touting the metal’s tremendous upside potential. As Silver prices have fallen to what some experts refer to as “artificially low” prices, many anticipate a reduction in Silver production. “The basic influence on Silver is the supply/demand relationship and there are potential issues for lower supply and higher demand at these lower price levels,” Haynes said.

At 4:44 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,335.40, Up $3.90.
• Silver, $20.08, Down $0.16.

Mid-Day Gold & Silver Market Report – 7/26/2013

SILVER FUNDAMENTALS POINT TO UPSIDE POTENTIAL

Precious Metals are down headed into the weekend, though both Gold and Silver are still expected to realize another week of gains. With prices depressed to multi-year lows and the future scale of quantitative easing (QE) still in question, many experts view current Precious Metals prices as an excellent buying opportunity for investors. The massive sell-off of Silver futures contracts in the first half of 2013, which reduced the price by nearly 34 percent year-to-date, has diminished the  Silver price to a level that has analysts touting the metal’s tremendous upside potential. As Silver prices have fallen to what some experts refer to as “artificially low” prices, many anticipate a reduction in Silver production. “The basic influence on Silver is the supply/demand relationship and there are potential issues for lower supply and higher demand at these lower price levels,” Michael Haynes, chief executive officer at APMEX Inc., said.

Stocks are set to sustain their first week of losses in nearly a month. The Dow Jones Industrial Average fell more than 100 points at one point as disappointing corporate earnings data weighed on investor sentiment and as concern continues surrounding the pullback of QE. “Fundamentals have been good, but the fundamentals from here are not going to support a run higher,” Timothy Hoyle, the director of research at Haverford Investments, said. As the month of August begins, anxiety remains a constant for investors who believe the Federal Reserve will begin  cutting back the level of monetary stimulus in September.

At 12:11 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,323.10, Down $8.70.
• Silver, $19.83, Down $0.42.