Morning Gold & Silver Market Report – 7/26/2013

WEAKER U.S. DOLLAR GOLD RIDING THREE WEEKS OF GAINS

A drop in the value of the U.S. dollar has had a ripple effect that extended beyond Wall Street’s equities market, triggering a sharp drop in Japan stocks overnight. Investors are looking ahead to next week’s data and the Federal Reserve meeting.Keith McCullough, chief executive officer at Hedgeye Risk Management, said, “Dollar down was bad for Japan (off three percent) and it’s bad for U.S. equities. The Russell closed at another all-time high yesterday too, so some of this is just called a correction.” The week is set to end on a flat note for Wall Street with the major indexes either ending slightly lower or with minimal gains. Steen Jakobsen, chief economist with Saxo Bank, said, “People are realizing growth is subpar and consensus is subpar too.”

The Gold price retreated overnight, but is still on course for its third week of gains. The fact that the U.S. dollar weakened against the basket of major currencies has helped to keep Gold on even footing. The Precious Metal is supporting a more than eight percent gain over three weeks. International demand, especially from China, the world’s second largest consumer of Gold, has helped to support the Gold price even as thousands of tons Gold have exited ETFs. In fact, China’s demand could hit a record high this year. It’s no surprise either.  Danny Laidler, head of ETF Securities' Australia and New Zealand business, said,  “The fundamentals for buying Gold are still there - loose monetary policy, concerns over the Middle East and Europe, and (economic) data from the U.S. and China not being as positive as expected.”

At 9:09 a.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,325.90, Down $5.90.
• Silver, $20.02, Down $0.22.

Gold Pressing Confluence of Technical Levels

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. In fact, yesterday’s reading was the highest since 11/23/12. Resistance is estimated at 1332 (now reached) .”

Commodity Trading Strategy: Short triggered at 1332, stop 1350, target half 1270

LEVELS: 1223 1267 1313 1332 1350 1395

Closing Gold & Silver Market Report – 7/25/2013

WEAK DOLLAR LIFTS GOLD AFTER WEDNESDAY’S PRICE DROP

Gold continues to react 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). 

While investors grope for signs that QE is set to be reduced,  stock prices were lifted slightly today as corporate earnings data continues to boost optimism. “We are kind of stuck in that middle ground where data is not bad enough to be encouraging about more quantitative easing, but it’s not good enough to convince people that there is enough there fundamentally to justify sharply higher prices,” Bruce McCain, chief investment strategist at the private banking unit of KeyCorp, said. As we continue to move through the second half of the year, investors will desire domestic growth, positive earnings and improved employment numbers to be assured the current bull market can be sustained. 

At 5:14 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,337.10, Up $14.60.
• Silver, $20.33, Up $0.22.

Morning Gold & Silver Market Report – 7/25/2013

JOBLESS CLAIMS FALL GOLD REVERSES COURSE

Gold and Silver prices have reversed losses this morning after economic datashowed a rise in jobless claims. U.S. stock futures fell after the news. The focus on data is surrounding quantitative easing and whether the Federal Reserve will have enough positive data to support tapering of the program.  The dollar index dropped slightly, Asian markets fell, and European data disappointed markets as well.

For Gold’s immediate future, all eyes continue to be on the Fed meeting next week. Standard Bank analyst Walter de Wet said, “We're likely to find support around $1,300, but Gold is going to struggle to maintain prices above $1,330, at least ahead of next week's Fed meeting. Our position is that the Fed will continue to taper QE, and market consensus believes it will probably happen in September.”

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

• Gold, $1,326.30, Up $3.80.
• Silver, $20.21, Up $0.11.

Gold Extends Gains Slightly Nears Parallel Channel

4Hour

Chart  Prepared by Jamie Saettele, CMT

Commodity  Analysis:  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. In fact, yesterday’s reading was the highest since 11/23/12. Resistance is estimated at 1332

Commodity Trading Strategy: Order to go short 1332, stop 1350, target half 1270

LEVELS: 1223 1267 1313 1332 1350 1395

Closing Gold & Silver Market Report – 7/24/2013

GOLD DIPS AS U.S. HOUSING MARKET HITS HIGHEST POINT IN 5 YEARS

Gold was pressured down today after optimistic U.S. housing market data was announced. The amount of purchased homes in the U.S. jumped to 8.3 percent in June, the highest point since May 2008. Positive economic data has become the center of concern for the market as the Federal Reserve announced they will continue to watch reports to determine if fiscal policy should be tapered. “Every new data becomes a point of speculation for the timing of the stimulus tapering,” David Lee, a vice president at Heraeus Precious Metals Management in New York, said in a telephone interview. “The market wants some clarity from the Fed.” 

Europe’s manufacturing data was released today and surprisingly showed development in July, something that hadn’t been seen in two years.  The report is a positive sign that the eurozone economy is on its way toward a healthy recovery. The “figures clearly support the notion that the eurozone economy as a whole is leaving recession behind,” Martin van Vliet, an economist at ING Bank NV in Amsterdam, said. “The monetary stimulus from the ECB, the earlier pick-up in the world economy and the overall slower pace of fiscal austerity have finally managed to stop the economic contraction.”

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

• Gold, $1,323.70, Down $14.00.
• Silver, $20.21, Down $0.13.

Morning Gold & Silver Market Report – 7/24/2013

METALS FLAT AS INVESTORS WEIGH DATA

Precious Metals prices are flat this morning, while U.S. stock futures are on the rise.  News out of China and other economic data  from around the world continue 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.”

MarketWatch’s Andy Xie forecast a $3,000 per ounce price tag for Gold 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.”

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

• Gold, $1,337.20, Down $0.50.
• Silver, $20.28, Down $0.06.

Closing Gold & Silver Market Report – 7/23/2013

GOLD UP AGAIN DOW CLOSES AT RECORD

The lagging U.S. dollar helped lift the Gold price today reaching a one-month high. The day started a bit listless for the Precious Metal, but it was able to stage a late day comeback on low trading volume as traders sought to cover short positions.  David Meger, director of metals trading at futures brokerage Vision Financial Markets, said, “There are some options-related buying as traders cover short positions in the options market, which adds to buying in the underlying futures.” Technical buying could also help Gold. Holding above the 50 day moving average of $1,331 an ounce may have provided some support for the yellow metal. Year to date, Gold is still down after gaining for the past 12 years.

The U.S. stock market finished with mixed results today, but the Dow was the clear winner, posting a new high.  Art Hogan, managing director at Lazard Capital Markets, said, “This week, we're entirely focused on a market that is luckily treating earnings on a case-by-case basis. You've got a general market trend where investors are comfortable with stocks for now—for now, we've a better understanding of Fed tapering means.” As earning season continues the market is closely watching returns. Today’s returns from companies like United Technologies and Boeing helped keep the Dow in the black.

At 5:00 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,347.80, Up $8.80.
• Silver, $20.54, Down $0.06.

Gold Extends Gains Slightly Nears Parallel Channel

Daily

Chart  Prepared by Jamie Saettele, CMT

Commodity  Analysis: Wrote last week that “between here and 1340 is ‘no man’s land’. A push above 1340 would warrant a closer look, possibly offering a chance to buy dips.”  Goldhas reached 1340. The area is defined by former support and parallel channel resistance. Near term support is now 1313.25. See how the market handles weakness after this rally.

Commodity Trading Strategy: Flat

LEVELS: 1313 1323 1326 1350 1365 1395

Morning Gold & Silver Market Report – 7/23/2013

ANALYSTS KEEP EYES ON FED FOR CLUES ON GOLD’S FUTURE

Precious Metals prices are dropping in early morning trading.    Monday’s gain was the largest for the Gold price since June 2012, and many analysts believe the fall today is 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.”

One of the key factors in Monday’s rally for the Gold Price was the value of the U.S. dollar.    The dollar index is flat this morning, hovering around a one-month low.  Jane Foley of Rabobank said, “The message has sunk in over the last couple of weeks that the Fed is still on a very accommodative monetary policy path.  Yesterday we had some weaker U.S. housing data that reinforced that message.”

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

• Gold, $1,332.80, Down $6.20.
• Silver, $20.24, Down $0.36.

Gold Rallies into Former Lows

Daily

Chart  Prepared by Jamie Saettele, CMT

Commodity  Analysis: Wrote last week that “between here and 1340 is ‘no man’s land’. A push above 1340 would warrant a closer look, possibly offering a chance to buy dips.”  Goldhas reached 1340. The area is defined by former support and parallel channel resistance. Near term support is now 1313.25. See how the market handles weakness after this rally.

Commodity Trading Strategy: Flat

LEVELS: 1301 1313 1323 1339 1365 1395

Closing Gold & Silver Market Report – 7/22/2013

GOLD JUMPS WITH WEAK DOLLAR U.S. HOUSING BUBBLE MAY BE NEAR

Gold is on the rise today after a weaker U.S. dollar caused investors to become concerned on whether the Federal Reserve will or won’t continue with its fiscal policy. The market is beginning to react after last week’s uncertain announcement from Fed Chairman Ben Bernanke about the bond buying program’s future. “We are seeing some support for Gold as Bernanke’s statements tell us that the Fed wants to see a visible improvement in economic conditions before they begin tapering, “ Michael Cuggino, who manages $12 billion of assets at Permanent Portfolio Family of Funds Inc. in San Francisco, said. “The longer-term reasons for owning Gold, like capital preservation, remain  as easy money will continue to flow into the system.”

The housing market has become one of the U.S. Federal Reserve’s newest concerns in desperate need to be corrected before monetary policy is cut back. Previous housing market reports reflected positive data, and it was presumed to be on track for a healthy recovery, but current figures are creating an alarm for analysts that we may be headed back toward a housing bubble. “I wouldn't say that we have bubbles today. But if prices keep rising at these rates, pretty soon you will be in a bubble territory,” Dean Baker, co-director of the Center for Economic and Policy Research, a Washington think tank, said. “Generally, you don’t see situations with rapidly rising prices and they just stop.”

At 5:05 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,337.50, Up $41.60.
• Silver, $20.59, Up $1.04.

Morning Gold & Silver Market Report – 7/22/2013

• Gold, $1,323.60, Up $27.70.
• Silver, $20.35, Up $0.81.

Gold Short Squeeze - Adam Hamilton

BREAKING - Gold futures hiccup indicates demand outpacing supply - Reuters

Huge demand for physical gold has more than countered ETF sales