Weekly Gold & Silver Market Report – 7/12/2013

PRECIOUS METALS BEGIN AND END WEEK WITH A RISE

The week began with the unofficial start to the second quarter earnings season, and futures pointed positive. Earning seasons are the months following the end of a quarter January, April, July, and October. Aside from the regular slew of financial news this week, including the release of the minutes from the Federal Open Market Committee meeting from June, investors will begin looking toward second-quarter earnings. Many companies have already brought down their growth forecasts, including financial firms which are expected to set the tone this quarter.  Dan Greenhaus, chief global strategist at BTIG, said, “This would be the second consecutive quarter of unimpressive earnings growth, which is rubbing many clients the wrong way.”

Precious Metals mostly added to gains during Monday trading,  and strategists at Deutsche Bank believe that the correction could be finished. With the caveat that Federal Reserve policy decisions could still hamper Gold’s recovery, the statement read, “It is possible that the major part of the Gold price correction has already occurred.” At Monday’s opening, the Gold price was approximately 30 percent down from its record high in September 2011.

POSITIVE DAY FOR STOCKS WITH A RECOVERING ECONOMY

U.S. stocks climbed on Tuesday, specifically the S& P 500. The S& P was within one percent of closing at it’s all time high as Wall Street seemed to be embracing a stronger economy, including higher interest rates. The Gold price extended its positive numbers into a second day, rising the most in seven sessions after breaking through a key technical level.  China’s inflation data boosted the Precious Metal’s appeal as a hedge against inflation for the world’s second largest consumer of Gold. Analysts have said that rising Chinese inflation should hamper significant easing responses as we continue to see this enhanced demand for Chinese Gold.

WEDNESDAY’S  FOMC  MINTUES RELEASE SUGGESTED  CONTINUING  MONETARY  EASING

Mid-week the minutes were released from the Federal Reserve’s June meeting, which affirmed many investors’ presumptions that officials prefer to see an improvement in the job market before tapering fiscal policy. “The Gold market is pleasantly surprised, and is rallying on the minutes,” Tom Power, a senior commodity broker at R.J. O’Brien & Associates in Chicago, said. “The unemployment number is the key number that the Fed is watching, and with that still above 7.5 percent, investors think that easing is here to stay for some time.” Gold increased by 0.3 percent after the minutes were released, extending its gains to a third consecutive day.

METALS END THE WEEK ON A POSITIVE NOTE

Precious Metals prices began trading flat Friday as  Gold and Silver were set up for their first week of gains in one month. Federal Reserve Chairman Ben Bernanke’s assuring commitment to ultra-loose monetary policy helped drive the safe haven appeal of metals as a hedge against dollar devaluation. This week’s upward movement has some experts predicting a reversal in the recent downward trend Gold has been experiencing. Felix Zulauf, president of Zulauf Asset Management, said, “Gold has turned here for a good recovery bounce, as the technicals are extremely oversold, leading to a run into the mid/upper $1,300 in coming weeks.” The perpetuation of quantitative easing measures by central governments weighs heavily on world currencies and has traditionally increased demand for Precious Metals.

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

• Gold, $1,286.10, Up $3.20.
• Silver, $19.95, Down $0.10.

Mid-Day Gold & Silver Market Report – 7/12/2013

PRECIOUS METALS, STOCKS TAKE BREATHER

Precious Metals prices are trading flat today as  Gold and Silver are set for their first week of gains in one month. Federal Reserve Chairman Ben Bernanke’s assuring commitment to ultra-loose monetary policy helped drive the safe haven appeal of metals as a hedge against dollar devaluation. This week’s upward movement has some experts predicting a reversal in the recent downward trend Gold has been experiencing. Felix Zulauf, president of Zulauf Asset Management, said, “Gold has turned here for a good recovery bounce, as the technicals are extremely oversold, leading to a run into the mid/upper $1,300 in coming weeks.” The perpetuation of quantitative easing measures by central governments weighs heavily on world currencies and has traditionally increased demand for Precious Metals.

Following Thursday’s market rally that boosted equities indexes to new record highs,  stocks remain relatively flat headed into the weekend. “The market is catching its breath after a big push to a record high,” Alan Gayle, senior strategist at RidgeWorth Capital Management, said. As Ben Bernanke has asserted that monetary stimulus measures will continue uninterrupted, stocks have continued their impressive climb. Investors will await news of a possible exit strategy as analysts and economists weigh the potential effects a tapering program will have on markets.

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

• Gold, $1,279.40, Down $3.50.
• Silver, $19.90, Down $0.15.

Morning Gold & Silver Market Report – 7/12/2013

STOCKS HOLD STEADY GOLD DEMAND HIGH IN CHINA

The U.S. stock market is holding steady this morning in premarket trading after surging yesterday to record highs.  Banking juggernauts J.P. Morgan Chase & Co. and Wells Fargo  have already reported earnings on tap for later are producer prices, consumer sentiment data and a few Federal Reserve speakers. Bank earnings are taking center stage as the financial sector is projected to have the highest earnings-growth rate of any sector for the second straight quarter in the S& P index.

Gold prices are coming down after a four day rally, but demand in China, the second largest consumer of Gold in the world, remains high. Demand relative to supply is so high that Gold premiums were at levels not seen since April of this year. These premiums are predicted to remain tight for the next few months. Prices for .9999 pure Gold on the Shanghai Gold Exchange were nearly $30 per ounce above the London spot price today normal Gold premiums are usually $5 to $7 above spot. The supply is tight due to import quotas by the Chinese central bank and a seasonal shutdown of Gold refineries. Gold bars are becoming scarce in the country.  Albert Cheng, managing director for the Far East region of the World Gold Council, said,  “The current Gold supply is getting increasingly constrained while the demand remains strong.”

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

• Gold, $1,275.30, Down $7.10.
• Silver, $19.88, Down $0.17.

Gold Rally is in 2 Equal Legs Watch Near Term Channel for Support

4Hour

Chart  Prepared by Jamie Saettele, CMT 

Commodity  Analysis:  Gold’s rally consists of 2 equal legs (almost exactly). This relationship is typical of corrective movements. Just as important, the level is also defined by the 6/20 close. Volume that day was the 4th  highest of the year, behind only 4/12, 4/15-4/16.

Commodity Trading Strategy: Limit on longs hit at 1295, sit tight for now.

LEVELS: 1223 1243 1267 1299 1319 1349

Closing Gold & Silver Market Report – 7/11/2013

GOLD, STOCKS RALLY ON QE COMMITMENT

The Gold price nearly reached a three week high Thursday following indications from Federal Reserve chairman Ben Bernanke that loose monetary policy will remain in place for the foreseeable future. Today’s price increase has given Gold its fourth straight session of gains as the metal begins to eye the $1,300 mark. Though Gold and Silver have been experiencing substantial downward pressure since the mid-April correction that saw Gold fall more than $200 an ounce,  ongoing commitment to the Fed’s quantitative easing (QE) program  may shift sentiment toward Precious Metals, which have historically benefited greatly from QE. Metals analyst Edward Meir at INTL FCStone said, “Investors prefer to focus on the probability that the Fed will remain easier for far longer.”

The stock market rally continues today with the  S& P 500 closing at an all-time high. The stimulus measures that have been so bullish for Gold in the past have also been an integral factor in boosting equities. “The story in stocks for this year is about confidence replacing uncertainty and anxiety,” Hank Smith, chief investment officer at Haverford Trust Co, said. As accommodative monetary policy continues, all eyes and ears remain intently focused upon every utterance from Bernanke. Precious Metals and stock markets alike have come to rely heavily on the liquidity offered by the Fed’s monthly asset purchases. Investors will await future Fed meetings to gain insight into the future of the program.

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

• Gold, $1,286.70, Up $36.80.
• Silver, $20.21, Up $0.95.

Morning Gold & Silver Market Report – 7/11/2013

BERNANKE: FED SHOULD BE MORE ACCOMMODATIVE

Precious Metals prices jumped Wednesday afternoon and have continued to climb today, with Gold nearing $1,300 and Silver jumping above the $20 barrier. After the release of the minutes from June’s Federal Open Market Committee meeting, U.S. Federal Reserve chairman Ben Bernanke spoke and revealed that the Fed should be more accommodative, which boosted the safe haven appeal of Gold. Analysts at Commerzbank wrote, “We presume that the strong reaction of the Precious Metal markets is also related to the fact that  investors believe that the Fed’s actions and attitude do not differ  significantly from those” of the highly accommodative European Central Bank or Bank of Japan. “This is likely to prompt investors to increasingly seek a ‘safe haven’ and a currency that is independent of the central banks, thus again luring in buyers of Gold.”

The minutes outlined clearly what the committee believed Bernanke should convey regarding tapering the quantitative easing program, and a key element was reminding the public that “decisions about asset purchases and other policy tools  would continue to be dependent on the Committee's ongoing assessment of the economic outlook.” With Wednesday’s announcement that the Fed should continue with low interest rates, it appears the economic data released since the June meeting didn’t meet the committee’s expectations.

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

• Gold, $1,287.20, Up $37.30.
• Silver, $20.17, Up $0.91.

Closing Gold & Silver Market Report – 7/10/2013

FED MINUTES SUGGEST FISCAL POLICY WILL CONTINUE

The minutes from the Federal Reserve’s June meeting affirmed many investors’ presumptions that officials prefer to see an improvement in the job market before tapering fiscal policy. “The Gold market is pleasantly surprised, and is rallying on the minutes,” Tom Power, a senior commodity broker at R.J. O’Brien & Associates in Chicago, said. “The unemployment number is the key number that the Fed is watching, and with that still above 7.5 percent, investors think that easing is here to stay for some time.” Gold increased by 0.3 percent after the minutes were released, extending its gains to a third consecutive day.

Once the minutes of the Fed’s June meeting were released, there was a noticeable drop in U.S. stocks, government bonds and the dollar. The market is reacting to the mixed responses from state representatives that strongly believe the Federal Reserve is moving too quickly with cutting back on its bond buying program. “The market is moving away from its concerns about tapering  and toward about the timing when [the Fed] will normalize interest rates and who will replace Bernanke,” Robbert Van Batenburg, director of market strategy at Newedge USA LLC in New York, said.

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

• Gold, $1,264.10, Up $15.70.
• Silver, $19.53, Up $0.30.

Morning Gold & Silver Market Report – 7/10/2013

FED MINUTES TO SHED MORE LIGHT ON QE TIMING

Precious Metals prices are on the rise this morning as  investors await minutes from June’s Federal Open Market Committee meeting, scheduled for release at 2 p.m. (ET). Some analysts believe that the market has already “built-in” expectations that the Fed will begin tapering its quantitative easing (QE) program in September, so clues that tapering will begin in December or later could be bullish for the metal in the short term. Standard Bank analyst Marc Ground said, “I think there should not be anything that will surprise the market from the minutes, we should pretty much already know what is in them.”

U.S. stock futures are  lower in anticipation of the Fed minutes, and Peter Cardillo of Rockwell Global Capital said, “If the minutes basically suggest the economy is mulling along continuing to slow at modest pace and that might put off the time limit in terms of trimming [the QE program], which is what the markets would like to see ... we’ll be at new highs for the S& P over the next day or two. That suggests the Fed may not be in such a hurry that markets have been anticipating. The bond market obviously has discounted that ... it’s a bit of a positive for equities, not a negative.”

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

• Gold, $1,256.10, Up $7.70.
• Silver, $19.35, Up $0.13.

Gold Near Term Objective Zone is 1295-1319

4Hour

Chart  Prepared by Jamie Saettele, CMT 

Commodity  Analysis: “Gold’s rally from the June low is impulsive and the decline from 1267 is corrective. That information is reason enough to be bullish for a move above 1267. A move through the high opens up 1295 (2 equal legs from the low) and 1319 (161.8%). Friday’s  FX Technical weekly  provides additional details.” 1223 is now support.

Commodity Trading Strategy: Triggered long last week at 1215…stop moved up to 1208.

LEVELS: 1180 1208 1223 1267 1295 1319

Closing Gold & Silver Market Report – 7/9/2013

STOCKS STILL RIDING HIGH, GOLD UP FOR SECOND DAY

U.S. stocks climbed on Tuesday, specifically the S& P 500.  The S& P was within one percent of closing at it’s all time high as Wall Street seemed to be embracing a stronger economy, including higher interest rates.    JJ Kinahan, chief strategist with TD Ameritrade said, “The market is voting itself that things are improving, with interest rates going higher without taking the stock market down.”  He continued on to say that we need to test at least the 1,650 level or higher with the S& P, a level breached three weeks ago.  Other indexes are up today, the Dow is up for the fourth session in a row.

The Gold price extended its positive numbers into a second day rising the most in sevens sessions after breaking through a key technical level.  China’s inflation data boosted the Precious Metal’s appeal as a hedge against inflation for the world’s second largest consumer of Gold.  Analysts have said that rising Chinese inflation should hamper significant easing responses as we continue to see this enhanced demand for Chinese Gold.

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

• Gold, $1,251.60, Up $14.20.
• Silver, $19.31, Up $0.19.

Morning Gold & Silver Market Report – 7/9/2013

• Gold, $1,253.00, Up $15.60.
• Silver, $19.31, Up $0.19.

Gold May Face Test at 1243

Hourly

Chart  Prepared by Jamie Saettele, CMT 

Commodity  Analysis:  Gold’s rally from the June low is impulsive and the decline from 1267 is corrective. That information is reason enough to be bullish for a move above 1267. 1243 is interim resistance. A move through the high opens up 1295 (2 equal legs from the low) and 1319 (161.8%). Friday’s  FX Technical weekly  provides additional details.

Commodity Trading Strategy: Triggered long last week at 1215…stop moved up to 1208.

LEVELS: 1180 1208 1223 1243 1267 1295

Closing Gold & Silver Market Report – 7/8/2013

FED TAPERING EXPECTED IN SEPTEMBER STRIKES IN SOUTH AFRICA MAY AFFECT PLATINUM

Gold felt the pressure last Friday after the Bureau of Labor Statistics reported a better-than expected nonfarm payrolls increase for June. Once the report was released, speculation began quickly on when the Federal Reserve might taper fiscal policy. “The unemployment rate remained at 7.6 percent, and our  economists maintain their 'Septaper' view that the Fed will begin to reduce the pace of its asset purchases at the September meeting,” Barclays wrote in a research note on Monday. Barclays noted that physical demand may have slowed due to a seasonal break with analysts expecting an increase toward the fall season for the Asian Markets.

The price and supply of Platinum is now a major concern for investors with confirmation that two Anglo American Platinum mines are on strike in South Africa. The strikes are due to the mining industry’s wage negotiation period, which is a critical time for this line of business. “If this strike results in a significant loss of production, it's going to help support the price  [of Platinum],” Robin Bhar at Societe Generale told CNBC. “The ongoing industrial unrest across South Africa is already having an impact on Platinum prices – and the situation is not going to get better soon.”

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

• Gold, $1,238.20, Up $23.00.
• Silver, $19.13, Up $0.30.

Morning Gold & Silver Market Report – 7/8/2013

EARNING SEASON BEGINS STOCKS, GOLD UP

It’s the unofficial start to the second quarter earnings season, and futures are pointing positive. Earning seasons are the months following the end of a quarter January, April, July, and October. Aside from the regular slew of financial news this week, including the release of the minutes from the Federal Open Market Committee meeting from June, investors will begin looking toward second-quarter earnings. Many companies have already brought down their growth forecasts, including financial firms which are expected to set the tone this quarter.  Dan Greenhaus, chief global strategist at BTIG, said, “This would be the second consecutive quarter of unimpressive earnings growth, which is rubbing many clients the wrong way.” Companies to watch this week are Alcoa today and JP Morgan and Wells Fargo on Friday.

The Gold price is moving higher today as investors find value in the Precious Metal after falling 10 percent since Federal Reserve Chairman Ben Bernanke announced the Federal Reserve would start tapering the bond buying program that has propped up the Gold price.  Peter Fertig of Quantative Commodity Reaserch  has a different view when he said, “We had a good [nonfarm payrolls] number on Friday but the unemployment rate remains unchanged at 7.6 percent and it is not a done deal that the Fed will start tapering its bond-buying in September.” Potential gains of the Precious Metal have been held in check by a rising U.S. dollar.

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

• Gold, $1,231.50, Up $16.30.
• Silver, $19.15, Up $0.32.

Weekly Gold & Silver Market Recap – 7/5/2013

JOBS NUMBERS PUSH DOWN GOLD AT WEEK’S END

This week saw Precious Metals continue their descent as Friday’s non-farm payroll numbers helped lift the stock market and put further pressure on Gold and Silver. Precious Metals  prices fell  today, reacting to a stronger-than-expected jobs report for June. Danske Bank analyst Christin Tuxen said that a stronger jobs report “would suggest that although rates are set to stay at record lows in Europe, that may not be the case in the United States.” The U.S. dollar rose more than one percent against competitors due to weakness in the euro, which also contributed to the losses in metals. The jobs report showed a gain of 195,000 jobs in June, though theunemployment rate was unchanged at 7.6 percent  due to an increase in the labor force of 177,000. The jobs readings from April and May were revised upwards as well. The good economic news has many investors believing that the Federal Reserve’s tapering of its quantitative easing program could indeed be coming soon, putting pressure on the price of Gold.

Prior to the July 4th  holiday, Egyptian upheaval and continued financial woes in Portugal helped give Gold a moderate boost. The  safe haven appeal of Precious Metals temporarily resumed  following political turmoil these regions. “Rising tensions in Egypt and re-emergence of the European crisis, along with the mixed data” combined to underpin Gold prices Wednesday, according to a Precious Metals dealer chief market analyst. As hastening violence erupted in Egypt, austerity difficulties in Portugal re-focused the spotlight on the eurozone as Portuguese debt and frantic stock selloffs highlighted troubles in the region. Domestic investors awaited Friday’s nonfarm payroll data to see if the reports would incite movement in Precious Metals markets that are currently in a tug-of-war with bargain hunting physical buyers and ETF sellers.

ECONOMIC DATA DRIVING STOCKS WEIGHING ON GOLD

Earlier this week, the Gold price was still struggling against a strong U.S. dollar. On Tuesday, Gold gained much of the ground lost last week, but those gains were short lived as money managers used the opportunity to sell out of long positions.  Phillip Streible, senior commodities broker at R.J. O'Brien in Chicago, said, “The dollar index is strengthening quite a bit, equities are strengthening and you're seeing interest rates go up. That seems to be the perfect storm against the metal at the moment.” Investors seemed hesitant to move much before the holiday. The Dow Jones Industrial Average and S& P 500 were both up Tuesday following news that U.S. factory orders improved for May. It appears as though equities markets have made the necessary adjustments, being bolstered by QE to make gains based on positive economic data. As we await corporate earnings reports, set to begin next week, the perception of domestic strength and the validity of economic recovery are expected to be the  factors that future market improvements will hinge upon. A strong reading in today’s jobs numbers was expected to be positive for the dollar and another blow to Gold.

GOLD PRODUCTION COULD SLOW

After a second quarter slide that saw Gold fall more than 23 percent, the yellow metal started July with strong gains. Following the recent decline that sent Gold through many key technical levels, a price jump earlier this week was due to a drove of backfill orders placed by bargain hunting investors. Along with discussion that the U.S. Federal Reserve will begin tapering quantitative easing, the “strengthening of the [U.S. dollar], unwinding of the global carry trade and tame global inflation” according to experts have all amalgamated to drive Precious Metals prices down the last couple months. However, with prices being so low, Gold producers are second guessing the profitability of their endeavors. The world’s largest Gold miner, Barrick Gold Corp., recently postponed the launch of a South American mine by two years.  Experts predict many other producers will suspend production  unless the Gold price can rebound enough to once again make manufacturing lucrative.

At 5:27 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,224.90, Down $29.50.
• Silver, $18.95, Down $0.84.