A Gold Moment: April 16, 2014

A Gold Moment

April 16, 2014

 

Yesterday’s Comex volume had the largest volume in over a week. This came as some traders liquidated positions and others reversed positions in a steep decline. This decline that started in early Asian trading hours accelerated as the Comex opened and CPI was released. Some looked to the World Gold Council’s tepid expectations for China gold demand for 2014 as a large catalyst, but the negative price reaction to the higher than expected CPI and core CPI numbers betrayed the economic focus that has been dominating the gold trader’s desks.   Today’s economic figures will certainly add more perspective as well as the slew of Fed president speeches on the roster. The housing starts and building permits will be the primary triggers.

 

Technically, charts are back into mixed signal territory with a slight nod to the bears. A spot gold close above 1312 would be needed today for any hopes for bullish action. On the other hand sell stops should be expected near the 1289 level and could deliver a test of 1275.

 

 

 Last                         GCM4

1303

SIK4

1960

PLN4

1441

PAM4

798

 

ETF: GLD Deposits:   806.82   tonnes   +0.60

Comex GC O.I. :  369,477    +5426

ETF: SLV Deposits:  10,228.97  tonnes    unch

Comex SI O.I.:  163,724   -1845

 

GC/EU                                  942

GC/SI                                    66.48

PL/GC                                   1.1059

GC/WTI                                12.43

 

Helpful links:

http://strategydb.com/blogs/

http://preciousmetalslife.com/

 

 

Carlos Perez-Santalla

 

 

A Gold Moment: April 15, 2014

Gold vs. The US Consumer

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

Gold traders took it on the chin again. The FOMC minutes has been giving traders worry about the Fed’s views and Mario Draghi created a little uncertainty in Europe as money managers began to worry about deflation. Then yesterday’s release of the US retail sales brought back economic optimism. The figures were better than expected with last month’s number revised upward as well. Thanks to the US consumer, some economists began calling for a 3.5-4% GDP in 3Q. With perspectives like this, it was only a matter of time before gold came under pressure.

 

The Ukrainian situation is now being viewed as an internal problem. Despite seemingly growing tensions, the market doesn’t view the trouble as spilling over into surrounding economies. It would take a more serious and active response from the west for this to affect markets.

 

The World Gold Council has come out with a new research paper defining China’s role as the primary gold consumer will only grow in the next few years. Private sector demand has been the driver in these numbers with the official sector not far behind. The economic development of the nation and the liberalization of gold ownership almost twenty years ago have been major factors.

 

Technically, bears are wrestling for control of spot gold. A break and close of the 200dma(1300) could be the deciding factor. Beneath that support will be found at 1296, 1291 and 1281. These levels had become familiar territory before the FOMC minutes were released. Any upside hopes will need a close back above 1313 when 1318, 1327 and 1335 will challenge bulls.

 

 

 Last                         GCM4

1305

SIK4

1978

PLN4

1446

PAM4

796

 

ETF: GLD Deposits:   806.22   tonnes   +2.00

Comex GC O.I. :  364,051    -4327

ETF: SLV Deposits:  10,228.97  tonnes    unch

Comex SI O.I.:  165,569   +3366

 

GC/EU                                  945

GC/SI                                    65.94

PL/GC                                   1.1089

GC/WTI                                12.63

 

Helpful links:

http://strategydb.com/blogs/

http://preciousmetalslife.com/

 

 -Carlos Perez-Santalla

A Gold Moment: April 14, 2013

Gold, Ukraine and Rates

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

Gold trading Friday was unusually quiet. This was likely due to the growing tensions in Ukraine. The acting president had given a time limit to the standoff between government troops and rebel protesters. Apparently most people believe these protesters are backed and armed by Russia. Over the weekend a small skirmish cost the lives of a few people on both sides. The rhetoric grows while the US threatens continued actions. The US’s previous actions have gone ignored. Gold stability is being helped by the Ukrainian instability, but is not being driven by it yet.

 

The driver in gold for the past week has been the FOMC minutes. After having fallen for the hope of potential rate increases in the near future created by Janet Yellen, money managers now see that this was folly. The Fed continues its stimulus program while the US economy continues to struggle. Worldwide rates have remained very low with few other incentives for businesses to expand. Mario Draghi has almost sounded the alarm that deflation is knocking on Europe’s door. A wave of QE out of the ECB would be likely if this were to seem inevitable. Worry over negative rates has begun.

 

Last week saw fund managers revise equity positions in sectors that were overbought. The Nasdaq plunged 3% in one day. Other sectors that show over enthusiasm may be susceptible to a similar fate. Equities are losing their attractiveness to real assets, like gold, in the face of deflation conversations.

 

Technically, although it is slowing, momentum remains with the bulls. A spot gold close above 1327 today is needed to see a run to 1341. There will be some challenges near 1335 on the way, but a break of 1341 will give way to a test of 1356.  The familiar downside numbers will remain as support with 1318, 1312, 1301 and 1297 all showing reasons for bargain hunters to enter.

 

 Last                         GCM41324 SIK41979

PLN4

1465

PAM4

811

 

ETF: GLD Deposits:   804.22   tonnes   -1.80

Comex GC O.I. :  368,378    +4195

ETF: SLV Deposits:  10,228.97  tonnes    unch

Comex SI O.I.:  162,203   -785

 

GC/EU                                  957

GC/SI                                    66.68

PL/GC                                   1.1064

GC/WTI                                12.76

 

Helpful links:

http://strategydb.com/blogs/

http://preciousmetalslife.com/

 

 

-Carlos Perez-Santalla

A Gold Moment: April 11, 2014

Gold Firms with Weak Stocks

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

Gold found itself slightly long yesterday morning after Asian hours took it to recent highs. There came a slight unloading after the release of the US weekly jobless claims figure. This number has grown in importance for traders after the Fed put greater importance on employment measures last year. The new measurement was the lowest in over a year. The mettle of the gold traders was tested as pressure came in.

 

In the meantime fund managers were still focused on the Fed minutes and began to reallocate capital. Weakness in the USD helped a sell-off in overvalued tech stocks. The Nasdaq index lost over 3%.  This equity weakness warned of further sell offs in over priced sectors of the stock market inviting money managers back into the safety of gold.

 

This support comes while there seems to have been a slowdown in physical demand. Pre-weekend trading would normally see some reversal of the week’s trend as speculators flatten positions, but this week end may bring fireworks from Ukraine. The acting president has been very vocal this week about what he wants to see from the pro-Russian protesters. This current situation is on schedule to culminate this weekend.

 

Technically, bulls are still holding the momentum. A prolonged trading period above 1326 will drive prices through the next resistance of 1332 on the way to 1345. Downside support should be expected at 1318, 1312 and 1306.

 

 

 

 Last                         GCM4

1323

SIK4

2008

PLN4

1462

PAM4

797

 

ETF: GLD Deposits:   806.22   tonnes   -0.26

Comex GC O.I. :  364,183    -1217

ETF: SLV Deposits:  10,228.97  tonnes    unch

Comex SI O.I.:  162,988   +3672

 

GC/EU                                  952

GC/SI                                    65.74

PL/GC                                   1.1067

GC/WTI                                12.81

 

Helpful links:

http://strategydb.com/blogs/

http://preciousmetalslife.com/

 

 

-Carlos Perez-Santalla

A Gold Moment: April 10,2014

Gold Firm with Return of Rate Perspective

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

Gold traders were filled with anticipation for the FOMC minutes most of yesterday. The outlook and perception was betrayed ahead of the minutes as prices were under some light pressure. Once the report was released prices snapped back to where they had been as a better reading of the Fed committee’s forecasts were needed. It now seems the Fed is not as anxious about raising rates as intimated by Mrs. Yellen. The apparently inherent bearishness in the market left gold near its New York high as the day closed.

 

Asian bulls grabbed the torch and began to run prices higher. They were then helped by an unexpected drop in Chinese trade numbers. The export and import measures both declined by much larger amounts than expected.  With that report gold prices jumped over the previous dat’s high and continued climbing. Adding to the price optimism came a loosening of bank capital ratio rules for the two largest banks in China. Regulators are hoping this stimulates growth by easing financing limitations.

 

All this economic news has been supportive of gold prices along with the still brewing potential escalation of trouble in Ukraine. Government ministers have declared a 48 hour time clock has begun ticking toward a resolution of eastern Ukraine protests. Russian troops stand by on the eastern border. NATO is indicating a placement of US troops in Eastern Europe to offset the Russian position. Some safe haven buying is likely if this occurs.

 

Technically, momentum is clearly in the bull camp. A close above major resistance of 1326  today could deliver 1342 tomorrow with minor struggles near 1334 on the way. The downside support levels come in at 1311, 1303, 1296 and 1292.

 

 

 Last                         GCM4

1323

SIK4

2020

PLN4

1458

PAM4

790

 

ETF: GLD Deposits:   806.48   tonnes   unch

Comex GC O.I. :  365,400    +2465

ETF: SLV Deposits:  10,228.97  tonnes    unch

Comex SI O.I.:  159,316   +2306

 

GC/EU                                  952

GC/SI                                    65.32

PL/GC                                   1.0990

GC/WTI                                12.78

 

Helpful links:

http://strategydb.com/blogs/

http://preciousmetalslife.com/

 

 

-Carlos Perez-Santalla

A Gold Moment: April 9, 2014

Gold Firm Ahead of FOMC Minutes

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

Gold jumped yesterday with the return of Chinese traders from their holiday. It was to their good fortune that the BOJ decided to hold off on any more stimulus. This had the effect of weakening the USD and helping the gold price remain firm. The weaker USD remained that way as ECB leaders indicated no need for stimulus either. Today may bring some new perspective as the minutes of the last FOMC meeting are released. Some position squaring ahead of this releaseshould be expected.

 

All this economic focus has not taken away from the troubles in Ukraine that have not gone away. The trouble has not been affecting the market except to help give it a bullish bias. This is just in case the problems escalate. The Russians will be sitting down with EU and US officials to discuss probable solutions. All this while NATO sends warnings is making for drama that doesn’t seem to be affecting money flows. The Crimean annexation has gone so peacefully that traders feel any more annexation of Ukrainian territory by Russia will go just as smoothly.

 

Technically, bulls tentatively have control of the momentum. A test of the downside near 1301 should be expected followed by support at 1295, 1287 and 1281. The upside has its troubles near yesterday’s high of 1314 followed by resistance at 1321, 1325 and 1345.

 

 

 Last                         GCM4

1306

SIK4

1979

PLN4

1440

PAM4

777

 

ETF: GLD Deposits:   806.48   tonnes   -2.70

Comex GC O.I. :  362,935    +97

ETF: SLV Deposits:  10,228.97  tonnes    unch

Comex SI O.I.:  156,948   +163

 

GC/EU                                  948

GC/SI                                    65.71

PL/GC                                   1.1016

GC/WTI                                12.77

 

Helpful links:

http://strategydb.com/blogs/

http://preciousmetalslife.com/

 

 

-Carlos Perez-Santalla

A Gold Moment: April 8, 2014

Gold Moves with Ukraine Uprising 

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

Gold trading set its low volume tone yesterday at the start of the week with the Chinese out on holiday. This in itself says a lot about the market these days with the largest demand center controlling the price activity. This morning price support returned as Shanghai returned. The measure of which is uncertain at best and very strong for sure.

 

The troubles in Ukraine have returned to the headlines. This time the Russians seem to be supporting an uprising of the eastern portion of the nation. This uprising is based on a demand for independence from the remaining country. It could have been the Russian warning of a civil war should the Ukraine government attempt to use force to regain control of their cities that triggered the buying in Asian hours today.

 

Technically, the momentum is firmly in the bull camp now. Support will be seen at 1308, 1303, 1298(200dma) and 1292. The upside will struggle getting through 1314 and 1325 on the way to test 1345.

 

 

 

 Last                         GCM4

1311

SIK4

2008

PLN4

1439

PAM4

778

 

ETF: GLD Deposits:   809.18   tonnes   unch

Comex GC O.I. :  362,838    -570

ETF: SLV Deposits:  10,228.97  tonnes    unch

Comex SI O.I.:  156,785   +2036

 

GC/EU                                  953

GC/SI                                    65.21

PL/GC                                   1.0968

GC/WTI                                12.96

 

Helpful links:

http://strategydb.com/blogs/

http://preciousmetalslife.com/

 

 

-Carlos Perez-Santalla

 

A Gold Moment: April 7, 2014

Gold Back Into Portfolios as NFP Disappoints  

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

Gold traders were clearly positioned for a better NFP number on Friday. Although the report wasn’t far off the mark from the consensus level of +200k, the +192 was seen to reflect Chairman Yellen’s worries over the jobs picture. Gold traders were not alone in this assessment as the stock market dropped and the 10Y treasury rate dropped to 2.72%. Despite the improved revision to last month’s number from 175 to 197, this move betrays the greatest fear money managers have. That is that the Fed’s carefully sculpted image of the US economy may not hold up. In the end it turned out to be a drop of 5k instead of an increase of 25k jobs as expected.

 

Very few economic headlines this week have the power to move prices. The Fed Chairman and the ECB president have given the market reasons to pay attention to price data. This week will see data to determine whether any stimulating action might be coming from central banks in the near future. This week also brings the FOMC minutes on Wednesday. This could give a better idea of the importance of all the measures being watched.

 

Technically, now that gold has moved above the 200dma(1298) and the consolidation range it capped momentum is in the bull camp. A spot close today above 1304 could deliver a test of 1325 in a couple of days. Support now rests at 1298, 1292, 1287 and 1281 while resistance should be expected at 1307, 1312, 1318 and 1325.

 

 

 

 Last                         GCM4

1300

SIK4

1985

PLN4

1437

PAM4

785

 

ETF: GLD Deposits:   809.18      tonnes   -1.70

Comex GC O.I. :  363,408    -1332

ETF: SLV Deposits:  10,228.97  tonnes    unch

Comex SI O.I.:  154,749   +1307

 

GC/EU                                  947

GC/SI                                    65.49

PL/GC                                   1.1054

GC/WTI                                12.91

 

Helpful links:

http://strategydb.com/blogs/

http://preciousmetalslife.com/

 

 

-Carlos Perez-Santalla

A Gold Moment: April 4, 2014

Gold Traders Await NFP

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

Gold prices had become so sensitive to the USD that yesterday’s ECB statement created a contradictory move. Mr.Draghi’s words were the most dovish he has given as the president of the ECB. Naturally the USD climbed against the Euro. This in turn saw gold weaken against USD strength, but as the day ticked away the easy money concept crept into gold trading rooms. Bigger moves might have been seen if it weren’t for the looming US employment report that is prominent in the minds of economists.

 

Traders continue to look at this coming NFP through the lens of the tapering schedule. Many money managers are so focused on the reduction of the stimulus program that the stimulus itself and the minimal effect it has been having are ignored. Mrs. Yellen brought the employment picture back to prominence after the last FOMC meeting. Any reading that is close or higher than expectations will be touted as an improvement that the Fed can work with. A weaker reading will need to be much weaker to invite bulls into the gold market.

 

Technically, spot gold is still inside a consolidation range, but momentum is beginning to favor an upside breakout. Support should find buyers at 1285,1277,1272(100dma) and 1267. Resistance should be felt at 1297(200dma), 1306, 1311 and 1318.

 

 

 Last                         GCM4

1291

SIK4

1993

PLN4

1445

PAM4

789

 

ETF: GLD Deposits:   810.98   tonnes   unch

Comex GC O.I. :  364,740    +1289

ETF: SLV Deposits:  10,228.97  tonnes    +16.39

Comex SI O.I.:  153,442   +3081

 

GC/EU                                  943

GC/SI                                    64.72

PL/GC                                   1.1176

GC/WTI                                12.80

 

Helpful links:

http://strategydb.com/blogs/

http://preciousmetalslife.com/

 

 

-Carlos Perez-Santalla

JPMorgan, Silver and the market

US second court

On March 27th the 2nd U.S. Circuit Court of Appeals said that a lawsuit brought against JPMorgan for having allegedly violated federal antitrust and commodities laws during the years 2007 to 2010 in the silver market should be dismissed.

The lawsuit alleges that JPMorgan would make fake trades when the market volume was thin and they would put on huge positions that market conditions did not justify. There were 43 complaints brought in 2010 that were consolidated into one lawsuit claiming that accused banks had made off with hundreds of millions of dollars in illegal profits.

In the lawsuit it claimed there were bankers such as HSBC and JP Morgan that specifically were out to short the market and force the price lower. In 2011 HSBC was dropped from the case and it left JPMorgan as the main defendant.

In the minds of the public they do not realize that it is not in the bank’s interest to lower the price of silver as their profit margin on trading activity would be decreased. This logical thought was pushed aside for the aforementioned more sensational accusations. The simple reason a bank would take a short position would be because they believe the market price would go lower so that they can profit from the price move. [Read more...]