A Gold Moment: April 23, 2014

A Golden Lull

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

Gold traders were searching for a sign of future prices through a slow news day and they were handed a gift with the housing numbers. The measure of house prices in the US released yesterday was just as expected, giving traders the confidence in a stable US economy that they were looking for.  In addition to that, the reported drop in home sales was lower than expected despite a low inventory.  These aren’t pretty numbers for a recovery after adjusting for expectations, but they show the stability that Yellen and Co. are working to establish. Gold prices slipped more than $10 following the numbers reflecting the stability of the USD and the strength of the US equity markets.

 

Ukraine received a visit from VP Biden. Since his meeting in Kiev, the anti-terror operations that fight against pro-Moscow gunman in the eastern region have escalated. The US has continued to demand that Russia ask that their supporters lay down their guns, while Russia declares they will defend their interests. This situation remains a regional conflict, but with the US sending some troops to Eastern Europe, international trouble could be lurking around the corner.

 

Technically, mixed signals remain with a potential for bulls to take charge if the low end of the consolidation range holds. That range remains between the 100 and 200 DMAs(1279 and 1300 respectively) despite the temporary break of the lower band yesterday morning. The upside will have a challenge with 1293 ahead of the 1300 level. An extended trading period above 1293 should invite buyers looking for a test of the 200dma. A close outside of the consolidation range should see continuation in the direction of the close.

 

 Last                         GCM4

1287

SIK4

1948

PLN4

1405

PAM4

785

 

ETF: GLD Deposits:   792.14   tonnes   unch

Comex GC O.I. :  370,187    +1010

ETF: SLV Deposits:  10,282.78  tonnes    unch

Comex SI O.I.:  160,315   -618

 

GC/EU                                  935

GC/SI                                    66.15

PL/GC                                   1.0925

GC/WTI                                12.69

 

Helpful links:

http://strategydb.com/blogs/

http://preciousmetalslife.com/

 

 

-Carlos Perez-Santalla

A Gold Moment: April 22, 2014

Gold Holding, for Now

 

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

After following the white metals into negative territory yesterday, gold failed to capitalize on the bearish slant during Comex trading hours. The potential mining settlements in South Africa started the sell-off. With most European countries off for a holiday, money managers stepped back and avoided getting involved in the less liquid environment. That didn’t stop the reallocation of capital away from the GLD ETF. Deposits now measure the lowest level since the end of January.

 

The geopolitical risk in Ukraine that helped promote the safe haven buying is now widely regarded as an isolated struggle. Despite the European and US pressure of increasing sanctions on Russia, Putin and friends seem unfazed. Gold traders are wise to keep an eye at the finger pointing as it can still escalate into an unwanted situation.

 

US economic headlines may help feed the growing confidence level among fund managers. Today brings the housing price index and existing home sales. As long as these figures are within close range of expectations, the belief in the Fed’s schedule for economic recovery will remain intact. The headline grabber today may actually be a speech by Ben Bernanke. Although he is no longer in charge, many see Janet Yellen to be following in his footsteps. This means his words may be seen as a proxy for the Fed chairman.

 

Technically, mixed signals remain and the consolidation range for spot gold is intact. Having reached to the lower end of the range, upside potential is now possible. The range is bound by the 100 and 200 DMAs. These are 1279 and 1300 respectively. A close outside of this range should see continuation in the same direction. Upside resistance will be seen at 1308, 1314 and 1325. A break through the downside will bring a test of 1267, 1256 and 1238.

 

 

 

 Last                        

GCM4

1292

SIK4

1952

PLN4

1413

PAM4

785

 

ETF: GLD Deposits:   792.14   tonnes   -3.00

Comex GC O.I. :  369,177    -613

ETF: SLV Deposits:  10,282.78  tonnes    +53.81

Comex SI O.I.:  160,933   +536

 

GC/EU                                  935

GC/SI                                    66.31

PL/GC                                   1.0937

GC/WTI                                12.52

 

Helpful links:

http://strategydb.com/blogs/

http://preciousmetalslife.com/

 

 

-Carlos Perez-Santalla

A Gold Moment: April 21, 2014

Gold Bears Grip

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

Thursday’s pre-Easter gold price activity came with more confidence than had been had for a couple of weeks. The trouble the Ukraine seems to be having is now viewed as an isolated regional problem that will not create unstable financial markets. With this also came a small wave of positive US economic headlines to complete the change in perspective. The weekly jobless number continued its downward trajectory. With that was added the Philadelphia Fed manufacturing number which showed a healthy picture. All these with positive corporate earnings drove money managers back into equities. The GLD ETF lost close to 12 tonnes in two days as the market confidence grew.

 

An interesting development from the Chinese market as the government mulls allowing gold imports directly into Beijing. This could damage the Hong Kong market and make measuring Chinese gold flows more difficult. As the public demand for the metal has grown, it has also been apparent that the PBoC has been building their reserves as well. At the same time the PBoC is considering allowing foreign institutions into their domestic bond market.  They are clearly building support for their currency.

 

Technically, early Asian trading hit stops under 1289 pushing prices to test the lower end of the current consolidation range. With mixed signals a trading range is still expected between the 100dma(1278) and the 200dma(1300). A close below the 100dma would test 1265, 1252 and 1238.  The upside has a challenge to get over 1300-1303 level with 1313 and 1322 resistance behind that.

 

 

 Last                         GCM4

1287

SIK4

1936

PLN4

1411

PAM4

795

 

ETF: GLD Deposits:   795.14   tonnes   -3.29

Comex GC O.I. :  369,790    +213

ETF: SLV Deposits:  10,228.97  tonnes    unch

Comex SI O.I.:  160,397   -3761

 

GC/EU                                  932

GC/SI                                    66.46

PL/GC                                   1.0970

GC/WTI                                12.49

 

Helpful links:

http://strategydb.com/blogs/

http://preciousmetalslife.com/

 

 

-Carlos Perez-Santalla

A Gold Moment: April 17, 2014

A Gold Pause

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

Gold prices stayed inside of a tight range yesterday as the worldwide economic picture sent out mixed signals. The day began with Chinese GDP coming in at the lowest level in years, but it was better than expected. This news put those expecting PBoC stimulus measures back on the bench. A slow down of the Chinese economy has been expected for a few years and the pace of the contraction is being accepted as healthy.

 

Later, mixed signals of the US economy gave confidence to the equity market, but uncertainty to the gold market. The US housing numbers were weak, which initially created a small pop in prices. Later, industrial production figures gave an impression of a healthier business climate. The USD firmed along with the stock market while gold slipped a little bit. The beige book also helped with the impression of a healthier US economy. With that some GLD deposits were liquidated.

 

Of all the Fed head speeches yesterday, Janet Yellen’s grabbed the most attention. Although she her statements landed inside of the FOMC guidance, her perspective gave some to cheer about. Using moral suasion to instill confidence is certainly one of her strengths.  Low rates look to be around for a long while, but that is in addition to low inflation.

 

Technically, consolidation remains the tone with mixed signals favoring neither bears nor bulls. Stops may still be found if prices reach down to 1289. On the other hand, a pop over 1311 could develop into a test of the 1324 resistance and further upside if that breaks.

 

 Last                         GCM4

1304

SIK4

1971

PLN4

1440

PAM4

801

 

ETF: GLD Deposits:   798.43   tonnes   -8.39

Comex GC O.I. :  369,577    +100

ETF: SLV Deposits:  10,228.97  tonnes    unch

Comex SI O.I.:  164,158   +434

 

GC/EU                                  940

GC/SI                                    66.34

PL/GC                                   1.1062

GC/WTI                                12.48

 

Helpful links:

http://strategydb.com/blogs/

http://preciousmetalslife.com/

 

 

-Carlos Perez-Santalla

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