Gold Weakens on Chinese Demand

A Gold Moment: July 25, 2014

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

Momentum in the gold market is a powerful force. Yesterday started with a bearish bias as traders recognized the failure of any more upside from the geopolitical pressures. Although the trouble in Ukraine seems to be escalating instead of subsiding and the growing power of ISIS remains evident, money managers don’t see these issues currently threatening the monetary system nor international trade, yet.

 

Then there is the US economy. Yesterday saw a good weekly jobless number, but it also brought a dramatically disappointing New Home Sales figure. This number was not only weaker than expected, but last month’s good news was replaced with a weak number. There is also the US rate hike conversation that is dying in importance for now. Whether a rate hike comes in late 2015 or early 2016 seems like semantics when they both mean the Fed is on track and in full control of the US economic system.

 

The demand picture seems to be getting a lot of attention as China’s import numbers from Hong Kong are down from the same period a year ago. Some analysts are pointing to these numbers as a measure of a slowing appetite for gold from the Chinese public. Of course, these weaker numbers are imports from Hong Kong, not total imports. The Chinese do not publish those figures and they began taking more deliveries into Shanghai over the past year. It is too early to tell what the real measures are there.

 

Technically, the short term time frames oversold signals kept prices from sliding too far and continue to search for a little more recovery. The longer time frames remain in the hands of bears making most rallies difficult to sustain. Resistance will likely be seen at 1303, 1307 and 1314, while support will again be 1292, 1286 and 1279.

 

 Last                       GCQ41296 SIU42050 PLV41477 PAU4877

 

 

ETF: GLD Deposits:   801.84   tonnes  -3.60

Comex GC O.I. :  400,327    -5290

ETF: SLV Deposits:  10014.63  tonnes     +25.37

Comex SI O.I.:  162,323   -162

 

GC/EU                                  963

GC/SI                                    63.16

PL/GC                                   1.1404

GC/WTI                                12.71

 

 

 

Carlos Perez-Santalla

Gold Price Tired of Headlines

A Gold Moment: July 24, 2014

 

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

The gold market clearly has a bearish stance as the quiet trading sessions have a slightly negative price action. The headlines have not been enough to interest traders. A CNBC interview shows an analyst publicly speaking about how the current troubles in the world are almost being ignored by money managers as they have not affected commerce. Bears will continue to control pricing until uncertainty and worry return. The price boost that came from the Malaysian jet tragedy has now been erased as if there has been a resolution to the risks inside Ukraine

 

Technically, a break through the 1292 support level could see further sliding to 1286 and 1279. Most timeframes favor downside action with the shorter 15 minute and 4 hour charts sensitive to oversold territory. Upside number land in familiar territory with 1303, 1306 and 1316 as resistance.

 

 Last                       GCQ4

1298

SIU4

2087

PLV4

1478

PAU4

873

 

 

ETF: GLD Deposits:   805.44   tonnes  +0.60

Comex GC O.I. :  405,617    +547

ETF: SLV Deposits:  9989.26  tonnes     unch

Comex SI O.I.:  162,485   -526

 

GC/EU                                  964

GC/SI                                    62.14

PL/GC                                   1.1385

GC/WTI                                12.64

 

 

 

Carlos Perez-Santalla

Gold Loses Favor to Equities

A Gold Moment: July 23, 2014

Spot gold had another quiet day as US equities grabbed the attention of most money managers. The strength in the US stock market helped boost the value of the USD and in turn kept a lid on the yellow metal. The US economic releases were in line with expectations so there was little reaction to their releases.

 

As expected the RBI has relaxed the use of gold for loans in India. This will not have an immediate effect on prices, but if farmers and business people begin to pledge their gold for loans the RBI may loosen import restrictions as these loans help boost the internal economy.

 

Technically, 1292-1340 is the range established by the two day slide last week. A break through the downside would see further sliding to 1279 level, while a break of the upside could deliver a test of 1368. This wide range has the 1303-1326 consolidation range in the middle keeping most traders satisfied with current pricing.

 

 Last                       GCQ4

1307

SIU4

2098

PLV4

1486

PAU4

873

 

 

ETF: GLD Deposits:   804.84   tonnes  +1.50

Comex GC O.I. :  405,070    +738

ETF: SLV Deposits:  9989.26  tonnes    -49.26

Comex SI O.I.:  163,011   -281

 

GC/EU                                  971

GC/SI                                    62.22

PL/GC                                   1.1368

GC/WTI                                12.78

 

 

 

Carlos Perez-Santalla

Gold Anticipates CPI

A Gold Moment

July 22, 2014

Gold prices lost some luster as the trouble in Ukraine is sinking back into controlled and isolated conflict. Despite headlines declaring cold war era relations between the US and Russia due to this situation, the ongoing problems give money managers the sense that world trade will not be affected. The same is true in the Gaza strip despite the escalating number of casualties in the fighting between Israel and Hamas. Off the front pages are the Syrians, the ISIS encroachment in Iraq and the failure of the Iranis to meet the deadline for a nuclear deal. That last one gets minor attention as it seems to be a never ending story without effect on gold prices.

 

The physical gold market has been lacking news since the Indian government surprised many by leaving their import restrictions unchanged from the previous government’s policy. Now the Indians may take a lesson from the Chinese and grow gold backed loan programs to help boost their economy.

 

Today brings the US CPI. The USD has been firming in advance as the gold price has been sliding. Confidence in the Fed’s control of pricing has been high. Any negative surprise will be a big one.

 

Technically, 1292-1340 is the range established by the two day slide last week. A break through the downside would see further sliding to 1279 level, while a break of the upside could deliver a test of 1368. This wide range has the 1303-1326 consolidation range in the middle keeping most traders satisfied with current pricing.

 

 Last                       GCQ4

1307

SIU4

2090

PLV4

1487

PAU4

870

 

 

ETF: GLD Deposits:   803.34   tonnes  -1.80

Comex GC O.I. :  404,332    -4330

ETF: SLV Deposits:  10,038.52  tonnes    unch

Comex SI O.I.:  163,292   -1410

 

GC/EU                                  968

GC/SI                                    62.51

PL/GC                                   1.1370

GC/WTI                                12.67

 

 

 

Carlos Perez-Santalla

Gold, Summer and Risk

A Gold Moment: July 21, 2014

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

Gold traders have decided to play the market close to the vest as volume and low volatility betray the increasing risk in pricing. The geopolitical troubles are grabbing headlines and attention of money managers as the Malaysian jet disaster has demonstrated how quickly a regional conflict can turn into international concern. Although the fighting in Gaza has cost many lives over the weekend, it is currently a story that is price supportive only in any hesitancy for speculators to short gold during the higher level of tension. Seasonality in gold trading generally sees lower activity in the summer months anyway, but the current conflicts are keeping gold traders’ attention.

 

Technically, 1303-1325 is the tight range prices are consolidating in. A break through the downside would see further sliding to test the 1292 level, while a break of the upside could deliver a test of the recent 345 high.

 

 Last                       GCQ4

1317

SIU4

2113

PLV4

1499

PAU4

886

 

ETF: GLD Deposits:   805.14   tonnes  +1.80

Comex GC O.I. :  408,662    +4790

ETF: SLV Deposits:  10,038.52  tonnes    unch

Comex SI O.I.:  164,702   +1540

 

GC/EU                                  970

GC/SI                                    62.57

PL/GC                                   1.1378

GC/WTI                                12.91

 

 

 

Carlos Perez-Santalla

Rise and Fall of Silver as Currency

Rise and Fall of Silver as CurrencyMiguel Perez-Santalla

 

 

 

 

Miguel Perez-Santalla talked about the role of silver in the U.S. economy in the 19th century. He spoke about the changes in both U.S. and international markets that contributed to the shift from silver to gold as a monetary standard. The Museum of American Finance hosted this event

Click here to watch the video

Gold is Still the Safe Haven

A Gold Moment: July 18, 2014

 

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

Proving It is still a safe haven for investors, gold jumped up on the news from Ukraine about the downed Malaysian passenger plane. The uncertainty about the reports and any international reaction initially drove spot gold $20 higher. As reports and reactions came across the news wires, less panic gave in to lower prices. As the situation looks as if there will be no military response, gold traders got back to the business of looking for downside.

 

Before the tragic news affected quotes, the Philadelphia Fed index showed a surprising increase of activity. Together with the weekly jobless claims drop, these economic news items were feeding bears. Pressure would have certainly continued had the US Housing starts and Building Permits numbers not been so disappointing. Now this morning to help keep the perspective of improving economies and a healthy business environment, the ECB is using the power of the podium. The WSJ reports ECB’s Weidmann talking about rate increases!

 

 

Technically, unless prices reverse their current paths and close positive for the day, bears will have taken control. A downside break under 1307 could trigger a test of 1300, 1293 and 1285. A close under 1293 could send prices back to the trading range of a month ago erasing the recent pop. 1318 and 1322 resistance levels will be challenging. Sustained trading over 1322 will trigger bullish signals that will take prices back into the mid-1330s.

 

 Last                       GCQ4

1311

SIU4

2104

PLV4

1500

PAU4

882

 

ETF: GLD Deposits:   803.34   tonnes  -2.69

Comex GC O.I. :  403,872    -4496

ETF: SLV Deposits:  10,038.52  tonnes    unch

Comex SI O.I.:  163,162   +715

 

GC/EU                                  968

GC/SI                                    62.40

PL/GC                                   1.1404

GC/WTI                                12.68

 

 

 

Carlos Perez-Santalla

Gold Gains from Different Angles

A Gold Moment: July 17, 2014

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

A lack of headline news helped gold bears wrestle control of pricing at the start of this week, but now some changes may be putting breaks on the slide. First of all, Janet Yellen’s controlled answers in congressional testimony yesterday gave pause to those who believed that interest rates would show signs of an increase within a year. In fact, her responses showed a belief for the Fed to remain uninhibited and ambiguous by rejecting an idea by the government to tie rate decisions to a formula.

 

In a twist to the trouble in Ukraine, just as the situation seemed to be more isolated and under control of the government, President Obama announced further economic sanctions against Russia for not doing more to stop the uprising. Although this action will not have dramatic affect to monetary flows in the region, it does cause distress among money managers in the Russian markets causing some minor demand for gold.

 

The latest Indian demand numbers were released yesterday with a bit of a surprise. The increased gold import number was up 65% YoY. An increase was certainly expected with the election of the new government, but this jump was healthier than most predicted despite the continued restrictions. Most economists believe this to be a one month anomaly. A sharp eye will look out for any indication to the contrary.

 

Technically, mixed signals have taken control out of the hands of bears. Overnight trading opened the upside to 1308 making a test of the 1312 level possible today with 1318 and 1322 resistance levels behind that. The downside has support coming in at 1299, 1292 and 1286.

 

 Last                       GCQ4

1305

SIU4

2086

PLV4

1497

PAU4

886

 

ETF: GLD Deposits:   806.03   tonnes  -2.70

Comex GC O.I. :  408,368    -980

ETF: SLV Deposits:  10,038.52  tonnes    unch

Comex SI O.I.:  162,447   +358

 

GC/EU                                  962

GC/SI                                    62.54

PL/GC                                   1.1472

GC/WTI                                12.76

 

 

 

Carlos Perez-Santalla

Gold Focus Back on Rates

A Gold Moment: July 16, 2014

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

Speculative gold longs have spent the past two days jumping ship. Monday’s washout started in Asian trading hours triggering automatic sell stops upon the Comex opening. Open interest in the futures contract has come off by a greater percentage than the price slide. This is understandable as the bullish factors that helped drive the spot gold price higher were being viewed as innocuous by many traders. The strongest and greatest price mover of the recent rally came from the FOMC statement from June 18. How money managers will see rate changes over the next few months has overcome any geopolitical risk and European debt issues once more. At this point spot gold remains above trading levels on the day of that announcement.

 

An interesting point comes with the loss of open interest on the Comex futures contract this week. This is clearly weaker longs stopping out, but not a reflection of loing term money manager’s perspectives. The latter group’s view can better be measured with the GLD ETF. This ETF has incidentally seen an increase in deposits so far this week. Any move in deposits in the GLD and any statement on rates from Janet Yellen during her Humphry-Hawkins testimony today should be noted. So far she has been careful.

 

Technically, short term momentum is clearly owned by bears. Upon reaching the lows yesterday oversold conditions were hit slowing the pace of sales. It will take a close under the 40dma of 1291 to trigger further sales. Then the 200dma of 1285 would get in the way. Upside struggles begin at 1303.

 

 Last                       GCQ4

1298

SIU4

2074

PLV4

1483

PAU4

870

 

ETF: GLD Deposits:   808.73   tonnes  +8.65

Comex GC O.I. :  409,348    -3845

ETF: SLV Deposits:  10,038.52  tonnes    unch

Comex SI O.I.:  162,089   -1964

 

GC/EU                                  958

GC/SI                                    62.50

PL/GC                                   1.1408

GC/WTI                                12.90

 

 

 

Carlos Perez-Santalla

 

Gold Backs Away from Banking Worry

A Gold Moment: July 14, 2014

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

Flat and dull action marked gold trading on Friday. It was very likely that the previous day’s worries over the Portuguese banks and the Greek bond auction faded away as situations under ECB control. There will need to be more out of the ECB before this concern is completely taken away.

 

The conflicts in Ukraine, Syria, Iraq and Gaza look as though they may last a while. These situations also continue to be viewed as isolated. There remains only limited assistance from the international community. As long as this holds, any spillover into the markets will be limited.

 

US Economic headlines are abundant this week. Markets will be very sensitive to any numbers that are skewed away from general consensus. Gold price sensitivity to worldwide stimulus is now centered on the perception of the USD value.

 

Technically, this morning’s sharp drop has stolen the technical dominance from the bulls and handed it to bears. Sell stop levels have already been triggered and prices are back below all short term moving averages. Spot gold currently sits back into a trading range that began June 19th. The 1303-1332 boundaries of that range will likely remain challenging.

 

 Last                       GCQ4

1320

SIU4

2116

PLV4

1504

PAU4

872

 

ETF: GLD Deposits:   800.05   tonnes  unch

Comex GC O.I. :  416,799    +1756

ETF: SLV Deposits:  10,038.52  tonnes    unch

Comex SI O.I.:  164,676   +1098

 

GC/EU                                  967

GC/SI                                    62.32

PL/GC                                   1.1383

GC/WTI                                13.17

 

 

 

Carlos Perez-Santalla