Gold Under Pressure from Status Quo

A Gold Moment: September 2, 2014

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

Gold has fallen back under pressure as days pass without any evidence of economic instability. Whether it is expectations of rate changes from the Fed and the other central banks or any destabilization of trade due to the many geopolitical battles, the more time that passes without monetary incident, the less need money managers feel a need for a safe haven like gold. The trouble in Ukraine does not seem to be waning at all. In fact the Russian president has been quoted as talking about a political solution contrary to what the west has been looking for. At the same time NATO is planning on building a force to protect Eastern Europe. Even these seemingly inflammatory statements have been viewed as contained.

 

The ECB is meeting this week and many traders have little hope they will hear some words to give the Euro a boost. The strength in the USD that comes fro the weaker Euro is also adding pressure to gold for now.

 

Technically, despite the pressure on thespot price today, consolidation is still the theme as intraday charts are oversold. The upside was tested last week at 1292 level and failed. This week starts with a test of the downside. If buyers do not materialize between 1270-1272, a close under this level will trigger sell stops sending gold to test 1258 and behind that, the June low of 1240 .

 

 Last                       GCZ4

1272

SIZ4

1924

PLV4

1417

PAZ4

891

 

 

 

ETF: GLD Deposits:   795.00   tonnes   -0.60

Comex GC O.I. :  365,562    +4588

ETF: SLV Deposits:  10,311.68  tonnes    unch

Comex SI O.I.:  159,634   +951

 

GC/EU                                  973

GC/SI                                    65.83

PL/GC                                   1.1120

GC/WTI                                13.41

 

 

 

Carlos Perez-Santalla

Gold as Economic Barometer

A Gold Moment: August 29, 2014

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

Yesterday’s gold price action is a testament to the greater sensitivity the market has to economic measures than to the geopolitical drama. The trouble in Ukraine continues to be a threat to global economic activity and yesterday’s headlines about a Russian invasion could not be ignored. This being said the conflict still remains isolated and, despite some sanctions, has not yet affected trade to any serious degree.  This is why when the US economic numbers were released gold slid back to its recent comfort zone. The GDP revision and the weekly jobless numbers together boosted the USD. These USD moves are considered an indication of Fed interest rate policy opinion. This strength did not last the day as profit taking in the stock market saw the greenback close nearly unchanged.

 

Today’s personal consumption and consumer sentiment figures may give traders reason to stick around a little longer ahead of the US three day weekend.

 

Technically, consolidation seems to be en vogue. Indicators are mixed with a day traders dream of good support and resistance numbers to work with. The upside should see intraday challenges at 1292, 1298 and 1302, while the downside should see buyers near 1282, 1275 and 1272.

 

 Last                       GCZ4

1286

SIZ4

1952

PLV4

1424

PAZ4

897

 

 

 

ETF: GLD Deposits:   795.60   tonnes   unch

Comex GC O.I. :  360,974    -2634

ETF: SLV Deposits:  10,311.68  tonnes    +38.79

Comex SI O.I.:  158,683   -5579

 

GC/EU                                  975

GC/SI                                    65.83

PL/GC                                   1.1080

GC/WTI                                13.55

 

 

 

Carlos Perez-Santalla

Gold Sturdy Ahead of GDP

A Gold Moment: August 28, 2014

 

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

Gold prices this week have taken a life of their own as volumes remain low. Yesterday saw weakness on a day the USD gave back a bit of its recent strength. Normally this would be unusual, but in quiet trading, repositioning affects prices more than the long standing relationships.  On the other hand, today’s Asian hours have seen a renewed interest for the long side. This could be the trouble in Ukraine, Argentine woes reminding fund mamagers of the fragile situation many countries are in, or the lowered estimate for the US GDP by the CBO. This last one is likely the biggest motivator as rate expectations have been dominating trading across all markets this summer.

 

Technically, bulls have a tenuous control of momentum. Resistance is nearby at 1298-1302. A break though that level should send spot gold to test 1320.

 

 

 Last                      

GCZ4

1294

SIZ4

1981

PLV4

1431

PAZ4

897

 

 

 

ETF: GLD Deposits:   795.60   tonnes   unch

Comex GC O.I. :  363,608    +1137

ETF: SLV Deposits:  10,272.89  tonnes     unch

Comex SI O.I.:  164,262   -2080

 

GC/EU                                  981

GC/SI                                    65.32

PL/GC                                   1.1059

GC/WTI                                13.78

 

 

 

Carlos Perez-Santalla

Gold Traders Looking for Rate Hints

A Gold Moment: August 27, 2014

 

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

After the early jump in gold prices yesterday a few headlines made it difficult to sustain the momentum. Most of those headlines were economic as the USD and US equities firmed after the Durable Goods orders, Housing Prices and consumer confidence measures delivered an appetizing mix for money managers.  In total these figures painted a slow and steady growth picture. That image matches the perception of the desired changes needed for a Fed rate increase by mid-2015.

On top of this pile of happy pills for economists came news of a cease fire in Gaza. Although there really hasn’t been any effect on the gold price from many of the geopolitical battles, an end to one is further from bullish than its existence. Despite all the bearish motivators out yesterday, the gold price held most of the morning’s gains. This may be from lack of traders in these waning summer days or it may be the quiet demand that comes in each time prices spike lower.

Last week’s news of a growing Russian reserve reminded traders that central bank inflows of gold are the current trend. The chink in the armor is currently getting a good reading from China. In the past estimates were based on gold exports from Hong Kong. Now that the Chinese have opened up their Shanghai importing abilities, it has become difficult to know the gold flow measures.

Technically, consolidation looks to be back. 1271-1298 is the potential sideways range with a test of the upside getting a few favoring indicators.  An unlikely close over that could open up to a near term move to 1320. A downside breakout would deliver a test of 1256.

 

 Last                       GCZ4

1286

SIZ4

1945

PLV4

1424

PAZ4

889

 

 

 

ETF: GLD Deposits:   795.60   tonnes   -1.49

Comex GC O.I. :  362,471    +609

ETF: SLV Deposits:  10,272.89  tonnes     unch

Comex SI O.I.:  166,342   -265

 

GC/EU                                  975

GC/SI                                    66.00

PL/GC                                   1.1057

GC/WTI                                13.68

 

 

 

Carlos Perez-Santalla

Gold Holds with London’s Return

A Gold Moment: August 26, 2014

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

With a large portion of the gold trading community off for a holiday, yesterday might have been the quietest day of the summer. The lack of motivators was also a factor. The geopolitical picture did not change too much, but a meeting has been set for the Russian and Ukraine presidents today. The ISIS crisis has lead to possible US attacks inside Syria. These two stories may be the largest potential market moving headline making events, but they still lack the disruption of trade that would give gold an upside move.

 

Today the US Durable Goods and Consumer Confidence measures should deliver a better view of economic activity. More importantly is any change in perception of what the Fed might do. Nothing dramatic enough to sway the markets current view is expected, but that’s what makes it interesting.

 

Technically, bears have lost their grip on the market. Early trading has seen a steay flow of buying interest on the Asian open and then again on the London open. Last Thursday’s high remains a barrier. A break through that will send spot gold to 1298-1302 resistance.

 

 Last                       GCZ4

1288

SIZ4

1961

PLV4

1425

PAZ4

887

 

 

 

ETF: GLD Deposits:   797.09   tonnes   -2.99

Comex GC O.I. :  361,862    -3740

ETF: SLV Deposits:  10,272.89  tonnes     unch

Comex SI O.I.:  166,607   -987

 

GC/EU                                  974

GC/SI                                    65.80

PL/GC                                   1.1072

GC/WTI                                13.75

 

 

 

Carlos Perez-Santalla

Gold Married to Rates

A Gold Moment: August 25, 2014

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

Gold traders, along with the rest of Wall St., were anticipating more from Fed Chairman Yellen with her Jackson Hole speech. What she delivered showed the world she has mastered the ability to say much and still leave an audience asking the same questions they were asking to start with. This ambiguity has become a trade mark of Fed Chairmen and Mrs. Yellen did not disappoint. She confirmed that the US economy was improving, but not as much as they would like. She confirmed the US labor market has improved, but not in the in a very constructive way. Most importantly, she confirmed that the Fed will stick to its plan, for now. That is to keep rates near zero for an extended period after the end of QE. The market’s assumption remains at mid-2015.

A London bank holiday today should keep trading fairly quiet. The biggest risks would come from the geopolitical hotspots whose isolated actions have kept money managers at a comfort level where they don’t need the golden safe haven so much.

 

Technically, bears have a grip on the market. A close above 1281 today could see a short covering rally take spot gold back up to test 1292. Failure to do so allows further downside with 1271, 1268 and 1256 as the next major support levels.

 

 Last                       GCZ4

1279

SIZ4

1947

PLV4

1420

PAZ4

888

 

 

 

ETF: GLD Deposits:   800.08   tonnes   unch

Comex GC O.I. :  365,102    -1250

ETF: SLV Deposits:  10,272.89  tonnes     unch

Comex SI O.I.:  167,594   +122

 

GC/EU                                  966

GC/SI                                    65.81

PL/GC                                   1.1103

GC/WTI                                13.62

 

 

 

Carlos Perez-Santalla

Gold Weak on Firm USD

A Gold Moment: August 22, 2014

 

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

Could it be gold traders are already tiring of the positive US economic data being released that reactions are limited? Yesterday’s release of the weekly jobless number had a better showing than most expected. Later, existing home sales and the Philadelphia Fed manufacturing index both came out more robust. The initial reactions to hose sets of numbers were almost in opposite directions. The short term trader seems to have overextended shorts for now. The value of the USD has been and will continue to be the driving data point for gold as money managers see a potential rate increase next year.

 

Few years ago Mr. Bernanke once used the Woods Hole symposium to articulate a wave of QE. Since then, this event has caught the world’s attention. Today Janet Yellen will be making her first Woods Hole speech as the leader of the Fed. Traders around the world will be holding off on any new bold positioning until she speaks.

 

Technically, bears seem to have a grasp of the market, but they may have gotten more than they deserved. The 200dma of 1284 should work as a pivot point heading into the weekend.

 

 Last                       GCZ4

1281

SIU4

1948

PLV4

1421

PAU4

882

 

 

 

ETF: GLD Deposits:   800.08   tonnes   unch

Comex GC O.I. :  366,352    -49

ETF: SLV Deposits:  10,272.89  tonnes     unch

Comex SI O.I.:  167,472   +2579

 

GC/EU                                  964

GC/SI                                    65.71

PL/GC                                   1.1115

GC/WTI                                13.70

 

 

 

Carlos Perez-Santalla

Gold Traders Fear Rate Increase

A Gold Moment: August 21, 2014

 

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

Moral suasion is one of the Fed’s most powerful tools. Gold traders and money managers are so hungry for a return to higher rates that the simple mention of the potential in the FOMC minutes was enough for a strong market reaction.  Gold prices began slipping earlier in the week, along with other commodities, on the strength of the USD. This strength came from the positive economic reports bolstering the trust in Fed actions. As the release of the minutes approached, this confidence grew and set the tone for stronger US equities with less need of a safe haven. Higher rates are in such high demand that just talk of them gets market participation. Traders now look forward to any new policy statements coming from Janet Yellen or any other central bankers in Jackson Hole Wyoming.

 

The geopolitical picture is still in the backs of trader’s minds. As long as they remain isolated to their geography the effect on money flows is expected to be limited. This is with one exception. That is the growing economic sanction war between the west and the Russians. These moves are believed to have impact as time marches on. Until that impact is better understood, markets will trade with disregard.

 

Technically, bears rule the roost. Prices triggered a wave of sell stops this morning hitting the target of 1271 sooner than expected. Short term charts are now oversold as spot gold dropped too far too fast. Upside resistance sits at 1288, 1292 and 1300. The more likely downside numbers are 1272, 1266 and 1258.

 

 Last                       GCZ4

1281

SIU4

1937

PLV4

1421

PAU4

878

 

 

 

ETF: GLD Deposits:   800.08   tonnes   +0.89

Comex GC O.I. :  366,401    -1501

ETF: SLV Deposits:  10,272.89  tonnes     +44.87

Comex SI O.I.:  164,893   -159

 

GC/EU                                  967

GC/SI                                    66.19

PL/GC                                   1.1106

GC/WTI                                13.83

 

 

 

Carlos Perez-Santalla

Gold Steady Ahead of FOMC Minutes

A Gold Moment: August 20, 2014

 

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

Prices in gold were fairly tame yesterday despite the nearly one directional move. Gold slipped as the US economic measures confirmed what equity traders were thinking. That is the perception that everything is under control. This view also seems to be a belief that under control is a positive economy. So the USD firmed, the stock markets firmed and gold slipped after CPI and Housing Starts were released. FOMC minutes will be released today. An expectation of certainty from the committee should be seen.

 

The trouble in Ukraine seems to be fizzling again as Putin and the Ukraine president plan to meet. The Gaza situation has erupted again and the ISIS crisis has been tamed for now. These three geopolitical hotspots have limited influence on the gold price as market disruption from any of them seems unlikely.

 

Technically, consolidation still reigns, but tentatively. A close today above 1298 could easily send gold back into the 1314 region, but a close below 1292 has the ability to trigger a wave of sell stops with a target of 1271 over the next week. On the way down support should be found at 1288, 1281 and 1278. In the meantime, sideways action is expected.

 

 Last                       GCZ4

1297

SIU4

1946

PLV4

1433

PAU4

872

 

 

 

ETF: GLD Deposits:   799.19   tonnes   +1.50

Comex GC O.I. :  367,902    -1182

ETF: SLV Deposits:  10,228.12  tonnes     unch

Comex SI O.I.:  165,052   -601

 

GC/EU                                  974

GC/SI                                    66.58

PL/GC                                   1.1073

GC/WTI                                13.90

 

 

 

Carlos Perez-Santalla

Gold Attracts Buyers Despite Firm Equities

A Gold Moment: August 19, 2014

 

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

Weakness in gold pricing yesterday seems to be continued market perception of a healthy US economy.  The NAHB housing market index reflects an optimism that hasn’t been seen since the start of the year.  This number usually passes with a few mentions, but yesterday it helped trigger a boost in the equities market reflected with a new high close in the NASDAQ index. Generally money managers will drop out of gold positions as equities climb. Day traders certainly expected more selling to come in, but not many expected fund managers to add to their GLD ETF holdings. This happened for the first time in four weeks.

 

The geopolitical picture is back to in the containment view. The trouble in Ukraine, ISIS and Gaza have not affected money flows in the way that had traders worried last week. The Russians have been doing their best to keep attention on a possibility of increased sanction wars. Another escalation may be more economically sensitive than previous sanctions simply because it increases the losses.

 

The economic picture gets a bit more clarity soon as the US CPI and US Housing starts are released. CPI is expected 2% with the core at 1.9%. The housing starts are expected to read 970K.

 

China is stepping up its effort to bring the pricing of gold to its shores by inviting three more foreign banks to import the metal into Shanghai. It is just a footnote at the moment, but this may be reflecting a change in gold trading as growing regulatory hurdles make the trading environment more challenging.

 

Technically, consolidation continues to reign. An upswing is possible to the recent 1308-1310 level with short term charts reflecting strength from over-sold levels. 1296-1292 should still have buyers lurking.

 

 Last                       GCZ4

1303

SIU4

1969

PLV4

1449

PAU4

897

 

 

 

ETF: GLD Deposits:   797.69   tonnes   +2.09

Comex GC O.I. :  369,084    -3116

ETF: SLV Deposits:  10,228.12  tonnes     +126.83

Comex SI O.I.:  165,653   +2403

 

GC/EU                                  973

GC/SI                                    66.21

PL/GC                                   1.1130

GC/WTI                                13.82

 

 

 

Carlos Perez-Santalla