Gold Loses in USD Boost

A Gold Moment: October 31, 2014

 

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

Gold is under pressure from falling commodity prices. Or commodity prices are falling due to strong USD. Or an expectation of higher rates to come after the FOMC statement and strong GDP figure has strengthened the USD and weakened all commodities. The latter is likely the best description to what is happening. A sign of speculative bearish pressure in gold is that open interest on the Comex has been steadily climbing the past few days as prices were under pressure. US real rates have not rebounded and are so close to zero that they leave a chance for negative short term rates. Clearly fund managers will have their eyes on any such move to reverse this bearish stance. Until then, the trend is their friend.

 

Technically, the 1180 triple bottom broke this morning and found stops large enough to take it down to 1167. Short term intraday charts show oversold but the daily has a bit more room. Support below the current low should be seen at 1156 and 1148. Upside resistance rests at 1186, 1195 and 1204.

 

 Last                       GCZ4

1174

SIZ4

1611

PLF5

1233

PAZ4

781

 

 

ETF: GLD Deposits:   741.20   tonnes   -1.20

Comex GC O.I.:  419,455    +5045

ETF: SLV Deposits:  10,681.42  tonnes    unch

Comex SI O.I.:  176,444  +2711

 

GC/EU                                  933

GC/SI                                    73.08

PL/GC                                   1.0512

GC/WTI                                14.58

Carlos Perez-Santalla

Gold Hurts from Fed’s Confidence

A Gold Moment: October 30, 2014

 

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

The gold market’s reaction to the FOMC statement was no surprise as traders have been focusing on the headline of the moment, Yellen and Co,’s stated confidence in the health of the US economy gave the USD a boost as money managers see it as a sign of higher rates. The jump in the USD has had a heavy hand in the drop in the gold price. This is especially because the real rates have rebounded slightly with increases expected within a few months.

 

If the Fed’s words were the only influence on the market spot gold would certainly have dropped further than it did. Testing the market’s resolve around the 1200 level has found some buying from traders likely watching the physical demand picture. Increased Indian demand, fueled by the Diwali festival, is being carefully watched as the recent boost surprised traders.  Sales of 1oz. gold Eagles by the US Mint are up 21% y/y for the month of October. Bloomberg reports the Russians have been building their gold holdings as had been suspected by some traders. The Chinese gold demand figure continues to be revisited with ever increasing estimates. Finally, the most important physical demand news is the impending Swiss referendum that is now seen as very likely to pass. If a fund manager is considering divesting his gold position, consideration to these demand points will have him looking to sell rallies not new lows.

 

Technically, intraday charts show momentum has been overdone for a downside move, yet a test of 1195 could bring selling into 1188 and ultimately the 1180-1183 triple bottom. A test of the 1213 level should be seen early as a break above that would send prices back above 1224.

 

 Last                       GCZ4

1204

SIZ4

1680

PLF5

1253

PAZ4

789

 

ETF: GLD Deposits:   742.40   tonnes   -1.19

Comex GC O.I.:  414,410    +95

ETF: SLV Deposits:  10,681.42  tonnes    unch

Comex SI O.I.:  173,733  -908

 

GC/EU                                  957

GC/SI                                    71.60

PL/GC                                   1.0408

GC/WTI                                14.78

Carlos Perez-Santalla

Gold Awaits Yellen’s Word

A Gold Moment: October 29, 2014

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

Whipsaw gold trading ahead of today’s FOMC statement was a surprise yesterday, but then again so were the headlines that caused it. The US Durable Goods numbers were much weaker than expected helping to boost gold prices back into the mid-1230s. Then another headturner came out in the form of the US Consumer Confidence measure. This one read at the most optimistic since early 2007! With this number fitting into the “good economy” mold money managers have come to believe in, gold prices dropped back under 1230 to wait for Yellen and Co. There is a disconnect though. Can the recent drop in gasoline prices at the pump have created such optimism despite what political polls are showing as a disapproval of the direction the country is heading in? What will next week’s US elections bring for future direction? The headline trading that has become the norm makes the daily price activity harder to grasp, but the long term gold price picture will certainly be tied to fundamentals.

 

Technically, a break of 1223 should deliver a quick visit o 1211. On the other hand a break of 1238 today should see a jump to 1251. Mixed signals in the longer term time frames promise consolidation in a wide range of 1202-1277 over the next few weeks.

 

 Last                       GCZ4

1228

SIZ4

1719

PLF5

1272

PAZ4

798

 

 

ETF: GLD Deposits:   743.59   tonnes   -1.80

Comex GC O.I.:  414,315    +3406

ETF: SLV Deposits:  10,681.42  tonnes    unch

Comex SI O.I.:  174,641  +942

 

GC/EU                                  963

GC/SI                                    71.44

PL/GC                                   1.0358

GC/WTI                                14.92

 

Carlos Perez-Santalla

Gold Set Back by Stronger USD

A Gold Moment: October 23, 2014

 

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

Thursday brought gold traders back to the comfort zone they were in before the negative economic headlines began to shake their views of reality last week. All it took was for another low weekly jobless claims number.  With this measure the belief of Fed interest rate increases coming sooner than later re-entered the daily conversation. The USD has regained its role as safe haven and real rates have crept back higher. These moves have been enough for the weaker longs to abandon their posts and join those who see stability in the global economy.

 

The renewed confidence in the USD would normally have knocked gold back to where it came from. This would especially be true with yesterday’s confirmation of stable and low US inflation as measured by the CPI. Yet the sell off was tame. The likely culprits are a combination of demand side expectations. It is said that the Russians are buying gold for their reserves as are the Chinese. The Indian gold demand for this year’s Diwali festival is measured higher than previously expected. On top of all this there is the Swiss gold referendum that seems to be picking up favorable support. The combination of all these factors may keep prices from dropping while money managers reallocate into USD based positions.

 

Technically, intraday charts favor bulls, the daily is neutral and the monthly favors bulls. Support in spot gold can be seen at 1224, 1218, 1212 and 1208. A rally and close over 1239 can renew the bullish momentum that started last week.

 

 Last                       GCZ4

1233

SIZ4

1724

PLF5

1258

PAZ4

786

ETF: GLD Deposits:   749.87   tonnes   unch

Comex GC O.I.:  409,425    -1632

ETF: SLV Deposits:  10,681.42  tonnes    unch

Comex SI O.I.:  172,627  +2435

 

GC/EU                                  974

GC/SI                                    71.52

PL/GC                                   1.0187

GC/WTI                                15.16

Carlos Perez-Santalla

Gold Weakens on Optimistic Views

A Gold Moment: October 23, 2014

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

Gold trader’s perceptions were exposed yesterday as two seemingly bullish news items failed to attract any upside. The first was a story about ECB corporate bond purchases to help fight deflation in Europe while boosting economic activity. The second was the small uptick in the CPI measure. Clearly it is not inflationary pressure that would have been bullish, but the freedom the Fed will continue to have to keep rates near zero. In the end, traders began to look to guard against bearish motivators as bulls may be looking for an exit. A downside push has been delivered by the unexpected growth in German manufacturing as measured by the PMI.

 

Short term real rates did go negative yesterday, but 10Y and further moved ot a touch. These cannot be ignored despite any optimism in equities markets. It will be the real rates that give an indication of the direction money managers will take moving forward.

 

Technically, this morning’s drop has returned daily momentum to bears. A recovery of the 1242 level on a closing basis would return to expectations of a boost towards 1265. Steady support should be seen between 1224-1235.

 

 Last                       GCZ4

1237

SIZ4

1707

PLF5

1259

PAZ4

767

ETF: GLD Deposits:   749.87   tonnes   -2.09

Comex GC O.I.:  411,057    +3598

ETF: SLV Deposits:  10,681.42  tonnes    unch

Comex SI O.I.:  170,192  +37

 

GC/EU                                  977

GC/SI                                    72.40

PL/GC                                   1.0170

GC/WTI                                15.35

 

 

Carlos Perez-Santalla

Gold Climbs Quietly

A Gold Moment: October 21, 2014

 

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

The start of the gold trading week was quiet but firm. Traders are focused on the recent bullish indicators as world economies show struggles still persist. The Chinese economy which has been the lifeblood for many parts of the word for years has missed its growth target. Although their growth is still big enough to be the envy of the world, the trend to a smaller pace of growth has caused some reconsideration by money managers. Also on the Asian continent the Indian Diwali season is stirring up talk of pent up gold demand hitting the market.

 

Today’s US existing home sales figure will certainly be thrown into the mix for determination of future Fed moves. Real rates continue to bounce along recent lows adding to the support gold has found. Since the release of the FOMC minutes on October 8th, the expectation of a rate increase by mid-2015 has diminished causing fund managers to reallocate their holdings.

 

Technically, momentum is in the bull camp and continues to show upside potential for a test of the 1268-1275 level. As long as the 1242 level holds, a breakaway gap may add a boost for technical traders.

 

 Last                       GCZ4

1250

SIZ4

1741

PLF5

1272

PAZ4

765

 

 

ETF: GLD Deposits:   751.96   tonnes   -8.97

Comex GC O.I.:  403,776    +1267

ETF: SLV Deposits:  10,681.42  tonnes    unch

Comex SI O.I.:  170,248  +1285

 

GC/EU                                  977

GC/SI                                    71.78

PL/GC                                   1.0184

GC/WTI                                15.16

Carlos Perez-Santalla

Gold Buyers Holding Recent Rally

A Gold Moment: October 20, 2014

 

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

Friday seemed that it was a day to confirm the validity of the recent upside move for spot gold. There were a few US economic measures that gave the stock market a rebound but hardly affected the gold price. The housing starts and building permits measures were firm but mixed.This gave a short lived test to downside support. Later in the day the Univ. of Michigan Consumer Sentiment Index showed the optimistic perspective in the US.

 

Stories have been building looking at the demand side. The Russians are said to be outpacing the Chinese for reserve holdings. This is always hard to measure in real time and an ear must be kept in the market to determine whether large amounts are moving. The Indian market is also expected to see a wave of retail buying as an expectation of pent up demand is apparent.

 

Technically, momentum is in the bull camp and continues to show upside potential for a test of the 1268-1275 level. 1249, 1253 and 1259 will be hurdles to jump before that happens.

 

 Last                       GCZ4

1247

SIZ4

1746

PLF5

1273

PAZ4

760

 

 

ETF: GLD Deposits:   760.93   tonnes   unch

Comex GC O.I.:  402,509    -362

ETF: SLV Deposits:  10,681.42  tonnes    -35.78

Comex SI O.I.:  168,963  -318

 

GC/EU                                  972

GC/SI                                    71.56

PL/GC                                   1.0217

GC/WTI                                15.14

Carlos Perez-Santalla

Gold Flat with Real Rates Nearing Zero

A Gold Moment: October 17, 2014

 

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

The weekly jobless claims figure released yesterday caused many money managers to reconsider the economic picture. The reallocation moves towards a more cautious portfolio slowed boosting the stock market back a bit, returning favor back to the USD while keeping the treasuries bid.  The headline 14 year low for the jobless figure is betrayed by the insecurity of the market reflected in the near zero real rates. As long as rates threaten negative territory, gold should remain on the favorable side of allocations.

 

Technically,momentum has stalled without a clear daily objective. The weekly chart still favors an upside move, but the rally from the October 5th low of 1183 to Tuesday’s high of 1250 has given rise to some profit taking. A pull back for consolidation has room for support at 1232, 1228 and 1224 with 1214 the midrange support. A close above 1236 in spot is needed to keep the upside alive in the short term. Resistance will be seen again at 1242 and1250 followed by 1259 and 1268.  The upside potential shows that the 1268-1275 level will be a major challenge that could stall the market.

 

 Last                       GCZ4

1238

SIZ4

1737

PLF5

1260

PAZ4

754

ETF: GLD Deposits:   760.93   tonnes   +1.79

Comex GC O.I.:  402,871    +5016

ETF: SLV Deposits:  10,717.20  tonnes    unch

Comex SI O.I.:  169,281  -48

 

GC/EU                                  965

GC/SI                                    71.19

PL/GC                                   1.0170

GC/WTI                                14.74

Carlos Perez-Santalla

Gold Boosted by Ebola Fears

A Gold Moment: October 16, 2014

 

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

Gold, more than anything else, is sensitive to the shifting belief in the shifting US economic perspective. Of course the US retail sales figure was disappointing. That may have been the first shot at the USD dominance. The weakness in the US equity market began to follow and was accelerated as details of a second Ebola case in the US increased fears of limited travel and commerce. The USD may continue to be a safer allocation for some money managers, but gold has re-entered their vernacular.

 

Technically, having jumped over 1242, spot gold has 1268 as a target. 1251 will be the next hurdle and yesterday’s selling near this level is witness to this. A close above that level today should deliver the upside quickly, but yesterday long upside shadow shows it may be a struggle. Although the long term charts show upside potential the 1268-1275 level will be a major challenge that could stall momentum.

 

 Last                       GCZ4

1243

SIZ4

1745

PLF5

1242

PAZ4

756

 

ETF: GLD Deposits:   759.14   tonnes   -2.09

Comex GC O.I.:  397,855    +126

ETF: SLV Deposits:  10,717.20  tonnes    unch

Comex SI O.I.:  169,329  -482

 

GC/EU                                  976

GC/SI                                    71.23

PL/GC                                   1.0000

GC/WTI                                15.44

Carlos Perez-Santalla

Gold Takes a Breather from Recent Climb

A Gold Moment:October 15, 2014

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

Lack of activity in gold pricing yesterday may have come from the money managers who had taken the holiday and returned with more questions than answers. According to the CFTC COT report, the recent price increase came as fund managers had reached the lowest long position in years. This shows that prices are moving contrary to the general perception. Maybe it was weakness in the USD, the weaker US stock markets or lower rates. Whether it was one, all or another reason, these bearish traders are waiting before turning around and moving along with the current trend.

 

Technically, momentum is now mixed with the 1242 level as major resistance. A close above that is needed to take prices up and test 1268. A close below 1225 would trigger short selling in anticipation of a slide back under 1200.

 

 Last                       GCZ41231 SIZ41720 PLF51254 PAZ4785

 

 

ETF: GLD Deposits:   761.23   tonnes   unch

Comex GC O.I.:  397,729    +11543

ETF: SLV Deposits:  10,717.20  tonnes    unch

Comex SI O.I.:  169,811  +316

 

GC/EU                                  969

GC/SI                                    71.59

PL/GC                                   1.0212

GC/WTI                                15.15

Carlos Perez-Santalla