Russian Moves Support Gold Px

A Gold Moment: November 13, 2014

The gold price has had a little support from military moves by the Russians. In the midst of what will likely become a takeover of Ukraine, Moscow announced they will be conducting military exercises in the Gulf of Mexico. Mr. Putin knows the US will hesitate to make any moves to help Kiev while MIGs fly close to Texas. These moves by Putin have given the gold market some attention, but money managers remain focused on USD strength. Until things go negative, the low rate environment is also becoming acceptable for fund traders.

 

The World Gold Council has come out with its quarterly demand figures. These numbers are being studied carefully by the markets as they show lower measures for China than market analysts have recently been reviewing. Since Beijing shifted much of its gold trading to Shanghai, many analysts doubt the normal method of measuring China gold demand by looking at Hong Kong exports to the mainland, but it remains the only solid numbers that can be used.

 

Technically, consolidation inside last Thursday’s range has been the theme this week. 1141-1177 being the body of that range will be challenging to break in either direction. A close above the higher end of the range should see follow through to 1186 and 1209 resistance. The downside break would see 1136 and 1121 support.

 

 Last                       GCZ4

1162

SIZ4

1571

PLF5

1205

PAZ4

778

ETF: GLD Deposits:   722.67   tonnes   -2.69

Comex GC O.I.:  443,422    -422

ETF: SLV Deposits:  10,727.23  tonnes     unch

Comex SI O.I.:  170,684   +333

 

GC/EU                                  932

GC/SI                                    73.86

PL/GC                                   1.0362

GC/WTI                                15.10

Carlos Perez-Santalla

Gold Shorts Hold Tight

A Gold Moment: November 11, 2014

 

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

A lack of headlines drove money managers back into their recent comfort zones. The US stock markets drove to new highs while the USD continues to soar.  In turn gold’s Friday rally was seen as overdone. The interesting part of the gold price drop yesterday was the increasing open interest on the Comex futures contract. The most recent CFTC COT report showed very high level of speculative shorts. It seems that the recent moves didn’t give any back, but instead invited(tempted) shorts to add on to existing positions. This alone may limit downside moves without external motivation. The Fed is closed today in honor of US Veterans, so little activity is expected in the FX, debt and precious metals markets.

 

Technically, bears will need a close below 1140 to gain momentum. The upside can now gain from a close above yesterday’s close and even more so if prices reach back above 1170.

 

 Last                       GCZ4

1155

SIZ4

1558

PLF5

1197

PAZ4

760

ETF: GLD Deposits:   725.36   tonnes   -1.79

Comex GC O.I.:  434,295    +16366

ETF: SLV Deposits:  10,727.23  tonnes    unch

Comex SI O.I.:  169,091  +425

 

GC/EU                                  930

GC/SI                                    74.09

PL/GC                                   1.0346

GC/WTI                                14.96

 

Carlos Perez-Santalla

Lower Rates Push Gold Higher

A Gold Moment: November 10, 2014

 

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

The NFP number was a miss on Friday. More importantly the wage measure continues to disappoint the market. Sure talk remains confident that the weaker wage picture keeps inflation at bay, but rate hike expectations for next yearare being pushed out to September. Suddenly the picture for US real rates doesn’t seem to be as stable as it was just last Wednesday.  Gold saw a rebound due to some short covering. The price recovery was shy of anything that could reverse the current bear trend.

 

Technically, bears will be looking to sell at the 1183 level if bulls can take spot that far. Bulls will need a close above 1194 for momentum.

 

 Last                       GCZ4

1166

SIZ4

1558

PLF5

1208

PAZ4

770

 

ETF: GLD Deposits:   727.15   tonnes   -5.68

Comex GC O.I.:  417,929    +3653

ETF: SLV Deposits:  10,727.23  tonnes    +44.72

Comex SI O.I.:  168,666  -1473

 

GC/EU                                  937

GC/SI                                    74.76

PL/GC                                   1.0342

GC/WTI                                14.67

Carlos Perez-Santalla

FX Directs Gold Demand

A Gold Moment: November 7, 2014

 

The tight range in the gold price on Thursday may clearly poi

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

nt out the importance of today’s NFP report, but it also points to the strength gold can have internationally despite the continued dominance of the USD. The comments out of the ECB yesterday were anything but supportive of the Euro. Rates will remain at very low levels while the ECB looks at a bond buying program. The Russian Ruble has been showing the pains of the western sanctions imposed upon their economy in reaction to the Ukrainian incursions. Yesterday was no different as the ruble has reached an all time low with no bottom in sight.

 

Although the NFP report is expected to show similar stability as has been seen the past three months, the flow of capital and the effects on US real rates will be closely watched as money managers look to improve their future returns. Currently the expectation of a Fed rate increase sometime early next year has been dominating allocations.  Doubts in this current perspective would be needed to shift gold into a supported stance.

 

Technically, bears have little to worry about. A short covering rally might take place with a break above 1154 with greater resistance at 1166 and 1183. Until this happens the downside support levels of 1126, 1114 and 1102 are targeted.

 

 Last                       GCZ4

1146

SIZ4

1542

PLF5

1202

PAZ4

758

 

ETF: GLD Deposits:   732.83   tonnes   -2.99

Comex GC O.I.:  414,276    -3101

ETF: SLV Deposits:  10,682.51  tonnes    unch

Comex SI O.I.:  170,139  -6324

 

GC/EU                                  923

GC/SI                                    74.33

PL/GC                                   1.0472

GC/WTI                                14.64

 

Carlos Perez-Santalla

Gold Shorts Dominate

A Gold Moment: November 6, 2014

 

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

After the $30 loss in gold prices during the Chinese lunch hour yesterday, the market stabilized and stayed inside a $5 range. One of the most interesting facts about yesterday’s trade action is the volume seen on the Comex contract. The preliminary numbers estimate over 270,000 contracts traded with open interest increasing again. The higher than normal volume is no surprise considering the fact that prices reached down into the lowest level in four years, but the fact that it was more than double the 30 day moving average for volume and OI climbed shows the bears are in full force while adding to their short positions.

 

Tomorrow’s NFP holds the key to any new market direction until the Swiss vote at the end of the month. If the threat of Swiss buying weren’t on the table, many analysts(who are as bearish now as they were bullish two years ago) would likely be happy with a further drop. The perception of a healthy US economy continues to drive up the USD and take away investment demand from gold.

 

Technically, spot is oversold on the daily chart with momentum still favoring bears. The price drop over the past six days has dropped any upside potential from short covering rallies to the mid-1180s. Support may be seen at 1134, 1126 and 1102. Resistance is 1152, 1166, 1174.

 

 Last                       GCZ4

1144

SIZ4

1529

PLF5

1208

PAZ4

757

 

ETF: GLD Deposits:   735.82   tonnes   -3.00

Comex GC O.I.:  417,377    +1854

ETF: SLV Deposits:  10,682.51  tonnes    unch

Comex SI O.I.:  176,463  +644

 

GC/EU                                  915

GC/SI                                    74.89

PL/GC                                   1.0559

GC/WTI                                14.58

 

Carlos Perez-Santalla

Heavy Hands Sell Gold

A Gold Moment: November 5, 2014

 

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

It is hard to believe that the US midterm elections had such a powerful effect on market prices. Oil prices have been coming off not only because of increased production by arab countries, but by expectations that Republicans would win control of both houses of congress. This would be a presumption that the new control would open up oil exporting permissions. The strength in the USD has now also gained momentum from the change in government and with it has come liquidation across commodities. This is especially true in the gold market where confidence in the US economy has driven money managers away from the metal.

 

This is US employment reporting week. Starting today with the ADP report and ending Friday with the NFP. All numbers are expected to reflect the strengthening that has led to USD dominance in the markets. Expectations of a Fed rate hike sooner rather than later have kept current real rates from having much effect on the markets, but any negative change would change that quickly.

 

Technically, spot is oversold on the daily chart with momentum still favoring bears. The price drop over the past six days has dropped any upside potential from short covering rallies to the mid-1180s. Support may be seen at 1134, 1126 and 1102. Resistance is 1152, 1166, 1174.

 

 Last                       GCZ4

1140

SIZ4

1523

PLF5

1205

PAZ4

763

ETF: GLD Deposits:   738.82   tonnes   -2.39

Comex GC O.I.:  415,523    -1205

ETF: SLV Deposits:  10,682.51  tonnes    -64.49

Comex SI O.I.:  175,819  -1523

 

GC/EU                                  914

GC/SI                                    74.84

PL/GC                                   1.0527

GC/WTI                                14.76

Carlos Perez-Santalla

USD Protects from Weaker Gold

A Gold Moment: November 4, 2014

 

The price of gold has been under pressure from the consistent strength in the USD. This strength has come from a variety of perspectives, but the alternative to the Euro has been one of the biggest. The European Commission now sees economic growth in the region at a slower pace than previously estimated. This comes at a time that energy prices have been dropping steadily. Where would growth be if energy were on the rise? The buying power the USD has gains seems to have built momentum with the drop in crude oil. Fund managers are quick to liquidate gold holdings in favor of anything reflecting USD strength. Gold’s primary investment purpose is to protect against a weakening USD which is far from the current direction.

 

Technically, 1177 will be a resistance barrier that could turn weak shorts around when broken. A close above this level could send spot to test 1194-1198 followed by 1205. Support below the current low should be seen at 1166, 1161, 1156 and 1148. Mixed signals have killed momentum. With such a deep drop recently, a bounce is expected, but so is selling rallies.

 

 Last                       GCZ4

1172

SIZ4

1609

PLF5

1231

PAZ4

803

 

ETF: GLD Deposits:   741.21   tonnes   +0.01

Comex GC O.I.:  41,728    -1531

ETF: SLV Deposits:  10,747.00  tonnes    +35.77

Comex SI O.I.:  177,342  -2266

 

GC/EU                                  934

GC/SI                                    72.83

PL/GC                                   1.0522

GC/WTI                                16.54

Carlos Perez-Santalla

Gold Losing its Luster

A Gold Moment: November 3, 2014

 

Gold Market Expert, Carlos Perez-Santalla

Carlos Perez-Santalla

The wave of bearish headlines for gold traders that came at the end of last week helped drive spot to its lowest level since 2010. The expected FOMC statement(without surprises), the unexpected strength of 3Q US GDP, and the dual over enthusiastic measures of consumer sentiment  al helped guide the price to a four year low. The positive consumer perspective also seems to be coming from another bearish punch in the form of lower energy prices. It certainly wasn’t the personal income number which reflected another pull back.

 

All these happy US figures helped prompt the BOJ to increase its efforts on the stimulus front. The initial reaction has been a weaker yen, but their motivation must be the success the Fed seems to have had with its program.

 

The Chinese are chasing down some suspicious gold export figures. At a time when the government is building its gold reserves, to see a multiple increase in exports is certainly suspect.

Technically, the former 1180 triple bottom is now major resistance. A close above this level could trigger short covering which would finf new resistance between 1194-1198 followed by 1205. Support below the current low should be seen at 1166, 1161, 1156 and 1148. Stochastics currently favor a short covering rally.

 

 Last                       GCZ4

1173

SIZ4

1610

PLF5

1243

PAZ4

808

ETF: GLD Deposits:   741.20   tonnes   unch

Comex GC O.I.:  418,259    -1196

ETF: SLV Deposits:  10,711.23  tonnes    +29.81

Comex SI O.I.:  179,608  +3164

 

GC/EU                                  938

GC/SI                                    72.72

PL/GC                                   1.0588

GC/WTI                                14.53

Carlos Perez-Santalla

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