|
-- Posted Monday, 26 April 2010 | | Source: GoldSeek.com
By Gene Arensberg Esse quam videri – To be rather than to seem.
Both gold and silver rebound just above our raised trading stops. HOUSTON – News, news, news! Europe kicked in the (volcanic) “ash,” the U.K elections loom; Russian central bankers still buying gold; Anglo and Gold Fields “talking, but only informally;” Goldman damage control in full swing, SEC “witch-hunt;” U.S. jobless claims back down to 456K (and gold spikes lower Thursday?); Greek bonds in two digit percentages; U.S. companies taking huge write-downs to offset the costs of Obamacare already; bad weather, higher fuel costs affecting mine output and throughput; Gold and silver moving in and out and back into futures backwardation; The LBMA sends out apologists for Jeff Christian’s remarks on a service ironically called “Financial Sense;” (GATA’s Powell is game for the challenge); Congress thinks another government regulator is the answer to the failure of the dozens of porn-watching regulators already; Sovereign debt crises aplenty; PIIGS; Risk of contagion; Trouble in Belgium over language; Carbon zealots and salesmen rising like bovine flatulence and the all-Goldman-all-the-Time TV channel keeps on and on… It’s been quite a week for gold news junkies like us. Trying to keep up with all the latest news can drive someone to drink, or worse. Luckily, just about everything that affects the precious metals markets ends up distilled in a series of key indicators we market watchers keep tabs on. So if all the news makes us pine for something “distilled” how about some charts? In essence, all the news is more than we all can read (much less keep up with), but the combined effect of the trading actions by tens of millions of traders, each acting in their own self interest, shows in the indicators we traders follow. If we had to do without either (1) following a mountain of often conflicting news, and (2) following the indicators, ratios and charts which “report” to us each week, we would have to drop the first and keep the second. Info-Triage In a conversation this week with Bill Haynes, who operates Arizona-based CMI Gold and Silver, Bill pointed out that some of his many clients feel they have to read every single news story that even remotely affects the gold market in a bid to stay informed. What a tough assignment they have chosen for themselves. Information is power. Good information is. But, too much of anything is … well, too much. By the way, Haynes runs a tight ship at CMIGS (our highest complement) and we think readers would do well to give his firm every consideration in their quest for quality precious metal bullion at a fair price. At times we all go into information overload as we hunger for more data, and then, inevitably into info-triage as we realize we cannot keep up a frenzied pace of data processing every single day. At least not and stay sane and reasonably happy. That is why we here at GGR tend to focus on a suite of regular, measurable and get-to-knowable indicators each week and why we don’t pretend to be a “current events” hub. With that intro, let’s move right into what has our attention this week. First, here’s this week’s closing table:
April 23, 2010 | | | | | Got Gold Report Indicator Comparison | This Week | Prior Week | Change | w/w Chg % | Gold Weekly Close (USD) | $1,157.60 | $1,137.70 | $19.90 | 1.7% | Silver Weekly Close (USD) | $18.32 | $17.74 | $0.58 | 3.3% | GLD Metal Holdings (Tonnes) | 1,140.13 | 1,141.04 | (0.91) | -0.1% | SLV Metal Holdings (Tonnes) | 8,912.94 | 8,912.94 | 0.00 | 0.0% | Gold Close COT Date | $1,140.56 | $1,150.90 | ($10.34) | -0.9% | Silver Close COT Date | $17.84 | $18.23 | ($0.39) | -2.1% | Gold LCNS (Contracts Net Short) | 257,396 | 263,484 | (6,088) | -2.3% | Silver LCNS (Contracts Net Short) | 54,317 | 55,389 | (1,072) | -1.9% | HUI EOW Close | 442.16 | 427.98 | 14.18 | 3.3% | US Dollar Index Weekly Close | 81.41 | 80.78 | 0.63 | 0.8% | ICE Commercial Net $ Pos. (Contracts) | (27,463) | (30,420) | 2,957 | -9.7% | Gold:Silver Ratio Weekly Close | 63.19 | 64.11 | (0.92) | -1.4% | Gold Intra-week High | $1,157.60 | $1,169.69 | ($12.09) | -1.0% | Gold Intra-week Low | $1,124.19 | $1,130.51 | ($6.32) | -0.6% | Silver Intra-week High | $18.32 | $18.60 | ($0.28) | -1.5% | Silver Intra-week Low | $17.51 | $17.63 | ($0.12) | -0.7% | Gold High/Low Spread | $33.41 | $39.18 | ($5.77) | -14.7% | Silver High/Low Spread | $0.81 | $0.97 | ($0.16) | -16.5% |
This Week’s Radar Screen The Got Gold Report – the full report – is published biweekly. Between reports we communicate more regularly on the GGR web log, so it pays to stop by once in a while to catch the latest offerings. The purpose of the Radar Screen is to briefly summarize our positioning for the gold and silver markets, and also to highlight one, two or maybe even three of the dozens of indicators, ratios and graphs we keep in constant touch with at Got Gold Report. Long-time readers know we update most of the Got Gold Report linked charts each week, even the weekends when we don’t publish the full report. For a little while longer, readers need only pull up the last full report (even this one) and click on the chart links on “off weeks” to see any updated comments. Changes are almost always completed by 6:00 pm EDT on Sunday evening and occasionally during the week itself as events unfold. The chart links are always at or near the bottom of the reports. Pretty soon now, however, all of the chart links will have to change as we are in the process of transitioning to our new permanent web home, which we are proud to say is up and functional at www.GotGoldReport.com. Back to this week’s Radar Screen: We returned to the gold bullish camp on February 5, with gold then in the $1,050s. We have been patient and cautious, moving our stops up first to the $1,080s, then near $1,105 and last weekend we moved our trading stops up to the $1,120 equivalent immediately following the SEC v Goldman news. We have been comfortable with our positioning, which allowed us to participate should gold and silver move forward, while preventing our “winner” positions from potentially becoming losing ones, then we moved our stops higher gradually to protect our growing profit positions, but still content to allow for more than normal volatility – until last weekend. On Monday, April 19, gold came within $4.19 of reaching our stop trigger point and had it gone below that for more than an hour we would have indeed stepped to the sidelines – calling a “payday.” Instead, gold snapped back higher, printing $1,135.76 at the close that day, leaving us in the game for now. Gold went on to challenge the $1,130s all four days of the rest of the week, before the short-covering rally Friday and an at-high-close of $1,157.60. We will have more about our positioning in the linked charts below and on the web log later this coming week, but for now our short-term dogs are still in the gold and silver foxhunt. This week in the Radar Screen we are focused on the “habit” of technical breakouts to re-test the prior resistance shortly after the event. That’s what just occurred with the gold market this past week, so it is a good time to focus on it. We also want to take a closer look at the positioning of the very largest of silver futures short sellers but first, here’s the short-term gold graph:
Successful Test of the Breakout Gold took an honest (or dishonest?) shot at giving the gold bears a failed breakout on Monday following the SEC v Goldman news, but there, and each time gold attempted a run into the $1,130s thereafter the yellow metal met with determined bidding. We can believe that technically minded traders all noticed the support which formed there in the $1,130s. Moving on from here we will mark the high $1,120s as potential support with potential resistance well above in the $1,160s – until proven otherwise on both counts. As usual, much of this week’s commentary is contained in comments inserted in the actual linked charts below, and we will be adding additional “intel” to the “blog” often going forward, so, on to other business. Once again we reiterate our longer-term view that the world will most likely continue down a path of fiat currency debasement, weakening confidence in all fiat currencies. We see the setup as long-term very bullish for gold metal and extraordinarily bullish for silver looking well ahead – if the world “holds it more or less together.” ***
COT Flash April 23 COT report issued today, Friday, April 23, 2010 at 15:30. Bottom line: COMEX commercials short bets for both gold and silver ease lower, but not very much. Gold -0.9% and the gold LCNS fell by 2.3%. Silver -2.1% and the silver LCNS declined by 2%. Details just below. As the United States Congress mulls a bill to create yet another regulator and another oversight bureau, opponents of even more government regulation were given a shot in the arm today as apparently some SEC employees were caught with their pants down so to speak. According to news reports it seems about 30 of them spent their daytime watching porn on our dime (with at least one filling up his computer hard drive with graphic images) instead of doing the people’s business. Apparently going after guys like Bernie Madoff and Alan Stanford just isn’t as interesting as watching hard-core video and such. (Just the most recent high-profile cases of government regulator fumbling.) At least we have more information now to understand what SEC rank and file consider as high priorities during a sure-enough financial crisis. Why does Elliot Spitzer come to mind now? He didn’t even work for the SEC. Normally we wouldn’t “schtupp” so low as to, uh, bring it up, but dog-gone it, we just don’t need another regulator in the U.S. We don’t need more regulations and more big government. We have plenty already, thank you very NOT. What we need is for the agencies and regulators we already have to, oh, maybe actually do the work they are paid to do and oh, maybe enforce the regs already in place... Enough about that, we have a new COT report to look at as both gold and silver regained the ground they lost on Friday one week ago. Remember the cutoff for data is the previous Tuesday, in this case Tuesday, April 20 and gold and silver had just begun to see a bid following the SEC’s party-line split decision Friday to go after the Goldman machine in New York. That Friday morning surprise announcement gave the Big Sellers of gold and silver a chance to knock the weakest of the longs out of the game – until now. With that, uh, “short” intro, let’s take a look at what the largest of the largest traders of gold and silver futures in New York did right after that sneak attack on the House of Blankfein, aka Goldman Sachs. Gold COT The Commodities Futures Trading Commission (CFTC) issued its weekly commitments of traders (COT) report at 15:30 ET today, Friday, April 23, 2010. The report is for the close of trading as of Tuesday, April 20. GotGoldReport.com is focused on the changes in positioning of the largest futures traders in that report – the traders the CFTC classes as “commercial.” We refer to those commercial traders as “LCs” for “Large Commercials.” For gold, as gold dipped a net $10.34 or 0.9% to $1,140.56 COT reporting Tues/Tues, COMEX commercial traders reduced their combined collective net short positioning (LCNS) by a smallish 6,088 contracts or 2.3% from 263,484 to 257,396 contracts net short as the open interest fell by a slightly higher 7,518 contracts from 528,856 to 521,338 contracts open. Remember that is as of the Tuesday close, before the Goldman damage control stories were getting out very much and before we learned that the decision by the SEC to take on GS was anything but unanimous. Here's the nominal LCNS graph for gold futures: 
Not really very much of a change by Tuesday in other words. Remember that gold had tested as low as the $1,130s on Friday, April 16 and as low as $1,124.19 Monday, the day before, so this COT reflects gold back on a $15.00 rise following a take-down. When compared to all contracts open, the relative commercial net short positioning (LCNS:TO - the most important graph we track) actually fell about half a percentage point from 49.82% to 49.37% of all COMEX contracts open. The LCNS:TO really didn’t move very much on the SEC shot across Wall Street’s bow in other words and we cannot point to either aggressive selling or covering in this report. *** The above is an excerpt of the full Got Gold Report web log update. To continue reading please click on this link: And thank you for doing so. 
A land developer, professional numismatist, self-taught bullion trader and investor since 1980, Gene Arensberg analyzes technical and fundamental developments in the precious metals markets. In 2000 Gene started sharing his own market research with fellow traders and fund managers. Those email reports evolved into his popular Got Gold Report, a biweekly look at important indicators for gold and silver published on the web. Gene’s more in-depth market reports, insights and trading ideas are available at www.GotGoldReport.com.
-- Posted Monday, 26 April 2010 | Digg This Article | Source: GoldSeek.com
Previous Articles
|
