-- Posted Wednesday, 29 February 2012 | | Disqus
| Close | Gain/Loss |
Gold | $1690.90 | -$94.30 |
Silver | $34.50 | -$2.39 |
XAU | 195.56 | -3.28% |
HUI | 529.72 | -3.41% |
GDM | 1536.33 | -3.39% |
JSE Gold | 2757.57 | -11.87 |
USD | 78.83 | +0.62 |
Euro | 133.22 | -1.36 |
Yen | 123.05 | -1.26 |
Oil | $107.07 | +$0.52 |
10-Year | 1.977% | +0.048 |
T-Bond | 143.09375 | -0.71875 |
Dow | 12952.07 | -0.41% |
Nasdaq | 2966.89 | -0.67% |
S&P | 1365.68 | -0.47% |
The Metals:
Gold traded mostly slightly higher in Asia and London, but it then plummeted throughout most of trade in New York and ended near its late session low of $1688.77 with a loss of 5.28%. Silver slipped to as low as $33.95 and ended with a loss of 6.48%.
Euro gold fell to about €1269, platinum lost $37.25 to $1676, and copper fell 4 cents to about $3.86.
Gold and silver equities fell over 3% by late morning and remained near that level for the rest of the day.
The Economy:
Report | For | Reading | Expected | Previous |
GDP | Q4 | 3.0% | 2.8% | 2.8% |
GDP Deflator | Q4 | 0.9% | 0.4% | 0.4% |
Chicago PMI | Feb | 64.0 | 60.0 | 60.2 |
Bernanke spoke before the House Financial Services Committee today and will speak to the Senate Banking Committee tomorrow.
Bernanke: Job market far from normal Reuters
Bernanke: Monetary Stance Meets Fed Goals Bloomberg
Bernanke sees ‘different signals’ from economy MarketWatch
Mortgage purchase applications jumped last week: MBA Reuters
Tomorrow brings Initial Jobless Claims, Personal Income and Spending, Core PCE Prices, the ISM Index, and Construction Spending.
The Markets:
Charts Courtesy of http://finance.yahoo.com/
Oil fell after the Energy Information Administration reported that crude inventories rose 4.16 million barrels, gasoline inventories fell 1.6 million barrels, and distillates fell 2.1 million barrels, but it then climbed back higher in late trade and ended with a gain on optimism about better than expected economic data.
The U.S. dollar index rose as the euro fell after the “European Central Bank's huge injection of three-year cash into the banking system lifted riskier currencies like the Australian and New Zealand dollars.”
Treasuries fell along with the Dow, Nasdaq, and S&P as Bernanke’s testimony was not as dovish as some traders were looking for.
Among the big names making news in the market today were Staples, Microsoft, Blackstone, Apple, Abbott, Goldman Sachs, Wells Fargo, and Costco.
The Commentary:
“Today was Fed Chairman Bernanke's chance to testify before the Congress' Financial Services Committee. Here is a quick synopsis of his comments as I see them.
"The economy is getting better based on what we can see of the employment numbers but it is not growing at a fast enough clip to justify any immediate change in our accommodative monetary policy. The uptick in hiring has been helped by this policy and any change to it at the present time is not warranted. Real Estate is still a concern. Us fiscal condition is dire and faces a serious challenge at the end of this year. Inflation is not a concern although temporary rises in energy prices bear monitoring".
There you basically have it.
Based on this testimony, gold and silver were murdered. The supposed reason? - We are told that traders were expecting QE3 to be imminent and were disappointed because the usually dovish Bernanke did not sound quite as dovish as before. Thus the metals were hammered mercilessly lower.
Excuse me - but as a trader who watches these markets each and every day for more hours than I would prefer anymore, I have not seen any analyst explain the reason for the heretofore rally in the metals as traders EXPECTING AN IMMINENT QE3 program to launch.
The reason for the rally has been expectations by the market that Central Banks would keep the liquidity spigots open for the foreseeable future (near zero interest rate policy coupled with QE out of Europe and the UK) and thus create an environment in which there was little opportunity cost for buying the metals. This has been generating RISK TRADES in which traders/investors buy both stocks and commodities and generally sell off the Dollar, which was particularly pronounced after a rush back into the Euro once traders were convinced that the immediate fallout from the Greece debacle was past.
Comments this morning trying to explain the selloff in gold mentioned the failure of the metal to make it through the $1800 level and downside stops as the culprit but ironically they are deathly quiet in regards to silver, which only yesterday had staged a MASSIVE UPSIDE BREAKOUT on strong volume out of a congestion zone. Yet today we saw a nearly 8% wipe out in silver which completely erased yesterday's breakout and then some.
My thinking AT THE MOMENT is that Bernanke and company were watching the commodity complex begin to accelerate higher once again as a result of their free money policy and began getting extremely nervous particularly as energy prices were rocketing higher. This is an election year and one thing that the boss cannot stand for is having to deal with that pesky issue of unhappy drivers bitching and complaining about the outrageous cost of filling their gas tanks especially since he and his crew are doing as much as they can to shut down drilling on public lands and offshore.
If one basically states that the economy is doing better - not out of the woods yet but better - and all the hedgies are leveraged to the gills because the FED GAVE THEM THE GREEN LIGHT TO DO EXACTLY THAT when it first announced that it would keep this near zero interest rate policy out to the end of 2014, then it is a simple matter of throwing a bit of uncertainty in that regards to generate a bout of selling. Toss in the same permabears as always capping at the highs of the day and the algorithms did the rest of the work as the stops were picked off.
In the meantime today's wild move in silver was a daytrader's/scalper's heaven. As said before, there are no worse traders on the planet than the hedge funds. Those guys could not trade their way out of a wet paper bag if their lives depended upon it.
In watching both of these metals, it does seem that we are now getting a bit of stabilizing in here around midday.
Gold and silver shares as usual are going nowhere. They made it just to the bottom of the critical resistance zone that I noted on the chart yesterday at the gap region 555-560 before going Kerplunk.
Interestingly enough, the long bond is down a full point right now as I write this. I am keeping an extremely close eye on this market. As stated yesterday, I refuse to believe ANY talk about an improving economy as long as the bond market does not start a solid downtrending move.”- Dan Norcini, More at http://www.traderdannorcini.blogspot.com/
GATA Posts:
Another day, another Fed and bullion bank intervention
Zero Hedge: NY Fed buys building housing Plunge Protection Team
LIBOR manipulation probe turns criminal in U.S., Reuters says
Bill Murphy: Russia and China know what GATA discovered about gold
Lee Quaintance and Paul Brodsky: Why Buffett is wrong on gold
The Statistics:
Activity from: 2/28/2012
Gold Warehouse Stocks: | 11,426,500 | -160 |
Silver Warehouse Stocks: | 130,988,830 | +365,638 |
Global Gold ETF Holdings
[WGC Sponsored ETF’s]
| Product name | Total Tonnes | Total Ounces | Total Value |
New York Stock Exchange Arca (NYSE Arca) AND Singapore Exchange (SGX) AND Tokyo Stock Exchange (TSE) AND Hong Kong Stock Exchange (HKEx) | SPDR® Gold Shares | 1284.609 | 41,301,472 | US$73,076m |
London Stock Exchange (LSE) AND NYSE Euronext Paris AND Borsa Italiana AND Frankfurter Wertpapierbörse (Deutsche Börse - Xetra) | Gold Bullion Securities | 118.63 | 3,813,918 | US$6,585m |
London Stock Exchange (LSE) AND NYSE Euronext Paris AND Borsa Italiana AND Frankfurter Wertpapierbörse (Deutsche Börse - Xetra) AND NYSE Euronext Amsterdam | ETFS Physical Gold | 126.23 | 4,058,350 | US$6,985m |
Australian Stock Exchange (ASX) | Gold Bullion Securities | 14.21 | 472,719 | US$782m |
Johannesburg Securities Exchange (JSE) | New Gold Debentures | 39.76 | 1,278,259 | US$2,277m |
Note: No change in Total Tonnes from yesterday’s data.
COMEX Gold Trust (IAU) Total Tonnes in Trust: 181.24: No change from yesterday’s data.
Silver Trust (SLV) Total Tonnes in Trust: 9,739.80: +24.18 change from yesterday’s data.
The Miners:
Freeport’s (FCX) work stoppage, Rubicon’s (RBY) closed financing, and Midway’s (MDW) resource estimate were among big stories in the gold and silver mining industry making headlines today.
WINNERS
1. Entree | EGI +3.85% $1.35 |
2. Avino | ASM +3.65% $2.27 |
3. Gold Reserve | GRZ +3.01% $3.08 |
LOSERS
1. Golden Minerals | AUMN -9.05% $8.34 |
2. Almaden | AAU -8.92% $2.96 |
3. Golden Star | GSS -8.06% $1.94 |
Winners & Losers tracks NYSE and AMEX listed gold and silver mining stocks that trade over $1.
Please see Yahoo’s Mining/Metals News Wire for all of today’s mining news.
- Chris Mullen, Gold Seeker Report
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© Gold Seeker 2012
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-- Posted Wednesday, 29 February 2012 | Digg This Article
| Source: GoldSeek.com
Gold Seeker Closing Report: Gold and Silver Fall Over 5% and 6%
