-- Posted Monday, 14 May 2012 | | Disqus

The Metals:

Gold fell to as low as $1556.81 in early New York trade before it bounced back higher at times, but it still ended with a loss of 1.44%.  Silver slipped to as low as $28.19 and ended with a loss of 2.35%.

Euro gold fell to about €1214, platinum lost $24.75 to $1435, and copper dropped 10 cents to about $3.53.

Gold and silver equities fell about 3% at the open before they rebounded to almost unchanged by midmorning, but they then fell back off into the close and ended near their lows of the day.

The Economy:

There were no major economic reports today.  Tomorrow at 8:30AM EST brings Retail Sales for April expected at 0.2%, CPI for April expected at 0.0%, and Empire Manufacturing for May expected at 8.4.  At 9AM is the Net Long-Term TIC Flows report for March, and at 10AM are Business Inventories for March expected at 0.3% and the NAHB Housing Market Index for May expected at 26.

The Markets:

Charts Courtesy of http://finance.yahoo.com/

Oil fell as the U.S. dollar index and treasuries rose on increased worries about Europe that sent the Dow, Nasdaq, and S&P lower.

Output falling, Euro zone heads for recession Reuters

Greece hits political stalemate, euro exit fears grow Reuters

Euro Officials Begin to Weigh Greek Exit as Euro Weakens Bloomberg

Among the big names making news in the market today were Ford, Avon, Yahoo, and JPMorgan.

The Commentary:

“Gold has continued to see further selling in today's session with traders once again exiting "RISK" trades in favor of the "Growth Off" or RISK AVERSION trades. Long commodity positions, along with long equities, are getting liquidated with money flows heading towards US Treasuries in general. This can be seen in the CCI, the Continuous Commodity Index, which is moving lower while bonds move higher, taking interest rates down even further as the yield on the Ten Year is now down below the 1.80% level. Remember, there has not been a week yet during which this yield ENDED BELOW that critical level.

Gold's move down towards $1550 has in the past attracted very substantial Central Bank gold buying. Hopefully this will remain the case as the market is now pushing towards the lower band of an eight month long trading range. If speculative selling of the metal is not absorbed down here and the market were to break below $1520 and fall to recover quickly, it will more than likely drop below $1500.

My own thinking on this is that the markets are moving so quickly away from risk and out of basically everything except Treasuries or cash, that the Fed is going to have a major problem on their hands if they do not soon give some sort of signal that they are preparing to act to stem the deflationary decline. JP Morgan's $2 Billion credit derivatives-based loss has spooked the banking sector and that is the one sector that the monetary officials do not want to see going from bad to worse. Keep in mind that back in 2008, once Lehman went under with Bear Stearns following, it was the woes of the financial sector that pulled the rug out from under the entire US economy and the US equity markets. The Fed is well aware of this and I suspect will not want to wait too long before beginning to make some noise to keep the markets from becoming too roiled.

The bank shares might be the first thing to watch for some signs of further monetary accommodation as one can be assured that there are lots of phone calls and discussions underway even now. If they were to show some signs of bottoming, it might be a hint of things to come.

Meanwhile gold will need to get at least back above $1600 to give the bulls some breathing room. With the Commitment of Traders report showing the NET LONG position of the big hedge funds at a 42 month low, there remains plenty of room for them to come back into this market and juice it higher but they need some sort of signal to tell them to do so. Right now they are not getting it; if anything, some hedge funds are now moving to the short side of gold along as well as a host of various other commodity markets.

Incidentally, China is lowering their bank reserve ratio requirements, a sign that they are responding to slowing growth there as their export markets are impacted by the woes in the Eurozone and the anemic growth in the US. This is one of the signals that copper has been sending for a while now as it descends in price. Were copper to finally show some signs of a bottom, that would be constructive for silver which is testing chart support down near the $28 level once again.”- Dan Norcini, More at http://www.traderdannorcini.blogspot.com/

GATA Posts:

German Parliament wants accounting of gold reserves; Bundesbank resisting

Pat Heller: U.S. govt. agency is specifically authorized to rig gold market

The Statistics:

As of close of business: 5/11/2012

Global Gold ETF Holdings

[WGC Sponsored ETF’s]

 Note: No change in Total Tonnes from yesterday’s data.

COMEX Gold Trust (IAU) Total Tonnes in Trust: 179.22: No change from yesterday’s data.

Silver Trust (SLV) Total Tonnes in Trust: 9,465.08: No change from yesterday’s data.

The Miners:

Seabridge’s (SA) updated National Instrument 43-101-compliant Preliminary Feasibility Study, Claude’s (CGR) first quarter results, Rubicon’s (RBY) drill results, and Silver Wheaton’s (SLW) first quarter results and dividend were among the big stories in the gold and silver mining industry making headlines today. 

LOSERS

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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• http://www.silverseek.com
• http://www.goldreview.com 

© Gold Seeker 2012

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-- Posted Monday, 14 May 2012 | Digg This Article | Source: GoldSeek.com

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