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Gold Seeker Weekly Wrap-Up: Gold and Silver End Mixed and Near Unchanged on the Week
By: Chris Mullen


-- Posted Friday, 18 May 2012 | | Disqus

Please Note: Canadian stock markets are closed on Monday for Victoria Day.

 

 

Close

Gain/Loss

On Week

Gold

$1591.40

+$17.70

+0.64%

Silver

$28.65

+$0.63

-0.90%

XAU

147.76

+0.05%

-2.31%

HUI

396.42

+0.80%

-1.88%

GDM

1151.86

+0.66%

-1.87%

JSE Gold

2370.86

+99.47

+0.53%

USD

81.07

-0.38

+0.98%

Euro

127.73

+0.79

-1.15%

Yen

126.54

+0.43

+1.13%

Oil

$91.48

-$1.08

-4.84%

10-Year

1.702%

UNCH

-7.55%

Bond

148.3125

-0.0625

+2.20%

Dow

12369.38

-0.59%

-3.52%

Nasdaq

2778.79

-1.24%

-5.28%

S&P

1295.22

-0.74%

-4.30%

 
 

 

The Metals:

 

Gold rose $23.67 to $1597.37 in early New York trade before it drifted back lower midday, but it still ended with a gain of 1.12%.  Silver surged to as high as $28.913 and ended with a gain of 2.25%.

 

Euro gold rose to almost €1246, platinum gained $1 to $1450, and copper remained at about $3.47.

 

Gold and silver equities rose about 3% by midmorning before they fell back off into the close, but they still ended modestly higher on the day.

 

The Economy:

 

Fed May Prefer Another Twist to Adding Assets Bloomberg

Private subsidies help the unemployed land jobs Yahoo

U.S. Can Create Jobs by Energizing Its Startups Bloomberg

How Rich Economies Must Adapt to Tomorrow's Job Market Bloomberg

 

All of this week’s other economic reports:

 

Leading Indicators - April

-0.1% v. 0.3%

 

Philadelphia Fed - May

-5.8 v. 8.5

 

Initial Claims - 5/12

370K v. 370K

 

Capacity Utilization - April

79.2% v. 78.4%

 

Industrial Production - April

1.1% v. -0.6%

 

Building Permits - April

715K v. 769K

 

Housing Starts - April

717K v. 699K

 

NAHB Housing Market Index - May

29 v. 25

 

Business Inventories - March

0.3% . 0.6%

 

Net Long-Term TIC Flows - March

$36.2B v. $10.1B

 

Empire Manufacturing - May

17.1 v. 6.6

 

Retail Sales - April

0.1% v. 0.7%

 

Retail Sales ex-auto - April

0.1% v. 0.8%

0.0% v. 0.3% CPI – April

0.2% v. 0.2% Core CPI - April

 

Next week’s economic highlights include Existing Home Sales on Tuesday, New Home Sales and the FHFA Housing Price Index on Wednesday, Initial Jobless Claims and Durable Goods Orders on Thursday, and Michigan Sentiment on Friday.

 

The Markets:

 

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

 

The U.S. dollar index fell as the euro rose on some relief/profit taking from this month’s steep losses.

 

Treasuries held steady as yields remained near historic lows on the possibility for more quantitative easing from the fed.

 

Oil fell along with the Dow, Nasdaq, and S&P on lingering worries about debt and slow economic growth.

 

Among the big names making news in the market Friday were Yahoo, JPMorgan, and Facebook.

 

The Commentary:

 

Gold continues to bounce higher in today's session as it moves further away from the bottom of the BROAD 8 MONTH TRADING RANGE shown on the chart below. The metal actually seems to be reverting to its safe haven function as it is holding its gain in spite of continued weakness in the broader US equity markets.

It does seem to have hit a band of resistance, as might be expected, near the psychological round number of $1600. For gold to get a handle of "16" in front of the price, we are going to need to see more hedge funds willing to go long this market even as their algorithms are increasingly playing a large number of the commodity markets in general from the short side. A clue that this might be happening is to watch for an increase in open interest which will mark an end to the wave of long liquidation that has dropped the price of gold so sharply over the past 2 weeks. We actually did see that increase in yesterday's open interest so I am especially interested in seeing Monday morning's data about today's session.

 

It should be noted that the rally has now taken the price back above the 10 day moving average. That is oftentimes a level that funds who are short will begin covering at. If the market has enough strength to make it to the 20 day moving average near $1617, you will see more of that short covering plus new buying from this camp. We will have to see whether or not that transpires early next week. I get the distinct impression from watching the price action in this market, as well as a host of other markets, that traders are extremely nervous, if not downright fearful about what might happen over the weekend in regards to the Euro zone and many did not want to risk being on the short side of the gold market heading into a weekend.

 

As stated in previous columns, the bounce from the bottom of this extended range is constructive as it further cements this level down near $1530 as extremely solid support. A sea change would therefore have to occur globally for those buyers whom have been active down there, to sit on their hands were prices to head back lower and revisit that level. I personally will feel a bit more comfortable that will not occur IF we can climb back over $1600 and keep that handle on the price. That will tell prospective buyers that the metal is not going to get any cheaper and if they were holding off waiting for better prices, they had better get in while the gettin's good. That means next week's price action will be very telling as to what we can expect for gold moving forward.

 

The reason I say this is because the first time that gold dipped down towards $1530 back in September 2011, it did not GET BACK DOWN THERE AGAIN for another three months. Then it rebounded immediately in December 2011 and has only now come back down to that level again. This time it was a period of 5 months. If prospective buyers see this thing will not back down below the $1600 level, they will commit to larger purchases as the odds favor it being another rather long period before they can hope to buy it this cheaply once again.

 

It looks to me like we have resistance pegged in a band between $1615 - $1625 on the upside. That will have to be taken out for gold to move back to $1650. There is some light support on the downside near $1565; after that additional support can be seen near $1550.


The HUI has not been able to REMAIN ABOVE the 400 level. If it can pull that off before the end of trading today, it will be a sign that this sector might have finally been sold out. If it closes back below the 390 level, it is going to move lower and retest the bottom made this week near 372. It did form a POTENTIAL spike bottom this week but as stated, it needs to confirm this by closing a week above the 420 level. Aggressive traders/investors can try nibbling on the long side of QUALITY MINERS only, with good chart patterns, PROVIDED they employ sound money management techniques. That means if the price moves through this week's low, get out - no questions asked. You can always try again; i.e. unless you foolishly turn a small trading loss into a large trading loss and end up looking like road kill on the trading floor.

 

Do not try arguing with a market and attempting to tell it why it is not behaving properly (that means going in the direction you THINK it should be going). Guess what? the market doesn't give a rat's ass what you or I or anyone else for that matter, thinks it should be doing. It will do what it wants to do, when it wants to do and the sooner you recognize that and give it the respect it deserves, the sooner you will be on your way to becoming a successful trader or investor. Show me a stubborn fool who refuses to admit that he or she is wrong for the time being and I will show you yet one more casualty whose carcass lies dead in the trading arena. The inscription that you will see on their trading tombstone is as follows:

"Here lies Mr. or Ms. Wannabe TRADER - he was right to the bitter end".


Silver has managed to hold the $26 level once again, although this time around it did not get down as close to 26 even as it has done on two previous occasions, once in September of last year and then again in December of last year as well. I am still skeptical of this market however as it is too closely associated with the risk trades. If Copper could ever stop falling out of bed, I will feel more comfortable about silver. The best thing that can be said about it right now is that at least it stop going down for a change. If we get any sort of news over the weekend detailing a worsening of conditions in Europe, silver is going to turn right back around and go lower. You just have too many funds selling the metal who need something to shift the sentiment towards inflation to bring them back into this market in a very big way. That means we will need more statements from Federal Reserve officials leaning towards QE sooner rather than later.

One last thing - I do find it very noteworthy, that in spite of the fact that the US equity markets are sinking today and nervousness remains in the minds of many traders, the US Dollar cannot seem to find a bid. It reached as high as 81.93 before swooning once again. That tells me that 82 in the USDX is a FORMIDABLE RESISTANCE LEVEL that is going to take some sort of terrible economic news to get enough "safe haven" bids coming into the Dollar to absorb all of the offers from willing sellers at that level.- Dan Norcini, More at http://www.traderdannorcini.blogspot.com/

 

GATA Posts:

 

 

JPMorgan unit has $100 billion in risky bonds

Doug Casey: Precious metals market manipulation?

Peter Grandich's presentation at the New York Hard Assets Conference

South Africa gives tax break to gold miners

GATA Chairman Murphy's presentation to Las Vegas Moneyshow

J.S. Kim: Fear and panic are banks' weapons against gold and silver

 

The Statistics:

Activity from: 5/17/2012

Gold Warehouse Stocks:

11,001,325.784

-32.15

Silver Warehouse Stocks:

141,713,563.790

-601,427.04

 

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

awaited

awaited

US$awaited

London Stock Exchange (LSE) AND NYSE Euronext Paris AND Borsa Italiana AND Frankfurter Wertpapierbörse (Deutsche Börse - Xetra)

Gold Bullion Securities

awaited

awaited

US$awaited

London Stock Exchange (LSE) AND NYSE Euronext Paris AND Borsa Italiana AND Frankfurter Wertpapierbörse (Deutsche Börse - Xetra) AND NYSE Euronext Amsterdam

ETFS Physical Gold

awaited

awaited

US$awaited

Australian Stock Exchange (ASX)

Gold Bullion Securities

awaited

awaited

US$awaited

Johannesburg Securities Exchange (JSE)

New Gold Debentures

awaited

awaited

US$awaited

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

 

COMEX Gold Trust (IAU) Total Tonnes in Trust: 176.34: -0.24 change from yesterday’s data.

 

Silver Trust (SLV) Total Tonnes in Trust: 9,619.02: +102.62 change from yesterday’s data.

 

The Miners:

 

Lake Shore’s (LSG) technical report, McEwen’s (MUX) overview and Golden Minerals’ (AUMN) mineral resource estimate were among the big stories in the gold and silver mining industry making headlines Friday.

 

WINNERS

1.  Golden Minerals

AUMN +6.78% $3.62

2.  Avino

ASM +6.35% $1.34

3.  New Gold

NGD +5.78% $8.23

 

LOSERS

1.  Golden Star

GSS -14.39% $1.13

2.  McEwen

MUX -8.64% $2.22

3.  Northern Dynasty

NAK -6.54% $3.86

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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Additional Resources for today’s Gold Seeker Report can be found:

© Gold Seeker 2012

Note: This article may be reproduced provided the article, in full, is used and mention to Gold-Seeker.com is given.

 

 

Disclosure: The owner, editor, writer and publisher and their associates are not responsible for errors or omissions.  The author of this report is not a registered financial advisor.  Readers should not view this material as offering investment related advice. Gold-Seeker.com has taken precautions to ensure accuracy of information provided. Information collected and presented are from what is perceived as reliable sources, but since the information source(s) are beyond Gold-Seeker.com’s control, no representation or guarantee is made that it is complete or accurate.  The reader accepts information on the condition that errors or omissions shall not be made the basis for any claim, demand or cause for action.  Past results are not necessarily indicative of future results.  Any statements non-factual in nature constitute only current opinions, which are subject to change.  Nothing contained herein constitutes a representation by the publisher, nor a solicitation for the purchase or sale of securities & therefore information, nor opinions expressed, shall be construed as a solicitation to buy or sell any stock, futures or options contract mentioned herein.  Investors are advised to obtain the advice of a qualified financial & investment advisor before entering any financial transaction.

 


-- Posted Friday, 18 May 2012 | Digg This Article | Source: GoldSeek.com

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