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Gold Seeker Weekly Wrap-Up: Gold and Silver Fall About 2% and 3% on the Week
By: Chris Mullen, Gold-Seeker.com


-- Posted Friday, 2 November 2012 | | Disqus

 

Close

Gain/Loss

On Week

Gold

$1678.00

-$35.70

-1.99%

Silver

$30.91

-$1.29

-3.59%

XAU

178.96

-4.34%

-2.06%

HUI

474.56

-4.50%

-3.41%

GDM

1372.88

-4.37%

-2.79%

JSE Gold

2385.42

-34.87

+2.40%

USD

80.57

+0.53

+0.65%

Euro

128.32

-1.11

-0.79%

Yen

124.34

-0.45

-1.07%

Oil

$84.86

-$2.23

-1.65%

10-Year

1.726%

+0.011

-1.37%

Bond

148.40625

-0.1875

+0.27%

Dow

13093.16

-1.05%

-0.11%

Nasdaq

2982.13

-1.26%

-0.19%

S&P

1414.20

-0.94%

+0.16%

 
 

 

The Metals:

 

Gold fell to as low as $1674.36 by about 1:30PM EST before it bounced back higher in the last couple of hours of trade, but it still ended with a loss of 2.08%.  Silver slipped to as low as $30.789 and ended with a loss of 4.01%.

 

Euro gold fell to about €1308, platinum lost $22.25 to $1542.50, and copper dropped 6 cents to about $3.49.

 

Gold and silver equities fell throughout most of trade and ended with over 4% losses.

 

The Economy:

 

Report

For

Reading

Expected

Previous

Nonfarm Payrolls

Oct

171K

125K

148K

Unemployment Rate

Oct

7.9%

7.9%

7.8%

Hourly Earnings

Oct

0.0%

0.2%

0.3%

Average Workweek

Oct

34.4

34.5

34.4

Factory Orders

Sep

4.8%

4.5%

-5.1%

 

The BLS net birth/death adjustment added 90,000 payrolls to October’s data. Private Payrolls rose 184,000.

 

All of this week’s other economic reports:

 

Consumer Confidence - October

72.2 v. 68.4

 

Construction Spending - September

0.6% v. 0.1%

 

ISM Index - October

51.7 v. 51.5

 

Unit Labor Costs - Q3

-0.1% v. 1.7%

 

Productivity - Q3

1.9% v. 1.9%

 

Initial Claims - 10/27

363K v. 372K

 

ADP Employment - October

158K v. 114K

 

Chicago PMI - October

49.9 v. 49.7

 

Employment Cost Index - Q3

0.4% v. 0.5%

 

Case-Shiller 20-city Index - August

2.0% v. 1.2%

 

Personal Income - September

0.4% v. 0.1%

 

Personal Spending - September

0.8% v. 0.5%

 

PCE Prices - Core - September

0.1% v. 0.1%

 

Next week’s economic highlights include ISM Services on Monday, Consumer Credit on Wednesday, Initial Jobless Claims and the Trade Balance on Thursday, and Export and Import Prices, Michigan Sentiment, and Wholesale Inventories on Friday.

 

The Markets:

 

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

 

Oil fell along with treasuries as the U.S. dollar index rose after this morning’s better than expected jobs report sent interest rates higher.

 

The Dow, Nasdaq, and S&P fell on uncertainty about next week’s election and concern that the fed may reduce their stimulative efforts.

 

Among the big names making news in the market Friday were Ralph Lauren, Enterprise, TripAdvisors, RBS, Chevron, Deutsche Bank, and LinkedIn.

 

The Commentary:

 

Another payrolls report today; another down day in the precious metals. Not much of a surprise here as that has been the norm for many a year. In one sense, it really did not matter what the number was as there was more than likely going to be bearish selling pressure no matter what.

When it comes to silver, if the number was a poor one, the bears would point to the fact that the QE3 was already baked into the cake and so was a non-factor. They would then point to the fact that the poor number was sign that the economy was still muddling along without any risk of inflationary factors due to the sluggish growth. Silver MUST HAVE AN INFLATIONARY ENVIRONMENT if it is to mount any sort of SUSTAINED rally.

If the number was considered friendly, then the bears would cry up the idea that the QE was not going to be continued as long as some were initially thinking since the economy was mending.

In other words, Heads, I win; Tails, you lose.

Either way, take a look at the following chart of the Continuous Commodity Index or CCI and notice that it has broken out of the recent congestion pattern. The breakout however was to the downside. Guess what; silver also broke out to the downside of its recent consolidation pattern.

I have pointed this link out to readers here for some time now - Silver is inexorably tied to the hip of the broader Commodity markets and will remain so into the foreseeable future. Next stop for the metal is today's low near $31.25 followed by a test of $31.00 - $30.80 should that previous level fail to stem its decline.

The fact that the open interest in silver refused to sharply decline during its descent was a warning that the stubborn bulls were vulnerable to a breach of chart support. There were just too many stale longs in this market which had not experienced a good and necessary cleansing. We are now finally getting that which is what this market needs in order to generate a more lasting move higher when the conditions are correct for such an event.

 

Note on that CCI chart, that the red support line which has been violated came in very near the important 38.2% Fibonacci Retracement level. If the index cannot rapidly recover this support level by climbing back above it and holding, it implies a subsequent test of the critical 50% level is in store.

With this in mind, observe the silver chart and note how similar the pattern is to the CCI. As stated above, the two are linked together and will generally rise and fall together.

Notice also how silver has lost support at the bottom of the recent congestion pattern which also was rather close to its 38.2% retracement level. If it cannot reverse the decline and get back above the 32 level, it will more than likely drift first towards psychological round number support near $31 and stronger chart support down near $30.70 - $30.75.- Dan Norcini, More at http://www.traderdannorcini.blogspot.com/

 

The Statistics:

Activity from: 11/01/2012

Gold Warehouse Stocks:

11,252,944.568

+6,430.00

Silver Warehouse Stocks:

142,467,161.836

-377,884.63

 

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

1336.301

42,963,411

US$72,365m

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

Gold Bullion Securities

140.87

4,529,191

US$7,619m

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

ETFS Physical Gold

155.80

5,009,232

US$8,168m

Australian Stock Exchange (ASX)

Gold Bullion Securities

11.16

358,789

US$604m

Johannesburg Securities Exchange (JSE)

New Gold Debentures

42.45

1,364,715

US$2,214m

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

 

COMEX Gold Trust (IAU) Total Tonnes in Trust: 209.55: +0.82 change from yesterday’s data.

 

Silver Trust (SLV) Total Tonnes in Trust: 9,947.28: +24.09 change from yesterday’s data.

 

The Miners:

 

Agnico-Eagle’s (AEM) dividend and Newmont’s (NEM) third quarter results were among the big stories in the gold and silver mining industry making headlines Friday.

 

WINNER

1.  Gold Resource

GORO+1.42% $17.10

 

LOSERS

1.  New Gold

NGD -8.88% $10.78

2.  Newmont

NEM -8.42% $48.74

3.  Golden Minerals

AUMN -6.85% $4.08

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

 

- Would you like to receive the Free Daily Gold Seeker Report in your e-mail? Click here

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, 2 November 2012 | Digg This Article | Source: GoldSeek.com

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