-- Posted Wednesday, 27 February 2013 | | Disqus
| Close | Gain/Loss |
Gold | $1597.10 | -$16.80 |
Silver | $28.97 | -$0.41 |
XAU | 137.22 | -1.78% |
HUI | 362.53 | -1.95% |
GDM | 1063.40 | -1.93% |
JSE Gold | 1922.47 | -21.0 |
USD | 81.53 | -0.31 |
Euro | 131.35 | -0.73 |
Yen | 108.48 | -0.19 |
Oil | $92.76 | +$0.13 |
10-Year | 1.903% | +0.024 |
T-Bond | 145.21875 | -0.40625 |
Dow | 14075.37 | +1.26% |
Nasdaq | 3162.26 | +1.04% |
S&P | 1515.99 | +1.27% |
The Metals:
Gold traded just slightly lower in Asia and London, but it then accelerated its losses in New York and ended near its late session low of $1592.54 with a loss of 1.04%. Silver slipped to as low as $28.84 and ended with a loss of 1.4%.
Euro gold fell to under €1216, platinum lost $23.50 to $1594.50, and copper fell a couple of cents to about $3,55,
Gold and silver equities fell about 2% by midmorning and remained near that level for the rest of the day.
The Economy:
Report | For | Reading | Expected | Previous |
Durable Goods Orders | Jan | -5.2% | -3.5% | 3.7% |
Durable Goods -ex trans. | Jan | 1.9% | 0.2% | 1.0% |
Pending Home Sales | Jan | 4.5% | 1.0% | -1.9% |
U.S. mortgage applications eased again last week -MBA Reuters
Tomorrow brings Initial Jobless Claims, GDP, and Chicago PMI.
The Markets:
Charts Courtesy of http://finance.yahoo.com/
Oil turned slightly higher after the Energy Information Administration reported that crude inventories rose 1.1 million barrels, gasoline inventories fell 1.9 million barrels, and distillates rose 500,000 barrels.
The U.S. dollar index fell as the euro rose on signs of improving economic confidence in the region.
Treasuries extended lower after today’s $29 billion 7-year note auction sold at a yield of 1.26% with a bid to cover of 2.65.
The Dow, Nasdaq, and S&P rose on better than expected housing data.
Among the big names making news in the market today were Flowers Foods and Wonder bread, Target, Coach, and Verisk.
The Commentary:
“"Some Time Soon".
Those words were uttered by Chairman Bernanke this morning in the second day of his bi-annual testimony before the Congress, this time speaking before the House of Representative Committee.
The phrase was in reference to The Fed's plan to review its exit strategy from the QE program. Note that the Chairman did not say anything about actually ending the program; he merely stated that the Fed would review its exit strategy sometime soon. This should not be news for it really is innocuous on the surface; however, it just goes to show how incredibly sensitive gold is to anything related to this bond and mortgage-backed securities buying program.
What Bernanke stated was that the Fed will be discussing their exit strategy. They are already in discussions about that as was evidenced by the FOMC minutes that came out last week. So what? Any responsible Central Banker must of course be reviewing these things unless they are completely oblivious to the potential for severe fallout from the creation of what will end up being nearly $3.5 TRILLION by the end of this year when you combine QE1, QE2, QE3 and QE4.
Bernanke spoke to this topic yesterday when he addressed the weighting of the potential risks associated with this degree of QE against the costs of not doing QE. In his opinion, the risk of not doing the bond buying program outweighed the costs of the harm done to the economy ( in his opinion of course). He went on to speak about the aid the program gives to those buying cars, houses, etc, as opposed to the harm the Fed is inflicting on savers. He also spoke to the harm done to those who are unemployed by doing nothing.
In short, you can get a glimpse into the nature of the discussions taking place within the FOMC over all this but it does seem pretty clear that the doves are still in ascendancy in regards to QE and the current monetary policy.
Why this would derail gold is therefore unclear, especially if the reason it did rally yesterday was due to a widely expected continuation of the QE program. As far as I can read this, the Chairman did not offer any changes of note to his comments of yesterday.
Part of what we are seeing in gold (and nearly all of the other markets) is the confusion, uncertainty and lack of clarity as to where all this "boldly going where no man has gone before" adventure in monetary policy by the Central Banks of the West is leading. Is it "RISK ON" and full speed ahead with the hugely leveraged carry trades or is it time for the sidelines? Are interest rates going lower or will they move higher? No one really knows because of the speed at which sentiment can shift globally.
The problem for gold has been and continues to be, the mining sector as evidenced by the HUI. It did manage to fill the first downside gap on its daily chart yesterday but could not even manage a decent close INSIDE THAT GAP. Simply put, the mining sector is so weak, even though it is so oversold, that it is undercutting any strength in the bullion. As I type these comments this morning, the S&P 500 is up nearly 1.3% while the HUI is down nearly 1.8%. It is that bad.
Yesterday I spoke about these spike lows and how dangerous that they are to trade because of the extent of the price swings that produce them. Here today we are seeing what happens to markets that plunge, reverse sharply higher only to plunge again. I want to repeat what I said yesterday" "TRADE SMALL OR NOT AT ALL". There are times to be aggressive and there are times to be cautious. This is a time to be cautious. Do not be foolish with your trading accounts. Please listen to this as I am trying to prevent some of you from taking foolish advice and getting harmed in the process.
So what if you do not manage to grab an exact bottom or exact top in the market. Guess what? The market will be there tomorrow and the next day and the day after that. You can always wade back into the water once the sharks stop stirring it all up. If on the other hand you like playing Russian Roulette with your trading account, please by all means, throw caution to the wind and go ahead and jump right into the market. All I can say is that you had better be fast on the buy or sell trigger and have a very large trading account that you can be content with as it becomes a very small trading account.
By the way, for the last time, gold is NOT IN BACKWARDATION. Those who keep pushing this nonsense are going to end up hurting many of you who blindly jump into the gold market to buy the futures only to have your rear ends handed to you as the market is doing today.
Back to the HUI, I need to see this index trading through and above 390 to suggest a longer term bottom has been made in the shares. That will tell us that sponsorship has returned to this sector. Right now there is valued based buying but it cannot force the sector higher by itself. It needs momentum based buying and that is simply not here right now. Maybe that will change soon. I do not know and truth to told, neither does anyone else. We are all just watching and trying to read the tea leaves in a very cloudy cup.
For example, if you would have told me two days ago, when the news of the Italian election outcome hit the wires, that stocks would be oblivious to the potential for real harm to occur across the Euro Zone, I would have said that you were blindly optimistic. Yes, stocks cratered on that news as the RISK TRADES were jettisoned with contempt yet here we are, two days later, and the S&P 500 has practically made it right back to the closing level of Friday's trade last week. In other words, the Italian election results, which struck a sharp stinging rebuke to the complete complacency that has enveloped the minds of traders/investors, never happened. We all just imagined that it did. Can you see what I mean by either trading small or not at all.
Closing words, be extremely careful right now. This is not a time to try being a hero lest you end up becoming a zero.”- Dan Norcini, More at http://www.traderdannorcini.blogspot.com/
“U.S. Stock Market – It’s consolidating major move up and bears can’t keep it down for long. The “Don’t Worry, Be Happy” crowd have the deck stacked in their favor so barring something truly unforeseen, a new, marginal all-time high is a question of when, not if.
Gold and Silver – While there are numerous positives I’ve posted about in last couple of days, the bears still hold serve. I continue to believe if one is a buyer of gold it’s best to continue standing on the sidelines until either the low $1,500s are tested or we have two consecutive closes above $1,700.
It’s mind-boggling how open interest remains so high despite the # of shorts in silver on the Crimenex (Comex). Either they will finally cave or the shorts may have bit off more than they can chew. Stay tuned.
U.S. Dollar – The way overvalued Yen is finally descending and that has underpinned the U.S. Dollar for the time being. But when the rooster finally comes home to roost in the U.S., the dollar can make new lows IMHO. I have over 80% of my portfolio in Canadian financial institutions and in Canadian dollars – legally!
U.S. Bonds – Bernanke may have kicked the can again, but it comes at a bigger and bigger price each time. Bonds are a total void in my book.
Oil and Natural Gas – No change
Mining and Exploration Shares – Each time it appears it can’t get any worse – it does! It shall take many months and a big reversal in the price of gold to have any meaningful and sustainable rally. Until then, stock up on ant-acids like I have.”- Peter Grandich, Grandich Letter
GATA Posts:
Mike Kosares: Gold chart staging areas
Egon von Greyerz: Will gold soon be regulated?
Sinclair dismisses COT but says central banks will need higher gold to reliquefy
Mexico's audit office tells Bank of Mexico to verify gold held at Bank of England
The Statistics:
As of close of business: 2/26/2013
Gold Warehouse Stocks: | 10,385,426.817 | +2,422.357 |
Silver Warehouse Stocks: | 162,931,549.973 | +1,051,511.985 |
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 | 1270.440 | 40,845,908 | US$64,939m |
London Stock Exchange (LSE) AND NYSE Euronext Paris AND Borsa Italiana AND Frankfurter Wertpapierbörse (Deutsche Börse - Xetra) | Gold Bullion Securities | 138.13 | 4,441,056 | US$7,119m |
London Stock Exchange (LSE) AND NYSE Euronext Paris AND Borsa Italiana AND Frankfurter Wertpapierbörse (Deutsche Börse - Xetra) AND NYSE Euronext Amsterdam | ETFS Physical Gold | 152.66 | 4,908,200 | US$8,004m |
Australian Stock Exchange (ASX) | Gold Bullion Securities | 11.16 | 358,789 | US$575m |
Johannesburg Securities Exchange (JSE) | New Gold Debentures | 42.45 | 1,364,715 | US$2,214m |
Note: Change in Total Tonnes from yesterday’s data: SPDR subtracted 2.408 tonnes.
COMEX Gold Trust (IAU) Total Tonnes in Trust: 215.30: No change from yesterday’s data.
Silver Trust (SLV) Total Tonnes in Trust: 10,602.76: No change from yesterday’s data.
The Miners:
Goldcorp’s (GG) new Executive Vice President and General Counsel, Eurasian’s (EMXX) project sale, and Entree Gold’s (EGI) licenses update were among the big stories in the gold and silver mining industry making headlines today.
WINNERS
1. Comstock | LODE +3.11% $1.99 |
2. Tanzanian Royalty | TRX +2.95% $3.49 |
3. Mines MGMT | MGN +2.62% $1.18 |
LOSERS
1. Banro | BAA -6.50% $2.30 |
2. Timmins | TGD -5.74% $2.30 |
3. Golden Minerals | AUMN -5.66% $3.00 |
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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-- Posted Wednesday, 27 February 2013 | Digg This Article
| Source: GoldSeek.com
Gold Seeker Closing Report: Gold and Silver Fall Over 1%
