-- Posted Friday, 26 April 2013 | | Disqus
| Close | Gain/Loss | On Week |
Gold | $1467.30 | -$7.00 | +4.74% |
Silver | $23.90 | -$0.40 | +3.11% |
XAU | 106.31 | -3.29% | +3.33% |
HUI | 276.39 | -3.57% | +2.97% |
GDM | 816.89 | -3.53% | +3.15% |
JSE Gold | 1569.63 | -32.72 | +4.43% |
USD | 82.48 | -0.34 | -0.29% |
Euro | 130.30 | +0.19 | -0.19% |
Yen | 101.97 | +1.26 | +1.51% |
Oil | $93.00 | -$0.64 | +5.67% |
10-Year | 1.663% | -0.048 | -2.35% |
Bond | 148.78125 | +0.84375 | +0.42% |
Dow | 14712.55 | +0.08% | +1.13% |
Nasdaq | 3279.26 | -0.33% | +2.28% |
S&P | 1582.24 | -0.18% | +1.74% |
The Metals:
Gold climbed $20.90 to $1485.20 in early Asian trade and fell back to $1459.20 at about 4AM EST before it rallied back to as high as $1482.92 in late morning New York trade and then dropped to a new session low of $1448.50 in early afternoon trade, but it then bounced back higher in the last couple of hours trade and ended with a loss of just 0.48%. Silver rose to as high as $24.824 in early Asian trade before it fell back to $23.874 in London and then climbed to as high as $24.52, but it then fell back to as low as $23.645 and ended with a loss of 1.65%.
Euro gold fell to about €1118, platinum gained $10.50 to $1476, and copper fell 6 cents to about $3.18.
Gold and silver equities fell over 4% by early afternoon before they bounced back higher at times, but they still ended with over 3% losses.
The Economy:
Report | For | Reading | Expected | Previous |
GDP | Q1 | 2.5% | 2.8% | 0.4% |
Chain Deflator | Q1 | 1.2% | 1.6% | 1.0% |
Michigan Sentiment | Apr | 76.4 | 72.4 | 72.3 |
All of this week’s other economic reports:
Next week’s economic highlights include Personal Income and Spending, Core PCE Prices, and Pending Home Sales on Monday, the Employment Cost Index, Case-Shiller 20-city Index, Chicago PMI, and Consumer Confidence on Tuesday, ADP Employment, the ISM Index, Constructions Spending, and a FOMC Rate Decision on Wednesday, Initial Jobless Claims, Productivity, Unit Labor Costs, and the Trade Balance on Thursday, and April’s jobs data, Factory Orders, and ISM Services on Friday.
The Markets:
Charts Courtesy of http://finance.yahoo.com/
Oil fell along with the U.S. dollar index on today’s worse than expected GDP report that sent treasuries higher and the Dow, Nasdaq, and S&P mostly lower.
Among the big names making news in the market Friday were Burger King, Chevron, Samsung, Boeing, D.R. Horton, and AIG.
The Commentary:
“Time constraints have prevented me from writing as much as I would have preferred to this week but I want to refer back to my last comments from Wednesday this week when I posted a 2 hour gold chart.
My argument back then was and still remains the same today - there is no enthusiasm to chase prices higher at the Comex gold market. That is indicated by the falloff in volume as price has moved higher. See the chart below...
In other words, this is more of a case of traders covering short positions out of fears popping up over bona fide reports of incredibly strong buying of physical gold than it is over a new found bullish enthusiasm on the part of the hedge fund/investment community.
Yesterday, the return of RISK ON trades came on the heels of the rotten economic data out of the Euro Zone. Once again we are in a situation where for the equity perma bulls, it is "Head's, I win; Tail's, you lose". The news was so bad that traders just knew it in their bones that ECB President Draghi is going to announce an interest rate cut next week. That of course is just what the equity bulls ordered.
Today however was a different case with the moribund GDP reading here in the US serving to remind us all that in spite of all of this reckless Central Bank liquidity creation, we are barely managing to limp along at the bottom when it comes to economic growth. Copper obviously wanted no part of this news today as it appears the short covering rally in that base metal might have come to an end also.
With the yield on the Ten Year Treasury note dipping back to 1.66% and with the 30 Treasury bond futures up nearly a full point today (not to mention the regularly recurring stupidity trade of buying the Yen as a safe haven), it is evident that whatever risk traders were willing to put on yesterday, they are taking it off today.
When it comes to gold here is the situation as I see it (nothing has changed in this regards but I want to restate it again) - Physical demand for gold is very, very strong; however, it is very, very strong at REDUCED PRICE LEVELS. Gold went on a fire sale last week and buyers jumped all over it. After all, a $200 drop in the matter of a couple of days is enough to get the attention of anyone wishing to acquire a metal that had a handle of "15" in front of it and then suddenly had one of "13". This has served to put a solid floor of support beneath the market and I believe a bottom that should hold if prices were to move back down towards that level in the near future for any reason.
The problem that I see is the same; while this sort of demand can bottom a market it CANNOT TAKE IT SHARPLY HIGHER without INVESTOR DEMAND from the hedge funds. Why? Because buying of physical is price conscious. People buy the stuff because it is so cheap. When it jumps back up too sharply, that kind of buying dissipates. What is then needed to take the price higher is the kind of mindless buying by hedge fund algorithms which have no conception of value whatsoever but are programmed to only chase motion.
Value based buyers acquire the metal when they perceive it to be cheap or underpriced. Hedge funds buy the metal when it keeps getting more and more expensive. Their buying kicks in when the value based buying eases off. Until the hedgies come in, what will happen is that price will move up to the point where the demand from the value based crowd gets choked off and loses some of its force.
The result is a market that has bottomed out but needs a shift in sentiment among the hot money crowd. With today's anemic GDP number, none of them are the least bit worried about inflation right now. Any doubts about that can be seen in the bond market price action as noted above.
The bulls did manage to take price through $1440, a level which earlier this week has attracting selling. When they then pushed it through $1450, traders who had sold against that level covered and that took it to $1470, another area that I was watching. Asian demand for the metal enabled buyers to take it another notch higher but as it moved into the mid-morning of the Western session, the buyer just dissipated and short term oriented traders took that as a signal to close out some nicely profitable long positions recently established.
Notice how the volume LEAPS as the price drops. That is both long liquidation from day traders/short term guys and fresh shorting. The price action in the HUI, confirms that.
What we want to watch now is how gold acts as it nears the $1440 level. That level was serving as an upside barrier earlier this week and now reverses polarity and becomes a level of chart support. If gold can hold above this level, and so far it is, it will give bulls some confidence to wade back in and will make a few of those brand new shorts reluctant to push their positions. We would then expect to see the metal move back higher and take another shot at resistance. I would want to watch both the volume and the price action were that to occur to see if this thing has a shot at $1500. Remember, it is still an intermediate term bear market in gold so until the technicals change, strength will be sold unless we get a violation of resistance and a shift in the momentum of this market.
Did anyone notice how the miners faded well off their highs late in the session yesterday even as the rest of the equity world was celebrating another back slapping day of further giddiness. That was another clue that the euphoria in gold was about to hit a temporary wall.
The HUI managed to claw its way back into the technically significant gap region I have previously noted, but as expected, it could not CLOSE THROUGH the GAP to end out the week. That must occur for this to kick up another leg higher. It did manage to close in the gap yesterday but the manner in which it faded out towards the end of the session forebode further downside today.
What does this translate to in terms of the gold shares from a technical perspective as a result? Same as gold - the market posture is decidedly bearish but it does appear as if a bottom is in. The sector is lacking a strong upside catalyst however at the present time. Value based buying is holding it up but the momentum based crowd is absent on the buy side. The result - sideways trade above support near 255 until or unless that gives way or the index pushes past the top of the gap just above 300.
By the way, the HUI to Gold ratio continues to drop.
One thing I am noting today is that the Gold Volatility Index is moving higher again. It had been falling as gold was moving higher reflecting the lack of concern about further price weakness of any sharp degree. With price having regained a very large portion of the overall price decline since key support at $1525 gave way, it looks as if there is some nervousness building on the part of players about some potential for some more downside. We'll see if that is correct or not.”- Dan Norcini, More at http://www.traderdannorcini.blogspot.com/
GATA Posts:
Jeff Nielson: Investors, central banks flee government currencies, not gold
Ohmigod! A gold mining company notes suspicions of market manipulation
Hugo Salinas Price: How to get the U.S. economy going again
Swiss banking chief tries to quell clamor about gold
Central banks load up on equities
The Statistics:
Activity from: 4/25/2013
Gold Warehouse Stocks: | 8,143,247.898 | +152,448.944 |
Silver Warehouse Stocks: | 166,140,642.024 | -477,691.132 |
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 | 1090.270 | 35,053,273 | US$51,559m |
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$6,472m |
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$524m |
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 2.707 tonnes.
COMEX Gold Trust (IAU) Total Tonnes in Trust: 195.56: No change from yesterday’s data.
Silver Trust (SLV) Total Tonnes in Trust: 10,366.89: +48.07 change from yesterday’s data.
The Miners:
Pretivm’s (PVG) closed financing, Agnico-Eagle’s (AEM) first quarter results, and First Majestic’s (AG) positive litigation judgment were among the big stories in the gold and silver mining industry making headlines Friday.
WINNERS
1. Golden Minerals | AUMN +4.57% $1.83 |
2. Banro | BAA +3.15% $1.31 |
3. Timmins | TGD +2.50% $2.46 |
LOSERS
1. Rubicon | RBY -8.95% $1.73 |
2. Seabridge | SA -6.36% $10.75 |
3. Agnico-Eagle | AEM -6.04% $30.97 |
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 Friday, 26 April 2013 | Digg This Article
| Source: GoldSeek.com
Gold Seeker Weekly Wrap-Up: Gold and Silver Gain About 5% and 3% on the Week
