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Gold Seeker Weekly Wrap-Up: Gold and Silver End Mixed on the Week
By: Chris Mullen, Gold-Seeker.com

 -- Published: Friday, 10 January 2014 | Print  | Disqus 

 

Close

Gain/Loss

On Week

Gold

$1247.10

+$18.70

+0.87%

Silver

$20.13

+$0.56

-0.15%

XAU

87.04

+3.37%

+0.47%

HUI

204.02

+3.01%

+0.26%

GDM

610.19

+3.03%

+0.47%

JSE Gold

1025.48

-10.43

-5.62%

USD

80.64

-0.30

-0.31%

Euro

136.66

+0.60

+0.59%

Yen

96.09

+0.65

+0.68%

Oil

$92.72

+$1.06

-1.32%

10-Year

2.860%

-0.103

-4.51%

Bond

130.65625

+1.3125

+1.60%

Dow

16437.05

-0.05%

-0.20%

Nasdaq

4174.66

+0.44%

+1.03%

S&P

1842.37

+0.23%

+0.60%

 
 

 

The Metals:

 

Gold saw decent gains in Asia before it fell back to $1228.59 just as this morning’s jobs report was released, but it then climbed to as high as $1248.75 by early afternoon in New York and ended with a gain of 1.52%.  Silver surged to as high as $20.25 and ended with a gain of 2.86%.

 

Euro gold rose to about €912, platinum gained $18.50 to $1432, and copper climbed 4 cents to about $3.35.

 

Gold and silver equities rose over 3% by midmorning and remained near that level for the rest of the day.

 

The Economy:

 

Report

For

Reading

Expected

Previous

Nonfarm Payrolls

Dec

74K

197K

241K

Unemployment Rate

Dec

6.7%

7.0%

7.0%

Hourly Earnings

Dec

0.1%

0.2%

0.2%

Average Workweek

Dec

34.4

34.5

34.5

Wholesale Inventories

Nov

0.5%

0.2%

1.3%

 

The BLS net birth/death adjustment subtracted 15,000 payrolls from December’s data. Private Payrolls rose 87,000.

 

Obama to Nominate Fischer, Brainard, Powell to Fed's Board Bloomberg

Bernanke gives upbeat assessment of economy to U.S. senators Reuters

 

All of this week’s other economic reports:

 

Initial Claims - 1/04

330K v. 345K

 

Consumer Credit - November

$12.3B c. $17.9B

 

ADP Employment - December

238K v. 229K

 

Trade Balance - November

-$34.3B v. -$39.3B

 

ISM Services - December

53.0 v. 53.9

 

Factory Orders - November

1.8% v. -0.5%

 

Next week’s economic highlights include the Treasury Budget on Monday, Retail Sales, Export and Import Prices, and Business inventories on Tuesday, PPI, Empire Manufacturing, and the fed’s Beige Book on Wednesday, Initial Jobless Claims, CPI, Net Long-Term TIC Flows, the Philadelphia Fed, and the NAHB Housing Market Index on Thursday, and Housing Starts, Building Permits, Industrial Production, Capacity Utilization, Michigan Sentiment, and JOLTS job openings data on Friday.

 

The Markets:

 

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

 

Oil ended decently higher in mixed trade as poor economic data was offset by the outlook for continued fed stimulus.

 

The U.S. dollar index fell and treasuries jumped higher on disappointing jobs data that held the Dow, Nasdaq, and S&P near unchanged on conflicting views about what this means for the economy and the fed’s tapering of its bond purchases.

 

Among the big names making news in the market Friday were Tiffany, Phillip Morris, Alcoa, and Target.

 

The Commentary:

 

Surprising Weak Payrolls number - What will the Fed do?  That is the question on traders' mind this AM as the jobs report detailing the December numbers shocked the market by coming in so low. The ADP numbers earlier this week had stoked expectations for a strong number above 200K. Many were looking for something closer to 250K, What they got instead was 74K.

Keep in mind that ADP (a private firm) had given us a 235,000 number on Wednesday. Also, the November payrolls number was upwardly revised from the previous 203K to 241K. That is what makes the December number so shocking.

The labor participation rate continues to shrink and this is something that runs the very real risk of becoming systemic. Sure that tends to shrink the overall unemployment number but at what cost to the rest of society?

The reaction in gold was as dramatic as was the reaction in the US Dollar. As a matter of fact, there seemed to be a bit of a resurgence in the "let's buy commodities" trade across the sector based on the weakness in the Dollar.

Crude oil moved up $1.70 a barrel at one point. Most folks would scratch their head and say, "Duh?" on something like that but we have come to expect the goofy reactions we get based off of these numbers. The market, instead of reacting with concern over the poor numbers and the resultant lower demand for energy, instead looks over at the Fed and thinks, "NO way they are going to taper right now". No immediate reduction in funny money and thus no immediate drop in liquidity being provided. Weakness in the economy means lower interest rates - lower interest rates means weaker Dollar and "Voila!,” let's buy commodities today.

The problem is that nothing has therefore changed on the perceived inflation front. I maintain that wages must increase and hiring must pick up if we are to see any signs of serious inflation arise. What today does is just refuel the fears of deflation.

Perhaps some in the market are thinking along the same line and coming to the conclusion that the Fed must also be worried about deflation reasserting itself and thus will ease back on the Tapering.

Who knows but if the last two years of bond buying by the Fed, and certainly the $85 billion/month coming out of the most recent QE4 program has not resulted in any serious inflation issues, why should we expect another 2 years, 2 months, etc of bond buying to produce any at all?

Given that backdrop, gold is still going to face headwinds as it needs to see confidence in the US Dollar eroding to mount a sustained move higher in price. Thus I see two drivers - one -the US Dollar drops sharply or - two- the economic data shows more rapid growth heating up inflationary pressures. Either way the result is the same as far as the inflation issue goes.

The metal is pressing up against the downtrending 50 day moving average, a key technical point that most traders watch closely. It has not been above this level since late October of last year and then it only managed to hold above this level for 5 days before succumbing to another bout of selling. My guess is that we can expect the same as we move ahead. I remain skeptical therefore about gold's fortunes but will respect what the chart action tells me. Right now, the jury is still out as the ADX shows a directionless market on the daily time frame.

Bulls are close to getting control of the market but are not there yet.- Dan Norcini, More at http://www.traderdannorcini.blogspot.com/

 

GATA Posts:

 

 

Dutch central bank refuses to disclose gold correspondence with other central banks

Alasdair Macleod reviews 'The Money Bubble'

Gold mining deals seen rebounding on price discount

Bill Holter: Gold Manipulation 101

 

The Statistics:

Activity from: 1/09/2014

Gold Warehouse Stocks:

7,777,822.548

+66,677.528

Silver Warehouse Stocks:

176,502,271.558

-976,698.996

 

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) AND Mexico Stock Exchange (BMV)

SPDR® Gold Shares

793.121

25,499,637

US$31,712m

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$5,525m

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$447m

Johannesburg Securities Exchange (JSE)

New Gold Debentures

41.88

1,346,506

US$1,674m

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

 

COMEX Gold Trust (IAU) Total Tonnes in Trust: 161.83: No change from yesterday’s data.

 

Silver Trust (SLV) Total Tonnes in Trust: 9,954.40: +44.91 change from yesterday’s data.

 

The Miners:

 

Jaguar’s delisting, Harmony’s (HMY) plans to cut costs, Excellon’s (EXN.TO) mine accident, Hecla’s (HL) exchange offer, and United Silver’s USC.TO) court-appointment of a receiver were among the big stories in the gold and silver mining industry making headlines Friday.

 

WINNERS

1.  Silver Standard

SSRI +7.22% $7.57

2.  NovaGold

NG +6.90% $2.79

3.  Endeavor Silver

EXK +6.81% $3.92

 

LOSERS

1.  Almaden

AAU -1.64% $1.20

2.  Richmont

RIC -1.06% $1.217

3.  Alexco

AXU -0.76% $1.31

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 2014

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.

 


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 -- Published: Friday, 10 January 2014 | E-Mail  | Print  | Source: GoldSeek.com

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