The Metals:

Gold climbed $10.78 to $1277.88 at about 8:20AM EST before it chopped back lower at times, but it still ended with a gain of 0.59%.  Silver rose to as high as $20.287 and ended with a gain of 0.1%.

Euro gold rose to about €934, platinum gained $2 to $1381, and copper fell a couple of cents to about $3.22.

Gold and silver equities saw over 3% gains about a half hour into trade and remained near that level for the rest of the day.

The Economy:

There were no major economic reports today.  Tomorrow at 10AM EST brings JOLTS Job Openings data for December and the Wholesale Inventories report from December.

The Markets:

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

Oil edged above $100 a barrel as the U.S. dollar index fell ahead of tomorrow’s testimony from new fed chairwoman Janet Yellen before the House Financial Services Committee.

Treasuries waffled near unchanged along with the Dow, Nasdaq, and S&P in relatively quiet trade.

Among the big names making news in the market today were Barclays, Vodafone, Boeing, McDonald’s, Chrysler, and Kite Realty.

The Commentary:

“Dow Jones is reporting this evening that the China Gold Association has provided some numbers detailing both Chinese gold demand and production for 2013.

According to the Association, Chinese gold output rose 6.2% on the year reaching 428.16 metric tons.

That continues the trend of China being the world's largest gold producer for the last seven years.

Chinese gold consumption hit a record 1,176.4 tons in 2013 - that was up 41.4%.

Chinese gold jewelry was up 42.5% to 716.5 tons while gold bar demand rose 56.6% to 375.7 tons.

My take on this is that it continues to underscore that demand from Asia, particularly China has been robust and looks to remain that way, especially on dips lower in price.

Western based investment demand is still the missing ingredient in the gold equation. If the Dollar continues to weaken, gold should be able to breach overhead technical price chart resistance levels but that will entail the inflow of hedge fund monies back to the long side of the gold market. We will continue to monitor the reported holdings of GLD to get a read on this.

There seems to be enough concerns about the both geopolitical concerns and monetary/currency/credit issues to keep gold from breaking down in price at this time but it still lacks a catalyst to kick it into a strong uptrending move.

Will we get one? We'll see. Keep an eye on the commodity complex as a whole. If hedge funds begin to view commodities as undervalued in relation to equities, they will return to the buy side across the sector although they will tend to be a bit more choosy as to which markets they will embrace. Specific demand/supply factors will be more closely scrutinized rather than the strategy they took back when QE was first introduced. That consisted of buying everything in sight in the commodity complex no matter what it was.

Higher beef and pork prices are a given this year. Soybean prices have been sneaking higher even in the face of a record S. American harvest expected. Corn, which was one of the worst performing commodities last year, has picked up in price somewhat while coffee prices have shot up sharply. Sugar has been bouncing around a bottom for some time now. We all know what natural gas and heating oil prices have done this winter.

It could very well be that the old adage: The best cure for low prices is low prices" may be at work again as demand is picking up for some of these low priced commodities.

I remain leery of the "February break" as it is a fairly regular occurrence across the commodity sector but as to its specific timing, it is difficult at times to read its arrival. Sometimes it comes early; sometimes it comes late. And to answer a question from a reader, yes, it does tend to affect the precious metals as well.

Based on the price action of some of these individual commodity markets, the break may have already occurred. I simply am not sure but am waiting and attempting to discern from the price action across the sector whether we have seen the "break" or not.

Just to repeat a warning I posted the other day in a column - traders - be careful in the commodity sector right now as many markets are treacherous. Action has been of the whipsaw nature and can really damage you if you are not alert and nimble. Whatever you do - do not remain too dogmatic but rather stay flexible and above all, humble!”- Dan Norcini, More at http://www.traderdannorcini.blogspot.com/

GATA Posts:

Gold demand in China at record

Bron Suchecki: How bullion banks work together to minimize their need for bullion

The Statistics:

Activity from: 2/07/2014

Global Gold ETF Holdings

[WGC Sponsored ETF’s]

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

COMEX Gold Trust (IAU) Total Tonnes in Trust: 162.58: +0.76 change from yesterday’s data.

Silver Trust (SLV) Total Tonnes in Trust: 10,045.79: No change from yesterday’s data.

The Miners:

AngloGold’s (AU) mine strike and binding agreement to sell its Navachab Gold Mine, Golden Star’s (GSS) updated Mineral Resource and Reserve estimate, and Yamana’s (AUY) preliminary operational results for the fourth quarter and full year 2013 were among the big stories in the gold and silver mining industry making headlines today.

WINNERS

LOSERS

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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• http://www.goldseek.com
• http://www.silverseek.com
• http://www.goldreview.com 

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