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Gold Seeker Closing Report: Gold and Silver Fall About 1% and 3%
By: Chris Mullen, Gold-Seeker.com

 -- Published: Wednesday, 26 February 2014 | Print  | Disqus 

 

Close

Gain/Loss

Gold

$1329.00

-$11.60

Silver

$21.24

-$0.62

XAU

100.24

-1.34%

HUI

240.00

-1.52%

GDM

723.08

-1.32%

JSE Gold

1473.66

-46.50

USD

80.40

+0.24

Euro

136.85

-0.60

Yen

97.71

-0.21

Oil

$102.59

+$0.76

10-Year

2.673%

-0.028

Bond

134.1875

+0.5625

Dow

16198.41

+0.12%

Nasdaq

4292.06

+0.10%

S&P

1845.16

+0.00%

 
 

 

The Metals:

 

Gold fell $17.79 to $1322.81 at about 11AM EST before it bounced back higher midday, but it still ended with a loss of 0.87%.  Silver slipped to as low as $21.102 and ended with a loss of 2.83%.

 

Euro gold fell to about €971, platinum lost $9 to $1426, and copper fell a few cents to about $3.21.

 

Gold and silver equities fell about 2% by late morning and remained near that level for the rest of the day.

 

The Economy:

 

Report

For

Reading

Expected

Previous

New Home Sales

Jan

468K

400K

427K

 

Tomorrow brings Initial Jobless Claims, Durable Goods Orders, and testimony from new fed chairwoman Yellen before the Senate Banking Committee.

 

The Markets:

 

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

 

Oil remained higher after the Energy Information Administration reported that crude inventories rose 100,000 barrels, gasoline inventories fell 2.8 million barrels, and distillates rose 300,000 barrels.

 

The U.S. dollar index jumped higher on surprisingly good housing data.

 

Treasuries added to modest gains after today’s $35 billion 5-year note auction sold at yield of 1.53% with a bid to cover of 2.98.

 

The Dow, Nasdaq, and S&P traded mostly higher on positive economic data and company reports.

 

Among the big names making news in the market today were J.C. Penney, Credit Suisse, Target, Lowe’s, Abercrombie, Barnes & Noble, and Dollar Tree.

 

The Commentary:

 

Yesterday's headline was; "A Wee Bit of Commodity Weakness". Today, that "wee bit" became a lot larger as the combination of a waning upside momentum met early end-of-the-month book squaring.

February has been an incredibly profitable month for anyone who was long the commodity sector. So much so that the famed February Break apparently decided to "take a break" from showing up. Maybe it will appear here at the end of the month or perhaps it has been a bit postponed until early March.

Either way, several key commodity futures markets experienced some big downside reversal patterns. That is taking some of the buying momentum out of the general sector as traders, particularly hedgies, do not want to let these profits slip away prior to getting those monthly statements out to their clients showing them how smart and clever they have been with their investment capital this month.

Here is a BIGGIE - Natural Gas and a HUGE downside reversal pattern.

 

Check out OATS - which is not a very largely traded market from a spec standpoint but nonetheless tends to be regarded by many as a type of general bellwether for the grain sector.

 

Here is Cotton.


And of course, Copper, which I continue to maintain has not validated the move higher across so many different commodities as it has been a laggard ( something which should not go unnoticed by those talking up hyperinflation concerns ).

 

This last chart of copper is the one that has made me such a skeptic when it comes to the recent buying binge that occurred throughout the commodity sector. In my view, you cannot have bellwether copper going one way on chatter about rapid growth and escalating inflation concerns all the while you have the rest of the sector moving higher. Something was not making any sense.

The month is not yet over but I must admit that this is one of the weirdest months I can ever remember because they entire commodity sector was on a tear higher and for the life of me, I haven't a clue as to what the heck was behind the move in some of these markets.

It has certainly been a momentum-driven buying event but other than perhaps some desire for diversification away from equities and into commodities, I failed to see the reason for this sort of wild buying. There has been a tremendous amount of damage done to the bears in the sector who were forced out across so many of these markets. Now the question, at least in my mind, is where do we go from here?

Further clouding the issue is this end-of-the-month book squaring. I want to see how things look at the close of trading this coming Friday ( the last day of this month ) and then see if money is put back to work in the commodity sector to start off the month of March or if we go back to range trading with markets being moved more by their own specific set of demand/supply fundamentals instead of this rather mindless and indiscriminate entire sector buying that we have seen this month of February.

Notice by the way, that both gold and silver are moving lower in sync with the sector. Also putting some pressure on both of the precious metals is a firm US Dollar and generally stable interest rates which seemed to stopped moving lower, at least for today.

Gold has stalled out at the resistance zone noted on the chart but still remains above initial chart support as dip buyers are still coming in on the heels of further nervousness involving Ukraine. The ADX has been steadily rising indicating the good trending move to the upside but it too is beginning to show some signs of that fading upward momentum.

 

The USDX has managed to get a nice bounce away from strong chart support near the 80 level. The New Home sales number seems to have made some Dollar bears nervous.

Try not to draw too much from any one day's worth of price action. Remaining flexible and not dogmatic is wise during this zany period.- Dan Norcini, More at http://www.traderdannorcini.blogspot.com/

 

The Statistics:

Activity from: 2/25/2014

Gold Warehouse Stocks:

7,156,331.156

-14,396.762

Silver Warehouse Stocks:

182,836,535.349

+798,715.78

 

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

803.704

25,839,887

US$34,400m

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$5,890m

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$476m

Johannesburg Securities Exchange (JSE)

New Gold Debentures

41.25

1,326,273

US$1,676m

 Note: Change in Total Tonnes from yesterday’s data: SPDR added 2.099 tonnes.

 

COMEX Gold Trust (IAU) Total Tonnes in Trust: 164.24: No change from yesterday’s data.

 

Silver Trust (SLV) Total Tonnes in Trust: 10,159.49: No change from yesterday’s data.

 

The Miners:

 

Fresnillo PLC (FRES.LN) explosives permit, Gold Resource’s (GORO) acquired interest in Canamex Resources (CSQ.V), and First Majestic’s (AG) 2013 results were among the big stories in the gold and silver mining industry making headlines today.

 

WINNERS

1.  Freeport

FCX +1.95% $33.41

2.  Royal Gold

RGLD +1.53% $67.82

3.  Rubicon

RBY +1.50% $1.35

 

LOSERS

1.  Rio Alto

RIOM -7.92% $2.15

2.  Almaden

AAU -6.47% $1.59

3.  Great Panther

GPL -6.40% $1.17

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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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: Wednesday, 26 February 2014 | E-Mail  | Print  | Source: GoldSeek.com

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