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Gold Seeker Closing Report: Gold Slips and Silver Dips
By: Chris Mullen, Gold-Seeker.com

 -- Published: Thursday, 20 March 2014 | Print  | Disqus 

 

Close

Gain/Loss

Gold

$1327.00

-$2.30

Silver

$20.29

-$0.28

XAU

98.54

+0.27%

HUI

236.69

+0.59%

GDM

706.66

-0.33%

JSE Gold

1574.00

+3.26

USD

80.21

+0.21

Euro

137.77

-0.53

Yen

97.62

-0.05

Oil

$99.43

-$0.94

10-Year

2.775%

+0.003

Bond

133.71875

+0.21875

Dow

16331.05

+0.67%

Nasdaq

4319.28

+0.27%

S&P

1872.01

+0.60%

 
 

 

The Metals:

 

Gold fell $8.63 to $1320.67 at about 9AM EST before it rose to see modest gains by late morning in New York, but it then fell back off in late trade and ended with a loss of 0.17%.  Silver slipped to as low as $20.162 and ended with a loss of 1.36%.

 

Euro gold edged above €963, platinum lost $14.30 to $1429.70, and copper fell 5 cents to about $2.94.

 

Gold and silver equities fell over 1% at the open before they rallied to see about 1% gains by midday, but they then fell back off into the close and ended near unchanged.

 

The Economy:

 

Report

For

Reading

Expected

Previous

Initial Claims

3/15

320K

330K

315K

Existing Home Sales

Feb

4.60M

4.60M

4.62M

Philadelphia Fed

Mar

9.0

2.0

-6.3

Leading Indicators

Feb

0.5%

0.3%

0.1%

 

There are no major economic reports due out tomorrow.

 

The Markets:

 

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

 

Oil fell as the U.S. dollar index climbed higher on the thought that the fed might raise interest rates sooner than previously expected.

 

Treasuries waffled traded mixed while the Dow, Nasdaq, and S&P rose on decent economic data.

 

Among the big names making news in the market today were ING Groep, Apollo, Time Warner Cable, and Lennar.

 

The Commentary:

 

Easing Ukranian Tensions, Hawkish Fed, undercut Gold

 

Take a look at the comparison chart of the price of gold (IN BLUE ) versus the Volatility Index, or as I prefer to call it, the Complacency Index (IN RED ). By the way, this is a 2 hour chart.

The VIX measures investor nervousness, lack of confidence, fear, panic or complacency, comfort, ease, confidence. When it is rising, investors are nervous; when it is falling, they are confident.

 

With that in mind, observe how the VIX spiked higher as tensions began building over in Ukraine as that came onto the radar screens of traders/investors. The more the hype ramped up about WWIII, new Cold War, etc., the more nervous traders became. As the VIX soared higher, gold followed up right along with it as its safe haven status came into play.

Additionally, the US Dollar refused to get any sort of safe haven bid during the crisis, further aiding the upward path of the gold price.

Notice however, that as soon as the VIX moved lower, so too did gold. Simply put, markets that move up on geopolitical events tend to come down just as fast once traders digest the news and the worse possible outcome does not come to fruition.

As the VIX moved lower and investors began to look at the Western sanctions, they realized how insignificant those were going to be and the extremely limited impact it would make on markets worldwide and they began moving back into stocks as nervousness faded.

Yesterday the Fed came out with what were generally interpreted as hawkish comments. Traders were caught off guard by Fed Chair Yellen's comments that interest rates would be going up sooner than expected. The current view, now that the Fed has made its announcement and Yellen has answered questions, is that the bond buying program (QE) will end this fall and interest rates will possibly move higher 6 months later. Effectively, next spring will see higher yields is how the market is viewing the Fed's new standing.

With no inflation in sight as far as the market (and the Fed) is concerned, traders are moving out of gold. Adding to that is the fact that concerns over China's economic growth are mounting. This is putting pressure on some key commodity markets, notably copper and that is working to take some of the buying out of the sector.

An additional headwind for gold is the strengthening Dollar. With the Fed talking higher interest rates, the greenback is drawing support at the expense of the European currencies in particular, as well as the commodity currencies, such as the Canadian and Australian Dollar.

As long as there is the potential for further flare ups or escalation of tensions in Ukraine and in Crimea, traders might be hesitant to remove the total " WAR" premium out of the gold price. They seem to have just about removed it all at this point but it is holding above $1320 for now. That is the zone that they needed to hold in order to maintain control of this market on the daily chart. So far, they are still hanging in there. It looks to me like the buying in the mining shares is offering some support to the actual metals at the Comex.

Silver by the way, is once again flirting with being a teenager. Copper continues to act as an anchor on the grey metal.

 

The Dollar has generated a buy signal on several of the daily charts. Gold holding support therefore must be a bit encouraging to the bulls but I want to stress this again - this must hold or they will cede control back to the bears and set up a likely test at $1305 - $1300.

Lastly, take a look at the Goldman Sachs Commodity Index, the daily chart. It had managed an upside breakout recently but has since surrendered those gains and is now trading back below its former breakout point which seems to once again be acting as overhead resistance to the sector as a whole. There remain individual commodity markets which are still showing signs of strength but we are trying to see the sector as a whole to gauge whether or not there is a general bid into this asset class. With the US Dollar strengthening once again, my guess is that some of the hot money from index funds that was blindly buying across the sector will be forced to be much more choosy.- Dan Norcini, More at http://www.traderdannorcini.blogspot.com/

 

GATA Posts:

 

 

Reuters: Chatroom evidence challenges Bank of England's story in FX probe

India allows more banks to import gold in easing of curbs

 

The Statistics:

Activity from: 3/19/2014

Gold Warehouse Stocks:

7,134,817.131

+7,330.20

Silver Warehouse Stocks:

182,847,742.740

-59,410.53

 

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

812.776

26,131,551

US$34,666m

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$5,913m

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$477m

Johannesburg Securities Exchange (JSE)

New Gold Debentures

40.03

1,287,107

US$1,783m

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

 

COMEX Gold Trust (IAU) Total Tonnes in Trust: 166.14: No change from yesterday’s data.

 

Silver Trust (SLV) Total Tonnes in Trust: 10,164.74: No change from yesterday’s data.

 

The Miners:

 

Franco Nevada’s (FNV) fourth-quarter loss and Osisko’s (OSK.TO) updated mine plan were among the big stories in the gold and silver mining industry making headlines today.

 

WINNERS

1.  ITH

THM +7.14% $1.05

2.  Fortuna

FSM +6.67% $3.84

3.  Midway

MDW +5.56% $1.14

 

LOSERS

1.  Solitario

XPL -6.90% $1.35

2.  Mines Management

MGN -5.11% $1.30

3.  Great Panther

GPL -4.96% $1.15

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: Thursday, 20 March 2014 | E-Mail  | Print  | Source: GoldSeek.com

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