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Gold Seeker Closing Report: Gold and Silver End Slightly Higher Again
By: Chris Mullen, Gold-Seeker.com

 -- Published: Tuesday, 20 May 2014 | Print  | Disqus 

 

Close

Gain/Loss

Gold

$1294.70

+$1.10

Silver

$19.42

+$0.03

XAU

88.38

-0.47%

HUI

216.99

-0.11%

GDM

648.22

-0.20%

JSE Gold

1478.88

-0.78

USD

80.03

+0.02

Euro

136.99

-0.11

Yen

98.74

+0.19

Oil

$102.44

-$0.17

10-Year

2.509%

-0.027

Bond

137.25

+0.28125

Dow

16374.31

-0.83%

Nasdaq

4096.89

-0.70%

S&P

1872.83

-0.65%

 
 

 

The Metals:

 

Gold dropped down to $1286.13 at about 8:20AM EST before it jumped up to $1296.56 by midday in New York and then chopped back lower at times, but it still ended with a gain of 0.085%.  Silver slipped to $19.259 before it rose to $19.455 and then also fell back off, but it still ended with a gain of 0.15%.

 

Euro gold rose to about €945, platinum remained at $1465, and copper fell a couple of cents to about $3.14.

 

Gold and silver equities traded mostly slightly lower and ended with modest losses.

 

The Economy:

 

Fed’s Dudley Sees ‘Relatively Slow’ Pace of Tightening Bloomberg

Fed's Plosser warns rate hike may come sooner than expected Reuters

 

There were no major economic reports today.  Tomorrow brings FOMC minutes from the fed’s April 30th meeting.

 

The Markets:

 

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

 

Oil held steady ahead of tomorrow’s inventory data.

 

The U.S. dollar index found slight gains as the Australian dollar dropped after the “Reserve Bank of Australia’s May meeting minutes signaled it was likely to maintain record-low interest rates.”

 

Treasuries rose as the Dow, Nasdaq, and S&P dropped on poor earnings reports.

 

Among the big names making news in the market today were GM, HSBC, JPMorgan, Credit Agricole, Home Depot, Target, Staples, and JPMorgan.

 

The Commentary:

 

There was some news today dealing with gold demand from out of China, now the world's largest gold consumer, and it was not particularly friendly for the yellow metal.

The World Gold Council announced that Q1 gold demand was 18% less than the previous year for the same time period. It was the 55% drop in bar and coin purchases that was primarily behind the fall off.

India was not exempt either as its gold demand fell 26%.

The WGC data showed an overall drop in global demand by 52% compared to a year ago resulting in a four year low.

Combine this with the big drop in GLD holdings, and you can see why gold has thus far been stymied in any attempt to mount a sustained upward move in price. The demand simply is not there.

That could change but until it does, the metal will continue to attract selling on rallies.

By the way, as an aside, this is another of the reasons that I suggest that the readers here ignore the now commonplace, breathless talk about "gold backwardation". If gold demand were that strong as these non-stop gold promoters insist, the WGC would not be reporting falling demand. Then again, some of these charlatans will no doubt inform us that the WGC is in bed with the powers that be and is distorting its own data in order to steer investors away from gold.

Sweeping away all the cobwebs and clearing the fog from their obfuscations, the gold price chart continues to reveal that pattern that is making me nervous about its fortunes. The pattern of LOWER HIGHS is not changing. Rallies are attracting selling at progressively lower points and while support is holding, the persistent inability of the mining shares to get anything going on the upside, is suggesting (note - this is not conclusive yet) that the support level is not going to hold.

The events in Ukraine remain a wild card however. The upcoming vote is going to be closely watched but more so, the reaction to that vote. Also, any further weakness in the broader equity markets will bring, as it did in today's session, more safe haven buying into the yellow metal. Some equity players are unsure whether the weakness in the smaller cap stocks is going to spillover into the larger caps. It seems that anytime stocks waver in the least, gold gets a safe haven bid. It is just one more thing for traders to have to decipher when attempting to approach this market for a trade. One thing is for certain - trading gold has become a shortest of time frame trades. One cannot hold a position for any length of time in this completely unpredictable and volatile environment.


Just today, after the Russell 2000 had managed nice back to back recoveries from the recent selling, it fell lower again. Currently it is down 1.96% compared to the 0.84% fall in the S&P 500 index and a 0.99% drop in the Dow. At the same time, the yield on the Ten Year Treasury has moved slightly lower once more. One can see the corresponding linkage when these safe haven/risk aversion moves are underway. Small Cap stocks underperforming mid to large caps is a sure sign of this risk aversion trade. Both the Yen and the Dollar are also a wee bit higher at the moment. Disappointing sales numbers from retailers seemed to be the culprit that induced the selling in the equities, brought a bid into gold and the other safe havens.

Here is a chart of the GDXJ. As you can see, it is working on putting in the lowest daily closing price since April 17th of this year; in other words, the lowest close in a month. It is sitting right at a key support level so if the juniors are going to manage a bounce, they are going to have to do it almost immediately or risk another leg down. The ADX is rising once more indicating that the potential for a trending move is now more realistic but until that support level gives way, the index is still in a range, albeit at the bottom of the range.

 

The Daily Chart of the HUI is not any better. It is working on the lowest closing price in three months.

 

On the grains front - traders are back to chasing soybeans higher once more, as if we are going to run completely out of beans before turning right around and throwing them all out. This market is about as convoluted as I can ever recall seeing it, especially the old crop as the situation involving those tight carryover stocks is at the forefront of their minds again. Technically based buying was seen in new crop beans as overhead resistance levels were taken out which brought in momentum-based buying. That buying then evaporated and sellers took over. Right now the beans are lower but whether or not they stay there or go on another wild tear higher is anyone's guess.

The initial catalyst behind the early session buying was news that China was into the US bean market as USDA this morning announced a purchase of 110,000 mt of optional origin beans. Combine those two words, "China" and "beans" and the result is always buying in the pit.

KC wheat is outperforming the Chicago wheat market as deterioration of that crop was reported yesterday. While recent rains will have helped ameliorate the slide in condition ratings, traders were looking backward at the damage and felt that perhaps some got too optimistic on prospects too quickly. After all, wheat prices had dropped over $0.80/bushel in less than two weeks time. Throw in the fact that the HRS crop is behind schedule for planting and that was enough to convince some shorts to go ahead and book some gains.

Corn is being pressured however by a strong planting pace (73% compared to the 5 year average of 76% and last year's 65%) although some of the northern tier states are running behind the norm. It does look like there is going to be an open window up there however this week so traders are looking at substantial progress to be made by the time next Monday rolls around and we get the new and updated planting progress report. Generally speaking, from this point on out, rains will now tend to be viewed as helpful for the crop.

For corn, 34% of the crop has emerged compared to the 5 year average of 42% and last year's 17%. Beans are 9% emerged compared to an 11% five year average and last year's 3%.

The cheaper corn, along with good pasture conditions, and tightness for feeder supplies is driving feeder cattle prices to record high prices. How high can they go is the big question at this point.

Let's see what we get when the trading for today's session ends. Trying to extrapolate from daily market action nowadays is becoming almost an exercise in futility due to the wild price swings and shifting sentiment. Perhaps we need to just take things on an hourly basis. That seems to be the new "long term" horizon.- Dan Norcini, More at http://www.traderdannorcini.blogspot.com/

 

GATA Posts:

 

 

German TV network broadcasts long program on gold market manipulation

Only mainstream financial journalism thinks central banks are out of the gold market

 

The Statistics:

Activity from: 5/19/2014

Gold Warehouse Stocks:

8,072,445.257

+7,590.244

Silver Warehouse Stocks:

175,706,585.428

-229,287.41

 

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

781.985

25,141,596

US$32,560m

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$5,751m

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$465m

Johannesburg Securities Exchange (JSE)

New Gold Debentures

41.68

1,340,057

US$1,736m

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

 

COMEX Gold Trust (IAU) Total Tonnes in Trust: 164.02: No change from yesterday’s data.

 

Silver Trust (SLV) Total Tonnes in Trust: 10,320.26: No change from yesterday’s data.

 

The Miners:

 

WINNERS

1.  Primero

PPP +3.46% $6.57

2.  Solitario

XPL +2.65% $1.16

3.  Almaden

AAU +2.29% $1.34

 

LOSERS

1.  Mines Management

MGN -6.50% $1.15

2.  Pretivm

PVG -3.87% $7.20

3.  Avino

ASM -3.73% $1.55

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: Tuesday, 20 May 2014 | E-Mail  | Print  | Source: GoldSeek.com

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