-- Published: Thursday, 4 September 2014 | Print | Disqus
Gold jumped up to $1276.70 at about 9:20AM EST, but it then fell back off for most of the rest of trade and ended with a loss of 0.56%. Silver slipped to as low as $19.03 and ended with a loss of 0.73%.
Euro gold rose to about €975, platinum lost $7 to $1401, and copper climbed a couple of cents to about $3.15.
Gold and silver equities saw slight gains for most of the morning, but they then fell back off in afternoon trade and ended with over 3% losses.
Unit Labor Costs
Tomorrow brings August’s jobs data.
Charts Courtesy of http://finance.yahoo.com/
Oil fell as the U.S. dollar jumped markedly higher after the ECB unexpectedly cut interest rates and announced plans to start buying asset-backed securities and covered bonds.
ECB cuts rates to ward off euro zone deflation threat Reuters
ECB Readying Broad Asset-Backed Purchases After Rate Cut, Draghi Says Bloomberg
Treasuries Drop as Yields Top Developed Peers by Most in 7 Years Bloomberg
The Dow, Nasdaq, and S&P turned lower in the last couple of hours of trade on worries about tomorrow’s jobs data.
Among the big names making news in the market today were JPMorgan, BMW, Audi, and J&J.
“’Stick a fork in it - it's done!’ is a common expression one hears down in Texas during Bar-B-Q season.
One could say the same thing about the Euro after the ECB slashed interest rates from 0.15% to a paltry 0.05%. I suppose the only thing left is to slash to absolute zero at this point and start handing out money to the general public.
Regardless, the Euro went "KERPLUNK" and the Dollar soared higher as the interest rate differentials between the two continue to be accentuated in the minds of forex traders.
Take a look at the Euro chart . After a brief period of consolidation in early August, the currency has been careening lower, crashing through one layer of chart support after another.
If today's low near the 1.300 level fails to generate any buyers, another 200 point plunge to down near 1.2800 is not out of the question. The RSI is deeply oversold but when it comes to currencies, oversold or overbought rarely mean much if anything.
With the Eurozone economy sluggish at best ( and being hurt by sanctions imposed on Russia ), there is simply not much reason for traders to turn aggressive buyers of the common currency as the Central Bank is trying everything but its own version of QE at this point.
They have made the usual calls for banks to lend but what good does that do if not enough want to borrow? Negative interest rates to essentially punish banks for not lending seem to be foolish to me as it only encourages reckless lending to those not credit worthy and thus creates another entire set of problems in my view.
Meanwhile, the counterpart of the Euro, AKA, the Dollar, is soaring. Look at the weekly chart for some longer term perspective.
The USDX has gained 5.5% since early May of this year and is currently working back to the top side of a more than two year long range trade. There is some light resistance near 84 with more formidable resistance near 85. If the Dollar breaks through both levels, one would have to say that a run to 88-89 is not out of the question.
The Daily chart shows a powerful uptrend underway. Simply put, it has become a matter of dueling economic performances. Traders are looking at the relative performance of the various nations/zones whose currencies comprise the USDX and compared those to that of the US and are voting in favor of the US.
This strength in the Dollar also tends to depress commodity prices in general. One thing that concerns me is that we are getting a surge higher in the Dollar at exactly the same time we are getting more and more confirmation of a bumper corn and bean crop. As a rising Dollar makes US grain/beans more expensive on the global market against our competition, prices may have to take into account the higher Dollar. Translation - foreign buyers of US grain may be waiting for prices to fall yet further than they otherwise would have to help offset the stronger greenback.
One last thing- this rise in the US Dollar is not going to make it any easier for gold to rise in price. In foreign currency terms, gold is doing okay, especially EuroGold but as said before here many times, it is geopolitical events supporting the metal.
As far as Europeans are concerned, an interest rate environment such as the ECB is creating, is a two-edged sword. On the one hand, it lowers the opportunity cost of holding gold since bonds there pay next to nothing and thus incentivizes ownership of gold. On the other hand, the stronger Dollar ( via weaker Euro) raises the price of the metal and thus makes it more expensive to buy and own.
That is why one must view the chart to gauge which view will dominate. If EuroGold takes out the psychological and technical resistance level of 1000, then maybe we have something. For now, it is range bound.”- Dan Norcini, More at http://www.traderdannorcini.blogspot.com/
ECB unexpectedly cuts interest rates as outlook darkens
Hugo Salinas Price: How the dollar will die
Jan Skoyles on asset inflation, Asian gold buying, bitcoin, and competing currencies
From chocolate to beer, 'shrinkflation' hits the supermarket
Activity from: 9/3/2014
Gold Warehouse Stocks:
Silver Warehouse Stocks:
Global Gold ETF Holdings
[WGC Sponsored ETF’s]
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
London Stock Exchange (LSE) AND NYSE Euronext Paris AND Borsa Italiana AND Frankfurter Wertpapierbörse (Deutsche Börse - Xetra)
Gold Bullion Securities
London Stock Exchange (LSE) AND NYSE Euronext Paris AND Borsa Italiana AND Frankfurter Wertpapierbörse (Deutsche Börse - Xetra) AND NYSE Euronext Amsterdam
ETFS Physical Gold
Australian Stock Exchange (ASX)
Gold Bullion Securities
Johannesburg Securities Exchange (JSE)
New Gold Debentures
Note: Change in Total Tonnes from yesterday’s data: SPDR subtracted 2.693 tonnes.
COMEX Gold Trust (IAU) Total Tonnes in Trust: 165.23: -0.04 change from yesterday’s data.
Silver Trust (SLV) Total Tonnes in Trust: 10,363.91: -7.44 change from yesterday’s data.
Goldcorp’s (GG) production forecast, Newmont’s (NEM) deal with the Indonesian government, NovaGold’s (NG) plans to invest in NFWF's Alaska Fish and Wildlife Fund conservation initiative, Coeur’s (CDE) filed technical report, SilverCrest’s (SVLC) drill results, and Santacruz Silver’s (SCZ.V) amended agreement were among the big stories in the gold and silver mining industry making headlines today.
AAU +7.41% $1.45
XPL +3.45% $1.50
NSU +2.42% $4.23
MUX -8.96% $2.44
RBY -8.63% $1.27
3. Silver Standard
SSRI -7.98% $8.03
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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-- Published: Thursday, 4 September 2014 | E-Mail | Print | Source: GoldSeek.com