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Gold Seeker Closing Report: Gold Falls and Silver Slumps
By: Chris Mullen, Gold-Seeker.com

 -- Published: Tuesday, 30 September 2014 | Print  | Disqus 

 

Close

Gain/Loss

Gold

$1209.00

-$7.50

Silver

$17.05

-$0.44

XAU

81.10

-2.11%

HUI

195.58

-1.99%

GDM

591.89

-1.72%

JSE Gold

1265.52

-5.63

USD

85.92

+0.31

Euro

126.30

-0.58

Yen

91.20

-0.15

Oil

$91.16

-$3.41

10-Year

2.508%

+0.017

Bond

137.96875

-0.34375

Dow

17042.90

-0.17%

Nasdaq

4493.39

-0.28%

S&P

1972.29

-0.28%

 
 

 

The Metals:

 

Gold saw slight gains in early Asian trade before it fell to $1205.22 at about 7AM EST and then rallied back to $1219.56 in the next few hours of trade, but it then fell to a new session low of $1204.87 by midday and ended with a loss of 0.62%.  Silver slipped to as low as $16.873 and ended with a loss of 2.52%.

 

Euro gold fell to about €957, platinum lost $9 to $1297, and copper fell 4 cents to about $3.01.

 

Gold and silver equities fell over 1% in the first ten minutes of trade before they rallied back to about unchanged by 10AM EST, but they then dropped to see about 2% losses by early afternoon and ended near their lows of the session.

 

The Economy:

 

Report

For

Reading

Expected

Previous

Case-Shiller 20-city Index

July

6.7%

7.4%

8.1%

Chicago PMI

Sep

60.5

61.5

64.3

Consumer Confidence

Sep

86.0

92.0

93.4

 

Tomorrow brings ADP Employment, the ISM Index, and Construction Spending.

 

The Markets:

 

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

 

Oil fell over 3% and the U.S. dollar rose as the euro ended its worst quarter since 2010 at a new 2-year low on the outlook for more monetary stimulus from the ECB.

 

Treasuries closed with modest losses while the Dow, Nasdaq, and S&P ended lower in mixed trade on disappointing economic data.

 

Among the big names making news in the market today were EBay, News Corp., Walgreen, Delta, and Pimco.

 

The Commentary:

 

WOW! The Euro is getting obliterated on the foreign exchange markets this morning as news of an horrendous reading (for the ECB) on the inflation front sent shock waves through the markets. Consumer price inflation came in at 0.3% for the month of September, the slowest rate since October 2009!

That immediately fueled further speculation that the ECB is going to be forced to implement some sort of QE over there in order to try to force a turnaround in the lackluster economy.

With a meeting of the ECB later this week, traders are paying even more close attention to what will come out of it in regards to potential moves by the Central Bank.

The currency has fallen through one level of chart support after another and as of yet still shows no sign of bottoming. Today's session low is right smack dab in the support zone noted. If that does not stem the bleeding, I do not see anything on the chart until below 1.2400.

 

With the Euro getting steamrolled and falling below support near 1.2650 and even psychological support at round number 1.2600, the US Dollar is soaring higher. As it moves higher, the commodity complex is also getting hammered.

Crude oil in particular is reeling as it is currently down more than $3.00/bbl as I type these comments. The low is near $91 thus far. There is some chart support just below the market near the zone from $90.60-$90.40, which if that fails to hold this market, is the last support zone I see on the crude chart until closer to the $87.50 level.

Silver has completely fallen out of bed as it is down more than 3% at this time and has lost psychological chart support near $17.00. It is trying to stabilize there but copper is threatening the $3.00 level and if it goes, so too will silver.

The Goldman Sachs Commodity Complex is imploding with the index currently down over 2% and notching a brand new, fresh 27 month low. Even cattle are seeing selling pressure today which is something considering the strength in that complex.

The strong dollar simply makes US exports that much more expensive on the global market and that fact tends to undercut buying. The Dollar is working its way steadily towards the next zone of resistance on the chart ( 86.50 - 87.00).

 

The Brazilian Real is also continuing to fall against the Dollar making US soybeans less competitive with Brazilian-origin beans as well. Again, most grain traders that I have known over the years haven't a clue about currency exchange ranges and tend to be myopically focused on the US domestic market to the exclusion of the impact of currency exchange rates on export business.

With today being the actual end of the quarter and the end of the month, these large moves in the markets may also be partially attributed to book squaring and evening of positions. The start of the new month will be very interesting to see how fund managers intend to position themselves as they put money back to work.

Here is a chart of the GSCI.

 

The HUI has completely surrendered all of its gains for 2014 and is now trading well below the ending level made on December 2013.

 

Here is the most recent TIPs spread chart overlaid with the gold price. Notice how the two seem to be moving in perfect harmony. The market is simply not the least bit worried about any inflation at this point.

 

One last chart for right now... it is the big gold ETF, GLD, which reported holdings that once more dropped. Total holdings are now at 772.25 tons, having now dropped to a level last seen in early December of 2008. All that gold that was bought based on the experiment we now call Quantitative Easing has been sold and the money put to work elsewhere. Simply put, Western-origin gold investment demand stinks to high heaven. Just remember that whenever some huckster out there regales you with wild, baseless and unverifiable claims of "massive gold buying".

 

Sure someone is buying the gold that is being sold but that is true in any market, even as it falls in price because there must always be a buyer when there is a seller. The point to remember however is that if there are more sellers willing to sell at a lower price than there are buyers willing to buy at a high price, the price is going to go down. Period!

A last written item - in watching the Japanese Yen trade in the midst of this carnage this morning, I am noting some firmness in that currency, as well as in the bond market, telling us that there is some safe haven buying occurring against this backdrop. It does appear that is what is keeping gold supported about the $1200 level for now even as the gold mining shares evaporate in price.- Dan Norcini
, More at http://www.traderdannorcini.blogspot.com/

 

GATA Posts:

 

 

Koos Jansen: China aims to exceed U.S. in gold reserves

Ned Naylor-Leyland: Journalist can and should publish his report on silver rigging

Greenspan: Gold is the ultimate money and China well might want more

Steve Lonegan: There are no free markets when markets don't set money's value

 

Geneva group's report predicts low interest rates forever

 

The Statistics:

Activity from: 9/29/2014

Gold Warehouse Stocks:

9,127,281.692

-159,303.25

Silver Warehouse Stocks:

182,194,097.531

-493,484.05

 

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

772.253

24,828,695

US$30,190m

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$5,359m

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$434m

Johannesburg Securities Exchange (JSE)

New Gold Debentures

38.04

1,222,979

US$1,509m

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

 

COMEX Gold Trust (IAU) Total Tonnes in Trust: 163.55: No change from yesterday’s data.

 

Silver Trust (SLV) Total Tonnes in Trust: 10,762.15: No change from yesterday’s data.

 

The Miners:

 

Alamos Gold’s (AGI) dividend, Richmont’s (RIC) accelerated and expanded development plan, Endeavour Silver’s (EXK) drill results, and Fortuna’s (FSM) updated Mineral Reserve and Mineral Resource estimates were among the big stories in the gold and silver mining industry making headlines today.

 

WINNERS

1.  Tanzanian Royalty

TRX +2.93% $2.11

2.  Revett

RVM +0.90% $1.11

3.  Freeport

FCX +0.46% $32.65

 

LOSERS

1.  Coeur

CDE -7.81% $4.96

2.  New Gold  

NGD -6.48% $5.05

3.  Avino

ASM -6.16% $1.37

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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