It seems that what we have been witnessing is akin to packs of wolves attacking the weak of a herd of Buffalo.

It seems that what we have been witnessing is akin to packs of wolves attacking the weak of a herd of Buffalo. As time passed and the moves to the downside have cleared the way for the strong. Now with a new day dawning, with what is expected this day to be the first Federal Reserve rate hike, the wolves have backed off and the herd is getting stronger. In the pack palladium led the way yesterday on the news of strong European auto sales and platinum today is playing catch up as the market is beginning to realize that the Volkswagen fiasco is more brand focused and not industry wide. Today’s Housing Starts were strong though Capacity Utilization was weak. Mixed numbers that more than likely will not dissuade the Fed from today’s expected action. The herd we call the precious metals group seems to be getting ready to stampede as the wolves/shorts are getting out of the way. After today’s news if it is as expected, it would not surprise me if the herd finds greener pastures ahead.

Today’s precious metals complex continues to be under attack as the US dollar continues to strengthen on Fed rate expectations.

Today’s precious metals complex continues to be under attack as the US dollar continues to strengthen on Fed rate expectations. Where will the bottom be? Well, in certain markets this downward price decline is directly the cause of financial crisis. Lonmin one of the world’s largest platinum producers is barely keeping above water. A departure of this miner would cause a squeeze on supply and crisis in employment in South Africa. The belief is that Lonmin will not be allowed to go under but the South African government which are minority partners will feel the pain down the road. Is it really possible to keep kicking that can down the road and there be no repercussions? Not likely. Shorting platinum may look good in the short term environment to fund managers at the moment. In this small illiquid market it can turn on a dime. Often people equate platinum and gold together but in reality this market is tiny in comparison and hence the price moves are often less justified by the market environment than by big money playing the part of a gorilla in a glass house. It looks like we are nearing the end of the recent barrage of attacks and we can expect a bit of recovery before the close today.

Trying to find real signs in this market is very difficult.

Trying to find real signs in this market is very difficult. It’s as if trying to find one whistling bird hidden among the trees and bushes. You really have to work hard to isolate the one whistle from the noises surrounding you. The media’s constant prattle does little to give true direction and causes more obfuscation than warranted in most cases. Yet the precious metals on lack of news continues to follow the trend developed since last week’s Fed announcement. Momentum has completely shifted and is targeting the downside. This is the second day in the row the group is in the red and not looking like there is no major support coming out yet. Today’s Factory Orders report was weaker than expected but did little to help the metals. Platinum is likely the one metal that will hold its next support level at 955 and most likely should turn around. For now get your binoculars out to look for any news that may be useful in validating a position, it seems as if it is harder than usual.

The truth will set you free is an axiom that speaks volumes.

The truth will set you free is an axiom that speaks volumes. But this morning the truth that seems to be coming out has done little to set gold free of its negative shackles. Today’s Durable Goods Report was significantly lower than expected. Consumer Confidence was also lower and it has been said that Goldman Sachs announced lower expectations on this week’s GDP report due on Thursday. The logic seems to be a global slowdown will mean lower commodity prices instead of weaker US dollar. The market seems to be wishing for lower gold prices though the US dollar is losing some ground. It seems we are in a perplexing situation as the major funds are not convinced they should back the yellow metal yet. All indications are that tomorrow’s Fed Rate decision will be a non-event as they will most likely hold off due to the recent economic reports. Precious metals in general should benefit overall to the upside. However truth in our society does not always come out as perception promulgated by media may have a greater influence in the short term.

A beautiful spring like day seems to be bringing in a spring like atmosphere

A beautiful spring like day seems to be bringing in a spring like atmosphere in the precious metals market. But this is not so for the global and US economy. Overnight news on China reported that passenger vehicle sales are the lowest they have been since 2012 for the year. This was followed up in the USA this morning by a deflationary Producer Price Index at -5 % and a weaker than expected Retail Sales of -.3%. Additionally the Business Inventories report shows signs of a stagnant economy at best. In this kind of environment the Fed Interest Rate Hike seems to lose its position as people are beginning to wonder if there is real growth in the US at all. Thought the demand for dollars and equities stays firm interest in hard assets are driving some funds into gold and platinum. The steam however seems to be running out this morning at current levels and it will take some Miracle-Gro to get it going any higher today.

Precious metals are red across the board on little news.

Precious metals are red across the board on little news. It seems that the continuing collapse of the copper prices on the profit decline of Chinese companies is spilling over into these markets. But the real loser in the group continues to be platinum which is baffling this me. The downward pressure on commodities might also be an effect of the snowballing price action is causing Glencore one of the largest base metal trading houses to be succumbing to the negative prices and putting them at significant financial risk. Yet no rate hike yet in sight maintains the gold price well above the $1100 dollar mark for now. With the Pope’s departure from the USA, precious metals markets are praying on getting some of that love he spoke so well about. In the end markets have no care and the money flows to where it sees profit potential. Where that is, is certainly not clear at the moment, as the Stock market is also is losing ground this morning.

Gold is holding firm over the 1100 which indicates strength

Gold is holding firm over the 1100 which indicates strength. Additionally today’s Retail Sales report were weaker than expected and though not as material the NY Empire State Manufacturing Index was way off the mark down -14.67.  These reports are continued indicator of less than lackluster performance of the US economy. With the Federal Reserve Interest Rate decision around the corner this Thursday we can expect to be very much locked into current levels with expectation to hold yesterday’s lows. Also this morning we had Industrial Production and Capacity Utilization both which missed expectations. Tomorrow’s Consumer Price Index should give a little more color as to whether we are truly in a deflationary environment. To most people wh live here it doesn’t seem that way. The world remains in turmoil with political conflict in the Mideast and most tragic Syria, China’s economic woes affecting outside customers and the US barely able to lift the rest of the weight. It continues to look unlikely that the current financial situation will change and we will remain status quo. The Federal Reserve is in  a precarious situation which is a problem for everyone. If they do not raise rates then money still waits on the sideline not certain when change will come. If they do it they may hurt the general economy. No one, including everyone at the FED is sure what will happen if they move. But one thing for sure is that the general populace suffers either way.

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Bank Notes

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2015 $125 ½ kilo Whooping Crane NGC PR70 - FDI

2015 $125 ½ kilo Whooping Crane NGC PR70 - FDI

2015 $125 ½ kilo Whooping Crane NGC PR70 - FDI
 
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Specifications

Date: 2015
Denomination: $125
Metal: Silver
Weight: Half – kilo – 16.075 oz.
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Mintage: 500
Condition: PR70
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This morning in the New York precious metals market we saw inordinate price moves

This morning in the New York precious metals market we saw inordinate price moves. At the time of the Unemployment data which was not great and only close to expectations there was a sell off on the gold market. Most likely big funds seeing the weakness in the thin summer markets took the opportunity to test downward. There was a quick flush out that lasted for about 30 minutes. Without any more success to the downside it was obvious we saw position covering and the market went back to where we started. It seems like maybe they also took the time to read the actual report by the Bureau of Labor and Statistics. The report tells us that the unemployment rate for teenagers was down 16.2% while that of adults declined only 4.8%. Sure kids need jobs but it seems like adults with families probably could use the income more. Hopefully these teenagers are helping at home. Average hours worked remain at 34.60 hours and Labor Force Participation at 62.6% both which are not positive signals for a strong economy. Silver is trying to go back above $15 this morning on what may be the sense that many have gotten that fundamental demand, which is high, does matter and it should disconnect from the more prominent gold price. But for the rest of the complex you can expect the markets to stay near current prices as the traders in the USA prepare for a summer weekend.

Holy Cimoli! The market is so dead that HBO might start a new show to compete against AMC

Holy Cimoli! The market is so dead that HBO might start a new show to compete against AMC’s The Walking Dead except it will be base around people working in the precious metals market. That being said there was some news this morning which par for the course had little to no effect. The ISM Manufacturing Index came out lower than expected and Construction Spending was also weaker. But what does this have to do with precious metals? It seems very little. With what looks like deflationary signals such as the ISM Prices Paid which came in lower as well, precious metal no longer look like an interesting vehicle for dollar denominated investors. In this lazy summer atmosphere look for less than stellar volumes and dampened volatility.

 

The Bank of England kept its key interest rate the same this morning and reported the same level of asset purchases.

The Bank of England kept its key interest rate the same this morning and reported the same level of asset purchases. The US Jobless Claims report came in close to expectations. We remain at the status quo level and though there have been attempts to the downside gold for instance is still stuck within the recent ranges. We will need to see a real breakdown below 1176 to see the bears take any stronghold on direction. It seems the market wants to keep trying lower but buyers especially in the New York market view every dip as another opportunity to buy in at discount levels. The US dollar has not moved significantly the last couple of days and most likely is waiting on tomorrow’s Unemployment report to give direction.

The US dollar came under some pressure this morning from what appears to be positive numbers for the Euro Zone.

The US dollar came under some pressure this morning from what appears to be positive numbers for the Euro Zone. Their Producer Price Index was lower than expectations while the Consumer Price Index was higher than expected creating a better atmosphere for business in their market. Meanwhile in the USA the Factory Orders report surprised downward -.4% which has added downward pressure on the US Dollar as well. Hence the precious metals are higher today, but guess what the anchor is still down and we are not far from the dock.

 

Most Important data this week will be this Friday’s Unemployment reports.

Excitement hits the precious metals market this morning as gold climbs from 1185

Excitement hits the precious metals market this morning as gold climbs from 1185 before 10 am to set the LBMA PM gold price at 1200-. This was preceded by silver making an upward move that may have been perceived to be directed by the poor Markit Services PMI report which missed the mark 1.2 coming in at 57.8, and right fully so indicating that Friday’s Durable Goods report though mixed may be showing signs of weakness. Yet a report by Reuters Friday announces a $1bn gold swap between Venezuela and Citibank which to many traders may be where the unending pressure on the gold market may have been coming from. With that report in tow traders may have felt that the news allows them to change direction and put on new longs. The upward move of course triggers stops making the precious metals  climb higher on the move. Today’s settlement prices on the metals are important to clarify whether this is a short term blip or a new trend to the upside is developing. This week’s news to watch for are the FOMC report and Gross Domestic Product both out on Wednesday.

Is there really a rebound on the way for the US economy?

Is there really a rebound on the way for the US economy? That is the question that is constantly dogging the precious metals market while traders have their ears perked for any positive sign that may direct the Fed to raise interest rates. This morning group was trading much higher than currently on concerns of Greek default. It is obviously less of a concern for the US investor as they quickly dumped metals on the back of an better than expected Philadelphia Fed Manufacturing Survey. Oddly enough, that was the only truly positive indicator versus what others believe are more important numbers such as Housing Starts, Building Permits and Jobless claims which did little to reaffirm a positive US economy. Where is the rebound? It is in the positive attitude of US business but numbers of late don’t prove it out. The continued underwhelming indicators balanced against the European economic and political back drop leaves the metals trading in current ranges. Unless gold the leader of the group breaks above 1225 we won’t be discussing any major bullish price direction. Tomorrows Consumer Price Index report  might be a catalyst to end the doldrums if it shows any major divergence.

Yesterday’s Federal Reserve announcement was mixed which leaves the market status quo.

Yesterday’s Federal Reserve announcement was mixed which leaves the market status quo. This has led to downward pressure on the precious metals market. Silver has had the biggest negative reaction trading as low as 16.14 and currently trading 16.21. Silver is down 6% on the week which is either a signal of more to come in the rest of the group or a good buying opportunity for the silver consumers. It almost appears as if the Friday’s Non-farm Payrolls never happened. Todays’ weekly Jobless claims report was slightly better than expectations but not an important factor to shape expectations, unless you are on television and selling the perception that everything is better than the recent more important figures convey. Technically the group looks weak and will remain under pressure. We are back to expecting downward moves to test lower price levels that will be short lived. For the US based market no important economic report is due until next week when we will have the US Retail Sales and Consumer Price Index.

Due to the holidays and Spring Break the market have been very slow

Due to the holidays and Spring Break the market have been very slow . The precious metals market received a boost on Friday when Non-Farm Payrolls missed the target by a wide margin. Off at almost 50% less than expectations with lower participation rates you would think that we would see a weaker dollar. However the market believes that all this means is that the Fed will still raise rates only later than sooner. This makes the US dollar and its equities markets the best looking when compare with other markets. After the initial boost which saw gold trade as high as 1225 the metals have seemed to hit a wall and come off due to a stronger US dollar. For today do not expect much action and expect sideways trading for the rest of the day.

The Yemen news yesterday gave a short lived pop to gold.

The Yemen news yesterday gave a short lived pop to gold. But yet there is something else going. In Asia gold traded as high as 1206. In London and NY it has traded above 1200 only to retreat. Today’s  fourth  quarter GDP report was  a little higher but the annualized was lower than expected which should have been bullish for gold. Reuter’s Michigan Consumer sentiment was slightly higher than expected causing a net zero effect on market direction. The precious metals complex remains under the gun from the expectations of higher interest rates, futures shorts and ETF liquidations. But in the battle of direction it does not seem that shorts hold all the cards as every good dip has been met by buying. The question is who will tire first, the bulls or the bears before a new direction is made clear when the dust finally settles.

No news today of import and precious metals are still testing to the upside.

No news today of import and precious metals are still testing to the upside. Though recent comments by the Fed were gold bullish the market is still confident on the US economy so they are cautious on putting on a gold long position. Still we can expect attempts to test a 1190 with a target of 1210 for the gold price. The rest of the complex should benefit on any upward mobility but for now the train seems to need some more coal in the caboose before this train gets moving.

All the attention this week is on Wednesday’s Fed’s Monetary Policy Statement

All the attention this week is on Wednesday’s Fed’s Monetary Policy Statement. Today’s statistics, Industrial Production and Capacity Utilization were weaker than expected but the bears still hold out the confidence that the Fed will change their statement to remove the word “patient”. Removing the word patient will indicate to the bears that interest rates will be raised at the June meeting. But will they use another word to befuddle the market?  For now the precious metals have seemed to found a bottom but remain under constant pressure. As the bears sell into rallies they have not been able to complete a total rout of all support levels. Expect precious metals to continue to make attempts to the upside but without any real impetus, as the Greek crisis has been sidelined, for the time being it will be difficult to see any break out from current ranges.

Netanyahu’s call for tough action against Iran had little effect on the market

Netanyahu’s call for tough action against Iran had little effect on the market or the sitting president of the USA. In fact it was received as  a ho-hum event by not only the US president but the Iranians as well. Today’s  Services Purchasing Managers Index (PMI) released by Markit Economics came out higher than expected which was quickly jumped on by bears as a bullish signal for the economy driving gold down below the 1200 price this morning and the whole precious metals group followed suit. Is this number that significant to warrant the reaction? Probably not and expectations are for it to recover and settle back above 1205 today. If it settles lower, then the bears will have weekend the support and the direction may change. For now the real focus will be the Unemployment numbers coming out Friday.

The precious metals markets remain strong this morning and still appears to be in bullish territory

The precious metals markets remain strong this morning and still appears to be in bullish territory. It is most likely we will continue to see attempts at going higher in gold towards the next resistance of 1308. Supporting the market is foremost the Euro’ identity crisis. Once thought to be a safe haven currency, after the Swiss National Bank debacle of last week and the impending Greek elections that are expected to further undermine its presence in global portfolios, it’s not clear what is next.  Additionally, quantitative  easing is expected to be the tool most likely to be implemented by the ECB which will continue to undermine its position. The news to watch this week will be, first the overnight report out of China on their GDP and more importantly the ECB’s policy statement on Thursday. Today is Martin Luther King Day in the USA. Banks, Government offices and the stock market is closed. Don’t expect much activity either way today.

The start of the first full week of 2015 is here

The start of the first full week of 2015 is here. This Monday is ringing it in with a bang as the Euro drops below $1.20 to as low as $1.1876. The driver against the Euro is in no small way concerns that the extreme left leaning party in Greece may take control in elections later this month. If they do the belief is twofold that Greece may leave the EU and that they may end austerity measures and not honor previous agreements. On this news funds have also been driven into the gold market driving it back up to the 1200 price level. Precious metals are all green across the board as investment money seeks alternative to Euro based assets. Additionally, US Car sales reports out this morning for the month of December rose topping off a strong year. This will give continued fundamental support to the Platinum group metals. It would appear that we can expect the precious metals to hold current price levels or go higher as the bears for now are in hiding due to the “Grexit” (Greek Exit from EU) threat.