Weekly Gold & Silver Market Recap ? 8/23/2013

MARKET PREPARES FOR LIVELY WEEK

Gold was flat for the majority of Monday after seeing substantial gains the week prior due tomonetary policy concerns, technical buying and further inflows to bullion-backed ETFs. The Gold price had jumped 8 percent over the last nine sessions while Silver rose roughly 13 percent last week, giving it its strongest week since September 2008. The week had many investors closely scrutinizing Wednesday?s release of the U.S. Federal Reserve minutes from July?s policy meeting to gain further insight into possible plans for the future of quantitative easing (QE). ?Our economists expect the minutes to reveal that the committee members viewed the improvement in labor markets and reduced downside risk as sufficient to signal that should the current trends continue, many on the committee stand ready to reduce the pace of asset purchases in September,? Barclays said in a note.

ANALYST RECOMMENDS GOLD IN YOUR PORTFOLIO

Investors are returning to Gold as analysts predict a very optimistic outlook for the metal. JPMorgan analyst, John Bridges, stays true to the yellow metal and suggests that Gold should be part of a portfolio, especially if someone is not confident in their currency. ?We feel that there's at least a technical bounce here,? he said, adding, ?If you're still uncertain about whether the financial crisis is truly over, then having some Gold in the portfolio makes a lot of sense.? Bridges went on to say, ?Gold is not an investment. Gold is a wealth-protection device. Gold does not increase in value over the long term. It holds its value over the very, very long term."

GOLD MOMENTUM CONTINUES

On Tuesday, Gold, known as an alternative investment for some, continued to trend upward for the fourth time in five sessions due to a weaker U.S. dollar. The market patiently waited for the Federal Open Market Committee meeting minutes, which was sought after to possibly provide more insight into the Fed?s plans to taper fiscal policy. The speculation of when the Fed will cut back its monthly bond buying program has been a key topic, and the majority of investors believe it may be as soon as September.  The thought was that the minutes would confirm the forecasted date.

FED MINUTES FAIL TO INSPIRE MOVEMENT

As expected, the release of July?s  Federal Reserve policy minutes  failed to stimulate Precious Metals prices in any significant way. Since Fed-centric news began dominating financial headlines several months ago, it may be time to start wondering if the impact of reducing the Fed?s quantitative easing (QE) program is already priced into metal?s markets. ?Gold dipped briefly in reaction to the minutes but quickly rebounded to set new intraday highs,? one market analyst said. Gold has rebounded significantly from lows reached in June but the  price is approaching technical resistance levels  in the $1,375 to $1,425 per ounce range. If tapering of the $85 billion in monthly mortgage-backed and treasury securities commences during the third quarter as many market experts predict, it will be interesting to see how Precious Metals prices react.

HIGHER GOLD PRICE  FORECASTED  BY YEAR?S  END

Thursday, Gold remained relatively flat as low volume and lack of investor commitment ahead of the highly anticipated Fed stimulus tapering kept Precious Metals trading in a tight range. The price plunge that saw Gold retreat to lows below $1,200 per ounce in late June has initiated a bevy of physical buying in India and China. Both nations traditionally represent the largest buyers of Gold jewelry, bars and coins, and the price retreat has further incentivized this demand amongtwo investment cultures that view Gold as the conventional method of preserving wealth. Since reaching its low point, the Gold price has rallied 16 percent. Many economists and analysts are now predicting prices to rise through the end of the year as outflows of Gold-backed ETFs slow and strong physical demand endures. JPMorgan Chase & Co. and Bank of America have both increased their 2013 projections for Gold, with the latter forecasting an average price of $1,495 per ounce during the fourth quarter.

PRECIOUS METALS END WEEK ON POSITIVE NOTE

As the week came to an end, Precious Metals jumped after government data showed new-home sales were weaker than expected, which caused  U.S. stocks and the dollar to immediately fall. The news added to analysts? speculation that the Federal Reserve will continue their bond buying program, which provided Gold a gain of nearly 2 percent.  ?The new home-sales data tells us that all is not well with the economy, and the Fed needs to continue to support growth,? Tom Power, a senior commodity broker at R.J. O?Brien & Associates in Chicago, said in a telephone interview. ?The housing recovery is an important thing that the Fed will be looking at when it makes its decision on the timing of the tapering.?

At 5:15 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,398.30, Up $25.50.
• Silver, $24.11, Up $1.01.

Mid-Day Gold & Silver Market Report ? 8/23/2013

FED STIMULUS CREATES ?UNIQUE MARKET SITUATION?

Precious Metals prices are trending up through mid-day trading.  With the release of a government report showing new-home sales data was weaker than expected,  U.S. stocks and the dollar have begun to fall.  A big part of investor uncertainty is the effect the report will have on the timing of the U.S. Federal Reserve tapering its stimulus program.  Managing director at Rosenblatt Securities in New York, Gordon Charlop, said, ? This has been a very unique market situation, with the Fed stimulus being such an important component to the market rally. This is uncharted waters for us, so regardless of what the move is, the fact you are someplace you haven't been before is cause for uncertainty.?

With Gold prices being historically lower than in recent years, Indonesian consumer?s purchasing rate has expanded to a four-year high.  India and China are the world?s biggest buyers of Gold, however recent price slumps and an expanding middle class have  spurred purchasing across Southeast Asia.  Djaja M. Tambunan, finance director at PT Aneka Tambang (ANTM), said, ?Our production cannot keep up with demand because it?s so high.  Investors see Gold as hedging against inflation. If inflation is out of control, people will turn to either forex or Gold markets.?

At 1:12 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,396.60, Up $23.80.
• Silver, $23.79, Up $0.70.

Morning Gold & Silver Market Report ? 8/23/2013

• Gold, $1,373.90, Up $1.10.
• Silver, $23.19, Up $0.08.

Closing Gold & Silver Market Report ? 8/22/2013

GOLD STEADIES AS STRONGER DOLLAR OUTWEIGHS CHINESE MANUFACTURING DATA

Better-than-expected Chinese manufacturing data helped to modestly boost Gold futures Thursday though  strength in the dollar softened the chance of more substantial gains. ?The flash (HSBC Purchasing Managers? Index) reading indicates that China?s economy is growing faster than the consensus had been expecting, and this is bullish for Gold and other commodities,? Brien Lundin, editor of Gold Newsletter, said. Manufacturing in China has been showing signs of mild contraction in recent months, but today?s reports to the contrary are positive for the Gold price. 

Major U.S. equities indices realized gains on positive global manufacturing data and strong employment numbers even as the Nasdaq flat lined for three hours following a computer error. ?The employment numbers were encouraging and showed a continuation of slow growth in employment,? Paul Mangus, head of equity strategy and research for Wells Fargo Private Bank, said. ?There are signs of stabilization in China and improvement in Europe, which could help U.S. multinationals in the long run.? Stocks have softened lately on anticipation of a reduction in quantitative easing measures by the Federal Reserve. Though stocks are down after reaching record highs,  quarterly earnings data for 71 percent of S& P 500 companies have surpassed profit projections. Investors will continue to anxiously await any stimulus tapering news to see how markets will react to a slowdown in the monthly injections of liquidity. 

At 5:10 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,378.30, Up $6.20.
• Silver, $23.24, Up $0.20.

Morning Gold & Silver Market Report ? 8/22/2013

?SUBSTANTIAL BUYING? OF PHYSICAL GOLD CONTINUES

The release of the weekly jobless claims report had little effect on Precious Metals prices, as the Gold price remained mostly flat and the Silver price remained positive.    New claims rose by 13,000 last week, though the level remains near a low since the recession.  Continuing claims rose as well, by 29,000.  Both levels are higher than economists predicted, but the U.S. Federal Reserve?s potential tapering of quantitative easing continues to take the spotlight.

The Gold price?s reaction to yesterday?s Fed minutes has some analysts surprised.  Karim Cherif of Credit Suisse said, ?You would expect that after the minutes, the Gold price would be slightly lower.  But this is not what is happening at the moment.  What is interesting in Gold prices right now is actually what is happening on the physical side. There is still substantial buying in the physical market.? 

At 9 a.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,377.10, Up $5.00.
• Silver, $23.30, Up $0.26.

Closing Gold & Silver Market Report ? 8/21/2013

FED MINUTES FAIL TO INSPIRE METALS MOVEMENT

As expected, the release of July?s  Federal Reserve policy minutes  failed to stimulate Precious Metals prices in any significant way. Since Fed-centric news has dominated financial headlines over the last several months, it may be time to start wondering if the impact of reducing the Fed?s quantitative easing (QE) program is already priced into metals markets. ?Gold dipped briefly in reaction to the minutes but quickly rebounded to set new intraday highs,? one market analyst said. Gold has rebounded significantly from lows reached in June but the  price is approaching technical resistance levels  in the $1,375 to $1,425 range. If the tapering of $85 billion in monthly mortgage-backed and treasury securities commences during the third quarter as many market experts predict, it will be interesting to see how Precious Metals prices react.

U.S. stocks continue their backslide  as Fed policy remains supportive of reducing QE levels by year end. Today?s price drop marks the longest decline in the Dow Jones Industrial Average in more than a year. ?It will be a seminal moment when (the Federal Reserve moves) from the easing they?ve been in for years toward some incremental tightening steps. The minutes are quite clear in the sense that the Fed doesn?t know that we are there yet where the process can begin,? Erik Davidson, deputy chief investment officer at Wells Fargo Private Bank, said. Though jobs data and the overall domestic economy continues to show modest progress, investors will wait to see if Fed officials deem the improvement strong enough to begin tapering monetary stimulus.

At 5:05 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,367.50, Down $7.10.
• Silver, $22.94, Down $0.22.

Gold Quiet Ahead of Big 1395-1400 Zone

Daily

Chart  Prepared by Jamie Saettele, CMT 

Commodity  Analysis:  Gold  broke through the July high and has entered a zone of consolidation that took place in mid-June. The consolidation stretches from 1365 to 1395. The top of this zone is a confluence of trendlines. The trade above July?s high makes August the first month since October 2012 for price to exceed the prior month?s high.

Commodity Trading Strategy: Flat

LEVELS: 1339 1347 1357 1384 1395 1424

• Fed tapering: The math investors need to know 

  Last Update: 8/21/2013 4:34:00 PM

  Federal Reserve ?tapering? ? the winding down of ?quantitative easing,? and the normalization of interest rates ? changes absolutely everything in the markets.

Morning Gold & Silver Market Report ? 8/21/2013

GOLD DOWN AHEAD OF FED MINUTES

Minutes from the Federal Reserve?s July meeting will be released at 2 p.m. (ET) today, and the U.S. dollar is on the rise. In turn, stock futures and Precious Metals prices are slightly lower in early morning trading.  Investors will be dissecting the minutes  for any clues on the internal Fed debate regarding tapering of its quantitative easing program. Ole Hansen of Saxo Bank said, ?Our consensus is (for stimulus to be reduced by) $20 billion (a month) at the beginning of September. Any deviation from that could have an impact on the price.?

Contrary to Mr. Hansen?s thoughts, Craig Erlam of Alpari Ltd. wrote, ?We?ve heard from a number of Fed members since the meeting and the camp seems split pretty evenly on the matter, which again, to me, suggests  tapering in September is unlikely.? Existing home sales data is due later this morning, but is not expected to have much of an impact on prices today.

At 9 a.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,366.90, Down $7.70.
• Silver, $23.09, Down $0.06.

Gold Test of Huge Resistance area Coming on FOMC?

Daily

Chart  Prepared by Jamie Saettele, CMT 

Commodity  Analysis:  Gold  broke through the July high and has entered a zone of consolidation that took place in mid-June. The consolidation stretches from 1365 to 1395. The top of this zone is a confluence of trendlines. The trade above July?s high makes August the first month since October 2012 for price to exceed the prior month?s high.

Commodity Trading Strategy: Flat

LEVELS: 1339 1347 1357 1384 1395 1424

Closing Gold & Silver Market Report ? 8/20/2013

GOLD MOMENTUM CONTINUES MARKET HOPES FED MINUTES PROVIDE CLARITY

Gold, better known as an alternative investment for some, continued to trend upwards for the fourth time in five sessions due to a weaker dollar. The market is patiently waiting for the Federal Reserve?s Federal Open Market Committee meeting minutes, which will be released Wednesday and could possibly provide more insight into the Fed?s plans to taper fiscal policy. The speculation of when the Fed will cut back its monthly bond buying program has been a key topic, and the majority of investors believe it may be as soon as September. Many expect the minutes to confirm the forecasted date.

Precious Metals are not the only commodity looking forward to the release of the minutes from the Fed?s July meeting.  The financial market will be watching for any key clues that indicate a timeframe of when to expect the cut-back of monetary easing. Avery Shenfeld, chief economist at CIBC World Markets, believes that the Fed presidents from Chicago, St. Louis and Atlanta provided insight into the internal debate at the central bank over whether fiscal policy is ready to be tapered. ?We know a lot about what they think individually. I can?t see how the minutes are going to add clarity,? he said.

At 5:12 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,372.40, Up $4.70.
• Silver, $23.08, Down $0.17.