• Gold: 1,466.39 1.67
  • Silver: 16.67 -0.00
  • Euro: 1.108 -0.001
  • USDX: 97.509 -0.012
  • Oil: 58.98 -0.15

August 15: Gold and Silver End Slightly Higher

Chris Mullen
|
Wednesday, August 15th
 

Close

Gain/Loss

Gold

$1604.10

+$4.50

Silver

$27.81

+$0.02

XAU

155.62

+0.41%

HUI

424.29

+0.43%

GDM

1219.80

+0.41%

JSE Gold

2437.00

-14.29

USD

82.66

+0.14

Euro

122.87

+0.66

Yen

126.79

-0.26

Oil

$94.33

+$0.90

10-Year

1.805%

+0.079

T-Bond

146.125

-1.375

Dow

13164.78

-0.06%

Nasdaq

3030.93

+0.46%

S&P

1405.53

+0.11%

 
 

The Metals:

 

Gold edged up to $1603.09 in Asia before it fell back to $1590.08 at about 4AM EST, but it then rose to as high as $1605.83 in New York and ended with a gain of 0.28%. Silver slipped to as low as $27.496 at about 4AM EST, but it then rose to as high as $27.99 in New York and ended with a gain of 0.07%.

 

Euro gold climbed to almost €1306, platinum lost $5.20 to $1390.80, and copper fell slightly to about $3.35.

 

Gold and silver equities saw small losses for most of the day, but they then bounced back higher in late trade and ended with modest gains.

The Economy:

 

Report

For

Reading

Expected

Previous

CPI

July

0.0%

0.2%

0.0%

Core CPI

July

0.1%

0.2%

0.2%

Empire Manufacturing

Aug

-5.9

5.0

7.4

Net Long-Term TIC Flows

June

$9.3B

-

$55.9B

Industrial Production

July

0.6%

0.6%

0.1%

Capacity Utilization

July

79.3%

79.3%

78.9%

NAHB Housing Market Index

Aug

37

35

35

 

U.S. mortgage applications dropped last week-MBA Reuters

Tomorrow at 8:30AM EST brings Initial Jobless Claims for 8/11 expected at 368,000, Housing Starts for July expected at 763,000, and Building Permits expected at 770,000. At 10AM is the Philadelphia Fed for August expected at -5.0.

 

The Markets:

 

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

 

Oil rose after the Energy Information Administration reported that crude inventories fell 3.7 million barrels, gasoline inventories fell 2.4 million barrels, and distillates rose 700,000 barrels.

 

The U.S. dollar index rose and treasuries fell on reduced expectations about whether or not the fed will announce another round of quantitative easing.

 

The Dow, Nasdaq, and S&P waffled near unchanged in quiet trade.

 

Among the big names making news in the market today were Carlyle Group, Walmex, Staples, Target, Standard Chartered, Deere, Lehman Brothers, Freddie Mae, Fannie Mac, Moody’s, and De Beers.

The Commentary:

 

As many of you who listen in to my regular weekly radio interview on the KWN Markets and Metals Wrap are aware, in my mind, the most important financial market is the bond or interest rate market. Everything revolves around interest rates and as such, those levels are the key in understanding where traders/investors are in their thinking at any given moment in time.

Take a look at the following chart denoting the interest rate being paid or the yield on the US Ten Year Note. Within the span of a mere 3 weeks or so, this yield has shot up from down near 1.4% all the way to 1.8%. That is a very rapid shift. It is now sitting at levels that we have not seen since the middle of May of this year.

From a technical analysis perspective, it has reached an inflection point. On the way down, this 1.8% level, held the market in check back late last year and early this year. Once it was broken to the downside in May, it subsequently tried to rally back above that level but failed. From that point on, it was straight downhill.

 

Now it has regained this level. Where it closes this week is going to be critical to our understanding of where things are headed in the following weeks. Apparently, investors have moved past the European debt crisis in their thinking (at least for the present). Something has gotten their attention to the point that they are pushing up interest rates.


Now, whether the Fed is particularly happy with this remains unclear but one has to suspect that the last thing the Federal Reserve wants to see is these longer dated rates getting too far out of hand. Also, keep in mind that the higher these yields move, the higher the cost of servicing the gargantuan, humungous, mind-boggling, stupendously large (how's that for superlatives?) US federal debt burden will become.

Given the mediocre condition of the US economic recovery, it is difficult for me to envision yields breaching this overhead resistance level. Still with a great deal of speculative short positions in the US bond and note futures markets, their short covering might be enough to take them higher for a while longer. A lot of those positions were put on as a result of anticipating the "slowing global growth" scenario; in other words, deflationary forces.


If this market however does not reverse course soon, chances are we might have seen a long term low point in interest rates. Stay tuned on this one folks as it will have implications for gold.


Also, I am wondering if the following chart might have something to do with bond and note traders shifting away somewhat from the "falling prices" scenario. I doubt that this in itself would be sufficient to take the bloom off of the deflation rose but when combined with the soaring price of grains, it certainly has to regarded at the very least as a contributing factor.


Note that the gasoline market has retraced 61.8% of its entire decline from the peak made earlier this year. That is a key Fibonacci retracement level. If it powers up and through this level, particularly if it closes the week above this level, odds will favor a push towards $3.20 initially followed by a test of the high near $3.40 if the former level does not hold. Generally speaking, if a market fails at the 61.8% level, it will drop back towards the 50% level and retest that to see if the bulls are still eager to buy.

 

By the way, if the shift towards inflation fears has gained ascendancy over the fear of deflation, you silver guys will be very happy indeed. Again, let's watch what develops. It is still too early to tell and we are not out of the wood yet on the European debt mess but things are indeed getting interesting.- Dan Norcini, More at http://www.traderdannorcini.blogspot.com/

 

The Statistics:

As of close of business: 8/14/2012

Gold Warehouse Stocks:

10,859,582.515

-607.14

Silver Warehouse Stocks:

137,924,125.664

-378,196.144

 

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)

SPDR® Gold Shares

1258.148

40,450,726

US$64,617m

London Stock Exchange (LSE) AND NYSE Euronext Paris AND Borsa Italiana AND Frankfurter Wertpapierbörse (Deutsche Börse - Xetra)

Gold Bullion Securities

127.61

4,102,821

US$6,574m

London Stock Exchange (LSE) AND NYSE Euronext Paris AND Borsa Italiana AND Frankfurter Wertpapierbörse (Deutsche Börse - Xetra) AND NYSE Euronext Amsterdam

ETFS Physical Gold

148.62

4,778,234

US$7,792m

Australian Stock Exchange (ASX)

Gold Bullion Securities

11.16

358,789

US$576m

Johannesburg Securities Exchange (JSE)

New Gold Debentures

41.26

1,326,508

US$2,152m

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

 

COMEX Gold Trust (IAU) Total Tonnes in Trust: 184.54: No change from yesterday’s data.

 

Silver Trust (SLV) Total Tonnes in Trust: 9,691.18: -51.25 change from yesterday’s data.

 

The Miners:

 

ITH’s (THM) second quarter results, Great Basin’s (GBG) second quarter results, Allied Nevada’s (ANV) positive record of decision, Aurizon’s (AZK) drill results, MAG Silver’s (MVG) underground development budget, Pan American’s (PAAS) drill results, and SilverCrest’s (SVL.V) second quarter results were among the big stories in the gold and silver mining industry making headlines today.

 

WINNERS

1. NovaGold

NG +4.90% $4.50

2. Revett

RVM +4.10% $3.05

3. Golden Minerals

AUMN +3.75% $4.43

LOSERS

1. Jaguar

JAG -3.54% $1.09

2. Midway

MDW-3.48% $1.11

3. Timmins

TGD -2.78% $2.10

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 2012

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