• Gold: 1,487.62 -0.06
  • Silver: 17.52 0.00
  • Euro: 1.113 0.000
  • USDX: 97.479 0.151
  • Oil: 54.36 0.72

January 30: Gold and Silver Gain About 1% and 2%

Chris Mullen
|
Wednesday, January 30th
 

Close

Gain/Loss

Gold

$1676.50

+$13.80

Silver

$31.98

+$0.63

XAU

150.95

-0.51%

HUI

398.44

-0.73%

GDM

1167.86

-0.58%

JSE Gold

2199.75

+15.92

USD

79.26

-0.29

Euro

135.66

+0.77

Yen

109.76

-0.52

Oil

$97.94

+$0.37

10-Year

2.006%

+0.018

T-Bond

143.0625

-0.375

Dow

13910.42

-0.32%

Nasdaq

3142.30

-0.36%

S&P

1501.96

-0.39%

 
 

The Metals:

 

Gold rose $6 to $1668.70 in Asia before it fell to see a slight loss at $1661.60 by a little after 8AM EST, but it then climbed to as high as $1683.50 just after today’s fed announcement and the yellow metal and ended with a gain of 0.83%. Silver slipped to as low as $31.24 by a little after 8AM EST, but it then shot to as high as $32.24 and ended with a gain of 2.01%.

 

Euro gold climbed to almost €1236, platinum gained $4 to $1679.50, and copper climbed 6 cents to about $3.74.

 

Gold and silver equities rose about 1.5% at the open before they fell back near unchanged in early afternoon trade and then bounced back higher around today’s fed announcement, but they then fell to new session lows in the last hour and a half of trade and ended with modest losses on the day.

The Economy:

 

Report

For

Reading

Expected

Previous

ADP Employment

Jan

192K

175K

185K

GDP

Q4

-0.1%

1.0%

3.1%

Chain Deflator

Q4

-0.6%

1.6%

2.7%

 

Mortgage Applications, Refi Activity Declined Last Week MortgageOrb

 

The fed maintained its aggressive bond-buying policy given the downside risks to the economic outlook.

 

Tomorrow brings Initial Jobless Claims, Personal Income and Spending, Core PCE Prices, the Employment Cost Index, and Chicago PMI.

 

The Markets:

 

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

 

Oil remained modestly higher after the Energy Information Administration reported that crude inventories rose 5.9 million barrels, gasoline inventories fell 1 million barrels, and distillates dropped 2.3 million barrels.

 

The U.S. dollar index fell after this morning’s surprising contraction in fourth quarter GDP.

 

Treasuries fell ahead of today’s fed announcement and remained lower after they maintained their previously stated stimulus measures.

 

The Dow, Nasdaq, and S&P traded mostly slightly lower on worries about contracting economic growth.

 

Among the big names making news in the market today were Chrysler, Boeing, RIM/Blackberry, Facebook, Chesapeake, Kinder Morgan, Amazon, Mercedes, Dell, and Northrup Grumman.

The Commentary:

 

Fear not ye despairing lads and lassies. Surely thou wert fearful that said supply of spirits to enliven yonder punch bowl wert in peril of being dried up. Hark - the sum of all economic activity in the realm didst verily sink a fortnight plus ago. This turn of events must surely bring forth the purveyors of joy and bliss to aid thee.

Okay - I got a bit carried away - the big news, and I do mean "BIG" news this morning that has gotten the commodity sector excited and is in the process of pushing the US Dollar lower, is the fact that 4th quarter 2012 GDP actually managed to SHRINK! Yes, you got that right - it shrank! As a matter of fact, the reading was the worst since Q2 2009! Remember that we were back in an official recession during that time frame.

Ironically, and this to me is a big deal, government spending decreased and that is perhaps one of the biggest reasons for the reduction in growth. I have mentioned previously on this site that government spending was a large factor behind recent improvements in the rate of growth in this nation and that were it subtracted from the numbers, we would be showing very little in the way of actual growth. Lo and behold, I did not expect the growth rate to actually shrink were it removed from the equation.

Here is the ironic part - the US MUST REDUCE SPENDING as it is headed down a road that will certainly lead to economic ruin. When government debt is 100% of GDP it is unsustainable. Any who doubt need merely look across the Atlantic Ocean to Greece, Spain, Italy, Portugal, etc. Heck, even one of the French officials made the slip of the tongue in admitting the obvious, namely that France was bankrupt! While the US Debt/GDP ratio is not yet at levels seen in the PIGS, it is most surely headed in that direction.

So guess what, if the US government attempts to rein in spending, economic growth will contract because this deficit spending by government is contributing to a large portion of the "growth" in this economy. But keep in mind, that government does not actually create wealth - it merely takes it from one sector of the economy with one hand and redistributes it to another sector with the other hand. To the extent that it adds "growth" to an economy, it is BORROWING FUTURE GROWTH INTO THE PRESENT when it deficit spends. Borrowed money must eventually be paid back and when it is in a debt-based economy, growth shrinks.

That brings us squarely back to the Fed - before this morning's GDP number was released, the world of investors were waiting with bated breath for the oracles to come forth from Delphi and issue their prophetic insight into the state of the US economy. Another duller way of saying this is that the conclusion of the FOMC meeting is today and the market was waiting for what statements would come out of that. Prior to today's GDP report, there were genuine fears of a curtailment in the QE4 program coming sooner rather than later. Today's GDP number should put those fears to rest.

This is what has gotten both gold and silver in such a tizzy this AM. Hedge fund shorts in silver in particular, that were put on below $31 are now being forced out. Same goes for gold shorts by hedge funds that were put on below $1660, those too are being covered. The reason? Traders are now revising their views of any premature end to QE4; based on today's contraction, it ain't gonna happen anytime soon.

I am going to wait until later in the day to see how the pit session closes and in particular, how the S&P 500 REACTS before doing any charting as I want to see those before making any conclusions as to near term technicals.

One thing I do want to point out however is that in spite of the pitiful GDP numbers, the bond market is FALLING. This is to me, perhaps, the most important price action of today's session. One would have expected slowing growth to rev up bond buying; it is not. The opposite is what is happening. The yield on the Ten Year note is now OVER 2.0% as I type these comments. We will have to monitor this extremely closely. Something big might just be afoot!- Dan Norcini, More at http://www.traderdannorcini.blogspot.com/

 

GATA Posts:

 

 

Germany's gold at NY Fed may be impaired, Centennial's analysts agree

GATA favorites to speak at SilverSeek's online conference Thursday

Two major Swiss banks nudge customers into allocated gold

Rob Kirby: Ted Truman talks turkey

New York Sun: The fiat Dow

Jeff Clark: Two chess moves away from capital controls

Astonished gold market analysts note FT's praise for GATA

 

The Statistics:

As of close of business: 1/29/2013

Gold Warehouse Stocks:

11,008,536.086

+4,050.90

Silver Warehouse Stocks:

32,810,409.678

+565,217.27

 

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

1328.092

42,699,501

US$71,003m

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

Gold Bullion Securities

160.87

5,172,236

US$8,677m

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

ETFS Physical Gold

156.89

5,044,324

US$8,226m

Australian Stock Exchange (ASX)

Gold Bullion Securities

11.16

358,789

US$602m

Johannesburg Securities Exchange (JSE)

New Gold Debentures

42.45

1,364,715

US$2,214m

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

 

COMEX Gold Trust (IAU) Total Tonnes in Trust: 220.22: No change from yesterday’s data.

 

Silver Trust (SLV) Total Tonnes in Trust: 10,443.19: No change from yesterday’s data.

 

The Miners:

 

Lake Shore’s (LSG) agreement to sell its Mexican property portfolio, Endeavour Silver’s (EXK) production growth, and Huldra Silver’s (HDA.V) sampling update were among the big stories in the gold and silver mining industry making headlines today.

 

WINNERS

1. Nevsun

NSU +5.75% $4.23

2. NovaGold

NG +5.41% $4.48

3. Timmins

TGD +5.20% $2.83

LOSERS

1. Tanzanian Royalty

TRX -3.75% $3.59

2. Turquoise

TRQ -3.56% $7.86

3. Almaden

AAU -2.83% $2.75

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 2013

Note: This article may be reproduced provided the article, in full, is used and mention to Gold-Seeker.com is given.

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