• Gold: 1,194.65 0.31
  • Silver: 15.06 -0.01
  • Euro: 1.135 0.000
  • USDX: 96.731 0.454
  • Oil: 66.63 -0.8

June 12: Gold and Silver Gain While Stocks Fall

Chris Mullen
|
Wednesday, June 12th
 

Close

Gain/Loss

Gold

$1388.70

+$10.00

Silver

$21.73

+$0.08

XAU

103.27

+0.82%

HUI

263.08

+0.91%

GDM

783.19

+0.83%

JSE Gold

1462.83

-4.36

USD

80.96

-0.13

Euro

133.34

+0.21

Yen

104.19

+0.10

Oil

$95.88

+$0.50

10-Year

2.230%

+0.035

T-Bond

140.21875

-0.125

Dow

14995.23

-0.84%

Nasdaq

3400.43

-1.06%

S&P

1612.52

-0.84%

 
 

The Metals:

 

Gold dipped to $1373.73 in Asia and traded mostly slightly lower in London before it jumped up to $1394.25 in late morning New York trade and then drifted back lower in afternoon trade, but it still ended with a gain of 0.73%. Silver surged to as high as $22.012 and ended with a gain of 0.37%.

 

Euro gold rose above €1041, platinum lost $1.75 to $1473.75, and copper climbed a couple of cents to about $3.22.

 

Gold and silver equities rose over 2% by midday before they fell back off in afternoon trade, but they still ended with almost 1% gains.

The Economy:

 

Report

For

Reading

Expected

Previous

Treasury Budget

May

-$138.7B

-$139.0B

-$124.6B

 

Yellen overwhelming favorite to replace Bernanke at Fed: Reuters poll Reuters

Inflation at 53-Year Low Belies U.S. Demand Strength Bloomberg

Mortgage applications rise even as rates climb higher: MBA Reuters

 

Tomorrow brings Initial Jobless Claims, Retail Sales, Export and Import Prices, and Business Inventories.

 

The Markets:

 

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

 

Oil remained higher after the Energy Information Administration reported that crude inventories rose 2.5 million barrels, gasoline inventories rose 2.7 million barrels, and distillates fell 1.2 million barrels.

 

The U.S. dollar index fell as the yen continued to rise on yesterday’s lack of action from the Bank of Japan.

 

Treasuries remained lower after today’s $21 billion 10-year note auction sold at a yield of 2.209% with a bid to cover of 2.53.

 

The Dow, Nasdaq, and S&P fell on uncertainty about future fed actions.

 

Among the big names making news in the market today were Chrysler, Apollo Tyres, JPMorgan, and IBM.

The Commentary:

 

Investors/Traders are growing more confused and uncertain as to market direction and many are heading to the sidelines or scaling back the size of their positions in this very difficult trading environment. Witness the type of wild moves we are getting in the currency markets, especially the Japanese Yen, and you are seeing these CARRY TRADES involving the Yen being unwound.

When traders place these highly leveraged bets, they expect LOW VOLATILITY in the carry currency. When that does not occur, but rather the opposite takes place, it wreaks havoc on their positions and they have no choice but to liquidate or reduce market exposure at the very least. The results are unpredictable price movements across a host of markets and extremely wide trading ranges as so many of these hedge funds are all on the same side in the markets they are trading that there is hardly anyone to take the other side as they exit.

The Nikkei is now down 18% from its year-to-date high as the continued strength in the Yen is the carry trade being unwound. AS a matter of fact, the Yen had its single biggest daily gain against the US Dollar in over THREE YEARS! Tell me that the Central Banks have not fed and fostered and nourished this insanely leveraged speculative mania that we have been seeing in equities. It is ALL one massive bubble whose fortunes are tied exclusively to the continuation of enormous Central Bank bond buying policies.

The problem in Japan is that investors there are losing confidence in the ability of the Abe government and the Bank of Japan to actually accomplish what they have promised to do. In other words, the aura of invincibility of the Central Banks is beginning to wane.

Silver is getting whacked extremely hard as it has not been able to recapture most critical support at the $22 level. Failure to get back above there almost immediately is going to send it down to retest the $20 level. It was getting a bit of help from copper but now that copper is swooning after temporarily moving higher on supply disruption fears, that leg of support for the grey metal has been cut off.

Gold is flirting with support near the $1365 level with bears eyeing those stops that are building just below that level. If the physical markets blink and do not quickly step up their pace of gold buying, it too looks vulnerable to further downside. I fear that if bears are able to reach those stops and set them off, a cascade of selling will catch the lower-down stops and take this market all the way back to $1340.

I have said it many times of late and will say so again - Gold must have a catalyst of some sort to reverse the downtrend and give traders a reason to chase prices higher. They are looking to sell rallies, not buy dips. The only reason for any buying in this pit right now is due to strong physical off-take. If that fades...

The HUI continues to act as a drag on the metal. That overhead gap noted on the chart is like a THE WALL in GAME OF THRONES. It must be breached if the night walkers are going to invade the realm of men. Translation - until that gap is closed, the HUI is going nowhere. There simply is no reason for the bears to cover and thus no reason for the bulls to chase prices higher either.

 

A bit of parting advice for TRADERS out there... be very careful - watch your position size does not get too large for your account right now, especially if you are trading currencies, and forget all the glorious predictions and COT analysis and other claptrap. Right now, none of it means anything. All the matters is money flows and carry trades. If you happen to get caught on the wrong side of this, your career as a trader is going to be rather fleeting.

Investors with a longer time horizon obviously have a different perspective on things because we all know where this is going to go.- Dan Norcini, More at http://www.traderdannorcini.blogspot.com/

 

GATA Posts:

 

 

Big banks manipulate currency markets, Bloomberg News investigation finds

Is gold mining the world's toughest business, or what?

Got Gold Report explains explosive positioning in gold futures

 

The Statistics:

As of close of business: 6/11/2013

Gold Warehouse Stocks:

7,706,990.282

-45,371.99

Silver Warehouse Stocks:

164,484,051.533

+99,690.80

 

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

1009.847

32,467,579

US$44,868m

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$6,185m

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$498m

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: 186.88: No change from yesterday’s data.

Silver Trust (SLV) Total Tonnes in Trust: 9,998.93: +10.51 change from yesterday’s data.

 

The Miners:

 

Barrick’s (ABX) 18-month plan in Chile, Freeport’s (FCX) force majeure declaration, and McEwen’s (MUX) exploration results were among the big stories in the gold and silver mining industry making headlines today.

 

WINNERS

1. Pretivm

PVG +5.77% $8.25

2. Comstock

LODE +3.61% $2.01

3. Richmont

RIC +3.45% $1.80

LOSERS

1. Midway

MDW -7.41% $1.00

2. Eurasian

EMXX -5.56% $1.36

3. Banro

BAA -3.64% $1.06

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

- Would you like to receive the Free Daily Gold Seeker Report in your e-mail? Click here

Additional Resources for today’s Gold Seeker Report can be found:

© Gold Seeker 2013

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