Gold Continues to Fight – Looking for Fresh News
Commentary for Friday October 14, 2016 (www.golddealer.com) – Gold closed down $2.10 at $1251.00 on the Comex today. This week for gold was kind of boring but in a good way – today’s $1251.00 was this week’s low and $1255.90 (Monday) was this week’s high. You would be right in claiming this has been very flat pricing but there are two other important points. Psychologically the fact that gold is fighting to hold its 200 day moving average carries some sway. Also this past week the Dollar Index moved from 96.50 to 98.00 – this should have pushed the price of gold much lower. So let’s be happy for now as traders look for fresh news which might hint at short-term direction.
Also consider the overnight Hong Kong market – steady around $1254.00 – the London domestic market sold off to $1246.00 and then recovered to the $1254.00 handle. The dip was no doubt the reaction to expected early consumer sentiment numbers – thought to be positive – but when released was disappointing – perhaps suggesting there might be a problem with the expected December rate hike. The good news about all this indecision is that gold is fighting for its 200 Day Moving Average ($1254.00). And in the meantime any fresh news will push the balance of trader’s indecision.
The reason this market is so quick to unwind below $1260.00 is that the technical picture for the price of gold is not stellar. We have moved in the past 30 days from an optimistic viewpoint considering a challenge of $1400.00 into a negative price bias reinforced by the notion that traders are more convinced the Federal Reserve will raise interest rates in December. But also watch the gold exchange traded funds – this is usually a fickle lot – because it is easy and cheap to get “in” and “out”. The number of gold ounces held has been steady and at their highest level this year – which might suggest that a lot of people are hedging their bets with gold.
Silver closed down $0.02 at $17.44. This is another market in the “middle of something” – I would have thought the silver bullion action on this latest pull-back would be “hot” – there is business but it’s tepid.
Platinum closed up $6.60 at $939.50 and palladium was higher by $11.45 at $648.30. This is another market which falls into the “waiting to happen category – platinum is trading for $312.00 less than gold and with such a discount you would think two things would happen – folks would be lined up to trade gold bullion or platinum bullion or simply buy platinum outright. And like silver there is action but considering the discount the volume numbers should be two or three times larger.
Our Patented Employee Survey – Gold’s Direction Next Week?
Of course it’s not really patented but we do have some fun along the way. This is what the GoldDealer.com employees think: 6 believe gold will be higher next week – 4 think gold will be lower and 1 thinks it will be unchanged.
Our Patented Customer Survey – Gold’s Direction Next Week?
Like the employees our customers were given three choices – up – down – unchanged. We limited the survey to a random sampling of 100 transactions – unscientific but worth considering because these people took action: 28 people thought the price of gold would increase next week – 61 believe the price of gold will decrease next week and 11 think gold prices will remain the same.
Precious Metal Closes & Dollar Strength – Oct. 10 – Oct. 14
The walk-in cash trade today was active and so were the phones.
The GoldDealer.com Unscientific Activity Scale is a “5” for Friday. The CNI Activity Scale takes into consideration volume and the hedge book: (Monday – 6) (Tuesday 5) (Wednesday – 5) (Thursday – 6).
The scale (1 through 10) is a reliable way to understand our volume numbers. The Activity Scale is weighted and is not necessarily real time – meaning we could be busy and see a low number – or be slow and see a high number. This is true because of the way our computer runs what we call the “book”. Our “activity” is better understood from a wider point of view. If the numbers are generally increasing – it would indicate things are busier – decreasing numbers over a longer period would indicate volume is moving lower.
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