Gold Unchanged in Quiet Trading
Commentary for Tuesday Nov 29, 2016 (www.golddealer.com) – Gold closed unchanged today at 1190.80 so it continues to zig-zag in price moving opposite the dollar. The Dollar Index traded around 101.20 and moved to 101.60 before moving below 101.20 and finally settling unchanged. Gold followed along – the overnight Hong Kong market saw trading in the $1190.00 range which weakened in London ($1180.00) finally moving higher in the domestic trade becoming stable around $1088.00.
The solid move in Consumer Confidence did seem to push prices lower initially but gold finally decided to ignore the news and finished unchanged from yesterday’s close of $1190.80.
Technically the price of gold broke down before Thanksgiving as short-traders had their way pushing gold below the long-term support level of $1200.00. Most held their breath – many still are – waiting for that second shoe to fall.
But this market has been stubborn – supported by the physical trade that seem happy increasing their bullion holdings as prices move lover. Still early days however – higher interest rates being problematical. What the Federal Reserve does not need at this point is a stronger dollar – this creates a big headache for American business overseas. So it’s not just a matter of whether they can get away with a ¼ point increase in December – they can – but at what cost?
There is an interesting whiff of something new in the air however – the notion that gold might do better than most think if they raise interest rates a small amount. A small increase would make little difference and it would give traders a change to see if the sky is going to fall. It won’t and this along with continued physical interest worldwide might just be the right tonic for gold.
This from Berkeley Lovelace Jr. (Reuters/CNBC) – Consumer confidence hits 107.1 in November, versus 101.2 estimate – “Consumers had a more optimistic outlook about the economy in November, according to a monthly survey released Tuesday.
The Consumer Confidence Index hit 107.1 in November, up from 98.6 in October, according to data from The Conference Board on Tuesday, the highest since July 2007.
Economists expected the consumer confidence index to hit 101.2, according to a Thomson Reuters consensus estimate. The survey, a closely followed barometer of consumer attitudes, measures confidence toward business conditions, short-term outlook, personal finances and jobs.
“Consumer confidence improved in November after a moderate decline in October, and is once again at pre-recession levels,” said Lynn Franco, director of economic indicators at The Conference Board.
Franco added that while the majority of consumers were surveyed before the presidential election, it appeared from the post-election sample that optimism was not impacted by the outcome.
The percentage saying business conditions are “good” increased to 29.2 percent in November from 26.5 percent, while those saying it was “bad” fell to 14.8 percent from 17.3 percent, according to the report. Furthermore, the percentage of consumers that said jobs are “plentiful” increased to 26.9 percent from 25.3 percent.
The report stated, however, the proportion expecting more jobs in the months ahead was unchanged at 14.5 percent, but those anticipating fewer jobs fell to 13.8 percent from 16.6 percent.”
Silver closed up $0.16 at $16.74.
Platinum closed down $2.00 at $921.30 and palladium closed up $8.90 at $765.25.
I have always had this notion – perhaps unfounded that counterfeiting would become a plague in the modern world of internet imaging and high-definition photography. At any rate the amount of actual counterfeit money in circulation, especially in the US is not well known – figures vary and sources who might really know might not be in a position to say. My point being that if there were real fears of counterfeiting becoming big – those holding cash might choose gold or silver bullion as an alternative. Think about it – does it not make sense?
This from Arthur L. Friedberg (Coin World) – $30 million in counterfeit notes: Secret Service makes its largest seizure ever – Peru is the site of seizure in massive counterfeiting operation – As has been reported in various media outlets on a consistent basis, Peru has been known for several years as the counterfeiting capital of the world. The U.S. Secret Service and Peruvian authorities on Nov. 15 made the largest seizure of counterfeit currency in Secret Service history. One report attributed to it as much as 17 percent of the counterfeit currency in the United States.
At least some of the activity has now come to an end. On Nov. 17 the Secret Service announced the success of the largest seizure of counterfeit currency in the history of the agency.
Called Operation Sunset, it was the culmination of a global investigation involving six Peruvian-based criminal organizations. On Nov. 15, 2016, the Peruvian government, along with U.S. Secret Service agents, executed 54 pre-dawn search and arrest warrants in Lima. More than 1,500 Peruvian National Police officers were involved in the operation, and 48 people were arrested in all.
The Secret Service said that $30 million in counterfeit Federal Reserve notes and €50,000 in euro notes were discovered, six counterfeit plants were suppressed, eight counterfeit manufacturing presses seized, and over 1,600 printing plates and negatives of varying denominations were found.
“The Peruvian government has become a valuable partner in our efforts to combat counterfeit currency,” said Secret Service Director Joseph Clancy. “Protecting the nation’s financial infrastructure is a vital component of our integrated mission of protection and investigations,” he said.
The U.S. Secret Service opened a resident office in Lima in an effort to combat the widespread counterfeiting and to offer support and training to the National Police. An anti-Counterfeiting Task Force was created and Peruvian officers were trained at Secret Service training facilities.
Holiday Update – GoldDealer.com will be closed Fri (Dec 23th) and Mon (Dec 26th) for Christmas. And a reminder that delivery times can slow by as much as a week during the holiday season.
And a special wish from our family to yours – that each of you enjoy a blessed season.
The walk-in cash trade was fairly busy all day but the phones were hit and miss.
The GoldDealer.com Unscientific Activity Scale is a “4” for Tuesday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Tuesday – 6) (last Wednesday – 6) (last Thursday/Friday – Closed) (Monday – 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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