Commentary for Wednesday March 24th , 2015 (www.golddealer.com)
By Ken Edwards and Richard Schwary of California Numismatic Investments Inc.………
Gold closed up $3.70 on the Comex today at $1191.70 which makes for higher prices for the 5 th day in a row.
Foreign physical demand is solid as India gets back into the game. Imports for January saw 39 tonnes, February 50 tonnes and so far in March imports have been 130 tonnes through legal channels. This has happened despite the fact that the import tax of 10% has yet to be removed. Lower prices are a factor as is the removal of the 80:20 rule which required re-export of 20% of gold imported into the country.
The recently firmer price of gold remains dollar driven in that the 5 day Dollar Index has moved from a high approaching 100.00 into today’s range of 97.00 – as of this writing it is trading at 97.18 with some upward bias but the weekly trend has been decidedly weaker – supporting higher gold prices.
Crude oil has an upward bias these last 5 days but seems steady in the $47.00 to $48.00 range.
As we have recently pointed out – the premium on smaller bullion coins like the Swiss and French 20 Franc and the British Sovereign are moving higher. My original thought was that this is happening because of European safe-haven buying. But let me also throw this piece of information into the pot. Paying with euro cash is very limited in Europe so I wonder if these smaller gold coins are becoming popular because they fall under the cash radar?
Now this is surprising – is Bank of America getting bullish on gold?
This from eFXnews.com – “Tuning to gold, B of A thinks that the completed, intra-day impulsive advance from $1143.00 (Mar-17 low) says the trend has turned bullish.
“NOW, it’s time to buy a dip. Pullbacks should not exceed the Mar-17 low at $1143.00. Upside targets are seen to $1307.00/$1345.00 and potentially beyond,” B of A advises.
In line with this view, B of A runs a limit order to buy Spot Gold at $1175.00, and to add at $1160.00, with a stop at $1142.00, and a target at $1307.00.”
Silver moved higher by $0.09 at $16.96. Yesterday the physical silver market was cold and today we are selling US Eagle Monster Boxes like crazy – go figure.
Platinum closed down $3.00 at $1141.00 and palladium closed down $7.00 at $763.00. Platinum is now trading at a $50.00 discount to gold – any takers out there? Physical platinum bullion products remain thin.
PAMP, one of the largest platinum bar producers in the world today, claims it will be mid-April before additional bars are available. Platinum bullion coins are also scarce – some dealers are now asking up to $200.00 over spot for the US Platinum Eagle (not now in production). We have a limited number of the popular Australian 1 oz Platypus at $95.00 over spot.
This from Jeffry Bartash ( MarketWatch) – Consumers pay higher prices in February for first time in four months – WASHINGTON – “The great deflation of 2014 caused by the plunge in oil appears to have run its course: U.S consumer prices rose in February for the first time in four months.
The consumer price index climbed by a seasonally adjusted 0.2% last month, the Labor Department said Tuesday. Gasoline prices have rebounded in early 2015, with the cost of oil stabilizing at around $50 a barrel after selling for more than $100 last summer.
Higher costs for food, housing and new cars also contributed to the increase in consumer prices in February. Still, there’s been zero overall inflation in the last 12 months, the offshoot of the biggest drop in gasoline prices since the Great Recession. The annualized rate of consumer inflation had even turned negative in January for the first time since 2009.
If food and energy are excluded, so-called core consumer inflation has risen at a 1.7% rate over the past 12 months. Although the Federal Reserve uses a different index as its preferred price gauge, the central bank views a 2% inflation as healthier for the economy. The central bank is more likely to raise interest rates if inflation starts to move steadily higher.
In February energy prices rose 1%, mainly because of higher gasoline costs. Yet gasoline price are still down almost 33% in the past year.
Food prices moved up 0.2% last month, bringing the increase over the past 12 months to 3%.
The price of housing also climbed again as shelter costs also rose 3% in the past year. Higher housing costs could be a drag on the economy if they don’t slow down.
The cost of medical care, however, fell in February for the first time since 1975, although overall health-care costs were unchanged.
The combination of higher consumer prices and a small decline in wages last month led to a 0.1% decline in inflation-adjusted hourly earnings — the first decline in five months. Real or inflation-adjusted wages for American workers have risen a modest 2.1% over the past year.”
The walk-in cash trade was just moderate today and the phones were on the slow side.
The GoldDealer.com Unscientific Activity Scale is a “ 4” for Tuesday. The CNI Activity Scale takes into consideration volume and the hedge book: (last Wednesday – 5) (last Thursday – 4) (last Friday – 7) (Monday – 5). 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”.
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