Commentary for Wednesday, Oct 24, 2014 (www.golddealer.com)
By Ken Edwards and Richard Schwary of California Numismatic Investments Inc.………
Commentary for Friday, Oct 24, 2014 (www.golddealer.com) – Gold closed higher up $2.70 at $1231.10. Gold was steady in Hong Kong and London overnight trading but after a failed attempt to move above the $1240.00 range yesterday this market remains defensive and needs more time to redevelop a trend.
Still it remains steady on both sides of $1230.00 going into the weekend.
The dollar and rates were up on the week and this creates problems for gold. Also the picture for oil remains negative – WTI Crude this month has moved from $95.00 to $82.00 and there is some talk it might break down – a move below $80.00 would also create further pressure on gold.
The two big factors to watch relative to the price of gold are first the results of next week’s Federal Open Market Committee (FOMC). Most believe the Fed will end the current quantitative program – and this will result in higher interest rates.
The jury is still out here as there is reasonable disagreement on the outcome because the Federal Reserve claims it will keep rates low for the “foreseeable future”.
The second important factor is how Mario Draghi will play the big slowdown in the European Union. Here too there is disagreement about what exactly is happening in Europe – is there a slowdown and deflation or has the Ebola scare just given everyone the jitters?
If EU President Draghi figures out a reliable way to inflate it will be good for gold. But here too there is a push – pull because a weaker euro usually means a stronger dollar.
Still Europe may produce a wave of safe-haven buying if anything goes off the tracts with its smaller countries. This weekend the results of European stress testing will be announced – a kind of check list for their financial institutions.
The idea alone that they are testing should at least raise some reasonable questions about liquidity. Will anything of substance happen? Probably not- but if the EU has problems it could turn into a worldwide disaster – and the run to safety would be big for gold.
So you can see there are plenty of cross currents and that is why gold will most likely remain trend less over the next week or two going into November – even skiddish as everyone tries to cover both sides of what appears to be a big divide.
Finally keep in mind that support for gold looks big around $1200.00 and there is reason to believe this level will hold just supported from physical demand. Real buyers like world central banks and Asian demand from China and India.
Silver closed up a quiet $0.02 at $17.13 – buyers and sellers are hiding.
Platinum closed down $4.00 at $1251.00 and palladium was up $4.00 at $781.00.
Precious Metal Closes & Dollar Strength – Oct. 20 through Oct. 24 – 2014
Gold Silver Platinum Dollar Index
Mon $1244.00 $17.30 $1268.00 $85.04
Tues $1251.00 $17.50 $1283.00 $85.40
Wed $1244.80 $17.18 $1271.00 $85.85
Thurs $1228.50 $17.11 $1255.00 $85.95
Fri $1231.20 $17.13 $1251.00 $85.71
Palladium Rhodium
Mon $761.00 $1230.00
Tues $775.00 $1230.00
Wed $775.00 $1230.00
Thurs $777.00 $1230.00
Fri $781.00 $1230.00
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 – 4 believe gold will be higher next week – 4 think gold will be lower and 3 believe it will be unchanged.
Our Patented Customer Survey – Gold’s Direction Next Week?
Like the employees our actual customers were given three choices – up – down – unchanged. We limited the survey to a random sampling of 100 transactions – unscientific yes but worth considering because these people actually took action: 55 people thought the price of gold would increase next week – 36 believe the price of gold will decrease next week and 9 think prices will remain the same.
This is interesting from Kitco’s Bodo Albrecht – Sapphire Vs. Gorilla Glass – A Win For Precious Metals – Alongside the introduction of Apple’s new iPhone 6, the bankruptcy filing of GT Advanced Technologies made headlines last week. GTAT was Apple’s designated supplier for sapphire glass screens which analysts widely expected to make its debut on the new products. It didn’t happen, and while we can only speculate on what went on commercially, here is a technical explanation.
To begin with, what is sapphire glass? Sapphires are naturally occurring minerals reflecting light in a variety of bright colors, depending on the impurities they contain. Only very pure sapphires are completely transparent and glass-like. Various processes were developed to artificially produce pure sapphires and have been in existence for a very long time. Starting material is alumina oxide (Al2O3). Large amounts of heat and pressure are required to first turn it into a blob of sapphire called a “boule”, which is then cut into thin wafers.
The art of all of the processes used lies not only in the cutting technique but also in the way the crystals themselves are grown in the process. Crucible materials vary but there is widespread agreement that iridium crucibles, despite the process taking the metal to its physical limits, will provide for the best temperature uniformity.
Sapphire glass, which has been used in watches for a long time is already used in some other smartphones and in parts of the iPhone (the fingerprint ID buttons). It is much harder than conventional glass and more scratch resistant but not indestructible as some sources claim; depending on the type of impact it will still shatter. Alas, because of the complicated production method it is also a lot more expensive than its rival, Gorilla glass.
Gorilla glass, developed by Corning Inc specifically for the first generation iPhone, has built a reputation of strength and scratch resistivity over many years. Now available in its third generation, it is used not only by Apple but also by many other producers of smartphones, tablets and the likes.
To make Gorilla glass, Corning uses large equipment made of platinum to melt, stir and pour the glass. Other glass manufacturers around the globe do as well, making technical glass a major application for fabricated platinum. Forever increasing demands for more purity and the prevention of inclusions have pushed platinum technology forward with the products it creates.
Whichever way the market develops, platinum and iridium will play a key role in making high quality technical glass, be it sapphire or Gorilla glass. So this battle of giants already has a winner: precious metals.
The walk-in cash trade was so quiet the staff started talking about lunch about 9:30 AM. The phones were equally uninteresting – it seems like gold’s failure to show strength above $1240.00 has really taken all the buzz out of the short term physical market.
The GoldDealer.com Unscientific Activity Scale is a “3” for Friday. The CNI Activity Scale takes into consideration volume and the hedge book: (Monday – 5) (Tuesday – 3) (Wednesday – 4) (Thursday – 3). 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 very busy and see a low number – or be very 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 – perhaps a week or two. 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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