GS: Gold Seeker Closing Report: Gold and Silver Gain Nearly 1% and 2%
The Metals:
Gold and silver rose about 1% in Asia and London and then extended their gains in morning New York trade to as high as $936.85 and $13.57 by about 11AM EST before they fell back off a bit in the last couple of hours of trade, but gold still ended with a gain of 0.90% while silver closed with a gain of 1.73%.
Euro gold rose to about €664, platinum gained $19.50 to $1178.50, and copper rose over 8 cents to about $2.56.
Gold and silver equities rose nearly 4% by late morning before they fell back off a bit into the close, but they still ended with almost 3% gains on the day.
The Economy:
Tomorrow at 8:30AM EST brings second quarter GDP expected at -1.5%. Core PCE is expected at 2.4%, the Chain Deflator is expected at 1.0%, and the Employment Cost Index is expected at 0.3%. At 9:45 is Chicago PMI for July expected at 42.0.
The Markets:
Oil climbed over 5% while the U.S. dollar index fell as better than expected earnings reports rejuvenated hopes over the economy and sent the Dow, Nasdaq, and S&P about 1% higher on the day.
Treasuries rose after today’s $28 billion 7-year note auction capped off a record high week of the government’s issuance of $115 billion of debt and actually went pretty well. The bid-to cover ratio of 2.63 was better than the recent average of 2.4 and the high yield of 3.369% was also pretty good, but indirect (foreign) buying was a little week.
Among the big names making news in the market today were Kellogg, Sony, Sharp, Nintendo, Exxon, Dow Chemical, Cablevision, Tyco, Symantec, Yahoo, MasterCard, and Motorola.
The Commentary:
“Dear CIGAs,
The dollar rallied in terms of the USDX yesterday, and the Euro came under pressure as Goldman Sachs repudiated a longstanding Euro buy and hold recommendation by issuing a sell Euro recommendation as the 5 year US Treasury bond auction went sour.
Logic has nothing to do with day to day trading. We all know the games that are played by big money interests with their lightening fast privileged information, goosed bids and offers, market manipulation (just in case you did not know exactly what that is all about) plus gold and silver market bravado bids and offerings to force price and neither buy or sell quantity.
Logic does have a lot to do with trends.
Let’s look at the logic of yesterday, forgetting the manipulative market intervention.
If you were to believe the market, you run out and BUY the US dollar to avoid risk BECAUSE MAJOR INTERNATIONAL INTERESTS WERE NO LONGER INTERESTED IN ACCUMULATING MAJOR ADDITIONAL DOLLAR DEBT ITEMS WHICH EQUATE TO THE DOLLAR ITSELF BEARISHLY. That is SIMPLE LOGICAL supply versus demand reasoning.
Now that is an exercise in INVESTMENT INSANITY.
Now here are today’s items concerning dollar fundamentals.
Keep in mind that if Bernanke does not support these US Treasury bond auctions without limit via QE, Bernanke whose term is coming up, is out, the Fed is a relic, and QE will support the auctions.
Chairman Bernanke’s decision is to either go full blast with QE or go back to teaching at Princeton while having chaired the demise of the Federal Reserve.
Volcker won it all. Greenspan gave it all way and more.
Bernanke will have chaired the demise of the Federal Reserve and its transition into something with teeth like the Department of Commerce plus an office for two lower level employees acting as financial traffic cops.”- Jim Sinclair, JSMineset.com
“Dear CIGAs,
The CCI (Continuous Commodity Index) bounced from near the 50% retracement level of its move up from the December low as money flooded back into the commodity sector after that same money flooded out of it yesterday. The idiocy and madness continues unabated it seems. Trying to read too much into any one day’s price action has become the sport of fools so let’s not get snared in that net. Rather let’s try to use the longer term charts to see if we can see how the battle between the deflationists and the inflationists is faring.
Obviously with crude oil and copper soaring, gold was not going to stay down today, and with the equities continuing their orchestrated low volume move higher, the good times were here again in the minds of the hedgies, or better yet, their trading algorithms which were busy jettisoning everything that looked remotely like a commodity yesterday.
The grain pits, led by the soybean market, tore higher today as news of Chinese buying set a fire under those markets. When you get a combination of the energy markets (crude and natural gas) moving higher alongside the grains, you are not going to get serious selling pressure in gold outside of the bullion banks as nearly all of the spec funds will be buying.
I marvel at the copper market which is flirting once again with its highs made just a few days ago having quickly shrugged off the weakness of the past two days. It is difficult to argue with the trend in there but it sure makes once wonder if that market either knows something that the rest of us do not or if it is beginning to get ahead of itself.
Bonds – well, they are becoming almost completely unpredictable… down sharply at one point on the surging commodity markets and higher equities only to miraculously come soaring back after news that the auction on 7 years went very well (at least that is what we are supposed to believe). Apparently some feel that yields are at decent levels and want to own them but who really knows what games are being played in that market behind the scenes. There is simply way too much government intervention in the bonds with QA buys and such taking place to know how strong demand really is.
Gold managed to climb back above support down near the $932-$930 level which gave way yesterday. That is a good sign but I will not rest easier until price gets back above $940 and remains there. Only then can one say that the bears’ advantage has been lost. For now, $930 is a key support level that must remain intact to keep price from dropping down below $920. Only a climb back above $950 turns the tide in the favor of the bulls.
Open interest shows that the longs are indeed being forced out in gold with bullion bank short covering occurring.”- Dan Norcini, More at JSMineset.com
“August Gold closed up 7.7 at 934.9. This was 3.7 up from the low and 2 off the high.
September Silver finished up 0.227 at 13.485, 0.095 off the high and 0.1 up from the low.
The gold market was lifted off a number of different angles on Thursday. However, the bear camp might suggest that given the number of bullish issues in the headlines, the magnitude of the gains wasn't that impressive. Clearly renewed weakness in the Dollar was the main factor serving to lift gold prices today, but seeing a number of US equity market measures reach new highs for the year seemed to foment talk of economic revival and that is typically supportive to gold prices. With an equally sharp recovery rally in energy prices, there was a long list of very supportive outside market moves for the gold bulls to embrace.
The silver market clearly seemed to embrace its physical commodity market standing with the gains posted on Thursday. However, silver probably saw just as much support coming from the reversal in the Dollar and the range up extension in the US equity markets. While the scheduled US data Thursday morning wasn't definitively positive, the sharp rally in the equity markets seemed to make the outlook for recovery a more likely outcome in the months ahead. With key central banks recently promising to leave easy money policies in place, the presence of macro economic optimism might have sparked some fleeting ideas of inflation.”- The Hightower Report, Futures Analysis and Forecasting
