• Gold: 1,558.59 -1.26
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  • Oil: 58.27 -0.5

July 24: Gold Gains While Dow Drops

Chris Mullen
|
Tuesday, July 24th
 

Close

Gain/Loss

Gold

$1582.30

+$5.10

Silver

$27.00

UNCH

XAU

143.11

-0.30%

HUI

387.82

-0.22%

GDM

1124.45

-0.07%

JSE Gold

2305.74

+50.42

USD

83.94

+0.29

Euro

120.71

-0.49

Yen

127.97

+0.36

Oil

$88.50

+$0.36

10-Year

1.404%

+0.031

T-Bond

152.875

+0.71875

Dow

12617.32

-0.82%

Nasdaq

2862.99

-0.94%

S&P

1338.31

-0.90%

 
 

The Metals:

 

Gold edged up to $1584.09 at about 9:30AM EST before it dropped back to $1569.05 in the next few hours of trade, but it then bounced back higher into the close and ended with a gain of 0.32%. Silver slipped to as low as $26.60 before it also bounced back higher into the close and ended unchanged on the day.

 

Euro gold rose to about €1311, platinum lost $17.35 to $1380.15, and copper fell another few cents to about $3.35.

 

Gold and silver equities saw slight gains for most of the morning before they fell to see about 1% losses by midday, but then then rallied back higher in late trade and ended near unchanged.

The Economy:

 

Report

For

Reading

Expected

Previous

FHFA Housing Price Index

May

0.8%

-

0.7%

 

Tomorrow at 10AM EST brings New Home Sales for June expected at 373,000.

 

The Markets:

 

Charts Courtesy of http://finance.yahoo.com/

 

Oil found slight gains on decent manufacturing data from China.

 

The U.S. dollar index rose as the euro fell after poor manufacturing data out of Germany and France.

 

Treasuries rose as the Dow, Nasdaq, and S&P fell on persistent worries about Europe.

 

Among the big names making news in the market today were Apple, Deutsch Bank, Cisco, UPS, AT&T, and JPMorgan.

The Commentary:

 

Both Gold and Silver are under selling pressure today as the sell off in the grains seems to have pushed a large amount of hot money out of the commodity sector. Soybeans are currently locked at limit down as is the front month corn contract. Talk that Smithfield is importing corn from Brazil has sent supply side bulls scurrying for cover and demand side bears are pressing their case. The pool in the July was 112K at one time and is now down to 26K currently. In the November Beans, the pool is at 37K as I write this.

Traders had been bidding up commodities in general of late as evidenced by the recent climb in the CCI (Continuous Commodity Index) but apparently the onset of some rain in the Corn Belt combined with continued Dollar strength and nervousness surrounding Spain and other European nations, is too much for some of the new longs to handle. They are heading to the exits today in both commodities and in equities.

One of the results of this has been to push the yield on the Ten Year Note down to an amazing 1.411 as I write this. Clearly interest rates continue to plummet globally as traders rush for anything that they feel can provide some sort of shelter. It is an astonishing thing to see yields in Denmark actually go negative!

The Dollar has also pushed into a new 52 week high today and is currently trading over the key 84 level on the USDX. It looks poised to head higher at this point. That is going to give us some extra headwinds for the precious metals do deal with, particularly silver.

For the last two weeks, every time silver has pushed below the $27 level, it has always popped back above that level before the session has closed. That has indicated the presence of strong buying. If these buyers do not surface before the end of today's trading session, silver will very likely head lower and retest the key $26 level. It must hold that level to prevent another round of long liquidation and fresh short selling by hedge funds playing the "slowing global economy" theme. Weakness in the mining shares is not aiding the cause of the bulls right now.

 

Gold coin sales are apparently slowing compared to the same period last year as reported by Dow Jones this morning.

Here is the short blurb:

The US Mint's sales of gold coins have been "unusually low" in
July, even when adjusted for the seasonal summer lull in gold coin demand, says
HSBC. With 17,500 troy ounces of gold sold as of July 23, the Mint is far
behind the 65,500 troy ounces it sold in the same month of 2011.

Again, with inflation fears being trumped by slowing growth fears, gold is catching fresh short selling as well as long liquidation. However, it is once again down into the region that has seen strong buying based out of Asia emerge. From here down towards $1525, strong hands have been accumulating. We will watch to see if they are still making their presence felt.

 

The Complacency Index or the VIX as others properly call it, is finally waking up. Maybe, just maybe, we are finally seeing some of these numbed, see no evil traders begin to get nervous. Hard to see what more they could need to rattle their cages but they apparently have a great deal more confidence in Central Bankers and monetary officials than I do.

 

The HUI chart has turned ugly once again and is now threatening to close in on the May low near the 370 level. Pressure on the mining shares has been very strong. Some of this is manipulative in nature; some of it is related to the ratio spread trade with hedge funds buying the bullion and shorting selective shares and profiting from the spread between the two. Notice how effective the Fibonacci retracement levels have been when analyzing the price action of this index.

 

The S&P 500 is flirting with its 50 day moving average, a key technical level on the price charts. Notice how it bounced off of this level earlier this month and proceeded to make a run back towards what might be a double top forming near 1375. Support is layered under this market as noted on the chart. A breach of 1300 could get things mighty ugly very quickly. We will see if the usual suspects arrive just in time to once again "miraculously" revive the index and prevent it from inflicting technical damage on the charts as they have done so often this year.- Dan Norcini, More at http://www.traderdannorcini.blogspot.com/

 

GATA Posts:

 

 

Lars Schall interviews Erste Bank's Ronald Stoeferle, Part 2

J.S. Kim: Most gold and silver investors haven't learned to handle volatility

Andrew Hepburn: Market rigging by central banks is gaining respectability

 

The Statistics:

As of close of business: 7/23/2012

Gold Warehouse Stocks:

10,810,732.969

+32.15

Silver Warehouse Stocks:

141,230,445.157

-1,329,524.33

 

Global Gold ETF Holdings

[WGC Sponsored ETF’s]

 

Product name

Total Tonnes

Total Ounces

Total Value

New York Stock Exchange Arca (NYSE Arca) AND Singapore Exchange (SGX) AND Tokyo Stock Exchange (TSE) AND Hong Kong Stock Exchange (HKEx)

SPDR® Gold Shares

1254.640

40,337,943

US$63,403m

London Stock Exchange (LSE) AND NYSE Euronext Paris AND Borsa Italiana AND Frankfurter Wertpapierbörse (Deutsche Börse - Xetra)

Gold Bullion Securities

123.92

3,984,289

US$6,288m

London Stock Exchange (LSE) AND NYSE Euronext Paris AND Borsa Italiana AND Frankfurter Wertpapierbörse (Deutsche Börse - Xetra) AND NYSE Euronext Amsterdam

ETFS Physical Gold

146.69

4,716,130

US$7,690m

Australian Stock Exchange (ASX)

Gold Bullion Securities

11.16

358,789

US$566m

Johannesburg Securities Exchange (JSE)

New Gold Debentures

39.35

1,265,119

US$2,041m

Note: No change in Total Tonnes from yesterday’s data.

 

COMEX Gold Trust (IAU) Total Tonnes in Trust: 181.96: No change from yesterday’s data.

Silver Trust (SLV) Total Tonnes in Trust: 9,708.78: +12.07 change from yesterday’s data.

 

The Miners:

 

Paramount’s (PZG) assay results, Gold Resource’s (GORO) dividend, Eldorado’s (EGO) revoked suspension order, Seabridge’s (SA) feasibility study, Nevsun’s (NSU) mineral reserves estimate, and Revett’s (RVM) second quarter 2012 production results were among the big stories in the gold and silver mining industry making headlines today.

 

WINNERS

1. Nevsun

NSU +6.53% $3.10

2. AuRico

AUQ +4.24% $6.39

3. Eldorado

EGO+3.57% $10.15

LOSERS

1. Revett

RVM-9.55% $3.03

2. Timmins

TGD -6.43% $1.60

3. Gold Reserve

GRZ -4.39% $3.27

Winners & Losers tracks NYSE and AMEX listed gold and silver mining stocks that trade over $1.

Please see Yahoo’s Mining/Metals News Wire for all of today’s mining news.

 

- Chris Mullen, Gold Seeker Report

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Additional Resources for today’s Gold Seeker Report can be found:

© Gold Seeker 2012

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