Looking for a bullish FOMC meeting

Tuesday, July 31, 2012 11:02:54 AM America/Toronto

Overnight news was fairly sparse and as a result, the precious metals traded in tight ranges.  As the debt crisis deepens in Europe, the broader euro-area unemployment rate has now reached 11.2%.  This is a record high dating back to the inception of the recording of the data in 1995.  There is also increased chatter surrounding the European Central Bank and it resuming its controversial bond-buying program and perhaps even pursuing quantitative easing.

Gold continues to pressure the pivotal resistance area of $1,628 – $1,630. Since the beginning of June, this area has been approached and / or touched thirteen times without decisively closing above it.  It has also touched it in the last three trading days.  With rumors last week of QE3 in the US that lent legs to gold, all eyes will be eagerly awaiting further commentary or allusions to it at the FOMC statement tomorrow at 2:15 AM EST.  Until a bullish statement is released, market participants are understandably wary about putting on new positions around gold’s precarious area here.  A failure to finally break this $1,628 figure on the heels of a less than bullish FOMC meeting will not bode well for gold heading into August.

 

Comments | Posted By Jamie Cohen

Toronto, Canada – August 1, 2012 – Canadian Bullion Services is pleased to announce its partnership with The Globe and Mail. During the RBC Canadian Open from July 22 – 28th, Canadian Bullion Services gave away complimentary three (3) – month subscriptions to attendees. Canadian Bullion Services continues to give away free Globe and Mail subscriptions every Monday at busy intersections all over the country.

“The RBC Canadian Open was the perfect event to launch this giveaway. The Open embodies great Canadian spirit, much like Canadian Bullion Services itself,” noted Jamie Cohen, the company’s Chief Strategy Officer.

The Globe and Mail is known as the country’s best business newspaper with the most up-to-date news and market analysis. Cohen states that these values align well with the mandate and level of service provided by Canadian Bullion Services, which believes that “economic research is worth investing in”.

Both Cohen and the firm’s Chief Operating Officer, Daniel Kroll, consider this to be a significant partnership for Canadian Bullion Services that will help emphasize the important role of precious metals in the months to come.

About Canadian Bullion Services: Canadian Bullion Services was established in order to provide individuals and businesses a vehicle to precious metals investing, while combining the lowest commissions and providing superior service for clients. Contact us to receive a free consultation on purchasing gold, silver, platinum, and palladium and review out weekly Bullion Update.

Comments | Posted By Jamie Cohen

South Korean Central bank buys 500,000 oz. of gold

Thursday, August 2, 2012 11:00:31 AM America/Toronto

Even though the South Korean Central Bank confirmed that it bought over 500,000 oz of gold in the month of July to add to its reserves, the yellow metal and the broader precious metals complex are still feeling heavy this morning.  In yesterday’s FOMC statement, the Fed once again failed to impress the market with its rhetoric.  Many participants had positioned themselves long the metal in anticipation of a bullish Fed statement that would finally allow gold to break through the key $1,628 resistance area.   With the Fed failing to explicitly mention QE3 though, this never came and gold has sold off accordingly.  Their wording in this meeting, and since the end of QE2, has continued to impress the same notions of taking further action when appropriate and “maintaining low interest rates for an extended period of time”.

In the European session overnight, ECB President Mario Draghi disappointed investors as well.  After claiming last week in London that he would do “whatever it takes” to preserve the euro, in today’s meeting he failed to outline specific ways of remedying the situation.  He broadly stated that governments should be ready to shore up liquidity but didn’t mention how this would be accomplished.  The market didn’t buy into his commentary and assets from equity bourses to commodities are all in the red as a result.  Gold is back on precarious footing and the downside seems the more likely scenario in the short term.  Should it close below $1,600, the next area of support comes from a four point trendline at $1,565.

 

Comments | Posted By Jamie Cohen

Gold testing the 200-day moving average

Wednesday, August 8, 2012 10:50:57 AM America/Toronto

In the early morning trade, October gold is pretty much unchanged and off its high today of $1619.1. The yellow one has over the last two trading sessions rallied and enjoyed the comments from ECB leadership late last week from Draghi. Also, some analysts have brought up new ideas that the Fed is more likely to act to support/stimulate the US economy in their upcoming September meeting.

If October gold can break above last week’s high of $1,630.6 a troy ounce, then I believe we can finally test the 200-day moving average which is currently resting at $1663.0 an ounce. Since the 14 period RSI is strongly pointing up and currently at 65.85 and will break 70.0 if it breaks last week’s high, I believe that $1700.0 would not be out of the question in the short-term.

 

Comments | Posted By Jamie Cohen

Violence in South African mining operation

Tuesday, August 14, 2012 10:47:40 AM America/Toronto

You know you’re in the midst of the summer doldrums when after being gone for a week on vacation, you come back, and all four precious metals are trading at the same exact price…  On increasingly thin volume, gold continues its consolidation with August’s range now inside of July’s which was inside June’s which was inside May’s.  The $1,628 – $1,630 area remains significant resistance which was failed at yet again in the last two trading days.  Since the beginning of June, $1,630 has been approached, but never closed above, a whopping 15 times.  With September just around the corner and considering that it is normally a bullish month for precious metals as investors return from summer keen on allocating funds, this $1,630 area in gold will almost assuredly be tested yet again in the early fall.  To the downside, support is coming in at a trendline at $1,572 and then below there at the low from 2012 of $1,527.  Despite the immediate risk and momentum seeming to be for lower gold prices in the next two weeks, traders should be wary about being short any of the precious metals as September arrives.

While news was fairly subdued overnight, participants who focus on the platinum group metals are closely monitoring developing headlines in South Africa.  In the past few days, nine people have been killed in violence related to Lonmin’s Western South African mining operation.  The situation seems to be a result of two rival unions, the established NUM and the newer AMCU, competing to attract members in order to more effectively negotiate with Lonmin.  Further escalation of this story will certainly compromise Lonmin’s mining operation and therefore could potentially cause a squeeze in platinum in the short term.

 

Comments | Posted By Jamie Cohen

Soros and Paulson increase their positions in gold

Friday, August 17, 2012 10:41:15 AM America/Toronto

I’m starting to feel like a broken record here… overnight news was sparse and the precious metals are yet again trading quietly in tight ranges as volumes on the exchange remain depressed.  In comparison to July 2011, the average daily volumes on the Comex exchange for gold and silver in the month of July 2012 are down 17% and 42%, respectively.   Summers are generally bleaker trading periods for the precious metals, but this summer seems to be especially so.   In a report released today, the World Gold Council cited that gold demand dropped by 7.1% in the second quarter of 2012 (compared to Q2 2011).  Jewelry demand fell by 15% while investment demand tapered off by a more staggering 23%.  Due to the new gold duty in India that was imposed earlier this year, gold imports fell by 56% in the same time period of Q2.

Shedding a little more positive light on gold, it was reported yesterday that two big names in the investment world increased their exposure to the yellow metal.  Soros’ fund doubled its investment in the SPDR gold ETF to 884,000 shares (a share in the ETF equals .1 toz gold).  Paulson increased his holdings in the ETF by 25% to 21.8 million shares as well.  Hopefully the fact that “smart money” is buying gold bodes well for it as summer winds down and we head into the typically bullish month of September.  For now, the ceiling still remains strongly entrenched at $1,628 – $1,630 while bids over the last two weeks have materialized in the $1,585 – $1,590 range.

 

Comments | Posted By Jamie Cohen

Breakout move in gold and silver?

Tuesday, August 21, 2012 10:30:26 AM America/Toronto

Is this finally the break out move gold has been waiting for?  In order to convince the broader market that it is ready to make steady gains from its consolidation over the last four months, gold first needs a close today above $1,630 (it looks like this will be achieved).  Above there it must convincingly break the 200 day moving average at $1,643, a level it hasn’t traded above since the end of March, in order to project into a new trading range.

In the overnight session, the yellow metal was able to catch bids on the back of two headlines.  First, China hinted that fresh economic stimulus could be on the horizon in the second half of the year.  Second, the USD began to materially weaken against the euro as rumors circulated that the European Central bank would step up efforts to aid peripheral euro-zone economies.  Considering that gold had pressured the $1,630 area fifteen times in the last three months, these two developments proved to be enough to finally allow the yellow metal to trigger stops and break above $1,630.  There was even a 7,000 lot (700,000 toz) buy sweep on the Comex electronic system that caused gold to spike to $1,638 from $1,630 in a matter of seconds.   While today’s move is encouraging, gold bugs should be cognizant of the fact that the move higher is happening on what is still considered lackluster overall volume.

 

Comments | Posted By Jamie Cohen

Summer is over, precious metals rise!

Thursday, August 23, 2012 4:07:33 PM America/Toronto

What a recent ride it has been for the precious metals!  Since last Wednesday, gold is up 5.35%, silver is up 11.80%, platinum is up 12.60%, and palladium is up nearly 15%.  The summer doldrums for the precious metals seem to have ended a few weeks early as our markets are once again exciting participants.  The precious metals are in the midst of a perfect storm from a technical, geopolitical, and fundamental perspective which has allowed them to explode higher over the last week.

Platinum and palladium caught initial bids last week on headlines of South African mining unrest.  Their moves upwards became more exaggerated once news was released of the deaths of 44 people (34 were shot dead by police) in relation to strikes at Lonmin’s Marikana mine.  Now there is fear in South Africa that the turmoil will spread to other mines.  Considering that about 80% of the world’s platinum is mined in South Africa, even temporary strikes and mine shutdowns have a very real impact on the price action of the white metal.

While platinum and palladium have influenced the overall precious metals complex over the last week, gold and silver have been given further legs by the latest FOMC meeting and renewed anticipation of quantitative easing.  At yesterday’s meeting, the FOMC made the strongest hints in quite some time at the prospects of QE3.  Given the committee’s belief that inflation is likely to remain low while unemployment higher than desired, they are more willing to consider unconventional policies to rectify the economy.  Gold has now steamrolled through the 200 day moving average of $1,642.50 and the next major target is $1,700

 

Comments | Posted By Jamie Cohen

U.S. Labour Day sell off in precious metals

Tuesday, August 28, 2012 3:27:52 PM America/Toronto

After a very impressive rally in the precious metals over the last week, all four are taking a breather today as they consolidate and become accustomed to these higher trading ranges.  It would not be surprising to see a bit more of a sell off ahead of the Labour Day holiday in the US and then a push higher in the typically bullish month of September.  In news this morning, US home prices bounced up in June for the second month in a row by 2.3%.  This was the strongest back-to-back monthly advance in the more than decade long history of the price gauge.  With this news, the USD was able to take back some gains against the euro after trending lower since mid-July.

Support for gold is coming in at the 200 day moving average of $1,640 while the market is likely to find offers waiting ahead of $1,700.  The PGMs (platinum group metals including palladium) have been the real stealers of the show though recently and given their fundamental picture, might be the best buy here of the precious metals.  Market participants are still closely watching developments in South Africa in relation to Lonmin and the broader mining situation.  Despite initial reports of Lonmin furthering talks with their mine workers, attendance at the mines was lower again this morning.  Support for platinum is at the 200 day moving average of $1,515.

 

Comments | Posted By Jamie Cohen

QE3 and support at the moving average for silver

Thursday, August 30, 2012 3:23:28 PM America/Toronto

The precious metals have continued to consolidate this week as traders trim positions ahead of Federal Chairman Ben Bernanke’s speech tomorrow.  While the speech should spur some activity in the market tomorrow, overall volume on the Comex and Nymex should remain low as we head into the long holiday weekend in the US.

Yesterday, the precious metals took a hit with the release of improved US GDP figures.  Gold reacted negatively as traders expectations for QE3 became dampened.  The sell off today in the precious metals seems to be a result of the broader liquidation seen over a host of asset classes ranging from equities to commodities.   The precious metals are clearly not the only asset succumbing to apprehension of further news regarding QE3 tomorrow.   This temporary downturn should provide some decent opportunities to get long the market.  Today silver has already held perfectly at the 200 day moving average of $30.30.  Participants should keep an eye on the 200 day moving average of gold $1,641.50 as an entry point as well.

 

Comments | Posted By Jamie Cohen