27/February/2015 Everyday Sydney Gold and Silver Prices

Gold Price $1550/oz, $49.83/g
Silver Price $21.21/oz, $0.68/g

Call us 02 9231 2535 or go to Sydney Gold Traders to find out more live gold and silver price

Chinese markets reopened earlier this week, following a week-long Lunar New Year Celebration, and renewed interest in Asian is helping to support the gold market, said analysts at UBS in a research note published Thursday.

They noted since trading resumed earlier this week, trading volumes on the Shanghai Gold Exchange have been picking up and premiums have also been pushing higher. However, the analysts add that although demand is positive, it is “nothing exceptional.”

“In a sense, we believe the unremarkable interest from physical markets observed in the past couple of months broadly remains in place,” they said.

Looking at imports from Hong Kong and Swiss trade statistics, analysts said that China imported about 91 tonnes of gold in January, relatively flat compared to December and down by about 5% from the previous year.

“This is not to say that Chinese demand this year is weak: it is not; but in our view, it is nothing to get excited about,” they said.

The analysts also warn that the trade data alone doesn’t necessarily provide a good picture of demand in the country. High onshore stockpiles of gold could be the reason for the low imports at the start of the year, they said.

These stockpiles need to be depleted before there is a need to significantly increase imports but UBS thinks this might take a little bit longer than expected as consumer demand, similar to investor demand, has been unimpressive.

According to their research, the Swiss-based bank said, jewelry sales outperformed other retail products during the holiday period but the data still disappointed.

“We note that a gradual shift in consumer behavior appears to be under way, whereby shopping is becoming less concentrated during traditional festivals: instead, purchases are becoming more spread out via online shopping throughout the year, and are also being absorbed in daily consumption,” they said. “Overall feedback from gold and jewelry retailers on Chinese New Year sales generally ties in with our observations on China’s gold demand, as well as indications from trade flows so far this year – still healthy, but nothing exceptional and likely flattish versus last year.”

Gold prices ended the U.S. day session with modest gains Thursday, but well down from highs seen early in the session. However, traders were still impressed by the yellow metal’s ability to hold any gains at all, given the very bearish outside market forces—a sharply higher U.S. dollar index and sharply lower crude oil prices. Short covering in the futures market and bargain hunting in the cash market were featured. Also, better demand for physical gold coming out of Asia this week, especially from China, was a bullish factor for gold. April Comex gold was last up $7.00 at $1,208.50 an ounce. May Comex silver was last up $0.116 at $16.59 an ounce.

Some upbeat U.S. economic data released that included higher-than-expected durable goods orders and a higher reading on core U.S. inflation pushed the U.S. dollar index sharply higher in morning trading. Meantime, crude oil prices traded sharply lower as attitudes in that market have turned more bearish this week.

In overnight news, European government bond prices rallied, with many yields hitting record lows, as investors anticipate the European Central Bank buying Euro zone bonds in April, to begin its quantitative easing of monetary policy plan. Reports said EU government bonds are already in short supply. The ECB will buy 60 billion Euros in bonds each month until September of 2016. European stocks rallied Thursday and are at or near multi-year highs, also supported by the upcoming QE by the ECB.

The Euro zone also got some more upbeat economic data Thursday, as bank lending in the region declined less than expected, while employment numbers in Germany showed improvement. Consumer confidence in the Euro zone also improved from January to February, it was reported Thursday.

Asian stock markets rallied Thursday on ideas the Chinese government will soon work to further stimulate the Chinese economy. China’s National People’s Congress begins next week, at which time new economic stimulus measures could be announced. This was also a mildly bullish underlying fundamental factor for the precious metals Thursday.

The London P.M. gold fix was $1,208.25 versus the previous A.M. fixing of $1,220.00.

Technically, April gold futures prices closed near mid-range. The gold bears still have the firm overall near-term technical advantage. A six-week-old downtrend is in place on the daily bar chart. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,236.70. Bears’ next near-term downside price breakout objective is closing prices below solid technical support at this week’s low of $1,190.00. First resistance is seen at today’s high of $1,219.90 and then at $1,223.00. First support is seen at today’s low of $1,203.40 and then at $1,200.00. Wyckoff’s Market Rating: 3.0

May silver futures prices closed nearer the session low today and saw more short covering. Silver bears still have the firm near-term technical advantage. A six-week-old downtrend is in place on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $17.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.00. First resistance is seen at today’s high of $16.905 and then at $17.00. Next support is seen at today’s low of $16.52 and then at Wednesday’s low of $16.295. Wyckoff’s Market Rating: 3.0.

May N.Y. copper closed up 495 points at 269.30 cents today. Prices closed nearer the session high today and hit a six-week high. The key “outside markets” were in a bearish posture for copper today, yet copper rallied anyway, which is a bullish clue for the red metal. The copper market bears still have the overall near-term technical advantage but the bulls have gained upside momentum to suggest that a market bottom is in place. A four-week-old uptrend is in place on the daily bar chart. Copper bulls’ next upside breakout objective is pushing and closing prices above solid technical resistance at 280.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 255.00 cents. First resistance is seen at today’s high of 271.40 cents and then at 275.00 cents. First support is seen at 265.00 cents and then at today’s low of 263.60 cents. Wyckoff’s Market Rating: 4.0.

For many years most of the perennially bullish precious metals commentators, led in terms of continuing vehemency on the matter by the Gold Anti Trust Action Committee (GATA), have been claiming that precious metals prices are being heavily manipulated by the big commercial banks in collusion with the U.S. Fed and other central banks.

And they cite as evidence various documentation, mostly quite old, obtained under freedom of information requests, together with some seemingly very strange volume and price movements on the COMEX markets at potentially key inflection points for precious metals prices, as well as the huge short positions held in all four major precious metals by a small group of major banks in particular.

It has always been the gold bulls’ gripe that the evidence they have come up with has been totally ignored by the mainstream media, but is this all changing?

In a key article published on Monday this week, perhaps arguably the most prestigious globsl mainstream financial newspaper of all, the Wall Street Journal, reported that at least 10 major global banks are being investigated for precious metals market rigging by the U.S. authorities.

The paper notes specifically that it has received reliable information that prosecutors in the Justice Department’s antitrust division are scrutinizing the benchmark price-setting process for gold, silver, platinum and palladium in London, while the Commodity Futures Trading Commission has opened a civil investigation, presumably into activities on the major commodities markets.

The newspaper reports that the mega banks under investigation include HSBC from the UK, which confirmed as much in the bank’s latest annual report also issued on Monday, JP Morgan Chase and Goldman Sachs from the U.S., Bank of Nova Scotia from Canada, Barclays and Standard Bank from the UK, Credit Suisse and UBS from Switzerland and Société Générale from France.

It seems likely that others may be drawn into the investigations as well.

While some of the investigations revolve around the rather archaic London Gold Fixing system, which is being replaced from next month by a new electronic process, it is worth pointing out that a recent investigation into this by the U.K. and German authorities found no evidence of wrongdoing.

There does seem to be a fair amount of circumstantial evidence that there is at least a degree of price rigging on the major commodity markets by the big money.

This is both in terms of the short positions held, and the need to protect them, and also in the futures markets, particularly for gold and silver, where enormous paper trades are put in place which would seem to have no other purpose than an attempt to influence physical pricing.

However the scope and focus of any official enquiry may be key in whether these specifics are duly investigated or not. Some previous CFTC investigations appear to have fallen short in this respect (the manipulation theorists again suspect collusion) and there’s no guarantee that any new investigation will be any different. But at least the possibility that the big money managers (the mega banks) might actually try to manipulate markets to their advantage has at last reached the attention of the mainstream media. It’s a start!

25/February/2015 Everyday Sydney Gold and Silver Prices

Gold Price $1535/oz, $49.35/g
Silver Price $20.86/oz, $0.67/g

Call us 02 9231 2535 or go to Sydney Gold Traders to find out more live gold and silver price

On Tuesday the gold price continued to lose ground as money rotates into riskier assets like stocks. In thin volumes on the Comex division of the New York Mercantile Exchange, gold futures for April delivery ended the day at $1,1999.30 an ounce, down slightly from Monday’s close after earlier slumping to near its lowest for the year at $1,190.60.

While the gold price struggles equity markets continue to reach new highs. London’s FTSE-100 hit an all-time record on Tuesday, while US stock markets did the same after comments from Chair Janet Yellen reassured investors about the timing of rate hikes.

California-based investment site Gold Eagle interviewed noted gold market commentator Nick Barisheff who provided some insights into the disconnect between the economy and capital markets and between paper and hard assets. The president and CEO of Bullion Management Group also showed two fascinating long-term graphs that capture the schizophrenic nature of markets today:

G-E: What asset classes are considered today very inexpensive relative to historical standards and current global economic conditions?

Instead of getting distracted by the manipulation, consider it a gift from the central banks.
Nick: For the precious metals sector, gold, silver and platinum are very inexpensive today. Right now there is a rare anomaly where platinum is below the price of gold and silver is grossly undervalued with respect to gold. The silver/gold ratio is around 73:1. Based on the US geological survey of how much gold to silver is in the ground, there is sixteen times more silver than gold in the earth’s crust. Under the US Coinage Act when you had the bimetallism standard, it was 16:1. In 1980 the ratio was 16:1. If the ratio reverted to the mean it would be around 56:1. The prices are way out of line for silver and there is a depressed gold price. Platinum is grossly undervalued, silver is grossly undervalued relative to gold and gold is dramatically undervalued. Undervaluation brings us to the $10,000 per ounce gold figure. Until 2012, the US debt and the gold price had a positive correlation of 97%. Then the figures diverge through manipulation, the gold price goes down and the US debt keeps rising. To get back to the correlated relationship that has been there for at least 20 years, the gold price would have to return to around $1,800. Gold is undervalued, silver is more undervalued and platinum is undervalued, so there is a lot of catching up to do. Instead of getting distracted by the manipulation, consider it a gift from the central banks. Right now gold, silver and platinum are all at a discount, so it is an ideal time to buy as much as you can.

CHART: Gold vs Fed debt shows fair price today is $1,800

gold-eagle-barisheff-chart-gold-fed-debt
Source: Gold-Eagle, Bullion Management Group

G-E: What asset classes are grossly over-valued?

Nick: People are pouring money into the US equity markets instead of looking at traditional calculations like P/E ratios and earnings per share, both of which are manipulated by financial engineering. The Warren Buffet indicator is the telling one where the market cap of the S&P500 is divided by the US GDP. That indicator is rising and is compounded by the vulnerability of record high margin debt for stocks.

gold-eagle-barisheff-chart-buffet-gdp-stocks