Gold & Silver Digest: 2/11/13
The Gold & Silver Digest contains headlines of stories that members of this group deem relevant and/or interesting to precious metals enthusiasts.
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2/11/13 4:36 PM EST US close metals price quotes from Finviz
Gold prices ended the U.S. day session solidly lower and hit a fresh five-week low Monday. Fresh technical selling was featured as April Comex gold dropped back below its key 200-day moving average. April gold last traded down $18.10 at $1,648.70 an ounce. Spot gold was last quoted down $19.60 at $1,648.00. March Comex silver last traded down $0.506 at $30.935 an ounce.
Gold prices were under modest pressure in overnight trading and then those losses were extended at the New York futures opening after sell stop orders were hit below what was important near-term technical support at the late-January low of $1653.20.
Long term – on major sell signal.
Short term – on mixed signals.
Gold sector cycle - down as of Oct 13.
The Big Story now is that there is evidence that powerful forces will be brought to bear shortly to support the ailing US Treasury market, which is close to crashing critical support, and those wielding the power will have no qualms about sacrificing either the commodity markets or the stockmarket to achieve this objective, if necessary. We will look at the outlook for the bond market and stockmarket later, after we have examined the gold charts and indicators.
On the 6-month chart for gold we can see that the time window for an upside breakout from the downtrend in force from last October is now rapidly closing, and the downtrend line and falling 50-day moving average, both close by overhead, looks set to force a breakdown soon from the lesser uptrend channel in force from December. The still bearish COT for silver does not help either, since it is unlikely that gold will go up without silver. The big question if gold does break down is whether the support at and near the high volume hammer low of early January will hold. It probably won’t, given the way things are shaping up, and if it doesn’t gold is heading down to the much more important support level at $1500.
When Vladimir Putin says the U.S. is endangering the global economy by abusing its dollar monopoly, he’s not just talking. He’s betting on it.
Not only has Putin made Russia the world’s largest oil producer, he’s also made it the biggest gold buyer. His central bank has added 570 metric tons of the metal in the past decade, a quarter more than runner-up China, according to IMF data compiled by Bloomberg. The added gold is also almost triple the weight of the Statue of Liberty.
FNC’s Eric Bolling on the current trends in gold pricing based on quantitative easing taking place around the world.
As leaders from around the world meet this week to discuss fears of competitive currency devaluations, analysts told CNBC the currency war could lead to a sharp rise in gold prices in the second half of this year, after a falloff in the first half.
"We think a currency war will be the biggest story of 2013 when we look back on the year," Patrick Armstrong, managing partner at Armstrong Investment told CNBC on Monday.
In the last update we called a bottom in silver the day after it put in a high-volume bull hammer early in January, and while it did reverse as expected, the short-term uptrend that developed has since stalled out in recent weeks and it now looks like it is about to reverse to the downside again.
On silver’s 6-month chart we can see how the price has advanced out of the intermediate base area that formed late in December and early in January, and also how the advance has fizzled out so that another top area appears to have developed, and with the price on the uptrend line it looks like it will break below it soon, or immediately, and in so doing reverse to the downside again. The advance out of the base was anemic and the price has fallen way short of making it to the upper boundary of the larger downtrend channel, which is an ominous sign. There is still an outside chance that it could now do so – although the latest COTs offer no comfort for bulls here.
Today billionaire Eric Sprott told King World News, “I’m sure we’ll be seeing $100 and $200 prices for silver.” Sprott also said that despite the advance in global stock markets, “There is no doubt that the path we’re on is not sustainable both for the economy, and for the financial system.”
Here is what Sprott had to say: “We had a negative print on GDP in the 4th quarter. The fact is I think we are on shaky ground. The shakiest part of the ground is the new numbers put out by the Department of the Treasury showing under GAAP what the true deficit was last year.
ETFs indexed to platinum group metals (PGMs) prices hit 17-month highs as Chinese car sales jumped 46% in January. Multiple factors combined to drive PGM prices to multi-year highs last week.
Ongoing signs of strength from the China’s economy, together with persistent supply shortages, are providing strong price support for PGM prices, with platinum rising 2.9% and palladium 2.6% mid-last week, before easing at the end of the week. More than two million vehicles were sold in China in January, a record monthly high, according to the China Association of Automobile Manufacturers. Chinese auto-catalyst demand alone accounts for 13% of global palladium demand.
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