Gold & Silver Digest: 4/30/13
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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4/30/13 9:04 PM EST US close metals price quotes from Finviz
Gold edged lower on Tuesday in volume as investors strong U.S. home prices and consumer confidence data kept investors cautious before policy meetings at the U.S. Federal Reserve and the European Central Bank later this week.
Bullion investors took profits after data showed U.S. home prices rose in February at their fastest rate in almost seven years, and another report showed U.S. consumer confidence rebounded in April.
Despite those encouraging reports, data showing contraction in U.S. Midwest business activity raised hopes that the Fed will keep its pace of bond buying at $85 billon a month throughout this year, analysts said.
For the most part, gold had a relatively good week last week making a good recovery from the massive drop of a week earlier. Seemingly this was largely driven by an almost unprecedented level of demand for physical metal, particularly from Asian and Middle Eastern markets, but also being seen elsewhere too. As long as that momentum continued then the gold price was on a bit of a roll.
However this week the recovery seems to have stalled somewhat. Variously this has been put at profit taking from those who were clever enough to buy at the recent bottom, continued selling by nervous holders and a Chinese holiday which has reduced buying there. The holiday lasts until Thursday at which point the buying spree could see a resurgence – particularly if prices remain muted in the interim.
Gold holdings in exchange-traded products plunged 174 metric tons last month, the biggest drop ever, as prices entered a bear market and wiped $17.9 billion from the value of the funds.
Holdings in the ETPs slumped 7.1 percent in April to 2,275.84 tons, the lowest since October 2011, data compiled by Bloomberg show. The value of the assets dropped to $108.1 billion. Investors pulled $10.23 billion from gold funds in the first quarter, the most since at least 2000, when the data begins according to Cambridge, Massachusetts-based EPFR Global.
Sales of gold coins by the U.S. Mint rose to the highest since December 2009 after the price of the metal in April fell the most in 16 months.
Last month, sales totaled 209,500 ounces, up from 62,000 ounces in March, data on the mint’s website show. The amount for December 2009 was 231,500 ounces. Silver-coin sales rose to 4.2 million ounces from 3.36 million in March.
What’s interesting about gold, when we had that big break two weeks ago we saw all the gold stocks trade down significantly, we saw all the gold products trade down significantly, but one thing that did not trade down, was gold coins, tangible real gold. That’s going to show you, people don’t want certificates, they don’t want anything else. They want the real product.
Investment company Physical Gold said there were waiting lists of three weeks for some coins, and four to six weeks for gold bars. "Previously all would have been available within a few days," the company said.
The company said that it had seen a 50pc increase in enquiries about purchasing gold and a 35pc increase in sales, with people buying tax-free gold coins. "We are now starting to experience physical gold shortages," said Daniel Fisher, CEO of Physical Gold.
The gold price fell, dramatically, and now is bobbing about. Meanwhile, the prospects for implementing a 21st century gold standard continue to rise. Dramatically.
In a recent media monetary policy media slugfest between The New York Times and The Atlantic, on one side, and Bloomberg.com and Forbes.com on the other, analyzed here, recently, the gold standard prevailed. It is noteworthy that gold’s victory in that skirmish came in a larger context.
Before we get started this early Saturday morning, I’d simply like to note that I was ready to trade in my Gold coins for a set of Ping irons on the announcement at April’s commencement, (that I and other of my Gold mates had apparently bought into, or missed, or like me had just heard of this past week), for the osmosis of 321Gold into 321Golf, making me thus evermore grateful for the venerable Kitco. But then, unable to sleep about it all, at 01:00 this past Thursday, courtesy of my trusty bedside iPod Touch, I revisited such purported conversion in a convincingly enough manner as to be reassured that this was nothing more than an April Fools' Ruse and thus so alerted my Gold compadres down the line, much to their responsive relief. Nice try, Barb: you truly had a number of us goin’ out there!
Gold now sits at 1462, which is 140 points (or 11%) above the Southerly off course low of 1322 as was charted eight trading sessions ago. (You’ll recall from last week’s missive that the Gold Troops, after their harrowing journey down across the Golden Archipelago, encountered Friend Fibonacci and thus came the establishment of Base Camp 1377, at and above which a bountiful amount of trading support has now been established). The rebound since then has been impressively large, given Gold’s natural response to being excessively oversold. Indeed for those of you scoring at home, this reactive up run, whether measured by points or percentage, is Gold’s strongest eight-session stint since August 2011, which of course led to the All-Time High of 1923 that September. Now, here’s the really groovy bit:
A man traveling with 15.7 kilos of unregistered gold was detected by customs officials at Athens International Airport on April 26. The gold, hidden in Easter candle boxes, was destined to Germany.
According to initial reports, the shipment was being exported by a company operating in the precious metals sector based on the Dodecanese island of Kalymnos, in the southeastern Aegean Sea. Sources said the gold had been purchased from pawn stores and did not carry regular documentation.
The most significant fact about silver, from a charting point of view, is the mega cup pattern formed over a period of more than 30 years.These cup (or cup and handle) patterns are very bullish formations. Below is a long-term silver chart showing the mega cup formation as well as two smaller cup formations:
When a cup is formed, it is often an indication that the price will eventually go higher than the peaks of the cup. This is why the mega cup formation is so significant, because it is telling us that the price of silver will eventually go higher than the $50.
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