Gold & Silver Digest: 8/2/13
The Gold & Silver Digest contains headlines of stories that members of this group deem relevant and/or interesting to precious metals enthusiasts.
If you have articles to submit for the next digest, please email them to me by clicking here.
8/2/13 9:16 PM EST US close metals price quotes from Finviz
Gold rose on Friday following a sharp rebound from earlier lows, after mixed signals from the U.S. nonfarm payrolls report suggested that the Federal Reserve could be more cautious about drawing down its economic stimulus program.
Bullion still posted a near 2 percent loss for its biggest weekly drop in five weeks, weighed down by a dollar rally.
Gold initially fell to a two-week low at $1,280 an ounce as encouraging U.S. gross domestic product and factory activity data earlier in the week reduced the metal's appeal as an investment hedge.
The metals were pounded in the quiet overnight session on the COMEX ahead of the Friday Jobs Report, with gold smacked down to $1282 and silver down to $19.20.
The jobs number came in light, and the metals rocketed back to where they started.
Gold traders are bearish for the first time in six weeks as accelerating U.S. economic growth and weaker sales of physical bullion curbed demand for the metal.
Twelve analysts surveyed by Bloomberg expect prices to fall next week, nine were bullish and four neutral. The metal retreated for a fifth day yesterday, the worst losing streak since May 17 and slipped below $1,300 an ounce earlier today for the first time since July 22. Physical demand slowed in the past several weeks, according to Standard Bank Group Ltd.
Weaker gold prices are expected next week, despite the market’s rebound on Friday following a lower-than-expected U.S. jobs report, a majority of participants in the Kitco News Gold Survey said.
In the Kitco News Gold Survey, out of 36 participants, 21 responded this week. Of those 21 participants, six see prices up, while 11 see prices down and four see prices moving sideways or are neutral, meaning 28.6% were bullish, 52.4% bearish and 19% neutral. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts.
As gold has gotten crushed this year, hedge funds have backed out of the trade, according to Anthony Scaramucci. And the managing partner of SkyBridge Capital, often viewed as one of the most-connected people on Wall Street, believes there will be no reason for them to get back in anytime soon.
"Guys like [John] Paulson are always going to have a steady position in gold," Scaramucci said. "It's a very good diversifier for their overall aggregate personal net worth. But in general, most of the hedge funds have backed out of this trade."
Gold GCQ3 had a comeback-kid story to tell on Friday. As weaker-than-expected July payrolls growth hit the tape, the metal began paring a $25-plus loss faster than you can say “gold bug.” But rather than a blockbuster at the box office, this move may amount to no more than a TV movie-of-the-week. December gold is keeping its head above $1,300 an ounce, a level that some say has now tentatively switched from support to resistance, but not exactly soaring.
How irrationally exuberant should a gold trader be now?
Most observers know there have been interesting movements in commodity markets of late, much of which has to do with curious developments among some of the largest banks in the world that have been reported in the mainstream media.
News readers recently learned that Goldman Sachs has been skimming profits by controlling aluminum supplies. In addition, J.P Morgan Chase has announced a plan to exit commodity trading.
Note: If you're reading this and are not yet a member of Peak Prosperity's Gold & Silver Group, please consider joining it now. It's where our active community of precious metals enthusiasts have focused discussions on the developments most likely to impact gold & silver. Simply go here and click the "Join Today" button.