Today’s AM fix was USD 1,568.50, EUR 1,189.34 and GBP 1,030.96 per
ounce.
Yesterday’s AM fix was USD 1,602.00, EUR 1,195.34 and GBP 1,045.76 per ounce.
Silver is trading at $28.73/oz, €21.87/oz and £18.91/oz. Platinum is
trading at $1,608.50/oz, palladium at $716.00/oz and rhodium at $1,200/oz.
Gold fell $40.30 or 2.51% yesterday in New York and closed at
$1,564.30/oz. Silver slipped to a low of $28.28 and finished with a loss of
2.99%.
Cross Currency Table –
(Bloomberg)
More speculative gold buyers appear to have been spooked by the FOMC
minutes from the Fed’s January 30th meeting which “said the central bank
should be ready to vary the pace of their $85 billion in monthly bond
purchases amid a debate over the risks and benefits of further quantitative
easing.”
Gold rebounded this morning from a 7 month low as physical buyers in
Asia bought the dip and it is likely that central banks are also accumulating
after this sharp correction.
The RSI or relative strength index is near 20 which suggests that spot
gold is deeply oversold and strong support is seen at the $1,500/oz level
(see chart below).
Other indices like the S&P 500 index has climbed 6% year to date
while gold has fallen 6% during the same period. The largest ETF, SPDR Gold
Trust, has fell 1.57% from the prior session to 1,299.164 tonnes on Feb 20th,
its lowest in over five months.
Gold in USD, 50, 100,
200 Day Moving Average and Support – (Bloomberg)
Gold has come under pressure from heavy liquidation by hedge funds and
banks on the COMEX this week. The unusual and often 'not for profit' nature
of the selling, at the same time every day this week, has again led to suspicions
of market manipulation.
Short sellers, technical and momentum traders have the upper hand and
are pressing their advantage with momentum and sentiment on their side.
Nervous longs are being stopped out through stop loss orders and concerns
regarding the clear downward short term trend.
Gold market sentiment is the most negative that we have seen in recent
years. The ratio of sell orders to buy orders was the highest it has ever
been in recent days. Yesterday, for the first time ever we had all sell
orders for gold and silver coins, bars and certificates and not one buy
order.
This shows that many retail buyers are very nervous about the outlook
for gold and concerned about the risk of further price falls.
There has been more selling from retail clients today and we are
getting a sense of fear from clients that they have not had in the last ten
years. Interestingly, long term buyers of gold and silver bullion,
particularly high net worth individuals were evident this morning and flows
from this demographic look set to continue.
Fear in the gold market and retail buyers selling their gold suggest
that we are very likely to close to a bottom.
Still it is important to always remember the old Wall Street adage to
"never catch a falling knife."
More risk averse buyers would be prudent to
hold off buying the dip until we get a higher weekly or even monthly close.
Alternatively, they should consider dollar, pound or euro cost averaging into
a position at these levels.
Gold’s ‘plunge’ is now headline news which is bullish from a
contrarian perspective. As is the fact that many of the same people who have
been claiming gold is a bubble since it was $1,000/oz have again been
covering gold after periods of silence.
Silver in USD, 50,
100, 200 Day Moving Average and Support – (Bloomberg)
Gold’s so called ‘death cross’ scare is simplistic, bogus nonsense
that should be ignored by all. Gold experienced a ‘death cross’ in April 2012
(see gold chart above) and similar alarmist analysis was put forward about
the death of the gold bull market and the likelihood of a 1980 style
plunge.
This did not come to pass, nor will it come to pass now given the real
world fundamentals driving the gold market.
Single technical indicators in and of themselves are completely
useless. It is far more important to focus on the real fundamentals of a
European and coming UK, U.S. and Japanese debt crises’, global currency wars
and the real risk of recessions and a Depression.
It is far more important to focus on the hard facts and the hard data
on money supply growth rather than mere words of central bankers. Currencies
globally continue to be debased.
Less informed money is again selling gold or proclaiming the end of
gold’s bull market. The smart money such as Marc Faber, Jim Rogers and those
who predicted this crisis and have constantly advocated a long term
allocation to gold bullion to hedge systemic and monetary risk, will
accumulate again on this dip.
Gold sinks below $1,600 amid
‘death cross’ talk – Market Watch
Gold dives to lowest since July on
Fed, hedge fund talk - Reuters
Collector Coins Ignore Weakness in
Bullion – Numis Master
COMMENTARY
Gold futures setup becoming
bullish – Got Gold Report
SAC Capital Partners Bets A
Quarter Billion On Gold, Silver, & Mining Shares –
Bull Market Thinking
Obama's State of the Union Address
– Totally Wrong on Energy – Casey Research
In The Strange Case Of Gold's
Regular Morning Mugging – Zero Hedge
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