Evening Gold Commentary-Jul 31st, 2013

Evening Gold Commentary-Jul 25^th, 2013

 

1: Market Review

 

 

 
 



2: Fundamental

 

1 Second quarter GDP growth topped expectations but partly due to first quarter GDP being revised down with annual revisions. GDP gained an annualized 1.7 percent, following a 1.1 percent rise in the first quarter. The prior estimate for the first quarter was 1.8 percent. Analysts had projected a 1.1 percent advance for second quarter GDP.--Bloomberg

2 Today's FOMC statement did not issue a reduction in quantitative easing but it left the door open for coming months. Policy rates were left unchanged, including the fed funds target rate of zero to 0.25 percent. The Committee decided to continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month.--Bloomberg

3 Home prices in the first half posted their largest gain since the housing boom peaked seven years ago, but there are signs the trend could slow.--WSJ

4 Officials in Washington opened new fronts in an examination of banks’ dealings in commodities, signaling intensifying scrutiny.--WSJ

5 U.S. stocks erased an earlier rally after the Federal Reserve refrained from indicating when it will reduce the pace of stimulus and data showed the economy grew more than projected in the second quarter.-- Nikolaj Gammeltoft & Nick Taborek(Bloomberg)

6 Treasuries rose, reversing earlier losses, and the dollar declined after the Federal Reserve refrained from indicating when it will reduce the pace of stimulus. Stocks erased gains in the final hour of trading.-- Nikolaj Gammeltoft & Michael P. Regan

3: Technical Analysis

 

Today, the COMEX August Gold Future experienced a sharp dive in the morning but rallied in the afternoon after the announcement of the Fed, ending at $1325.10, or decreased by 0.07%. The MA5 and MA10 have a trend to form a “dead cross” which is a bad news the market. Candlestick has an extremely thin red body, with long upper and lower. The volume was much less than yesterday’s volume.

First support level: $1300                   Strong support level: $1180

First resistance level: $1350               Strong resistance level: $1380

MACD: DIFF and DEA are both positive, which is a bullish signal. However, investor should be aware that the value of MACD is shrinking, which means we need more signals to be long.

Bollinger bands: The candlesticks have a trend to break the upper BB. It will be an extreme situation. The main factor is the sharp rally in the previous days.

4: Opinions and Expectations

 

1 Lawrence Summers likely wouldn’t beat a rapid retreat from the easy-money policies pursued by Ben Bernanke if he get the top job at the Fed.--WSJ

2 Goldman Sachs Group Inc. (GS) President Gary Cohn said his firm continues to do business with SAC Capital Advisors LP, the hedge fund that was indicted on charges of insider trading last week.-- Michael J. Moore(Bloomberg)

3 India will contain gold imports below 845 metric tons this year as Asia’s third-biggest economy takes steps to curb a record current-account deficit and defend the currency, Finance Minister Palaniappan Chidambaram said.-- Siddhartha Singh & Swansy Afonso(Bloomberg)

4 Village Main Reef Ltd. (VIL), a South African gold producer, fell in Johannesburg trading and headed for its lowest close in more than a month after suspending funding for a mine it has operated since June 2012.-- Andre Janse van Vuuren(Bloomberg)

 

5 Banks are selling the least structured notes tied to commodities in nine years as investors shun the securities amid a slowdown in China’s economy and the prospect of the U.S. Federal Reserve winding down stimulus.-- Alastair Marsh(Bloomberg)

 

6 It’s impossible for China to replace, if they imported over 800 tons of gold last year, and let’s say you couldn’t really buy it, the number they would have to buy is something like 48,000 tons of silver to replace that (gold equivalent). We only mine 25,000 tons a year, and there’s only 10,000 tons of that available for investment. And it looks to me like they (India and China) are buying it all right now. So I think if this data is true we have the most phenomenal story for silver that you could possibly imagine. We will just nail those paper sellers to the wall here.—Eric Sprott (http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/6/28_Eric_Sprott_-_Stunning_Indian_Buying_To_Crush_Silver_Shorts.html)

7 Yellen Is The Most Bullish For Gold & Silver—Peter Schiff (http://peterschiffblog.blogspot.com/)

 

8 "The physical market is starting to drive the price of the metal, rather than what we have seen the past several months where paper selling drove gold and silver prices to abnormally low levels. The bottom line, Eric, is that in a year or two when we look back at today, we will marvel at how cheap the prices of physical gold and physical silver plummeted to."—James Turk (http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/7/8_Turk_-_Something_Shocking_Has_Occurred_In_The_Gold_Market.html)

 

5: Tomorrow’s Focus

 

Jobless Claims

 

Released On 8/1/2013 8:30:00 AM For wk7/27, 2013

 

 Prior                     Consensus                          Consensus Range

New Claims – Level                         343 K                    345 K                                     340 K to 350 K

 

 

ISM Mfg Index

 

Released On 8/1/2013 10:00:00 AM For Jul, 2013

 

 Prior                     Consensus                          Consensus Range

ISM Mfg Index - Level                    50.9                        53.1                                        52.1  to 53.5 

 

 

6: Important Charts

 

COMEX GOLD August

 

Key Economic Data