Amark’S Bullion Update
As US equities methodically grind to all time highs, it is unsurprising that gold finds it increasingly difficult to attract interest and sustain rallies. Volume on the Comex has been trending lower for two weeks and is currently at an unimpressive daily volume of just under 90,000 contracts. This figure will likely decrease as the US market approaches the Thanksgiving holiday in the US too. After reaching record highs in terms of holdings at the beginning of this year, SPDR gold ETF holdings have now dropped to lows not seen since 2009. Near term support for gold is coming in at $1,252, the four month low, and then below there at $1,240.
Premiums for manufactured products in silver have fallen off a cliff in the last few months. This is the case for nearly all silver products except for US silver eagles. In the last few weeks, silver eagle premiums have jumped up over 100%. The first reason is that the US Mint has imposed some of the smallest allocations of the year over the last two weeks. The second is that the US Mint announced that they will have their last weekly allocation of 2013 dated silver eagles on Monday, December 9th. They are effectively cutting off three weeks of supply at the end of this year in order to hoard silver in anticipation of 2014 demand. Silver eagles premiums should remain elevated and will likely go higher over the next month.
After four consecutive down days, short covering in gold ensued in the afternoon yesterday on the heels of commentary from Federal Reserve Board Vice-Chair Janet Yellen. Her key lines of note were the following:
- The US economy and jobs are "performing far short" of potential
- Unemployment is too high with inflation short of 2% goal
- Economy must improve before Fed lessens stimulus
The USD tanked against a basket of currencies while the euro and gold ripped higher. The overnight session was largely tame but was reignited in NY with Yellen's testimony this morning. Gold jumped up $20 before finding resistance ahead of $1,300. Without achieving a close above $1,300, it's difficult to get too bullish on gold in the short term though. Working against the yellow metal on the fundamental side is some news out of India.
The World Gold Council stated that gold imports into India fell in the 3rd quarter to the lowest level in more than four years. This is largely attributed to the government's escalation of tariffs in an attempt to quell Indian demand for gold. Silver has caught some bids today after five consecutive down days but will likely follow gold lower should it turn south. Of interest, the US Mint sales of American Silver Eagles have already hit a new record in 2013 of nearly 40.2 million ounces.
Premiums for manufactured products in silver have fallen off a cliff in the last few months. This is the case for nearly all silver products except for US silver eagles. In the last few weeks, silver eagle premiums have jumped up over 100%. The first reason is that the US Mint has imposed some of the smallest allocations of the year over the last two weeks. The second is that the US Mint announced that they will have their last weekly allocation of 2013 dated silver eagles on Monday, December 9th. They are effectively cutting off three weeks of supply at the end of this year in order to hoard silver in anticipation of 2014 demand. Silver eagles premiums should remain elevated and will likely go higher over the next month.
After four consecutive down days, short covering in gold ensued in the afternoon yesterday on the heels of commentary from Federal Reserve Board Vice-Chair Janet Yellen. Her key lines of note were the following:
- The US economy and jobs are "performing far short" of potential
- Unemployment is too high with inflation short of 2% goal
- Economy must improve before Fed lessens stimulus
The USD tanked against a basket of currencies while the euro and gold ripped higher. The overnight session was largely tame but was reignited in NY with Yellen's testimony this morning. Gold jumped up $20 before finding resistance ahead of $1,300. Without achieving a close above $1,300, it's difficult to get too bullish on gold in the short term though. Working against the yellow metal on the fundamental side is some news out of India.
The World Gold Council stated that gold imports into India fell in the 3rd quarter to the lowest level in more than four years. This is largely attributed to the government's escalation of tariffs in an attempt to quell Indian demand for gold. Silver has caught some bids today after five consecutive down days but will likely follow gold lower should it turn south. Of interest, the US Mint sales of American Silver Eagles have already hit a new record in 2013 of nearly 40.2 million ounces.
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