From the Trading Desk
It has been an absolutely lethargic start to the week for the precious metals. Gold has traded in a mere $12 range so far this week and its attempt today to recover from Friday’s strong payroll figure was underwhelming at best. The physical coin and bar market in North America and Europe continues to disappoint with margins for fabricated products right around all-time lows. The weakness in the coin market is best exemplified by US Mint bullion sales figures. Silver eagle coin sales went from 4.5 million coins in May to 2.84 million in June to just 1.37 million in July. Prior to June, the US Mint hadn’t sold less than 4 million coins in a month all year. Despite the coin and bar market being firmly entrenched in the summer doldrums, the precious metals as a whole still look strong. Exchange-traded products featuring precious metals saw its biggest January – July inflow of capital, approximately $51 billion, since 2009. For now, any move in gold towards $1,310 will find solid bids while $1,370 – $1,375 remains the area to watch overhead.
Indeed not much action today with told as it simply moved a small amount opposite what the dollar did. The dollar was down 24 cents but still over the 96 mark and I am using that as my key to think about longs again, at least from a micro perspective. There seems to have been some buyers come in the last day or so, but not like the past few months which is why I am still a little cautious going long. Let the dollar dictate the trade.
My secret indicator foretold what we know now as lower U.S. Mint sales. “Silver eagle coin sales went from 4.5 million coins in May to 2.84 million in June to just 1.37 million in July. Prior to June, the US Mint hadn’t sold less than 4 million coins in a month all year.”The jury is still out if dumb hedge fund money is keeping ETFs like SLV and GLD sales string. I say dumb money only because they chase return. Hedge fund managers in general are terrible. I do address hedge fund managers and their track record in my new book Illusions of Wealth.
Doug Eberhardt is a 28 year financial services veteran and precious metals broker selling gold and silver at 1% over wholesale cost. Doug has written a book to help investors understand how gold and silver fit into a diversified portfolio, how to buy gold and silver, and what metals to buy. The book; “Buy Gold and Silver Safely” is available by clicking here Contact phone number for Buy Gold and Silver Safely is 888-604-6534
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