While the gold market has shown periodic strength this week and has seemingly rejected the $1275 level on the charts as if that is some form of value, the early bias today liens in favor of the bear camp. As usual strength in the dollar would appear to be the primary culprit behind the weakness throughout the metals complex and it is possible that the dollar might extend further into and through the ECB results this morning.
However expectations call for increases in initial and ongoing claims and that could moderate the upward track in the dollar temporarily. Intensifying political conflict in Venezuela is a potential safe haven support for gold but currently that situation hasn't reached the breakdown point. While Goldman overnight trumpeted commodities as an attractive asset class and pointed to their interest in gold because of recent gold sector mergers, the gold trade this morning doesn't appear to be poised to embrace big picture demand hopes.
Several gold production readings were released overnight but the net impact from those production figures on prices should be mixed. Russian Polyus saw its 4th quarter production decline by 8% to 637,000 ounces, Kaz Minerals showed full year production to have come in above guidance at 183,000 ounces, while two other minor producers saw slight reductions.
In a minor negative development exchange traded funds reduced their holdings of gold by 2,742 ounces yesterday but their net purchases year to date remain at 1.3 million ounces. Silver on the other hand saw an inflow of 1.07 million ounces and that reduced the year to date "net sales" to 10.5 million ounces. Bloomberg reported the silver ETF inflow yesterday was the biggest daily inflow since November 13th.
We invite you to signup for our more comprehensive market update delivered directly to your inbox.
Non-Reliance and Risk Disclosure: The opinions expressed here are for general information purposes only and should not be construed as trade recommendations, nor a solicitation of an offer to buy or sell any precious metals product. The material presented is based on information that we consider reliable, but we do not represent that it is accurate, complete and/or up to date, and it should not be relied on as such. Opinions expressed are current as of the time of posting and only represent the views of the author and not those of Zaner Financial Services LLC, unless otherwise expressly noted.
