Archive for the ‘General Economy’ Category

A Yuanderful New Era for Gold?

Posted by on September 20th 2014 in CFTC, China, CME Group, Federal Reserve, General Economy, Gold, India, Short Sellers, Silver, U.S. Congress, Wall Street | Be the first to comment!

YaGottaYuander

Following Thursday’s launch of the Shanghai Gold Exchange‘s trading of contracts in the city’s free-trade zone, China’s first exchange completely open to foreign investors, Reuters reports that “A successful take-up of the exchange could see gold priced and paid for in yuan rather than the U.S. dollar, challenging the traditional dominance of London and New York in trading.  While physical demand provides underlying support for gold, prices are largely driven by speculative trade. China’s push for an international physical exchange means physical demand could have a stronger influence.” But BullionVault‘s Adrian Ash makes the case that “China’s inability to export gold bullion puts a big block on it affecting world prices.”

See also:

Bloomberg:  Gold falls on equity rally, silver drops to four-year low; Dollar has longest win streak since 1967 on divergence

GoldSeek/Mineweb:  Gold and silver fall more than 1% and 4% on the week; Julian Phillips – Silver at ‘bargain levels

Gold Silver Worlds:  Gold and silver prices drop to critical Fibonacci levels

Zero Hedge:  Fed’s Fisher admits “Fed has levitated markets“, warns of “signs of excess”; Quantitative proof the Fed is destroying the middle class

Fiscal Times:  Instead of QE, the Fed could have given $56,000 to every household in America

Reuters:  U.S. House passes Fed audit bill, but measure seen doomed in Senate; Angry with Washington, 1 in 4 Americans open to secession

The Wire:  Congress heads home after some eight days in session between late-July and mid-November

Silver Investors See Low Cost, Long-Term Value

Posted by on September 19th 2014 in CFTC, China, Federal Reserve, General Economy, Gold, Monetary Policy, Short Sellers, Silver, Wall Street | Be the first to comment!

SilverThePriceIsRight

Earlier this week, Reuters reported that holdings at the world’s five largest silver ETFs hit a record high last Friday, when a one percent rise in the U.S.-based SLV posted its biggest one-day inflow since May 1. Now, Bloomberg‘s running of the numbers shows that holdings in silver backed exchange-traded products are up 1.5% since mid-July, nearing last October’s record, at the same time that hedge funds have turned their back on silver

“Retail investors who account for 80 percent of U.S. ETP purchases expect long-term growth to spur industrial demand for silver in everything from solar panels to electronics,” according to Bloomberg.  The article goes on to quote the Permanent Portfolio’s fund manager: “The increase in dollar value has acted as a hammer on commodities, including silver, and the funds and several investors are selling.  The long-term investors, on the other hand, are holding on to it since silver is a store of value and they look at it as significant metal both from the standpoint of monetary policies and economic activities.”  More from GoldCore:  “Silver buyers keep stacking and demand higher despite falling prices.”

See also:

SilverSeek/Coin NewsSpot gold & silver gain with stocks; Gold & silver futures fall

Investing.com:  Bob Kirtley – Monetary policy weighs on precious metals

Mineweb:  Economist Murenbeeld’s bearish & bullish factors for gold; GFMS sees gold price ‘recuperating

TradePlacer: David Levenstein- Leaders lying about state of world & economy, while gold is on sale

Bloomberg/Telegraph:  China opens gold market to foreigners amid price ambition; Super-rich rush to buy ‘Italian Job’ style gold bars

Metals Fall on Fed ‘Signal’; Eye Scottish Vote

Posted by on September 18th 2014 in ECB, Federal Reserve, General Economy, Gold, Monetary Policy, Short Sellers, Silver, Wall Street | Be the first to comment!

 MetalsFallOnFed

Spot gold and silver lost more than 1% on Wednesday following the release of the policy statement from the FOMC’s September meeting. “While the Fed’s renewed pledge … to keep interest rates near zero for a ‘considerable time’ boosted the dollar and U.S. equities,” reports Reuters, “bullion reversed small earlier gains after the Fed forecasts signaled earlier-than-expected increases in interest rates next year.” And while one precious metals trader echoed that in saying, “the market quickly refocused itself on the idea that at this point everybody is speaking to the eventuality of a rate hike in 2015,” the Fed is also seen as being in no hurry to raise interest rates.

And in advance of Scotland’s independence vote on Thursday, a securities analyst tells MarketWatch that while he thinks that the “no” vote will prevail, “We do expect to see a massive short-covering rally in gold if Scotland votes ‘yes’, an event that should be momentous in terms of the economic fallout on both the U.K. and Europe.”

Metals Gain Ahead of Fed

Posted by on September 17th 2014 in CFTC, China, Federal Reserve, General Economy, Gold, Goldman Sachs, India, Janet Yellen, Monetary Policy, Short Sellers, Silver, Wall Street | Be the first to comment!

China'sStealthQE

Gold and silver advanced for the second and third session respectively, with gold said to be “getting a bid as the dollar weakened and China has announced some stimulus program,” described as a “stealth QE” that injected the equivalent of some $81 billion of liquidity into five banks.  The metals were also seen benefiting from talk that the Fed will slow-walk any eventual interest rate increases, in advance of  Wednesday’s conclusion of the two-day FOMC meeting. And with silver outperforming gold, Reuters reports that “a technical indicator showed Tuesday’s gains sent the white metal out of oversold conditions.”

See also:

Hard Assets Investor:  Bulls shouldn’t be worried, they should buy if gold falls to $1,180

Michael Pento/Seeking Alpha:  Why Goldman Sachs is wrong on gold; Complete 2nd Quarter gold all-in costs show that ‘peak gold’ may be a reality

GoldCore/Reuters:  Gold demand in India triples as China launches global gold bourse this Thursday

Bloomberg:  China may boost gold reserves amid imbalances in holdings; Biggest banks said to overhaul FX trading after scandals

Wall Street On Parade:  There’s a bear growling in this bull market; Today’s stock market – Shades of the company town

Of Two Minds/Mises CanadaJanus Yellen and the great transition from risk-on to risk-off; Economic policy treats symptoms, not underlying causes

‘Retail Buyers’ Spike Silver ETF Holdings

Posted by on September 16th 2014 in CFTC, China, Federal Reserve, General Economy, Gold, India, Janet Yellen, Short Sellers, Silver, Wall Street | Be the first to comment!

SilverETFholdings

With gold and silver futures inching up 0.3% and 0.1% respectively on Monday, holdings at the world’s five largest silver ETFs hit a record high on Friday, reports Reuters, driven by a one percent rise in the U.S.-based SLV, which posted its biggest one-day inflow since May 1 of this year. The article cites precious metals dealers as saying that “Long-term silver retail buyers stepped up demand after silver broke below the key $19 level last week.”  And a partner at a commodities investment firm said that he expects “ETFs in silver to outperform those in gold as small silver speculators continue to come onboard.”

See also:

NASDAQ/SRSrocco Report:  Is silver a value at current levels?; The collapse of U.S. silver stocks as public debt skyrockets

Dan Norcini/Got Gold Report:  Hedge funds exiting gold once again; Koos Jansen – China again buys the dip in gold and silver gets scarcer

Bloomberg/Times of India:  India August gold imports surge 176%; China to invest $100 billion in India over 5 years

Telegraph/Ron Paul:  Anxious Scottish investors buying gold; Will the Swiss vote to get their gold back?

Ciovacco Capital/WSJ:  Fed: The key portion of this week’s statement; How does Janet Yellen spend her time? - Check her calendar

Down Week Also Brings Talk of Peak

Posted by on September 13th 2014 in CFTC, China, Federal Reserve, General Economy, Gold, India, Iraq, Middle East, Short Sellers, Silver, Wall Street | Be the first to comment!

?PeakGold?

With gold and silver falling some 3 percent on the week, USA Gold’s market report observes that “A lessening of geopolitical tensions (albethey superficial), expectations of diverging monetary policies and the resulting rise in the dollar are all contributing to the weaker tone in the yellow metal. However, a couple key factors suggest that the downside is limited from here. Previous forays below $1200 have prompted strong buying interest,” and, “the supply of gold is in fact tightening already.”

It cites a Wall Street Journal interview earlier this week with the CEO of mega-miner Goldcorp, Chuck Jeannes, who said that miners have reached “peak gold,” which he sees as “very positive” for gold’s long-term price. More on “peak” prospects, from Mineweb‘s Lawrence Williams, who writes that “Jeannes is almost certainly correct in his prediction that global gold output is about to turn downwards, and may well remain on a downwards path for many years to come.”

See also:

Mining.com/Got Gold Report:  Heavy precious metals shorting is bullish; Speculator ‘insurance shorts’ and swap dealer shorts likely to spark a counter rally in gold

SilverSeek:  Will the real silver commercial traders stand up?

Reuters/Bullion Star:  India’s love affair with gold may be over; India’s June gold import highest in 12 months

Seeking Alpha/Forbes:  Gold – Russia, Iran and China are ‘Doomsday Preppers‘; Transacting in gold can shaft the IRS

Street Talk Live5 things to ponder -”bear-ly” extant; The 7 deadly sins of investing

The Automatic Earth:  The Fed has a big surprise waiting for you

Wall Street Journal/Of Two Minds:  The Federal Reserve’s too cozy relationship with banks; Why has classical capitalism devolved to crony-capitalism?

TPM-AP/Liberty Blitzkrieg:  Has the world been bamboozled by the ISIS PR machine?; Florida Congresswoman – “I’m glad people have this 9/11 mentality again”

Metals Pull Back; Time to Pull the Trigger?

Posted by on September 12th 2014 in CFTC, China, ECB, Federal Reserve, General Economy, Gold, Iraq, Middle East, Monetary Policy, Russia, Short Sellers, Silver, Ukraine, Wall Street | Be the first to comment!

AreWeThereYet?

Following what was described as “the usual London-New York hit applied to the precious metals” Thursday morning, gold futures ended off 0.5% to hit a seven-month low, and silver gave up Wednesday’s gains, and then some, falling 1.7%. “It’s hard to get excited about gold in this current environment when the dollar is rising and the political tensions have eased,” said a money manager quoted by Bloomberg, adding that investors “don’t want gold when rates are expected to rise, while inflation has remained muted.” But further out, an analyst cited by MarketWatch, “said he’s not bearish on gold over the longer term due to geopolitical uncertainties and growth problems in Europe and China. Evidence of increasing inflation pressures in the U.S. could also push gold higher.”

See also:

Gold Switzerland/GoldCore:  Gold market’s weak hands have been shaken out; China holds “Gold Congress” – Positioning itself as global hub

SilverSeek/TradePlacer: Interview with Gary Christenson – Gold prices in 3 waves, silver is inexpensive & the stock market/gold relationship; Christenson – The silver sentiment cycle suggest higher silver prices in the years ahead

Hugo Salinas Price/GoldSeekFiat money and independence for Scotland; John Browne – A wee problem for the UK

Reuters:  Fed’s rate guidance on chopping block, new exit plan nears

Zero Hedge: Why U.S. interest rates can never rise (in one chilling CBO chart); How you know the time for more QE has come

Peter Schiff/Dan Norcini:  Doubling down on inflation; No inflationary pressure until wages move higher

Marketplace/CNBC:  Wage growth in the U.S. is stuck in the ’70s; Why Main Street isn’t creating jobs

Hit ‘N Run Gold Timers Seen Moving On

Posted by on September 11th 2014 in CFTC, China, Federal Reserve, General Economy, Gold, Iraq, Middle East, Quants, Short Sellers, Silver, Wall Street | Be the first to comment!

Sentiment Shift

“Gold is finally getting close to a bottom in prices,” declares MarketWatch‘s observer of all things contrarian, Mark Hulbert. He explains that “what contrarians focus on is market sentiment, and on that front there has been a big change: For the first time in a long time, a large number of short-term gold timers have decided to throw in the towel. As a result, the market-timing community on balance is now more bearish than it has been in 14 months — which, according to the contrary logic of contrarian analysis, is a bullish development. The last time the typical gold timer was as gloomy as he is today, gold began a two-month rally in which it gained more than $200.” More on contrary investing, and why silver, especially the physical variety, may now be “the epitome of a contrary opinion asset.”

See also:

Coin News/BullionVault:  Gold falls, silver inches up and U.S. Mint coins gain; 3 reasons why the gold/silver ratio “will fall” as 2014 ends

Acting Man/Daily Reckoning:  Gold gets whacked – What happens next?; Jim Rickards – A win-win scenario for gold investors

Zero Hedge/Street Talk Live:  Why interest rates will stay low (or what happens when you cry “recovery” for 5 years in a row)

Bill Bonner/GoldSeek:  What I learned in China about the fate of the U.S. dollar; China pulling the strings

WSJ/OilPrice.com:  China deploys troops in South Sudan to defend oil fields; Islamic State’s ultimate goal- Saudi Arabia’s oil wells

Mining.com:  Goldcorp CEO – We have hit peak gold

Dollar Strength Trumps Hotspots—For Now

Posted by on September 10th 2014 in CFTC, ECB, Federal Reserve, General Economy, Gold, India, Middle East, Monetary Policy, Russia, Silver, Ukraine | Be the first to comment!

PumpMeUpBefore spot gold and silver staged a late rally Tuesday to end up a fraction of a percent, they were weighed down by the dollar hitting a 14-month high against the euro, and what was seen as an easing of tensions in Ukraine:  “Political turmoil in various parts of the world that made gold attractive earlier this year seems to have eased, and now economics is overriding geopolitical events,” according to a precious metals dealer quoted by Bloomberg. But a USA Gold market report, while acknowledging that “recent cease-fires in Ukraine and in Gaza have perhaps prompted the unwinding of some safe-haven positions,” reminds that “the underlying problems that have resulted in these global hotspots are a long-way from being resolved.”

See also:

GoldCore/TradePlacer:  Macro factors dominating gold price as U.S. dollar outweighs physical demand & investor flows; Rising dollar weighing on gold & silver, but short-term reversal possible

Financial Times:  India prepares for shining return of gold demand

Bullion Star/Reuters: German gold repatriation accelerating; Peru’s gold output will likely fall 20 percent this year – official

Jesse’s Café Américain/Seeking Alpha:  Learning to love the Fed’s bubbles our only choice; Tracking the decline in risk aversion

Wall Street on Parade: Contagion – What the next Wall Street crisis will look like

CNBC/ValueWalk:  American stock holdings at 18-year low; CNBC’s ratings drop to 21-year low

Hitmen vs. Headlines; Dow vs. Gold

Posted by on September 9th 2014 in CFTC, China, ECB, Federal Reserve, General Economy, Gold, Monetary Policy, Russia, Short Sellers, Silver, Ukraine, Wall Street | Be the first to comment!

Dow:GoldRatioChart

Following what was described as “the usual hit,” silver and gold futures were off 1% on Monday, with MarketWatch attributing gold’s drop to “weak headline risk,” citing one analyst who argues:  “Curiously, geopolitical tensions do not seem to be providing it with much of a bid, and we suspect that this is because the apparent political upheavals are not impacting the global equity or bond markets other than to cause them to rally.” But a Seeking Alpha post points out, as illustrated by the above chart, that despite the Dow reaching a record high, the “Dow/gold ratio is still low on an historical basis,” remaining 69% below its all-time high.

See also:

USA Gold/Dan Norcini:  Gold retreats as euro and yen weakness pushes dollar higher

Seeking Alpha/Zero Hedge: Fake dollar strength continues to make gold an opportunity; Obama’s former chief economist calls for an end to U.S. dollar reserve status

Got Gold Report/BullionStar.com:  For Sept/Oct, watch CFTC’s ‘other reportables’ in silver futures; Another week of strong gold demand in China; Silver remains scarce in Shanghai

Reuters:  Ownership of UK gold up for negotiation if Scotland votes “yes”; New poll shows rival camps neck-and-neck

GoldSeek/Prudent Bear:  John Mauldin – Europe takes the QE baton; Doug Noland – Do whatever it takes to shock and awe

CBC/Project SyndicateDesperately seeking economic health in the era of free money; Kenneth Rogoff – The exaggerated death of inflation

Gold and Silver Supply: A Mere 20 More Years?

Posted by on September 6th 2014 in China, General Economy, Gold, India, Russia, Silver | Be the first to comment!

 

Gold&SilverSupply

Metals Dip as ECB Rips

Posted by on September 5th 2014 in ECB, Federal Reserve, General Economy, Gold, Monetary Policy, Short Sellers, Silver, Wall Street | Be the first to comment!

ECBrates

In what was described as “a ham-handed attempt at perception management,” gold and silver futures fell 0.3% after “the European Central Bank stunned markets by cutting interest rates and embarking on a trillion-euro asset-buying binge,” sending the euro below $1.30 for the first time in 14 months. “While an environment of easier global monetary policies tends to be friendly for bullion, gold and the euro have a historical positive correlation,” said HSBC precious metals analyst, James Steel, “Subsequently, further pressure on the euro may weigh on gold.”

EuroGoldChart,jpg

Referencing the above chart, which dates back to February and currently sits at about 980 euros, Dan Norcini points out that for Europeans, “an interest rate environment such as the ECB is creating, is a two-edged sword.” In that “it lowers the opportunity cost of holding gold since bonds there pay next to nothing and thus incentivizes ownership of gold,” but also, “the stronger dollar (via weaker euro) raises the price of the metal and thus makes it more expensive to buy and own.” He concludes that “if EuroGold takes out the psychological and technical resistance level of 1000, then maybe we have something. For now, it is range bound.”