Pedal to the Metals

“This is why people are buying gold now,” is the headline of a Credit Writedowns post that introduces a commentary by economist and business professor, Dr. Peter Morici, who asks: “Is Italy next to fail and will gold go to $3,000 an ounce?“  Morici sees Europe “approaching the end game. Credit markets and other governments know what its leaders won’t admit, namely the euro is failing. And then gold, more than the dollar, is set to rocket in value as the crisis unfolds….With the implosion of Italy, Portugal and Spain would not be far behind, and French debt will come under closer scrutiny. At that point, investors will stampede from the euro-denominated debt of most governments, but with rates so low on U.S. Treasuries and too little Japanese and Chinese sovereign debt in open circulation, gold would become the asset of choice.”

Related Links:

Reuters:  Euro falls most vs dollar in 15 months on Italy debt

Dow Jones:  Gold slips as Italy fears push dollar higher; silver down 2.3%

Trader Dan:  Silver whacked along with copper as risk trades are taken back off (AGAIN)

KWN:  James Turk – Expect cataclysmic events in the coming weeks

Jesse’s Café Américain:  Psycho killers qu’est-ce que c’est?

Mineweb:  HSBC:  Gold to average $2025 an ounce during very volatile 2012

Examiner:  Ron Paul: Dollar could drop to infinity and gold skyrocket without changes

Seeking Alpha:  Silver set to reach new highs

Forbes/SilverSeek:  MF Global bankruptcy could rattle silver market for days

Bloomberg:  Italy bond attack breaches euro defenses, contagion worsens

Reuters:  French, Germans explore idea of smaller euro zone

GoldSeek:  Gold and silver gain as bond markets get a taste of the future

KWN:  Nigel Farage – Where is Europe’s gold?

The Local:  Bundesbank gold location kept secret

GATA:  Financial Times Deutschland joins hunt for Germany’s gold

Max Keiser:  China to beat IMF to Italy’s gold

Among a crop of new books that focus on economic strife is Jim Rickards’ “Currency Wars,” which will be released November 11.  Early reviews include Kirkus Reviews citing Rickards’ “intriguing thinking,” Publishers Weekly writing that while “the book will no doubt interest policymakers, even non-experts will be rewarded for their efforts, and a particularly glowing review from Booklist, which calls the book “a must-read,” says that Rickards “presents a compelling case for his views and offers thought-provoking information.”  James Turk concludes that “I have nothing negative to say about ‘Currency Wars.’ It is a great book, and you will not be disappointed with it.”

On a day in which silver fell 17.7% to close at $30.10 an ounce, before rebounding after hours, silver traders are implored to “Stop cryin’ and start buyin’!,” and trends forecaster Gerald Celente tells King World News that he’s doing just that:  “I’m now buying physical silver for the first time.  One of my reasons is I am very concerned that when gold prices begin their upward ascent again, I believe the central banks and the governments are going to blame the gold people for the financial problems.  They have regulated the price of gold before, not that they will be able to do it, but I am concerned they will try something to regulate the supply (to the people) and the price of gold as the price eventually keeps going higher.  Silver to me is not going to have that kind of regulation imposed upon it.  So I’m buying a position in silver against any future actions taken by the world governments to restrict the supply and the price of gold.  They did it before in the US, they will do it again.”

Related Links:

Reuters:  Gold price tumbles more than $100

IBT:  Gold falls hard; silver falls harder

WSJ:  Silver’s role as precious and industrial metal hits prices

Mineweb:  Silver biggest loser so far in precious metals and markets sell-off

TF Metals Report:  Who/what is selling?

Jesse’s Café Américain:  “It is important to keep this retracement in context”

KWN:  Sprott Money temporarily runs out of physical silver

MarketWatch/Zero Hedge:  CME raises margins for gold, silver, copper

Benzinga:  What to make of gold and silver pullback?

Bullion Vault:  Why has the gold price tumbled?

NYT:  A gold rush wanes as hedge funds sell

Tim Iacono:  Margin calls whack gold

FX Street:  Gold:  Since the fall and how low can it go

Wall St. Cheat Sheet:  What’s next for gold?

Kitco:  Higher prices seen for gold next week – survey participants

Reuters:  CFTC backs down on commodities rules

Seeking Alpha:  Gold ‘believers’ appear distraught over dollar strength

MarketWatch:  Fed watchers stunned by market downturn

Peter Schiff:  Fed’s lame twist paves way for QE 3

SafeHaven:  Why are the markets so hectic? Debt and growth

Bloomberg/NYT:  Treasuries decline on speculation G-20 will act on European debt crisis

Telegraph:  IMF’s Lagarde blames politicians for bringing world to brink of recession

Daily Beast/Politico:  9 juicy bits from Ron Suskind’s “Confidence Men“

“I believe we have also lost true liquidity in silver, as we have in gold,” writes Ted Butler.  “This can be seen in the volatility of the silver price, same as in gold. Back in April, the commercials panicked in silver and bought back shorts, causing prices to explode into the end of that month. Then, a giant manipulative takedown occurred, starting May 1.  Recently, the commercial shorts in silver haven’t panicked as they have in gold. In fact, JPMorgan, who I believe to be the largest COMEX silver short, added to short positions in the last COT, as I reported on Saturday. Considering what has occurred in gold, I believe it is only a matter of time before the big commercial shorts also panic in silver. But the panic in silver will be much more profound than it has been in gold….It’s impossible to say when such a process will start in silver, but we surely are closer to that than ever before. This is more a case of inevitability than it is of timing. It will come when it is least expected, but it will come.”

Related Links:

MarketWatch:  Gold tops $1,900 intraday, but finishes lower; silver drops 2.8%

Bloomberg:  Gold declines from record as Swiss National Bank imposes franc ceiling

Zero Hedge:  How Switzerland caught up to the rest of the world In devaluing paper currencies against gold

Seeking Alpha:  Swiss intervention paves way for metals, Singapore and Canada

The Daily Gold:  Silver and silver stocks forming bullish cup and handle pattern

SilverSeek:  COMEX silver stocks remain near record

Mineweb:  U.S. Mint:  Strong gold and silver bullion coin sales for August

KWN:  Andrew Maguire – LBMA gold and silver shorts will be forced to take losses

GoldSeek/Bullion Vault:  Wikileaks drops bombshell on gold market

GATA:  More Beijing embassy cables show China sees gold as central in currency war

Sharps Pixley:  Is China buying gold?

Financial Times:  Gold still endures as a wealth protection

MarketWatch:  Gold bugs cheer bounceback

Daily Bell:  Doug Casey interviewed on continuance of Greater Depression and the brighter prospects for gold

Telegraph:  IMF: global economy faces a ‘threatening downward spiral‘

Business Insider: Nassim Taleb:   U.S. economy will transfer $5 trillion to banker pay & bonuses over next 10 years

“Technically silver is looking better by the day and is now trading not far above its 50 and 100 day moving averages,” according to a GoldCore analysis that suggests silver could reach $50 an ounce in “early autumn.”  GoldCore’s Mark O’Byrne told Bloomberg that “The 50-day moving average is rising after the recent price gain and is looking like it will cross the 100-day moving average in the coming days, which will be a bullish technical signal.  We should see silver surpass the record nominal high in the coming weeks or months.”

And in a column headlined “Will gold top $2,000 by the end of September?,” Patrick Heller writes that “If gold can reach $2,000, I also would expect to see silver top $50 as well.  There are no major gold or silver commodity options or contract expirations until the December maturities hit in late November.  With such a relatively clear path that would not be sabotaged by price suppression tactics as such contracts mature, we could see a very interesting next few months.”

Related Links:

Reuters:  Gold slips on U.S. economic data, strong dollar

MarketWatch:  Gold settles modestly lower; silver off 0.6%

Coin News:  US Mint sales:  Bullion coins soar

KWN:  Louise Yamada – Critical levels to watch on gold & silver

GATA:  How exchange-traded fund GLD lets you pretend to own gold

Jesse’s Café Américain:  “extreme fractional reserve nature of current metals markets is an accident waiting to happen“

The Standard:  China punters sway gold market

Reuters:  Barclays wins Shanghai Gold Exchange membership

MSN Money: 5 reasons gold is headed for $3,000

Mineweb:  Gold to continue rising as the need for further liquidity measures grows/Interview

CNBC/Zero Hedge:  CEO:  Buy gold before Fed announces further easing

Phoenix Capital Research:  QE3 ain’t coming unless one of these two items happen

Bullion Vault:  Euro crisis “not over” and “will test German economy”

Financial Times:  IMF and eurozone clash over estimates

Spiegel:  ‘Italy is burning and no one is putting it out’

Guardian:  Berlusconi vowed to leave ‘shitty’ Italy in conversation recorded by police

Among the ten participants in Barron’s mid-year roundtable was Marc Faber.  Asked, “Is gold still attractive at $1,500 an ounce?,” he said that “Not to own gold is to trust the value of paper money and the government’s integrity. No one in his right mind could trust the U.S. government any more. The government’s economic statistics are distorted and there is no consensus on how to solve the budget crisis. So, yes, people should own some gold. It can correct by $100 or $200 an ounce, but you own it as an insurance policy. The world is grossly underweight gold. It is flooded with U.S. dollars. Investors might be bearish about the U.S. dollar, but international dollar reserves exceed $9 trillion. Compared to that, there is very little gold.”

Related Links:

Coin News:  Gold and silver prices rise Friday, split on week

Reuters:  CFTC:  Speculators cut net length in gold and silver, raise bets against U.S. dollar

Trader Dan:  HUI – Gold ratio reflects the return of a deflationary mindset

Jesse’s Café Américain:  The almost shocking year-to-date divergence between gold and the gold miners

Mineweb:  Touch and go for gold this summer

Commodity Online:  Barclays: Macro environment supportive of gold prices

CNBC:  Dennis Gartman: Gold could reach $1650 by year’s end

GoldAlert:  One of John Paulson’s Few Bright Spots: Gold

Casey Research:  Its weight in gold:  The real price of things

MoneyWeek:  What the ’70s bull run can teach us about today’s gold market

Seeking Alpha:  Rep. Ron Paul’s gold and silver holdings

Zero Hedge:  Forget “blood diamonds”, here comes “conflict gold“

Reuters:  IMF cuts U.S. growth forecast, warns of crisis

Time:  What U.S. economic recovery?  Five destructive myths

CNBC:  How miserable? Index says the worst in 28 years

Describing the end of QE2 as a potential “danger” for gold, UBS analyst Edel Tully tells Bloomberg that it would also “be a buying opportunity for gold because certainly looking at gold towards the second half of this year, it certainly paints a positive picture given inflation prints around the world are elevated, given the European sovereign-risk fears are certainly more front and center, and macro data is rolling over, not over just in the U.S. but globally. So you have the risk that potentially you could have further quantitative easing later on this year, and you know, gold is off to the races once again.”

She also cites “Indian demand” to argue that the gold market is less seasonal than it used to be, and reminds that despite all the talk about gold, “ownership is very, very low.”

Related Links:

Mineweb:  After all that gold and silver fall-out, where are we now?

Mad Hedge Fund Trader:  A review of the gold fundamentals

Seeking Alpha/IBT:  Trading gold in the face of a strong dollar

MarketWatch:  5 money moves one gold bug is making now

Minyanville:  19 things you didn’t know about gold

Zero Hedge:  Shanghai silver trading volume surged by 65% last month

SilverSeek:  Silver action a reminder of the risks of the paper market

MarketWatch:  Margin hikes threaten your silver, gold, oil stake

Dow Jones:  Miners pare their hedging positions as gold soars

Reuters:  Speculators cut net longs in silver, gold, copper

SafeHaven:  Silver – Wanted at $50, not wanted at $35 – Time to call in the psychiatrists…

KWN:  Louise Yamada – $5,200 gold is long-term channel target

WSJ:  Why gold will outshine silver

New Zimbabwe:  Head of Zimbabwe’s central bank urges gold-backed Zimbabwe dollar

James Turk:  Political control of money

Bloomberg:  Strauss-Kahn arrest lifts emerging-market push for IMF leadership overhaul

As analysts surveyed by Kitco “look for silver to correct still lower in near term,” one trader interviewed by CNBC, in a video segment that looks at “Speculators vs the Industrialists,” reminds that “$38 is where this whole move began, starting in the beginning of April.  We went from $38 to that overnight high of $49.82.  So if we remain above that $38 area, I have a feeling that some good buying support will come in at those levels.” Also appearing on CNBC, Peter Schiff argued that at $40 an ounce, silver is “right back to its trend line. I think it’s a good buy right now… I don’t think there’s a lot left to this correction.”  He added that “Anybody who thinks this is a turn in the precious-metals market because silver has dropped back to $40, I mean, look at the fundamentals.”

Related Links:

The Street:  Gold, silver prices extend losses

Bloomberg:  Silver’s biggest 3-day drop since 1983 leads commodities lower

Reuters:  Silver margins surge 84 percent in 8 days

Zero Hedge:  Charting the parabolic rise in CME silver margin hikes

Money Morning:  Industrial demand set to drive a rebound in silver prices

WSJ:  Silver is down, but China is still buying

MarketWatch:  Silver pullback is a buying opportunity

WSJ/Tickerspy:  Soros sells some, but Paulson still loves gold

Gold Investing News:  Bulls v. bears in the gold market prize fight

Forbes:  Paulson vs Soros: Gold and silver still look hot

MarketWatch:  Is gold about to go vertical?

Financial Times:  Mexican central bank buys 100 tons of gold

Reuters:  Mexico ramps up gold reserves at dollar’s expense

Bloomberg:  Russia and Thailand increase gold reserves

Resource Investor:  Portugese gold sale urged by German lawmakers

CNN Money:  Gold recycler makes a mint

Mohamed El-Erian: Bin Laden is dead. Now it’s time to fix the economy

“The second you actually hand over cash in exchange for a piece of gold, it all falls into place,” writes Grant Williams, in his Things That Make You Go Hmmm… newsletter, extolling the virtues of physical over ETFs:  “Gold FEELS like money – more so than even the highest-denominated fiat banknote you will ever hold. Trust me. If you haven’t done it yet, try it.”

And Williams suggests that if more institutional investors decide to follow the lead of the University of Texas’s endowment fund and invest in gold, they might have some competition for supply from central banks.  He points out that China, Japan, Russia, India and Saudi Arabia each hold less than 10% of their Forex reserves in gold, which is “considerably less gold than might be considered prudent given a) the times we live in and b) their exposure to a rapidly depreciating dollar.”

Related Links:

Bloomberg:  Asia:  Gold advances to record, set for best run since November 2006

dshort.com:  The dollar and gold:  A 20-year perspective

Mish Shedlock:  Gold – a flight to quality

Gold Report:  Interview with James West:  $1,500 gold – the beginning of a revolution

Stock Research Portal:  Gold and silver – what’s driving their prices?

Gold & Silver Blog:  Why the gold and silver rally will continue

P. Radomski:  Gold:  What to watch out for in early May

Jesse’s Café Américain:  Fluctuations and trends in the Comex silver inventory

SafeHaven:  More silver than you imagined

Silver Coins Today:  Values for coins composed of silver explode

Numismaster:  Some silver values might surprise

New York Times:  Stimulus by Fed is disappointing, economists say

Wall Street Journal:  Fed searches for next step

Tim Iacono:  Bond vigilantes arrive suddenly, apparently

Zero Hedge:  China proposes to cut two thirds of its $3 trillion in USD holdings

MarketWatch:  IMF bombshell: Age of America nears end

A Seeking Alpha post that recommends “putting a great portion of your retirement portfolio into physical gold and silver bullion held in your own possession. There is really no other safe alternative,” refers to the recent “touting” of silver by an article in the Financial Times, and by Jim Cramer, while qualifying the latter’s endorsement:

“Suspicious as I am of Cramer’s motives and past history, he is performing a public service by correctly recommending to buy silver at this time, when virtually no one else in the main stream media is even addressing silver as an investment opportunity, good or bad, although most investors would certainly have their interest piqued if they were even aware of the 600% gain that silver has returned over the past decade.”

Related Links: 

MarketWatch:  Gold gains, silver up 2% on inflation fears

Resource Investor:  Am I being too conservative on silver?

SilverSeek:  A flaw in the silver topping theory

GoldCore:  Silver backwardation ends but COT data is bullish

24/7 Wall St.:  Can silver keep rising against gold?

Zero Hedge:  Sprott Physical Gold Trust (PHYS) to add $300 million; PSLV next?

KWN:  Eric Sprott – Gold to go over $2,000 because of money printing

Pragmatic Capitalism:  How will Bernanke let the market down softly?

MarketWatch:  Bernanke:  Commodity-driven inflation will pass

Midas Letter:  Gold and silver and the endgame for U.S.A. Inc.

Telegraph:  The US recovery is little more than an economic ‘sugar-rush’

WSJ:  Fed’s low interest rates crack retirees’ nest eggs

Reuters:  IMF urged to use gold profits to aid poor nations

Coin Update News:  Gold bullion sales rise with Gold Buffalo launch

Daily Reckoning:  Gold and silver coins continue to make headlines

AP:  Feds seek $7M in privately made silver ‘Liberty Dollars’

“The Libyan central bank — which is under Colonel Gadhafi’s control – holds 143.8 tonnes of gold,” reports the Financial Times, “according to the latest data from the International Monetary Fund, although some suspect the true amount could be several tonnes higher.  Those reserves, among the top 25 in the world, are worth more than $6.5 billion at current prices, enough to pay a small army of mercenaries for months or even years.”

And the paper points out that “While many central banks hold their gold reserves in international vaults in London, New York, or Switzerland, Libya’s bullion is in the country, said people familiar with the country’s activities in the gold market,” which “may provide Gadhafi with a lifeline — if he can sell them. To raise large amounts of money, bankers said, Gadhafi would have to transport the bullion out of Libya.”  The former head of Libya’s central bank transported himself to Turkey in early March.

Related Links:

Bloomberg:  Asia:  Gold gains to near two-week high on Libya conflict, Japan crisis

Reuters:  Gold gains on dollar drop, oil rise, geopolitics

Coin News:  Gold rallies for fourth day, silver returns to $36

Commodity Online:  Why silver is outperforming gold

GoldSeek:  China imports 245 tons of silver in February

Resource Investor:  Silver:  A currency for crisis

MarketWatch:  Dollar’s safe-haven status goes missing

KWN:  James Turk – Panic selling of US dollar could happen quickly

Financial Times:  Iran bought gold to cut dollar exposure

Mineweb:  Gold in euros – more than meets the eye

Expected Returns:  Sitting and watching trends unfold

USA Gold:  International turmoil:  How the physical gold market is likely to be affected

Reuters:  Premiums rise as gold regains luster in Japan

Seeking Alpha:  Rebalancing silver and gold weights within a precious metals allocation

News & Observer (Charlotte):  Legislator says the state needs its own currency

Sun Sentinel:  South Florida becomes a national center for bullion firms operating in virtual regulatory limbo

While silver is technically not one of the 17 rare earth elements (REE’s), it is “the rarest of all the rare earth elements,” argues Ted Butler:  “The thing that separates silver from all other REE’s is that you can invest in it directly. Sure, you can buy stocks in companies that mine silver or REE’s, but only silver has the dual role of basic investment asset and industrial material.  That’s what makes silver the rarest of the rare.”  He goes on to predict that “The coming rush into silver by investors seeking profits and industrial users looking to stockpile a vital manufacturing component makes a shortage almost certain. There is no way production can ramp up nearly as quickly as the combined force of investment and user demand.”

Related Links:

Coin News:  Gold and silver prices dip slightly

Trader Dan’s Market Views:  4 hour silver chart

KWN:  James Turk – Silver is in extreme backwardation

Seeking Alpha:  Gold/silver price ratio near multi-decade lows

Gold Core:  Silver lease rates rise sharply

KWN:  Perth Mint out of 100 ounce silver bars for at least 6 weeks

Hard Assets Investors:  Options for silver traders

Howard Ruff:  Are gold and silver prices peaking?

Gold Report:  Taylor MacDonald: The perfect storm for gold

FINalternatives:  How fund managers and investors play gold

Zero Hedge:  Dutch central bank orders pension fund to sell its gold

Reuters:  Fed’s Warsh, inflation hawk, to leave at end of March

Slate:  Does Ron Paul really want to end the Fed?

Along the Watchtower:  The madness continues

CNN Money:  IMF calls for dollar alternative

AP:  Mubarak’s decision to stay fuels economic fears

BBC:  The losing battle against Somali piracy

Financial Times:  What Somali pirates reveal about the global economy