Pedal to the Metals

“I have been very positive about gold and I still accumulate gold every month.” says Marc Faber in a wide-ranging interview with Bloomberg.  “But I think that we had an intermediate peak at $1921 on September 6 of last year. Then we dropped sharply to $1,522 an ounce on December 29, 2011. Since then we’ve had a feeble recovery. I would call that very feeble.  And I think that the correction period is not yet over. I’m not selling my gold because I don’t trust governments and I don’t trust the Federal Reserve, nor would I trust the ECB and the other money traders in the world. They are all going to print money. So I still recommend to hold gold.”

More from Faber in an interview with CNBC, in which he predicts that “Somewhere down the line we will have a massive wealth destruction that usually happens either through very high inflation or through social unrest or through war or credit market collapse.”

Related Links: 

SafeHaven:  Gold is still getting fixed

Coin News:  Gold gains modestly, silver surges 1.9%, US Mint 1 oz coins rise

Trader Dan:  Start of Q2 brings hedge fund money flows with it

Peter Brimelow:  Gold bugs think Q2 will bring new rebound; Indian buying seems likely to resume

Mineweb:  Jewelry strike ends as India defers excise duty on non-branded gold

Seeking Alpha:  Silver and gold: Low-risk opportunity

Commodity HQ:  Forget gold, why your portfolio needs silver

Kalenjin Advisors:  The financialization of precious metals

Bullion Vault:  The great billionaires gold fight

WSJ:  Why China loves gold

The Observer:  Gold rush:  What happened to bling?

Zero Hedge:  David Rosenberg recaps the record quarter

Mineweb:  Dressing down the Fed: Jim Grant on the gold standard & Fed manipulation

Bloomberg:  Why are the Fed and SEC keeping Wall Street’s secrets?

ProPublica/CBS News:  Ron Paul is really serious about transparency; Paul on Face the Nation:  “I’m trying to save the Republican Party from themselves”

Before gold and silver futures closed on Friday at $1,671 and $32.48 respectively, James Turk said that “If gold and silver close the week above $1650 and $32 respectively, I think it will then be safe to assume that this long and tedious correction of precious metals prices is over. Sentiment is near  rock-bottom as everyone’s patience is being severely tested, even the old-timers.  That is another reliable sign saying that we are near an end of this correction.  The longer the correction, the bigger the base that is formed.  The bigger the base, the more prices will soar when they finally start heading higher.”

Related Links:  

Forexpros/BBC:  Gold spikes as Europe lifts ceiling on bailout fund

MarketWatch:  First quarter gains for gold & silver at 6.7% and 16% respectively

TF Metals Report/GoldCore:  Q1 is a wrap; Gold and silver outperform major currencies – fiat devaluation continues

Wall St. Cheat Sheet:  Should investors activate gold & silver airbags?

Resource Investor:  Is gold hustling for a move?

Seeking Alpha:  Gold’s fundamentals shining again – time to cover shorts

GoldSeek:  The decline and fall of the US dollar

P. Radomski:  Will the situation in the stock market and in the dollar affect gold?

WSJ:  Gold traders struggle to recognize the Fed’s tune

Jesse’s Café Américain:  Who captured the Fed?

Zero Hedge:  Jim Grant crucifies the Fed, explains why a gold standard is the best option; Visualizing the Fed’s clogged plumbing

Global Macro Monitor: CNBC interviews Grant

Forbes:  Gold, money creation, and the monetization of debt

FSN:  Dr. Joseph Salerno explains why silver & gold are honest money

Business Standard/Casey Research:  Indian jewelers strike enters 14th day; Will India stop buying gold?

After UK Chancellor George Osborne said in a speech last week that the government was “taking the opportunity to rebuild Britain’s [gold] reserves, which had fallen to historically low levels,” MarketWatch commentator Matthew Lynn applauds the notion and predicts that “The next leg of gold’s bull run … will be developed world central banks moving back into the precious metal; the U.K., Germany, France, Switzerland and potentially the U.S. as well…. And if they do, it would put real rocket fuel into the price of the precious metal,” providing “the bull market in gold with a whole new impetus.”

Among the rationales Lynn cites for the move is that while “Most paper currencies are sinking fast…. reserves held in gold can be expected to grow in value every year. Indeed, cynically, by holding more gold central banks are insuring themselves against their own profligacy. They print money. They price of gold goes up. And if they hold a lot of the stuff in their vaults, they are the big winners from the rise in price. If you can pull it off — and there isn’t anything to stop you — that sounds like an easy way to make a living.”

Related Links:

Dow Jones:  Gold slips 1.6% after failing to crack $1,700; silver off 2.4%

Trader Dan/CNBC:  Goldman Sachs issues “buy” on gold; says price ‘too low’

Wall St. Cheat Sheet:  Will monetary policy and inflation continue to support gold?

Reuters:  Gold: For richer, for poorer as crisis cools

Eric Sprott & David Baker:  The [recovery] has no clothes

Tim Iacono:  Why the April jobs report could be a disaster

KWN:  Egon von Greyerz – European leaders lying, trillions need to be printed

The Victory Report:  Interview with The Silver Doctor

Beacon Equity:  Attention silver bugs: Get back into the pool—now

Silver Investing News:  Silver tailings: Profitable waste?

Chris Martenson:  Gold is manipulated (but that’s okay)

GoldSeek:  Explaining central banking to the publicly educated

Forbes:  Peter Schiff:  Market-crushing Treasury collapse to hit around 2013

Zero Hedge:  Are there any currencies backed by gold?

Mineweb:  Political pressure, jeweller strike force India to review gold tax proposals

Jim Rogers gestures skyward to illustrate the rising debt during an informative and entertaining interview Monday, in which he touted “real assets,” while pointing out that given it’s an election year, “you’re gonna see a lot of good news coming out of Europe and America,” before being overwhelmed by “problems that are going to hit us in 2013, 2014.”

Later on Monday, Fed Chairman Bernanke raised the prospect of additional easing, saying that “Further significant improvements in the unemployment rate will likely require a more rapid expansion of production and demand from consumers and businesses, a process that can be supported by continued accommodative policies.”

After which, reports Inside Futures, “Spot gold did not waste a moment before it took off to the upside to begin to discount more easy money, perhaps inflationary expectations, and most importantly, the unintended consequences of Bernanke’s policies.”

Related Links:

MarketWatch:  Gold rallies 1.4% as traders cheer Bernanke speech; silver gains 1.5%

Trader Dan:  Pass the juice please

Wall St. Cheat Sheet:  Bernanke lends a helping hand to gold and silver

Jesse’s Café Américain:  A burst of liquidity expectations sparks a flight to the metals

Coin News:  Gold and silver prices rally, U.S. silver coins rise

Zero Hedge:  Bernanke reprises his role as a gold bug’s best friend; Did Ben unleash the “new” QE? Not so fast says JP Morgan

Gold Scents:  Can Bernanke break the dollar rally?

Jim Sinclair:  The supremacy of the US dollar is behind us; US launches economic war, gold reacting

City Press (South Africa):  Brics’ move to unseat US dollar as trade currency

Frank Holmes:  Gold and China: Where the bulls and bears square off; India spares silver from new tax

Mineweb:  Industrial metals, gold and China: It’s not that bad out there!

Sovereign Man:  “We have entered the most favorable era for gold prices in our lifetime…”

KWN: Richard Russell – Gold & silver being bought up by billionaires

GATA:  Zero Hedge:  Can gold-plated tungsten be rehypothecated too?; Bron Suchecki: Fake bars — the facts

In a new video, silver analyst David Morgan calls silver the Achilles heel of the financial system and argues it has an advantage over gold because it’s not held by central banks.  He sees the monetary aspects of silver “coming to the fore, more and more,” citing new state laws and silver-as-money advocates like Hugo Salinas-Price, and explains why he believes that “the physical silver market has much more power than the paper market.”  Morgan also lauds blogger BrotherJohnF for his “Bernanke Busted” video on Rep. Ron Paul grilling the Fed chairman about silver.

Related Links:

Reuters:  Gold hits two-month low on slowdown fears

Wall St. Cheat Sheet:  Gold and silver drop to mid-January levels

Kerry Lutz’s Podcast:  Technical analysts explain the precious metals doldrums

GoldSeek:  Risk vs. Reward (Au Style)

Frank Holmes:  Why gold can go the distance

SilverSeek:  Silver painted into potential head & shoulders top’s neckline

Zero Hedge:  Catching the “silver crusher” algorithm in the act

GATA:  The CFTC has already done all it can about silver — and everything else

Gold is Money:  Ted Butler comments on silver position limits

Reuters:  Interview:  High-frequency trading distorts commodities prices

Silver Coins Today:  Silver Eagles highlight of U.S. Mint sales, followed by proof coins

Bullion Street/WSJ:  Can ‘peoples gold’ help Turkey overcome economic jam?; Turkey targets gold stashes

Mineweb:  Gold from Thailand, China flood Indian markets

Bullion Vault:  Gold regulation: How emerging market governments are grappling with crisis

The Golden Truth:  Lawmaker to Geithner:  How much Treasury debt?

James Turk:  Mr. Bernanke goes to college

Naked Capitalism:  Roger Lowenstein’s disgraceful propagandizing via “Bernanke as Hero” piece

In analyzing what he describes as only a “Marginal Metal Exodus,” Got Gold Report‘s Gene Arensberg points out that “in this current metals sell-down there have been little in the way of metal inventory reductions in the world’s precious metal ETFs. Wealth is exiting the metals, that’s true, but so far, not like it ‘means it.’

We can state categorically that if there was a major exodus of capital from precious metals – if the world suddenly regained more confidence in fiat currencies and less confidence in gold – we would be seeing negative liquidity in spades. We would be seeing large and consistent reductions in the amount of metal being held by the world’s big metals ETFs. Does [the above] chart look like an exodus of wealth from the largest gold ETF is currently underway?”

Related Links: 

Wall St. Cheat Sheet:  Gold and silver climb higher on dollar weakness

Scott Pluschau:  Legacy COT Report in the dollar index is still bearish

Seeking Alpha:  Another healthy correction for gold and silver

Mineweb:  U.S. Mint gold, silver bullion coin sales rebound from February doldrums; Silver set to shine after escaping India’s budget clutches

GoldMoney:  Chinese gold imports will keep increasing

Financial Times/Reuters:  Central banks pounce on falling gold; Central banks snap up gold after price pressure

The Golden Truth:  Listen to what central banks do, not what they say

KWN:  James Turk – Physical gold buyers won the day, shorts to retreat; John Williams: Inflation effect – tough to ignore or contain

LewRockwell.com:  How quickly can price inflation explode to the upside?

Market Oracle:  Europe’s QE3 will boost gold and silver

Alasdair Macleod:  Eurozone banks and contagion risks

Reuters:  Fed’s Fisher:  No more liquidity needed for economy; Fed not yet decided on more easing, Fed’s Dudley says

Tim Iacono:  Almost nobody believes the Fed

CNBC/Trader Dan:  Will the stock market rally last?; UP and UP she goes – where she stops nobody knows

Zero Hedge:  “This time it’s different?” – David Rosenberg explains the melt up and the latent risks

“The $100 fall in gold prices at the end of February rattled many investors but, are we now moving too quickly to the other side of the investment spectrum?“  That’s the question Mineweb‘s Geoff Candy asks, reviewing the short-term shift in sentiment, while pointing out that “many of the fundamentals underpinning the gold price haven’t really changed. Europe, even with a new debt deal for Greece is still in a fair bit of trouble. The US deficit hasn’t gone away and neither have concerns about Iran.”

Related Links:

Dow Jones:  Gold ends lower, India in focus

Bloomberg/Economic Times:  India raises gold-import tax for second time, prices drop; 2012 budget takes sheen off gold, adds glitter to silver

GoldMoney:  Gold ETFs thorn in the eye of Indian jewellery traders

Kitco:  Survey participants torn as this week’s gold survey shows no majority

Bloomberg:  Survey:  Gold bulls weakest in two months as economy gains

Bullion Vault:  Gold’s bullish would-be bears

P. Radomski:  Gold rollercoaster likely to go up

KWN:  Egon von Greyerz – Gold will react to the $120 trillion of additional debt

Financial Times:  Why quantitative easing is the only game in town

Puru Saxena:  The power of cheap money

Money Morning:  The Bernanke Effect on gold & silver prices means time to buy metals

Seeking Alpha:  When to acquire silver, the metal of emperors?

SilverSeek:  Silver’s false bullish breaks head fake technicians

Reuters:  Gasoline lifts U.S. inflation, factory output up

Asia Times: War, Pipelineistan-style

The Atlantic:  Why Iranian public opinion is turning against the nuclear program

GATA:  Embargo of Iran could restore gold standard in southwest Asia

Eric Parnell, who recently wrote that “Operation Twist” could still benefit both gold and silver before running its course, predicts that while this week’s events “caused many analysts to seize the opportunity to declare the end in the rally for silver. Instead, we are likely still just at the beginning of the sustained rally despite the recent setback.”

Foremost among his arguments is that “the fundamental thesis for owning silver has not changed at all in the last few days. The monetary spigots from global central banks continue to flow at full blast, with interest rate cuts and new rounds of quantitative easing being announced on a regular basis in recent weeks. This ongoing aggressive stimulus and the resulting debasement of fiat currencies continue to support the demand for silver as a hard asset alternative. None of this has changed with Bernanke’s testimony.”

Related Links:  

MarketWatch:  Gold, silver suffer daily, weekly losses

Dow Jones:  Dollar gains push Comex gold to 5-week low

Trader Dan:  Silver retreats from resistance but holding support

Got Gold Report:  COMEX large commercials step up opposition ahead of Wednesday silver plunge/COT report

Kitco:  Survey participants see gold prices rising next week

Sharps Pixley:  Gold fall creates a fantastic window of opportunity for potential buyers

Seeking Alpha:  Gold and silver face the Fed

Bullion Bulls Canada:  Bernanke’s B.S. bludgeons bullion

Mineweb:  In India, silver investors still extremely bullish despite price crash elsewhere

Telegraph:  UK’s top gold fund manager: ‘I see gold’s strong trend continuing’:  Gold price will plunge below $1,000 an ounce, bears claim

Reuters:  Wall Street, Fed face off over physical commodities

Motley Fool:  Gold manipulation, currency intervention, and the death of free market capitalism

GATA:  China is in on gold price suppression too

Barron’s:  China’s sale of U.S. debt — Beginning of the end?

Financial Times:  Brazil declares new ‘currency war’

Following a mid-January report that China’s consumer sector is growing faster than the overall economy, the Los Angeles Times, in a lengthy article, looks at how those consumers are impacting gold sales:  “China is now bedecking itself in bling. It’s on track to become the globe’s largest consumer of gold as early as this year, knocking off India— whose elaborate wedding dowries kept it on top for years. Some of the gold is going to its central bank as the government quietly boosts reserves. But the biggest driver is Chinese consumers. They’re snapping up jewelry, coins and bars as a hedge against inflation and to flaunt their rising wealth.”

Related Links:

MarketWatch:  Gold inches 0.1% lower on profit-taking, dollar; silver up 0.5%

Telegraph:  Can silver keep up its polished performance?

SilverSeek/GoldMoney:  Silver price rises twice as fast as gold as the eurozone floods with money; U.S. monetary base hits new record

SafeHaven:  What to expect this week for precious metals, gold stocks and dollar

KWN:  Stephen Leeb – What to look for next in gold, silver oil & copper

Bloomberg:  Rising oil prices could send gold “much higher,” says UBS

Tim Iacono:  Why this isn’t your father’s gold market

Mineweb:  Indian gold ETF investment doubled in 2011, set to surge this year

Reuters:  Venezuela & China partner to develop Las Cristinas gold mine

NYT/Bloomberg:  A call for Beijing to loosen its grip on the economic reins; China congress of billionaires makes Capitol Hill peers look like paupers

Zero Hedge:  Art Cashin on why the world is running out of ideas to bail itself out

James Turk:  No reprieve for Greece from debtor’s prison

ChrisMartenson.com:  Ben Davies: Greece is just a preview of what’s coming for the rest of us

Trib.com:  Wyoming House advances doomsday bill

SafeHaven:  The financial system is sick, are precious metals the cure?

Technical analyst Dan Fitzpatrick says that many mainstream investors aren’t paying much attention to gold and silver, thinking “that’s so last year.  But those are the trades we really want.  You look at gold, you look at silver, they’ve actually consolidated really nicely in a healthy way.  They haven’t broken down, it’s not a top, it’s just some really great price action to get these stocks and metals down to levels where investors are starting to buy them again. And the uptrend still remains.  You look at any chart and you can see that.”

And according to Sprott’s John Embry, “the smart money has been buying gold all along…. I don’t think the general public gets in, until gold clears $2,000 and maybe even higher.  At some point people will be forced to talk about it.”  As for silver, he thinks that “Once it starts to really gain a head of steam, the very lack of positive sentiment could change quite abruptly,” and that silver has been hurt by “the fact that the Dow goes up day after day.  The bulk of the public is focused on what the mainstream is promoting and it’s doing well, I think it detracts from gold and silver, which is where investors should be.”

Related Links:  

MarketWatch/Reuters:  Gold, silver end lower but score weekly gain

Kitco/CNN:  Higher gold prices seen for next week as Iran tensions lend support

Daily Reckoning:  Is oil the new anti-dollar?

Zero Hedge:  $200 oil coming as central banks go CTRL+P happy

GoldMoney:  Gold and silver prices benefiting from liquidity flood

KWN:  Ben Davies – Central bank buying has gold shorts trapped

Eric Sprott & David Baker:  Unintended consequences

SafeHaven:  Silver market update

AP:  17 tons of silver from shipwreck return to Spain

The Hindu:  China outshines India as largest consumer of gold jewelry

GATA:  In search of the ‘gold bubble’ in Palm Springs

LA Times/Coin Week:  Goldline agrees to refund up to $4.5 million to former customers

Jim Rogers: U.S. presidential favorites clueless on economy

Politico:  Debt doomsday may come sooner than expected/Report

Russia Today:  Argentine advice for Greece: ‘Default now!‘

Mike Shedlock:  Pact with the devil over gold

In a Seeking Alpha post, Eric Parnell argues that “If history is any guide, we may soon see the monetary stimulus tailwinds shift away from stocks and directly into the sails of gold.”  The above chart shows how gold responded to QE1, QE2 and Operation Twist, in green, which is scheduled to continue through June.

Parnell points out that “In each instance, gold thrashed around and traded generally sideways in the first several months after the launch of a Fed stimulus program. But it was after nearly four months following the start of both QE1 and QE2 that gold found its spark and began accelerating higher. And this shift higher in gold during QE2 coincided almost exactly with the inflection point where stocks stopped rising and began trading sideways. We could reasonably expect a similar outcome for gold in the current Operation Twist (stealth QE3) cycle.”

Related Links:  

Kitco:  Comex gold pushes still higher, at 3-month high

MarketWatch:  Gold rallies 0.9% on dollar pullback, Greece; silver gains 3.5%

Trader Dan/TF Metals Report:  $1800 in play for gold; The gold & silver battle royale begins

Peter Brimelow:  Great day for gold:  But bugs, and some skeptics, think it could go further

Investor Place:  Why gold’s rally is far from over

Bullion Vault:  Why China’s buying gold

KWN:  Caesar Bryan – Asia’s gold buying continues, Japanese next

WSJ/Mineweb:  India predicted to import 5000 tonnes silver in 2012, price to exceed $60/oz

Resource Investor:  Miners saving the silver price?

Mineweb/NY Times:  Another phase in the Greek tragedy – it could lose all its gold!

Zero Hedge:  Projected PIIGS pillage: 3233.5 tons of gold to be confiscated by insolvent European banks

Casey Research:  If gold could talk

Bullion Vault:  Gold mining assets in an election year

CNN Money:  3 of 4 GOP candidates would add to deficits

Reason:  Ron Paul hits the coastal elite big time: A mostly positive profile in the New Yorker

Greg McCoach, who publishes the Mining Speculator newsletter, thinks that gold could hit $2,500 to $3,000 this year “depending on how much QE3 is injected into the system,” but he sees even more of a potential “explosive upside in silver,” laying out his rationale in an interview with The Gold Report:

“When you understand how tight the silver market is right now, and all the game-playing that’s been going on and the monster short position that exists, there’s not enough physical metal in the world to cover this. There’s such a total disconnect in that market that, at some point, when it is allowed to become a free market, I think silver’s going to run like crazy and I see that coming very soon … Silver could easily see $70, $75, even $80/oz if these events occur this year as I expect.”

Related Links:  

Dow Jones:  Greek bailout, weaker dollar lift gold, silver

Trader Dan:  Greece is fixed so let’s buy everything

Zero Hedge:  IIF’s Dallara warns holdout Greek bondholders could kill “successful” Greek deal

Telegraph/Bloomberg:  Eurozone’s shocking prescription for Greece; Greek rescue leaves Europe default risk alive

KWN:  Rick Rule – Greek bailout & what it means for gold

GoldSeek:  Will the Greek bailout make gold, silver rise or fall?

Morningstar:  Are central banks moving the gold market?

Bloomberg:  Gold imports by India seen dropping from record to make China top consumer

Reuters:  India’s 2012 silver imports seen marginally up

Silver Doctors:  Eric Sprott: Silver will become a currency again

AP:  Colorado bill would legalize gold, silver currency

Commodity Online:  Tax free gold – Singapore’s new investment attraction

The Daily Gold:  Warren Buffet mischaracterizes gold’s bull market

ChrisMartenson.com:  Jim Rickards:  Paper, gold or chaos?

Time:  Is it time to start worrying about inflation again?

Paul Farrell:  Halftime in America? More like sudden death