Archive for the ‘Monetary Policy’ Category

QE Ends; Greenspan Goes All Gold Bug

Posted by on October 30th 2014 in Federal Reserve, Gold, Interest Rates, Monetary Policy, Short Sellers, Silver, USD, Wall Street | Be the first to comment!

GoldBugGreenspan

Spot gold and silver fell some 1.4% and 0.8% on Wednesday, with most of the drop following the FOMC announcement that it was ending it’s QE program, but that it would also keep interest rates low for a “considerable time.” The U.S. dollar rose on the announcement, which was said to have also “put downside price pressure on gold.”

But according to former Fed Chair Alan Greenspan, during an appearance Wednesday, QE “didn’t do much for the real economy.” And as Zero Hedge points out, Greenspan “has suddenly had an epiphany and now has a very different message from the one he preached during his decades as the head of the Fed:  ‘Mr. Greenspan said gold is a good place to put money these days given its value as a currency outside of the policies conducted by governments.’”  And USA Gold’s buying it:  “With the price of gold down in reaction to today’s policy statement, now might be the perfect time to heed the former chairman’s investment advice.”

Metals Quiet Ahead of Fed

Posted by on October 28th 2014 in Bart Chilton, CFTC, China, Federal Reserve, General Economy, Gold, Goldman Sachs, India, Interest Rates, Janet Yellen, Monetary Policy, Short Sellers, Silver, USD, Wall Street | Be the first to comment!

MetalsQuietAheadOfFed

Silver and gold futures inched up and down respectively on Monday, with the market said to be in “a wait-and-watch mode” ahead of this week’s FOMC meeting. One reason that gold “came under pressure” on Monday, reports Reuters, was “a sharp pullback in crude oil after Goldman Sachs slashed its price forecasts, citing lackluster global demand.” But it was also “underpinned” by China’s net gold imports from Hong Kong hitting a five-month high in September. This as the Times of India reports that annual Swiss gold exports to India have hit a record high level in advance of Switzerland’s gold referendum on November 30.

See also:

Mining.com/Mining Feeds:  Will the Fed turn off the QE tap?; What will the end of QE mean for the precious metals?”

Motley Fool CA/Market Sanity:  3 reasons why I remain bullish on silver; Rick Rule – Why to love the silver bear market

SafeHaven:  Gold and silver – Respect the trend but prepare for a reversal

Telegraph/BullionVault: BIS warns on ‘violent’ reversal of global markets; Gold as investment insurance

SRSrocco Report:  China- 10,000 tons of gold reserve? Could have been done with ease

Zero Hedge:  How China & gold will shape the future; Caption contest – Bart Chilton salutes you

A ‘Lifeboat’ Against Central Bankers, Politicians

Posted by on October 25th 2014 in China, Federal Reserve, General Economy, Gold, Interest Rates, Monetary Policy, Short Sellers, Silver, USD, Wall Street | Be the first to comment!

MetalsLifeboat

While spot gold and silver ended nearly unchanged Friday, futures inched up slightly as the dollar dropped for the first time in four days. “Today’s upward move is all about the dollar reacting to Ebola fears in New York,” according to a market strategist quoted by Bloomberg, who added that the metals’ “long-term price direction will be all about what the Fed does next,” with the next FOMC meeting set for October 28-29.

Despite being “stopped in their tracks” on Friday, “as the price dominant Comex continues to exert its inordinate influence over the real world economies,” Jesse’s Café Américain counsels that “the most fruitful perspective for the precious metals is that of a long-term investor.  Short term traders may find little to interest them here.  And when they do, it may be too late to climb on board. So we must take the markets as they are. There is no sense to criticize a lifeboat for not being a motorcycle. Do we need lifeboats? Do you trust the central banks and the politicians to safeguard your wealth and the integrity of the money and the financial system?”

See also:

Alasdair Macleod:  Weekly market report – Precious metals subdued as panic over; Financial markets and reality disconnected

Numismaster/SafeHaven:  Patrick Heller – Silver demand tops gold; Bullish silver stealth buying

SilverSeek:  Bank for International Settlements paves the way for silver & gold

Mineweb/Fast MarketsSwiss gold referendum – Early opinion poll strikes fear; Swiss National Bank could be forced to buy $60 billion of gold

SF Chronicle/Channel NewsAsia:  Huge, honkin’ gold nugget hits the market; Singapore-based Bullion Star gives employees the option of being paid in gold

Burning Platform:  What could you buy with $100 worth of silver or gold if you invested 40 years ago?

Metals End Mixed; Stock Bear Rips Economy, ‘Moron’ Central Bankers

Posted by on October 24th 2014 in China, Euro, Federal Reserve, General Economy, Gold, Media, Monetary Policy, Silver, USD, Wall Street | Be the first to comment!

2015GDPgrowth

Spot silver added 0.6% and gold fell 0.9% on Thursday, as new U.S. unemployment claims held below 300,000 for the sixth straight week, the dollar rallied and the Dow surged on what were seen as strong earnings results.  But according to noted stock “über bear,” Albert Edwards, “The bottom line is that there is far too much over-confidence in the U.S. recovery. Fragile and vulnerable in itself, the U.S. recovery now battles against the rest of the world, which like a horror movie is dragging it down into a hellish Ice Age underworld.”

Armed with the above chart on 2015 GDP growth, Zero Hedge has more on Edwards’ latest warning:  “Simply put, the central banks for all their huffing and puffing cannot eliminate the business cycle. And they should have realized after the 2008 Great Recession that the longer they suppress volatility, both economic and market, the greater the subsequent crash. Will these morons ever learn?

See also:

Peak Prosperity/SafeHaven:  Why gold is undervalued, and poised to re-price upwards; Gold or crushing paper debt

P. Radomski:  Gold & silver trading alert: How will we know that the bottom is in?

SilverSeek/Silver Institute:  October Silver Eagle sales best ever, and with 10 days remaining; Silver investment may increase by one billion ounces over the next decade

Dan Norcini/Bill Bonner:  Gold mining stocks continue to sink; Huge upside in gold miners from here?

GoldSeek:  Chris Powell – The crucial questions financial journalism won’t ask & central banks won’t answer

USA Today/Naked Capitalism:  America’s perpetual state of emergency; The financialization of life

‘Plunge Protection Team’: Everywhere or Nowhere?

Posted by on October 23rd 2014 in Bailout, Federal Reserve, General Economy, Gold, Interest Rates, JPMorgan, Monetary Policy, Short Sellers, Silver, Ted Butler, USD, Wall Street | Be the first to comment!

PlungeProtectionTeam

Gold and silver futures ended off 0.5% and 1.8% on Wednesday, with the drop attributed in some quarters to a “firming dollar and subdued inflation,” which an analyst cited by MarketWatch sees as “a normal trading correction.”  And while a post at Jesse’s Café Américain agrees, suggesting that the metals “may have taken a pause at support,” he also finds it “interesting to see them run with stocks today, in the face of some exogenous risk events. They are certainly acting oddly. One has to wonder if this is a related action by the “Plunge Protection Team” which feels free to purchase stocks at key points apparently to help restore confidence.”

David Stockman’s Contra Corner advances the argument that there is a “Plunge Protection Team,” and “It’s called the FOMC.” This as Bloomberg reports that Citigroup analysts “have put a price on how much liquidity central banks need to provide each quarter to stop markets from sliding. By estimating that zero stimulus would be consistent with a 10 percent quarterly drop in equities, they calculate it takes around $200 billion from central banks each quarter to keep markets from selling off.”

Ted Butler has also raised the issue of the “Plunge Protection Team” meddling in the metals, alleging that it gave JPMorgan the greenlight to manipulate the silver market.

Silver Seen Gaining on Gold

Posted by on October 17th 2014 in CFTC, China, CME Group, Federal Reserve, General Economy, Gold, Interest Rates, Monetary Policy, Quants, Short Sellers, Silver, USD, Wall Street | Be the first to comment!

G:Sratiodrop

With the gold/silver ratio at 71.4 on Thursday, Bloomberg‘s “Chart of the Day,” from 2012 on in the above, cites a forecast by UBS that has the ratio falling to 65.6 in 12 months. That calculation is based on UBS’s bearish forecast of $16 for silver and $1,050 for gold. According to one of the bank’s Singapore-based analysts, the gold/silver ratio currently “stands near crisis levels, which ignores the fact that economic activity next year should accelerate, with developed markets advancing and emerging ones moderating somewhat. Increases in silver ETFs suggest that the holding power of silver investors is immense and the metal still attracts physical investors.”  More from Mineweb‘s Lawrence Williams:  “Expect big silver price surge if gold stays positive.”

See also:

SilverSeek/Coin News:  Gold and silver end mixed as stocks stabilize; U.S. Mint sales – Core sets and Silver Eagles lead

Jesse’s Café Américain:  Cap, cap, cap – The fingerprints of officialdom were all over the markets today; Fed’s Bullard and the Plunge Protection Team to the rescue

WSJ/David Stockman:  Bullard says he would consider continuing QE after October; Now comes the “specter of deflation” – The money printers’ latest scam

Pragmatic CapitalismSo much for rate increases…

TF Metals Report/Alhambra Partners:  The current cap in gold; Another reminder gold is not often as it seems

Reuters/Businessweek:  45% of Americans say avoiding international air travel; America’s Ebola preppers go shopping for Clorox

Ebolisis

Metals Rise as Dollar Drops Most In a Year

Posted by on October 7th 2014 in CFTC, China, Federal Reserve, General Economy, Gold, Janet Yellen, Monetary Policy, Short Sellers, Silver, Wall Street | Be the first to comment!

MetalsRiseOnDollarDrop

After falling below $1,200 last Friday with the release of September’s jobs report, Monday saw investors having second thoughts about the data. Gold rebounded 1.3% and silver more than doubled gold’s gains, soaring almost 3%. A Reuters‘ article attributes the turnaround to a “sharp retreat” in the U.S. dollar [see above chart] that “sparked fresh physical demand and short covering.” It quotes one metals’ strategist as saying, “The spate of economic news has put downward pressure on gold, but the payrolls report might have painted a much better picture for the job market than what it really is,” specifically stagnant wages. “The dollar fell as much as 0.9 percent against a basket of 10 currencies,” reports Bloomberg, “as uneven U.S. labor-market data fuels speculation on when the Federal Reserve will raise interest rates.”

See also:

Dan Norcini/Coin News:  Macro trade reverses from Friday; Gold bounces above $1,200; Silver Eagles hurdle 34 million

Seeking Alpha/Sovereign ManRecord shorting in silver; This one chart shows exactly how undervalued gold is right now…

Trading Floor:  Are you aware of the potential Swiss gold shock?

Zero Hedge:  Will gold crash with the Dow… or soar?; 10 reasons why reserve currency status is an “exorbitant burden

Bloomberg:  The world’s most powerful central banker: Janet who?

Jobs Report: 230,000 Shades of Grey

Posted by on October 4th 2014 in CFTC, China, ECB, Federal Reserve, General Economy, Gold, Monetary Policy, Short Sellers, Silver, Wall Street | Be the first to comment!

230,000ShadesOfGrey

Gold and silver were said to have been “hit hard today in honor of the non-farm payrolls report. It sent gold negative for the year, with the spot price falling as low as $1,189 on Friday before ending off 1.8%, on a report that was described as both “beating expectations,” and “ugly,” notwithstanding the “joyous headlines” on Fox Business and CNBC.  The 248,000 new jobs went inordinately to workers in the youngest and oldest age groups, wage gains continued to be stagnant, and the number of those that have checked out of the labor force hit a record high.

“Strengthening payrolls are going to add the perception that the Fed is going to raise rates sooner,” said one research analyst quoted by Bloomberg, a perception he sees as “negative for gold.” But with the latest round of QE winding down, it’s also argued, in a cogent analysis at TF Metals Report, that “Without the constant dump of fresh greenback into the global banking system, we are right back to where we were in 2008. Namely, deflation.” And while this will initially drive metals lower, the Fed, with its stated mission to prompt unemployment and inflation, “will be forced to act … Deflation is their number one enemy and they will do anything (and this includes QE4) to avoid it!”

See also:

TradePlacer/Eric Sprott:  Why there is still hope for gold bulls; Metals vastly oversold from naked shorting

KWN:  Worried about today’s gold & silver smash – Just read this; Man who executed QE1 for Fed says own gold, fiat will burn

Coin News:  U.S. Mint sells 1.65 million Silver Eagles in three days, 2.74 million this week

Bullion Star:  New York Fed gold holdings tumble 15 tonnes in August:  Could it be sie Germans?

GoldCore/BloombergNew gold rush cometh with global bond market on edge of ‘cliff’; Humans lose to machines in $500 billion-a-day U.S. bond market

Wolf Street:  This chart shows how you get screwed in the stock market

Metals Rise as Airlines Sink Stocks

Posted by on October 2nd 2014 in CFTC, China, Federal Reserve, General Economy, Gold, Media, Monetary Policy, Short Sellers, Silver, Wall Street | 1 comment

FlightToQuality

Spot gold and silver ended up 0.5% and 1.4% respectively on Wednesday, with the gains attributed to a September slow down in U.S. manufacturing growth, a flat U.S. dollar and a stock sell-off that was led by shares in airlines and travel booking companies, based on fears about ebola.

“One catalyst for gold could be a flight to quality bid if equities continue to deteriorate,” said a trader quoted by MarketWatch, who added that “From a timing perspective, the best opportunity would likely come when the dollar finally pauses to consolidate its current gains. Even the temporary dissipation of such a headwind would likely lead to a sharp rally.”

See also:

Hard Assets Investor/SilverSeek:  Gold bulls hanging on in battle vs. surging U.S. dollar; Dollar is the last stop before gold & silver spike

Seeking Alpha:  Investors fleeing euro & yen, could U.S. dollar be next currency to crumble?

Coin News/SRSrocco Report:  Gold rises in October start; U.S. Mint coin sales explode; The U.S. Mint sells over 750,000 Silver Eagles in one day

Mining.com:  Demand for physical gold remains strong as bullion banks suppress prices

Zero Hedge/Bill Bonner:  Bridgewater’s Ray Dalio – “There is always a downturn”; What CNBC isn’t telling you about the end of QE

CBC/Reuters:  China warns Hong Kong protesters of ‘unimaginable consequences‘; Security firm – Advanced iOS virus targeting protestors

Gold/Silver Ratio Tops 70

Posted by on October 1st 2014 in CFTC, China, CME Group, Federal Reserve, General Economy, Gold, Goldman Sachs, JPMorgan, Monetary Policy, Short Sellers, Silver, U.S. Congress, Wall Street | 1 comment

Gold:SilverRatioTops70

With spot silver slumping 2.5% on Tuesday, and silver futures diving 19% for the quarter, the biggest drop since mid-2013, the falling price is bringing out the coin buyers.  The 4.1 million 2014 American Silver Eagles sold in September more than doubled August’s total, and was the “highest since sales of 5,354,000 in March,” reports Coin News.  “Silver Eagle sales for the year are at 32,251,000, the second quickest pace in the coin’s 29-year history.”

An Economic Times article deems silver to be a “better investment bet than gold,” given silver’s sharper fall in price, compared to gold’s, along with silver’s rising industrial demand.  It also points out that the gold/silver ratio, which hit 71.2 on Tuesday, is “much above the 10-year average of 57.75 times. So the risk-reward ratio is more in favor of silver.”

See also:

Numismatic News:  Patrick Heller – Silver gets cheaper relative to gold

Reuters/Dan Norcini:  Gold posts first quarterly loss this year as dollar soars; EuroZone inflation data hammers the euro

SafeHaven: Does surging demand for gold and silver coins signal a bottom?

Bullion Star/USA Gold:  China aims to surpass U.S. in official gold reserves; Why China thinks gold is the buy of the century

Zero Hedge:  Why is China hoarding gold? Alan Greenspan explains

BBC/Reuters:  Hong Kong democracy protesters defiant on National Day; Protests approach potential National Day flashpoint

Wall Street on Parade/Washington Times:  Carmen Segarra – Wall Street’s Spy vs. Spy; Sen. Elizabeth Warren calls for corruption investigation of Federal Reserve

Indian Gold Demand Smokes Comex

Posted by on September 26th 2014 in CFTC, China, CME Group, Federal Reserve, General Economy, Gold, India, Monetary Policy, Short Sellers, Silver, Wall Street | Be the first to comment!

IndianGoldSmokesComex

“After a gap of nearly five months, there is some cheer emerging from India for the bullion market,” begins a Mineweb report, “as buyers appear to be taking advantage of the relatively low gold prices. Gold demand has picked up across the country, according to traders, despite it being an ‘inauspicious’ period as per the Hindu calender.”  The period’s end, which occurred on Wednesday, “also marks the beginning of festive buying that peaks around Diwali,” the start of the Hindu New Year.

Given the Indian government’s restriction on gold imports, the buying season’s surge in demand is being met by another surge, one that has reportedly seen 50 tonnes of gold smuggled in over 10 days.

Jesse’s Café Américain puts the contextual icing on that cake:  “So much for the mainstream media reports of a waning interest in gold in India and elsewhere. To put this into perspective, there are just under 32 tonnes of total registered gold on the Comex.”

See also:

Bloomberg: Gold rebounds from eight-month low as U.S. equities slide

Dan Norcini: Stock market weakness brings safe-haven buying into gold, bonds:

Business Insider/The Trading Report:  NYSE margin debt drifting higher again; 5 U.S. banks each have $40 trillion in exposure to derivatives

John Hussman:  The Ponzi economy

Zero Hedge/Joseph Stiglitz:  China set to fire its central bank head, unleash the liquidity floodgates; “The U.S. will always pay its debt. Because it just prints the dollars.”

Pragmatic CapitalismThe great gold debate

Gold and Silver: ‘Sellers Remain In Control’

Posted by on September 25th 2014 in CFTC, ECB, Federal Reserve, General Economy, Gold, India, Monetary Policy, Short Sellers, Silver, Wall Street | Be the first to comment!

StrongDollar

Spot gold and silver were off half a percent on Wednesday as the dollar gained on the back of single-family home sales hitting a six-year high in August, even though the overall housing numbers are seen as “still fairly depressed.” As for the dollar, “the rally in the U.S. dollar index to a four-year high has been a major bearish ‘outside market’ factor working against gold and silver,” according to an analyst’s report cited by Coin News, and “the continued bearish technical postures for both gold and silver are allowing the sellers to remain in control.”

See also:

MarketWatch/Gold-Prizes.biz:  Gold may rebound as extreme bearishness sets in

Mineweb/KWN:   Lawrence Williams – What’s behind the current silver disconnect?; Despite pressure, is silver ready to turn mega-bullish?

Numismastic News/Reuters:  Patrick Heller – Soft metals weaken U.S. coin prices; American Eagle gold coin sales set to jump in September

JS Kim:  Don’t be misled by weakness in gold & silver paper markets

Yahoo! Finance/Seeking Alpha:  Analyst – Dollar power is a problem for stocks

Arabian Money:  Can gold and silver really fail when stocks and bonds fall?