Archive for the ‘Monetary Policy’ Category

Metals Drop On OPEC Production Punt

Posted by on November 28th 2014 in CFTC, Federal Reserve, General Economy, Gold, Interest Rates, Middle East, Monetary Policy, Short Sellers, Silver, USD, Wall Street | Be the first to comment!

MetalsSqueezed

Spot gold and silver ended off 1.9% and 4.3% respectively Friday, falling with oil as the U.S. dollar gained after OPEC left its production target unchanged at a meeting on Thursday. “It is a brave new world,” declared one analyst quoted by Reuters, “OPEC is clearly drawing a line in the sand at 30 million barrels per day. Time will tell who will be left standing.”

In response to a CNBC article asking, “Could oil collapse cause next credit crisis?,” USA Gold’s Mike Kosares looks at the potential impact on gold and silver prices if that happens:

“If the latest oil shock – this time in a southerly direction – creates knock on effects, we will hear a great deal about systemic risks in the days and weeks ahead, Recall that gold at first went south in the crisis of 2007-2008 and then headed sharply higher as investors moved to shore up their portfolio’s against the possibility of a showdown on Wall Street and within the banking system.

We are in a much different situation today than we were back then and the system as a whole still suffers from the damage done by the last crisis. If a crisis were to hit today, it would start with a much weaker line-up on the playing field than the last time around. Keep in mind too that all of this has occurred because quantitative easing on a global basis simply has not worked.

We suspect that gold and silver demand will grow stronger even if the price weakens, or perhaps because the price weakens. Those who understand the virtues of gold ownership are not going to suddenly go to their national currencies, or the banking system, or the New York Stock Exchange as a defense. They will go to gold and silver.”

‘Extreme’ Bearishness Seen Boding Well for Metals

Posted by on November 27th 2014 in CFTC, China, Federal Reserve, General Economy, Gold, Interest Rates, Monetary Policy, Russia, Short Sellers, Silver, USD, Wall Street | Be the first to comment!

GOODnewsBEARS

“Sentiment toward gold is at such a bearish extreme,” begins a MarketWatch analysis, that “it seems as if every market seer is saying it’s time to buy because nearly everyone else has been selling.” It cites the proprietor of a sentiment tracking service, who calls an early November sentiment showing that just 3% of traders were bullish, one of “the most extreme we have seen.” He compares it to a 98% bullish reading in August 2011, “just as gold was about to embark on a journey from more than $1,900 an ounce down into the $1,100s.” Among the strongest of the bearish-is-bullish adherents are the Elliott Wave practitioners, two of whom expressed their optimistic forecasts for gold and silver last week.

See also:

Coin News: Gold and silver dip slightly in quieter pre-holiday trading

John Hathaway/The Gold Report: Monetary tectonics; Harry Dent’s simple strategy for surviving withdrawals from ‘markets on crack’

Zero Hedge: Bubbleology – The science of bubble money; Central bank credibility, the equity markets, and gold

GATA/Gold-Eagle: Curbing central banks is the point of the Swiss gold initiative; Grandmaster Putin’s golden trap

SRSrocco Report: Exchange warehouse silver stocks – large declines across the globe

Arabian Money/SafeHaven: What’s delaying the U.S. stock market crash?; What are the rich doing with their money?

Swiss Gold Vote Coverage Ramps Up

Posted by on November 26th 2014 in CFTC, China, CME Group, ECB, Federal Reserve, General Economy, Gold, Goldman Sachs, JPMorgan, Media, Monetary Policy, Quants, Short Sellers, Silver, U.S. Congress, USD, Wall Street | Be the first to comment!

ClockIsTicking

As the non-financial mainstream media begin focusing on Sunday’s Swiss gold referendum, USA Today reports a Bank of America prediction that “the price of gold could jump to more than $1,350 an ounce — an increase of 18%,” if the “yes” vote prevails. And a Guardian article, headlined “Fears that ‘dangerous’ Switzerland referendum could spark gold rush,” refers to a quote by the chairman of the Swiss National Bank, who said during a ‘sermon’ he delivered at a Swiss church, “The initiative is dangerous because it would weaken the SNB.”

But the lion’s share of the Guardian‘s quotes come from precious metals analyst and blogger Koos Jansen, who calls the Swiss initiative “merely part of a increasing global scramble towards gold and away from the endless printing of money,” adding that “While those behind the Swiss initiative have often been portrayed as crazy, they’re merely acting out of fear that their central bank is losing control of its monetary policy, and of the Swiss franc being sucked into this currency war and losing its value.”

SwissGoldCoverageRampsUp

Coin News/SilverSeek:  Precious metals rise as dollar dips, U.S. coin sales gain; Silver – what COT analysis tells us

Gold Silver Worlds:  Algos gone wild?  Gold price went ballistic to $1,450 in less than 20 minutes

Bloomberg/Mineweb:  China’s gold imports rise for a third month on jewelry sales; China 2014 gold demand heading for 2,100 tonnes

SafeHaven/Financial Post  Can gold extend its rally?; 6 reasons to be bullish on gold

Bloomberg:  Platinum & Pallidum – HSBC, Goldman rigged metals’ prices for years, suit says

GATA/WSOP: U.S. Senate report shows how easily banks can rig gold, copper, and other markets; Scale of Wall Street’s commodity holdings are “unprecedented in U.S. history

Russia/Ukraine Gold — All In vs. All Gone

Posted by on November 19th 2014 in China, Federal Reserve, General Economy, Gold, India, Interest Rates, Monetary Policy, Russia, Short Sellers, Silver, U.S. Congress, Ukraine, USD, Wall Street, Warren Buffett | Be the first to comment!

Russia:UkraineGold

While Reuters pegs Tuesday’s gains in gold and silver to a falling dollar, a Bloomberg article headlines Russia adding to its gold reserves as a major factor in gold topping $1,200 an ounce on its way to a two-week high. “The fact that Russia is buying more gold instead of diversifying into another currency or buying more dollars is a big positive,” said one trader, in response to a report that Russia has purchased about 150 tonnes of gold so far this year, almost twice its 2013 buy, including 35 tonnes since the end of September.

But in Ukraine, according to a Zero Hedge post, the head of the country’s central bank said during a TV interview that “in the vaults of the central bank there is almost no gold left,” adding that there’s “a small amount of gold bullion left, but it’s just 1% of reserves.” Earlier this year the IMF put Ukraine’s gold holdings at 42.3 tonnes, or 8% of total reserves. Zero Hedge concludes: “now that the disappearance of Ukraine’s gold has been confirmed, perhaps it is time to refresh the “unconfirmed” story that a little after the current Ukraine regime took power the bulk of Ukraine’s gold was taken to the United States.”

See also:

Mineweb/SilverSeek: Gold bounces back above $1,200 – will it jump higher?; Gold and silver supply is very tight

Dan Norcini/Sprout Money: Gold taking cues from forex market movements; When will gold’s fundamentals rise to the surface?

Bloomberg: Gold lending rate most negative since 2001 on longer refining

Acting Man/TradePlacer: Wrinkles of the Swiss gold referendum; Impressions of the latest TV debate

Mauldin Economics/Peak Prosperity/Wolf Street: Correction? What correction?; John Hussman – The stock market is overvalued by 100%; Warren Buffet is dumping stocks out the backdoor

Confounded Interest: Fed’s FOMC speeches become more complex over time as Middle Class feels more abandoned

Rutherford Institute/LA Times: Are ‘We the People’ useful idiots in the digital age?; NSA surveillance bill defeated in Senate

Silver’s Million Ounce Monday

Posted by on November 18th 2014 in CFTC, China, ECB, Euro, General Economy, Gold, India, Monetary Policy, Short Sellers, Silver, USD, Warren Buffett | Be the first to comment!

MillionOunceMonday

Although spot gold and silver ended off 0.1% and 0.7% respectively on Monday, as the dollar rose on news overnight, that Japan fell into a recession, more than a million Silver Eagles were sold on the first day the coins were available since going dark almost two weeks ago. “At 40,393,000 coins sold in 2014 so far,” reports Coin News, “there is now just one stronger year in the Silver Eagle’s 29-year history — 2013 at 42,675,000 coins.”

And an argument that silver is showing “Signs of Life,” suggests that despite the “demoralizing” price action since July, recent technical and fundamental activity “could be screaming at us that this is about to change. Increasing physical demand highlighted by a lack of availability of and rising premiums for silver coins and bars coupled with an extension and overbought condition in the gold-silver ratio is significant. Add to that a pair of bullish key-reversal days on consecutive Fridays validated by the same action in gold.”

See also:

Mineweb:: Elliott Wave analyst sees big gold and silver price surge ahead

Mining.com/Bullion Star: India back to being world’s top gold consumer; Who’s feeding China’s gold hunger?

Jesse’s Café Américain/GATA: How many potential owners per ounce of registered Comex gold?; Four key observations from Deutsche Bank’s report on the Swiss gold initiative

BullionVault: Eurozone’s QE “could include gold bullion” to boost inflation

Zero Hedge: Here is your “global recovery” in 24 charts; Mission accomplished – Stocks and homeless kids hit all-time highs

Reuters/PBS NewsHour: The COLA crunch: Why Social Security isn’t keeping up with seniors’ costs; Laurence Kotlikoff’s Social Security advice archive

Down, Up, Up: Metals Spike; Myriad Reasons Cited

Posted by on November 15th 2014 in CFTC, China, CME Group, Federal Reserve, General Economy, Gold, Middle East, Monetary Policy, Short Sellers, Silver, USD, Wall Street | 1 comment

MetalsSpike11:14:14

After falling Friday morning on an upbeat U.S. retail sales report for October, spot gold and silver roared back to gain 2.5% and 4.4% respectively,” reports Reuters, quoting one metals’ trader as observing that “The early morning pressure was met with significant bargain-hunting, and when the market was unable to continue its move lower, short-covering ensued.”

Reuters also attributes gold’s gains to a “sudden weakening of the dollar,” which is emphasized by Zero Hedge, along with a report that the “yes” vote is leading in polling on the Swiss gold referendum.  Add to that, a money manager tells MarketWatch that “Gold reversed after oil got bid on speculation that OPEC will cut oil output,” while a trader quoted by Bloomberg concurs: “The spike in oil prices acted as a catalyst. There was a lot of fund buying.”

See also:

GoldMoney/Arabian Money:  Alasdair Macleod – Market Report – Is gold turning the corner?; Swiss gold referendum and Russian buying gives gold and silver a rally

GoldCore:  Swiss gold shenanigans intensify prior to November 30 vote

Hard Assets Investor/BullionVault:  Commodity ETF flows: Traders bet on oil & silver, dump GLD; Gold/silver ratio 2015: Can silver rise when gold falls?

USA Gold/Wealth Daily:  Gold capitulation? Not likely; Central banks buying record amounts of gold

Short Side of Long/SilverSeek:  Portfolio update: Bought silver & China; Primary silver miners losing nearly $3.00 for every ounce of production

Marketplace/The Guardian: It won’t be easy for ISIS to create its own currency

Marc Faber: Physical Gold Trumps Mining Shares

Posted by on November 14th 2014 in CFTC, CME Group, Federal Reserve, General Economy, Gold, JPMorgan, Monetary Policy, Russia, Short Sellers, Silver, Ted Butler, USD, Wall Street | 1 comment

BuyGoldYouCanHold

In a subscriber-only ETF.com interview, excerpted by Hard Assets Investor, Marc Faber weighs in on where gold’s headed and why he prefers the end product over the companies that mine it:

Q:  Gold plunged immediately after the [Oct. 31] BoJ announcement [that it would expand its asset purchases], which came only days after the Federal Reserve announced the end of QE. Where do you see gold headed in 2015?

Faber: I think it will go up. But can it go down first? Yes. In general, I would say the game that central bankers are playing is very clear: They start out with QE1 in the U.S., and then that forced essentially other central banks to do the same, to also go QE. They’re kind of passing each other the ball. One stops, the other one starts. It’s basically a game designed to kill the purchasing power of paper money. I’m not sure they’re aware of it, but in my view, this is the beginning of the end of paper money in this century.

And asked about physical gold vs. mining shares, Faber says: In general, my advice to investors is to own physical gold and not gold mining shares. Because in a disaster scenario, you don’t know what financial assets will be worth, whereas physical gold is in your possession.”…Read more>>>

See also:

Bloomberg/24/7 Wall St.:  Gold inches up, silver flat, as jobless claims rise more than forecast

Dan Norcini/WGC:  World Gold Council issues its latest report

Acting Man:  Gold market sentiment – A contrarian’s dream?

Forbes/TradePlacer:  Are small investors right about silver?; Ted Butler to silver miners – COMEX is responsible for low silver prices

Telegraph/RBTH:  Putin stockpiles gold as Russia prepares for economic war

Gold Market Macro: Eastern physical demand versus Western financial supply – who will win out?

Physical Buyers Seize Paper-Selling Opportunity

Posted by on November 11th 2014 in CFTC, China, Federal Reserve, General Economy, Gold, Interest Rates, Media, Monetary Policy, Short Sellers, Silver, USD, Wall Street | Be the first to comment!

PaperSelling=Opportunity

Silver and gold ended off 1.1% and 2.2% respectively on Monday, giving back a portion of Friday’s gains as the U.S. dollar rebounded. “From a technical perspective,” according to USA Gold’s daily market report, “Friday’s key-reversal on the daily chart and the hook-reversal on the weekly chart favor further short-term positive price action” in gold.  “However, persistent firmness in the dollar and buoyant stocks continue to prompt outflows from ETPs indexed to gold. Another eight tonnes came out of the paper market last week.”  But, citing numerous examples that demand for physical gold and silver “remains robust,” it notes that “We’ve seen this time and time again: Lower prices spurred by selling in the paper market are viewed as a buying opportunity by those who prefer to hold real physical metal.”

See also:

Coin News/Mineweb::  U.S. Mint gold coins gain; Silver Eagle sales remain suspended; Gold demand still running high, so where’s the turning point?

Bullion Star/USA Today:  Chinese gold demand strong, mainstream media twisting; China hoarding gold to challenge U.S. dollar?

GoldMoney/Reuters:  Deflation comes knocking at the door; Fed’s Rosengren says fight for higher inflation should be vigorous

MarketWatch/Mineweb:  Silver and gold say global growth (still) stinks; Permanent gold backwardation = global meltdown ahead

Zero Hedge:  The Council on Foreign Relations apologizes for the “Greenspan glitch

Greenspan: On Gold, Uncut

Posted by on November 8th 2014 in Federal Reserve, Gold, Monetary Policy, USD | Be the first to comment!

 GreenspanUncut

Gillian Tett: Do you think that gold is currently a good investment?

Alan Greenspan: Yes… Remember what we’re looking at. Gold is a currency. It is still, by all evidence, a premier currency. No fiat currency, including the dollar, can match it.

Metals Hover Near 2010 Lows; Coin Sales Continue Climb

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

 SilverCoinSurgeOct14

With silver and gold futures inching up and down respectively on Monday, paper and physical continue to diverge as explosive demand for bullion coins is being seen in both the U.S. and Europe.  According to a German coin dealer quoted by that country’s Gold Reporter:  “On Thursday and Friday people had to draw numbers in order for us to control the run. On both days we sold each around 40,000 silver ounces – incredible. Demand is back – and hysteria as well.”

And Coin News reports that U.S. Mint “bullion coins rallied to start November with gold coin sales jumping 14,500 ounces and silver coin sales advancing 736,000 ounces. Gains extended from an exceptional October when gold coin sales were the highest since January 2014 and silver coin sales were the highest since January 2013.” This as Sprott’s John Embry contends that “silver remains as undervalued an asset as I have ever seen.”

See also:

InvestorIntel/ReutersWorld demand for gold is strong, despite a price drop to the lowest level in four years

Seeking Alpha:  Markets misreading of Fed statement is opportunity in gold; Gold and QE – Setting the record straight

USA Gold/Zero Hedge:  The reinvention of Alan Greenspan; Greenspan to Marc Faber: “I never said the Fed was independent

Silver Seek/SafeHaven:  A silver primer – Where are we now?; A sunny silver forecast: Low price today means high price tomorrow

Mining.com/GATAChina’s gold strategy; ETF outflows – Is that where all that gold going into China is coming from?

Bloomberg/Wall Street on Parade:  JPMorgan faces U.S. criminal probe into currency trading; Despite criminal history, JPMorgan holds $1.7 trillion in QE bonds

Thanksgiving: Metals Over October After Down Day, Week, Month

Posted by on November 1st 2014 in China, Federal Reserve, GATA, General Economy, Gold, Interest Rates, Monetary Policy, Short Sellers, Silver, USD, Wall Street | Be the first to comment!

ScaryBears

Gold futures were off 2.3% on Friday and silver doubled that decline, with both hitting four-year lows on the day and having their worst week since April 2013.  “Japan basically pushed gold over the edge as it triggered a major risk-on move,” according to a Saxo Bank commodity strategist, citing Japanese stimulus, the Fed ending QE and dollar strength as being “more than the market could cope with this week.”

“The main reason for gold’s fall is the strength in the dollar after the BOJ’s desperate efforts to weaken the yen,” said the head of one asset management firm, and while predicting that “Gold could fall further in the short term as the dollar could rise,” he also thinks “gold should eventually benefit as a hedge against the uncertainties and economic turmoil brought by central-bank actions.”

While in the realm of the coins, Silver Eagles had their best month of the year in October, and with sales of some 38 million this year, they’re only about one million behind the pace of 2013’s record-setting year.

See also:

Jesse’s Café AméricainGood morning, Fiat Nam!

Dan Norcini:  Hedge funds feasting on small specs in silver; Gold bears nail hedge fund sell stops

Seeking Alpha:  Putting the gold selloff into perspective

Mineweb/Bullion Star:  Gold and silver dive yet Chinese demand keeps rising; The great Chinese silver market debate

The Gold Report321 Gold‘s Bob Moriarity – Flock of black swans points to imminent stock market crash

KWN/Sprott Global:  Eric Sprott says the stock market will crash, not gold; What Greenspan’s latest talk means for gold

GATA:  Here’s what the World Gold Council is doing today amid the war against gold

Silver Slump Gives Ratio Bump

Posted by on October 31st 2014 in CFTC, China, Euro, Federal Reserve, General Economy, Gold, Interest Rates, Monetary Policy, Russia, Short Sellers, Silver, USD, Wall Street | Be the first to comment!

SilverSlumpsRatioBumpsFollowing better-than-expected U.S. GDP growth of 3.5% for the third quarter, spot gold and silver fell 1% and 3.4% respectively on Thursday, and futures were hit even harder, tumbling 2.1% and 4.9%, on what was “a rough day for the precious metals, with the financial powers-that-be trying to prove that the end of QE III need have no negative effects on their financial engineering of The Recovery™.”

With silver hitting a 56-month low, the gold/silver ratio is now pushing 73, a 66-month high, but if an in-depth chart analysis published by SilverSeek — “Time Running Out on Silver Bear” — proves correct, that could change in weeks, not months.  It predicts that November is “the time for the present silver bear market to end, and for silver to begin its next leg higher within its primary bull market.”

See also:

Zero Hedge/Businessweek:  Broken stocks, battered bullion, and bruised crude; Did the U.S. just ‘steal’ GDP growth from the fourth quarter?

James Grant/Eric Parnell:  Complexity – The hidden cost of central bank actions; A once-in-a-generation change for stocks

Bullion Star/Mineweb:  China stocks up on oil & gold while prices are low; China’s ‘new normal’ still global metals demand driver

Bloomberg/Mining.com: Russia buys most gold for reserves since 1998 financial crisis; Pushes forward plans to mine the moon

CNBC/Grant Williams:  Currency traders eye Swiss vote on gold holdings

GoldCore:  U.S. Mint gold coin sales near 60,000 ounces in October – Swiss gold initiative leading to increase in demand?