Archive for the ‘Monetary Policy’ Category

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

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

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.”

See Ya in September!

Posted by on August 30th 2014 in CFTC, China, Federal Reserve, General Economy, Gold, India, Middle East, Monetary Policy, Short Sellers, Silver, Wall Street | Be the first to comment!

HopeSpringsSepternal

Gold and silver futures fell about a half a percent on the final U.S. trading day in August, but it’s said that “September should be glowing for gold,” with the biggest boost likely coming from India. The article accompanying the above chart points out that Indian seasonal buying which is forecast to be better than last year, “typically increases with the country’s festival period, which runs from late August to October….” A Wall Street Journal feature on India’s ‘improving appetite‘ for gold, is echoed by a Scrap Monster report that gold premiums in India have more than doubled this week, “in anticipation of towering festive season demand.”

See also:

Jesse’s Café Américain/SafeHaven:  Coppock Indicator – An intermediate term bottom for gold is in; Enormous paper silver trading volumes

BullionStar.com/Smaulgld:  Precious metals markets – China vs. US; The Importance of gold to nations & individuals

WSJ/USA Gold:  Bernanke – 2008 meltdown was worse than Great Depression; Don’t think it can’t happen again

Businessweek/CBS News: For every education level, real wages have gone down so far this year; Americans fear economy is permanently scarred

CNBC/Dow Jones: One-percenters bullish on US despite ‘failed’ Obama presidency; Fed’s Lockhart & Fisher were active personal asset traders in 2013

Zero Hedge:  Marc Faber slams US intervention in Middle East, warns “whole region will blow up

What Is It Saying?

Posted by on August 29th 2014 in Federal Reserve, General Economy, Monetary Policy, Short Sellers, Wall Street | Be the first to comment!

 

WhatTheHell'sItSaying?

Metals Edge Down as Stocks, Dollar Gain on QE Hints

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

 ECBQE

Following a brief move higher on Monday, spot gold and silver ended down a fraction of a percent, with gold said to have been under pressure from “a stronger U.S. dollar and rallying global financial markets,” buoyed by the prospect of the ECB launching a QE program, based on remarks by Mario Draghi at Jackson Hole. But USA Gold points out that “the yellow metal has proven fairly resilient … Despite the dollar strength—which is more a function of euro and yen weakness.  A weak round of U.S. data this morning may be helping the cause as well, pushing back Fed rate hike expectations somewhat.”

See also:

Bloomberg/Washington Post:  Jackson Hole theme – Labor markets can’t take higher interest rates; Central banks to lawmakers - You try growing the economy

Confounded Interest:  Yellen discusses labor slack, but not terminal (money) velocity or sterility

John Hussman/HBR:  Fed policy and the growing gap between Wall Street and Main Street; Profits without prosperity

Bloomberg:  Speculators lower gold bull wagers on U.S. rate outlook; Silver open interest reaches 14-month high on short bets

Seeking Alpha/BullionStar.com. Commodity outlook – Silver; India imports 2559 MT of silver in 5 months

Gold Scents/SilverSeek:  Manipulation is still alive and well in the gold market; Beditching hour - Silver knocked down at 6 p.m. for 83% of sessions in last 3 years

Fed Seen ‘Trying to Bluff the Market’

Posted by on August 23rd 2014 in Bart Chilton, CFTC, China, Federal Reserve, General Economy, Gold, Janet Yellen, Middle East, Monetary Policy, Russia, Short Sellers, Silver, Ukraine, Wall Street | Be the first to comment!

Janet,Jackson

At the end of a down week for gold and silver, off some 1.8%  and .7% respectively, both were up slightly on Friday as Ukraine held sway, with 130 trucks from Russia’s long-stalled “aid” convoy rolling across the border into Ukraine, which characterized the breach as a “direct invasion.” Not so direct was Fed Chair Yellen, whose speech at Jackson Hole was seen as “noncommittal,” and even “confusing,” while an analyst quoted by Bloomberg saw misdirection:  “They’re trying to bluff the market,” he said of the Fed. “They’re trying to warn investors about the potential for rate increases, without actually implementing a rate increase. I think that will strengthen the trading range for gold.”

See also:

GoldSeek/The Sovereign Investor:  Gold rising-rate fallacy; Inflation, interest rates, and why you should own gold

Gold Switzerland:  Gold unloved and undervalued

Hard Assets Investor/Dan Norcini:  Commodity ETF flows:  Money enters GLD & SLV; Aggressive hedge fund selling plagues silver

Got Gold Report:  Revolving Door Watch – High-frequency trading critic Bart Chilton joins HFT lobby effort

Zero Hedge/Jesse’s Café Américain:  South African bank – Give us your gold; A bond paid for & denominated in gold

Reuters/Mineweb:   China gold exchange gains traction as yuan reforms stir interest; Russia leading central bank gold buyer, but China – who knows?

NY Times/CNN:  NATO – Russians open fire in Ukraine; Is Obama heading toward airstrikes in Syria?

Metals Still Not Moving Much; Fed Split on Rate Rise

Posted by on August 21st 2014 in CFTC, China, Federal Reserve, General Economy, Gold, India, Janet Yellen, Monetary Policy, Short Sellers, Silver, Wall Street | Be the first to comment!

GoldStayingPuts

By one account, gold and silver prices “seem determined to hold on here,” as they continued to trade in a narrow range on Wednesday, with spot silver up 0.2% and gold off 0.4%.  Reuters attributes the drop in gold to gains in the dollar, “on economic optimism after the minutes of the Federal Reserve’s latest meeting showed the U.S. central bank has seen progress in the U.S. labor market.” But MarketWatch, describing “a growing division within the Fed” over the health of the labor market, reports that “a majority still don’t believe there’s been enough progress to consider altering interest rates soon.” The July minutes were also dismissed as “a market diversion until Jackson Hole.”

See also:

Zero Hedge: Jackson Hole – ‘Tremendous’ downside risks if Yellen doesn’t go full-dovish

Street Talk Live:  The illusion of strength; Alternative measures suggest weaker economy

Reuters/Seeking Alpha:   Fading volatility promises long period of gold stagnation; Silver prices will remain rangebound

Got Gold Report:  Heckle if you want, but be prepared for anything in gold and silver

Hard Assets Investor/Casey Research:  Gold/silver ratio says silver is cheap, but it can get cheaper; Silver – As close to a no-brainer investment as it gets

Business Insider:  Ten countries hoarding enormous piles of gold

Hotspots Not Heating Up Gold—More Floor Than Soar

Posted by on August 20th 2014 in CFTC, China, CME Group, Federal Reserve, General Economy, Gold, Iraq, Monetary Policy, Russia, Short Sellers, Silver, Ukraine, Wall Street | Be the first to comment!

Gold&GeopoliticalRisk

“Gold obviously didn’t like the U.S. CPI and housing data, which boosted the dollar,” said a Saxo Bank manager, speaking about a 0.1% increase in the monthly inflation rate, and July’s 15.7% jump in U.S. home construction.  But despite that, spot gold was off only 0.2%, while spot silver took a 1% hit. And according to an analyst quoted by MarketWatch, gold will likely remain in a narrow trading range, “unless by some miracle, all the tensions in the world are sorted out. A doubtful scenario.  I hasten to add that gold is not the perfect safe haven, far from it, but it does knee-jerk react to headlines, and as such, the downside should be limited for the time being.”  But that said, gold is also not going through the roof during this period of global tensions, as evidenced by the above chart. Grant William’s looks at what’s behind “Gold’s sudden ignorance of geopolitical risk.”

See also:

Jesse’s Café Américain:  The paper metals are a charade

Reuters/BullionStar.com:  China said to allow 3 more banks to import gold; East Asia geared up for renminbi gold trading

GoldSeek/GATA:  The U.S. gold in Fort Knox is secure, gone, or irrelevant?; U.S. gold reserve likely has been leased out, Grant Williams tells KWN

CEO.caBig move brewing for gold

Of Two Minds/Tim Iacono:  Are capital inflows propping up U.S. markets?; Stocks or bonds – Which has it right?

Bloomberg:  Only rich know wage gains with no raises for U.S. workers

ProPublica/TomDispatch.com:  The best reporting on federal push to militarize local police; One nation under SWAT

Gold Up and Down on Crises Fluctuations

Posted by on August 9th 2014 in ECB, Federal Reserve, General Economy, Gold, Iraq, Middle East, Monetary Policy, Russia, Short Sellers, Silver, Ted Butler, Ukraine, Wall Street | Be the first to comment!

Gold&Crises

Reuters reports that before ending off 0.3% on Friday, “gold rallied to a three-week high on news U.S. aircraft bombed Islamic fighters marching on Iraq’s Kurdish capital of Arbil.  But safe-haven buying dried up after Russia’s Defense Ministry said it had finished military exercises near its border with Ukraine.” And after also losing a fraction on Friday, silver was down 1.8% for the week, while gold logged a 1.4% gain. But when it comes to 2014 bullion coin sales, silver’s thumping gold.

See also:

BullionVault/Yahoo Finance:  The dollar, gold & Middle East oil; Why this is the moment of truth for the gold trade

Dan Norcini:  Ukraine events supporting gold, but for how long?

Bloomberg/Time: World war on Russia’s mind when U.S. duels over Ukraine; Putin’s popularity soars to 87% in the face of adversity

Bloomberg/Telegraph:  Draghi says geopolitical risks to economy increasing; Germany close to recession as ECB admits recovery is weak

GATA/Zero Hedge:  Alasdair Macleod:  No market crashes anymore, just currency risk; Marc Faber – By printing money, the Fed has delayed the inevitable ‘cleaning’ process

King One Eye/Ted Butler:  Two precious metal must-sees; Oh, Oh – The dangers inherent in gold and silver pool accounts

Coin News/Numismaster:  U.S. Mint suspends in-person sales of Kennedy gold coin; JFKa Ching – First four gold Kennedys go for $20,000

Silver Snaps Loss Streak; Eagles Heat Up

Posted by on August 7th 2014 in CFTC, China, ECB, General Economy, Gold, Monetary Policy, Quants, Russia, Short Sellers, Silver, Ukraine, Wall Street | Be the first to comment!

 SilverEagleSalesHeatUp

Concerns about the situation in Ukraine boosted gold futures 1.8% on Wednesday and silver futures added 1% to snap a four-session losing streak. Silver fared better in the spot market, rising 1.7% compared to gold’s 1.6% increase.  Gold was also said to have benefited from data showing that Italy slid into recession in the second quarter, for the third time since 2008.  And, American Silver Eagle gained for the the third straight day, reports Coin News, surpassing 27 million for the year “to maintain a pace that is the second quickest in the coin’s 29-year history.”

See also:

SafeHaven/Got Gold ReportSilver pyramid power; Right or wrong, a great spot for a silver bounce

Mineweb:  Central banks continuing to boost gold reserves

Bloomberg/Telegraph: Russia sanctions accelerate risk to dollar dominance; Putin signs historic $20bn oil deal with Iran to bypass Western sanctions

Jesse’s Café Américain: Currency wars and the inevitable banquet of consequences

Ciovacco Capital/Peak ProsperityScenarios for a vulnerable stock market; Is this decline the real deal?

Reuters/WSJ:  High-frequency trading takes root in U.S. securities class actions; How one whistleblower turned the tables on high-frequency traders