Archive for the ‘Russia’ Category

Conflicts Seen Supporting Gold for ‘Next Several Years’

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

WorldOfProblems

Silver futures were flat on Tuesday and gold ended modestly lower, at just over $1,300 an ounce, on what was seen as a number of technical factors, such as profit-taking and chart consolidation, as well as “less risk aversion in the market place.” But according to the CPM Group’s Jeffrey Christian, the latter could be short-lived. He’s quoted by Reuters as saying that without the current crop of international conflicts, “gold probably would be down around $1,240 – $1,280 at present.”  But he also points out that these conflicts “all fester without a joint international effort to help resolve them. This means more problems being more difficult to resolve, which probably means that more investors will seek gold as a portfolio diversifier and safe haven over the next several years than otherwise.”

See also:

USA Gold/Dan Norcini:  Gold supported by geopolitical risk, even as stocks, dollar gain; Euro currency breakdown

Sharps Pixley/Mineweb:  Gold & silver – Geopolitical tensionsLawrence Williams – Escalating Ukraine crisis could blow gold sky high

Casey Research/Bloomberg:  The truth about China’s massive gold hoard; Middle East seen gaining gold share as trading expands

Telegraph:  How a golden shield can work for investors; Have central banks been breaking the law?

Zero Hedge:  Portugal president admits Espirito Santo failure could be systemic; NY Fed slams Deutsche Bank (and its €55 trillion in derivatives): Accuses it of “significant operational risk”

SRSrocco Report:  How derivatives will trigger a bond market melt-down

 

Squeezing the Shorts — ‘Watch For It’

Posted by on July 22nd 2014 in CFTC, China, CME Group, Federal Reserve, General Economy, Gold, India, Janet Yellen, Monetary Policy, Russia, Short Sellers, Silver, Ukraine, Wall Street | Be the first to comment!

WatchForShortSqueeze

“You know, if someone with quite a lot of firepower were to take a good look at the Swap Dealer combined positioning in gold and silver, and exploit that by pressing the metals a bit, they sure might have a squeezing good time of it,” writes Got Gold Report‘s Gene Arensberg, in a comprehensive analysis of the current COT set-up. He goes on to predict that “Most anything can happen short term, but at some point gold and silver are going to catch a tail wind strong enough that those attempting to prevent runaway breakouts could be overwhelmed.  It is in such cases that the trader community on the COMEX becomes its most cutthroat and merciless.  If the other traders sense a trapped large trader or group of traders, you know, maybe one with a way-too-huge-short position in a rising price environment as an example … well, let’s just say that all traders consider it a duty to pile on and make them pay.  Watch for it.”

See also:

Reuters/Coin NewsGold rises above $1,300 on heightened tensions, S&P drop;  Gold rises 0.3%, silver advances 0.6%; US Mint bullion coins gain

CNBC/Zero Hedge:  David Stockman – Market’s teetering on edge, beware of Black Swan; Saxobank – “Be warned” of delayed market reaction to “escalation of global turmoil”

MarketWatch:  Bank of America Merrill Lynch – The worst for gold may be over;  Yellen encourages ‘fully-fledged equity bubble,’ says Jeremy Grantham

Bloomberg:  Fed’s junk loan bubble-busting faces trouble as sales jump; Yellen wage gauges blurred by Boomer-Millennial shift

The BRICS Post/The Telegraph:  BRICS bank capital might not be held in U.S. dollars; The dollar’s 70-year dominance is coming to an end

Financial Times:  U.S. dollar clearing rules make gold the new green

Metals Off as Rate-Rise Talk Trumps Turmoil

Posted by on July 19th 2014 in Federal Reserve, General Economy, Gold, Monetary Policy, Russia, Short Sellers, Silver, Ukraine, Uncategorized, Wall Street | Be the first to comment!

GazaTurmoil

Spot gold and silver were off about 1% Friday with the drop attributed to profit-taking and the prospect of an accelerated interest-rate increase, reversing Thursday’s gains and trumping events in Ukraine and Gaza.  Investigators were reportedly denied access to the Ukrainian crash site by “heavily-armed” rebels, and the U.S. is now claiming that Russia may have helped launch the missile that brought down the plane. This as Prime Minister Netanyahu said that Israel is prepared to “significantly widen” its Gaza ground offensive, as it authorized the call up of an additional 18,000 reservists, and both sides are thought to be “in this for the long haul.”

MortgageApps

As for ongoing speculation over the timing of an interest-rate increase, it was further stoked on Thursday by St. Louis Fed President James Bullard, when he predicted that the Fed might have to raise short-term interest rates “sooner rather than later.” But with mortgage applications at 13-year lows, as illustrated in the above chart, Zero Hedge asks:  “Just what happens if interest rates ever rise?

Tragedy Puts Focus on Safe Havens

Posted by on July 18th 2014 in Gold, Russia, Silver, Ukraine | Be the first to comment!

TragegyPutsFocus on SafeHAvens

Gold and silver were already up Thursday on escalating Ukraine tension, and then extended their gains following the news that a Malaysian airliner was shot down in eastern Ukraine, killing all 298 on board. AFP reports that “Social media posts by pro-Russian insurgents — most of them hastily removed — suggest the rebels thought they had shot down a Ukrainian army plane before realizing in horror that it was in fact a packed Malaysian airliner.” It came just days after a Ukrainian transport plane was downed by a surface-to-air missile, which was seen as foreshadowing Thursday’s crash.

While lamenting the tragedy, Dan Norcini writes of also being “a bit disappointed in the gold price as the metal could not even stay above the $1320 level. With the backdrop of an Israeli ground operation against Hamas, and with this commercial airliner incident, one would think it would have garnered some more upside. Tomorrow is going to be an important day for the metal therefore.”

Metals Hit by BRICS or ‘Bubbles’?

Posted by on July 16th 2014 in CFTC, China, Federal Reserve, General Economy, Gold, IMF, India, Janet Yellen, Monetary Policy, Russia, Short Sellers, Silver, Wall Street | Be the first to comment!

BRICSbank

As Jim Sinclair weighs in on Monday’s market shenanigans, spot gold and silver ended off 0.6% and 0.3% respectively on Tuesday.  Gold “was weakened, opined analysts, by strength in the U.S. dollar,” reports Coin News. “The greenback saw gains after Fed chairwoman Janet Yellen testified before Congress and said the U.S. economy is improving but still needed support.” This as other analysts, and some traders, also saw her testimony as “largely neutral for the gold market,” and “tended to blame the price decline on factors such as another large sell order that reportedly hit the market, sell stops, long liquidation by funds and a reaction to outside markets.”BubblesTestimony

Echoing that notion, while also downplaying the role of Yellen’s testimony, the proprietor of Jesse’s Café Américain opines that “Most would think that the slam on the metals, and that is clearly what it was, is coincident with Bubbles Yellen and her appearance before the Congress. I was thinking it was more related to the BRIC meeting in Brazil,” where, reports Newsweek, the countries “announced the long-awaited bank and contingency fund, a clear move away from the dominance of the West in global economics and the dire consequences of an unstable dollar.”

Metals Only Bend on Big Jobs Number

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

MetalsOnlyBend

With gold and silver futures off, but by less than one percent following an estimate-topping jobs print of 288,000, the head of investment advisory H.C. Wainright said that “In a more normal, less tense environment, the employment data should have sent gold much lower by $25-$30 an ounce quickly, but these are not normal conditions.  Good U.S. economic news is tempered in part by foreign events which the U.S. has no influence or control over at present.”

Metals’ spot prices took even less of a hit, with spot silver ending flat on the day.  As for gold, Dan Norcini echoes the above sentiment in observing that it “looks as if geopolitical events in Iraq are continuing to provide some support. The stronger dollar coming on the heels of the payrolls number, provided pressure. The lack of wage inflation did likewise. However, while the market bent, it did not break. The geopolitical premium remains.”

See also:

Mining.com/Silver Investing News:  Silver above 15-week high on world tensions, investor confusion; Still going strong, silver beats last week’s high

Zero Hedge:  People not in labor force rise to new record; June full-time jobs plunge by over half-a-million, part-time jobs surge by 800K

Washington Post/Of Two Minds:  More Americans are stuck in part-time work; Is this a self-sustaining recovery or as good as it gets?

Reuters/Bloomberg:  China gold imports may drop 400 tonnes hit by financing curbs-consultant; Chinese trader said to pledge metal 3 times for loans

Salient Partners:  China in the golden age of central bankers

Businessweek/In Gold We Trust:  How bad would a housing market crash be for China?; Are the Chinese ghost cities really empty?

Metals Hold Gains; Weak Dollar, Geopolitical Strife Support Gold

Posted by on July 2nd 2014 in CFTC, Federal Reserve, GATA, General Economy, Gold, Iraq, Russia, Silver, Ukraine, Wall Street | Be the first to comment!

GoldVsDollar

Despite big gains in stocks, gold and silver “held their rally” on Tuesday, as futures again inched up with gold’s support seen coming from a declining dollar — “The dollar weakness is helping gold stay supported at the current levels” — and geopolitical tension — “Gold is being supported by Iraq and now Ukraine.” Concerning Monday’s rally, Dan Norcini cites the latest number from the GLD holdings showing “a nice influx of some 5.05 tons of gold since the last updated number,” which he describes as “a nice ‘positive’ strike three. I mean by that, you had the gold price moving higher yesterday, the mining shares moving higher and the GLD showing an increase of 5 tons. That is exactly what one wants to see if they are a gold bull. That, plus the fact that the U.S. dollar index fell below 80 on its chart.”

See also:

Hard Assets Investor:  Rick Mills – Rising demand and falling supply equals higher metals prices

Scott Pluschau/SilverSeek:  Silver is at a key reference area to trade from; Trading the ratios and swapping gold for silver

Market Oracle/BullionVault:  Gold prices benefit from economic sins; Gold price vs. pundits – can’t both be wrong

Telegraph/Bloomberg:  Fund manager – ‘Why I am backing cash and gold until stock markets fall’; How Memphis firm decoded bond secrets mystifying Wall Street

GATA:  Gold market manipulation injected uncomfortably into BNN interview; Bank of England gets pretty intimate with the London Bullion Market Association

Silver Takes Quarter; Gold Wins Half

Posted by on July 1st 2014 in CFTC, China, Federal Reserve, General Economy, Gold, India, Iraq, Janet Yellen, JPMorgan, Monetary Policy, Russia, Short Sellers, Silver, Ted Butler, Timothy Massad, Wall Street | Be the first to comment!

SilverQuarterAfter spot gold and silver added a fraction of a percent on Monday, silver ended up 7% for the quarter, its highest gain in three quarters, reports Reuters, and gold gained about 3.5 percent on the quarter after a nearly 7 percent gain in the first quarter, making gold the best-performing asset in the first half of 2014.

Reuters attributes gold’s gains to tensions over Ukraine and Iraq, and going forward, geopolitical tensions are alsoGoldHalf seen as the “wild card” for gold and silver, according to one analyst quoted by MarketWatch.  He adds North Korea as a potential third hot spot, and says that “Any flare up in these areas could quickly lead to another round of ‘safe haven’ buying in the precious metals.”

See also:

BullionVault/Mining.com:  Gold & silver beat stocks, best first-half since 2011 after “surge in bullish hedge fund bets”

Mineweb:  Silver the star performer in recent precious metals rally; Silver – The irresistible force

Jesse’s Café Américain/Ted Butler:  Comex silver stockpiles at the end of 2Q 2014;  Comex – Why it’s corrupt

Financial Times/GATA:  Singapore seizes on soaring Asia gold demand; Koos Jansen – Chinese gold demand remains robust and in an uptrend

Telegraph/Peak Prosperity:  BIS – Ultra low interest rates could make global economy permanently unstable; Axel Merk – The Fed’s next move

MarketWatch:  Taper Time? Janet Yellen’s Georgetown neighbors complain about ‘doughnut bellies’ of security detail

Metals Pause, but Technicals Still Seen as Positive

Posted by on June 24th 2014 in CFTC, Federal Reserve, General Economy, Gold, Iraq, Janet Yellen, Russia, Short Sellers, Silver, Wall Street | Be the first to comment!

SlumpingDollarA 0.1% gain in gold futures on Monday was attributed to a slumping dollar, while silver fell for the first time in ten sessions, ending the day off 0.1%. Weaker U.S. stocks and increasing violence in Iraq also supported gold, according to a Reuters report, which points out that “Rising safe-haven bids were reflected in a recent drop in the open interest of gold call options, suggesting short covering in the bullion options market continued. This as Coin News cites one analyst who notes that while gold saw “Some profit taking and technical chart consolidation” on Monday, “gold and silver bulls still have some upside technical momentum on their side.”

See also:

Tim Iacono:  Yellen’s latest misstep lights a fire under precious metals

Investing.com/SafeHaven:  The real price of gold; Silver headfake report

Dan Norcini/Gold Silver Worlds: Crude oil – Speculative frenzy kicking off; What crude oil says about silver

Peter Schiff/GoldSeek:  The bond trap; Will silver and gold short squeeze collapse the bond market?

Zero Hedge/Jesse’s Café Américain:  Germany gives up on trying to repatriate its gold, will leave it in the Fed’s “safe hands”; Germany’s gold – Auf wiedersehen

Gold Holds Gains; Silver Keeps Surging

Posted by on June 21st 2014 in CFTC, China, Federal Reserve, General Economy, Gold, Goldman Sachs, IMF, Iraq, Monetary Policy, Russia, Short Sellers, Silver, Wall Street | Be the first to comment!

 BestWeekForMetalsInFourMonths

Gold futures inched up 0.2% on Friday, but silver gained 1.5% on what was seen as a “perfect storm” of buying.  Both metals had their best week in four months, and according to a Bloomberg report, “Trading in bullion options show the biggest rally in nine months has more to run after some contracts betting on higher prices surged by the most since 2012 yesterday.”  It points to Fed Chair Yellen’s outlook for low U.S. interest rates as “bringing investors back to gold.”

But another theory for the metals’ rise that took root in the financial alternative media — see post below — gets some mainstream exposure.  MarketWatch quotes an FX strategist who says that “In the background, the unwind of China’s commodity financing deals may be helping to boost the price of gold as Chinese speculators sell their physical gold and at the same time buy back their hedges in the futures market.  This mechanism assumes that the paper market dominates the pricing of gold rather than the physical market, which seems possible given the difference in volumes.” That it does. How about 55 to 1?; Maybe 100 to 1?; Or even 400 to 1?

See also:

Dan Norcini:  Silver takes the lead over gold; Inflation expectations rise this week

Arabian Money:  Geopolitics more important than Fed hints on inflation in shifting gold & silver prices higher from here

KWN:  Andrew Maguire – 90-ton delivery triggered short squeeze in gold; Grant Williams: “Given [gold's] scarcity, the prices that we could see are astronomical”

In Gold We Trust:  Investment gold demand higher in Switzerland than China?

Wall Street Journal:  IMF girds for market storms ahead; The Fed’s never-ending downward growth revisions

CBS News:  Former Goldman Sachs trader sues over skimpy $8.25 million bonus

Stock Gains Trump Europe Concerns—For Now

Posted by on June 10th 2014 in CFTC, China, ECB, Federal Reserve, General Economy, Gold, India, Monetary Policy, Russia, Short Sellers, Silver, Wall Street | Be the first to comment!

StockGains

With gold and silver inching up on Monday, Bloomberg quotes one trader as saying that while “Worries about Europe are bringing in some safe-haven buying” of gold, prices will “remain range-bound as the rally in the equity market will continue to overshadow everything else.”  But negative interest rates in Europe “should play out as a gold positive,” argues USA Gold, and “the prospect of deflation in Europe goes beyond simply declining price.  Deflation usually spells trouble for financial institutions, as the bankruptcy rate rises and business in general slides into the tank.  That trouble could generate a cross-border contagion effect….All of this is likely to fuel global gold demand and perhaps generate a summer surprise as paper gold speculators defensively cover their positions or migrate to the long side of the market.”

See also:

Arabian Money/Street Talk Live: US stocks are the most expensive in the world; More signs of bullish excess

BullionVault/SilverSeek:  Gold ticks up as speculative betting against silver hits record high; U.S. bank’s silver short positions send buy signal

Acting Man/Mineweb:  Gold outlook improves; Gold premium slides as Indian banks boost imports

Silver Bear Cafe/Financial Times:   “China’s 2008″ — Why the Chinese must buy gold to survive; Russian companies prepare to pay for trade in renminbi

SafeHaven:  Gold and silver – Let ‘dollar’ collapse or choose war. Elites will opt for war

Casey Research/Fiscal Times:  Good reason for gloom and doom; Retirement savings fears grip Americans

 

TIPSing Point: Falling Yields Seen Boosting Gold

Posted by on June 5th 2014 in China, ECB, Federal Reserve, General Economy, Gold, JPMorgan, Monetary Policy, Russia, Short Sellers, Silver, Wall Street | Be the first to comment!

TIPSingPoint

In describing the thinking of many gold analysts, that the relationship between real long-term U.S. interest rates and the gold price is strongly negative, Mining.com explains that “The underlying reason for the relationship is that as yields rise, the opportunity costs of holding gold increases because the metal is not income producing. Higher rates also boost the value of the dollar which usually move in the opposite direction of the gold price.”

But, as illustrated by the above chart, “this inverse correlation … has broken down.” The 10-year TIPS (Treasury Inflation Protected Securities), “is currently at 0.32% (which is consistent with a gold price north of $1,400), down from 0.68% two months ago. It goes on to cite a research note from Capital Economics that sees this as bullish for gold:  “This decline at least partly reflects growing speculation that the neutral level for official interest rates in the longer term has fallen, which should reduce the opportunity cost of holding gold.” And it concludes that “Unless there is a decisive move below $1,200 per ounce, which seems unlikely given the (rising) floor set by mining costs, we are therefore retaining our end-2014 forecast of $1,450.”

See also:

Coin News/Jesse’s Café Américain:  Precious metals change narrowly; Gold and silver charts – What a Draghi

SafeHaven:  Silver – still seeing the forest for the trees

Bloomberg/Seeking Alpha:  China mulls offshore yuan gold trade in free-trade zone; The demon gold bears are mistakenly overlooking

Business Insider/Mises.org:  The downward GDP revisions have begun; Why central bank stimulus cannot bring economic recovery

MarketWatch:  Half of Americans can’t afford their house; MacArthur Foundation survey- How Housing Matters

Bloomberg/Zero Hedge:  JPMorgan sees record $100 billion in loan funds: Repackaged junk as never smelled so sweet