News and Views

Gold and silver gained 0.5% and 1.6% respectively on Monday, “as losses in equities triggered safe-haven buying,” reports Reuters.   With stocks already falling on Monday after last Friday’s weak jobs report and a note from Goldman Sachs warning that U.S. stock valuations are “lofty by almost any measure,” stocks accelerated their drop following comments by Atlanta Fed President Dennis Lockhart that were seen as taper friendly. See also: Scott Pluschau:  Silver is “coiling up” on the daily chart Bloomberg:  Why gold prices may rise 12% this year; Jim Rogers says he’s hedged some gold but not selling Mineweb:  U.S. selling of gold likely nearing exhaustion; China seen boosting its bank reserves GATA:  Western central banks can’t have much gold left, Eric Sprott says Wall Street on Parade:  JPMorgan & Madoff were facilitating nesting dolls-style frauds within fraudsContinue Reading
Spot gold and silver gained 1.5% and 2.9% respectively on Friday following a nonfarm payrolls report showing that only 74,000 jobs were created in December, the smallest increase since January 2011.  Analysts were “shocked” by the number, which fell far below the consensus estimate of some 190,000, reports the Los Angeles Times, and were left trying to determine if it was “a fluke or a sign that the economy isn’t as good as many thought.” How bad was the number?  It was so bad, notes Jesse’s Café Américain, “that they had to skip the traditional metals raid, and the bad news bears got stuffed on a quick reversal.” Opinions are mixed about what impact the jobs report might have on additional Fed tapering at the next FOMC meeting in late January. MarketWatch quotes one currency trader as saying that the Fed “acted too soon” in tapering, and “While it isContinue Reading
Gold Silver Worlds introduces the above analysis from asset management firm, Incrementum AG, which asks:  “How is gold impacted in this inflation vs deflation war? The key conclusion of the research is that, due to the fractional reserve banking system and the dynamics of the ‘monetary tectonics’, inflationary and deflationary phases will alternate in the foreseeable future. Gold, being a monetary asset in the view of Austrian economics, tends to rise in inflationary periods and decline during times of disinflation. The key take-away for investors is to position themselves accordingly and consider price declines as buying opportunities for the coming inflationary period. How comes one can be so sure that inflation is coming? Consider that the government must avoid deflation; it is a horror scenario for the following reasons: —Price deflation results in a real increase in the value of debt and a nominal decline in asset values. Debt canContinue Reading
As Wednesday’s release of the minutes from December’s FOMC meeting, in which QE tapering was initiated, reveal that a majority of Fed officials saw diminishing returns from asset purchases, Grant Williams, who authors the newsletter, Things That Make You Go Hmmm…, sees a similar dynamic at play in recent gold price smashes. He tells King World News that “I think we are now at the point where these bear raids in the Comex market are becoming very, very instructional.  In April of last year, the price of gold was smashed and was then digested as gold traded sideways.  But now the recoveries from these smashes have gotten shorter and shorter…This insatiable demand for physical gold is what pushes the price straight back into the face of the gold bears.  So I’m watching very carefully these bear raids and the reaction to them.  The fact that the physical buyers are absorbingContinue Reading
The producers of Frontline‘s look at insider trading prosecutions, which premiered Tuesday evening, took questions in an online chat.Continue Reading
As a Mineweb article predicts “short-term volatility for gold,” a pair of analyses suggest that gold and silver could benefit from seasonality. Hard Assets Investor points out that “If history is any guide, the first few months of the year are good times to be a bull and that it’s not until May and June that the bears send prices falling. But it’s the summer months of July and August that tend to be when gold puts in its best performance of the year.” And according to a column published in the Globe & Mail, “The strongest time of year for the price of silver has been from Dec. 23 to Feb. 28. Over the past 20 years, the metal has gained an average of 9.05 per cent with positive results recorded in 14 of the past 20 periods. Gains are prominent during the first two months of the yearContinue Reading
  Asking, “Why do we continue to keep the faith with gold (and silver)?,” Sovereign Man points to this “one simple statistic”:  “Last year, the US Federal Reserve enjoyed its 100th anniversary, having been founded in a blaze of secrecy in 1913. By 2007, the Fed’s balance sheet had grown to $800 billion. Under its current QE program (which may or may not get tapered according to the Fed’s current intentions), the Fed is printing $1 trillion a year. To put it another way, the Fed is printing roughly 100 years’ worth of money every 12 months. (Now that’s inflation.) Conjuring up a similar amount of gold from thin air is not so easy.” The article also cites what it describes as the “magisterial (and deeply witty)” 2013 Year In Review by Cornell chemistry professor David Collum, which is also a great resource for its meticulous footnoting.  In his thoroughContinue Reading
With gold and silver coin buyers seeing 2013’s sharp drop in prices as a buying opportunity, the Wall Street Journal reports that the “demand for gold coins shot up 63% to 241.6 metric tons in the first three quarters of 2013, according to the latest figures available from the World Gold Council. Sales of Gold Maple Leaf coins by the Royal Canadian Mint surged 82.5% to 876,000 ounces in the first three quarters of 2013 from the same period of 2012.” As for all of 2013, the article notes that “The Perth Mint, Australia’s national coin and bar producer, saw sales rise 41% to 754,635 ounces last year, while the U.S. Mint sold 14% more American Eagle gold coins than it did in 2012, along with a record amount of silver coins.” According to the year-end tally from the U.S. Mint., 42,675,000 American Silver Eagles were sold in 2013, surpassingContinue Reading
“As has been the case for the past five years (since it acquired the concentrated short positions of Bear Stearns), 2013 was the year of JPMorgan in silver and gold,” declares Ted Butler.  “Everything important that transpired in silver and gold can be traced to JPMorgan, just as this bank will dictate what happens in the future. I realize I am being overly specific and that many different factors influence the price of any market; but the circumstances surrounding JPMorgan are so overwhelming as to render all those other factors combined moot when it comes to silver and gold.” In concluding his well-detailed analysis, Butler argues that “We fell sharply in 2013 because of JPMorgan and will likely rise sharply in 2014 for the same reason. From my perspective, that’s all that matters. 2013 – Good riddance. 2014 – Step right in.” …Read More >>>Continue Reading
Gold and silver gained 1.7% and 3.8% respectively to begin 2014, while the Dow dropped more than 130 points and stocks had their worst opening day since 2008. Earlier this week, in the CNBC segment sbove, analyst Peter Boockvar made the case for gold outperforming stocks in 2014, predicting that the Fed’s QE exit is “going to be extremely messy.” And a USA Gold report points out that “Despite the fact that 2013 marked the first annual loss in gold in thirteen-years, unprecedented physical demand underpinned the yellow metal throughout the past year and may well reawaken the underlying secular bull market in 2014. After all, while price discovery occurs in the paper market, the paper market is dependent on the availability of the underlying physical metal. And that underlying physical has been moving from the weak hands in the west, primarily to strong hands in the east.” Jim RickardsContinue Reading
2013’s wild ride, in which gold and silver saw their biggest drop in three decades, continued on the last day of the year.  After being smashed lower, gold and silver bounced back to end basically flat on Tuesday. In recapping the action, Dan Norcini writes that “Around mid-morning, a rash of  ‘sudden orders’ to buy flipped the market higher after it had run down near $1180. It moved as low as $1181.4 before shorts began ringing the cash register to close out the year.”  But he also cautions that “making any predictions as to future price movements based on the price action from the last day of trading for the year is not wise.” Before Tuesday’s market activity, an Aden sisters’ commentary noted, “It’s been six months now since gold hit $1180 intraday in June.  And it’s recently been testing these lows. Will it hold? …. That’s the million dollarContinue Reading
As USA Gold’s Michael Kosares presents “The Gold Owner’s Guide to 2014,” the gold-owning CEO of Overstock.com explains why he’s buying into bitcoin, if not buying it. Following last week’s announcement by the online retailer that it will begin accepting bitcoin in 2014, CEO Patrick Byrne was asked by Fortune if he owns any bitcoins, “No. I own gold….A lot,” he said, adding, “Let’s just say enough that if zombies walked the Earth I will have enough gold that me and mine are taken care of.” After explaining the financial reasons for Overstock.com accepting bitcoin, Byrne said “the philosophical reason” is because “I am from the Austrian School of Economics, which means we’re the guys who hate fiat money. The long-run value of all fiat money is zero. If you believe in limited government, you want to have a monetary system that is based on something where no government mandarinContinue Reading