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.”

Metals Firm Up After Falling Off

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

MetalsFirmUp

Spot gold and silver ended up a few-tenths of a percent on Wednesday, reports Reuters, attributing gold’s gains to “lingering tensions” over Ukraine, following cease-fire “confusion,” and a weaker dollar, both of which were said to have prompted “bargain hunting and short covering” following Tuesday’s sharp drop. But it also quotes UBS strategist, Edel Tully, as suggesting that “the lack of physical demand makes gold more vulnerable to the downside should U.S. employment data surprise on the upside this Friday.”

See also:

321 Gold/Hard Assets Investor:  Gold and silver – Jobs report tactics; Surging dollar sinks gold, but greenback’s upside looks limited

USA Gold/Gold Investing News:  Gold consolidates as focus shifts to ECB policy

Acting Man/Gold Silver Worlds:  Gold stocks and gold – Potentially bullish developments; Gold model projects prices from 1971 to 2021

Zero Hedge:  Icahn, Soros, Druckenmiller, and now Zell – Billionaires quietly preparing for the plunge; Message from top managers – “Prepare for turmoil

David Stockman/Of Two Minds: World’s financial system is rife with “stimulus” junkies; Central bank monetary policy enables us to put off real reforms

Yahoo! Finance:  Mysterious fake cellphone towers are intercepting calls all over the U.S.

Gold ‘Punished’ by Surging Dollar

Posted by on September 3rd 2014 in CFTC, China, ECB, General Economy, Gold, Russia, Silver, Ukraine, Wall Street | Be the first to comment!

GoldPunishedByDollar

Those who have yet to employ September’s “buy gold now” strategy, received a discount Tuesday.  On what was described as a “volatile day” in the markets, spot gold, and silver, fell more than 1.5% as the dollar surged against the euro, with the strengthening dollar said to have finally caught up gold.  Sharps Pixley’s Ross Norman tells Reuters that “It’s when the dollar hits big numbers that gold gets punished and this is clearly one of those moments.  There is a lot to be concerned about on the political and economic front (but) people tend to get inured to the idea of bad news and it doesn’t affect them anymore.”

See also:

Jesse’s Café Américain:  Gold and silver charts – Cap, cap, pounce

Reuters/Deutsche Welle:  U.S., allies to stage exercises in West Ukraine as battles rage in East; Russia, China break ground on joint mega gas pipeline

Got Gold Report-Bloomberg:  China banks boost precious metals hoard amid lease demand

BullionVault/BullionStar.com:  China leads “strong recovery” in photovoltaic silver demand; Chinese weekly gold demand highest since February

GoldSeek:  Central banks get discounts for trading everything through CME Group and Comex

USA Watchdog/Arabian Money:  John Williams – U.S. economy in severe trouble; Finance professionals split over likelihood of a crash

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

Russia vs. Ukraine; Banks vs. Bullion

Posted by on August 29th 2014 in CME Group, Gold, JPMorgan, Russia, Short Sellers, Silver, Ukraine, Wall Street | Be the first to comment!

MetalsGainOnUkraine

Spot gold and silver gained about a half a percent Thursday as tensions ratcheted up between Ukraine and Russia. “The market is getting nervous about the Ukraine situation, and people are moving to gold,” said one commodities broker, adding that “Talks of further sanctions against Russia are increasing the safe-haven premium of gold.” And while noting that the “propaganda is flying hot and heavy from both sides” of the Ukraine border, Jesse’s Café Américain suggests that “A real flight to safety would crush the precious metal shorts if it spills over from paper to the bullion markets.  And so I would look for the banks to do all that they can to avoid it, diffuse it, deflect that possibility.”

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?

Dollar Seen Losing Altitude

Posted by on August 28th 2014 in CFTC, China, ECB, Federal Reserve, General Economy, Gold, Iraq, Middle East, Russia, Short Sellers, Silver, U.S. Congress, Ukraine, Wall Street | Be the first to comment!

DollarThrottlesBack

“The numerous sources of geopolitical crisis are evidently preventing the gold price from slumping,” said Commerzbank’s head of research, after spot gold edged up 0.1% on Wednesday and silver added a couple ticks more to gain 0.3%.  Gold’s gain was also attributed to a drop in the dollar, but there’s more to come, according to the chief economist at Saxo Bank:  “Our major call is:  short the US dollar index and long commodities … USD will weaken significantly from mid-Q3 into Q1-2015. The market remains overexposed to the dollar and U.S. equities relative to the norm. Furthermore, with mid-term elections on November 4 the coming budget talks will have a hard time producing the convincing and long-term results needed.”

See also:

USA Gold/BullionStar.com:  The interest rate trap and what it means to the gold market; Chinese gold demand y-t-d, silver surprise

Foreign Affairs/Market Oracle:  Just-published article recommends policy shift that is very bullish for gold

Gold Switzerland:  Interviews with GoldMoney’s Alasdair Macleod and The Telegraph‘s Ambrose Evans-Pritchard

Financial Times/New York Times:  Central bankers face ‘confidence bubble’; A new reason to question the official unemployment rate

Daily Reckoning:  Steve Forbes interviews James Grant – Bubbles, bargains & everything in between

Ted Butler: How Silver Could Bubble Up

Posted by on August 27th 2014 in China, Federal Reserve, General Economy, Gold, JPMorgan, Short Sellers, Silver, Ted Butler, Ukraine, Wall Street | Be the first to comment!

SilverBubbleIn making the case for a “coming silver bubble,” Ted Butler explains that “an asset bubble develops when an undervalued asset which has a compelling investment story and there exists an overall financial environment of sufficient buying power, catches the collective interest of the crowd. For example, by the mid-2000’s and after years of steady appreciation, residential real estate developed into an asset bubble amid the self-fulfilling cycle of continued gains and the availability of easy credit.

As far as great stories go, silver has the best potential story to develop into a bubble. First, there is little argument BubblingUpthat it is among the most, if not the most undervalued asset of all by objective relative historical price comparison. In addition, it is at or below its primary cost of production, as evidenced in recent quarterly earnings reports. Remember, most bubbles start out with an asset that is undervalued – on this score silver more than qualifies as being undervalued. Aside from extreme undervaluation, the silver story is multi-faceted.”… Read More >>>

See also:

Coin News/SRSrocco ReportGold, silver rise; Silver Eagle bullion coins top 28M;  Shanghai silver warehouse stocks fall 24% in one week

Bloomberg/LA Times: Gold advances most in two weeks on Ukraine tension

GoldCore/GoldSeek:  Russia coordinating gold reserve accumulation with ex-Soviet states?; Will the U.S. succeed in breaking Russia to maintain dollar hegemony?

Mineweb/SafeHaven:  Is Asian gold demand really slipping so much?; Road sign says – Pot of gold ahead

Daily Reckoning/Zero Hedge:  As the Fed prints money, buy gold and brace for impact; Council on Foreign Relations – “Central Banks should hand consumers cash directly

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?

Gold Falls on Rate Hike Speculation

Posted by on August 22nd 2014 in ECB, Federal Reserve, General Economy, Gold, Janet Yellen, Short Sellers, Silver, Wall Street | Be the first to comment!

RateHikeSpec

Spot silver was down 0.2% on Thursday, but gold ended off 1.4%, hitting a two-month low on the prospect of an earlier-than-expected interest rate rise and what was seen as “encouraging” data on jobs and housing. “The market is digesting the likelihood of the Fed raising rates,” according to one analyst quoted by Bloomberg, who added, “That’s very dollar-bullish, and it’s creating a lot of pressure on dollar-denominated assets, especially gold.”

But according to a CNBC survey of Wall Streeters, chart above, they expect “the Federal Reserve to be so dovish that the coming round of interest rate hikes won’t begin until the middle of next year and won’t end until the next president is in office for nearly a year.” As for the economy, its growth is seen as “still coming primarily from the growth of paper assets and not from any underlying activity in the real economy.”

See also:

New York Sun-USA Gold/SilverSeek:  The mystery of Jackson Hole

Wall Street on Parade/WSJ:  Two charts that should frighten Fed Chair Yellen; Fed’s Plosser warns very-easy money policy increasingly risky

Washington Post/The New YorkerWorse than the 1930s – Europe’s recession is really a depression; Hurt Putin, hurt yourself?

BullionVault/Bloomberg:  Central banks buying gold “firmly” in 2014; U.S. Mint platinum coins bypassed in rush for gold [and silver]

Washington’s BlogGoldFellas! – Former Mafia boss trusts physical metals over ‘shady’ Wall Street

USA Today/MarketWatch:  Bank of America agrees to nearly $17B settlement; Ferguson and money – Where did all the banks go?

Market AnthropologyBreaking the banks & finding gold

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