Wait a Minute(s): ‘Dovish’ Fed Seen in No Hurry to Raise Rates

Posted by on July 10th 2014 in CFTC, China, CME Group, Federal Reserve, GATA, General Economy, Gold, Janet Yellen, Monetary Policy, Short Sellers, Silver, Wall Street | Be the first to comment!

FedSaysWaitAminutes

Gold and silver gained before and after Wednesday’s release of the minutes from June’s FOMC meeting, which warned that “market participants were not factoring in sufficient uncertainty about the path of the economy and monetary policy.” The Fed also delivered what was described as a “dovish message” on interest rates, with FOMC members said to be “clearly in a position where at least right now, they’re inclined to let this thing run a little further, to take out some insurance. Given how long we have under performed, if you’re the Fed and you view things the way they do, what’s the harm in going a little further?”

But according to a contributor at The Street, who describes Wednesday’s stock market gains as a “dead cat bounce,” the Fed is also “between a rock and a hard place. It has said that it will end the bond purchasing by October. If it withdraws the easing by stopping the money printing, the Fed will puncture the asset bubbles. If it keeps printing, inflation will gather strength. As weak data over the rest of the year come in, the Fed will realize it has tapered into weakness. This will cause it to launch new money printing, or QE4, in 2015.  The big winner in terms of asset class will be the precious metals [and] energy.”

See also:

Short Side of Long/Got Gold Report:  Precious metals bulls are back!; COT turning point?

King One Eye/Yahoo Finance:  Gold is still in a big uptrend (chart); Technical analyst – Charts hinting at a big move for gold

GATATF Metals Report – Understanding the latest bank participation report; London Silver Fix – Meet the new boss…

CNBC:  Schiff makes case for gold, but Gartman not buying it; Marc Faber says stock market will crash, just don’t know catalyst

Zero Hedge:  Gold and China’s challenge to the “narrative of central bank omnipotence”

Metals Rangebound: Any Breakout In Sight?

Posted by on July 9th 2014 in CFTC, China, CME Group, ECB, Federal Reserve, General Economy, Gold, JPMorgan, Monetary Policy, Short Sellers, Silver, Ted Butler, Wall Street | Be the first to comment!

GoldBreakout?

Spot gold and silver saw the slightest of gains on Tuesday while futures were slightly off in what Gold Forecaster‘s Julian Phillips brands a “strange” market, where gold demand is “steady and solid in a relatively thin market, but not swayed by speculators,” who, along with and dealers, “are trying to move gold around with the euro, which keeps going stronger as the dollar weakens.”  But, he added that gold “keeps drifting higher as U.S. investors are now net buyers of the SPDR gold ETF in the last three weeks.”

As for the prospect of gold drifting even higher, CNBC, under the headline “These 3 charts tell you to buy gold,” highlights a note from Sterne Agee.  The author contends that the investment advisory “remain new buyers and would be new buyers right here, in anticipation of the current ‘bearish-to-bullish’ reversal continuing and gaining urgency as new participants are drawn in.”  It goes on to predict that gold will rise to $1,500/oz, but with no timeline, before running into resistance….Read More >>>

See also:

Barron’s/Bloomberg:  Gold, silver – The speculators are back; Gold shines again as hedge funds boost wagers on advance

Expected ReturnsI’m back!; Do you remember? Why gold?

Eric Sprott:  The physical buyers will overwhelm the paper sellers

Mining.com/SilverSeek:  Reports- CME/Thomson Reuters to run the silver fix; Ted Butler – CME’s Comex- Why it’s corrupt

Zero Hedge:  Stock buyback shocker; Debt – Eight reasons why this time is different; Is the Fed going to attempt a controlled collapse?

Reuters/New York Sun:  Fed’s Yellen to deliver monetary policy report to Congress next week; Congress eyes rules for the Fed

Gold Market Analyst: ‘U.S. is Out Of the Game Right Now’

Posted by on July 8th 2014 in CFTC, China, ECB, Federal Reserve, General Economy, Gold, India, Janet Yellen, Monetary Policy, Short Sellers, Silver, U.S. Congress, Wall Street | Be the first to comment!

USOutOfGoldGame

With gold and silver futures ending down a fraction of a percent on Monday, a Bloomberg report attributes gold’s drop to predictions by some banks that the Fed will raise interests earlier than previously assumed, from the first quarter of 2015 to the fourth quarter of this year. But dismissing the notion that an early rate increase would hurt gold, Bloomberg Industries’ Kenneth Hoffman said that “I think the U.S. is out of the game right now,” pointing to Asia as the epicenter of the market. Citing the Singapore Exchange’s introduction of gold trading in September, he says that he recently returned from Asia and with so many “traders moving into Singapore and Hong Kong and Shanghai, there’s a lot of excitement about gold in Asia.”  In late May, Mineweb wrote about a presentation by Hoffman, who offered up statistics showing that China and India are consuming more gold than the world is mining.

See also:

Los Angeles Times/GoldSeek:  Why interest rates may stay very low for a lot longer

GoldCore/Peak Prosperity:  Europe seeks alternative to dollar dominance – 70-year shift; Mike Maloney – The dollar as we know it will be gone within 6 years

Confounded Interest/Reuters:  Has the Federal Reserve destroyed market discipline for housing and the stock market?; House Republicans propose Fed reforms, set hearing

Zero Hedge:  Life on planet Yellen; The stunner from today’s round table debate to “fix” the London Gold Fix

Arabian Money: Traders see gold & silver as best bets for H2 like coffee in H1; Gold and silver entering a win-win scenario for the hedge funds?

Got Gold Report:  COMEX heavy commercial gold shorts not always a sign of a top; John Hathaway – Financial leverage now $100 trillion, nine ‘compelling’ gold charts

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?

‘Boring’ Gold ‘Quite Resilient’ as ETF Holdings Surge

Posted by on July 3rd 2014 in CFTC, China, Clinton Inc., Federal Reserve, General Economy, Gold, Goldman Sachs, IMF, Janet Yellen, Monetary Policy, Short Sellers, Silver, Wall Street | Be the first to comment!

GoldETFSurge

With gold and silver futures gaining 0.3% and 0.9% respectively ahead of Thursday morning’s release of the jobs report for June, BullionVault‘s Adrian Ash tells MarketWatch that “Mid-June’s big jump aside, gold has become so boring not even U.S. payrolls are giving traders much fun right now,” but he adds that unless the jobs number exceeds 300,000, “it’s hard to see U.S. futures getting sold before the long weekend.”

This as Bloomberg reports that assets in GLD rose 1.4% on Monday and Tuesday of this week, the biggest two-day gain since November 2011. The article quotes one commodity broker as saying that “the dovish outlook from the Fed is increasing interest in gold, and we are seeing some investors return,” and cites a report from UBS AG analysts, who wrote that “Although the overall macroeconomic backdrop remains unfriendly towards gold, with ongoing QE tapering, looming rate hikes and stocks at record highs, prices have generally been quite resilient.  That the aggressive ETF selling of 2013 has not made a comeback has provided ongoing support.”

See also:

BullionVault/SRSrocco Report:  Silver prices- Is 14% enough for one month?; The coming two-stage rally in silver;

Alhambra Investment Partners/CNBCThe golden tail?; Trader- Gold will be the second half’s big winner

USA Today/The Hill:  Stock market’s correction-free run tops 1,000 days; Another financial meltdown on the horizon?

Arabian Money:  Is gold going to be an effective hedge in the next global financial crisis?

NY Times/Reuters:  Janet Yellen signals she won’t raise interest rates to fight bubbles; Yellen drives wedge between monetary policy, financial bubbles

Zero Hedge:  The Fed’s inflation survey that the Fed would rather not hear; “Clinton Inc.” raises almost $3 billion, and the biggest ‘donor’ is…

Wall Street on Parade:  Hillary and Bill- Their rugged journey from paupers to one-percenters in 365 days

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

Ted Butler: Current Silver Setup the ‘Best in History’

Posted by on June 28th 2014 in CFTC, Gold, JPMorgan, Quants, Short Sellers, Silver, Ted Butler, Timothy Massad, Wall Street | Be the first to comment!

SilverSetup

With gold and silver futures posting their longest run of weekly gains since January, MarketWatch‘s “Commodities Corner” column looks at “Why silver’s outperforming gold and isn’t done yet,” and Ted Butler declares that “there has rarely been a better time to buy and hold silver because the sharp price decline has created an undervaluation that I never expected.”

Describing the two categories of traders known as “raptors” and “technical funds,” Butler explains that “The raptors who are long have the technical funds who are short over a barrel. It’s only a matter of time until the raptors decide to ring the cash register by orchestrating higher silver prices. This will cause the technical funds to buy back their silver short position. Because the technical funds hold a record silver short position, this makes the current setup the best in history. Make no mistake, the technical funds must buy back, rather than deliver metal to close out their short position. As a result, there is now the largest amount of potential buying power in history. Silver should surprise to the upside at some point soon.”… Read More >>>

Chinese ‘Unwind’: A Great Leap Forward for Gold and Silver?

Posted by on June 27th 2014 in China, Federal Reserve, General Economy, Monetary Policy, Quants, Short Sellers, Silver, Wall Street | Be the first to comment!

GreatLeapForward?

Spot gold and silver ended mixed on Thursday, with silver up and gold down, each by about a quarter of a percent. St. Louis Fed President James Bullard talking up higher interest rates was seen weighing on gold, but the big news was a report that Chinese gold processing companies used falsified gold transactions to borrow about $15 billion from banks, which was said to be either good or bad for gold, and by extension silver, depending on the source and the timeframe.   “If China continues to clamp down on these financing deals, it would likely be negative for the gold price in the short run,” according to one analyst, reasoning that “More gold will be available on the market and less demand for gold from these financing deals.” But another tells MarketWatch that “The Chinese story is a likely bullish force for gold and may partially explain the massive buying behind the June 19 rally.”

CCFDsGoodForMetals?

And that $15 billion may be just the tip of the iceberg.  Citing a Bloomberg article on the “fake gold trades,” Zero Hedge notes that “As much as 1,000 tons of gold may have been used in lending and leasing deals in China, and Goldman reports that up to $80 billion false-loans may involve gold. As one analyst noted, this was unlikely to have a significant impact on the underlying demand for gold in China, and as we have pointed out before, any unwind of the gold CFDs would lead to buying back of ‘paper’ gold hedges and implicitly a rise in prices….So unlike in the industrial commodities – where the CCFD unwind drives prices down as the image above shows, thanks to synthetic manipulation and domination of the paper gold (and silver) market, the opposite occurs in precious metals.”

But apparently taking aim at Zero Hedge, without naming it, Dan Norcini comes down on the other side:  “The usual ‘we have never seen a story concerning gold that we could not spin to make it bullish’ website somehow manages to contort this story as friendly! Just use common sense and do not get lost in the weeds with their ‘logic’ and you will see what it is that has been lurking out there in the minds of metals traders. They are understandably nervous about this.”

And while it certainly won’t be the last word on the subject, today’s comes from that “oasis of civility,” Jesse’s Café Américain, which offers “Some thoughts on leverage in the great gold and silver frauds.”

Metals Rebound on GDP Tank

Posted by on June 26th 2014 in CFTC, China, Federal Reserve, General Economy, Gold, Janet Yellen, JPMorgan, Quants, Short Sellers, Wall Street | Be the first to comment!

GDPtank

Gold and silver pared losses on Wednesday to end slightly up after data showed that U.S. GDP for the first quarter fell 2.9%, and the dollar dropped with it.  USA Gold, describing what it calls “this stunning collapse in economic activity,” cites Jim Rickards’ “prescient assertion early in the new year that the Fed was tapering into weakness, and in doing so before achieving their own growth and inflation criteria. ‘The danger now is that they cause a recession,’ Rickards stated in a February interview. I wrote last week that gold’s gains back above the $1300 level significantly improved the technical picture and went a long way toward confirming the cycle lows at 1182.10/1179.83. The latest “In Gold We Trust” report from Incrementum AG of Lichtenstein [see below] seems to agree: “We are therefore convinced that the technical picture has been repaired and that a stable bottom has formed.”

See also:

Bloomberg/Zentrader:  Gold euphoria won’t last with Yellen’s rally fading; Few believe gold can shine

Jim Sinclair: 30 reasons the bear phase in gold ends this summer

SilverSeek/Mining.com:  Has key to silver ‘bet’ finally changed?; Is silver the cure for silver prices?

CDN/Reuters:  Germany’s missing gold; Singapore vie for Asia gold pricing alternative to London

Zero Hedge:  Chairman of China’s largest copper producer commits suicide by jumping from hotel

New York Times:  Barclays faces New York lawsuit over dark pool and high-frequency trading

In Gold We Trust — 2014 Edition

Posted by on June 25th 2014 in CFTC, China, Federal Reserve, General Economy, Gold, Iraq, Janet Yellen, Monetary Policy, Short Sellers, Silver, Wall Street | Be the first to comment!

InGoldWeTrust

Introducing the latest edition of the highly-regarded annual report, “In Gold We Trust,” authors Ronald Stoeferle and Mark Valek, write that “The tug-of-war between a deflationary debt liquidation and politically- induced price inflation is well and alive. Last year we coined the term “monetary tectonics” which describes the battle between these powerful forces. Recent developments may be the beginning of a reassessment by market participants regarding the risk of price inflation. Should the price inflation trend reverse, there would be excellent opportunities in inflation-sensitive assets like gold, silver and mining equities.”

Offering a shorthand version of the comprehensive analysis, Mineweb’s Lawrence Williams points out that while “In Gold We Trust” may be “positive in its outlook, it’s not one of those documents put out by the gold mega bulls predicting a $10,000 gold price, but an extremely considered and balanced analysis of gold’s fundamentals and the global factors which contribute to its demand as a monetary metal and tends to disregard most aspects of gold as a commodity….Anyone interested in the precious metals sector should view the latest “In Gold We Trust” report for the wealth of detailed analysis on virtually all aspects of the gold market.”

See also:

Reuters/MarketWatch:  Gold and silver hit multi-month highs as S&P falls; Gold futures score 5th straight session gain

Nuveen Asset Management:  Is the Fed underestimating inflation?

Confounded Interest/Dan Norcini:  Credit Suisse fear barometer hits all-time high as income remains stagnant

SRSrocco Report/SilverSeek; Should I invest in gold or silver, coins vs. rounds?; Gold versus Silver

USA GoldReflections in a golden eye

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