Precious metals are closing the week out with a good rally. The Federal Reserve nonsense proved to be a catalyst as it can be in either direction. Regardless of the Fed, the precious metals sector was oversold and due for a bounce. We wrote about that last week. Maybe this could be the bear market bottom. Maybe not. It concerns us that Gold is rebounding from an area of insignificant long term support amid sentiment that is not at a bearish extreme. Extreme bearish sentiment coupled with very strong support raises the probability of a major rebound or bear market bottom. I don’t see that for Gold, yet. Full Story
Riding a tiger is one thing. But getting off the tiger, without that tiger then whirling around and consuming you – now that is another thing altogether. A short non-econospeak translation of the results of the March 17-18 Federal Reserve meeting is that Fed chairwoman Janet Yellen still maintains that she is getting off that tiger – someday – but not at this moment because she doesn't know how to keep the US economy and markets from being eaten in the process. Full Story
By: Adam Hamilton, Zeal Intelligence - 20 March, 2015
Silver is scraping major support again, after a rough couple months where speculators left it for dead. But today’s brutal lows and extreme universal bearishness are the perfect breeding ground for silver’s next big rally. Investors are very underexposed, while speculators have big short positions that will have to be covered. So as gold reverses decisively and paves the way, capital is going to flood back into silver. Full Story
Have you noticed that some gold investors don’t seem very concerned about the current behavior of gold? While the price remains weak and range-bound, some gold investors don’t seem worried about it at all. The natural reaction to an asset you own losing a third of its value, with seemingly little motivation to move higher, is cheerless and maybe even depressing. So why aren’t they? Full Story
By: Richard (Rick) Mills, Ahead of the herd - 20 March, 2015
Drought is a normal recurring feature of the climate in most parts of the world. It doesn’t get the attention of a tornado, hurricane or flood. It’s slower and less obvious, a much quieter disaster creeping up on us unawares. Climate change is currently warming many regions, warmer temperatures increase the frequency and intensity of heat waves and droughts. Full Story
Chinese wholesale gold demand can be slightly less than what is disclosed because of withdrawals from the Shanghai International Gold Exchange. My best estimate is SGE withdrawals could be 3 tonnes less at 505 tonnes. However, I have no hard evidence any foreign traders are withdrawing gold from the Shanghai International Gold Exchange. I’ve made an inquiry at the SGE if they can shed some light on this. Hopefully, next week I know more. Full Story
Following the Federal Open Market Committee (FOMC) meeting yesterday, Federal Reserve Chair Janet Yellen made it clear (again) that interest rates would not be raised until inflation gains more steam. With current inflation rates negative for the first time since 2009, and with the U.S. dollar index at an 11-year high, we can probably expect near-record-low interest rates for some time longer. Full Story
China and Russia have taken the lead in establishing the Asian Infrastructure Investment Bank (AIIB), seen as a rival organisation to the World Bank and the Asian Development Bank, which are dominated by the United States with Europe and Japan. Full Story
The US dollar has topped out with its spectacular recent spike followed by a five per cent crash on Wednesday. That’s the conclusion of HSBC today, although something like the bankruptcy of Greece could still push the euro underwater again. So where do currency speculators turn to next for a momentum trade? Full Story
For once in a rare change, gold futures have actually held onto a gain achieved the previous day. Although they made no upside headway on Thursday, it was something of an achievement for them to have merely stayed aloft. The bullish abc pattern shown has a clear-as-can-be rally target at 1186.70 that has been confirmed by the stall precisely at 1172.70, the ‘p’ midpoint pivot. As always, an easy move through p would imply more upside to D, at least. If bulls are revved up and ready to blast off, they should be able to surpass 1186.70 today without much trouble. Full Story
By: Peter Spina, President, CEO of GoldSeek.com & SilverSeek.com - 19 March, 2015
I cannot see how the Fed will be inclined to raise rates significantly considering the strength of the US Dollar. The vast amount of debt from consumers to government is only sustained at these historically low-rates. The leveraged system cannot function if rates rise too high. Full Story
Never before has holding bonds denominated in national currencies been more risky and less rewarding. That may seem like a provocative statement, but it’s not hyperbole. It’s the reality investors around the world now face. Full Story
Yesterday’s FOMC was bullish for most assets, as the FED indicated it was not ready to beginning raising rates. The FED’s ZIRP policy, designed primarily to encourage lending and speculative asset purchases, is clearly here to stay for a while longer. But for gold, this policy has done little for it over the past 3 years, as speculative money is much more concerned with chasing equity and bond markets higher. Full Story
The Fed lost patience. Well they did not so much as lose patience but they dropped the word “patient” in their “guidance” language. It seemed to be widely expected that they would. Then the Fed talked out of both sides of its mouth simultaneously (aka – Fed speak). The Fed may no longer be “patient” but in the same breath they downgraded the expected pace of growth and inflation. In other words, they are no longer using the word “patient” but they will still be “patient”. Go figure that one out. The word “patient” may have become the most overused word in the English language over the past few months. Full Story
You might have heard that the FOMC removed the word “patient” from its directive yesterday, in that it would no longer be “patient” in waiting to remove monetary policy accommodation. Lots of people were betting—have been betting for weeks—that this would be the meeting where Janet Yellen would lay out the path for a rate hike in June. The dollar has gone straight up against just about every G10 currency. Full Story
Yesterday the Fed made their announcement and deleted the famous word "patient". I have never seen such a nonsensical frenzy over anything, never mind a single word. The reaction was everything ...except the dollar was bid. Sadly, reality has also been deleted as the Fed cannot "go there", if they did and when they do (are forced to), life as we knew it will be history. Reality is the global economy has stalled. Most of Europe is in recession, China's growth has stalled and the U.S., even with fudged numbers will not be able to show any growth. Full Story
The titanic creation of paper assets such as bonds, currencies, and stocks has created substantial risk. That risk has spilled over into the crude oil, gold and silver markets since they are strongly influenced by the paper derivative markets – paper contracts for crude oil, paper gold, and paper silver. Leverage and derivatives magnify risk. The instability will eventually create a second version of the 2008 recession/depression. Full Story
Interest rates have been falling for over three decades. Conventional economics has two things to say about this. One, inflation expectations are falling. Monetarists believe that the interest rate is set based on bond traders’ predictions of future price increases. Two, if employment and GDP are weak, then the central bank should increase the money supply. Full Story
Until the latest pullback on Wednesday, the U.S. dollar index had been on a rip-and-tear for most of this year. Earlier this week the dollar hit a new multi-year high as concerns over Europe and China have fueled foreign interest in U.S. assets. The greenback’s relentless strength is also a cause for concern among investors who fear that a stronger dollar will erode corporate profits this year. Since much of the bull market of the last few years was based on the bull market in corporate profits, this point is being taken seriously by Wall Street pros. It’s also worth examining in this our latest installment. Full Story
In part 1, I wrote about why the Fed can’t raise interest rates without the US economy going back into a recession. For part 2, I am going to explain why the Fed can’t raise interest rates without crashing the stock market. The biggest misconception about the stock market is that it’s not overvalued. This assumption is based on the average Price to Earnings ratio (PE ratio) of the companies in the S&P500. To justify this assumption, they compare its PE ratios, to the ones in 1999. Full Story
Yet another dollop of meaningless drivel from the Fed impelled stocks sharply higher on Wednesday, goosing this vehicle to a 2107.75 peak that exceeded my rally target by six points. The announcement, something to the effect that the Fed would be less ‘patient’ about implementing a rate hike, was not only semantic garbage, it was also yesterday’s news, since the policy change — that’s what the Street and the news media evidently are calling it — was first floated by the spinmeisters in February. Full Story
Wednesday is yet another Fed meeting where we get to hear "policy" from them. So many times in the past, the upcoming meeting has been called "THE" most important meeting ever. This one is being called the same thing. I have mentioned more than a few times in the past six years "what can they really say?". I've done this because the Fed never had any choices. Full Story
As I’ve stated before on these pages, effectively the only thing Quantitative Easing (QE) can buy is time. Since 2008 our monetary wizards have merely been able to keep the can on the road, perpetually kicking it further into the abyss through QE. Solutions are still debated between policy makers behind closed doors, as our current fragile international monetary system does not allow public debate on significant changes or it will risk implosion. Full Story
200 million Chinese have driver’s licenses, and McKinsey expects that Chinese auto sales will grow by an average of 8% a year between now and 2020. The luxury market, however, is where the big bucks are being made. McKinsey expects luxury cars sales to grow by an impressive 12% a year over the same period. “Demand outstrips supply for our vehicles,” said Klaus Maier, president of the China Mercedes-Benz division. Full Story
Greece, as a country, represents 2% of Europe’s GDP. The country lied in its financial to enter the EU. Since that time, it’s been officially bankrupt since 2010. The country has since gone through a series of “bailouts” and experienced a 25% collapse in GDP (roughly equivalent to what Argentina experienced in its 2001 implosion). And yet, despite all the bailouts and claims that Greece was “fixed,” the country is set to default on some of its debt this Friday. Full Story
The markets have been very volatile. This has led to many questions and the most frequently asked questions follow… Q. We’re hearing a lot about deflation, but how bad is it? A. Currently, it’s intensifying. Inflation is declining around the world and it’s gone negative (deflation) in the Euro area and most recently in the U.S. Full Story
The student debt category has been one of the biggest culprits of debt accumulation in American history. Loans backed by the government have led to runaway inflation in secondary education, as the universities know that they can charge more and more every year and the government will simply issue students larger loans. Full Story
We have been following the strength of the US Dollar for awhile and its impact on various asset classes throughout the second part of 2014 and the first quarter of 2015. A major story that we have touched on, but not discussed in-depth, is the crash in commodity prices over the last 9 months. Those who follow this blog regularly should probably remember from previous posts that many of the individual commodities are down between 50 to 70 percent from their respective 2011 peaks. But what about commodities as a whole? Full Story
In 2014 SGE withdrawals, which can be used as a proxy for Chinese wholesale gold demand, have lost their accuracy since the Shanghai International Gold Exchange (SGEI) was launched in September, providing foreign enterprises to trade gold in renminbi, take delivery and export the gold from the Shanghai Free Trade Zone (FTZ). SGE and SGEI withdrawals are not published separately and thus SGEI activity can distort SGE withdrawals (being a proxy for Chinese wholesale demand). Full Story
By: Julian D. W. Phillips, Gold/Silver Forecaster - Global Watch - 17 March, 2015
The London Gold Fixing, the twice daily gold pricing mechanism at which the bulk of physical gold transactions take place is changing dramatically. In the past five London Based gold bullion banks on a direct telephone link to their clients established a price at which these transactions took place. This was an efficient way to establish an accurate price for gold deals done outside of the contracts used to supply the bulk of gold deals. Full Story
Some days, I sit back, and look at the patterns in the metals and think “this market is truly trying to screw every possible participant that it can.” Along those lines, for the last several weeks, I have been warning you that the set up I am tracking is “evil in nature, as it would likely hurt the most traders/investors from a psychological standpoint.” Full Story
The FOMC meeting looms ahead, as the main driver of global gold prices, in the short term. The policy announcement will be made at about 2PM on Wednesday, and most analysts believe Janet Yellen will remove the word “patience” from the Fed’s position on interest rate hikes. View the weekly gold chart. My analysis suggests gold could trade down to $1095, if the Fed removes the word “patience”, and from there a major tradeable rally would begin. Full Story
Hidden in the wreckage of today’s beaten-up resource market are stocks you can buy for much less than their real value. Entire companies are trading for less than their cash. Not all those stocks are going to recover, however, since in some cases management is such a liability that the cash is likely to be wasted. But it does tell us we are at or near the best time to implement the “buy low” part of the investment formula, picking up the stocks with real value. Full Story
As an addendum to yesterday's writing, today we should tie together the new alliances and what appears to be Western defections toward the East. Just overnight, Australia also applied for membership to the AIIB, a U.S. rebuke is sure to follow, who is next? With this in mind, it is my belief the Chinese will be the key player in the gold market and the "pricing" of gold in the future. In turn they will gain even more financial strength because of the massive amounts they have already accumulated. Full Story
In our opinion speculative short positions (full) in gold, silver and mining stocks are justified from the risk/reward perspective. We are keeping the stop-loss levels at their current levels, which means that we are effectively keeping some gains locked in and at the same time we’re allowing the profits to increase. Full Story
SPECIAL GUEST: DOUGLAS C.NOLAN , Vice President, Federated Income Securities Trust and serves as senior portfolio manager of Federated Prudent Bear Fund, Federated Prudent DollarBear Fund and Federated Market Opportunity Fund. With more than 20 years of investment experience, he leads the nine investment professionals who comprise Federated’s Alternative Equity Management Team. Before joining Federated, Doug was employed with David Tice & Associates, Inc. where he served as an assistant portfolio manager and strategist of Prudent B F Bear Fund and Prudent Global Income Fund. Full Story
Just one week after the surprising Swiss decoupling from the euro peg, the ECB unleashed its quantitative easing program. On January 22, the President of the ECB, Mario Draghi, announced a €1.1 trillion monetary injection plan, which would start in March 2015 and last until the end of September 2016, or “until we see a sustained adjustment in the path of inflation”. What does this €60bn monthly bond-buying program imply for the economy and gold market? Full Story
Weak revenues in the shale sector could put debt-laden companies at risk; a lot of these companies still own assets, but their cash flows have dropped off. They may begin to sell off these assets in order to cover their debts. Who’s going to buy those assets? It could be companies with stronger balance sheets -- and those that want to get into the North American shale sector. Full Story
Chris Ecclestone, principal and mining strategist at London-based Hallgarten & Co., finds optimism in the most unlikely places. He says that the key reason to be cheerful in 2015 is that the mining sector remains largely ignored. Ecclestone posits that the eventual rotation of broad market money into the sector will float many boats and lead to further M&A, which could start this year. In this interview with The Gold Report, he recommends being long mining stocks and keeping your eye out for M&A activity. Full Story
The biggest news last week and for the year so far, pertains to the SWIFT clearing system and what they just did. The U.S. has been pushing to kick Russia out which would certainly hamper their ability to do business internationally. The idea was to isolate Russia and box their trade in. This action has been at the top of the list for the U.S. in their move to press more and more financial and trade sanctions on Russia. It just backfired and may even boomerang. Full Story
Most retirement account and other long term investors continue to follow the same financial strategies they've been following for decades, believing that the "science" of modern finance will reliably build wealth and security for them. Meanwhile, for some years now and as a matter of openly stated policy, the Federal Reserve, European Central Bank and Bank of Japan, as well as the central banks of other nations have sought to create what are known as "negative real rates of return". Full Story
The process of our sovietized democracy devolution continues to accelerate with the bureaucratization of the Internet in the US, which will have more profound effects on the population than most realize. (i.e. think ‘thought police’.) Make no mistake, this is a power grab by the bureaucrats to regulate and tax the net, further enhancing their ability to control all important aspects of your life, liberty, and freedom – and nobody is doing anything about it. Full Story
Possibly China’s national currency will be part of the IMF’s Special Drawing Rights (SDR) this year. If so, this would have substantial implications for the international monetary system. Currently the SDR, which was invented in 1969 right after the London Gold Pool collapsed, consists of US dollars (41.9 %), Euros (37.4 %), Pound sterling (11.3 %) and the Japanese yen (9.4%). The weights assigned to each currency in the SDR are adjusted to take into account their prominence in terms of international trade and national foreign exchange reserves. Full Story
A few years ago, Poland made the first such move to ‘nationalize’ a portion of its pension system. Nationalize probably isn’t the right word though: steal is more appropriate. Given the fact that most Americans probably can’t even point out Poland on a map, the news was given little attention. If something doesn’t happen right in our own backyard, it might as well happen on Mars. Full Story
As the title suggests I want to talk more and chart a little less this week. We do so much charting and parameter management that I think we are in no danger of falling behind the curve in those areas. The same goes for the indicators and sentiment tools we use. It is all still there, available and ready for use at the drop of a hat. Full Story
The dollar has staged such a stellar performance since the start of the year there is now an almost universal acclamation of its strength and a consensus that parity with the euro is very close. A strong dollar means a low gold price, or does it? Gold is actually one of the world’s best performing currencies this year, off just a couple of per cent compared with double-digits for the euro. Full Story
The new Apple watch could revive the allure of gold for young consumers. Apple, which called gold “uniquely luxurious” in its advertising, has a history of swaying consumer tastes. U.S., U.K. and Italian demand for wearables made out of gold has been cut in half over the past decade, according to data from the World Gold Council, as shoppers favored white-colored metals such as silver and platinum. Apple’s status as the arbiter of cool means its new $10,000 gold watch and yellow iPhones and MacBooks may entice consumers to buy gold wearables and ornaments again. Full Story
Gold reached the target at $1150 and closed above that support level last Friday. Unfortunately, the weekly chart is still suggesting that price is heading lower. The three moving averages are in bearish alignment, MACD is in bear mode (both lines below zero), and the MACD histogram is moving further below the zero line. Full Story
Thanks to the repeal of the the Glass-Steagall Act and related financial fail-safes, Pandora's box is fully ajar, economic misery is imminent. Some executives succumbed to the lure of exorbitant bonuses, choosing profits to the detriment of investors. Goldseek.com Radio welcomes Jeffrey Nichols in his debut appearance on the show. Economist Jeffrey Nichols recommends that every investment portfolio includes Full Story
So with the advent of global QE, and zero interest rates, have central banks unlocked the key to perpetual bull markets? Let’s just say, I doubt it. They have managed to stretch some of the multi-year cycles, and hold off the bear much longer than most have anticipated, but I don’t think they have discovered the secret to infinite prosperity. Full Story
Reserve currency or no, hyperinflation is a process. And we are fully entrenched in that process. History defines the parameters for us. Too much debt, too much money created from nothing. And ultimately, the loss of confidence, leading to panic. Those who deny it are not looking, not measuring correctly, or both. Much of the confusion comes from the unnecessary use of jargon and euphemism. Full Story
By: Chris Powell, Secretary/Treasurer, GATA - 15 March, 2015
Bullion Star market analyst and GATA consultant Koos Jansen reports today that the international division of the Shanghai Gold Exchange is not moving gold out of China but rather supplementing the country's gold imports. As a result, Jansen writes, withdrawals from the Shanghai Gold Exchange remain a good proxy for China's domestic gold demand, and 456 tonnes have been withdrawn this year through March 6. Full Story
Chinese wholesale gold demand, that equals withdrawals from the vaults of the Shanghai Gold Exchange (SGE), accounted for 45 metric tonnes in week 9 of 2015 (March 2 – 6). Year to date 456 tonnes have been withdrawn from the SGE vaults. An estimate suggests 340 tonnes has been net imported into the Chinese domestic gold market over this period (calculating with a yearly SGE scrap rate of 250 tonnes). Full Story
When you look at these different currencies you will see some massive topping patterns that reversed their bull markets. You will also see they still have a long ways to go to the downside before this bear market is over. If that is the case then the US dollar has a long ways to go in its bull market. Full Story
If one addresses what is going on between China and the IMF, while keeping an eye on the Federal Reserve’s fiat debt instrument, incorrectly called the “dollar,” then the likelihood of a significant rally in gold and silver may not develop this year. Those believing the fiat “dollar” is on its currency deathbed and about to implode to its true intrinsic worth, zero, are not paying enough attention to realize that the elite’s are still in control while in the process of merely switching horses: to China from the US. Full Story
Stocks never showed a spike low this week as I’d hoped but instead are now setting up for a further move lower. I am always optimistic in my views and look for the best outcome but I am not blinded by it. I readily change my view as action dictates and it is telling me markets have a little more correcting to do. Full Story
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