With the Eurozone going to the extreme of negative interest rates and the IMF belatedly revising downwards their expectations of US economic growth, deflation is now the favoured buzzword. It is time to untangle myth from reality and put deflation in context. Full Story
We find it very helpful to look at the “Big Picture” and compare historical market presidents when trying to understand if a market is cheap or expensive. When we look at the price of silver and gold, especially when adjusted for inflation, we see a lot of upside potential. Because we believe that the most exciting part of a bull market is at the end of the move, we believe that the best may still be ahead of us. Full Story
Gold and silver staged a spectacular advance yesterday, with prices up three and five per cent respectively, after Fed hints that higher levels of inflation ‘noise’ may be tolerated as the US economy recovers. But it is the deteriorating geopolitics of Iraq and Ukraine that are really going to shift precious metal prices higher from here. Full Story
But with oil prices up yet again yesterday a vicious bear squeeze followed after someone bought over 3,500 gold contracts, driving the price up to just under $1300. Once this level broke at 13.40 New York time, gold jumped a further $15 as stops were triggered. Full Story
As bullish as I am on precious metals going forward, it is important to realize that manipulation is still occurring and there are banks with access to nearly unlimited funds and extreme leverage via futures markets that can slam the price down at will. They are finally being exposed and even fined for the manipulation, putting an end the cries of “conspiracy theory.” But I am not convinced that they are out of the market quite yet. Full Story
By: Julian D. W. Phillips, Gold/Silver Forecaster - Global Watch - 19 June, 2014
The media appears to have misread the results of the Credit Suisse case as they did with the UBS case two years ago. Yes, the bank was fined a massive fine in the U.S. but this did not reach back into Switzerland. How come, you may well ask? Full Story
The chart of the S&P 500 is one everyone who is long the market should be worried about. In terms of bull markets, while the current one may not be the most powerful one following a 50% or more collapse in the market it is one of the longest. This current bull is now over 1,300 trading days old. The other two markets that saw the market fall 50% or more was the bear market of 1929-1932 and 1937-1942. Full Story
This chart courtesy www.seasonalcharts.com shows the historical trend of the price of gold, based on 30 years of data. Once the doldrums of June and July are out of the way, price usually rises until January-February. The challenge is to catch the June lows. Full Story
The FOMC issued guidance at its Wednesday policy meeting to the effect that interest rates would remain low into the foreseeable future. It further lowered the pace of its monthly asset purchases by $10 billion to $35 billion per month. The Fed also said it expects the unemployment rate to range between 6.0% and 6.1% for the rest of the year, which is slightly lower than its previous projection. Full Story
Janet Yellen spent an entire career climbing the Ivory Tower, brainwashing herself into believing Keynes was smarter than von Mises and idolizing Alan Greenspan, Ben Bernanke and likely John Law. At age 67, she finally reached the pinnacle of academic success in chairing history’s most virulent money printing edifice. Unfortunately, just four months into her tenure, she’s already lost most – if not all – of her credibility as her policy of pretending the Fed’s policies have fostered “recovery” is rapidly losing its effectiveness. Full Story
Most investors or would-be investors in Precious Metals stocks are so soured by the seemingly interminable bearmarket in the sector, that has gone on for 3 years now and been made even worse by its having unfolded against the background of a rising stockmarket, that they won’t see the major opportunity now being presented, even when it’s as plain as the nose on your face, which it is. This is a bit sad really, because huge profits look set to be reaped by those buying the sector now. Full Story
The European Central Bank's (ECB) decision to charge a negative interest on overnight deposits is not going to lead to a higher targeted inflation rate, despite ECB President Mario Draghi's insistence that it will. Like all cases of central planning, this decision will have unintended and costly consequences - some of which are already starting to play out. In this particular case, instead of stimulating business lending or higher prices, the decision will only stimulate the increased buying of insolvent government debt - leading us all one step closer to the economy's eventual unravelling. Full Story
I hate being the bearer of bad news. I remember the one and only time in my life I agreed to umpire a Little League game behind the plate. My youngest son was on the mound, and his older brother came to bat. The count went to 3-2, and I realized I had a huge knot in my stomach. Full Story
The first chart I would like to show you is the BPGDM that shows you what percent of the big cap PM stocks are on a buy signal using the point & figure chart. After trading sideways for most of June the BPGDM finally gave a buy signal yesterday after being whipsawed several times lately. To get a buy signal you need to have the BPGDM trading higher than the 5 dma and the 5 dma trading higher than the 8 dma. We now have that. Full Story
A current survey by the German Forsa-Institute, commissioned by the precious metal vendor Pro Aurum shows, that gold is still highly recognised by the Germans, but equities have caught up in terms of profit expectations. Full Story
By: John Browne, Senior Economic Consultant at Euro Pacific Capital - 18 June, 2014
On June 5th, Mario Draghi, President of the European Central Bank (ECB), announced a package of measures, including a policy of negative interest rates, aimed at encouraging or even forcing Eurozone banks to increase their lending to businesses.Although previously imposed by Swiss banks on their depositors, this will be the first time that a central bank has charged negative interest rates. The package also contained a reduction in Base Rate, a further major new Long Term Refinancing Operation (LTRO), a reaffirmation of 'Forward Guidance' to indicate low interest rates for the foreseeable future, and hints that the ECB might in future engage in Bernanke-style Quantitative Easing (QE). Full Story
By: The Gold Report and Frank Holmes - 18 June, 2014
Close your eyes. Imagine India growing and importing gold again freely. China and the U.S. investing in infrastructure. Europe stable. The Middle East conflict-free. What would that mean for commodities? In this interview with The Gold Report, U.S. Global Investors CEO Frank Holmes outlines the developments that could move us toward that vision and the impact that scenario could have on gold, diamonds and steel. Full Story
India is now, according to The World Gold Council (WGC), the world’s second biggest consumer of gold having been surpassed by China. However, India remains a major player in the gold market. In this article, I will look at the importance of India in the gold market. In India, gold is religion. India's love affair with gold is timeless, spanning centuries even millennia. Roman historian, Pliny, lamented some 1800 years ago, how India, the sink of precious metals, was draining Rome of gold, an appellation that resonates even today. Full Story
We cannot understand today’s gold market without understanding the role China and, in a different way, India play in it. The gold market in general is very opaque and the Chinese one, in particular, is even more. In this article, I will look at China’s role in the gold market. In 1950, communist China prohibited private ownership of bullion and put the gold industry under state control. Fifty years later the People’s Bank of China abandoned its monopoly on the purchase, allocation and pricing of gold. In 2004, for the first time since 1950, private persons were permitted to own and trade gold. Full Story
By: Chris Powell, Secretary/Treasurer, GATA - 18 June, 2014
Thanks to exchange rate calculations provided by market analyst Bron Suchecki of the Perth Mint - gold researcher and GATA consultant Koos Jansen has revised substantially upward his estimate, published yesterday, of the net amount of gold that came out of the Bank of England's gold vault for the year ending in February. They agree that the Bank of England's custodial gold total fell by 755 tonnes. Full Story
The FIFA World Cup and market predictions have in common that we are tempted to create a world of make-believe when it comes to predicting outcomes. While others ponder about the meaning of a round ball, we’ll focus on the implications of a make-believe world comprised of ever-higher asset prices. Our caution: look out below! Full Story
First of all, it is important to keep in mind that Miners are extremely undervalued and the down move in Metals was a cyclical bear market within a secular bull market which means that the primary trend is up. Bullish price action and bullish patterns have been taking place since several weeks in Miners and Metals. You can see on the following charts that the HUI/GOLD ratio bottomed almost at the same level as in 2000 which was a major bottom for the Miners Index. Full Story
Gold has failed to breakdown significantly from the tight coil pattern it created over a 2-month period. Failed breakdowns often mark key reversal points in markets, especially after moves that take a while to play out. In a downtrend, the duration of the move produces the angst and disgust that causes most of the selling. Then the final break of support creates the final flush out of the weak holders who didn't sell out earlier in the move. Full Story
The security situation in Iraq has taken a dramatic turn for the worse with Al Qaeda offshoot the Islamic State of Iraq and al-Sham now comprising only 10 per cent of a far wider Sunni insurgency, sources on the ground told ArabianMoney today via email. Full Story
A couple of the markets we follow closely appear to have resolved their former range bound states. Both did it in the direction I most expected, unfortunately for the gold market. Don’t despair though. Notwithstanding a mountain of negative sentiment (I think because of it) gold soon found a bottom and is moving up again. I think we are overdue for the juniors to break out of their torpor and could have a much better summer than most expect. Let’s deal with the large markets first though. Full Story
By: Chris Powell, Secretary/Treasurer, GATA - 17 June, 2014
Custodial gold held by the Bank of England fell by nearly 500 tonnes over the year ending in February, gold researcher and GATA consultant Koos Jansen reports today upon examining the bank's new annual report. During the same period, Jansen writes, the United Kingdom reports having a net gold export balance of nearly 1,600 tonnes. Full Story
Today is a very important day at City Hall in London, England. Central bank research group OMFIF is presenting a blockbuster report on public sector spending. I think that everyone in the global gold community should take note of it. OMFIF argues, quite persuasively, that governments, central banks, and sovereign funds are now holding stock market investments worth about $29 trillion. Full Story
By: The Gold Report and Philip Richards - 17 June, 2014
Commodities from coal to gold once traded in close correlation, but today the graph looks helter-skelter. This means Philip Richards of RAB Capital has had to think on his feet when choosing names for his company's Special Situations Fund. In this interview with The Gold Report, Richards explains how commodities markets have changed in recent years, and he lists companies of interest in the gold, silver, nickel, vanadium, zinc and oil and gas sectors. Full Story
By: Steve St. Angelo, SRSrocco Report - 16 June, 2014
Even though present Geo-political events in Iraq have now pushed up the price of gold due to Brent Crude hitting a new high in 2014, the value of the yellow metal relative to oil is still way below its historical average. Currently, the price of Brent Crude is trading at $113.35, while gold is at $1,275. This is an embarrassing 11.2 to 1 ratio.... thanks to the manipulation by the Fed and member banks. Full Story
U.S. Global Investors recently welcomed Doug Peta, an economist from BCA research, to our offices. He presented some interesting research regarding the Fed Funds Rate Cycle, and in turn, what that research could mean for gold. I wanted to share points from his presentation, as well our own in-house research, to help you understand the positivity we see for the precious metal looking towards 2015. Full Story
Well, we’re there – we touched that magic number – 107 – last week. In reading my last post on this subject you would know that 107 is very important Fibonacci resonance based resistance on the S&P 500 (SPX) / iShares Silver Trust (SLV) Ratio, where a two-day close above 107 would signal a move to somewhere between 115 and 145, and a de facto crash in silver. And you know what, although I thought this was unlikely last time this prospect was examined, I must confess, now a breach of this resistance appears possible. Read on to find out why. Full Story
The great liquidity tsunami of the post Crash era is coming to an end. But the inflationary aftereffects are only just beginning. The Fed is now actively tapering its QE programs. The $85 billion per month QE 3 and QE 4 programs have been reduced to $45 in asset purchases billion per month. While this still comes to an annualized rate of $540 billion in purchases per year, it marks a significant shift in Fed policy. Full Story
In his latest installment, the Silver Investor follows the Austrian Economic Model, showing how an increase in money supply is the only cause of inflation. He answers the question: given the Feds profligacy, where is the runaway inflation? The head of Euro Pacific Capital and Euro Pacific Gold Fund (EPGFX) says the latest stimulus by the ECB, which resulted with a negative benchmark rate (-0.10%), is inflationary and bullish for gold. Much of the metals sold during the retracement were absorbed by deep pockets, with the intention of holding for the long haul and much higher prices. Full Story
First, gold entered a seasonally slow period. This could last for another month or so but seasonality alone doesn’t explain why the decline was so steep and sudden. More impressive, gold’s safe haven appeal has diminished somewhat. Following the Ukraine elections, for instance, concerns eased. But with Iraq now heating up, gold could continue its current rebound rise. Full Story
Standby for some more geopolitical shocks to raise the price of energy and precious metals this week. First up is likely to be the final cutting of gas supplies to Ukraine from Russia tomorrow. It’s been threatened many times but should finally happen as the eastern Game of Thrones moves to another level. Full Story
One of the many luxuries that my readers have afforded me over the years is their willingness to allow me to explore a wide variety of topics. Not all writers are so blessed, and their output and responses to it tend to stay focused on specific, often quite narrow topics. While this approach allows them to dig very deep into particular subject matter, it can reduce the total scope of their research, vision, and advice. But don’t get me wrong; these types of letters are very important. I benefit greatly from being a subscriber to a number of letters that give me detailed analysis for which I simply don’t have the time to do the research. There’s just too much going on in the world today for any of us to be an expert in more than a few areas. Full Story
Since 2008 the RSI of the ratio has made 7 important lows below 30 that were also matched with a decent bottom in the silver price.There was also a quickly reversed bottom in the RSI in May of 2013 but silver prices were still falling and showed no sign of a bottom until early July. Full Story
Markets were extremely overbought last weekend and began to roll over this week right on schedule. We are well off those overbought readings now and are setting up for another round of strength as stocks work to complete bases. From what I see there is nothing that tells me we are in for anything more than a small consolidation period, not any sort of major correction. Full Story
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