Gold is not a commodity, it’s money. In the past, when the British pound was devalued against the dollar, it was also devalued against Gold and every other currency too. It had to be. For example, the pound cannot devalue against the dollar and stay at the same exchange rate against the euro, as that would also devalue the euro against the dollar. The pound devalues against both of them, leaving the euro/dollar exchange rate the same. The same happens for Gold. Gold in dollar terms would more or less remain unchanged. Full Story
Gold continues to drift near summer-doldrums lows, feeding and intensifying bearish sentiment. But an exceedingly-bullish event just happened which will ignite a major new upleg. Speculators’ gold-futures short positions have soared near all-time record highs! That means the recent heavy gold selling is exhausted, and massive proportional short-covering buying is imminent. That will catapult gold much higher. Full Story
Just for perspective, Facebook’s crash today was bigger than the entire market value of Nike, General Electric, Goldman Sachs, Blackrock, Starbucks, Airbus, and several South American economies all combined. The equivalent of the loss of several of America’s greatest corporations and a few South American economies all in one day is truly the hardest fall anyone has ever taken. Those who were feeling giddy about their retirement funds being invested in tech stocks yesterday might not being feeling quite so giddy today. Full Story
Not much has changed since the last 3 Amigos macro update. Amigo #2 (long-term yields) has long-since reached the Continuum’s ™ limiter (the 100 month exponential moving average on the 30 year Treasury yield) and Amigos #1 (SPX/Gold) and #3 (the 10-2 yield curve) are still on their respective trends (up for SPX/Gold and flattening for the yield curve), indicating a positive and risk ‘on’ macro backdrop. Full Story
In this article I point to the pressures on the Fed to moderate monetary policy, but that will only affect the timing of the next cyclical credit crisis. That is going to happen anyway, triggered by the Fed or even a foreign central bank. In the very short term, a tendency to moderate monetary policy might allow the gold price to recover from its recent battering. Full Story
Gold has been dropping like a stone over the last several months, and getting no relief as the summer doldrums for precious metals meander along. Historically gold’s worst month is March, with January and September the next best months to look for a rally. September is when gold demand spikes in India due to the buying of jewelry for weddings to correspond with the Diwali festival in October-November. April to July is when gold usually drops below its average monthly return. Full Story
Some emerging markets, Argentina and Turkey in particular, deal with the economic crises, while their currencies are continuing their collapse. The Fed Chair, Jerome Powell, has recently said that “the role of U.S. monetary policy is often exaggerated”. On the other hand, many analysts believe that the Fed’s tightening causes a dollar shortage and pushes emerging markets into trouble. Full Story
A 3.11% rate ceiling on the Ten-Year Note that has held for two months looks likely to be challenged in the weeks ahead. A forecast I put out in December, when rates were around 2.34%, caught the May high almost to-the-tick, raising the odds that the peak would prove to be an important one. Now, however, it’s time to prepare for the possibility that yields are headed still higher -- presumably to levels investors will not be able to shrug off as easily as they have a protracted period of Fed tightening and ‘tapering’ of its balance sheet. Full Story
Although precious metals have not rebounded too strongly yet, the long awaited summer rally could be underway (at least in Gold). Gold is oversold and its sentiment is overly bearish. But it is holding important support in the low $1200s. Silver has begun to rally after breaking down from a triangle consolidation. The gold stocks held up well during recent carnage in the metals but are struggling around very important support levels. The nature of their potential rebound is important as they try and maintain current support. Full Story
Silver and gold make sense in a crazy economic world. Out-of-control expenditures, expanding benefits, larger social programs, horrific debt and excessive borrowing guarantee more inflation. Expect a financial reset someday. Full Story
The ongoing July silver (and gold) slam has a 2008 feel about it. Important data point elements are different, but there's an air of panic on the part of physical precious metals' owners. "Major trend lines" being broken to the downside; physical metals' buying (in the U.S. off significantly so far on the year; (some) long-term silver holders giving up the ghost and selling their metal below spot. Full Story
While the U.S. reached a new record of 11 million barrels of oil production per day last week, the top five shale oil fields also suffered the highest monthly decline rate ever. This is bad news for the U.S. shale industry as it must produce more and more oil each month, to keep oil production from falling. Full Story
There is also another link between the Mises Institute and gold. Coming to the Mises University or talking with the staff you can learn a lot about the gold directly. I don’t mean that they are all gold bugs, although some of them are. And some prefer Bitcoin. But what they have in common is that they are opponents of the current monetary system based on fiat currencies. Full Story
The existing and new home sales reports this week were worse than even I expected. Given the statistical manipulation tools used by the National Association of Realtors (existing home sales) and the Census Bureau (new home sales) – both entities use the same regression software – one can only wonder about the true rate of home sales decline. Full Story
Now that China seems to have seized control of the gold price, capping and suppressing it to knock commodity prices down, thereby easing the de-facto devaluation of the yuan in China's trade war with the United States, the gold sector is more demoralized than ever. The only pulses left in the sector seem to belong to mining executives and internet sites touting shares to an ever-diminishing audience. Full Story
Trump suggests the U.S. is put at a “disadvantage” given that the European Central Bank and Bank of Japan continue their more expansionary monetary policies. Markets reacted by selling off the dollar versus major currencies. If that were all, you might shrug this off as disruptor-in-chief rattling the currency markets a bit. Maybe there isn’t much more to it. After all, speculators had been bidding up the greenback of late and, possibly, this was as good a catalyst as any to take some profits. Full Story
Louis Navellier of Navellier and Associates sees the best corporate earnings in decades, a 24% increase in the 1st Qtr. Gold and related shares deserve a place in every investment portfolio according to our guest, as the ideal panacea against government profligacy. He finds little fault in the much maligned trade tariffs, agreeing with his friend and colleague Larry Kudlow that the plan to undo protectionist policies. Full Story
Though other factors such as headlines and the dollar index can affect price on a minute-by-minute basis, the primary driver of the gold price in the summer of 2018 is the yuan-dollar exchange rate. Though the PBOC has long-maintained a "peg" in the relative valuation of the yuan versus the dollar, the past 90 days have seen a steady devaluation of this peg to the tune of nearly 8%. Full Story
By: Chris Martenson and Theodore Butler - 25 July, 2018
Every time we’ve had a rally in the last 10 years, ever since J.P. Morgan took over the investment bank Bear Stearns, J.P. Morgan has added aggressively to its paper short division on the COMEX as speculators, technical fund,s and what-have-you come in to chase rallies higher. J.P. Morgan has always been the seller of last resort, and they sell whatever is required to satisfy all buying. And, ultimately, after that buying is satisfied, the prices roll over and come back down. This is the "wash, rinse, repeat" cycle that many people have become aware of. J.P. Morgan adding short positions has stopped every rally in silver -- and gold, for that matter -- over the last 10 years. Full Story
Benjamin Franklin was purported to have said “that which hurts, also instructs.” Yet, society, as a whole, has a very short memory. Thus, lessons learned through the pain of generations gone by often are quickly forgotten. We have very few people left worldwide who actually lived through the Great Depression. While I have been told many stories by my grandparents of what it was like to live through the 1930’s and 1940’s, I clearly do not have first-hand experience. Full Story
Commodities, including gold and silver, have plunged to become so deeply oversold that a snapback rally looks likely soon, that could be sharp as if they turn up here it will trigger a wave of short covering. Such a rally is likely to be sparked by a dollar reaction, as we will see, but it is likely to be followed by further heavy losses across the sector if a general market crash ensues as expected. Full Story
Against the dollar, GDX has continued to build an enormous base in my buy zone of $23 - $18. The $21 area is the “meat and potatoes” of that zone. Investors who have gone shopping for gold stocks on a weekly or monthly basis in this price zone should be sitting happily on some great core positions, and ready for some great upside action that appears to be imminent! Full Story
Bob Hoye of Institutional Advisors outlines the latest financial market activity from his scenic mountain office overlooking the bay in Vancouver. The central importance of the national yield curve for every North American as well as our International listener's is the crux of today's episode. Financial institutions remain solvent buy borrowing at lower interest rates in the short-term while lending at higher interest rates with longer maturity's. Full Story
The Turkish government, in particular its central bank, has a relatively unique relationship to gold. Few governments directly involve themselves in the gold market as much as Turkey's. This post provides a short review of this relationship. Gold is popular in Turkey. According to a 2015 report by the World Gold Council, Turkey generally accounts for around 6% of global gold consumer demand. Full Story
The precious metals sector is on a long-term buy signal. Short term is on sell signals. The cycle is up. COT data is supportive for overall higher metal prices. We are holding gold-related ETFs for long-term gain. Full Story
Sounds like the rich already have all the stuff they need and are now just letting the cash accumulate as it comes in from stock dividends and executive salaries, while everyone else is borrowing to hold onto what they have. This of course doesn’t work in the long run because interest payments eventually eat whatever raises the working-class borrower gets in even a strong economy. When the inevitable recession hits, the debt remains while income falls, pushing millions of people over the edge. Full Story
Anticipate before you participate in the market. This is a classic piece of advice I like to give investors and have written about extensively in my CEO blog, Frank Talk. Financial markets are influenced by relatively predictable cycles and trading patterns, and by better understanding these we are able to react thoughtfully to headline noise or unexpected market developments. Full Story
Cryptocurrencies lack tangible value, and that does make them speculative and potentially prone to abuse. But no currency is more prone to abuse than an unbacked fiat currency that can’t or won’t compete freely in the market. Full Story
John Kenneth Galbraith is giant amongst economists. Well, at least amongst liberal economists. He was born in Iona Station, Ontario on October 15, 1908 and passed away in Cambridge, Massachusetts on April 29, 2006. Amongst his influential books were American Capitalism (1952), The New Industrial State (1967), and The Affluent Society (1958). His main criticizers were well-known economists Milton Friedman, Paul Krugman, and Robert Solow. Full Story
The best performing metal this week was platinum, nearly flat but down 0.07 percent after rallying 2.60 percent on Friday. Swiss exports of gold rose 2.3 percent in June, reaching 117.6 tons, according to the Swiss Federal Customs Administration. The majority of those exports – 62 percent or 61.3 tons – went to China, while 21 percent or 18.9 tons went to India. Swiss imports of gold were down 5.3 percent to 173.6 tons. Full Story
The big question I’ve been grappling with recently is the inflation or deflation theme. Last Friday’s price action felt like a counterpunch to the deflation scenario as the US dollar fell pretty hard and interest rate reversed. It was almost exactly a year ago around at this time that we started to take some positions related to the inflationary scenario by buying some of the different commodities stocks like BHP, COPX, KOL, UWT, SCCO, SCHN and STLD. Full Story
The USD has had a bullish run out of it’s Intermediate and Yearly Cycle Low (YCL) in early February but it is now deep in my timing band to start seeking out its next 5-6 Month Intermediate Cycle Low (ICL). While I don’t want to overplay the negative correlation between the USD and Gold the correlation has been quite strong for most of 2018. A major top in the USD here, should benefit Gold and the broader CRB here. Full Story
The central problem is unsound money, not excessive debt. More specifically, the problem is that when banks make loans they create money out of nothing. It’s this creation of money out of nothing and the subsequent exchange of nothing for something, not the build-up of debt, that leads to reduced productivity. If all debt involved the lending/borrowing of real savings then no amount of debt could ever make the overall economy less efficient. Of course, if all debt involved the lending/borrowing of real savings then the total amount of debt would be a small fraction of what it is today. Full Story
The inevitable result of a parasite that grows faster than its host is the death of the host. In this case that means municipal bankruptcies on a vast scale in the next recession, default on hundreds of billions of municipal bonds necessitating a government bailout – culminating in a system-wide crisis that pops the Everything Bubble here and around the world. Full Story
The price of gold fell another ten bucks and that of silver another 28 cents. Perspective: if you’re waiting for the right moment to buy, the market is offering you a better deal than it did last week (literally, the price of gold is a 7.2% discount to the fundamental vs. 4.6% last week). If you wanted to sell, this wasn’t a good week to wait. Which is your intention, and why? Full Story
It is my privilege now to welcome in Greg Weldon, CEO and president of Weldon Financial. Greg has over three decades of market research and trading experience, specializing in the metals and commodity markets, and his close connection with the metals led him to author a book back in 2006, titled Gold Trading Boot Camp, where he accurately predicted the implosion of the U.S. credit market and urged people to buy gold when it was only $550 an ounce. Full Story
Is Silver’s long bear market over? If so, it would be exciting news for bulls who have suffered through a hellacious, 72% correction since the metal peaked in 2011 just beneath $50. The monthly chart (see inset) provides reason for cautious optimism, implying as it does that Comex futures could be bottoming slightly above $15. If a powerful and sustained upturn lies in the offing, the September contract would need to hold above 15.093, a midpoint ‘Hidden Pivot’ support shown in the chart (see inset). It bounced precisely from this number a year ago and is trying to hold above it now. A small breach of a few pennies would not likely prove fatal, but a more decisive one of perhaps 30-40 cents would. That would probably doom this vehicle to a further slide to at least 12.221, the pattern’s ‘secondary’ Hidden Pivot, or even to the ‘D’ target at 9.350 (although I seriously doubt things will get that ugly). Full Story
Head of the Trends Research Institute, Gerald Celente expresses concerns over the potential for a showdown of epic proportions in the Middle East. Extreme tensions in the region could ignite the crude oil market, sending price per barrel soaring while sparking a stampede into the precious metals sector. Bill Murphy of GATA.org notes precious metals investors will ultimately be rewarded for their patience. An endgame scenario is unfolding in the financial markets that could result in an explosive move higher for safe haven assets. Full Story
Economic cracks big enough to drive a car industry into are opening up all over the globe. Trade gaps are opening up between major allies. Widening spreads between the dollar and other currencies are shredding emerging markets. As we start into summer, these cracks and several others described below have become big enough to get everyone’s attention, just as I said last year would become the situation. Full Story
Standing in front of a speeding train is rarely a good idea, but most investors are doing it right now. They survive only because the debt train is still way down the tracks. It is nonetheless coming, and you will want to move before then. But which way? Full Story
Indian silver imports increased significantly from 2013 to 2015 as investors took advantage of lower prices. However, the Indian investor wasn’t as interested in acquiring silver in 2016 as its price surged to $21 versus $14 at the beginning of the year. But, as we can see in 2017, Indian silver imports rose to 20% of global mine supply versus 13% in the prior year. And, if Indian silver demand remains strong throughout the rest of the year, it could surpass 8,700 mt and account for 32% of global silver mine supply. Full Story
After a brutal few weeks in precious metals, you’d expect trend-following speculators to be heading for the exits. And the most recent gold and silver futures action — aka the commitment of traders (COT) report — shows exactly that. Which is good news. In gold, speculators – who tend to be wrong at big turning points — cut their net long position by 8%, while commercial traders – who tend to be right at turns – cut their net short positions by about 9%. These are big moves for a single week and bring both groups closer to levels at which, historically, precious metals start to rise. Full Story
This article does not speak to gold’s proper fundamentals, which are not yet very healthy (although some positive signs are finally gathering). For the proper counter-cyclical atmosphere to engage gold bulls would need have risk ‘on’ markets and assets crack. Yet, gold’s (and silver’s) price may well bottom before readily obvious fundamental improvement is apparent to a majority (as was the case in Q1 2016). Full Story
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