Gold & Precious Metals

Pretty Sure Bets....

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Posted by Bob Moriarty via The Gold Report

on Monday, 13 August 2012 08:30

"In July of 1932, during the depths of the depression, with the Dow at 41, a few brave souls realized that no market goes to zero and they invested. Just short of a year later, the Dow was 108, a climb of 150% during the worst part of the depression.

It’s been my observation in my 40 some years of investing that markets that decline between 87 and 91% will tend to have a countertrend rally of 150%.

Rhodium is quoted at $1170 an ounce today. It is used in catalytic converters primarily but also to plate white gold and sterling silver jewelry. It is one of the platinum group metals. (PGM) It hit a high of just over $10,000 an ounce in mid-2008. It hit a low for this year of $1150 a week ago".

.....read more HERE


Gold & Precious Metals

Gold's Seasonality & Yearlong Consolidation Setting Up Rally To All-Time Highs

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Posted by Robert Zurrer for Money Talks

on Friday, 10 August 2012 06:52

With Europe in Financial Crisis, the US Debt soaked and struggling economically, the biggest influence on gold prices right now is the expectation towards more monetary easing, either out of Europe or the U.S. That’s the No. 1 driver. For Gold investors this happily coincides with Equity Clock's seasonal and technical studies which clearly show that Gold typically embarks on a significant upward swing during the month of August. Furthermore, as the second chart shows that Gold in US Dollar Terms is not only down 16% from its high, it is breaking out of a yearlong descendng triangle, typically a reliable technical indicator. 

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Gold Mining issues outperformed this week too, as another indication that this rally is getting underway. The GDX is up 4% so far and the GDXJ is up 4.5%. 



One interesting facet is that Silver is in Backwardation. Backwardation occurs when the future price of a commodity (gold, silver, oil, corn, etc.) is less than the current spot price. In other words, the price you pay now is higher than the price you have the option of paying a month later. . .two months later. . .or a year later.” The result, according to Brian Hicks of Wealth Daily, is “Historically backwardation means one of two things:

1) there’s a current shortage of silver bullion available on the open market and/or

2) silver traders believe the price of silver is about to take off.” Hicks continues, “Basically it means that there are relatively few silver owners that are willing to sell their bullion holdings. As a result of this tight supply, there’s an increasing amount of demand for bullion that is jacking-up the current spot price of silver. And that’s the significance of backwardation. The current spot price of silver is an accurate record of the real spot price of physical silver as long as people are willing to exchange currency for silver at that price, which is why backwardation is so important.” 

James Turk pointed out in an interview with King World News that gold may also be in backwardation. Turk says, “I think it is, even though the gold forward rate doesn’t show it simply because dollar interest rates are manipulated. I think to a large extent gold interest rates can’t be manipulated any more than they have been. So the true reflection of the market is you have a backwardation, but it’s not obvious because of the various interest rate manipulations that are going on. That’s very bullish. Whenever you get the metals in backwardation it’s a very bullish situation. I” I think that’s what we’ve got right here.” Turk also commented, “The bottom line is we are in a fiat currency bubble. Eventually this bubble is going to pop because we are using this fiat currency, backed by nothing, not just in one country, but throughout the world".

John Embry of Sprott Asset Management says that the next big move in gold may be the result of supply more than demand. He told King World News, “I have been a long time proponent of the idea that we may very well be at peak gold production in the world. We may have seen the peak. The problem is that all of the low hanging fruit has long since been plucked. The high grade ore bodies in geopolitically (friendly) places have (already) been mined and a lot of these open pits have been mined. And they (open pits) have a very finite life. Underground mines last forever (by comparison). But the fact is all of the easy stuff has been mined and where you are now finding anything of significance, it tends to be in geopolitically unattractive areas. They are hard to mine and they are going to be extraordinarily expensive to mine... I don’t worry too much about the fact that the production profile can’t grow that much because ultimately that will be extremely bullish for the gold price. This is a classic supply/demand squeeze. We know that demand is rising in many parts of the world... If there is no greater amount of gold coming out of the ground, the only thing that can arbitrate where the gold goes is price, and the price will go up a lot. I think the gold price could go up to multiples of the current price.” Embry is even more bullish on silver: “I have been of the long held opinion that if we get into a raging bull market, which we are going to in the two precious metals, that silver will head towards the low end of the gold/silver ratio, which is currently over 50. In real bull markets, it will fall as low as 10 or 15 (to 1). If that happens, silver will move up three times as fast as gold by the time this is all over. And I think gold is going a long ways, so you can get really excited about the upside potential in silver.” 

The Bottom Line? The framework for a strong move higher in Gold has become established.   In addition to increased inflation expectations, the US Dollar index has also come under pressure over the course of the past month and a minor head-and-shoulders top can be spotted on the charts.   The target of this topping pattern points down to 81, also the point at which the price action would intersect with the rising intermediate trendline.  As you can see in Equity Clocks Seasonality Chart below, the US Dollar Index seasonally declines, on average, between now and September, supporting commodity prices, such as Gold.

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Gold & Precious Metals

Gold Seeks "Foothold Above $1600", China Stimulus "Likely to be Positive for Gold"

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Posted by Ben Traynor - BullionVault

on Thursday, 09 August 2012 04:50

WHOLESALE MARKET prices to buy gold bullion hovered in a tight range around $1615 an ounce for much of Thursday morning in London – marginally above where they started the week – before dipping slightly around lunchtime, while stock markets also edged lower following gains earlier in the week.

"Gold seems to have gotten a foothold above the $1600 level and seems to be relatively stable," says Robin Bhar at Societe Generale 

"It's still showing this correlation to riskier assets. We've seen a bit of a rally in the oil market and equities, and gold has kept a par with those moves."

Prices to buy silver also ticked lower towards the end of Thursday morning, dipping to $28.04 per ounce, while other commodities were broadly flat.

"Like gold, silver is showing no trend momentum," says technical analysts at bullion bank Scotia Mocatta.

"We continue to watch the $28.40 level on the upside and $27 on the downside."

Chinese consumer inflation continued to fall last month, dropping to 1.8% – down from 2.2% in June – according to official consumer price index (CPI) data published Thursday. 

Producer price inflation fell further into negative deflationary territory, while industrial production and retail sales growth both slowed.

With inflation falling and the economy showing signs of slowdown, "the numbers confirm that the door for more monetary easing is open," reckons Dariusz Kowalczyk, economist at Credit Agricole.

"[However], we expected CPI inflation rise from now on, reaching 3.8% at year end."

"Any relaxation of monetary policy is likely to be very positive for gold," adds Nomura analyst Saeed Amen in London. 

"Gold isn't fully pricing in further easing."

Over in India, which lost its position as the world's biggest gold buying nation to China in the six months to March, jewelers are finding that some consumers are opting to buy gold in less quantity, purchasing smaller items of gold jewelry, Mineweb reports.

"People do make their annual jewelry purchases at this time," says precious metal retailer Madhukar Jha.

"Marriage season will soon be here and the high gold price will not stop purchases."

As the Rupee has fallen on currency markets, the Rupee price to buy gold has continued to set records this year, despite the wholesale market  Dollar price retreating from last September's $1920 per ounce high.

India's new finance minister Palaniappan Chidambaram meantime described gold bullion as "not a productive asset" earlier this week, as he laid out his plans to boost investment and the economy.

"In 2007-08, savings touched 36% of GDP. It is now down to 32% of GDP," Chidambaram said.

"One of the reasons may be a perceived lack of attractive investment opportunities and instruments. 

Hence the attraction of gold, but gold is not a productive asset and the demand for gold worsens the current account deficit."

Chidambaram added that government policies will be announced "to attract more people to invest in mutual funds, insurance policies and other well-designed instruments".

Pranab Mukherjee, Chidambaram's predecessor as finance minister and now India's president, argued in June that Indians should invest in "wealth generating" assets rather than buy gold. 

Mukherjee twice raised import duties on bullion in the first half of the year, as well as gold sales taxes, sparking a three-week strike by many of India's gold jewelers.

Here in London, Standard Chartered is seeking legal advice over whether it can take action against the New York State Department of Financial Services, after the regulator accused the bank of being a "rogue institution" over dealings with Iran.

"Our reputation has been damaged," Standard Chartered chief executive Peter Sands told the Financial Times.

"It's not worth pretending that isn't the case."

Shares in Standard Chartered were the FTSE's biggest gainers during Thursday morning's trading, regaining some ground after falling sharply following the DFS allegations. StanChart's share price however remained more than 10% below where it closed last Friday.


Ben Traynor


Gold value calculator   |   Buy gold online at live prices


Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK's longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.


Gold & Precious Metals

The Big Picture for Gold

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Posted by Stewart Thomson via Graceland Updates

on Wednesday, 08 August 2012 08:30

1. To view the big picture for gold, look at the chart below (click HERE for Larger Image) . Gold has been consolidating for almost a year. 


2.  Two key symmetrical triangles have formed, and they appear to be acting as the “firing pins” that will help gold begin a major price advance.

3.  Please click here now.  You can see that gold pulled back towards the middle of the green triangle, and then quickly bounced higher.

4.  As of this morning, gold is also trading above the larger dark blue triangle, which technically confirms a breakout. That breakout should produce serious follow-through to yesterday’s price action, for the rest of the trading week.  

5.  Please click here now.  Is that a chart, or a piece of sculpture created by Michelangelo?  I would argue that the GDXJ chart qualifies as “chart of the year”. 

6. Many individual junior gold stocks are coming to life, and this GDXJ chart suggests a virtual price geyser is imminent.  Note the small but beautiful head & shoulders bottom.  It is a complex pattern, featuring two heads.

7.  The neckline of that pattern sits at about $20.30, denoted by the thin black line of HSR (horizontal support & resistance).

8. GDXJ had a great day of trading yesterday, but Canadian markets were closed.  Many hedge funds engage in what may be called “nefarious” shorting of junior resource companies on the CDNX exchange.

9.  When Canadian markets open today, I want to see GDXJ blast up through the neckline and over the green downtrend line.

10. The two green trend lines denote an enormous bullish wedge pattern.  The GDXJ chart could be termed a “snorting bull”.  The chart showcases a double bottom pattern, a head & shoulders bottom, and a bullish wedge.

11. I don’t think that junior gold stock investors could ask for a more bullish chart than this one.  

12. The amount of pain endured by the average gold stock investor in this crisis rivals that endured by 1990s technology stock investors.  The difference is that you are likely about to be rewarded in a very big way!

13. Silver fans should click here now.  Note the bullish pullback to the apex of a triangle pattern.  It’s technically bearish if the price “hangs around” the apex, and bullish if it can quickly move higher.

14. In this case, price has moved higher, opening the door for a run towards $28.50.  Silver is trading less aggressively than gold is now, which is what I want to see at the beginning of a major bull phase for precious metals.

15. August 7th is my “official start date” to the Dow crash season, and it runs to October 31.  The Dow rarely crashes, but I still like to be out of the market during crash season.

16. Platinum is a metal that is much more volatile than gold and tends to crash badly when the Dow crashes.  In 2008, platinum fell over 60%, while gold only fell by about 30%.

17. Is platinum hinting that the global economy, and perhaps the Dow, are about to take a hit?  Please click here now.

18. While the gold and silver charts look superb, there is a nasty head & shoulders top pattern in place on the weekly platinum chart.

19. It is sitting on strong price support on the longer term charts.  Please click here now.  You can see that $1340 and $938 are two key areas of enormous price support.

20. I would be a modest buyer of platinum in the current $1400 area, and a much more substantial buyer in the $900-$1000 area.

21. Please click here now.  GDX performed like a champion yesterday, and I expect more of the same action all week long. 

22. Note the HSR line defined by the circled low at $43.98. GDX is chewing at that resistance like a pitbull chews on balsa wood.

23. If GDX can get over $44, I think it will quickly surge towards the HSR created by the circled high of $48.72, and the circled low of $49.22. 

24. The 2011 gold stocks debacle was arguably as bad as the wipeout of the early 1980s or the lows of 1999, but the gold community, and the stocks it invests in, possess a resiliency that never existed in the technology sector. Welcome to the golden age of the gold community.  It starts now!

Special Offer For Website Readers:  Send me an Email to freereports4@gracelandupdates.com and I’ll send you my free CPI report!  Learn what cost push inflation is and how QE helped to create it.  I’ll explain why CPI is the most powerful driver of the gold market now, and which stocks could benefit from it!




Stewart Thomson

Graceland Updates

Written between 4am-7am.  5-6 issues per week.  Emailed at aprox 9am daily.



Gold & Precious Metals

Gold "Popular Again"

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Posted by Ben Traynor - BullionVault

on Tuesday, 07 August 2012 07:30

Despite Worries Over Indian Monsoon, But Overall Market "Lacking Conviction"


THE SPOT MARKET cost of buying gold climbed to $1616 an ounce Tuesday morning in London, its highest level so far this week, as commodity prices and stocks markets also edged higher, with the exception of the FTSE which was hit by allegations that one London-listed bank has hidden "secret transactions" from US regulators.

"Gold appears to be enjoying increasing popularity again," says Commerzbank's Commodities Daily note.

"There would appear to be brisk buying interest on the market below [$1600]...which should provide the price with a safety net."

The US Dollar gold price has remained within 3% of $1600 for virtually all of the last two months.

"The market as a whole lacks conviction," says Marc Ground, commodities strategist at Standard Bank.

"The little confidence that was forming will most likely have been destroyed by last week's disappointment [from the lack of action by the Federal Reserve and European Central Bank]."

"We continue to like precious metals, even as central bank event risks have been largely removed until September," says a note from Societe Generale.

"Further disappointment with politically driven 'growth agendas' should confirm the need for even stronger monetary solutions to reignite nominal growth."

The price of buying silver meantime rose to $28.12 an ounce – up 1% so far this week – while on the currency markets the Euro held steady near one-month highs above $1.24.

Major European stock indices were up on the day by lunchtime, with the exception of the FTSE in London, which was hit by a fall of more than 20% in Standard Chartered shares after the bank was accused by the New York State Department of Financial Services of violating US law by dealing with Iran.

"For almost ten years, [Standard Chartered] schemed with the Government of Iran and hid from regulators roughly 60,000 secret transactions, involving at least $250 billion," says the New York State Department filing, which describes the London-headquartered bank as a "rogue institution".

Standard Chartered last night issued a statement saying it "strongly rejects the position and portrayal of facts made by the New York State Department of Financial Services."

In India meantime, the "sputtering" monsoon is set to hit gold buying ahead of the forthcoming wedding season, traditionally associated with strong demand for gold, the Wall Street Journal reports.

"In India, the monsoon is another negative factor [for gold]," the WSJ quotes Michael Shaoul, chairman of Marketfield Asset Management, which looks after over $2.5 billion. Shaoul also says India's relatively high interest rates also give people an incentive to keep cash in savings account rather than convert it into gold bullion.

The Rupee has lost over 20% of its value against the Dollar over the past 12 months, a factor that has contributed to record Rupee gold prices in recent weeks. In addition, India's government has twice increased import duties on bullion since the start of 2012.

"We're all aware of the current conditions in India," says Ani Markova, co-manager at AGF Precious Metals Fund, which manages $600 million.

"But India hasn't been a strong player in the market this year...I think China is driving the bus."

In the six months to the end of March China overtook India to become the world's biggest source of demand for buying gold, according to World Gold Council data. China's imports of gold bullion from Hong Kong however – regarded by many as proxy for overall imports – fell 10% in June compared to a month earlier, official Hong Kong government statistics published last week show.

Ben Traynor


Gold value calculator   |   Buy gold online at live prices

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK's longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.

(c) BullionVault 2011

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.


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