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Gold & Precious Metals

Peter Schiff: Gold to $5,000

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Posted by Peter Schiff - Euro Pacific Metals

on Wednesday, 18 July 2012 09:48

Peter Schiff told CNBC this morning that Gold at $1,200 is not expensive “considering all the money that we’ve created and all the money that we are going to create”. According to Schiff investors should invest in Gold because the yellow metal will at some point, perhaps prior to Obama leaving the White House, hit $5,000 per troy ounce. Here's Schiff on how high Gold & QE3:

Schiff: I think a minimum of $5,000. But it could go a lot higher than that. A lot of it depends on future actions of central banks. We’re on a trajectory right now to send gold a lot higher, but central banks could do the right thing, and that would limit gold’s gains. But the more they keep printing money and the more they keep interest rates low to artificially prop up the economy, the higher gold is going to go.

Regarding the Fed and  QE3: 

Schiff: No. I think they’re going to do it. The Fed always does the wrong thing, and QE3 would be the wrong thing, so they’re going to do it. If you look at what the Fed says, they say we’re going to do QE3 if the economy needs it, and the economy is going to need it, from their perspective, because without QE, the economy will lapse into a worse recession than the one we just finished. That’s because we still have a lot of problems to correct because the last recession was cut short by the stimulus.

So the stimulus interfered with the market’s attempt to correct all the imbalances that were built up over the phony boom that was a function of prior Fed mistakes. If you understand that the economy is basically floating on a sea of stimulus, then when the stimulus goes away, we’re back in recession. The Fed saying we’re only going to do QE if the economy needs it is like a heroin addict saying he’s only going to take more heroin if he needs it.

 

The interview above came from Vette350's Junior Mining Blog



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Gold & Precious Metals

Dr. Bernanke's Golden Conundrum: "The gold market feels like the Indy 500 track on race day"

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Posted by Stewart Thomson via Graceland Updates

on Tuesday, 17 July 2012 14:26

1. The gold market feels like the Indy 500 track on race day.  All the cars of the precious metals sector are revving their engines on the start line.        

2. The junior gold stock sector seems to be revving its engine the loudest of all.  To get a visual picture of why I hear that sound, please click here now.

3. I’ve compared GDXJ to CDNX, and you can see that a head & shoulders bottom pattern has formed, suggesting that junior gold stocks are poised to significantly outperform the general junior resource sector.

4. Both the GDXJ daily chart and the 30 minute chart have very bullish patterns in play.  Please click here now.  Indicators like MACD are moving higher and selling has dried up.

5.    When few sellers remain in an oversold market, strongly bullish news can send the price higher surprisingly quickly.

6.    Please click here now.  This 30 minute chart showcases an island bottom.  GDXJ is currently “chewing” at resistance in the $19 area.

7.    I expect GDXJ will burst through that resistance and charge higher, but it’s important to remember that charts show investors a picture of what is probable, not what is guaranteed.

8.    The most probable scenario indicated is that GDXJ makes its way to the dotted black line I highlighted on the daily chart at $27.16, but Ben Bernanke could throw a monkey wrench into our victory dance. 

9.    Dr. Bernanke is scheduled to speak publicly today and tomorrow. There’s no question that the “recovery” has lost steam, and it would seem logical that anything he says should be supportive for gold.

....read points 10-24 HERE



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Gold & Precious Metals

Egyptian tycoon makes "spectacular" $500m bid for Canadian gold firm

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Posted by Arabian Money

on Tuesday, 17 July 2012 08:04

Egypt’s second richest man Naguib Sawiris has made a $500 million bid for the Canadian gold mining group Mancha Resources, the most spectacular move yet into the yellow metal by an Arabian businessman.

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Mr Sawris confirmed to The National newspaper that talks are in progress but declined further comment, except to say La Mancha has a ‘geographically diverse portfolio of assets offering exposure to growth.’

Golden assets

La Mancha operates four gold mines in Africa and Australia. Mr Sawris and his even richer brother have amassed a multi-billion dollar fortune as the founders of Orascom Telecom and have major investments in cement, construction, fertilizers and hotels.

They have made a great deal of money by being early investors in sectors before their future value became apparent. But gold mines are a completely new field for Mr Sawris and mark a major diversification away from his past successes.

Naguib Sawiris is worth $3.1 billion and his brother Nassef $5.1 billion, according to Forbes magazine. They could well be readers of the ArabianMoney investment newsletter which has been advising such a diversification strategy for some time (subscribe here).

It certainly does not say much for the global economic outlook that a man of such wealth is turning to the yellow metal as an investor rather than redeploying money into telecommunications, for example, where he has previously done so well.

Investment logic

But if you think the global economy is going to contract and the central banks print money to try to offset that deflation then it makes a great deal of sense to invest in precious metals. The price of these assets along with food, certain commodities like oil and even real estate are likely beneficiaries of central bank money printing even while the rest of the economy struggles at best with stagnation.

In this environment taking wealth out of the stagnant sector and putting it into an asset class that will benefit from reflation is a clever one. By buying a gold company Mr Sawris is also taking a bet that the highly depressed market for gold equities will outperform the metal itself as the price of gold goes up.

That is the theory, although it has not worked for the past few years. Arguably, however, that leaves gold mining shares cheap and even more attractive to bold investors like Mr Sawris. Perhaps his move is bold enough to spark a revaluation of the sector.

 

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Arabianmoney.net is the first dedicated financial comment website to be published from Arabia, and provides lively and topical commentary on both local and global news (For our introductory video click here).

It is a free website that introduces the more detailed investment analysis of our paid-for subscription newsletter, and anybody seriously interested in Arabian investment should get this monthly pu



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Gold & Precious Metals

Still in a Bullish Configuration (Updated post close)

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Posted by Mark Leibovit - VR Gold Letter

on Monday, 16 July 2012 08:34

page14image568

(scroll down for post close comments). FVOI stands for Futures Volume and Open Interest. It is computed like On Balance Volume with the only difference being that open interest (the number of open gold futures contracts) is added into the calculation. FVOI (the red line) is a great tool to tell if the price of gold has gotten ahead of itself or if there is latent strength during gold declines. As you can see in the weekly chart above, FVOI normally tracks very well with gold. It is during times of divergence that the real value of the FVOI is found.

The current divergence is continuing to show that there is positive action going on with regard to the accumulation of gold futures contracts as the FVOI remains just below its recent high while the price of gold tries to rebound off of its early June low. While gold has been chopping around in seemingly directionless trade, the FVOI is still in a tight range just below its high. This is still a bullish configuration that tells us that gold contracts are being accumulated here. Once this accumulation phase is completed, we expect gold prices to move sharply higher. 

Also from Mark Leibovit's VR Gold Letter's extensive Gold News Raw:

Gold will climb 22% to a record by yearend as the global economy slows from the weight of too much debt, says Eric Sprott, the founder and chairman of Canadian fund manager Sprott Inc. (SII)

“I just can’t imagine the demand for gold is going down,” he said in a July 9 interview at Bloomberg’s Toronto office. “I don’t personally see a solution to the problem that we’re in, the financial leveraging issue that we all have where everybody wants to shed debt and there’s no buyers.”

All the above comes from Mark's 24 page VR Gold Letter which you can read more about HERE

Post Close Comments

Ed Note: As you know Mark Leibovit is one of Michael Campbell's favorite analysts and here's a good reason why. I get all of Mark's services, and one thing stood out glaringly in his VR Trader Platinum service. Of the 31 recommended stocks that Mark has liquidated since June 4th/2012 81% of them were closed at a profit. The 6 that were closed at a loss, the losses were very smalll, specifically -.12 cents, -8 cents, -7 cents, -.30 cents , - 2 cents and a "big" -$1.25 on a $39 stock. Moreover of the 8 stocks Mark is currently long, only one is showing a loss at today's close of - 6 cents. 

Now for Mark's closing commens for today:

The stock market is trading modestly lower after retail sales disappointed and following reports that Democrats will let the US go over the "fiscal cliff" if Republicans refuse to raise taxes on the wealthy. But the market is being supported by a better than expected manufacturing survey and hopes for Fed stimulus. The Dow is down 32, S&P down 2, and NASDAQ down 4.

Financials are steady (XLF -0.1%) after Citigroup (C +1.2%) reported better than expected earnings.

Industrials are the biggest losers (XLI -0.7%) after General Electric (GE -1.1%) was downgraded by Morgan Stanley.

Natural resource stocks are also weak (XLB -0.6% and XLE unchanged) as the weak economic data hurt commodity demand.

Treasuries rallied to record highs after the disappointing retail sales report. The long bond future is up 1 2/32 to 152 8/3

The US Dollar Index is trading lower after the US's disappointing economic data and the possibility of new stimulus from the Fed. The US Dollar Index is down 0.198 to 83.151.

The European Central Bank wants to impose losses on owners of Spanish debt even though finance ministers agreed not to do so.

The Euro is up 0.13% against the Dollar.

Precious metals are getting support from a flight to safety, but industrial metals are down on those demand concerns. Gold is up 4.30 to 1593.70 and silver is up 0.03 to 27.37, but platinum is down 12 to 1416, palladium is down 6 to 578, and copper is down 0.0165 to 3.4875.

Oil is getting support from continued unrest in Syria and its political implications. Crude oil is up 0.36 to 87.46.

Retail sales fell 0.5% in June, well below forecasts for a 0.2% increase. It was the third consecutive decline in sales, the first time that has occurred since 2008.

The Empire State manufacturing index rose from 2.3 to 7.4 in July. Economists expected a smaller rebound to 5.0.

The International Monetary Fund reduced its forecast for global GDP growth by 0.1% this year and 0.2% next year. The IMF now expected GDP to expand 3.5% in 2012 and 3.9% in 2013.

------------------------------------------- 
CANADIAN NEWS:

The Canadian market is down modestly, just like the US market. The TSX is down 8 or less than 0.1% and the TSX Venture is down 5 or 0.4%.

The Canadian Dollar is down slightly as traders move to safer currencies. FXC is down 0.12 to 97.88.


 

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Gold & Precious Metals

Now is the perfect moment to Buy Gold says this indicator. It's spied 5 out of 6 bull markets in gold early...

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Posted by Adrian Ash: BullionVault

on Friday, 13 July 2012 08:12

The BULL MARKET in gold is back, reckons Dr. Steve Sjuggerud, writing in his Daily Wealth email.

Now is the perfect moment to Buy Gold. Sentiment is still negative; indeed, a growing section of the investment world hates gold. And we have a hint of an uptrend.

This is exactly what we wait for.
 
In short, things are getting "less bad" in gold. Based on history, I believe we could see enormous gains over the next few months. And our True Wealth Systems computers tell us it's time to Buy Gold.
 
As my True Wealth Systems subscribers know, we track gold two ways. Our first "Gold in Currencies" system tests gold versus four of the major world currencies. The idea is simple. We want to own gold in a bull market. But what is a gold bull market? 

You might hear people say, "It's not a bull market in gold... It's simply a bear market in the Dollar." You see, if the US Dollar is crashing against other currencies, it's likely also going down in terms of gold. So it looks like gold is in a bull market. But what if gold is falling in terms of the Euro or Yen while it's rising against the Dollar? That's not a gold bull market.

So what is a bull market in gold? 
 
One simple definition is: When gold is going up in terms of all the world's most important currencies, it's a bull market in gold. 
 
We used this definition to come up with a simple system for gold. We tested the idea on four major currencies – the US Dollar, Euro, British Pound, and Japanese Yen.

If the average price of gold is up in all four currencies versus the previous month...the Buy Gold. Repeat the next month. That's it.
 
I know it sounds too simple, but it works. We want to own gold when this system says "buy". We've tested the idea on 40-plus years of data. The results are astonishing.

Take a look at this chart from the most recent True Wealth Systems...

sjuggerud13vii

Based on history, buying a double-long gold fund when this system says "buy" is good for 41.4% annualized returns. 
 
Yes, that's right. This system returns over 41% a year when it flashes "buy". 
 
Importantly, these signals are somewhat rare. Our computers say "buy" less than one-third of the time. Meaning, on average, we'll only get about four buy signals every year.
 
And right now, the True Wealth Systems computers tell us now is the time to Buy Gold and ride it higher.

The thing is, we still don't have the uptrend, based on our "Gold Uptrend" system. I'm not concerned, though – that system is a bit slow to signal. Our "Gold in Currencies" signal can be a great "early sign" of a new uptrend in gold.

In short, based on our historical testing, we could be at the brink of a major breakout in gold, but without a confirmed uptrend as yet. Now, I pored over the data and found an incredible result...

In 40-plus years of testing, we've seen six MAJOR gold bull trades. (That doesn't sound like many. But remember, gold went down, consistently, between 1980 and 2000.) Our "Gold in Currencies" system said "buy" before our "Gold Uptrend" system did at the beginning of every trade except one. (In that case, they signaled at the same time.) 
 
In these five cases, our "Gold in Currencies" system signaled "buy" one to three months before the "official" uptrend kicked off. However, being a few months early can "juice" our long-term gains.

The average return on our five gold uptrend trades was 110%. That's an incredible return. However, by following our "Gold in Currencies" system into the trade a few months early, we're able to increase our average return to 133%.

Importantly, every one of these trades was MORE successful because of following the currency system in early.
 
Today, we could be on the verge of another major move in gold. Of course, we can't know if this is the case. But simply based on history, we want to own the yellow metal when our "Gold in Currencies" system says "Buy Gold". Historically, it's good for 41.4% annualized returns, regardless of predicting a new uptrend.

You get the idea – right now is a great time to Buy Gold. It is still a bit hated, and we could be on the brink of a major uptrend.

Get the safest gold at the lowest prices using world #1 for physical ownership – off-risk for anyone else's financial performance – BullionVault...

Steve Sjuggerud13 Jul '12
Former stock-broker, mutual-fund vice-president and hedge-fund advisor Dr. Steve Sjuggerud is the founder and editor of True Wealth. Launched in 2001 and now one of America's best-followed newsletters for private investors, True Wealth also provides free analysis and ideas in the Daily Wealth email service.


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