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Gold & Precious Metals

Gold Demand: Grand Slam For Islam

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Posted by Stewart Thomson - Graceland Updates

on Tuesday, 06 December 2016 08:11

Dec 6, 2016

  1. Institutional money managers move gargantuan amounts of gold market liquidity. Their fundamentally-based actions create the chart patterns that technical analysts use to try to project the next rally or decline in the gold price.
  2. On that note, please  click here now.  Double-click to enlarge this key daily bars gold chart.
  3. Note the three big fundamental events that I highlighted on the chart. The Brexit, US election/Indian fiat call-in, and the Italian referendum were all predicted by most analysts to boost the price of gold. The sad reality is that gold went nowhere or tumbled after each of those events.
  4. On the eve of the US election, I warned the world gold community that gold was very vulnerable to a major sell-off, partly because it traded near major sell-side resistance at $1320. What happened?
  5. Gold promptly stunned the gold community and tanked from there, as the Indian fiat call-in overwhelmed the US election news.
  6. So, what now? Well, another major fundamental event is now in play, as of Monday December 5, 2016. Please  click here now. The Shariah Gold Standard was just approved!
  7. Please  click here now. Details of the standard are being released at this week’s annual World Islamic Banking Conference in Bahrain.
  8. The bottom line is that gold is set to get a major boost in demand from 25% of the world’s population who are part of the Islamic faith. 


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Gold & Precious Metals

Gold Seen Averaging $1,350 In 2017

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Posted by Catalin Chiloflischi, CEO Canarc Resources

on Friday, 02 December 2016 15:26

This recent report from UBS is very suggestive. I'm in agreement that the further downside may be contained in gold. ~ Catalin

Swiss bank UBS looks for gold to average $1,350 an ounce in 2017, characterizing the metal as “down but not out” after significant price declines over the last few weeks.

Silver, platinum and palladium are also seen rising next year from current levels.

Strategist Joni Teves said in a report Thursday that the bank’s higher gold-price expectation has been tapered to reflect moves across a range of markets after U.S. elections, with expectations that fiscal stimulus will boost economic growth and yields. In the near term, gold looks “fragile” and is likely to remain under pressure ahead of the Dec. 14 meeting of the Federal Open Market Committee, UBS said. A rate hike is widely expected.

As of late Thursday morning, spot gold was at $1,169.10 an ounce; UBS said $1,150 is possible.

“However, given that the market has already moved and positions have been adjusted, we think any further downside from here is likely to be relatively more contained,” UBS said. “We think gold is now looking attractive around these levels and would buy into further weakness, gradually building a long-term gold position. A few weeks ago, we set our three-month forecast for gold at $1,300; while the
recent pressure on the market makes this target look ambitious, we continue to expect gold to make its way back towards this level in the months ahead as the rationale for holding gold from a strategic standpoint remains intact, in our view.”

The key for gold, UBS said, will be “real” interest rates, which is the yield on government bonds –traditionally 10-year notes -- minus inflation.

“A scenario where nominal yields run up yet inflation/inflation expectations also pick up such that real rates remain relatively flat or even compress would remain supportive for gold, especially against the backdrop of lingering macro uncertainty,” UBS said. “A compression in real yields amid easy monetary policy or risk-off scenario would also be positive for gold.”

Still, the bank acknowledges that the downside risk to its base-case scenario has increased. Any downside in gold could accelerate if real yields rise on a sustained basis.

Meanwhile, UBS looks for silver to average $18.60 next year. Spot metal was around $16.50 late Thursday morning.

Analysts suggested silver may largely be driven by moves in gold. Still, “we think silver's links to economic activity via its industrial-demand component should help its relative performance to gold during periods when markets are optimistic about growth and risk.”

Platinum and palladium are seen averaging $1,060 and $755 next year, respectively. As of late Thursday morning, they were around $901 and $750.



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Gold & Precious Metals

Critical 61.8% Retracements

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Posted by Mike Larsen - Money and Markets

on Friday, 02 December 2016 11:51

As it is quite often said (but just as often forgotten when things get volatile), no market can move up or down in a straight line. There have to be corrections along the way as some traders cash in their profits, others get scared out of their positions etc. The question is – where (at what price) is such a reversal likely to take place. Focusing on news and fundamental analysis alone will not provide you with an answer here, simply because the markets are not logical in the short term, but emotional (it is also the case in the medium term, but to a smaller extent). Consequently, we need to apply technical tools to determine what is the most likely level at which the price will reverse. One of the most useful tools in doing that are the Fibonacci retracements. Out of those retracements, there are 3 classic ones that are very useful for precious metals, currencies and other markets: 38.2%, 50%, and 61.8%. The reason we are writing about the above is that the important 61.8% retracement was just reached in many important markets and the implications are also important. Let’s take a look at the charts for more details (charts courtesy of http://stockcharts.com).

sc-1

The above chart shows the Japanese yen, which has been moving in tune with gold, especially this year. The decline in yen started when it reached the 38.2% Fibonacci retracement based on the long-term decline (thus confirming the usefulness of the Fibonacci retracements on this market) and it now reached a 61.8% retracement, without a bigger correction since the decline started. This makes a temporary upswing here very likely. Since yen and gold moved in tune, the above also has bullish implications for gold in the short run.

While we’re discussing the Japanese currency, let’s also look at the Japanese stock market, which has been moving in the opposite way to gold.



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Gold & Precious Metals

No Surrender in the Feds’ “War on the Markets”

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Posted by Bill Bonner - Diary of a Rogue Economist

on Friday, 02 December 2016 10:57

bill-bonner-headshotPeople never intend to bring disasters upon themselves. 

But they sometimes put themselves in situations in which disaster is the only way out. 

The War Between the States was supposed to be quick and decisive. 

The glorious histories of the war were already written – at least in the minds of the combatants – by the time of the First Battle of Bull Run. 

There would be a few heroic charges; Napoleon’s Marshal Ney would have nothing on the dashing Confederate generals in their gray and red tunics. 

Mounted on their fine Tennessee horses, waving their swords and shouting encouragement to their cavalry, they would sweep the enemy from the field… send him fleeing back across the Potomac… and the war would be over. 

But even authors often don’t know how their stories will turn out. 

Events and personalities take over. Between the first chapter and the final one, there are twists and turns that few expect. The hero turns out to have a fatal flaw. Circumstances weren’t what they thought. The enemy had surprises. 

And then, at the end, the great victory turns into a nightmare defeat.

No Surrender



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Gold & Precious Metals

Silver Prices and Interest Rates

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Posted by Gary Christenson - The Deviant Investor

on Thursday, 01 December 2016 09:15

“History shows the only place for interest rates to go from here is higher.”

word-image-3-768x433-1

Examine the above chart of interest rates for 200 years.

  1. Rates rise and fall in long cycles, 20 to 40 years from a peak to a trough.
  2. Important highs occurred in 1920 and 1981.
  3. Important lows occurred in 1946 and probably 2016.
  4. Current rates are the lowest in 200 years. Some analysts have said the lowest in 5,000 years.

Examine the chart of annual silver prices since 1913 on a log scale. The upward trend in silver prices is clear and will continue as long as debt is increasing in our fiat currency system.



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