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Gold & Precious Metals

Coup d'État That May Shake the World

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Posted by Arkadiusz Sieron, Ph.D.

on Friday, 13 April 2018 07:47

Everyone focuses now on the chemical attack in Syria. Meanwhile, the most important turnover in the world remains mostly unnoticed. But we’re on guard. Let’s read our analysis of the key revolution of 2018 and find out the implications for the gold market.

Hawks Take Over the Fed

Are we going to write about Syria? North Korea? China? No. You already know everything you should about these geopolitical threats. The media bomb you with news about bombings, trade wars, nuclear trials, etc. But the key upheaval is taking place in silence, in the cool marble rooms of the Federal Reserve Banks. ‘The Hawkish Revolution’ – this is how the future historians will call it.

What is going on? We will tell you – but first read the key paragraph of the minutes from the recent FOMC meeting the Fed published yesterday.

Some participants suggested that, at some point, it might become necessary to revise statement language to acknowledge that, in pursuit of the Committee's statutory mandate and consistent with the median of participants' policy rate projections in the SEP, monetary policy eventually would likely gradually move from an accommodative stance to being a neutral or restraining factor for economic activity.

What does it mean? The FOMC members have started to consider the end of its accommodative stance. This is a real revolution, as the U.S. central bank has been supporting growth since the outbreak of the financial crisis. Now, for the first time since the Great Recession ended a decade ago, the Fed is talking about adopting a neutral or even tight stance. The possible consequences are enormous. More interest rate hikes are up ahead. Gold investors, be prepared!

Before we discuss the conclusions for gold, let’s analyze the rest of the latest minutes. Generally speaking, even without the remarks about possibly dropping the accommodative bias, the minutes had a hawkish tone. Why? Well, the FOMC members agreed that the nation’s economic outlook had recently strengthened:

All participants agreed that the outlook for the economy beyond the current quarter had strengthened in recent months. In addition, all participants expected inflation on a 12-month basis to move up in coming months.

Have you noticed something interesting? Look carefully. “All” – isn’t this a rare show of unity? We are all hawks now. Indeed:

Most participants commented that the stronger economic outlook and the somewhat higher inflation readings in recent months had increased the likelihood of progress toward the Committee's 2 percent inflation objective.

And another hawkish strike:

A number of participants indicated that the stronger outlook for economic activity, along with their increased confidence that inflation would return to 2 percent over the medium term, implied that the appropriate path for the federal funds rate over the next few years would likely be slightly steeper than they had previously expected.

Brace yourself for further hikes.

Fed Comments Trade Wars

Interestingly, the FOMC members discussed the potential impact of Trump’s trade wars. Although they downplayed the importance of U.S. tariffs, the central bankers worried about retaliatory trade actions:

A number of participants reported concern among their business contacts about the possible ramifications of the recent imposition of tariffs on imported steel and aluminum. Participants did not see the steel and aluminum tariffs, by themselves, as likely to have a significant effect on the national economic outlook, but a strong majority of participants viewed the prospect of retaliatory trade actions by other countries, as well as other issues and uncertainties associated with trade policies, as downside risks for the U.S. economy.

The Fed officials were also uncertain about the impact of the American fiscal policy. Generally, they believed that it should boost growth, but some question marks remained.

Tax changes enacted late last year and the recent federal budget agreement, taken together, were expected to provide a significant boost to output over the next few years. However, participants generally regarded the magnitude and timing of the economic effects of the fiscal policy changes as uncertain, partly because there have been few historical examples of expansionary fiscal policy being implemented when the economy was operating at a high level of resource utilization. A number of participants also suggested that uncertainty about whether all elements of the tax cuts would be made permanent, or about the implications of higher budget deficits for fiscal sustainability and real interest rates, represented sources of downside risk to the economic outlook.

Implications for Gold

Is gold doomed after the hawkish revolution? Well, the price of gold has indeed declined after the minutes were released, as one can see in the chart below.

Chart 1: Gold prices from April 9 to April 11, 2018.

gold-price-chart



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Gold & Precious Metals

Gold Tests Resistance – Again

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Posted by John Rubino - Dollarcollapse.com

on Wednesday, 11 April 2018 08:42

Gold is rattling against $1367 resistance as Donald Trump tweeted early this morning "Russia vows to shoot down any and all missiles fired at Syria. Get ready Russia, because they will be coming, nice and new and “smart!”.  Two takes below, one a wait and see, the other by an analyst who wrote yesterday before all of these Syrian missle tweets and Gold's rise that "The Time is Now" for Gold to make a move. So far they are both right, but if Gold should break through this resistance at $1365 barrier the latter could be significantly more right - R. Zurrer for Money Talks

Gold Tests Resistance – Again

Just when everyone was getting used to gold sitting around and doing nothing while tech stocks provided non-stop thrills and chills, the metal took off this morning on the “news” (read “Tweet”) that Trump is aiming some cruise missiles at Syria. 

Now the $1,360 resistance level that has been an absolute brick wall since 2014 is looming once again, and gold-bugs are – once again – wondering where the next resistance lurks if this level is finally pierced. 

 

Gold-resistance-April-18

The correct answer is that the chart doesn’t (or at least shouldn’t) matter in a world where Russia might soon be trying to shoot down US cruise missiles, Chinese and US aircraft carriers are staking competing claims to the South China Sea and trillion-dollar deficits are explicit and unapologetic government policy. 

But until fundamentals retake control and precious metals start acting like bitcoin circa 2017, charts like this one are a fun diversion.

Gold Market Nirvana: The Time Is Now

Apr 10, 2018

  1. The main drivers of global stock, bond, and gold markets are interest rates and demographics. Unfortunately, most investors focus on items that get a lot of media attention but are almost irrelevant to price discovery in the markets.
  2. Please  click here now. I’ve predicted that there will be no trade war, but governments around the world will roll out a modest amount of mildly inflationary tariff taxes.


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Gold & Precious Metals

Great Alignment – Metals – Shares – Tangible Assets

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Posted by Martin Armstrong - Armstrong Economics

on Monday, 09 April 2018 08:49

Martin reinforces the case that it is just not time for Gold yet but that there is a necessary alignment taking place. How about this quote in Martin's answer: "99% of analysis out there on gold is just so wrong it is laughable". More from Martin below is "Understanding the Markets - R Zurrer for Money Talks

Great-Alignment

QUESTION: Hi Mr. Armstrong, I notice that the gold market and the Dow Jones they both had a high in January and since then they have been treading water, are these markets getting in sync or is just a coincidence. Also when it comes to the markets you have explained that we will always see the “if then” situation, my question is a what point do we know that this is the right time to pull the trigger on buying or selling? Thank you - NMP


ANSWER: We are not there just yet. However, we are starting the Great Alignment and this is what needs to take place as we move into the future. The 99% of analysis out there on gold is just so wrong it is laughable. They typically call the dollar to collapse and gold will soar. They look at historical charts without understanding the economics behind them. Yes, you see gold rally between 1930 and 1932 so they forecast gold will rally with the collapse of the dollar and the stock market. However, 1931 was the Sovereign Debt Crisis where most of the world permanently defaulted on their National Debts. The USA did not. So because we were on a gold standard, if the price of gold rose, so did the dollar. OMG! That must be heresy!

When you are on a gold standard, then tangible assets drop in terms of currency so yes gold rises. But when you are NOT on a gold standard, then gold is just a tangible asset that declines against the currency along with everything else. Most of these people are clueless about understanding the monetary system

During the rally for gold into 1980 when the dollar was declining in the floating exchange rate system, the stock market did not crash – it consolidated. These people spin out total sophistry that sounds great, cause so many people to lose their savings, and they never repent or try to understand why they have been wrong ever since 1980

The Great Alignment will be when all tangible assets rise against a declining purchasing power of the currencies which today are NOT linked to gold.

We are getting closer. Do not rush in where only fools are found.

.....also from Martin: 

Understanding the Markets

 



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Gold & Precious Metals

Key Junior Miners Look Impressive

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Posted by Morris Hubbartt - Super Force Signals

on Friday, 06 April 2018 06:05

During the nearly 2 years Gold has been capped by the $1360 - $1370 level Morris Hubbartt thinks junior mining stocks have been tracing out some impressive patterns and several juniors are poised to move sharply higher. Analysis of the Dow and Nasdaq is also included below. Before pulling the trigger, read this missive Gold is not Saying Something – Its Screaming It- R. Zurrer for Money Talks

Here are today's videos and charts (double click to enlarge):

SFS Key Charts & Video Update

zu1


SF60 Key Charts & Video Update



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Gold & Precious Metals

"Gold Stocks: The New Safe Haven"

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Posted by Stewart Thomson - Graceland Updates

on Wednesday, 04 April 2018 04:55

No surprise there are two distinctly different takes on Gold & Gold Stocks right now. First we have a minority thinking It's Not Yet Time for Gold, which includes Martin Armstrong in "this public article" and in this more specifically in  Private Blog Post at month end. Alternatively there is a major industry that continues to market Gold aggressively despite its declining trend since 2011, the same time period the Dow Industrial Average doubled from 11,917 to yesterdays 24,007.  This article looks at the upward performance of Gold and Gold stocks while the Dow shed 800 points over the the last 3 days - R. Zurrer for Money Talks

April 3, 2018 

1.   Will this Friday’s US jobs report be the catalyst that sends gold above the key $1370 resistance zone and ushers in a new era of institutional enthusiasm for gold stocks?

2.  Please click here now.  Double click to enlarge.  The US stock market suffered yet another “cardiac arrest” moment yesterday.   

3.  Market breadth has thinned horrifically, and the low rates and QE that have incentivized corporate buybacks have been replaced with rising rates and QT.  That’s akin to replacing a firetruck’s water with gasoline.

4.  I’ve outlined the case for a possible minor rally in April from current price levels, but the market is so weak internally that it is risk of a much bigger cardiac arrest event.  

5. I don’t think Jay Powell will announce a rate hike at the early may Fed meeting, but he might.  If he does, stock market investors should be ready to trade in their “Sell in May and go away” mantra for… “Sell in May after getting blown away by Jay.” 

6.  If he wants to do four hikes in 2018 but avoid doing a hike in the September stock market “crash season” month, he is likely to seriously consider doing a hike in May.  Are investors prepared for such a surprise?  If they own lots of gold, the answer is yes!

7.  Please click here now.  So far in 2018 almost eighteen billion US dollars in institutional money has flowed out of the main S&P500 ETF.  This market is very sick, and getting sicker.  

8.  The bottom line: US stock market rallies should be sold and the proceeds should be placed in cash, gold bullion, and gold stocks.

9.   Please click here now. Double-click to enlarge this horrifying T-bond chart.  On a day that the Dow Industrials fell more than 700 points at one point, the T-bond could barely rally at all.

10. Institutional money managers and sovereign wealth funds are beginning to realize that rate hikes and QT are a tremendous headwind to the US government’s ability to finance itself.

11.  During the latest stock market mini crashes, they have clearly started to move their focus from T-bonds to gold.  

12.  As more rate hikes and QT create much bigger and more frequent crash events in the stock market, I expect this institutional interest in gold to accelerate.

13. Please click here now. Technically, gold’s price action is very impressive.  A small head and shoulders top formation was quickly destroyed with yesterday’s safe haven rally.

14.        Please click here now.  Indian demand for the Akha Teej festival is solid.  It should serve as great support for an imminent surge through upside resistance at $1370. 

15.        For an important look at that resistance zone, please click here now.  Double click to enlarge.  Gold is coiling in what I call a bull “super flag” pattern, and seems eager to burst higher in a rally that should carry it to $1425.

16.        What’s particularly exciting is that in addition to bullion, the GDX ETF is beginning to act as a safe haven!  

17.        “Newbie” investors to the precious metals asset class have memories of the deflationary declines in 2008.  They get nervous when they see the stock market fall, and wonder if gold stocks will also fall.

18.        The goods news for these investors is that the current situation is more akin to the late 1960s or early 1970s than 2008.  

19.        Please click here now.  While institutional money is pouring out of stock market ETFs, it’s starting to pour into the GDX gold stocks ETF.



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