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Gold & Precious Metals

Gold and Reflation

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Posted by Arkadiusz Sieron

on Friday, 03 February 2017 11:05

In recent years, deflation was considered one of the biggest threats to the global economy. These fears are vanishing. As deflation becomes the thing of the past (there was even the end of deflation in Japan at the end of 2016), reflation is now attracting the attention of investors. What does it mean? According to the most popular definition, reflation is an increase in economic activity and inflation, usually caused by using inflationary measures to reverse deflationary trends. We simply take reflation to be acceleration in the rate of inflation, i.e. the opposite of disinflation, which is a decrease in the rate of inflation.

Is the inflation rate increasing in the world economy? Well, let's look at the chart below. As one can see, inflation has recently risen both in the U.S. and the euro area. In the former, the annual inflation rate has increased from 0 percent in September 2015 to 2.1 percent in December 2016. In the euro area, the acceleration has come a bit later due to stronger deflationary forces, but the inflation rate has risen from -0.24 percent in April 2016 to 1.1 percent in December 2016. In particular, the consumer prices rose 1.7 percent in December in Germany, the euro area's growth engine. This was the fastest pace since July 2013.

Chart 1: The CPI rate year-over-year for the U.S. (blue line) and the euro area (red line) over the last ten years.
43616 a

Inflation expectations also have risen significantly since the summer of 2016, as one can see in the chart below.

Chart 2: The monthly averages of U.S. spot inflation expectations derived from 10-year Treasuries (red line) and the forward inflation expectations derived from 5-year and 10-year Treasuries (blue line) over the last ten years.



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Gold & Precious Metals

Long Liquidation Looks Bullish for Gold

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Posted by Streetwise Reports

on Thursday, 02 February 2017 01:10

Rudi Fronk and Jim Anthony, cofounders of Seabridge Gold, examine the gold COMEX data and find it supports a bottom in the gold correction.

Fronk1-31-17cover

Last week we thought that we had seen the bottom in the gold correction. More evidence of that came Monday with the release of Friday trading data from COMEX. Last week, as the gold price began to fall towards its 50 day moving average where corrections usually end or breakdowns can begin, COMEX Speculators blew an enormous number of contracts out the window.

At the close last Monday, the Open Interest on COMEX was 483,408 contracts, a total which had grown quickly as the gold price advanced from the December low of $1124. At the Friday close, the Open Interest had fallen to just 395,599 contracts, a reduction of an enormous 87,809 contracts or 18.1% in just four trading days. Clearly, a large number of players panicked and liquidated BUT the price never even touched the 50 dma at $1178.

What happened? Was it fear of this week's Fed meeting (statement this Wednesday)? Or the employment report this coming Friday? We don't know. But it was the fastest, most aggressive liquidation we have seen in years. And it did not break gold. We think that's likely bullish.

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Gold & Precious Metals

Embry – A Jaw-Dropping 8.6 Million Ounces Of Paper Gold Longs Just Blew Up At The Comex!

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Posted by John Embry via King World News

on Tuesday, 31 January 2017 06:12

King-World-News-Maguire-This-Triggered-Todays-Massive-Selloff-In-Gold-Silver-864x400 cU.S. Economy Weakest Since 2008 Collapse

John Embry:  “With all of the chaos regarding the immigration decrees, I think most observers have lost track of what is really happening with the U.S. economy.  Instead they are focusing on the turmoil in the country and the record highs on the Dow…

....continue reading about the Comex drop HERE

....also:

20,000 Dow but Will It Hold



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Gold & Precious Metals

Is the Gold Market Finally ready to breakout?

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Posted by Sol Palha - Tactical Investor

on Monday, 30 January 2017 06:59

If pleasures are greatest in anticipation, just remember that this is also true of trouble.

Elbert Hubbard

Throughout 2016, we stated we did not expect much from Gold, and we stuck to this forecast, even though many experts went out of their way to report that Gold was ready to soar to the Moon or even to the next Galaxy. In fact, since 2011, we have continuously said that until the Trend turns positive, it would be best to play other lucrative markets, such as the general equities market, the US dollar, etc. During this time several experts stated that Gold was ready to surge and some issued insane targets ranging from $20,000-$50,000. Under no circumstance can we ever see Gold going to $20,000 or $50,000 and even if drank a whole bottle of scotch or any other toxic compound it would still be very hard to visualise such a target. Issuing such targets is perfect for fear mongering, and we find that tactic to be unpleasant and distasteful.

You would think that experts would try to release targets that made some sense. After all, Gold has not even traded past $2,000, so it makes one wonder how any individuals with a shred of common sense could issue a target of over $5,000. Even this target is quite high, and we only envision it being struck under extreme conditions. Don’t fixate on these preposterous targets for such targets are only for those who live in Lala land and have plenty of time to ponder over rubbish. Gold would need to trade past $1990 on a monthly basis to indicate significantly higher prices. Until that occurs, focus on targets that are below $2,000.

Having said that Gold has for the time in many years issued a confluence of bullish signals. The trend is still neutral but moving closer and closer to the bullish zone.

Let's examine these bullish factors

Panic in the Gold Camp; we spotted a surge in frustration in the Gold camp when Gold traded below 1200 after creating the illusion that It was ready to take off in Nov 2016; this frustration soared when it broke below 1150, and it reached a screeching point when it traded below 1130

Many Technical Indicators, including several of our custom indicators are trading in the extremely oversold ranges on the weekly charts. Weekly charts, infers that each bar on the chart represents one week’s worth of data

8 out of the top 10 sectors based on relative strength are commodity based industries; Gold comes in at number 10.

Some speculative stocks such as GSS have taken off; GSS, for example, is several hundred percentage points since Jan of 2016. GSS did its own thing completely ignoring the price of Gold. Individually, this is not a big deal, but collectively it takes on more weight.

GSS Jan 2017

If you look at the weekly chart of GSS, you would not think this stock is in the Gold sector given the strong performance. When small caps stocks start to take off before the metal, it is usually a sign of good things to come. Markets are forwarded looking beasts so stocks like GSS could be pricing a future that is more favourable to Gold.

Technical outlook



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Gold & Precious Metals

Historical Official Records Reveal Gold’s Value Should Be 20 Times Higher

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Posted by SRSroccoREPORT

on Thursday, 26 January 2017 07:02

According to historical official records, the price of gold should be 20 times higher than the current market price.  While many precious metals investors have heard about the revaluation of gold to back the outstanding fiat currency, my analysis focuses on monetary gold stocks versus global GDP (Gross Domestic Product).

To understand how the global GDP versus monetary gold stocks has changed, we need to look at information and data published in the U.S. Bureau Of Mines 1932-33 Gold-Silver Mineral Yearbook:

US-1932-Yearbook-42-Countries-Abandon-Gold-Standard-768x454

As we can see from the text above, Britain abandoned the gold standard in 1931.  However, the most interesting part of the text above was, “It is surprising to learn that within a year 42 countries have abandoned the gold standard or are maintaining it artificially.”

Thus, in all actuality, the world abandoned the gold standard in the early 1930’s, even though the United States Gold-backed Dollar became the world’s reserve currency via the Bretton Woods Agreement in 1944.

Now, the Central Banks and Financial elite had a very good reason to drop the gold standard.  The financial and banking elite would profit immensely by printing money and charging interest, but only if money wasn’t gold or backed by gold.  Because, the increase in above ground gold stocks was limited to its annual gold production.  In addition, the industrial revolution had a profound impact on global economic growth.

In the past, international trade was mainly settled in gold or bills of exchange.  However, global economic growth was surging as the industrial revolution was now being powered by coal and oil.  These two energy sources enabled the world to increase economic growth at a massive scale and pace versus human and animal labor… which was the foundation of economic markets for thousands of years.

OIL ECONOMICS 101:  A Barrel Of Oil = 2,875 People Working An Eight Hour Day

For example, a barrel of oil provides the equivalent of 23,200 man-hours of labor (source). If we divide it by the typical eight-hour work day, a barrel of oil equals the labor of 2,875 people.  By taking that a step further, let’s look how daily U.S. oil consumption equates to human labor:

19 million barrels per day oil  X  2,875 people = 54.6 billion people per day


.....continue for more analysis and 6 charts HERE

 



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