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Gold & Precious Metals

Wilders’ Defeat and Gold


Posted by Arkadiusz Sieron

on Friday, 17 March 2017 06:32

The parliamentary election in the Netherlands is behind us. What does the outcome imply for the gold market?

Wednesday was a turbulent day. The U.S. central bank hiked its interest rates for the third time during the current tightening cycle, while a general election was held today in the Netherlands. Although usually nobody cares about the Dutch politics, this time was different. This is because the anti-EU Geert Wilders’ Freedom Party has gained in popularity recently, raising concerns over the rise of populism in the West. The elections were believed to be a litmus test of the sentiment in Europe after the Brexit (by the way, yesterday the Queen gave Royal Assent to the Brexit bill, clearing the way for Theresa May to trigger the exit) and before elections in France and Germany this year.

How did the test go? According to preliminary results, Wilders’ party is set only for 20 seats, while the ruling center-right People’s Party for Freedom and Democracy will take 33 of the 150 available parliamentary seats. Christian Democrats and the centrist Democrats 66 will secure 19 each of them, while the Socialist Party is expected to take 14 seats, the same amount as the Green Party and five more than the Labor Party. Hence, Wilders came in the second place and due to the fractured system of proportional representation, he is unlikely to form a ruling coalition.

What do these results mean for the gold market? Well, Wilders’ defeat may be a signal of a reversal in the worldwide populist trend. It does not bode well for Marine Le Pen in the upcoming French elections and it rules out the possibility of a Dutch withdrawal from the European Union. Therefore, the outcome of the Wednesday’s election reduced political uncertainty, which is negative for gold, the ultimate safe haven. However, investors should not forget that the results should strengthen the euro. The rise in the common currency against the U.S. dollar is usually positive for the yellow metal. Indeed, the currency channel prevailed yesterday and the euro was boosted, as well as gold.

....related from Arkadiusz Sieron:

European Elections and Gold

 



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Timing & trends

Fed Hikes, Markets Yawn


Posted by Bill Bonner - Diary of a Rogue Economistist

on Thursday, 16 March 2017 10:49

4701 The Fed gave us another quarter-point rate increase yesterday. That makes the third such hike in the last 10 years! 

Whoa! Hold on… We can’t take that much excitement.

But wait… The Fed also signaled that it may abandon its “data dependent” position and take the lead. 

Instead of reacting to the news… it may lead the world’s interest rate levels back to normal, regardless of what the headlines tell it.

Oh, dear reader, you already know this is not going to happen. The Fed can never voluntarily return to sound money and market-set interest rates. 

It presides over the biggest bubble in stocks and bonds the world has ever seen. Without underpriced credit, the whole thing would collapse. 

That’s why the Fed can only take baby steps toward normalization… and only so long as they don’t matter.

We’re entering our ninth year of near-zero interest rates. During that time, businesses, investors, speculators, and consumers have adapted to extraordinarily cheap credit. 

They’ve used it to refinance their debts… and drive up their stock prices. They’ve used it to sell automobiles and buy houses. 

The big players have gotten used to gambling with money that is almost free. And if they get into trouble, they can borrow more.

If the cheap-credit system were to end – or even if people were to think it is coming to an end – it would take about two minutes for the whole capital structure to fall apart. 

Businesses couldn’t refinance. Bonds would crash (except for U.S. Treasurys… which would get a temporary boost on “safe haven” buying). 

Stocks would repeat their move of 2008–’09, but probably worse.

Crash Risk



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Real Estate

Average house prices up 3.5% in past year...


Posted by Canadian Real Estate Association

on Thursday, 16 March 2017 10:39

The price of the average Canadian home rose up by 3.5 per cent to and average price of $519,521 in February, even as the national figures continue to be skewed by hot activity in the country's biggest market: Toronto. "That said, Greater Vancouver's share of national sales activity has diminished considerably over the past year, giving it less upward influence on the national average price," CREA said.

According to statistics released today by The Canadian Real Estate Association (CREA), national home sales were up on a month-over-month basis in February 2017.

Highlights:

  • National home sales rose 5.2% from January to February.
  • Actual (not seasonally adjusted) activity in February was down 2.6% from a year earlier.
  • The number of newly listed homes was up 4.8% from January to February.
  • The MLS® Home Price Index (HPI) in February was up 16% year-over-year (y-o-y).
  • The national average sale price edged up 3.5% y-o-y in February.

 

Screen Shot 2017-03-16 at 10.16.59 AM

....read more HERE



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Energy & Commodities

Largest New Discovery of Oil in USA - Fed Raises Rates Markets Rally


Posted by Martin Armstrong - Armstrong Economics

on Thursday, 16 March 2017 10:07

Screen Shot 2017-03-16 at 10.35.19 AMMartin: Another major discovery of oil has been made in Alaska of 1.2 billion barrels. It is the largest find of conventional oil for 30 years on US territory.

The Fed Raises Interest Rates & Markets Rally!

"The Fed’s forecasts have moved in the direction of tightening, and despite what they say publicly, the most serious stimulus is rising stock prices"

....continue reading HERE

 



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Stocks & Equities

Stock Trading Alert: Stocks Get Close To Record High Again As Fed Hikes Interest Rates


Posted by Paul Rejczak - Sunshine Profits

on Thursday, 16 March 2017 10:01

Sent to subscribers on March 16, 2017, 6:55 AM.

Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,410, and profit target at 2,200, S&P 500 index).

Our intraday outlook is bearish, and our short-term outlook is bearish. Our medium-term outlook remains neutral, following S&P 500 index breakout above last year's all-time high:

Intraday outlook (next 24 hours): bearish
Short-term outlook (next 1-2 weeks): bearish
Medium-term outlook (next 1-3 months): neutral
Long-term outlook (next year): neutral

The U.S stock market indexes gained between 0.5% and 0.8% on Wednesday, breaking above their recent consolidation, as investors reacted to the FOMC's Rate Decision announcement. The S&P 500 index has bounced off support level of 2,350-2,360 on Tuesday. It accelerated its short-term uptrend yesterday and got closer to March 1 all-time high of 2,400.98. The Dow Jones Industrial Average has managed to close above 20,900 mark, and the technology Nasdaq Composite index has got close to its record high above 5,900 mark. All three major stock market indexes continue to trade relatively close to their early March new record highs. The nearest important level of support of the S&P 500 index is at around 2,370-2,375, marked by recent local highs. The next support level remains at 2,350-2,360, marked by local lows and the February 21 daily gap up of 2,351.16-2,354.91. The support level is also at around 2,320. On the other hand, the nearest important level of resistance is at around 2,390-2,400, marked by all-time high. Will the market extend its year-long medium-term uptrend even further before some more meaningful downward correction? We can see some short-term volatility following four-month-long rally off last year's November low at around 2,100. Is this a topping pattern before downward reversal? The uptrend accelerated on March 1 and it looked like a blow-off top pattern accompanied by some buying frenzy. The S&P 500 index continues to trade above its over year-long medium-term upward trend line, as we can see on the daily chart:

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