Gold & Silver Digest: 1/18/13
The Gold & Silver Digest contains headlines of stories that members of this group deem relevant and/or interesting to precious metals enthusiasts.
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1/18/13 6:10 PM EST US close metals price quotes from Finviz
LONDON, Jan 18 (Reuters) - Gold prices were slightly lower on Friday as weak U.S. consumer sentiment data offset earlier strength following positive economic data from China, the world's second-biggest economy.
Gold pushed to a high of $1,694.90 in early trade, close to the previous session's one-month peak, but retreated ahead of the long U.S. holiday weekend after U.S. data showed consumer sentiment at its lowest in more than a year.
Equity markets and oil prices rebounded after U.S. House Republican leaders said they would seek to break a government budget impasse next week.
Jan 17 (Reuters) - U.S. Mint has suspended sales of its 2013 American Eagle silver bullion coins after running out of stock due to soaring investor demand for the newly minted coins in the first two weeks of the year.
Sales to authorized dealers will resume on or about the week of Jan. 28 after the U.S. Mint has replenished its inventory, it said in an email to authorized dealers on Thursday. The coins are produced at the Mint's West Point, New York, facility.
While it is typical for collectors to snap up newly stamped coins, interest this year has ballooned due to investors seeking refuge from U.S. economic uncertainty.
Earlier this week the Bureau of Labor Statistics released its monthly inflation report. The numbers came in at 1.7 percent a year for all items. Excluding the ever-volatile food and energy, it was 1.9 percent.
That's about as low as inflation has been in the last 50 years. Only 1986 (1.1 percent), 1998 and 2001 (1.6 percent), 2008 (0.1 percent) and 2010 (1.5 percent) have come in lower, and a few years in the mid-2000s registered the same.
The disappearance of inflation over the past 20 years, however, has barely dented the pervasive belief that inflation remains one of the greatest threats to economic stability. These convictions persist in spite of all evidence to the contrary: Inflation is nowhere visible. For many, that is just proof that we are living in a lull -- a phony war soon to be disrupted when that age-old enemy reappears and wreaks havoc.
On Thursday gold staged a bullish ‘outside day.’ In traditional technical analysis, an outside day is traced when the low of the day is lower than the previous day’s low and the high of the day is higher than the previous day’s high. Candlestick or OHLC chart displays make it easy to see.
In the context of where it occurred on the chart, this is a bullish key technical reversal in gold. The chart shows the pattern on gold futures. Silver futures traced a similar pattern. Popular ETFs SPDR Gold Shares (GLD) and iShares Silver Trust (SLV) followed.
(MoneyWatch) The argument between those who believe in gold as an investment and those who prefer to rely on stocks and bonds is an old one. It's a beef that can get heated, quickly veering from how best to make a buck into fundamental questions about how we order our economy and what we expect from our government. Gold enthusiasts criticize central bank "easy money" policies and see rampant inflation around the corner, while stock investors may well welcome low interest rates and a bit of inflation.
In a recent post, MoneyWatch blogger Larry Swedroe cautioned investors to be wary of forecasters' predictions about on the precious metal, a position he has taken in columns going back to 2009, during which time gold has outperformed stocks. Swedroe's last post post prompted this response from noted investor Peter Schiff, CEO of EuroPacific Precious Metals, a bullion dealer based in New York, who believes the U.S. is living beyond its means and is heading for financial catastrophe, making gold a necessary investment. This is Schiff's response to Swedroe's column.
A solid majority of participants in the Kitco News Gold Survey see higher gold prices next week, as signs for gold have turned bullish after a mixed start for the market in 2013.
In the Kitco News Gold Survey, out of 33 participants, 26 responded this week. Of those 26 participants, 18 see prices up, while three see prices down, and five see prices moving sideways. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts.
On Wednesday, Goldman Sachs upped the ante on its call that 2013 will mark the end of a long-running bull market in gold by introducing a new forecast: the bank's commodity strategists see the shiny yellow metal falling to $1200 per ounce by 2018.
However, despite having a bearish 5-year forecast for gold prices, Goldman's 3-month forecast is actually quite bullish. In fact, strategists Damien Courvalin and Alec Phillips write in a note to clients today that they expect gold to reach $1825 per ounce over the next few months – up from current prices around $1690 – as the debt ceiling debate drags on in the United States.
Sales of American Eagle gold coins so far this month are 67 percent higher than the total for December, according to data from the U.S. Mint. Silver-coin sales also gained.
Gold-coin sales reached an estimated 127,000 ounces, compared with 76,000 ounces in December, data from the mint’s website show. In January 2012, the total was 127,000 ounces.
Danske Bank A/S (DANSKE), Credit Suisse Group AG and UniCredit SpA (UCG), the three most-accurate gold forecasters tracked by Bloomberg Rankings over the past two years, project record average prices for gold in 2013, after 12 straight annual increases for the metal. Central-bank stimulus will sustain buying as a hedge against inflation and currency devaluation, they said.
Spot market gold prices hovered around $1,690 an ounce Friday morning in London, having touched a one-month high in earlier Asian trading, while European stock markets opened slightly higher after gains in Asia, following the release of the latest economic growth figures from China.
"[Gold] support is at $1,625, the Jan. 4 low," say technical analysts at bullion bank Scotia Mocatta.
Silver prices are expected to remain bullish in the coming months as industrial demand is firming up. Prices have risen by over 2.5-3 % in the past one week.
"Silver prices will firm up as industrial activity picks up owing to global cues and economic activity unleashed by the government," said Prithviraj Kothari, managing director, Riddisiddhi Bullion. He added that demand of both silver and gold is currently low with a liquidity crisis in the market.
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