Gold & Silver Digest: 1/24/13

Adam Taggart
By Adam Taggart on Thu, Jan 24, 2013 - 6:24pm

The Gold & Silver Digest contains headlines of stories that members of this group deem relevant and/or interesting to precious metals enthusiasts.

If you have articles to submit for the next digest, please email them to me by clicking here.

1/24/13 5:55 PM EST US close metals price quotes from Finviz

Reuters: Gold drops 1 percent on technical selling, HSBC cut

NEW YORK, Jan 24 (Reuters) - Bullion posted its biggest one day drop in three weeks, falling 1 percent on Thursday after repeatedly failing to break above a key technical resistance, its 50-day moving average at under $1,700.

Investor confidence in gold was further eroded when major bullion bank HSBC said in a note that it had halved its exposure to gold, shifting its inflation hedge to U.S. Treasury Inflation-Protected Securities (TIPS).

A recovery in gold prices earlier this week ran out of steam as the metal hit strong overhead resistance between $1,690 and $1,700. Gold has failed to breach that level in the last five sessions in a row.

CNN Money: Gold bugs dancing on the debt ceiling

There is a common misconception that gold is only a great thing to own when investors are in full-blown Chicken Little panic mode. But gold has enjoyed a decent rally in the past few weeks even though very few people on Wall Street are looking up and seeing the sky falling.

Stocks are at five-year highs. CNNMoney's Fear and Greed Index is so firmly ensconced in Extreme Greed territory that it only has seven points to go before it reaches its maximum level of 100. Unless you're a shareholder in Apple (AAPL), there is little to be afraid of right now.

Bloomberg Businessweek: Gold Seen by Morgan Stanley Extending Rally as QE3 Runs to 2014

Gold will rally this year and into 2014 as U.S. Federal Reserve policy makers will probably maintain asset purchases for two more years to buttress the recovery of the largest economy, according to Morgan Stanley.

The metal, which rose for a 12th year in 2012, may average $1,830 an ounce in the final quarter from $1,715 in the first, $1,745 in the second and $1,800 in the third, analysts Peter Richardson and Joel Crane said in a report today. Prices will be supported by investment and central-bank buying, they wrote.

Live Mint: Gold And Silver: A Wealth Hazard

The fascination for gold and silver has transcended millennia and ruined many a rational investor. After falling out of fashion at the start of the 1980s, both gold and silver have staged a comeback with nominal prices near all time highs (Graph 1).

Perhaps, it is some primeval hoarding instinct that clouds our judgement as soon as we behold these shiny metals. The modern investor who considers himself above such atavistic impulses is only rationalizing his purchase of precious metals by proclaiming doom-laden end of world scenarios. The perilous state of the global economy and voodoo central banking has unnerved investors and made them seek out the comfort of traditional stores of value. In addition, gold and silver have enhanced their lustre in the eyes of investors by outperforming almost every other asset and returning an annualized 17% and 20%, respectively, since the start of 2003 (calculated based on data here. Used historical London fix from 31-Dec-02 to 31-Dec-12).

ABC News: Gold Fever: Hunting For Gold in Alaska

And then there is gold. Which explains why anybody would be up here they've been chasing his precious -- for over a century in the old days you could pick nuggets -- off the beach. But these days you gotta get wet to get -- -- four Z ten off and his ex girlfriend Emily Riddell.

That's a problem. Now they may look like pictures from Manhattan are priestess from Seattle in fact -- a classically trained opera singer. But they are modern prospects.

GlobalResearch: Central Banking with “Other People’s Gold”: A $368bn Treasure Trove in Lower Manhattan

Germany is repatriating its gold reserves from the New York Federal Reserve. This decision has created a frenzy in the gold market. But that is just the tip of the iceberg.

According to the NY Fed, there are (2012) approximately 530,000 gold bars, with a combined weight of circa 6,700 metric tonnes stashed away in the Fed’s Lower Manhattan vaults.

SilverSeek: Royal Canadian Mint starts rationing silver coins

Jason Hamlin of Gold Stock Bull reports that, following the U.S. Mint, the Royal Canadian Mint has begun rationing its silver coin production:

It's not that silver isn't available. It seems to be that the mints don't want to buy the metal necessary to meet coin demand, lest they allow the price of silver to be pushed up to jeopardize the government-backstopped price suppression scheme.

Silver Bear Cafe: Silver seems Ready to Take-Off – Are you ready for the Flight?

No sooner had the House got its 212 votes to pass the Debt Ceiling extension, Silver and US Stock Markets began to rise whereas Gold declined. The Commitment of Traders report shows Commercials have yet again reduced their Net Short position in Silver [1], which is now close to the low of 2003 at the beginning of the Bull Market. Commercials are generally seen as the "smart money", so if they reduce their Net Short Position, they expect prices to rise (or at least not drop substantially during periodic corrections).

The reason why Commercials are the "Smart Money", is that – unlike the millions of small investors who burn their hands by buying high and selling low – they tend to "Buy" low (reduce short positions as price declines) and "Sell" high (increase short positions as price rises).

SilverSeek: Trading the Gold / Silver Ratio to Produce a Gold Yield

Report of tightness in the silver market are appearing all over the blogosphere. Does one trade this informaiton, or is there a better way to judge how tight the gold and silver markets really are? And therefore, is there a better way to trade the gold silver ratio?

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