Gold & Silver Digest: 1/25/13

Adam Taggart
By Adam Taggart on Fri, Jan 25, 2013 - 8:06pm

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.

1/25/13 8:03 PM EST US close metals price quotes from Finviz

Reuters: Gold posts biggest weekly drop in five weeks

NEW YORK, Jan 25 (Reuters) - Gold notched its biggest weekly drop this year as an improving global economic outlook sent the safe-haven metal below a key technical support.

Bullion fell below its 200-day moving average, which it had held for the most part in the last five months, as U.S. equities measured by the S&P 500 rose for an eighth day for its longest winning streak in more than eight years.

GoldSeek: Gold Seeker Weekly Wrap-Up: Gold and Silver Fall About 2% on the Week

Gold climbed $4.47 to $1672.17 in Asia before it fell back to $1656.14 at about 10AM EST, but it then bounced back higher in the last 6 hours of trade and ended with a loss of just 0.53%.  Silver saw a gain of $0.11 at $31.77 in Asia, but it then slipped to as low as $31.11 in New York and ended with a loss of 1.45%.

Euro gold fell to about €1233, platinum gained $9.70 to $1690.20, and copper remained at about $3.66.

Gold and silver equities fell over 2.5% by midmorning and remained near that level for the rest of the day.

321Gold: Golden Patience & Trading Rules

Gold is the premier asset to hold in a debt crisis, and that is precisely why my largest personal holding is gold, followed by silver. My recommendation is that physical metal should comprise 70% of all resource-oriented portfolios, and 30% of your entire net worth. I trade the other 30% of my portfolio with a proprietary timing system.

Sprott: Ignoring The Obvious

Not a day goes by without hearing about the fiscal cliff, the debt ceiling or another political deadlock. We would not disagree that some of these are important issues that need resolving but, in the grand scheme of things, they are relatively superficial.

As we all know, central banks around the world have been frantically expanding their balance sheets. While exceptional times might warrant exceptional measures, Figure 1 below paints a rather troubling picture. The monetary base, the amount of money in circulation in the economy, has expanded at an incredible pace. Since the mid-80s, the U.S. monetary base had been very stable at around 5-6% of GDP. Through fractional reserve banking, this amount was sufficient to maintain annual inflation around 2-3%. With the banking system collapsing in 2008-2009, it was necessary for the Fed to increase the monetary base. However, banks are now in much better shape than they were in that period and the benefits of monetary expansion seem to be waning.

GoldSilver: Gold Backed Bonds - An Alternative To European Austerity

Overnight gold bounced back from an almost 2 week low and was again especially strong in yen terms - strengthened by the Bank of Japan’s stance on aggressive monetary easing.

Russia’s Central Bank said it will continue to buy gold bullion as it seeks to diversify its foreign reserves away from paper assets, such as the euro, it views as more risky.

At Davos, George Soros, one of the largest buyers of gold in the world today, warned of currency wars and that “interest rates are going to take a big leap” - probably this year.

Bull Market Thinking: Mining Executive Bruce Bragagnolo: “Gold Will Be The Best Business On The Planet; It’s The Only Thing That Works”

I had the chance yesterday to speak with gold mining executive and co-founder of Timmins Gold, Bruce Bragagnolo. It was a fascinating conversation, as Bruce has raised $85 million dollars up to 4 years ago to grow what is now, a near $450 million dollar gold producing company.

What Bruce is doing right now in this market, is closely watching the price of gold, and ”constantly scanning” the marketplace for acquisition targets.

SilverSeek: Silver Investing and the Sanctity of Savings

A basic issue with silver investing for many people is that the actual metal is scarce, valuable and increasingly vulnerable to explicit and implicit confiscation.

Yet silver is not only an investment vehicle. It also acts as an alternative savings vehicle to saving wealth in fiat currencies.

Silver remains both literal and symbolic of the principles here. Furthermore, the physical possession of silver requires a different kind of investor strength and resolve, and it involves directly confronting market risk, storage risk and confiscation risk.

The Market Oracle: The Price of Silver in the Age of Broken Promises

The price of silver remains at the mercy of the big banks that make of the majority of the short side at COMEX — which is still the primary paper pricing mechanism for silver.

Could silver prices go above $50 and beyond this year — and then perhaps retest $50 as a floor?

Quartz: The crazy economics of mining asteroids for gold and platinum

Not one but two companies have now decided that they’re going to mine asteroids to collect gold and platinum. The aptly named Deep Space Industries joins Planetary Resources in the competition for meteor material—and we wish them the best of luck. But we’re a little concerned here; a NASA mission to an asteroid to bring back 2 kg of material in 2021 is expected to cost the space agency $1 billion. Before we turn over billions of dollars as angel investors, we’d like to run some math on this venture.

These mining ventures aim to bring back resources like platinum, water, and gold. At market close Jan. 24, 50 troy ounces of platinum sold for $1681.30 (32.15 troy ounces equal 1 kg). Even if NASA could bring back 2 kg of pure platinum, it would only net $108,107.59. Clearly that’s not going to bring in the big bucks. But we’re going to consider that private companies might be able to mine galactic material more cheaply—US government spending is hardly known for its efficiency—so bear with us.

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