Gold & Silver Digest: 2/14/13

Adam Taggart
By Adam Taggart on Thu, Feb 14, 2013 - 6:05pm

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.

2/14/13 5:54 PM EST US close metals price quotes from Finviz

Reuters: Gold drops to 6-week low on euro recession fears

NEW YORK, Feb 14 (Reuters) - Gold fell to a six-week low on Thursday as renewed worries about the euro zone economy weakened bullion's appeal as a hedge against possible inflation, and after an industry report stirred fears about demand for the precious metal.

Gold fell around 0.5 percent, down for a second day, after data indicated the euro zone slipped deeper than expected into recession in the last three months of 2012 after its largest economies, Germany and France, shrank late last year.

CNBC: Central Banks Bought Most Gold in Nearly 50 Years

Central banks scooped up more gold in 2012 than they have annually in nearly half a century as they sought to diversify reserves, the World Gold Council (WGC) said on Thursday.

Central banks bought 534.6 metric tons of the precious metal last year – the most since 1964 – led by Russia, Brazil and Iraq. Net purchases by central banks accounted for 12 percent of overall demand in 2012, compared with a 10 percent share in 2011.

European Gold Centre: How can you be bearish on gold?

Jim Sinclair is one of the most outspoken commentators on gold. In his long career in the business of metals, mines and money, he has built a prominent record of having been right with his predictions. This has made him a man that many people like to listen to when he speaks. Recently, he has spoken out again and how! Let me quote a part of his recent message:

 “Gold is going to and beyond $3500 based entirely on this initiative certain to become completed as a reality. It is already happening right in front of your eyes, but the world is still blind to it."

Wall Street Journal: Gold: Too Expensive for Consumers, Just Right For Central Banks

People have been talking about “peak gold” and the downward trajectory of global gold production for some time now: the gold industry hasn’t discovered its equivalent of shale oil or deep-sea drilling, and gold prices have shot up in the last decade when output from the world’s mines declined.

But what happens to all the gold that is still out there, in circulation or freshly landing on the market? We’ve got a breakdown, courtesy of the World Gold Council, which released its annual report today.

In short: gold is moving away from its functional purposes — jewelry, technology — with investors and central bankers picking up the slack. Here’s the five-year average of where gold demand comes from:

Spread Liberty News: Precious Metal Sellers in Houston Now Fingerprinted and Photographed

Selling gold, silver, and other precious metals in Houston, Texas now requires a little more than just the transaction.

According to KTRK News, last week the Houston City Council passed a measure that is intended to crack down on offenders who are trying to resell items that have been stolen. What is the city’s solution to stopping the crime? Fingerprinting and photographing sellers of precious metals is its decree.

Gold buyers are now required to take a photograph of the seller and the item being sold as well as fingerprint the seller. “It’s going to allow us the tools necessary to combat a lot of the high-end jewelry thefts that’s going on in the city, whether it’s robberies or burglaries,” Houston Police Officer Rick Barajas explained to KTRK.

Gold Silver Worlds: The Price Of Gold In The Cold-Gold War

The collapse of the USSR in 1991 was seen as the triumph of capitalism over communism. The 40-year cold war was over and the West had won. That perception, however, was as premature as it was misleading. The struggle of world powers wasn’t over. Today, the struggle continues in a far more fundamental venue; on capitalism’s home court in the arena of paper money.

"The West, as Mao Tse-Tung once claimed, is not a paper tiger; unless, of course, you’re referring to its paper money."

In 1991, communism was, in fact, collapsing. But capitalism, unbeknownst to itself and others, was bankrupt after its costly decades-long struggle with communism. Today, the former communist super-powers, Russia and China, have re-emerged and are playing the high-hand of gold against England, the US and the West and their now vulnerable paper currencies.

Devient Investor: Gold Volatility – Are You Worried?

Does this sound familiar? “Gold is going nowhere – up one day and down the next! I’m scared! Maybe I should bail out.”

Unlike buying stocks, which Wall Street and the media are constantly touting, gold is difficult to buy and hold. Proof: The S&P500 Index has made essentially no gain in 13 years, while gold has increased in price about 15% per year for the past 13 years. Yet few people own gold, and many people still listen to the siren song of Wall Street – “buy and hold stocks forever.” Going against the herd is difficult, and buying gold is a contrarian investment. Few people buy gold, fewer still hold on through bull and bear markets, and most still believe the nonsense that “gold is in a bubble.”

Fox Business: Why You Should Stick With Gold

Gold Bullion International president Savneet Singh explains why you should keep your money in gold.

View Video

Silver Bear Cafe: What's next for silver?

It's very easy to get sucked into the silver story. It's very seductive.

Indeed, a recent Thunder Road report by analyst Paul Mylchreest described silver as "(probably) the best asset in the world".

Is he right? Should we all be piling into silver?

MSN Money: Investing in silver makes more sense than gold now

I applaud Federal Reserve Chairman Ben Bernanke for pulling out all the stops in an effort to supercharge the economy.

The unlimited quantitative-easing (QE) measures, capital infusions and ultra-low interest rates have ignited a strong rally in the stock market. This rising economic tide has helped lift all ships from the smallest, newly-funded IRA accounts to behemoth corporate interests. Everyone is getting wealthier, but the question is, what are the looming side-effects of such an unfettered policy?

While the Fed's efforts are still being absorbed and utilized by the economy in a positive way, the excess liquidity may eventually lead to an extremely inflationary economic situation.

Note: If you're reading this and are not yet a member of Peak Prosperity's Gold & Silver Group, please consider joining it now. It's where our active community of precious metals enthusiasts have focused discussions on the developments most likely to impact gold & silver. Simply go here and click the "Join Today" button.


jcat3022's picture
Status: Bronze Member (Offline)
Joined: May 9 2012
Posts: 78
From the msn article/link -

From the msn article/link - "I applaud Federal Reserve Chairman Ben Bernanke for pulling out all the stops in an effort to supercharge the economy"

"The unlimited quantitative-easing (QE) measures, capital infusions and ultra-low interest rates have ignited a strong rally in the stock market. This rising economic tide has helped lift all ships from the smallest, newly-funded IRA accounts to behemoth corporate interests. Everyone is getting wealthier, but the question is, what are the looming side-effects of such an unfettered policy?

what planet are these MSM "analysts" on?

saxplayer00o1's picture
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4260
Soros cuts back on gold and Citi talks price ‘hibernation’

Soros cuts back on gold and Citi talks price ‘hibernation’

Adam Taggart's picture
Adam Taggart
Status: Peak Prosperity Co-founder (Offline)
Joined: May 26 2009
Posts: 3247
So, what the heck is going on with gold & silver??

What an ugly end to an ugly week.

Precious metals prices were down nearly 2% this morning. Is this just further bullying by big players in the market, or has something more fundamental shifted?

Definitely the former, says Ted Butler, who I briefly spoke with this morning. His key points:

  • There is no data that shows demand for physical bullion is anything short of very robust. The price action here is totally a function of the paper (futures) market, where all sorts of shenanigans (which Ted has spoken on extensively) are being allowed to occur.
  • This price manipulation is nothing different from what we've seen before. Yes, this has been a particularly punishing week, but the players and the behavior we're seeing isn't materially different from what we're used to.
  • The same institutions knocking down the price are also the ones buying. They are manipulating metals prices to make money on the way down, and then on the way back up. Do you best to avoid being among the ones shaken out by this artificial raid.
  • The manipulative behavior we're seeing is illegal and largely unique to the precious metals markets. And it is becoming more brazen. The CFTC is truly asleep at the wheel, or worse, turning a deliberately blind eye to these transgressions.

His advice: this is a time for every precious metals investor to hold fast. For those with additional dry powder, it's a good opportunity to begin deploying it at these lower prices.

Does Ted think prices could continue down lower from here? It sure can't be ruled out. In his expert opinion, though, this raid is feeling close to played out.

Rob P's picture
Rob P
Status: Bronze Member (Offline)
Joined: Oct 8 2008
Posts: 85
A couple of thoughts

There have been a oouple of things that have really been hard to learn - and I'm still learning after 8 years of invovlement with PMs.

Firstly, it helps to keep things in perspective.  Try this:  (This is the 10 year gold chart at kitco. Seriously, take a look at it if you haven't in a while)

try this one too:

It's very easy on a down day, or during a down period, to lose sight of the forest for the trees.  The emotions of watching your investment (whether in the form of stock, options, or the physical metal) go down can be overwhelming and cause a person to do crazy implusive things that, on reflection, were not the best choice.  I try hard, with varying degrees of success, to make a rational plan during sane times (i.e. the weekend).  I then try really hard to stick to that rational plan when things are EITHER going really well (euphoria) or badly (e g this week, fear). Either emotion will make me do crazy things or to miss doing the best thing.  I think that emotions literally have no place in investing - in fact I think you have to develop the capacity to do exactly the opposite of what your emotions are saying in the moment. But I've also learned that doing the contrary thing, in itself, is not enough to guarantee success. But still, success is not possible without it; "Necessary but not sufficient" as the saying goes.

If you feeling like shit and pretty scared looking at your portfolio, it's probably time to buy.  If you're feeling on top of the world and rich as you look at the little green numbers, you might consider selling (nawwww - it'll keep going up forever, right?).  There will come a time, probably in the not too distant future, when everything that feels bad about this weeks, really bad, market will feel excatly the opposite - you know, when spot au hits 2,000.  I try to not react from emotions now and I will try to not react from emotions then.  That's my goal anyway.

Then there's the physical metal. There, I think, just buy and hold.  Nothing has changed.  They're going to print, print, print money to pay for all that Social Security, military equip, medicare, etc etc etc..  The currency is absolutely, without a doubt, one way or another, eventually headed for the trash bin.  I figure that when the time comes, I won't even remember what I paid for it - it really won't matter. 

Smile everybody, prices are cheap. Seriously.




jcat3022's picture
Status: Bronze Member (Offline)
Joined: May 9 2012
Posts: 78
good stuff guys.  Noticed

good stuff guys.  Noticed myself being short with people this morning after yet another 8am takedown of PM prices.  Had to close my office door for a few minutes a remember this is marathon, not a sprint.  I believe in the overall narrative that we discuss here and what PM's will do for me and my family when it's time to get our sustainable lifestyle to the next level.  Guess the only thing to do is do what I do every month.. go see my buddy at the coin shop, have a cup of coffee, talk politics, the markets & buy my gold & silver.

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