Gold & Silver Digest: 2/19/13
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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2/19/13 7:57 PM EST US close metals price quotes from Finviz
NEW YORK, Feb 19 (Reuters) - Gold fell near a six-month low on Tuesday, holding just above $1,600 an ounce, as an equities rally and signs of an improving global economic outlook dented bullion's safe-haven appeal.
The metal fell 0.5 percent as investors were drawn to riskier assets as the S&P 500 climbed to a five-year high with a string of recent merger activity suggesting stocks could offer even more value.
Technical weakness also sent precious metals lower across the board. Silver fell around 2 percent to a six-month low.
Gold bugs beware. Investors are assiduously positioning deep in the options market for gold to edge lower even after last week's decline of almost 4%. Investors are buying bearish puts and selling upside calls as the SPDR Gold Trust pauses ...
Gold continues to tumble today after a brutal Friday session took the shiny yellow metal below $1600 per ounce. Over the past four months, it's fallen more than 10 percent from its October 4 high of $1798.10.
In a note to clients, Deutsche Bank commodities analyst Xiao Fu has a few thoughts on why gold prices are falling.
Perhaps the biggest factor weighing on gold prices is the drop in the equity risk premium, which in turn is driven by rising yields.
While the mainstream media continues to spew out bearish news and headlines on precious metals and (especially) mining shares, SAC Capital Partners LP, a $20 billion dollar group of hedge funds founded by Stephen A. Cohen, quietly positioned itself in over $240 million dollars worth of gold, silver, and mining share investments during Q4 2012.
Of great interest is the structure of those positions. They are indicating, that the firm is expecting a massive spike in both gold and silver, as well as a staggering move higher in the mining shares.
Gold miners have responded to recent falls in the price by concentrating on the highest quality deposits, scrapping extraction of more marginal material. This will cause a "significant decline" in global production of gold, according to Angelos Damaskos, who runs the Junior Gold fund.
"A shift in gold market dynamics in the near future could result in a supply crunch," he said.
"Investors have recently been disappointed by the gold miners' inability to control costs. With miners' profitability naturally at risk if there is a decline in the gold price, the sector has experienced a sell-off.
Gold dipped below $1,600 last week, falling to a six-month low, much to the chagrin of gold investors. I find the timing of the correction peculiar, given the G20 Finance Ministers Meeting taking place over the weekend. There’s been a growing debate over Japan’s move to devalue its currency to stimulate growth, with reaction from the G-7 leaders stating that “domestic economic policies must not be used to target currencies,” reports Reuters.
While the G-7 tried to legitimize the currency debasement with this statement, in reality, investors seem to be able to see through to the real motivations.
As silver suffers its biggest one-day drop of the year, following a February of strange 'spikey' behavior, we thought it might be useful to show just what has been going on for the last few weeks. It appears that from the open of US equity trading pre-market to the close of Europe's equity markets (~0730ET to ~1130ET), Silver has been offered non-stop. Out of that four-hour window, on average, Silver has not moved in the month of February. With the dramatic nature of physical demand at the Mint, this serial slam-down of Silver just seems a little too premeditated and predictable.
February has seen more than its fair share of price drops...
Most precious-metals investors know that silver is more volatile than gold. But do they know just how big that difference really is?
We thought it would be interesting to measure how much greater silver's daily moves are – both in gains and declines – than gold.
We documented the daily price movements for both metals, and then calculated the difference using absolute values. To interpret the charts below, you need to know that:
An Israeli investigative journalist has launched a search for nearly half-a-ton of Jewish-owned gold and platinum believed to have been stolen by the Nazis and dumped in a remote lake north of Berlin during the last days of the Second World War.
Yaron Svoray, who is also an anti-Nazi campaigner, announced that he has begun a new attempt to find the stolen gold using sophisticated sonar equipment, following a number of previous failed bids.
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