Gold & Silver Digest: 2/28/13

Adam Taggart
By Adam Taggart on Thu, Feb 28, 2013 - 6:35pm

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.

2/28/13 5:43 PM EST US close metals price quotes from Finviz

Reuters: Gold down 1 pct on day, posts 5th straight monthly drop

NEW YORK, Feb 28 (Reuters) - Gold fell more than 1 percent on Thursday, as gains in U.S. equities and economic optimism sapped safe-haven demand for the precious metal, which ended February with its fifth straight monthly drop, the longest string of monthly declines since 1996.

Bullion fell sharply for a second day, after U.S. data showed the economy grew slightly in the fourth quarter while new claims for unemployment dropped last week.

Signs of an improving U.S. economy have sent the Dow Jones industrials and the S&P 500 stock index within striking distance of record highs. 

Forbes: P.M. Kitco Metals Roundup: Gold Slumps Again on More Technical Selling Pressure, Firmer U.S. Dollar Index

(Kitco News) - Gold futures prices ended solidly lower and near the daily low Thursday. The market extended moderate early losses in late-morning trading as the U.S. dollar index moved higher on the day. Serious near-term chart damage has been inflicted in gold recently. That chart damage has invited fresh speculative selling interest, including the past two days. April gold futures came close to seeing a bearish monthly low close on Thursday. Gold futures prices also posted declines for the fifth straight month as February draws to a close–the first time that has happened since 1997. April Comex gold last traded down $17.10 at $1,578.60 an ounce. Spot gold was last quoted down $17.20 at $1,579.50.  May Comex silver last traded down $0.52 at $28.465 an ounce.

Bloomberg: Gold Heads for Longest Run of Monthly Drops Since 1997

Gold futures fell, capping the longest run of monthly declines in 16 years, as signs of economic optimism curbed demand for the metal as a haven.

Jobless claims in the U.S. dropped in the week that ended Feb. 23, the government said today. German unemployment unexpectedly fell in February amid signs that Europe’s biggest economy is recovering, and Japan’s industrial production in January rose for the second straight month. Gold has dropped 5.8 percent in 2013 after a 12-year rally boosted prices sixfold.

“Gold is no longer the preferred asset as people globally are waking up to the fact that the economic conditions are showing some signs of improvement,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates, said in a telephone interview.

Barron's: ‘The Gold Rush is Over’: Societe Generale

Societe Generale’s strategists put out a bearish note on gold overnight, predicting that the metal’s decade-and-more of price rises is jeopardized.

The arguments are familiar to investors who’ve been paying attention. Improvement in housing and employment plus talk at the Federal Reserve of winding down quantitative easing are negatives:

Jim Sinclair's Mineset: You Want Dates For The End Of This Reaction?

Dear CIGAs,

You wants dates? Ok.

The bet on the short of gold side is that the Sequester takes place. I have felt that the gold market’s longest period of reaction possible would end on my birthday, March 27th. That puts it directly in place of this wager in time.

Regardless of whether or not Sequester occurs, I stand by this timing assumption that I have held since this decline started.

Forbes: What Guru Investors Are Doing with Gold

As gold rallied again in the fourth quarter of 2012, several Gurus who had tremendous holdings in the metal began unloading, namely macroeconomic trader George Soros and Lone Pine’s Steve Mandel. John Paulson chose to maintain his position. Both Soros and Paulson have read economic signs and traded at just the right times to reap profits and avoid losses on gold in the past, adding significance to their recent decision.

Only one Guru, Jeremy Grantham, significantly increased his holding.

Bloomberg: Gold Demand in India Seen Rebounding After Import Tax Maintained

Gold demand in India, the world’s biggest user, is poised to climb after the government unexpectedly refrained from raising import taxes and as prices headed for a fifth monthly decline.

Finance Minister Palaniappan Chidambaram refrained from boosting the tax from 6 percent after it was tripled in the past year to curb demand. All India Gems & Jewellery Trade Federation, a grouping of retailers, traders and exporters, had predicted the duty to climb to 8 percent. The “status quo” on taxes is a good sign for the industry and will attract people to gold, said Bachhraj Bamalwa, chairman of the federation.

Reuters: Vietnam's gold demand to fall as govt curbs bite -consultancy GFMS

Investment demand for gold in Vietnam could be a quarter less in 2013 than last year as the government tightens its grip on the bullion market to stabilise the country's currency, metals consultancy GFMS said.

People in Vietnam tend to store gold as a hedge against inflation, once among the highest in Asia, while the dong currency is often pressured by accumulation of the dollar for use in smuggling in the metal, given the absence of official imports.

GoldSeek: Gold in the Time of QE

Within the last two weeks, the price of gold dropped sharply to levels not seen since July 2012 and nearly as low as the lows of December 2011. Spot gold lost 112 points in the ten days from February 11th to February 21st, a 6.7% slide.

Just prior to the selloff, many analysts identified an onerous chart pattern as well as a popular technical indicator that appeared to be turning bearish enough to reverse gold’s long standing bullish trend. The worrisome chart pattern is the bearish triple top. The indicator that anxious traders carefully watched for proof of a trend reversal to the downside is aptly named the “Death Cross”. SILVER: BUY NOW! UP-DATE N° 25 / FEBRUARY 27, 2013

 In 1980, the price of one ounce of silver reached $ 50. Today, the purchasing power of the US dollar is substantially less than in 1980.

The price of one ounce of silver would have to rise to $ 150 to reflect the value of the US dollar thirty years ago, assuming an average annual inflation of 3.5%.

During the financial crisis of 2008, the silver price corrected 57% from the high of $ 20.79 down to $ 8.95. This correction was followed by a spectacular rise of more than 400%

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