Gold & Silver Digest: 3/5/13

Adam Taggart
By Adam Taggart on Tue, Mar 5, 2013 - 6:47pm

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.

3/5/13 6:22 PM EST US close metals price quotes from Finviz

Reuters: Gold pares gains as Dow's record saps safety bid

March 5 (Reuters) - Gold edged higher on Tuesday, paring earlier gains as demand for safe havens was sapped as the Dow Jones industrial average tore to a record high as economic optimism fueled a rally in equities.

Platinum group metals rose sharply as a fresh strike in South African mines stirred supply fears.

Tuesday's rise snapped bullion's four-day losing streak. Fears of fund liquidation and losses in the holdings of gold-backed exchange-traded funds have dented sentiment.

Business Insider: ROSENBERG: Gold Is Heading To $3,000

The CFA Institute of Chicago is holding an event today with some high-profile speakers including David Rosenberg, Lakshman Achuthan, Howard Lindzon, and one of our favorite finance bloggers Josh Brown.

Brown is live-tweeting David Rosenberg's talk right now.  One of the big headlines is that Rosenberg is reiterating his call for gold to head to $3,000/oz.

Reuters: Private gold investors less bearish than funds in Feb -survey

NEW YORK, March 5 (Reuters) - Private investors added physical gold following the metal's heavy selloff late in February, underpinning a market hit hard by heavy fund liquidation last month, a survey by BullionVault showed on Tuesday.

London-based BullionVault, an online physical gold and silver market for individual investors, said its Gold Investor Index dipped to 54.4 in February from 54.9 in January. February's figure marked the lowest reading since September 2012.

Market Watch: B. of A. Merrill Lynch cuts '13, '14 gold forecast

Bank of America Merrill Lynch Tuesday cut its outlook on gold prices for this year and next, citing improving economic conditions and a rise in U.S. nominal rates.

The bank reduced its 2013 average price forecast for gold by 6.9% to $1,680 a troy ounce and its 2014 forecast by 9.8% to $1,838/oz. It now doesn't expect gold to break above $2,000/oz until 2014, a turnaround from its previous forecast for a move above $2,000/oz in the second quarter of 2013.

"After a multi-year rally, gold prices have been range-bound for several quarters," said Michael Widmer, Bank of America Merrill Lynch's metals strategist. "In our view, headwinds to gold prices will persist in the near term."

Financial Sense: SPDR Gold Trust (GLD) Sees Longest Ever Run of Gold Outflows

US. dollar gold prices climbed to $1584 an ounce Tuesday morning, 1.2% above last week's low, as stocks and commodities also edged higher and the Dollar weakened slightly after another Federal Reserve policymaker spoke in favor of ongoing quantitative easing.

Silver hovered just below $29 an ounce this morning, 3.5% up on last week's low, while major government bond prices fell.

Business Week: Bank of Korea Boosts Gold Reserves as Central Banks Buy

The Bank of Korea increased gold holdings 24 percent last month to diversify investments, joining peers in boosting bullion reserves even as prices fell.

The bank added 20 metric tons in February, raising the total to 104.4 tons, it said in a statement today. By value, holdings increased about $1.03 billion to $4.79 billion at the end of February, equivalent to 1.5 percent of total reserves, according to the statement.

GoldSeek: Could gold and the US dollar rise in tandem?

Featured is the weekly gold chart, with the US dollar at the top.  Five times during the past five years did gold and the US dollar rise in tandem.  The sixth time could happen any day.  In 1973 and in 2005, gold and the mining stocks rose along with the U.S. dollar from April to December.

321Gold.com: The HUI 5:15 Train

  1. Every baseball player knows the saying, “3 strikes and you’re out!” Well, the dollar bugs may be about to strike out, against silver bullion.
     
  2. Please click here now . You are looking at the daily silver chart. It’s almost eerie how similar each of the three highlighted trough areas are to each other.
     
  3. In the first two examples, silver made a “capitulation low”, and that was followed by a final lower low, which looks like a spike.

Silver Bear Cafe: The Roadmap To $4,866 Gold Within 2 Years

"They say history does not repeat, but it rhymes sometimes.  Ever since gold assumed its multi-decade low in 1999 (the infamous Brown Bottom) and then, a year or two later, started its rise in a now more than a decade long bull market, there have been five prominent price spikes: May of 2001 with $288.35, on February of 2003 with $385.00, on May of 2006 with $725.75, on March of 2008 with $1,023.50, and on September of 2011 with $1,896.50....

"Expressed differently, they seem to come in pairs.  Further more, the rise within the pairs (1 to 2 and 3 to 4) was 34% and 41%, while from one pair to the next (2 to 3 and 4 to 5), if we assume that the most recent fifth spike belongs to a pair as well, it was 89% and 85%.  If we take the middle of these respective moves, and also extrapolate the times between them into the future, we could try and guess what a sixth and a seventh price spike could look like (see also chart below).  Our guess would be June of 2013 at $2,603.37 (spike 6) and January of 2015 at $4,865.73 (spike 7).  So, should you be surprised if you would see a $1,000 move in gold in the first half of 2013?  We think you shouldn't.

SilverSeek: Silver Prices Defy the “Law of Supply and Demand”

Let’s begin with a definition. Investopedia.com defines the Law of Supply and Demand as follows:

The effect that the availability of a particular product and the desire (or demand) for that product has on price. Generally, if there is a low supply and a high demand, the price will be high. In contrast, the greater the supply and the lower the demand, the lower the price will be.

A solid definition, agreed? The Law of Supply and Demand should be the core premise of all economic studies as it has proved itself to be historically true.

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