Gold & Silver Digest: 4/3/13

Adam Taggart
By Adam Taggart on Wed, Apr 3, 2013 - 6:21pm

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.

4/3/13 6:56 PM EST US close metals price quotes from Finviz

Reuters: Gold tumbles along with sharp losses in crude, equities

Gold dropped 1.5 percent on Wednesday, tumbling to a nine-month low near $1,550 an ounce as deepening losses in crude oil and equities triggered a sell-off of commodities.

Bullion, a traditional inflation hedge, came under heavy pressure as swelling U.S. crude stockpiles indicated a struggling economy with limited demand for fuel.

Safe-haven buying was absent as weaker U.S. equities weighed down on assets across the board after a disappointing U.S. private-sector job report.

Forbes: Yellow Brick Road May Lead To Dow 11K And $5,500 Gold

Russell Napier’s 2006 book, Anatomy of the Bear, is not exactly beach reading,but he does a great job pinpointing the factors in play at those moments when secular bear markets end and secular bulls begin.

The inflection points Napier describes — when bear turns to bull — are in 1921, 1932, 1949 and 1982. And based on those previous market cycles, Napier’s book projected the next turn would come in 2014 — next year. (Which lines up with the 14½-year average for secular bear markets.) Napier did not project a date… but he did say for the market to reach valuation levels equal to those earlier turning points, the S&P 500 index — currently above 1,500 — would crash to 450. Ouch, that implies a Dow in the neighborhood of 5,000 — in line with David Rosenberg’s forecast.

BullionStreet: China to introduce night Gold trading

BEIJING(BullionStreet): As yet another step towards globalizing it's gold market, China is about to introduce a night trade market.

According to Shanghai Futures Exchange,an additional 9 p.m. to 2:30 a.m local time trading time to be added to the trading.

Currently the gold and silver trading time is Monday to Friday, 9 a.m. to 11:30 a.m. and 1:30 p.m. to 3 p.m.

Bloomberg: The Gold Standard Wasn't So Bad

David Stockman, a former Republican congressman and director of the Office of Management and Budget, has been receiving a lot of criticism for his apocalyptic take on the state of American capitalism. Some of the critiques are justified, but others go too far. It is incorrect to describe the U.S. under the classical gold standard (roughly 1870 to 1913) as a "dystopia," as Matt O'Brien did in the Atlantic. Even if you think that the gold standard would be inappropriate right now, the data do not indicate that it was obviously inappropriate then.

Academics have investigated this before. Christina Romer, a Berkeley professor and former adviser to President Barack Obama, wrote the go-to paper in 1999. She found that "real macroeconomic indicators have not become dramatically more stable between the pre-World War I and post-World War II eras." In other words, even if you exclude the Great Depression and the recent crisis, the classical gold standard didn't make the economy more volatile.

GoldMoney: Marc Faber: 'I would probably choose gold'

Episode 119: Alasdair talks to Marc Faber, publisher of the Gloom Boom & Doom (new.gloomboomdoom.com) Report. Marc discusses his 40 years of experience in capital markets and the lessons he has learned.

He looks at the underlying nature of the American economy and details the problems arising since 2007. Money printing -- along with the insidious effects of underreported inflation -- is to some extent disguising the sorry state of the US economy. Faber is cautious on China, and when questioned about Cyprus and the loss of depositor funds, raises pertinent points about the problems that deposit insurance may cause and what the ramifications of the bailout conditions in Cyprus may have on otherwise conservative investors.

Acting Man: Gold, Redeemability, Bitcoin, and Backwardation

I recently released a video about the Internet-based currency, Bitcoin. I asked the question: is Bitcoin money? In brief, I said no it’s an irredeemable currency. This generated some controversy in the Bitcoin community. I took it for granted that everyone would agree that money had to be a tangible good, but it turns out that requirement is not obvious.This prompted me to write further about these concepts.

A human being has a physical body with physical needs, and lives in a physical world. He produces that he may eat and clothe and shelter himself. Once civilization develops beyond subsistence, men specialize to increase their production. Each relies on others, who specialize in other fields. Each trades his products for the goods produced by others.

Reuters: Young nation Kyrgyzstan fights over gold at top of the world

In an impoverished young nation with a habit of overthrowing its rulers, the future now balances on a mountain of gold at the top of the world, where the air is so thin collapsing visitors may be rushed to a pressure chamber for oxygen.

After two revolutions in eight years, nationalists in Kyrgyzstan are threatening to return to the streets to topple another government unless it expropriates the Kumtor goldmine, a treasure they say was sold off too cheaply to foreigners.

King World News: Russia & China Loot Western Gold While JP Morgan Sells Silver

Today Jim Sinclair told King World News that Russia and China are looting Western gold while JP Morgan sells silver.  He also said that all of this chaos is taking place as central planners conceal serious financial problems from the general public.  Below is what Sinclair, who was once called on by former Fed Chairman Paul Volcker to assist during a Wall Street crisis, had to say. 

Sinclair: “If you watch the market throughout the night and into the morning, as we have to, there is only one conclusion you can come to, and that conclusion is that this takedown has been totally orchestrated.  It has been executed using tremendous strategy, and it was perfectly timed.

Seeking Alpha: U.S. Mint Sales For March: U.S. On Pace To Use All Domestic Mine Production For Silver Eagles

Pay Attention GLD, PHYS, PSLV, and SLV investors - the U.S. Mint's full March sales numbers show the strongest March in terms of silver eagles sold. We will go inside the numbers to show this to investors, but the dichotomy between the silver price and silver sold seems to continue, with strong physical investment demand being opposed by relentless paper sales.

Analyzing the U.S. Mint Sales Numbers

When analyzing sales numbers it is important that investors go past the headlines and dig deep into the true nature of the sales. For brevity we are only showing the last few years of sales, but for doing comparisons we have used data from the beginning of the current bull market in 2001.

SilverSeek: Recent Action in Silver ETFs Is Bad News for Precious-Metals Bears

Two weeks ago we looked at the difference between gold ETF outflows vs. physical gold purchases, and showed that most sales were coming from the former while aggressive buying was coming from the latter.

This week we examined the same data for silver – and discovered a rather striking trend. Not only are silver ETFs seeing no net outflows, their holdings are increasing. Bearish investors who treat the two precious metals as being the same, interchangeable thing, and sell silver along with gold are at risk of missing the boat.

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