Gold & Silver Digest: 5/7/13

Adam Taggart
By Adam Taggart on Tue, May 7, 2013 - 8:19pm

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.

5/7/13 8:08 PM EST US close metals price quotes from Finviz

MarketWatch: Gold loses over 1%; ETF outflows still hurt

Gold futures lost more than 1% on Tuesday to settle near their lowest level in a week, with investors still concerned about big outflows from gold exchange-traded funds that helped to drag prices for the metal down by nearly 8% last month.

Prices for gold also failed to get a lift from news of another round of global easing, this time from Australia.

Gold for June delivery GCM3 +0.04%  fell $19.20, or 1.3%, to settle at $1,448.80 an ounce on the Comex division of the New York Mercantile Exchange. That was the lowest settlement since May 1.

Yahoo!Finance: Gold Is Collapsing, Not Bottoming: Swedroe

Just when you thought the 8% bounce in the price of gold over the past few weeks might just be the long-awaited start of a bigger turn around, and some investors are saying it's nothing more than a temporary turnaround.

While many investors continue to call for a rebound to the prior record levels of $1900 an ounce and beyond, other pros suggest this might be the perfect time to jump off, and Larry Swedroe, principal with Buckingham Asset Management, is one of them.

"The main reason people buy gold, I find, is as a protection against inflation and it doesn't do that job well at all," he says in the attached video. "I think gold hedges two things; the risk of lose monetary policy and certain geopolitical risks like wars."

Resource Investor: Gold and silver: Sentiment reversal is inevitable

The usefulness of sentiment's stealth crystal ball is about to be revealed to the litany of unsuspecting precious metal bears and skeptics who have convinced themselves that gold's bull market is either over or, at the minimum, in need of lengthy ongoing retesting, restructuring and consolidation.

This article will bring us up to date as to the degree of current bearish sentiment regarding both gold and silver using no fewer than five sentiment indicators (with nine illustrative charts), as well as provide the reader with an opportunity to observe the price outcome of previous bearish extremes using these sentiment indicators.

The Daily Bell: Antal Fekete: Gold Backwardation and the Collapse of the Tacoma Bridge

Daily Bell: Nice to speak with you again. Let's jump right in. Why is the price of gold declining?

Antal Fekete: Columbia University professor Michael Woodford, the world's most closely followed monetary theorist said recently that if we are going to scare the horses, might as well scare them properly. He said it in an allegorical sense: loose talk about ending QE and about exit strategies is amateurish. Telling the world that central bank financing of the public debt is here to stay, and that QE is forever, is professional. The allegory can be extended from fiscal policy to monetary policy as well. The demand for dollars is waning spectacularly due to its unprecedented debasement that, to add insult to injury, is done with great fanfare. The price of paper gold was declining in April because Bernanke now thinks it's time to scare the horses properly. They have strayed too far afield to graze. They should get back to the dollar turf.

The TSI Trader: Gold and Silver: Sentiment Reversal is Inevitable

The usefulness of sentiment's stealth crystal ball is about to be revealed to the litany of unsuspecting precious metal bears and skeptics who have convinced themselves that gold's bull market is either over or, at the minimum, in need of lengthy ongoing retesting, restructuring and consolidation. 

This article will bring us up to date as to the degree of current bearish sentiment regarding both gold and silver using no fewer than 5 sentiment indicators (with 9 illustrative charts), as well as provide the reader with an opportunity to observe the price outcome of previous bearish extremes using these sentiment indicators. 

When we begin the sentiment indicator discussion we will look at charts of the put/call volume ratio (options) of SPDR's Gold Trust ETF (GLD) and iShares Silver Trust ETF (SLV), then examine Hulbert's Gold Sentiment Index, followed by the Blees Rating, then gold's Commercial and Non-Reportable (futures) traders positioning detailed in the most recent Commitment of Traders Report (COT) from the CFTC, and conclude with a daily gold futures price chart that includes the corresponding readings of the Ulcer Index indicator.

GoldSilver.com: 223.5 Metric Tons of Gold Imported into China in March

After the gold rush is thought to have waned, and the two tons of gold American Eagle coins sold by the U.S. Mint (in one day alone), has faded from the headlines, we find the simply shocking news:

223.519 metric tons (mt) of gold was imported into mainland China for the month of March. Compare that to the 51.3mt and 97mt imported in January and February, respectively. When was the last time China even came close to importing gold on this scale?

GoldSilverWorlds: Gold – You Better Hold It

When it comes to precious metals, April 2013 was characterized by extreme price swings, historic facts & figures, and remarkable news stories. This article is an attempt to focus on the real underlying story based on facts & figures. It should help our readers and ourselves understand what is going on, what take away from this period and manage expectations. Our focus is on gold; we will cover silver later.

Fact: retail investors search for monetary protection

Numerous are the stories coming out of all regions of the world about the surge in demand for physical gold and silver. A summary from the most recent ones:

The Economic Times: Silver holds no charm for Indian buyers even at lower price

Silver in India, the poor man's gold, is witnessing a reverse trend compared to the world market where a slump in silver prices has spurred demand.

In India, the demand for silver jewellery has dropped significantly and the investment demand for the metal has almost dried up despite the price falling to Rs 46,000 per kg. This may bring down the country's import of silver by 12% to 2,200 tonne this year from 2,500 tonne last year.

SeekingAlpha: Silver Miners Respond To The Drop In Silver Spot Price

According to The World Silver Survey 2012 29% of silver is produced in primary silver mines, and an additional 13% is produced in gold mines as a by-product. The rest of new silver production comes from lead-zinc mines (37%), and copper mines (21%). To quote Silver Wheaton's (SLW) summary of this report:

The impact of the price of silver is most acute on primary silver production.

The recent drop in precious metal spot price has therefore raised concerns among investors in primary silver mining companies.

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