Gold & Silver Digest: 6/13/13

Adam Taggart
By Adam Taggart on Thu, Jun 13, 2013 - 7:07pm

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.

6/13/13 7:42 PM EST US close metals price quotes from Finviz

Reuters: Gold drops as U.S. data dims Fed hopes; PGMs tumble

Gold slid on Thursday after stronger-than-expected US economic data helped ease concerns about the impending start of the winding down of stimulus from the Federal Reserve.

Platinum group metals also tumbled on easing supply fears after South Africa's top mining union delayed plans to strike.

Gold remained lower after U.S. government said retail sales rose more than expected in May and first-time applications for jobless benefits fell last week, showing signs of resilience in the economy despite belt-tightening in Washington.

Plata: Copernicus, Galileo and Gold. Part II

The development of Economics and the development of Astronomy share interesting parallels.

Aristarchus of Samos – the Greek island that produced Pythagoras – was born in 310 B.C. Aristarchus set Astronomy on the path that would have led to its correct development by postulating the Sun as the center of the Universe, with the Earth revolving around the Sun while revolving around its own axis; he also set the planets in the correct order of their distance from the Sun.

CNN Money: Gold prices drop 1%. Is $1,150 next?

U.S. stocks were able to evade the rout in Asia, but gold wasn't so lucky.

In fact, the precious metal has been one of the most jittery asset classes this year.

Gold prices plunged to a two-year low in April on worries about slowing growth in China. Investors also shunned gold in favor of stocks, which have had a record-setting run this year...before all the recent volatility.

GoldSeek: Are the Gold Bugs Wrong?

What a ride the precious metals have been on recently. Gold and silver prices have fallen off a cliff, while gold stocks were thrown on the rocks and left for dead. GLD has seen record outflows.

Popular financial news shows featured guest after guest who proclaimed gold is now "officially" in a bear market, emboldened by the fact that in spite of its recent bounce, the price has languished below its September 2011 peak for 20 months. As a group, gold stocks are down an abysmal 54% over that same period. The capitulation process has been brutal.

PeakProsperity: Is Gold at a Turning Point?

There's no way to sugarcoat the dismal performance of the precious metals in recent months. But a revisitation of the reasons for owning them reveals no cracks in the underlying thesis for doing so.

In fact, there are a number of new compelling developments arguing that the long heartbreak for gold and silver holders will soon be over.

SFGate: This Is Litecoin, The 'Silver' to Bitcoin's 'Gold'

Bitcoin isn't the only cryptocurrency out there. 

An alternative called Litecoin is starting to gain traction.

Bitcoin and Litecoin are incredibly similar. Both are decentralized electronic currency, meaning that they aren't linked in any way to big banks. They're independent. And where the money supply of US dollars is always fluctuating, both Bitcoin and Litecoin will reach eventually reach a gross sum and maintain a finite, unchanging supply.

Seeking Alpha: Peter Schiff Has It Totally Backwards - Gold Is Not Going 'To The Moon'

I recently wrote an article titled "Gold: It's OK to be wrong, it's not OK to stay wrong." Clearly Mr. Schiff didn't read it. In this video Peter Schiff, CEO of EuroPacifc Capital, outlines an outdated and disproved theory on monetary policy and its impact on gold. Mr. Schiff's theory is that because interest rates are going higher, the economy will slow and therefore the Fed will have to print even more money to keep the economy afloat. Ignoring the obvious problem this theory has in that gold and SPDR Gold Trust (GLD) peaked over 2 years ago, and QEfinity continues, Mr. Schiff seems to believe that continuation of a program that hasn't propped up the price of gold will for some reason reverse its course and suddenly start supporting the price of gold. I wouldn't count on it.

Arabian Money: Central banks won’t be able to stop printing money like in 1994 so buy gold

It’s curious to hear economists like ex-Goldman Sachs chief Jim O’Neill talking about the bond market having the same feel as in 1994 when the Fed also tightened monetary policy, but it is just not going to happen this time.

Why? Because the world is addicted to the crack cocaine of cheap money and the global economy will collapse in a heap if it is taken away.

SilverSeek: Silver Cycles: What Next?

Silver prices peaked in April 2011 and dropped about 60% over the next 25 months. Sentiment by almost any measure is currently terrible. Few are interested in silver; most have lost money (on paper) if they bought in the last two and one half years, and the emotional pain seems considerable. It reminds me of the years after the NASDAQ crash in 2000.

So will silver drop under $15 or rally back above $50?

To help answer that question, I examined the chart of silver for the last 25 years and identified several long-term cycles. Then I constructed a spreadsheet that attempted to model the price of weekly silver based on those cycles and a few assumptions.

Note: If you're reading this and are not yet a member of Peak Prosperity's Gold & Silver Group, please consider joining it now. It's where our active community of precious metals enthusiasts have focused discussions on the developments most likely to impact gold & silver. Simply go here and click the "Join Today" button.

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