Gold & Silver Digest: 6/19/13

Adam Taggart
By Adam Taggart on Wed, Jun 19, 2013 - 7:02pm

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.

6/19/13 6:46 PM EST US close metals price quotes from Finviz

Reuters: Gold hits 1-month low on Bernanke's reduced stimulus talk

Gold fell to a one-month low on Wednesday after the U.S. Federal Reserve chairman said he expects to slow the pace of the central bank's bond purchases later this year and bring them to a halt around mid-2014.

After trading higher most of the session, bullion prices tumbled after the Fed sharply lowered its forecast for inflation in a statement released at the end of its two-day policy meeting. 

Barron's: Gold Touches Fresh Four Week Low After Big Ben Speaks

The price of gold moved briefly below $1,350 for the first time in more than two years four weeks this afternoon, setting a fresh low at $1.348.50. The level hasn’t been seen since February 2011 May 20. according to FactSet Research Systems.

The take my colleague Mike Aneiro has on Fed chairman Ben Bernanke’s commentary also has implications for gold:

The Fed didn’t make any real changes to its current policy, but by signaling that downside economic risks have diminished, the Fed effectively took a slightly more hawkish tack by hinting that it now has more reason to start tapering its bond purchases down the road.

Forbes: Bernanke's Comments On Fed Tapering Are Negative For Gold

Gold prices fell after a statement of the Federal Open Market Committee and press conference by Chairman Ben Bernanke Wednesday suggesting that if economic conditions continue to improve, the Fed will start tapering its stimulus program.

Equity markets also fell, while the U.S. dollar and U.S. Treasury yields rose, and analysts said those markets acted as if the tapering of the stimulus programs will happen much faster than what Bernanke outlined in his press conference.

The initial reaction by the markets was muted, but as Bernanke spoke, the markets extended their moves in the afternoon. Comex gold futures ended their day-session trade ahead of the FOMC meeting, settling at $1,374 an ounce, but prices crumbled after that.

Financial Sense: Western Mining Industry in Serious Crisis

Two months ago, resource analyst John Kaiser made perhaps the call of his lifetime on the Financial Sense Newshour when he warned that gold investors should be prepared for a coming washout and correction in the gold market.

His prediction came true and within a week, as many of you probably remember, gold plunged by its largest recorded amount in 33 years. The Gold Miners ETF (GDX), which tracks the price of gold mining companies worldwide, similarly lost around 25% of its value in the weeks following.

Yahoo! Finance: Stay Short Gold, Go Long Crude: Krinsky

After a nine-month slump and a 25% haircut, investors who are hungry for a bargain might be tantalized by the chance to buy gold (GLD) for $400 an ounce less than its recent peak in October.

But according to Jonathan Krinsky, chief technical market analyst at Miller Tabak + Co., you might want to wait a bit before dropping that ticket, because his work shows that gold is still vulnerable.

"All the major moving averages are still above [the current] price and declining," he says in the attached video. "Momentum is mediocre at best and, to me, that suggests that there really could be another leg down here."

GoldSilver.com: Is it Time to SELL GOLD & SILVER? - VisionVictory Video

SRSroccoreport.com: MUST READ: Sunday Gold Fix – The Gold Crash ’75

Thus the recent gold price crash was met largely with glee and gloating among the professional economist cohort as evidence of central bank success in not only initiating “normal” financial conditions but refutation of monetary critics.  For this view, gold prices in 2013 represent the same as gold prices in the 1970-80 time period. 

…If this view is correct, then we should expect, as economists do, a further crash in gold prices and another Great “Moderation” in the domestic and global economy. However, as I have noted previously, there are numerous other examples of gold price volatility that have failed to result in “moderate” economic conditions and stability in the monetary arena.

321Gold: Silver: Will it drop to $ 10/ounce?

A drop of the silver price to $ 10/ounce is highly unlikely in view of the sharply rising National Debt in the USA but also in Europe.

To quote John Hathaway, manager of one of the most respected gold funds, a sharp rise of the gold and silver price is more likely:

“With gold and silver under continued attack from the mainstream media, John Hathaway warned King World News that we are at the point where global investors will be shocked as gold is quickly re-priced a jaw-dropping $1,000 (about $ 40 / ounce of silver) higher , taking gold and silver to new all-time highs.

SilverSeek: Get Ready for Stupid Cheap Silver Prices

It's a jungle out in the silver markets. Investors are holding on for their lives as the price of metals swings to higher highs and lower lows and junior equities bounce along the bottom. In this interview with The Gold Report, David H. Smith, senior analyst at silver-investor.com's The Morgan Report, navigates the jungle by advising buying on the way down and selling on the inevitable way up.

The Gold Report: David, Silver Investor analyzes the long-term macro trends and specific stock catalysts in the silver market. What do you see as the risk/reward profile over the next 12 to 36 months in the space?

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1 Comment

SingleSpeak's picture
SingleSpeak
Status: Platinum Member (Offline)
Joined: Dec 1 2008
Posts: 503
Do you ever feel like

someone is slapping you around for trying to avoid the fiat madness? That's what I feel like watching PMs today.

SS

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