Gold & Silver Digest: 8/20/13

Adam Taggart
By Adam Taggart on Tue, Aug 20, 2013 - 11:01pm

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.

8/21/13 2:56 AM EST US close metals price quotes from Finviz

Reuters: Gold turns higher as dollar down ahead of Fed minutes

Gold prices rose on Tuesday as the dollar weakened and U.S. Treasury bond yields retreated on lingering uncertainty over when the Federal Reserve will reduce its economic stimulus program.

Gold fell almost 1 percent earlier in the session, then turned higher as speculators bought futures to cover their bearish bets ahead of Wednesday's release of the minutes of the Fed's July policy meeting. 

Forbes: Silver Outpaces Gold Strongly During Rally Of Last Two Weeks

The combination of investment and industrial demand means silver has two ponies hitched to its wagon rather than one, enabling the metal to race ahead much faster than gold over the last two weeks, analysts said.

An expectation for rising industrial demand as the economy improves has given an added boost to a metal that normally tends to rise or fall more than gold anyway, they added.

Bloomberg: Gold Borrowing Costs Remain Near 4 1/2-Year High on Tight Supply

The cost of borrowing gold held near a 4 1/2-year high in London as U.S. futures moved into backwardation this month, a signal that near-term supplies are tightening at a time when prices gained on more physical demand.

The one-month gold forward offered rate, which shows the interest rate at which dealers will lend metal for dollars, has been negative since July 8, pushing one-month lease rates to 0.3067 percent on Aug. 8, the highest since December 2008. The cost of borrowing was at 0.2929 percent today, data compiled by Bloomberg showed. August futures on the Comex in New York rose above the December contract for the first time on Aug. 2.

Reuters: U.S. gold coin sales plunge in August as retail buying fades

Demand for U.S. gold coins has plunged in recent weeks as the unprecedented buying by retail investors that helped bullion prices recover from their historic sell-off four months ago has almost vanished.

Record highs in U.S. stock markets, combined with little clarity about when the U.S. central bank may start curbing its bond-buying stimulus have prompted investors to hold back their physical gold purchases.

Money Morning: Silver Prices Today Riding Higher on these Four Trends

After slipping nearly 40% this year by June, silver prices today have rebounded, and now trade near $23 an ounce. Silver ended the week up 14%.

This puts the precious metal at a level not seen since May.

There are several reasons for this move up in silver prices - reasons that will carry silver prices to $40 an ounce - and then $60 an ounce - by 2014.

King World News:   Richard Russell - America In Trouble As Gold War Rages

On the heels of continued volatility in key global markets, the Godfather of newsletter writers, Richard Russell, warned about the severe problems the United States is facing.  Russell also wrote about gold, and included some fantastic charts which covered everything from the withering consumer, to the ongoing war in the gold market. 

Richard Russell: “I don't think the public is aware of the problems that are arising in America's cities ... What's really happening is nothing like what the government reports to us through their frequent rosy announcements.  But it won't be long before the US public realizes the ominous drift that the nation is sinking into. 

GoldSilver.com: What Are the Biggest Factors in the Gold Market?

Bloomberg's Olivia Sterns and Bloomberg Industries' Kenneth Hoffman put futures in focus with an examination of the factors weighing on gold prices, from inflation in India, outflows from ETFs, to Federal Reserve tapering expectations in "On The Markets." They speak on Bloomberg Television's "In The Loop."

The Market Oracle: Silver To Rally Due To Coming Dow Stock Market Crash

Since the last update, the Dow has had a rally which exceeded the previous all-time high. The rally appears to be nothing significant, since it was likely just a retest of the previous breakdown – See the Dow -chart below (from freestockcharts.com):

As previously stated, I believe the Dow to be the main obstacle to Gold and Silver’s major rallies. So, just as I expect the Dow to drop violently, I expect a violent rise in gold and silver at roughly the same time. This is because it is likely the same panic that causes the Dow fall that will make value to run towards gold and silver.

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