Gold & Silver Digest: 1/9/13
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.
1/9/13 US close metals price quotes from Finviz
Gold traded little changed as the dollar’s strength sapped demand for an alternative investment, countering optimism that demand will remain robust in China, which reported better-than-expected trade data for last month.
Spot gold was at $1,657.05 an ounce at 11:04 a.m. in Singapore from $1,657.75 yesterday. The metal earlier slipped 0.2 percent. Gold for February delivery added 0.1 percent to $1,656.90 an ounce on the Comex in New York, after declining 0.4 percent yesterday. The Dollar Indexadvanced for a third day.
Sidetracked by the discussion over the “fiscal cliff” and possibly a New Year’s hangover, it’s time to face 2013 in earnest. Is the yen doomed? Will the euro shine? What about Asian and emerging market currencies? Will gold continue its ascent? And the greenback, will it be in the red?
We believe the currency markets are well suited for decision-making based on macro-analysis. Just as throughout 2012 the themes were evolving, please keep in mind that our 2013 outlook may be outdated the moment it is published, as we update our views based on new information or a new analysis of old information. Still, those who have followed us over the years are well aware that we like to shift our views within a framework. Please consider our 2013 outlook in this context: p>
Gold has had a pedestrian start to the year. But, as has become the pattern, gold miners have had it worse.
With gold prices treading water, investors could use some good news from miners. But two of the largest provided the opposite this week. Barrick Gold said talks to sell its 74% stake in listed subsidiary African Barrick Gold to state-owned China National Gold ended without a deal. Meanwhile, Goldcorp cut guidance for output but raised it for spending—a never-popular combination.
There is a war raging behind the scenes among the world's currencies. Chris Mancini, an analyst with the $400 million Gabelli Gold Fund, believes that gold will emerge the victor. In this interview with The Gold Report, Mancini makes his case for why gold is a currency and not just a relic and why his fund doesn't own bullion.
Speaking of monetary abstractionism, there has been recent talk of a fiscal gimmick called “The Trillion Dollar Coin,” in which a platinum coin valued at $1 trillion would be created by the U.S. Mint for the Treasury Department. Treasury would then rid itself of its pesky fiscal deficit in one fell swoop by simply keeping the coin on deposit at the Fed.
The TDC idea is a marvel of political imagination and public ignorance (and so it seems to have legs!). As with most clever illusions, the TDC is based on sound logical footing, one in fact we have argued in favor of: asset monetization. But there is a fundamental difference separating the Fed monetizing Treasury’s gold to devalue the dollar, followed by a re-pegging of dollars to gold at the higher fixed exchange rate (our idea), and assigning an arbitrary value to an asset no one else is allowed to own.
After declaring the coin to be worth $1 trillion there would be no market-based discipline.
Seeking Alpha has only 3 entries under the ‘Gold & Precious Metals’ section of its most recent ‘Macro View’ email notice:
- Silver: Another Decade of 500% Returns is Possible
- Silver: Are We Ready Yet for the Rally to $60+?
- Silver is Set to Explode in 2013
To be fair, the second article highlights lower near-term targets prior to a rally to $60+ and this brings me to my point; silver is in a bear flag. I too am bullish on Ag and Au in 2013, but the charts are the charts and silver’s daily chart targets 27-28 first, which we have been noting in the newsletter despite a recent change to a bullish risk vs. reward stance on the precious metals complex.
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