Gold & Silver Digest: 7/10/13
The Gold & Silver Digest contains headlines of stories that members of this group deem relevant and/or interesting to precious metals enthusiasts.
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7/11/13 12:03 PM EST US close metals price quotes from Finviz
Gold futures rose the most in a year after Federal Reserve Chairman Ben S. Bernanke said yesterday that the U.S. economy needs “highly accommodative monetary policy for the foreseeable future.” Silver also gained.
Bullion slumped 23 percent last quarter as Bernanke said that the central bank may reduce its $85 billion of monthly asset purchases this year. Minutes of a Fed policy meeting released yesterday showed many officials wanted to see more signs of improving employment before backing a cut in bond buying. The number of Americans filing for unemployment benefits unexpectedly increased to a two-month high in the week ended July 6, Labor Department figures showed today.
Gold jumped to a near three-week high on Thursday as the dollar tumbled after the U.S. Federal Reserve signalled it would continue to pursue monetary stimulus, given tame inflation and a fragile labour market.
Fed Chairman Ben Bernanke said on Wednesday that highly accommodative policy was needed for the foreseeable future, surprising investors after his comments on June 19 that the economy was expanding strongly enough for the Fed to end the stimulus measures by mid-2014.
Leveraged gold speculators panic whenever someone decides to sell large numbers of transient short positions into the market. That isn't anything unusual. It is because they are gamblers who, like their soul-mates in Las Vegas, ignore common sense and think they can win against the House. But, the House always wins. It is no different with the world's derivative players who play at derivatives casinos. The only difference is that while casinos in Las Vegas admit that the odds are rigged in their favor, derivatives casinos are more deceitful, and don't.
The derivatives casino gamblers always set automatic points, where their positions will be automatically sold if the price dips low enough. This is supposed to show that they are "investing" rather than gambling. But, the stop positions are well known, because they cluster around technical "resistance" and "support" levels. The gamblers virtually all believe that they can foresee the future through non-living psychics, known as "charts". Coordinated short selling, therefore, will ALWAYS be devastating. It will be targeted to trip those automatic stop-loss orders, to result in the dominoes falling, and a deep decline in paper prices.
Gold may gain next year and in 2015 as central banks boost holdings and investors look to diversify assets amid global uncertainty, said Australia & New Zealand Banking Group Ltd.
Bullion may reach $1,300 an ounce by year-end, gaining to $1,400 next year and $1,500 in 2015, analysts led by chief economist Warren Hogan said in an e-mailed report today. While there remains further downside for prices in the near-term, the current selloff is approaching an end, they said.
In the next part of our on-going look at the global gold market we now turn our attention to the Shanghai Gold Exchange. An exchange which has received more interest of late, than any other in the world of gold and silver.
Previously we have looked at the global gold market, COMEX, and more recently the London Gold Market. The next logical focus of our investigations is the Shanghai Gold Exchange. We also have a great infographic providing you with the top figures.
What’s going to happen with gold and silver?
They’re going to be extremely volatile. But these are the sort of times where gold and silver have done very well over time. Remember, as my friend John Mauldin puts it, “We want to own things central bankers can’t print.” They can’t print gold and silver.
Right now, we’re seeing a classic move from one set of hands to another. For the last 10 years, the pricing of gold and silver has been determined by the futures markets — not the physical markets. Futures markets are highly leveraged and momentum-driven. Currently, long leveraged carry trades by institutions are unwinding. The buyers are unleveraged individuals purchasing record amounts of physical gold and silver around the world. A number of central banks in developing countries are also adding to their gold bullion reserves.
Episode 138: Félix Moreno interviews T. Ferguson of the tfmetalsreport.com. They discuss the end of the great Keynesian experiment, how the current economic and monetary system will fall apart and how to prepare for it.
Ferguson and Moreno discuss the Fed’s takeover of the US Treasury market, the impact of QE on interest rates and how any attempt by the Fed to stop suppressing interest rates would have huge fiscal repercussions. They discuss the gold market, its fundamentals and the recent moves in the price of gold. They comment on the similarities to the previous gold bull market in the 1960s and 1970s – including the infamous London Gold Pool and how it fell apart, leading to a huge rise in the gold price.
With gold and silver skyrocketing and the U.S. dollar plunging, today the man who first spotted the historic LBMA backwardation told King World News that we are now witnessing shocking and earth-shattering events in the gold market. Incredibly, last Monday James Turk was the first person in the world to expose the historic backwardation event at the LBMA and King World News was the first to report on it. Other sites soon followed suit by covering this earthshaking event, but today the man who first spotted it tells KWN readers around what to expect next as these incredible and historic events unfold and the gold market catches fire.
Turk: “Eric, when I told you early on Monday that something shocking had taken place in the gold market, it really was an earthshaking event and we are seeing the results of that now. It was clear that there was going to be an explosion higher in gold and silver because the prices simply could not be sustained at those critically low levels.
Gold Cycles: A Low About NOW?
Background: Gold prices peaked in September 2011 and have dropped over one-third in the past 22 months. Sentiment by almost any measure is currently terrible. Few in the US are interested in gold (although gold is selling well in China), most have lost money (on paper) if they bought in the last two years, and the emotional pain seems considerable. It reminds me of the S&P, gold, and silver crashes in 2008-9.
So, will gold drop under $1,000 or rally back above $2,000?
Given the steep slide in commodity prices in the second quarter of 2013, there have been rumblings that in this current price environment, silver producers will struggle to keep up healthy, if any, profit margins.
There’s some debate about the cost of silver production. Some analysts peg the total cash cost to produce an ounce of silver at around $20 an ounce. That’s just above the current price of about $19.
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