Gold & Silver Digest: 7/12/13
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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7/12/13 6:06 PM EST US close metals price quotes from Finviz
Gold eased on Friday but notched its biggest weekly advance in nearly two years as fears of an imminent winding down of the U.S. Federal Reserve's monetary stimulus eased for now.
Spot bullion rose 4.8 percent for the week, the biggest weekly gain since October 2011. The metal rallied after Fed Chairman Ben Bernanke on Wednesday said the U.S. central bank needed to keep an stimulative monetary policy in place given low inflation and an uncertain job market.
Gold traders are the most bullish in five weeks after Federal Reserve Chairman Ben S. Bernanke said the U.S. still needs stimulus.
Nineteen analysts surveyed by Bloomberg expect prices to rise next week, nine were bearish and three neutral. Gold fell 23 percent last quarter, with the decline accelerating after the Fed chairman said June 19 that bond buying could slow if the economy improves. Unprecedented money printing by central banks since the global recession boosted bullion buying as a hedge against inflation.
Today marks the beginning of a new segment on Breakout called "The Trade" where we don't just talk about markets, but tell you the best way to play the day's hottest stories. All opinions are my own. It isn't advice on what to do with your portfolio, your money is your own. The Trade is about explaining the facts at hand and telling you what I'd do with my personal portfolio.
Today's Trade: Market Vector's Gold Miner ETF (GDX), commonly referred to as its ticker symbol. The GDX is designed to trade in line with the fortunes of the most prominent gold mining companies in the world. Companies like Barrick Gold (ABX), Goldcorp (GG) and Newmont (NEM) are three of the largest component companies.
The Bank of England has opened up its gold vaults to the public for an exclusive – virtual – look at its inner workings with a new iOS, Android and web app.
The tour of the famous building in Threadneedle Street is – perhaps surprisingly – free to download and use.
It offers a rare chance to see the inner workings of the UK's foremost economic institution.
How the mighty have fallen! Not so long ago South Africa dominated global gold output with the rest coming nowhere in comparison, but the country’s gold output has been on the decline since the 1970s.
It fell to fifth largest gold producer in 2012 when it was overtaken by Russia and on the latest output figures the country has drifted downwards towards being now only the world’s sixth largest gold producer, having been overtaken by Peru as well – however that is on production so far this year.
Hedge funds and money managers raised bullish bets in gold and futures and options for a second straight week, as signs of tight physical supplies sparked buying, a report by the Commodity Futures Trading Commission showed on Friday.
Speculators also boosted net longs in silver futures and options and trimmed net shorts in copper in the week to July 9, according the CFTC's Commitment of Traders report.
Today 50-year veteran Art Cashin warned King World News that if the gold market holds its recent lows we may see a massive upside spike in gold because of panicked short covering. Cashin, Director of Floor Operations at UBS ($650 billion under management), also warned that the Fed’s position is becoming increasingly desperate.
Eric King: “What about the gold market? We are seeing record short positions by hedge funds and the public. What could this mean for the gold market going forward, Art?”
Naked shorting of silver is not really the issue, as silver analyst, Ted Butler has been pointing out for decades, it is more about the extreme concentration of short silver positions and less about the big players being caught red-handed sending blatant signals of market price fixing collusion.
Also, forget about gold and silver being valued as commodities, since most people will agree that these metals both have a monetary demand associated with them.
What would a silver market default look like? Look no further, because a silent default is happening now. The cash settlement mechanism for the default has been well-established and put in place for that purpose.
Cash settlement for now, nevertheless, without physical delivery for industrial users, would send shock waves throughout the industry. The drama is enough to trigger a panic, despite any ability of some users to switch or find substitutes.
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