Gold & Silver Digest: 9/17/13
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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9/17/13 8:34 PM EST US close metals price quotes from Finviz
Gold fell on Tuesday on muted U.S. inflation data and as investors braced for the expected announcement by the Federal Reserve of a reduction in its bond-buying stimulus.
A sharp hike in top bullion consumer India's import duty on gold jewellery also dented buying sentiment in the physical market.
The U.S. Labor Department said consumer prices barely rose 0.1 percent in August but analysts said rising rents and medical care costs might prompt the Fed to begin scaling back, or tapering, its economic stimulus measures.
Gold declined for the fifth time in six sessions as a government report showed the cost of living in the U.S. rose less than forecast, crimping the appeal of the precious metal as a hedge against inflation.
The consumer-price index rose 0.1 percent in August from July, the Labor Department said today. The median forecast in a Bloomberg survey called for a 0.2 percent gain. Federal Reserve officials meet today and tomorrow, when policy makers are forecast to cut monthly bond buying by $10 billion to $75 billion, according to a Bloomberg survey. Gold has fallen 22 percent this year as bets that the Fed will slow stimulus curbed demand.
Mike Maloney sent out a special video presentation exclusively to our GoldSilver Insiders. Mike receives 100’s if not 1000’s of emails and took the opportunity in this special presentation to address the many of the most common questions he is asked.
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Time and again, people ask the question, “Does investing in gold have a future?” Over the years, like every other commodity, gold has shown a lot of volatility. When the world was hit hard by the economic recession of 2007-08, people flocked to buy gold. They were doing something humans have done for a very long time – stacking up gold in case global currencies lost their value. Throughout history, people have used gold as the “go-to” asset class during the times of economic calamity. But, as the world is slowly and steadily recuperating from the effects of global recession, people are asking whether the gold run of gold is finally over?
As the world awaits the Fed’s decision, today a 42-year market veteran told King World News there will be no tapering and that the gold will soar “after the Fed has surprised the market tomorrow.” Greyerz also warned KWN that to further complicate matters for the Fed, there is a “major shortage of physical gold” ahead of their decision. Below is what Egon von Greyerz, who is founder of Matterhorn Asset Management out of Switzerland, had to say.
Greyerz: “Eric, it is important to consider what the truly important factors are that will determine what will happen to the world, its people, and to the global economy. If we look around, what do we find? We find a world that is financially, politically, and morally bankrupt.
This is a world that is feeding on ever-increasing debt and money printing. Just look at the G-7 debt….
It is all about the Fed tomorrow and what level of market intervention they will maintain in buying public and private (Treasury and mortgage) debt.
I think a mix of both with a total below $10 billion may be a likely expectation. I think the taper will be slow, and the unwind of the balance sheet even much slower. I think we are looking at quite a few years, and not months. We will know once the economy has actually improved and we are certainly not there yet. Not with a stagnant median wage which dampens consumer demand.
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