<b>Gold Price</b> Exploding In Emerging Markets [SPDR Gold Trust (ETF <b>...</b> |
- <b>Gold Price</b> Exploding In Emerging Markets [SPDR Gold Trust (ETF <b>...</b>
- <b>Gold Price</b> Might Cut Through Down Trend this Week
- The <b>Gold Price</b> Shot Up $20.30 or 1.6 Percent to $1260.40
- <b>Gold Price</b> Analysis- Feb. 4, 2014 - DailyForex.com
| <b>Gold Price</b> Exploding In Emerging Markets [SPDR Gold Trust (ETF <b>...</b> Posted: 04 Feb 2014 05:24 AM PST Mainstream economists and mainstream media remain convinced that the economy and markets are in full recovery mode. Along the same lines, gold is unanimously expected to decline in the year(s) head. One of the most recent appearances of that kind was the 2014 outlook of IMF economic counselor, Olivier Blanchard, who explained last week that global growth would average 3.7% in 2014. Ironically, the recovery story, based on the central bank premise that they can create wealth by simply exploding their balance sheets, seems as solid as a "house of cards." Past week Thursday and Friday, several emerging markets suffered from an economic earthquake, especially in their currency markets, which resulted in losses in most developed world markets not seen since 6 months. The Yen and the Swiss Franc were considered a safe haven, just like gold (PHYS) and US Treasury bonds (TLT). Bloomberg says this is the worst selloff in emerging-market currencies in five years, revealing the impact from the Federal Reserve's tapering of monetary stimulus. "Investors are losing confidence in some of the biggest developing nations, extending the currency-market rout triggered last year when the Fed first signaled it would scale back stimulus. While Brazil, Russia, India, China and South Africa were the engines of global growth following the financial crisis in 2008, emerging markets now pose a threat to world financial stability." Argentina, Venezuela and Turkey have been hit hard. Argentine's Peso and Turkish Lira lost significant value against other major currencies in the past week. They recovered slightly today. In Argentina, the central bank pared dollar sales aimed at propping up the peso to preserve international reserves that have fallen to a seven-year low. "The central bank said it would lift two-year-old currency controls and allow the purchase of dollars for savings starting next week. […] The government told today it is not intervening in the peso's decline, allowing the market, which is mostly closed to buyers of dollars, to adjust prices. It was not a devaluation induced by the state. For the lovers of free markets, supply and demand was expressed in the capital markets yesterday." The Turkish central bank tried an unscheduled intervention in the market to stop the lira from falling to record lows, something they haven't done since two years. "Investors are speculating the central bank's efforts to prop up the lira by burning through foreign-exchange reserves will prove futile without raising interest rates." The loss in purchasing power for people holding Argentine's Peso is astonishing:
The loss in value of the Turkish Lira (TRYS) is not as dramatic as the Peso, but it is still very bad:
The interesting part for us, gold enthusiasts, is the price of gold in the slaughtered currencies (prices on the close of January 31st):
This chart shows the price of gold in USD (yellow line) and in Peso (blue line). The black line is the currency exchange rate Peso against the USD. Chart courtesy: Sharelynx. (click to enlarge) Interestingly, the explosion of the gold price in Peso and Lira has pushed the gold price higher in the Western currencies. That is an important evolution, as it indicates what gold really stands for: a monetary asset. One should note that gold has gone higher even without inflation fears. This could be one of those catalysts that could break the downtrend in gold in major currencies. The underlying reason for the emerging market turmoil is said to be attributed to capital flight out of those markets. Directly linked to that is the tapering fear from the US Federal Reserve. What is the importance of this for Western investors? There could be a counter intuitive answer to that question. Basically, up until today, there was a narrative surrounding the Federal Reserve who got credit for the positive economic results after having stopped the implosion of the financial system in 2009. However, there is still no empirical evidence that the plan has worked, because the world is still on the monetary infusion. We should note that the present type of situation, characterized by tapering in a global fiat based monetary system with huge amounts of debt, is unique in human history. As John Mauldin pointed out this week, if the narrative about central planning changes, indicating that the present monetary experiment was the wrong answer to the problem, there could be very nasty effects, especially out of the emerging markets. This is why (courtesy of Ben Hunt):
Nobody knows exactly how a change in the narrative will play out, but given the effects we are seeing in the emerging markets currency crisis, it seems likely that a flight out of risk assets into gold is very likely. Our belief is that, once the central bank narrative changes, the major currencies will likely be hit by a trust crisis. That is one of the most reasonable catalysts for dollar gold and euro gold. Our belief is that a loss of trust in central banking could materialize in the next 12 to 24 months. Disclosure: I am long PHYS. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.  | ||||
| <b>Gold Price</b> Might Cut Through Down Trend this Week Posted: 04 Feb 2014 07:50 PM PST Gold Price Close Today : 1251.70 Change : -8.70 or -0.69% Silver Price Close Today : 19.402 Gold Silver Ratio Today : 64.514 Silver Gold Ratio Today : 0.01550 Platinum Price Close Today : 1371.80 Palladium Price Close Today : 699.90 S&P 500 : 1,755.20 Dow In GOLD$ : $255.08 Dow in GOLD oz : 12.339 Dow in SILVER oz : 796.06 Dow Industrial : 15,445.24 US Dollar Index : 81.240 The GOLD PRICE dropped as low as $1,246.80 and the 20 DMA ($1,247.44) but came right back to close Comex at $1,251.70. Then it gained $3.20 in the aftermarket. Silver gained an infinitesimal 1.3 cents to 1940.2c.
This is an even sided triangle so could break either way, but the gold price remains above its 20 and 50 DMAs and has been steadily advancing, recovering every time it is knocked back. Reasonable to expect it might cut through that post-April downtrend this week, barring a close below $1237.50. Since December began the SILVER PRICE has traded sideways between 2050c and 1889c, with one intraday low at 1872c. It has just bounced off that roughly 1890 support again, and now needs to cross 1950c and get past 2050c. Other reasons to look for the gold price rally to continue: the GOLD/SILVER RATIO appears to have peaked and begun dropping. The Gold/Philadelphia Bank Index, which reflects investor confidence and risk appetite, has been falling since December ended.
Every once in a while I check the numbers just to see if things are as bad as I suspect they are. In the last eight days the Japanese Nikkei 225 stock index has lost 10.8%. Reckon that Abe-nomix has hit a little hiccup. Since 21 January when the present waterslide began, the Dow has lost 969.2 points or 5.9%. Today the Dow bounced up 72.44 (0.47%) to 15,445.24. S&P500 clawed back 13.31 (0.76%) to 1,755.20. Where does that leave stocks? Launched off a cliff, lifted on a tiny updraft, with no ledge in sight. Dow cut through its 200 DMA yesterday, bounced back to it today, but has little reason to stop here. More likely place is 14,760. But of course I could be fooled, and if the Dow turns, climbs, and crosses 16,000 y'all will know I was. Otherwise, bet on gravity. The gold price fell $8.70 at Comex close today and stocks rose, but by the end of the day the Dow in Gold had risen only 0.7% to 12.32 oz (G$254.68 gold dollars). Dow in silver fell 0.51% to 792.47 oz, and is trying to break down. In case y'all have forgotten: Dow in Metals down, good for metals; Dow in Metals up, bad for metals. These indicators show the value of stocks in metals, whether metals are gaining or losing value against stocks. Since mid-September the US dollar index has been jailed between 81.50 and 79.70, with one spike to 79.06 in October. It rises, it falls, it makes neither progress nor regress. Today it gained 10 basis points to 81.24. Unless it can jump over 81.60 or falls below 79.50, it's just jawing. The euro, however, declineth in earnest. Down another 0.1% today to $1.3515. If the euro's chart were your EKG, you'd be scrambling for the phone to make sure your burial insurance was up to date. Hard to see why it won't sink to $1.3300 at least. The radioactive Yen, on the other hand, is rallying in earnest, from a 94.83 c/Y100 low in January to 98.31 today, down 0.54% for the day but aiming for the 200 DMA at 100.1. Argentum et aurum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger © 2014, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold or 18 ounces of silver. or 18 ounces of silver. US $ and US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down. WARNING AND DISCLAIMER. Be advised and warned: Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures. NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps. NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced. NOR do I recommend buying gold and silver on margin or with debt. What DO I recommend? Physical gold and silver coins and bars in your own hands. One final warning: NEVER insert a 747 Jumbo Jet up your nose. | ||||
| The <b>Gold Price</b> Shot Up $20.30 or 1.6 Percent to $1260.40 Posted: 03 Feb 2014 04:21 PM PST Gold Price Close Today : 1260.40 Change : 20.30 or 1.64% Silver Price Close Today : 19.389 Gold Silver Ratio Today : 65.006 Silver Gold Ratio Today : 0.01538 Platinum Price Close Today : 1385.00 Palladium Price Close Today : 702.50 S&P 500 : 1,741.89 Dow In GOLD$ : $252.13 Dow in GOLD oz : 12.197 Dow in SILVER oz : 792.86 Dow Industrial : 15,372.80 US Dollar Index : 81.140 Whoa. Stocks got whupped today with a big knobbly stick. Silver and GOLD PRICES reversed. My, my. The GOLD PRICE shot up $20.30 to $1,260.4, higher by 1.6%. Silver gained 28.4 cents (1.5%) to 1938.9 cents. But look closer. Friday gold made a tiny reversal by closing slightly higher than Thursday. Today it defended about the same low, then rocketed to the downtrend line and closed near there, above all its moving averages except the 200 DMA. That last is now at $1,317.29, and slowly turning up, a good sign, plus this two day upward tergiversation. Gold prices have now thrice beat on the door of this downtrend line, and today's reversal begs the conclusion that it will pierce that line tomorrow or the next day. Twould be extremely bad taste if it didn't, not to mention weak. Ought to run up at least $100 or so. The SILVER PRICE hath bounced off that support line left by December lows, and like gold, strengthened on Friday and closed higher today. All that said, silver remains below its 20 and 50 DMAs (now 1982c and 1977c). Must cross them, but more strategically, 2050c. All indicators pointing toward the sun today. To escape the shadow of one last possible plunge to a new low, gold needs to close above this downtrend line from April and the resistance at $1,267.50, then jump higher to $1,361.80, the October high. How high could this rally carry gold? If the height of what I take to be an upside down head and shoulders reversal (Nov - Jan) measures the gain, then it should run at least to that $1,361.80 October high. But first, confirmation by puncturing that downtrend line and support at $1,267.50. Dow fell 326.05 (2.08%) to 15,372.80, below the 200 DMA (15,469.68). S&P500 lost 2.28% (40.7) to 1741.89. Too early to judge whether the January top was the ultimate -- another may come later in the year -- but for now stocks are headed firmly down, perhaps to 14,760-14,720, the September and October lows. A genuine waterfall today. Today's stock weakness and metals strength drew the Dow measured in metals down. Dow in gold sank 3.06% to 12.23 oz (G$252.82 gold dollars) and drew nearer the 200 dma (11.79 oz or G$243.72). It falleth ever nigher its long term downtrend line. Dow in silver dropped 2.66% to 796.52 oz, well below the 816.54 50 DMA but still way above the 200 DMA (731.61). Rolling over, over, over. US Dollar index fell today 24 basis points (0.3%) to 81.14, but like a pouty child still refuses to confirm any rally. Yen rose 1.04% to 99.04 and certainly is rallying. Euro at 1.3525 still looks sick as a snake-bit cur. Argentum et aurum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger © 2014, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold or 18 ounces of silver. or 18 ounces of silver. US $ and US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down. WARNING AND DISCLAIMER. Be advised and warned: Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures. NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps. NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced. NOR do I recommend buying gold and silver on margin or with debt. What DO I recommend? Physical gold and silver coins and bars in your own hands. One final warning: NEVER insert a 747 Jumbo Jet up your nose. | ||||
| <b>Gold Price</b> Analysis- Feb. 4, 2014 - DailyForex.com Posted: 04 Feb 2014 01:19 AM PST
By: DailyForex.com The XAU/USD pair (Gold vs. the American dollar) scored a gain of 1.17% on Monday as the American dollar lost strength after the manufacturing activity data out of the world largest economy disappointed the market. The latest report released from the Institute for Supply Management showed the manufacturing index fell to 51.3 from 56.5 the prior month. The pair traded as high as $1266.19 an ounce before pulling back to the 1257 level. Although the precious metal scored a monthly gain on the back of sharp corrections in equities markets, the market is still struggling to get above the 1268 level. For the last nine sessions, including today, gold prices have been trapped between the Fibonacci 23.6 and 38.2 levels (based on the bearish run from 1433.70 to 1182.35) and this consolidation might continue as investors want to see the outcome of major central banks' meetings. From a technical point of view, the bulls will have to hold prices above the 1255/2 zone unless they don't want to lose the advantage they have. If this support remains intact, it is possible that prices will continue its bullish tendencies and try to push through the resistance level at 1268. Beyond 1268, expect to see resistance at 1274.48 and 1278. Closing above this area would suggest that the market is going to tackle 1293 and 1307 next. If the bears take the reins and drag the XAU/USD pair below 1252, support can be found at 1246.60 and 1238. Once below that, the bears will be aiming for 1230 and 1225. In the meantime, I will continue monitoring the major stock markets and USD/JPY pair. |
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