The <b>Gold Price</b> Lost $3.80 and Ended Comex at $1279.60 |
- The <b>Gold Price</b> Lost $3.80 and Ended Comex at $1279.60
- FX Markets: The Key to Predicting Moves in the <b>Gold Price</b>
- <b>Gold Price</b> Ignores Yellen's “Extraordinary” Promise, Hits 7-Week <b>...</b>
- Speculations Reversed - <b>Gold Price</b> Stealth Rally 2014 :: The Market <b>...</b>
| The <b>Gold Price</b> Lost $3.80 and Ended Comex at $1279.60 Posted: 01 Apr 2014 04:04 PM PDT Gold Price Close Today : 1279.60 Change : -3.80 or -0.30% Silver Price Close Today : 19.669 Gold Silver Ratio Today : 65.057 Silver Gold Ratio Today : 0.01537 Platinum Price Close Today : 1428.00 Palladium Price Close Today : 708.10 S&P 500 : 1,885.52 Dow In GOLD$ : $267.08 Dow in GOLD oz : 12.920 Dow in SILVER oz : 840.54 Dow Industrial : 16,532.61 US Dollar Index : 80.240 The GOLD PRICE lost $3.80 (0.3%) and ended Comex at $1,279.60. Silver was basically flat today. Closed Comex 6-1/2 cents (0.3%) lighter than it started, but at 1966.9 that was no big fall. Range was 1991 - 1964c. The GOLD PRICE continues to dance over and under that neckline from the Dec-Feb. upside down Head and Shoulders. Stochastic is trying to turn up, lower now that it was at the December low. So is the rate of change, and the RSI is nearly that low. It would be very surprising to see a market as oversold as gold stage another big drop. Possible, but not likely. Volume is dropping, a sign the move is drying up. What about the SILVER PRICE? Well, RSI is lower than the December low, as is the rate of change and full stochastics. The downtrend has run out of steam. Oh, I know, the Federal Reserve may announce tomorrow they've learned how to transmute compost into gold, and drive the market straight down, but that is NOT in the charts. Maybe a hair more price erosion, but very little. And if the Fed did announce that, you can be sure that the next day they would announce, "Whoops! We made a mistake! We meant to say 'transmute compost into loam.' Typo. Never mind." I bought more silver today, and a little gold. I'm not a bit good for this today. Sun is shining, it's about 78 degrees, we have a place covered with daffodils, and we have 47 new piglets. Too much to distract me. But here goes anyway: Think about the whole mess as a shift from real assets to paper assets and a shift back. In 2011 commodities -- real stuff -- all peaked after long rises, and have spent about 2-1/2 years correcting those rallies. They are not commodities, but they are real, so I include silver and gold under that heading "commodities." Where's my proof? Look at the Reuters -CRB (CCI) commodity index, or at platinum, or palladium, or gold, or silver, or oil, and now copper. That last seems to be recovering from its bad fall, and if it can close above $3.25 will turn up. All of these have either broken out above their downtrend lines from 2011 peaks or are now challenging those lines. Meanwhile, for the first quarter in a long time, the Dow did not rise in the first quarter 2014, and the S&P500 only a trivial amount. Investor attention is shifting from paper to real assets. And a roll like that doesn't happened overnight, it wheels slowly, so you have to be patient. Against this long term backdrop all this daily back and forth confusion is unrolling. Helps to lift up your eyes and look at the horizon now and then to make sure where you're going. Later this year a crisis and hard fall will come in paper assets, namely, stocks, but it will take a long time before the crowd understands that the tides have turned. I think that stocks broke out to the upside today, but they need one more up day to confirm that. Dow rose 74.95 (0.46%) to 16,532.61 and the S&P bumped up 13.18 (0.7%) to 1,885.52, a new high. That pokes the heads of both indices above the upper boundary of that, and since an uptrend has long been in progress, the presumption lies with higher prices. Looking for a top in May, but maybe later. On strength in stocks the Dow in Metals indicators are still correcting upward. Dow in gold rose 0.81% today, reaching 12.92 oz (G$267.08 gold dollars). To give you a feeling where this is, the December high was 13.8 oz (G$285.57) and the Dow in gold has not quite retraced 61.8% of the plunge from that high. The Dow in silver reached 839.73 oz (0.78%), correcting nearly 90% of the fall from December to mid-February. December high was 853.15 oz, and who knows, it may retrace that whole fall. That would paint a big double top on the chart. Both the Dow in Gold and Dow in Silver are way overbought and itching to drop. The infamous US dollars index (well, the index isn't infamous, but the dollar surely is) behaved very oddly today: it closed unchanged. Traded in a narrow range from 80.12 to 80.29 and closed at 80.24. Inspires confidence like watching your pilot climb on the plane, reach in his pocket and take out a half pint of whiskey, throw it back for a long slug, and then turn and smile at you. Not that the Euro looks much better. It rose 0.15% today to $1.3793, but remains under its 20 day moving average and a strong downtrend line, charming as a slug in salt. Japanese yen lost 0.45% in an accelerating downtrend. Closed at 96.46, right at the last low of 96.38 cents/Y100. Below that it has no support before 95.51. Yea, it stinketh. - 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.  |
| FX Markets: The Key to Predicting Moves in the <b>Gold Price</b> Posted: 02 Apr 2014 09:50 AM PDT In 1914 gold was money. Money wasn't debt or credit back then. It was simply gold, and banks created credit on top of their gold reserve base. They couldn't go crazy in the credit creation process, because there was only so much gold in the world and its supply grew at around 2%. Plus, gold (not debt) was a form of international payment, so once again debt growth didn't get too excessive. If you ran a trade deficit, your creditors demanded payment in gold to settle the debt. If you ran out of gold, interest rates would rise (to discourage consumption and encourage saving) and the trade deficit would slowly swing back to surplus. That's roughly how the gold standard kept things in balance. But in 1922 that all changed… It set the world on a path to where we are today. Where money and debt and credit are all interchangeable terms. Where debt must keep rising to keep the system going. And where it will increase to such a point that it will collapse back on itself. Most people think the world's monetary architecture changed for the worse in 1971 when Nixon severed the US dollar's link to gold. But actually, a little known event in 1922 set the global monetary system on its present day course. Meanwhile, we've sneaked a look at Marc Faber's presentation at this year's World War D conference in Melbourne, Australia, and his basic premise is that the system is now on its last legs. It should be an interesting few days. On the topic of money, the Wall Street Journal reports that profit growth slowed at China's big banks in 2013. Industrial and Commercial Bank of China grew profits by 10%, the slowest pace since listing in 2006. Bank of China's profits grew 12%, the second slowest pace of growth since listing in 2006. And Agricultural Bank of China posted a robust 15% profit rise, but was still the slowest pace of growth since listing in 2010. China's big banks make state sanctioned profits. Although the rules have loosened a little recently, for years financial repression saw the big banks make a chunky 3% spread on lending. That is, depositors received 3% interest while borrowing costs were 6%. The difference was the banks' to keep. As the chart below shows, since 2009 bank loan growth in China has been huge. Although it's slowing marginally, it's still running at a healthy clip of just under 15%. Most of the recent slowdown has come from the 'shadow banking' sector, which is included in the 'total credit' growth rate in the chart. But the problem for China's banks is that some of the loans they made during the boom are coming back to bite them… Bad loans are on the rise and as the credit bubble deflates, banks will have to write off past profits. Expect more of that in the next few years. The market certainly does, which is why China's banks look 'cheap'.  So, whatever happened to good old 'money'? Gold, once the anchor of the global financial system, is now nothing more than flotsam in a sea of debt. Last night it fell another few dollars, and is now about $100 dollars an ounce lower than it was 10 days ago. So much for gold's recovery! Gold is a mere shadow of its former self. Trading in the gold market is now dominated by paper forms (derivatives) of the metal. Physical trading makes up a very small portion of the overall market. When a financial system goes from sound to unsound, it creates more claims on real assets than there are real assets in existence. So the system creates paper assets to absorb the constant supply of new money/credit/debt. Hence the explosion of the derivatives market in recent decades. Most investors don't own real assets; they simply have 'exposure' to them via the derivatives market. Or in the case of gold, which also forms the role of alternative currency, the derivatives (or paper forms of it) extend to the currency markets. Back in the 1970s gold received a currency symbol, XAU, which made it available for trading in the foreign exchange (FX) markets. FX markets are huge. They are the largest markets in the world by volume. Back in 2011 the London Bullion Market Association (LBMA) released a trading survey showing that daily clearing in the gold market was the equivalent of 5,400 tonnes, or around US$240 billion at the time. Last year, we sent the LBMA an email asking whether gold trading as an FX currency was behind the huge volumes. We recently got the following response:
So most of the 'gold' trading that takes place occurs in the FX markets and has nothing to do with physical gold. No wonder it's turned into a volatile beast. The proper price signals that poor old physical gold used to give off, warning about system excesses, have been well and truly muffled. Regards, Greg Canavan Ed. Note: In Greg's presentation at the World War D conference in Melbourne, Australia, he explains in detail why the system cannot continue to muffle gold for much longer, what that means for future gold prices, and how investors can use it to their advantage. And even if you couldn't make the trek to Melbourne, The Daily Reckoning's managing editor was live on the scene, so readers still get a front row seat to the whole thing. To gain access to this and other great benefits, sign up for the FREE Daily Reckoning email edition, right here. |
| <b>Gold Price</b> Ignores Yellen's “Extraordinary” Promise, Hits 7-Week <b>...</b> Posted: 01 Apr 2014 12:00 AM PDT Gold price gains of more than 7% during the first quarter of 2014 were cut on the first day of Q2 Tuesday morning, with a rally from overnight lows at $1278 in the spot market fading at $1284 per ounce. Silver tracked the gold price but with less volatility, holding around $19.80 per ounce, a 7-week low for Dollar investors when first seen last Wednesday. "The US economy is still considerably short of the two goals assigned to the Federal Reserve," said new Fed chair Janet Yellen in a speech in Chicago late Monday. Repeating the phrase 4 times, Yellen said "extraordinary support" is still needed from monetary policy – referring to zero rates and QE asset purchases – because "Inflation is well below 2% [and] it is [also] appropriate to continue to provide substantial help to the labor market." [Hear More: Jim Puplava's Big Picture: Yelling Yellen and the Change in The Fed's Direction] The US Dollar ticked lower after Yellen's speech on the forex market. That saw gold prices for Euro and UK investors slip to 8-week lows. Australia's central bank overnight kept its key interest rate at 2.5% per year, sparking a jump in the Aussie Dollar which drove the gold price in AUD down near 2014 lows – nearly 11% beneath the 6-month high of only 2 weeks ago. "Buying interest is starting to emerge," reckons Swiss bank and London bullion market maker UBS. Calling the last fortnight's 8% drop a "relatively orderly correction", UBS points to "the underlying improvement in sentiment towards gold," driven by large investors wanting to diversify "and insure against tail risks." Gaining 7.2% on the London PM Fix during the first quarter, gold prices averaged their strongest month since September in March. Over in China – the world's largest gold consumer – spot prices for physical bullion on the Shanghai Gold Exchange today fell for the 10th day in 12 sessions, but cut their discount to international prices to $2 per ounce, the smallest discount in over a week. China manufacturing data pulled in opposite directions Tuesday morning, with Beijing's official manufacturing PMI showing slight growth, while HSBC analysts cut their March figure to show a worsening contraction in activity. Shanghai's stock market snapped a 4-day losing streak regardless, rallying 0.7% and helping Asian emerging-market equities reach their highest level of 2014 so far on MSCI data. Monday's gold price drop saw the quantity of bullion held to back shares in the giant SPDR Gold Trust fund fall some 0.5%, retreating to 813 tonnes — a 3-month high when first recovered in mid-March. |
| Speculations Reversed - <b>Gold Price</b> Stealth Rally 2014 :: The Market <b>...</b> Posted: 02 Apr 2014 12:10 PM PDT By: Peter_Schiff
In spite of this overwhelming negative sentiment, gold is experiencing a stealth rally as one of the best performing assets of the year. Let's look at some important metrics of the most under-valued sector in this market. Speculations Reversed So many investors want to believe that last year was the death knell for the yellow metal that they've stop paying attention to the technical metrics responsible for driving the price down. These metrics have already started to reverse. Last year, technical speculators - and everyday investors trading behind them - influenced gold's price more than anything else. Notably, 2013 was the first year since their creation in 2003 that gold exchange-traded funds (ETFs) experienced a net outflow of their gold holdings. This played a pivotal role in driving down both the gold price and investor expectations for the yellow metal. Gold ETFs sold off their holdings by a whopping 881 metric tons last year. GLD, the largest fund, sold 550 of those tonnes on its own. This was influenced by, and then compounded, the effects of extremely bearish gold futures speculators, whose large net-short positions were responsible for some landmark drops in the gold price throughout the year. As is typical with markets, negative sentiment became a self-fulfilling prophecy. For the previous decade up until last year, physical gold demand had driven the gold bull market. However, ETFs have over this time accumulated a greater and greater share of the market. Thus, last year's sudden ETF sell-off was enough to drive total global gold demand down 15% year-over-year. Even 28% growth in bar and coin demand - resulting in record-breaking total demand - couldn't counter the market's bearish turn. But ETFs are getting back in the game. GLD started adding to its holdings again in February, the first increase since December 2012. And by mid-March, COMEX gold futures contracts had the most net-long positions since November 2012. Gold Versus Equities Prices are up in every area of the gold sector. GLD and COMEX futures are both up more than 6% this year. GDX, one of the broadest gold-mining ETFs, is up more than 12%. Even with a sell-off in the last week of March, physical gold was up almost 8% in the first quarter. Meanwhile, the general stock market is barely performing at all. The S&P 500 and the NASDAQ are up barely 2% YTD, while the Dow is down. Most importantly, when measured in terms of gold, the Dow has actually started to drop significantly. At the end of March, the Dow was about 12.5 times the gold price. This is already a 9% decline since December. For the majority of the last 100 years, the Dow has traded far below this level.
Overpriced and Under-Earning Anyone who really buys the story of economic recovery is likely riding a wave of irrational exuberance after a year in which the major indices hit record high after record high. They don't express the slightest concern that the stock market is already in dangerous bubble territory. However, one of the most important metrics of stock market valuation completely contradicts this. The Shiller Price/Earnings Ratio (Shiller P/E) is well-respected for helping analysts like me identify one of the most over-valued markets in history - the dot-com bubble. This metric gauges the return on investment for someone buying into the broader stock market. A higher ratio indicates investors are paying more for shares of companies that are earning less; therefore, they are receiving less value. At the end of March, the Shiller P/E stood at 25.60 - almost 55% higher than the historical average of 16.5. As you can see in the chart below, the only previous times the ratio has breached 25 were during the 1929 stock craze, the dot-com bubble, and just before the '08 financial crash. I would not want to be anywhere near an investment with such poor yield.  Don't Look Back Investors often make the mistake of investing in the last trade, the same way that governments always fight the last war. After a year in which stocks brought in about a 30% return while gold was pummeled, nobody wants to be the first one to jump back into hard assets. But fortunes are often made by ignoring the popular trend and buying underpriced assets when nobody else sees their value. Sometimes this is a risky maneuver, but in the case of today's gold market, it's as close as we can get to a sure thing. It's hard to predict what will trigger the next collapse of stocks, but gold is already on the road to new highs. Janet Yellen is gearing up to unleash a new torrent of freshly printed dollars onto global markets. I'd recommend building your ark well in advance. Peter Schiff is Chairman of Euro Pacific Precious Metals, a gold and silver dealer selling reputable, well-known bullion coins and bars at competitive prices. Click here for a free subscription to Peter Schiff's Gold Letter, a monthly newsletter featuring the latest gold and silver market analysis from Peter Schiff, Casey Research, and other leading experts. And now, investors can stay up-to-the-minute on precious metals news and Peter's latest thoughts by visiting Peter Schiff's Official Gold Blog. © 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication. |
So far, 2014 has been a paradoxical year for gold. Many investors aren't even aware that it has rallied almost 8%. On the rare occasion that the financial media mentions the yellow metal, it is only in the context of comparing the recent rise to last year's decline.
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