Our Market Letter Returns January 7th – Happy Holidays !
Posted: December 28, 2012 Filed under: Uncategorized Leave a comment
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Posted: December 24, 2012 Filed under: Uncategorized Leave a commentRecent Gold Price Chaos Explained
Posted: December 23, 2012 Filed under: Central Banks | Tags: Bank of Japan, Clickteam, European Central Bank, Federal Reserve System, Gold as an investment, Japan, Money supply, Quantitative Easing Leave a commentDespite the announcement of more aggressive monetary easing by the Fed in the form of QE4 and the Evans Rule, gold has been taking a beating as of late.
Yves Lamoureux, long-time gold bull who quit the rally in September 2010 and President of the macroeconomic research firm Lamoureux & Co., thinks he knows why.
According to Lamoureux, a lack of synchronicity in monetary easing has been the prime culprit behind gold’s poor performance. The Fed is not providing the totality of global liquidity by itself, and the failure of the ECB and BoJ to adequately encourage short-term liquidity explains why gold has been going nowhere.
Here’s Yves:
In terms of money supply, the U.S. is on a cruise while Japan has been running on a treadmill, and Europe just isn’t hitting the gas pedal like it needs to.
In the past, central bank easing had been more coordinated and synchronized, which had allowed gold to reach its highs. Yves notes that similar contractions occurred in 1980, 1988, 1991, 2000, and 2008 which all negatively impacted gold.
Yves, also offered another reason why gold was particularly hard hit this week. Gold is considered a safe haven asset, and the rise in long term interest rates gives gold more competition. Investors can receive a higher rate of return on their fixed-income assets without worrying about the impact any volatility in the price of gold may have on their portfolios. Yves forecasts “more pain ahead, because rates are going higher
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- The Emperor Has No Gold (noliesradio.org)
Gold Just Hit A Critical Level
Posted: December 21, 2012 Filed under: Forecasts, Gold, Technical Analysis | Tags: Apple, Business, Commodities and Futures, Gold, Investing, Market sentiment, Moving average, Technical analysis Leave a commentYesterday, as gold continued to head lower, it breached a line closely watched by traders: the 200-day moving average.
Today, gold is rebounding a bit, but futures are still trading a few bucks below the line:
A breach below this line is an indicator of bearish sentiment. As the zoomed-out chart below shows, gold has only fallen below its 200-day moving average twice – and both times, substantial further declines followed (click on the chart to enlarge):
However, traders are looking for “confirmation” of this possible shift before they place bearish bets – which is why today’s session and the next few will be so important to watch.
This is one of the most fundamental concepts for practitioners of technical analysis. Right now, gold is trading about six bucks below the 200-day moving average, and if gold bulls can’t push it back above that line soon, it could mark a turn in sentiment and send futures considerablyAvailable
Now at AMAZON.COM – The Gold Investor’s Handbook – click here for more detail on the in’s and outs of investing in gold
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- Is the Correction Over in Gold? (safehaven.com)
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The Christmas Gift That Keeps On Giving $$$
Posted: December 21, 2012 Filed under: AMP Books and Seminars, Gold | Tags: $3.99/item, Amazon.com, AmazonPrime, Hulu, Kindle, Netflix, Shipping, Streaming media Leave a comment
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Brazil Doubles Gold Reserves – other Central Banks Report Buying
Posted: December 21, 2012 Filed under: Central Banks, Gold | Tags: Bank of Korea, Central bank, Federal Reserve System, Gold reserve, International Monetary Fund, National Australia Bank, Turkey, World Gold Council Leave a commentDec 21
Brazil boosted gold reserves for a third month in November to double the country’s holdings since August as central banks from Russia to Belarus and South Korea add the metal to diversify their assets.
Brazilian holdings expanded 14.7 metric tons in November to 67.2 tons, the most since November 2000, according to data on the International Monetary Fund’s website. The country bought 17.2 tons in October after adding 1.7 tons in September, the first increase since 2008. Russia’s holdings increased 2.9 tons last month and Belarus’s reserves expanded 1.4 tons, the data show. Turkey pared holdings 5.9 tons and Mexico sold 0.1 ton.
Central banks have been expanding reserves as the metal heads for a 12th annual gain and investors hold a record amount in bullion-backed exchange-traded products. Nations bought 373.9 tons in the first nine months of the year and full-year additions will probably be at the bottom end of a range from 450 to 500 tons, the London-based World Gold Council estimates.
“Central banks, particularly in the emerging economies, are looking to increase the proportion of gold in their reserve assets,” Alexandra Knight, an analyst at National Australia Bank Ltd., said from Melbourne. “That will drive prices of gold because they can be quite significant purchases.”
Gold for immediate delivery traded at $1,643.75 an ounce at 10:01 a.m. in Singapore, up 5.1 percent this year. Still, the metal slumped to $1,635.70 yesterday, the cheapest since Aug. 22, as data showed the U.S. economy is improving.
Total Reserves
The proportion of gold as a share of total reserves is much smaller in emerging economies than advanced countries, and there’s probably going to be a continued push to increase the amount of metal held, Knight said.
The U.S., Germany, Italy and France hold more than 70 percent of their reserves in gold, according to data from the producer-funded WGC. The share in Brazil, the largest emerging economy after China, is 0.8 percent, the data show.
In Asia, the Bank of Korea increased gold reserves 20 percent last month to diversify investments, boosting holdings for the fourth time since June 2011, according to a statement Dec. 5. Gold is a physical, safe asset, the Bank of Korea said.
Gold has advanced as central banks from the U.S. to Europe and Japan ramp up stimulus to boost their economies, stoking concern that currencies will be debased and inflation may accelerate. The Dollar Index, a gauge against six counterparts has lost 1 percent this year, set for the first drop since 2009.
The U.S. Federal Reserve said Dec. 12 it would buy $45 billion of Treasury securities a month from January, adding to $40 billion a month of existing mortgage-debt purchases. The Bank of Japan expanded an asset-purchase program for the third time in four months yesterday.
Gold will probably peak in 2013 and keep declining the following year as U.S. growth accelerates, Goldman Sachs Group Inc. said in a report on Dec. 5. Immediate-delivery metal reached a record $1,921.15 an ounce in September 2011.
Holdings in gold-backed ETPs reached a record 2,632 tons yesterday, and are 12 percent higher this year, data compiled by Bloomberg show.
Available Now at AMAZON.COM ( go to books )
The Gold Investor’s Handbook – click here for much more detail on the in’s and outs of investing in gold
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- IMF study in 1999 found 80 central banks lending 15% of official gold reserves (gata.org)
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Belo Sun Mining Update
Posted: December 21, 2012 Filed under: Exploration Companies, Speculative | Tags: Belo Horizonte, Belo Sun Mining, Brazil, Dundee, Open-pit mining, Sun, TD Securities, Volta Grande Leave a commentBELO SUN MINING
(T-BSX) $1.59 +0.02
The chart on Belo Sun Mining shows that it is one of the very few juniors out there that has escaped the malaise, but then their Volta Grande project in Brazil just continues to grow…both in size and with the latest report out this week—even the grades are starting to look tastier.
Earlier this week they announced a 44% increase in the only open-pit resource size to 6.9 million ounces from 5.2 million ounce prior at a rather decent grade of 1.79 g/t .
Analysts Calls
Canaccord analyst Rahul Paul points out, “Volta Grande remains one of the highest grade +5 Moz undeveloped open-pit projects not owned
by a major.” Is it a potential take-over target? We suspect yes.
Meanwhile, a couple of analysts changed their targets while Paul stays with his $2.50 target, Dundee raises their target to $2.50 from $2.25 and TD Securities raises their target from $2.00 to $2.25.
The big question or dream remains, for a prize of this size – is investor hope that there be some big boys stepping up to the table.
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- Belo Sun Mining Merger Speculation (ampgoldportfolio.com)
Silver Vaults Stuffed
Posted: December 20, 2012 Filed under: Silver | Tags: Bank of America, Bloomberg, Bloomberg L.P., China, Exchange-traded product, Fresnillo plc, Singapore, United States Treasury security Leave a commentSilver Vaults Stuffed Means Price Rising 30% in ’13
Silver Bullion Pte, one of Singapore’s largest suppliers of coins and bars to retail investors, says sales tripled since October, part of a global surge in demand that drove holdings to a record.
“Our clients are worried that a major currency crisis or mass bankruptcies would occur,” said Gregor Gregersen, the 36- year-old founder of Silver Bullion, whose sales now average about S$6 million ($4.9 million) a month. “It all has to do with falling confidence in the heavily indebted Western governments and financial institutions.”
Global investment through silver-backed exchange-traded products reached a record 18,854 metric tons in November, or more than nine months of mine output, data compiled by Bloomberg show. Holdings are now valued at about $19.2 billion. Prices will rise as much as 29 percent to $40.25 an ounce next year, based on the median of 49 analyst, trader and investor estimates compiled by Bloomberg.
Silver almost tripled since the end of 2008, lagging behind only platinum in gains for precious metals this year as policy makers from the U.S. to China to Europe pledged more action to boost economies. That’s attracting investors betting that stimulus will stoke inflation and debase currencies. It’s also luring those wagering growth will strengthen industrial demand for silver, 53 percent of which is used in everything from televisions to batteries.
Hedge Funds
The metal advanced 12 percent to $31.22 this year, compared with a 6.8 percent gain for gold and 14 percent rise for platinum. The Standard & Poor’s GSCI Index of 24 commodities dropped 0.1 percent and the MSCI All-Country World Index of equities jumped 14 percent. Treasuries returned 1.8 percent, according to a Bank of America Corp. index.
Hedge funds and other large speculators increased bets on higher prices 12-fold since the end of June, to a net 34,862 futures and options, U.S. Commodity Futures Trading Commission data show. That’s about 50 percent higher than the average over the past five years, a period during which speculators have never been bearish.
Equity investors also bet on higher prices. Shares of Mexico City-based Fresnillo Plc (FRES), the largest primary silver producer, rose 24 percent this year. The company will report a 22 percent gain in net income to a record $927.1 million in 2013, according to the mean of seven estimates compiled by Bloomberg. Coeur d’Alene Mines Corp. in Idaho, which gets about 65 percent of its revenue from silver, fell 6.3 percent to $22.63 since the start of January and will reach $31.89 in 12 months, the average of analysts’ predictions shows.
Deposit Boxes
Silver Bullion, which started in 2009 in a rented bedroom with 18,000 ounces, now has 246,000 ounces (7.65 tons) stored in vaults for customers as well as its own inventories. The company operates from the Certis CISCO Center, home to one of Singapore’s largest providers of safety deposit boxes. It sells everything from 1- to 32-ounce coins and 10- to 100-ounce bars, as well as gold, platinum and palladium.
Investors bought 1,464 tons through ETPs this year, data compiled by Bloomberg show. They will probably add another 300 tons in 2013, Barclays Plc estimates. That’s less than the so- called implied physical surplus that the bank says will reach 6,441 tons in 2013. Its analysts expect silver to average $32.50 next year, from $31.20 in 2012.
IMF Outlook
The surplus may drag prices lower should economic growth slow because it would curb demand for consumer goods. A car contains as much as 30 grams and a mobile phone about 0.25 gram, according to the Washington-based Silver Institute. While the International Monetary Fund expects a 3.6 percent global expansion in 2013, from 3.3 percent this year, the forecast was cut twice since July.
The metal retreated 23 percent in 2008 as the global economy tumbled into a recession. Japan and the 17-nation euro zone are contracting again this year and the Congressional Budget Office says the U.S. economy faces the same risk should lawmakers fail to resolve more than $600 billion of automatic spending cuts and tax increases scheduled to start next month.
Investors may also be dissuaded by the metal’s price swings. Its 100-day historical volatility is almost twice as high as gold, meaning investors are subject to bigger losses as well as gains. Silver for immediate delivery reached a record $49.79 in April 2011 before tumbling 35 percent in less than three weeks.
Bullion Market
Comex silver futures are valued at about $22.6 billion, compared with $72.4 billion for the bourse’s gold contracts, data compiled by Bloomberg show. Members of the London Bullion Market Association handled an average of $34.7 billion of gold a day in October, and $3.26 billion of silver.
Investors own 18,760.34 tons through ETPs, less than 1 percent below the record set on Nov. 15. Morgan Stanley predicts they will add a further 500 tons in 2013. The bank said in a report Dec. 6 that silver is among its top commodity picks for next year, along with gold, corn and soybeans, because it will be boosted by investor demand and a weaker U.S. currency.
Central banks are seeking to boost growth through printing money, increasing investor concern the actions will debase currencies and spur inflation.
The Federal Reserve said Dec. 12 it would buy $45 billion of Treasury securities a month from January, adding to $40 billion a month of existing mortgage-debt purchases. Silver jumped about 53 percent during the first round of so-called quantitative easing from December 2008 through March 2010, twice the gain in gold. It advanced 24 percent in the second phase that ended in June 2011, about three times more than the other metal. The central bank bought $2.3 trillion of debt in total.
Subway Station
The scale of intervention is a sign to some investors that markets will be roiled once more by financial meltdowns. That’s reflected in Silver Bullion’s sales, which reached S$38 million in 2011, from S$700,000 in the first year of business. Orders were also boosted by the government lifting a goods and service tax on investment-grade gold, silver and platinum from Oct. 1.
While Gregersen’s first sale was made in a Singapore subway station, his company is now a member of the Singapore Bullion Market Association, with suppliers from the Perth Mint in Australia to the Mexican central bank.
“There’s going to be another big crash, we are really near it now,” said Chin Kuan Yew, a businessman and Silver Bullion customer who sold all his properties, including his condominium, to buy more metal. “You have on the one hand the U.S. printing money and the European Union is on the brink of collapse.”
What to Do Next?
If you have been predicting the ups and downs of the market well over the last few years, then stick with the strategies that are working for you. However, if you have a spotty track record, then likely you need some assistance in charting a course to better results.
The Gold Investor’s Handbook – click here for more detail on the in’s and outs of investing in gold
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Gold Futures Decline on U.S. GDP Report
Posted: December 20, 2012 Filed under: Gold | Tags: Baltimore, Betty Liu, Bloomberg, Bloomberg L.P., Exchange-traded fund, Federal Reserve System, New York Mercantile Exchange, Stifel Nicolaus Leave a commentDEC. 20
Gold futures fell to the lowest since August after a report showed the U.S. economy grew more than forecast last quarter, damping expectations that the Federal Reserve will expand monetary stimulus.
The U.S. grew at a 3.1 percent annual rate in the third quarter, more than previously reported and exceeding all projections in a Bloomberg survey, Commerce Department figures showed. The Fed said Dec. 12 it will boost its main stimulus tool by adding $45 billion of monthly Treasury purchases to an existing pledge of $40 billion in mortgage debt a month. The program is its third round of debt buying, known as quantitative easing, aimed at spurring growth.
Gold Futures Decline to Lowest Since August
Chris Ratcliffe/Bloomberg
The price may drop to $1,535 an ounce if it closes below the 200-day moving average, said Dave Lutz, the head of exchange-traded fund trading and strategy at Stifel Nicolaus in Baltimore.
The price may drop to $1,535 an ounce if it closes below the 200-day moving average, said Dave Lutz, the head of exchange-traded fund trading and strategy at Stifel Nicolaus in Baltimore.
Dec. 20 (Bloomberg) — The number of Americans filing first-time claims for unemployment insurance payments rose by 17,000 to 361,000 in the week ended Dec. 15, Labor Department figures showed today. The U.S. economy grew at a 3.1 percent annual rate in the third quarter, according to Commerce Department figures released today in Washington. Betty Liu and Dominic Chu report on Bloomberg Television‘s “In the Loop.” (Source: Bloomberg)
“The GDP number was better than forecast, so the thinking is that improving conditions in the economy might mean a light at the end of the tunnel on when the Fed will end QE3,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates in Chicago, said in a telephone interview.
Gold futures for February delivery fell 1 percent to $1,650.80 an ounce at 9:48 a.m. on the Comex in New York, after touching $1,647.30, the lowest since Aug. 31. Through yesterday, the price was up 6.4 percent this year.
The metal
is poised to close below its 200-day moving average near $1,668, a bearish signal to some analysts who study historical price patterns. A close below the level means gold could drop to $1,535 by the end of the first quarter, Dave Lutz, the head of exchange-traded fund trading and strategy at Stifel Nicolaus & Co. in Baltimore, said yesterday.
Annual Gains
As of yesterday, prices surged 89 percent since the end of December 2008 as the Fed kept borrowing costs at a record low and bought debt. Bullion is heading for a 12th annual gain after central banks from the U.S. to China and Europe took action to prop up economies.
Holdings in gold-backed exchange-traded products increased to a record 2,631.79 metric tons yesterday, data tracked by Bloomberg show. They’ve expanded 12 percent this year.
Silver futures for March delivery tumbled 2.9 percent to $30.215 an ounce on the Comex. Earlier, the metal touched $30.05, the lowest since Aug. 23.
The ratio of silver’s price to gold climbed to 54.74, the highest since August.
AMP Gold and Precious Metals Portfolio: The Gold Investor’s Handbook by Jack A Bass (Sep 18, 2012)
Available Now at AMAZON.COM ( go to books )
The Gold Investor’s Handbook – click here for investment profits and much more detail on the in’s and outs of investing in gold
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