• Tag Archives Precious Metals
  • Doldrums and Summer lows? Pining sez No!

    With analysts at most public PM websites now turning decidedly bearish, with the summer doldrums staring us in the face, with the new rate hike raising interest rates (on paper making gold less desirable as it provides no yield), and with the gold seasonals suggesting that ‘sell in May and go away’ was the play, there is a definite bearish tilt to the sector right now. That’s why (among other things) we have a great risk-reward setup staring us in the face.
    Pining thinks it’s a great place to go long (with stops)! Let me give you a few reasons why, then I’ll outline the trade:
    Sentiment:
    A quick review of 7 popular and publicly available precious metals analytics/trading sites, and a glance through the comments on those sites, made clear to me that there is (at least roughly) a general consensus in the metals complex right now: after failing to break through 1300, and first pushing through then falling back below the long-term downtrend line in gold, the summer doldrums are upon us and consensus sentiment has turned bearish. The two most likely scenarios I saw discussed were either (1) we languish and churn lower for the next few months following typical gold seasonals pattern into a July or August low, or we cascade from here into an earlier low, perhaps late June or early July.
    I like this widespread bearishness very much. This is precisely the type of setup the metals love; wrong-foot the investing public, going against well-known patterns (because it’s never that easy in the metals) and making sure the majority of retail is not on the train and has to chase price. That’s also why the so-so COT doesn’t bother me much, that pattern has been a bit TOO clear recently and has been becoming a little too easy to trade, so I think it’s due for a wrong-foot. In fact it is this ‘juking the crowd’ and subsequent chasing of price on the way up that provides the fuel for the best runs in the metals. This is an excellent setup from a sentiment standpoint. Just ask yourself, when was the last time the majority of retail sentiment was dead-on correct and on the right side of the trade in the metals? Thought so.

    This post was published at TF Metals Report on June 19, 2017.


  • The Fed Rate Hike and Gold – Precious Metals Supply and Demand

    Shrinking the Balance Sheet? The big news last week came from the Fed, which announced two things. One, it hiked the Fed Funds rate another 25 basis points. The target is now 1.00 to 1.25%, and there will be further increases this year. Two, the Fed plans to reduce its balance sheet, its portfolio of bonds.
    ***
    It won’t do this by actually selling, but by not reinvesting some of the principal repaid as the Treasury rolls over each bond at maturity. This is like reducing the workforce by a hiring freeze and attrition, rather than by layoffs.
    We are no Fed insiders, but if we were to take an educated guess, we would read the last part as a shuffle between the Fed and the banks. No one can afford rising long-term bond yields, as the banks hold plenty of them and this would be a capital loss. Also, if bond prices drop then all other asset prices would drop too. Banks would take another hit.

    This post was published at Acting-Man on June 20, 2017.


  • Bonds and Related Indicators (and more macro discussion)

    The target for TLT continues to be around 129. Treasury bonds are in bull trends (remember back a few months ago to all the bond hatred in the media). How does an eventual decline in bonds square with what we just noted above regarding Q4 2008? [work done in the preceding Precious Metals segment] Treasury bonds were a wonderfully bullish asset during Armageddon ’08 and who’s to say that an upside blow off may not be coming sooner rather than later amid massively over bullish sentiment? I mean, there is certainly no stop sign at our 129 target. Sentiment, as we are all too aware, can take a long while to manifest in pricing.

    This post was published at GoldSeek on Monday, 19 June 2017.


  • Stocks and Precious Metals Charts – Blues en Mineur 1940

    “Man has places in his heart which do not yet exist, and into them enters suffering, in order that they may have life.”
    Lon Bloy
    There was a stock option expiration for June on this Friday past as noted on the option calendar below.
    There will be a Comex option expiration for the precious metals on June 27th which is the Tuesday after next.
    The economic news still indicates an economy that is faltering on the edge of a sustainable recovery. The biggest problem is still the lack of real income (wage) growth among the breadth of the participants in the real economy.
    I am afraid that the deck is still stacked pretty much against the 99% because of financial, regulatory, and political distortions in favor of the wealthiest few at the expense of the many.

    This post was published at Jesses Crossroads Cafe on 18 JUNE 2017.


  • Return of the Gold Bear?

    It was exactly one month ago we discussed our posture as a ‘bearish Gold bull.’
    The gold mining sector hit a historic low nearly 18 months ago but this new cycle has struggled to gain traction as metals prices have stagnated while the stock market and the US Dollar have trended higher. Unfortunately recent technical and fundamental developments argue that precious metals could come under serious pressure in the weeks and months ahead.
    First let me start with Gold’s fundamentals, which turned bearish a few months ago and could remain so through the fall. As we have argued, Gold is inversely correlated to real interest rates. Gold rises when real rates fall and Gold falls when real rates rise.
    Real interest rates bottomed in February and have trended higher ever since. As we know, the rate of inflation has peaked and is declining. Meanwhile, the fed funds rate has increased while bond yields have remained stable. The real fed funds rate and the real 5-year yield have increased by 1% in recent months. If inflation falls by another 0.5% and the fed funds rate is increased by another quarter point, then the real fed funds rate would be positive by the end of the year. That would mark a 2% increase inside of 10 months.

    This post was published at GoldSeek on 18 June 2017.


  • How Precious Metals Can Help Protect Your Wealth from Hackers

    Could your wealth be hacked? It’s a threat most investors overlook. But they do so at their own peril.
    Learn How to Exploit the Gold Frenzy! If elections can be hacked, then so can bank and brokerage accounts, as well as any online platforms for digital currencies.
    More than five months into Donald Trump’s presidency, the ‘Russia hacked the election’ conspiracy theories still won’t go away. They’re expanding to also implicate Russian hackers for meddling in elections in France and elsewhere. The latest Russian hacking story centers on Qatar.
    According to the Guardian, ‘An investigation by the FBI has concluded that Russian hackers were responsible for sending out fake messages from the Qatari government, sparking the Gulf’s biggest diplomatic crisis in decades.’
    Choose From 10-100oz Pure Silver Trusted Bullion Dealer – Buy Now! silvergoldbull.com The Russian government has repeatedly denied involvement in these hacking campaigns. Regardless of whether the news about Russian hackers is fake, the threat of cyber-attacks is very real.
    In recent months, major e-mail providers and e-commerce sites have been hit by hackers. They often take customers’ information and try to sell it on the dark web.

    This post was published at GoldSilverWorlds on June 17, 2017.


  • Reflation, Deflation and Gold

    One of the most important economic debate today is whether the economy will experience reflation or deflation (or low inflation) in the upcoming months. Has the recent reflation been only a temporary jump? Or has it marked the beginning of a new trend? Is the global economy accelerating or are we heading into the next recession? It goes without saying that it is a key investment issue because of the implications for different asset classes, including the precious metals. Let’s try to outline the macroeconomic outlook.
    As one can see in the chart below, inflation has recently risen both in the U. S. and the euro area. And inflation in the UK has really accelerated recently. It’s true that there was a slowdown in the U. S. after a peak in February, but the level of inflation rates remains much higher than in 2014-2015.
    Chart 1: The CPI rate year-over-year for the U. S. (blue line), the Eurozone (red line), and the UK (green line) over the last ten years.

    This post was published at GoldSeek on 16 June 2017.


  • Trader: “The Downside Doesn’t Get Interesting Until S&P Hits 2,400…”

    “Keep It Simple Stupid,” is the key lesson from Bloomberg’s Richard Breslow note this morning as he conjures doves, snakes, hawks and starfish to make his point. Simply put, don’t panic… yet. Here are the assets he’s watching and levels to trade…
    Sometimes when you just can’t keep the story simple, it’s best to do so in your trading. The world is a complicated place and there’s great risk in trying to reduce all causality to one factor. There’s a tug of war going on and the rope resembles a starfish not a snake. Although I’d have to admit, a lot of what we’re witnessing has a distinctly reptilian aura about it.
    So what are some of the things we need to factor in?
    Chair Yellen was hawkish. Why various assets responded to her in the way they did is a story about them. And well worth considering. But it doesn’t change the underlying fact. Bonds being bid doesn’t mean they don’t believe her or we’re watching a different press conference than precious metals traders.

    This post was published at Zero Hedge on Jun 15, 2017.


  • Precious Metals & The Block Chain, A Game Changer? David Morgan

    The following video was published by The Morgan Report on Jun 15, 2017
    Precious Metals expert David Morgan’s talk at the Cambridge House Metal Writers Conference in Vancouver.
    His talk was on the state of Blockchain technologies along with the pros and cons of this technology and its role as currency.
    He goes through the parabolic cycle and compares it to the 1980 parabolic cycle of silver and gold.
    Other things is the dangers of Bitcoin and Blochchains in a volitile digital cyber security world.


  • One Massive, Global, Serial Bubble

    Precious metals expert Michael Ballanger reflects on the state of the stock and bond markets and their effect on the gold market.
    ***
    These missives that I construct periodically usually have as their genesis a “Eureka!” moment while reading a research piece or a written commentary from one of the thousands of self-styled market authorities or if I have the random luck of catching an interview on Bloomberg or (UGH!) CNBC. During a normal week, I will text myself a quick note or leave myself a voice note when and if an idea comes to mind so when I am travelling, it is usually preferable that I be close to a decent WiFi signal in order for my ramblings to be relevant.

    This post was published at GoldSeek on Thursday, 15 June 2017.


  • The Anatomy of Brown’s Gold Bottom – Precious Metals Supply and Demand

    The Socialist Politician-Bureaucrat with the Worst Timing Ever
    As most in the gold community know, the UK Chancellor of the Exchequer Gordon Brown announced on 7 May, 1999 that HM Treasury planned to sell gold. The dollar began to rise, from about 110mg gold to 120mg on 6 July, the day of the first sale. This translates into dollarish as: gold went down, from $282 to $258. It makes sense, as the UK was selling a lot of gold… or does it?
    We won’t get into the theories of his motivation. However, we note that if he wanted to – pardon the dollarish – push down gold, he was not particularly effective. He squandered half of Britain’s gold to get the price to drop 8.5%. That lasted but a few months.
    By the end of September, the price was not only back up to $282 but rising rapidly on its way past $320. Then it came down with volatility, rose, slowly fell to just under $260 about two years later. The price bottom just about coincides with the end of his selling.

    This post was published at Acting-Man on June 13, 2017.


  • Why the World’s Billionaire Investors Buy Precious Metals

    Why are these billionaires buying precious metals?
    Their cited reasons can basically be summed up with six categories: wealth preservation, store of value, inflation hedge, portfolio diversification, future upside, and investment fundamentals.
    What Billionaire Investors are Doing
    1. Lord Jacob Rothschild
    In late summer 2016, Rothschild announced changes to the RIT Partners portfolio because he was worried about very low interest rates, negative yields, and quantitative easing, saying they are part of the ‘greatest monetary experiment in monetary policy in the history of the world’.
    His solution? Buy gold to help preserve wealth, and as a store of value for the future.

    This post was published at GoldSeek on 11 June 2017.


  • Louisiana Legislature Passes Bill to Repeal State Sales Tax on Precious Metals

    Earlier this week, the Louisiana House gave final approval to a bill that would exempt precious metals from state sales and use taxes. This would remove one barrier from buying gold, silver and platinum. It would also help encourage their use and take the first step toward breaking the Federal Reserve’s monopoly on money.
    Rep. Stephen Dwight (R) and Rep. Mark Abraham (R) introduced House Bill 396 (HB396) on March 31. The legislation would exempt the sale of platinum, gold, or silver bullion, ingots, or coins that are valued only on their precious metal content from the state sales tax. It would also exempt certain numismatic (collectable) coins.
    The House passed HB396 95-0 on May 24. The Senate followed up on June 2 and approved the measure by a vote of 30-2 with some technical amendments. On June 6, the House concurred with the Senate amendments by a vote of 103-0, sending the bill to Gov. John Bel Edward’s desk for his consideration.
    IN PRACTICE
    Imagine if you asked a grocery clerk to break a $5 bill and he charged you a 35 cent tax. Silly, right? After all, you were only exchanging one form of money for another.

    This post was published at Schiffgold on JUNE 8, 2017.


  • Stocks and Precious Metals Charts – Tenacious D

    “The dictatorship, and the whole process of its coming into being, was above all diverting. It provided an excuse not to think for people who did not want to think anyway. I do not speak of your ‘little men,’ your baker and so on; I speak of my colleagues and myself, learned men, mind you. Most of us did not want to think about fundamental things and never had. There was no need to.
    Milton Mayer, They Thought They Were Free: The Germans 1933-1945
    “Representative institutions no longer represent voters. Instead, they have been short-circuited, steadily corrupted by an institutionalized system of bribery that renders them responsive to powerful interest groups whose constituencies are the major corporations and wealthiest Americans. The courts, in turn, when they are not increasingly handmaidens of corporate power, are consistently deferential to the claims of national security…”
    Sheldon Wolin, Inverted Totalitarianism
    “It seems that under the overwhelming impact of rising power, humans are deprived of their inner independence and, more or less consciously, give up establishing an autonomous position toward the emerging circumstances.
    The fact that the foolish person is often stubborn must not blind us to the fact that he is not independent. In conversation with him, one virtually feels that one is dealing not at all with him as a person, but with slogans, catchwords, and the like that have taken possession of him.

    This post was published at Jesses Crossroads Cafe on 07 JUNE 2017.


  • In Gold We Trust

    With the U. S. dollar taking another hit last Friday on a weaker-than-expected jobs report, gold closed up 1.12 percent for the day today. A Bloomberg gauge of 72 junior miners, however, has lost 15 percent since the end of January, and the rebalance of the VanEck Vectors Junior Gold Miner ETF (GDXJ), which I previously wrote about, is also having a depressing effect on many gold names.
    This was a major concern among investors at the International Metal Writers Conference in Vancouver, which I presented at last week. Despite gold gaining 9 percent so far this year, junior gold miners have not followed through with those gains as the GDXJ is set to cut in half its exposure to the junior mining space on June 16.
    We’ve Only Just Begun
    Other investors aren’t so pessimistic. Every year for the past 11 years, Liechtenstein-based investment firm Incrementum has issued its closely-read ‘In Gold We Trust’report. The 2017 edition, released last Thursday, raises a number of interesting observations that add some shine to gold’s investment case.
    For one, its analysts firmly believe that gold’s price turnaround last year ‘marked the end of the cyclical bear market,’ adding that ‘the rally in the precious metals sector has probably only just begun.’ To illustrate this, the group tracked the performance of every gold stock bull market going back to 1942, using the Barrons Gold Mining Index. The bull market that began last year, highlighted in red below, does indeed look as if it has much more room to run.

    This post was published at GoldSeek on 7 June 2017.


  • Stocks and Precious Metals Charts – The Summer Wind

    “It was June, and the world smelled of roses. The sunshine was like powdered gold over the grassy hillside.”
    Maud Hart Lovelace
    “Who has seen the wind?
    Neither I nor you.
    But when the leaves hang trembling,
    The wind is passing through.
    Who has seen the wind?
    Neither you nor I.
    But when the trees bow down their heads,
    The wind is passing by.”
    Christina Rossetti
    Today was just a bit of a ‘risk off’ day, with gold and silver showing gains, and the big gap NDX showing its first negative number on the futures in twelve trading days.
    The weather here is glorious one day, and cooler and rainy the next. Nature is fairly bursting forth as Spring gives way to early Summer.
    Gold is bumping its head against a new high for the year, and some serious overhead resistance.

    This post was published at Jesses Crossroads Cafe on 06 JUNE 2017.


  • Gold and Silver ETF Demand Lacking as Prices Jump, Yuan Leaps vs. Dollar

    Gold prices jumped to new 7-week highs at $1291 per ounce on Tuesday, again testing the 6-year downtrend line in place since the metal’s 2011 record highs as Western stock markets fell with longer-term interest rates.
    After the ISM Prices Paid measure of inflation in manufacturing costs “tanked” in Friday’s report for May, 10-year US Treasury yields today fell again to post-Trump election lows of 2.15%.
    Crude oil also extended its drop despite the “freezing out” of Qatar by other Gulf states over what Saudi Arabia and now US President Trump call the “funding of radical ideology.”
    British police meantime said they and the MI5 security service had one of Saturday night’s 3 suicide-murderers in London Bridge under close surveillance back in 2015 when he appeared on a national TV documentary entitled The Jihadi Next Door.
    “Gold is not just for turbulent times, it has been a good source of returns over the last 10, 20 and 30 years,” said former UBS and then Paulson & Co. strategist John Reade, now chief market strategist for the mining-backed World Gold Council, at the Asia Pacific Precious Metals Conference in Singapore.

    This post was published at FinancialSense on 06/06/2017.


  • Qatarstrophe Sends Gold Near Post-Election Highs As Crude Tests 2017 Lows

    With Treasury yields at their lowest since the election, it appears a shift towards safe-havens (or Trumpflation unwinds) is well underway. Gold is nearing $1300 this morning – its highest since the election. WTI Crude has sunk back to a $47 handle, ignoring dollar weakness as the Qatarstrophe raises more doubts about OPEC coordination.
    A weaker dollar is helping precious metals (and Bitcoin) but not crude – a break in the relationship regime we have seen this year.

    This post was published at Zero Hedge on Jun 6, 2017.


  • Stocks, Bonds, Euro, and Gold Go Up – Precious Metals Supply and Demand

    Driven by Credit
    The jobs report was disappointing. The prices of gold, and even more so silver, took off. In three hours, they gained $18 and 39 cents. Before we try to read into the connection, it is worth pausing to consider how another market responded. We don’t often discuss the stock market (and we have not been calling for an imminent stock market collapse as many others have).
    The initial reaction in the US equities market (futures, as this was before the opening bell) was down. But it was muted, and then in a few hours turned around and the market ended even higher.
    Each stock represents a business. Presumably, if jobs growth was disappointing then this is bad for stocks on two grounds. One is that companies hire based on their revenue expectations. Slow or no hiring means slow or no revenue growth. The other is that people who aren’t hired don’t buy as much, and so there is a feedback loop into sluggish business revenue growth.
    However, the stock market disagreed. It said let’s cut the earnings yield a bit more, from 3.94% to 3.93%. This presumably means that earnings are set to take off (or it could mean that everyone from wage-earners who pour their surplus into the stock market to older speculators are not thinking about earnings yield).
    Not only did the stock market go up, so did the euro. As did US Treasury bonds. And, finally, gold and silver. What is the one thing that these all have in common?
    It is possible to borrow to buy these assets.
    We read this as a garden-variety day of credit expansion. Folks, this is how the monetary system is supposed to work, according to mainstream economic thought. Based on <insert story du jour>, people borrow to buy assets. This creates a wealth effect, as rising asset prices makes people (at least those who own those assets) feel richer. When they feel richer, they go out to eat more, buy more Rolexes and Porsches, and that employs everyone else. Or so their theory goes.
    Fundamental Developments
    Stock analysts have a wealth of material to study the fundamentals of public companies. We leave that work to them. We have a theory, model, and now a robust software platform to study and calculate the fundamentals of gold and silver.

    This post was published at Acting-Man on June 6, 2017.