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Monthly Archives: January 2015

Gold Reaches Five-Month High on Haven Demand

Gold reached a five-month high on Tuesday as investors sought to safeguard their wealth from uncertainty surrounding the euro.

The most actively traded gold contract, for February delivery, rose $17.30, or 1.4%, to $1,294.20 a troy ounce on the Comex division of the New York Mercantile Exchange. It was the highest settlement since Aug. 20.

The euro retreated against the dollar as investors braced for the outcome of the European Central Bank’s policy-setting meeting on Thursday. The ECB is expected to announce a bond-buying program aimed at buttressing the region’s fragile economy. The euro is likely to weaken further in response, having tumbled to 11-year lows against the dollar last week after the Swiss National Bank scrapped its cap on the franc’s value against the common currency.

Gold drew investors who expect the precious metal will keep its value better than paper currencies and other investments, such as stocks, if the euro falls further. (more…)

Gold Swoons 1% After Biggest GLD Inflow Since 2011 Top, Silver ‘Outperforms’ as ECB Seen ‘Disappointing’ on QE Thurs

GOLD PRICES sank 1% in 15 minutes as New York opened Wednesday and trading in the $30 billion SPDR Gold Trust (NYSEArca:GLD) began after the largest inflow of investor money since gold’s summer 2011 peak.

Having hit new 5-month highs at $1304 per ounce, the gold price also fell swiftly for non-Dollar investors, dropping 1.3% against the Euro, which rallied on the FX market ahead of tomorrow’s policy decision from the European Central Bank, widely expected to launch QE asset purchases.

That still left gold 9% higher in Dollars and 13% higher in Euros from the start of the month.

Silver prices also fell hard in afternoon trade Wednesday in London, but held nearly 15% higher for 2015-to-date against the Dollar.

The gold needed to back GLD shares – the largest exchange-traded fund 3.5 years ago, valued at $77.5bn – yesterday grew by another 11.5 tonnes. (more…)

Coinbase’s $75M raise shows investors still see gold in Bitcoin

Coinbase announced a raise today of $75 million, putting the company’s total fundraising just over $106 million.

That’s the biggest raise that a Bitcoin company has every seen, despite the fact that Bitcoin’s value continues to decline. Last week, the coin fell below $200. As of this writing, however, it’s worth roughly $210 per Bitcoin.

Today’s raise isn’t surprising, according to numbers from social investing platform Hedgeable — investors still have faith in Bitcoin’s overall trajectory. The platform surveyed its community of investors to see where they thought the price of Bitcoin is headed in the next three years.

The community is divided up between traders, venture capitalists, entrepreneurs, Bitcoin enthusiasts, and the media. While the media has no hope for the future of Bitcoin, traders showed more faith. They predict that though Bitcoin may have a rough 2015, it will rebound in the years to follow with a 171 percent price increase in 2016 and a 152 percent rise in 2017. (more…)

Gold rallies to 4-month highs

Seems like the shiny stuff is enjoying its re-found safe haven status and now stands around 4month highs of 1285

Offers into 1300 and 1325 with support now coming in at 1275 and 1255.

What are you gold traders looking for from here ?

Gold Market Update

Nothing has been done to address the structural inadequecies and distortions that lead to the 2008 financial crisis – instead our leaders have resorted to the procrastination made possible by turning to drugs, specifically Quantitative Easing, which has enabled them to clamp interest rates at 0 to prevent the already unserviceable debt load from compounding out of sight. Spearheaded by the US, this money printing policy has now become standard practice around the world, with Europe and Japan following suit in a big way. The notion put about that all this newly printed money can somehow be contained within banks is nonsense as demonstrated by the soaring prices of stockmarkets in developing markets until recently and in various asset bubbles like the boiling London and New York Real Estate markets.

This global procrastination worked until recently, but now this reckless and economically suicidal policy is visibly coming apart at the seams – it didn’t work for Robert Mugabe’s Zimbabwe and it won’t for anyone else either because it is a flawed scheme to avoid facing up to the consequences and fallout from one’s actions. The only reason that the ship hasn’t sunk so far is complex financial engineering that has enabled the rot at the heart of the system to be obfuscated for as long as possible, but now the markets have gotten control of the ball and things look set to get ugly fast. (more…)

Randgold and Fresnillo rise as gold and silver benefit from Swiss move

The shock move by the Swiss Bank to end the currency peg against the euro has sent the euro tumbling, put markets under pressure and sent investors scurrying for havens for their cash.

So inevitably gold is benefiting, rising 2% to a 12 week high of $1259 an ounce while silver is up from $16.8 to $17.1.

Michael Hewson at CMC Markets said:

The ripple out effect of the Swiss move is likely to be hard to quantify, and we could well get a lot more volatility as investors and markets in general try and work out what this sudden change in policy means for future central bank promises going forward, but it seems likely that the US dollar could well benefit, as well as gold, as investors look again at the more traditional havens.

This morning’s moves also highlight how fragile financial markets still are nearly six years after the financial crisis despite trillions of dollars of central bank largesse and the risk is that markets start to lose faith in these new masters of the universe as investors look at central bank promises with large dollops of scepticism. (more…)

Gold Demand Seen Expanding 15% by HSBC on Asia-to-ETP Buying

Gold demand will rebound in 2015 as bullion consumption in Asia increases and investors return to exchange-traded products backed by the metal, according to HSBC Securities (USA) Inc.

Global demand may rise 15 percent to 4,127 metric tons this year, analysts James Steel and Howard Wen wrote in a report dated Jan. 14. Consumption reached a record 4,582.3 tons in 2011, when prices climbed to a peak of $1,921.17 an ounce, according to data from the World Gold Council.

Gold last year posted the first back-to-back annual drop since 2000 as assets in bullion-backed ETPs contracted, the dollar advanced and U.S. equities surged. An economic slowdown in China and import restrictions in India also hurt gold purchases by the world’s largest consumers in 2014. Rising Asian demand for gold may help bullion prices to recover after testing new lows this year, Barclays Plc said in report this week. (more…)

Gold miners are starting to look good again – but expect a rough ride

It’s been a long time since I’ve been able to say this.

But suddenly, things are looking up for gold mining.

From 2012 to 2014, a gold mining company was just about the worst thing you could have owned. But broader market conditions have changed.

If you haven’t already, is now the time to buy back in?

The worst thing you could have owned (more…)

Market doomsayer Marc Faber: Gold will rally 30% in 2015

Gold has absorbed its fair share of the commodities-market blows in recent years, but now is the time to move back into the precious metal, according to superbear Marc Faber.

“I’m positive that gold GCG5, -0.41%  will go up substantially in 2015 — say 30%,” Faber, whose investment letter is called the Gloom Boom Doom Report, said at Société Générale’s global strategy presentation in London on Tuesday.

“My belief is that the big surprise this year is that investor confidence in central banks collapses. And when that happens —a I can’t short central banks, although I’d really like to, and the only way to short them is to go long gold, silver and platinum,” he said. “That’s the only way. That’s something I will do.”

Gold has tanked 35% since reaching an all-time high just above $1,900 an ounce in September 2011, making it one of the worst performing assets in recent years. In 2014, it lost 1.5%, following a 28% slide in 2013. So far in 2015, however, investors have taken a liking of the metal, with the front-month contract up 4.1%, outpacing gains for even a solidly performing dollar. (U.S. equities have been testing the waters on both sides of the break-even mark.)

“We simply have highly inflated asset markets. Real estate is high, stocks are high, bonds are high, art prices are high, and interest rates and short-term deposits are basically zero,” Faber said. “The only sector that I think is very inexpensive is precious metals, and in particularly precious-metals stocks.”

Faber, at times identified as “Dr. Doom,” singled out U.S. stocks as especially overvalued. Emerging markets, in contrast, could be on the cusp of another bull run, although investing in them in the early part of 2015 may be premature, he said.

“I don’t think they are that cheap. Valuations are not expensive, but they are not the bargain of the century. But I believe some time in the next six to nine months emerging economies will become relatively attractive.”

Inflation Down, Gold Up?

So the consensus amongst analysts, fund managers and longer-term traders is unchanged, writes Adrian Ash at BullionVault.

Inflation is low and falling, yet the Fed will start raising US interest rates in 2015, and that will be bad for gold and silver prices.

Perhaps. It would more surely be bad for US Treasury bond prices. Because higher rates mean lower bond prices. Something which fixed-income investors haven’t really suffered since the 1990s.

The yield offered to investors by US Treasury debt adjusted for inflation in the cost of living of the last 15 years,falling steadily since 1999 as bond prices rose.

Gold prices have moved in tandem, rising as those inflation-adjusted yields fell, up until what clearly marks a big turning point for both in late 2011. (more…)

Suddenly, gold bugs have reason to smile

After months of being beaten up, gold is finally becoming a safety trade again.

The yellow metal is trading near 12-week highs as global investors flee volatile overseas equity markets and collapsing oil prices. In the last two months, gold is up nearly 7 percent. The move comes after gold posted its first back-to-back annual loss in bullion since 1997.

Despite the rally, some traders remain skeptical.

“Ultimately, gold will have to fall because we do have an anemic recovery in place and at some point that will mean rising interest rates,” said Gina Sanchez, founder of Chantico Global. “However, it is an anemic recovery, and I think that’s going to put the Fed on hold for most of the year. That’s going to leave gold some room for what I think are going to be mini-rallies.” (more…)