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Morning Gold & Silver Market Report – 9/26/2012
By Ryan SchwimmerSeptember 26, 2012GREECE & SPAIN HURT EURO, DRIVE DOWN METALS PRICES
Precious Metals are trading lower this morning as central bank buying wasn’t enough to keep prices in positive territory. Renewed concerns out of Greece and Spain have driven the euro downward and strengthened the dollar. However, analysts at Commerzbank noted, “Central banks are likely to continue to buy Gold for the remainder of this year, thereby stripping supply from the market and contributing to climbing Gold prices.”
Protesters have taken to the streets of Greece and Spain yet again. The fresh Greek government is currently working on a budget with the European Central Bank, International Monetary Fund and European Commission in order to receive more bailout funds. The problem is that the Greek people have apparently reached a breaking point on austerity measures. Author and economist Vicky Pryce said, “They are trying to see whether they can have a stay of execution, and the protests are actually probably going to help, because it’s obvious that they can’t take any more austerity. The cost has been great for the Greeks… There’s just no light at the end of the tunnel at present.”
Spanish Prime Minister Mariano Rajoy seems to be gambling with his country’s well-being. The latest speculation out of Spain is that Rajoy is delaying a bailout request because he believes that issues in Italy will worsen, making the bailout terms more friendly for Spain when it does finally request a bailout. Raphael Gallardo of Rothschild Asset Management said that Spain “would be in better company and would suffer less stigma if it was to ask for a rescue at the same time as Italy. Italy needs further austerity efforts so those are probably more reachable with the support of the European Union and the ECB.”
At 9 a.m. (EDT), the APMEX Precious Metals spot prices were:
- Gold, $1,747.90, Down $17.50.
- Silver, $33.69, Down $0.27.
Manipulation Of The Gold Price
There is much discussion these days as to whether the price of gold is being manipulated. The answer is simply " yes." Read More
Gold Weakness from the Top is Impulsive
Daily Bars
Prepared by Jamie Saettele, CMT
“The decline from the high in gold is impulsive (5 waves) but that decline could just as well complete a flat. As such, it is best to refrain from the short side until a drop below last week’s low (1752).” A drop below would shift to 1715 and probably quickly given the crowded nature of this market.
LEVELS: 1715 1737 1752 1770 1780 1790
Last Updated : 25 September 2012 at 22:40 IST
Gold, Silver remain safe haven assets in this troubled world
Source :Silver-Coin-Investor.com
Basically, precious metals allow investors to engage in a new way of thinking, where investment priorities are anchored to real value and permit advance planning for troubled times.
By Dr Jeffrey Lewis
The reasons for holding precious metals as a relatively safe haven for one’s personal wealth are numerous. One common investing thesis for buying precious metals is that these intrinsically valuable commodities can hold their value in times of rising price levels. This characteristic can help American savers keep pace with credit expansion and paper currency debasement.
Diversify out of the Dollar
For example, precious metals can provide a safe haven in terms of the diversification they offer relative to holding U.S. Dollars in cash or Dollar-denominated assets.
Physical gold and silver investments can take up a core position in an investment portfolio since they offer an easy way to have some wealth stashed out of Dollar-denominated assets. These hard assets also provide a viable alternative to holding foreign currencies or foreign equities.
Basically, precious metals allow investors to engage in a new way of thinking, where investment priorities are anchored to real value and permit advance planning for troubled times.
When the Dollar bubble bursts
In much the same way that market bubbles have been blown in various asset classes over the last 40 years, largely via Fed sanctioned interest rate manipulation, the overvalued U.S. Dollar seems like yet another bubble waiting to burst.
Basically, the value of silver has been artificially deflated in U.S. Dollar terms via price control implemented using contracts traded at global futures exchanges.The symbolic investigation of this so-called conspiracy by the CFTC just passed its fourth year.
Underpriced assets like silver will eventually lead the way back to what will very likely be the largest bubble the world has ever seen. The U.S. Dollar and the U.S. bond market appear destined for a long overdue crash.
Various factors point to this outcome. They include such things as: intrinsically worthless paper wealth, high frequency trading, a world where MF Globals can exist, the threat of taxation, and rampant money printing — otherwise known as Quantitative Easing.
Competing with the banks for credit
Major international banks have benefited disproportionately compared to the individual investor from credit expansion in recent years. Banks enjoy better profits from cheap money and can buy future cash flows very inexpensively.
Meanwhile, consumer credit has contracted leaving consumers holding the bag in many cases. People are also unable to consume as much because of a rise in general price levels and the failure of the troubled financial system to purge itself of bad debt.
If at any point the American consumer and banks are equalized with additional credit infusions, the tide will then begin to turn. Consumers can then free up more discretionary income as America goes back to work.
Nevertheless, until the two groups are made equal, credit will neither expand nor contract. Instead, credit supplies will stay constant, although prices will continue to rise relative to consumer incomes.
Precious metals provide a safe haven investment that can often help compensate an investor for such price rises. Furthermore, if at any point the system balances and allows for credit expansion to extend to Main Street, then precious metals investors will typically benefit.
For more articles like this, and to stay updated on the most important economic, financial, political and market events related to silver and precious metals, visit http://www.silver-coin-investor.com
Closing Gold & Silver Market Report – 9/25/2012
By Nicholas WilseySeptember 25, 2012GOLD STAYS STEADY U.S.A. FISCAL CLIFF INCHES CLOSER
Today’s Gold prices remained relatively flat for the majority of the day. The main reason for the calm is quite simple there has been a lack of financial news to push the market in either direction. One piece of news that has been gaining attention is the amount of Gold that countries have been adding to their central banking systems. South Korea and Paraguay lead all other countries by adding more than 24 tons of Gold to their reserves in July alone. " Whether you're looking at physical flows into ETFs or the options market, activity has clearly been on the bullish side, and that will see prices move higher as we go through the fourth quarter,'' said Credit Suisse analyst Tom Kendall.
There has been a lot of finger-pointing between the European Central Bank and the governments in the European Union, which leaders say should bear the responsibility of cleaning up the financial mess in the region. " Our policies can only be the bridge toward a more stable future… governments must undertake more fundamental measures," European Central Bank President Mario Draghi said today. All sides agree it must be a group effort to succeed. Now the task is to get the group to work together, which has yet to happen.
The term " fiscal cliff" has been in the news quite often in the United States in the past few months. Due to the political split in Washington D.C. there has been a stalemate in budget talks. There are spending and tax measures set to expire at the end of the year, and if there is no compromise reached, it could have significant affects throughout the global economic landscape. " The level of political partisanship in Washington is higher than it's ever been, and that it is making it much harder to deal sensibly with some of the economic and other problems America is facing," said Xenia Dormandy, a senior fellow at Chatham House.
At 5 pm (EDT), the APMEX Precious Metals spot prices were:
- Gold, $1761.70, Down $1.90.
- Silver, $33.81, Down $0.19.
Morning Gold & Silver Market Report – 9/25/2012
By Geoffrey VarnerSeptember 25, 2012HOUSING AND CONSUMER CONFIDENCE REPORTS DUE
Stocks are holding their own Tuesday morning as investors are waiting for housing and consumer confidence data. At 10 a.m. (EDT), the July home-price index and the September consumer-confidence index will be released. Christian Tegllund Blaagjerg, Chief economist at FIH Erhvervsbank, said, “I think we’re going to see a very bullish housing market. I think the bottom was reached awhile ago. We’re not on a Ferrari-like recovery path, but still more like a Chevy pickup truck, [with] stable and continuing improvement.”
Gold is gaining ground against a stronger dollar today. The move was in response to data that central banks added to their Gold holdings in July and August. The countries leading the charge were South Korea with an increase of 16 tonnes and Paraguay with an addition of just over 7.5 tonnes. Gold is on a four-month positive trend, up 4.6 percent in September alone. Daniel Smith, an analyst at Standard Chartered said, " Ultimately, I think it's quite likely we will get above $1,800 before the year-end, so maybe a month of sideways trading possibly and then generally trending higher in the next six months to a year."
At 9 a.m. (EDT), the APMEX Precious Metals spot prices were:
- Gold, $1,773.60, Up$10.00.
- Silver, $34.39, Up $0.40.
Gold Steadies Central Banks Add to Holdings
http://www.cnbc.com/id/49156919
Gold Daily And Silver Weekly Charts - End Of Quarter
The fundamentals for gold look formidable. The long lull of summer may be coming to an end. Read More
1,170,000,000,000 Reasons To Buy Precious Metals
B of A published a report saying the Fed will increase size of its balance sheet from $2,800,000,000,000 to $5,000,000,0... Read More
Last Updated : 25 September 2012 at 08:00 IST
Silver to outperform Gold in coming quarters: Morgan Stanley
Source :Commodity Online
Silver has outperformed gold since speculation over QE3 (a third round of U.S. quantitative easing) emerged in early September this year
NEW YORK (Commodity Online): Silver to outperform gold in the coming quarters, said Morgan Stanley in a weekly commodities research note.
According to Morgan Stanley, Silver has outperformed gold since speculation over QE3 (a third round of U.S. quantitative easing) emerged in early September this year.
“While the risk-on rally in the first quarter of the year underpinned a strong performance from silver, uncertainty in global macroeconomic policy steered investors toward gold in 2Q and 3Q,” they added.
“For the next several quarters, however, we think silver will again outperform gold,” Morgan Stanley concluded.
Global gold prices ended the United States day session lower on Monday as risk aversion was the order of the day to start the new trading week.
The key outside markets were in a bearish posture for the precious metals Monday as the U.S. dollar index was higher and crude oil prices were lower.
December gold last traded down $13.70 at $1,764.40 an ounce on the Comex division of the New York Mercantile Exchange. Spot gold was last quoted down $10.70 an ounce at $1,762.75. December Comex silver last traded down $0.678 at $33.96 an ounce.
Gold Drops but Remains Constructive
240 Minute Bars
Prepared by Jamie Saettele, CMT
The decline from the high in gold is impulsive (5 waves) but that decline could just as well complete a flat. As such, it is best to refrain from the short side until a drop below last week’s low (1752). Also, the chart shown today highlights a common bullish setup in which RSI slips to new lows while price makes higher (although barely in this case) closes. Focus would shift to 1715 in the event of a 1752 break.
LEVELS: 1715 1737 1752 1780 1790 1800
Closing Gold & Silver Market Report - 9/24/2012
By Brandi BrundidgeSeptember 24, 2012GOLD PRICE LOOKING FOR INSPIRATION
Gold is attempting to hold its price as investors have begun to take profits today. Natixis Bank believes QE3 was a major contributor to Gold’s rising price and they think more positive contributors will come for the metal. Natixis Bank said, " The market will instead turn to the question of the imminent U.S. " fiscal cliff" and the need for an increase in the country's debt ceiling shortly thereafter. It is worth recalling that the peak in Gold prices in 2011 was related not to QE, but to growing concerns about the health of U.S. finances, and the prospect that the U.S. may be suffering from problems similar to those of European governments."
Now that another round of quantitative easing has been announced, it is no longer a matter of when the Federal Reserve will provide further stimulus to the American economy, but if the measures will be sufficient enough. " QE3 will likely be insufficient to significantly boost equity markets and we wouldn’t be at all surprised to see the Fed dramatically augment this program (i.e., QE4) before year-end," said Morgan Stanley chief equity strategist Adam Parker in a research note.
At 4:10 p.m. (EDT), the APMEX Precious Metals spot prices were:
- Gold, $1,766.00, Down $11.00.
- Silver, $34.05, Down $0.60.
Mid-Day Gold & Silver Market Report – 9/24/2012
By Ted PrinceSeptember 24, 2012EUROZONE NOT IN AGREEMENT STOCKS AND METALS PRICES FALL
The latest news concerning Europe’s struggle to see eye to eye on correcting the region’s debt crisis has caused U.S. stocks to fall today. The turmoil between eurozone leaders and reports that indicate a slowdown in the Chinese and German economies have extended losses for the S& P 500 for the third straight session. “There’s no magic bullet to this European crisis,” said Hayes Miller, who helps oversee about $48 billion as the Boston- based head of asset allocation in North America at Baring Asset Management Inc. “The politicians have been trying to put on a face of unity. Yet there are no easy solutions. You’re going to have an economic growth rate that’s going to be quite poor over the next year. It’s going to be a challenging environment.”
Profit-taking from recent highs and a stronger dollar have caused precious metals prices to dip today. “Double-digit gains for the quarter are going to be attractive for people to book their gains,” said Nick Trevethan, senior commodities strategist at Australia & New Zealand Banking Group Ltd. “With prices up near the highs for the year on Sept. 21, and the market seemingly not able to push through $1,800, it’s fair to say some people are cashing in.”
The gold/silver ratio, which determines the number of silver ounces it would take to buy one ounce of gold, is currently 51.89 and is expected to tighten in the near future. Though the outlook for gold remains positive, technical analysts at ScotiaMocatta said they expect silver to shorten the gap between itself and the yellow metal. " While the ratio has been consolidating the past week, the larger trend remains bearish, with an initial target at the March low of 47.67," it said.
At 1:25 p.m. (EDT), the APMEX Precious Metals spot prices were:
- Gold, $1,764.00, Down $13.00
- Silver, $33.99, Down $0.66
Last Updated : 24 September 2012 at 20:00 IST
Gold has the potential to rise to $3500-4000: Sharps Pixley
Source :Commodity Online/Sharps Pixley
The central issue with respect to the third round of quantitative easing is whether it would lead to more jobs. Gold has the potential to rise to $3500 to $4000 levels as the size of the US Fed balance sheet keeps on risiing, according to Ross Norman, Chairman of Sharps Pixley, London
LONDON (Commodity Online): Gold has the capacity to rise to $3500 to $4000 an ounce depending on the increasing size of the US balance sheet, according to Ross Norman, CEO of Sharps Pixley, London. The Fed balance sheet which has grown four-fold from pre-crisis levels is set to double again.
“If gold is to maintain its run rate - and why wouldn't it - and if prices were to correlate with the size of the US monetary base, this would suggest that the gold price rally is also only roughly half way there (arguably it would outperform as confidence in the US dollar evaporates). In other words gold has the capacity to rise to between $3500 and $4000 - something we have maintained for some time. Furthermore, this level would see the dow/gold ratio marking a fall to 2.5:1 as we also forecast,” Ross Norman said.
The central issue with respect to the third round of quantitative easing is whether it would lead to more jobs.
“The biggest crisis in our view is less of under-employed people than under-employed money (or investment fuel). Some have coined QE3 as " QE Infinity" on the basis that the Fed will be purchasing $40 bn/month in MBS for perpetuity - bringing to mind that line from Buzz Lightyear " To infinity and beyond" - others might reflect on the latest policy move and call it " to insanity and beyond" .”
Sharps Pixley maintains its bullish outlook with the best of prices yet to come, Ross Norman added.
Morning Gold & Silver Market Report – 9/24/2012
By Peter LaTonaSeptember 24, 2012GOLD & SILVER PRICES FALL IN EARLY MORNING TRADING
Increased fears about the slowing U.S. and European economies have driven up the U.S. dollar while driving down Gold and other commodities across the globe. Gold and Silver prices are currently up over their morning lows. Most likely, this downward movement is a correction in the value of the euro versus the U.S. dollar.
Spain was once a strong advocate that Ireland and Portugal be required to accept a bailout. Now the tables have turned, and it is the Spanish government who is feeling that pressure. Spain’s recent support from the European Central Bank, which lowered their borrowing costs, has bought them time. However, in order to cut contagion, Spanish leaders are being pressured to move to the next step, which would be a bailout.
U.S. investors are buying U.S. Treasuries at a quicker pace than international investors for the first time since 2010. This has certainly contributed to the U.S. debt climbing above $16 trillion USD for the first time. U.S. Treasuries have become popular despite their record-low yields because many investors do not believe that QE3 will succeed in stimulating the economy and creating more jobs. International investors still own 50.4 percent of the U.S. Treasuries, but this is down from the 55.7 percent share owned in 2008.
At 9 a.m. (EDT), the APMEX Precious Metals spot prices were:
- Gold, $1,762.50, Down $14.50
- Silver, $33.91, Down $0.74
Gold retreats from 6-1/2 month high as dollar firms
Mon Sep 24, 2012 6:19am EDT
* Euro, stock markets hurt be worries over European growth
* Monetary easing measures support gold near highs
* Gold's ratio to silver eases a touch (Updates throughout, changes dateline, pvs SINGAPORE)
By Jan Harvey
LONDON, Sept 24 (Reuters) - Gold prices eased nearly 1 percent on Monday, pulling back from the previous session's 6-1/2 month high, as the dollar rose and assets seen as higher risk, like stocks, the euro and other commodities like crude oil retreated.
The metal remained underpinned however, by expectations for longer-term price strength, after central banks including the Federal Reserve and European Central Bank announced fresh rounds of monetary policy easing earlier this month.
Spot gold was down 0.8 percent at $1,758.51 an ounce at 0940 GMT, while U.S. gold futures for December delivery were down $16.80 an ounce at $1,761.20. On Friday gold hit a peak of $1,787.20, its highest since Feb. 29.
The Fed this month launched a third round of quantitative easing - printing money to buy bonds - under which it will purchase $40 billion a month in mortgage-backed debt until the outlook for the labour market improves substantially.
Further monetary easing is likely to maintain pressure on long-term interest rates, keeping the opportunity cost of holding gold at rock bottom, and to undermine the dollar, boost liquidity, and stoke fears over inflation further down the line.
However, a stronger dollar and caution among investors over the uncertain outlook for Europe has put the brakes on gold.
" Part of the issue is the lack of obvious catalysts in the near term to take gold prices higher," Deutsche Bank analyst Daniel Brebner said. " We have some continuing risk issues in Europe, U.S. manufacturing data continues to be for the most part disappointing, and Chinese growth continues to be a real risk as well in the near term."
" There are a number of low growth concerns which could underpin the dollar, and keep gold somewhat moribund near term."
" But I do think we will likely see over the next quarter or so greater policy action both in Europe and China to support growth within those regions," he added. " The likelihood is for further accommodative monetary policy in both regions, and that could keep the gold price moving higher. We think we will see $2,000-plus gold prices in the first half of next year."
European shares and the euro followed a broad range of riskier assets lower on Monday as investors refocused attention from central bank stimulus schemes to weak economic fundamentals and the euro zone's yet-to-be-resolved debt crisis.
Bund futures rose after a worse-than-expected German business sentiment survey, and were expected to gain further in the near term as Spain's reluctance to seek a bailout unnerved investors.
GOLD ETF HOLDINGS APPROACH RECORD
Holdings of gold-backed exchange-traded funds tracked by Reuters rose by nearly 330,000 ounces on Friday to 73.748 million ounces, climbing back towards last week's record high at 73.681 million ounces.
The bulk of inflows were seen into the world's largest gold ETF, New York's SPDR Gold Trust. ETFs, which issue securities backed by physical metal, have proved a popular way to invest in gold in recent years.
Meanwhile, demand in major consumer India picked up, as a drop in local gold prices to a three-week low on Monday prompted a wave of buying, while an upcoming week-long holiday in China has generated some physical gold buying interest. ]
" Buying interest is much higher than last week, mostly because the rupee has appreciated substantially," one Mumbai-based dealer said, adding that physical demand might be sustained if prices - at 31,281 rupees per 10 grams earlier on Monday - held below 32,000 rupees.
Among other precious metals, silver was down 1.7 percent at $33.84 an ounce.
The gold/silver ratio, which measures the number of silver ounces needed to buy an ounce of gold, recovered from last week's 5-1/2 month low at 50.9 to 51.9 on Monday, after silver underperformed the yellow metal late last week.
Technical analysts at ScotiaMocatta, who study past price moves for clues as to the future direction of prices, said they expect the ratio to continue falling. " While the ratio has been consolidating the past week, the larger trend remains bearish, with an initial target at the March low of 47.67," it said.
Spot platinum was down 2.1 percent at $1,603.10 an ounce, while spot palladium was down 3.8 percent at $642.97 an ounce.
Industrial unrest in major platinum producer South Africa simmered down a touch during a national holiday in the republic, after weeks of sometimes violent protest killed 45 and sent the metal to multi-month highs. Tensions remain elevated, however. (Reporting by Jan Harvey Editing by Alison Birrane)
Monday, September 24th 02:27 PM IST
Can Gold perform in all scenarios
Many analysts predicted the gold to hit the coveted $2000 mark next year. However the diversity of analyst predictions also mirrors the uncertainties in the global markets.
LONDON(BullionStreet): Gold gained more than 15 percent so far this year from $1530 an ounce to $1770 by late September.
What is the forecast for the gold price 2013 and beyond?
At the beginning of 2012 the gold price had increased on an annual basis in each year for a decade. Will the 10-year upwards trend of the gold price continue in 2013?
The overarching driver of the gold price for the year 2013 and beyond will be the development of global financial crisis. The levels of debt piled up by Western governments and often also corporate/private sectors are still not sustainable.
There is basically one scenario to get rid of this burden: disciplined deleveraging or reduction of debts. The alternative, which was pursued over the past years, is to create more debt. This could eventually lead to inflation levels significantly above the inflation rates witnessed during the last decade in Western currencies.
Either way, both a deleveraging, which will probably be long and painful ('the lost decade'), or a reduction of the real debt pressures by means of higher inflation will potentially preserve gold as an attractive insurance asset or store of value for many conservative investors in 2013 and beyond. Geopolitical risks, e.g. in relation to Iran, will support this position of gold as a 'safe haven' further.
Many analysts predicted the gold to hit the coveted $2000 mark next year. However the diversity of analyst predictions also mirrors the uncertainties in the global markets.
An interesting fact about gold is that it often performs well in scenarios of deflation (for instance driven by global debt reductions) but also in scenarios with higher than usual inflation rates (which could potentially occur as public debt level increases further).
Gold therefore tends to perform positively in times of economic uncertainties as well as in acute crises. Unfortunately, the global financial problems are not yet sorted out. Some credible commentators expect several more years of uncertainty and painful deleveraging, which could end only when we are approaching the next decade.
Thus, in the foreseeable future a moderate allocation to gold will remain the imperative for many investors and could result in a positive trend of the gold price 2013 and beyond.
Portfolio diversification, i.e. the allocation of funds to different asset classes and investments, should remain an imperative for safety-orientated investors over the coming years.
Last Updated : 24 September 2012 at 14:05 IST
India's recent physical Gold demand encouraging: UBS
Source :Commodity Online
Physical gold demand from India has been encouraging of late and based on our physical flows to the country, the week is so far shaping up to be the best we’ve seen since mid-July
MUMBAI (Commodity Online): There are signs of a pick-up in Indian physical gold demand, which has been described as soft for much of the year in large part due to a weak rupee, said the Union Bank of Switzerland (UBS) in a commodity research note. India is the world's biggest gold consumer.
“On the physical front, demand from India has been encouraging of late and based on our physical flows to the country, the week is so far shaping up to be the best we’ve seen since mid-July,” the Swiss bank added.
“Volumes aren't huge, but it’s clear that demand is quick to emerge on local price pullbacks. This is a very slight improvement to this year’s physical story,” the Zurich based bank concluded.
India's benchmark gold price dropped to a two-week low of 31,281 rupees per 10 grams, as the rupee continued to rally and climbed to a 4-1/2-month high.
India is gearing up towards the festival and wedding season, which will peak at the Hindu festival of lights in November. Gold is an essential component of dowry and gifts presented during the festival celebrations.
Last Updated : 21 September 2012 at 19:05 IST
Gold to break $1,900/oz by end of October, if QE history repeats: Deutsche Bank
Source :Commodity Online
NEW YORK (Commodity Online): Gold prices to break $1,900 an
ounce level by the end of October this year, if QE history repeats, according to
Deutsche Bank in a weekly commodity research note.
According to the German bank, the recent gains in gold have been comparable
to the price appreciation immediately following the first two rounds of
quantitative easing in the U.S.
“In fact, if gold prices continue to track what happened in those episodes,
it implies gold prices hitting USD1,900/oz by the end of October,” Deutsche Bank
added.
The metal has rallied in recent weeks after news of a third round of QE in
the U.S., as well as news of bond-buying intentions by the European Central Bank
and more QE from the Bank of Japan.
Deutsche Bank earlier this week put out a report forecasting $2,200 gold by
next year.
“We expect the sector will continue to benefit from negative real interest
rates, a weaker U.S. dollar, central-bank buying and the prospect of further
rounds of QE by the Fed,” Deutsche Bank concluded.