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- Update: These 110 Analysts Believe Gold Will Go Parabolic to $3,000 or More!
- These 84 Analysts Now on $5,000 Gold Bandwagon
- Gold in Canadian Dollars: The Impact of Interest Rates
- December NFP and the Tug-of-War Economy
- Weather Causes Price Volatility
- The Gold Standard - Perspectives in the Austrian School
- Peter Schiff on Why the American Economy Is Broken – and What to Do About It
- Pound Sterling / Gold Sovereign & the Historic GSR
- This past week in gold
- Gold – Bottom or Breakdown?
- Can a monetary "deflation" happen in a world of floating exchange rates and no gold standard?
- “Bring Us Sugar!” U.S. Inflation And the Rest of the World
- Gold and Silvers Daily Review for January 7th, 2011
| Update: These 110 Analysts Believe Gold Will Go Parabolic to $3,000 or More! Posted: 09 Jan 2011 05:57 AM PST More and more economists, analysts and financial writers, 122 in fact, have taken the bold step of projecting the price at which gold will achieve its parabolic peak with 6 individuals claiming that the peak price will be realized sometime in 2011. Some have adjusted their previous prognostications higher given gold's strong advance again in 2010 while others have jumped aboard what has become a bandwagon of optimism. The majority (83) maintain that $5,000 or more for gold is possible. Words: 826 |
| These 84 Analysts Now on $5,000 Gold Bandwagon Posted: 09 Jan 2011 05:56 AM PST This little band of gold enthusiatists started out few in numbers a few years back but has made a parabolic move over the past year or so much like their projections for the future price of gold. They now number an unbelieveable 109 who have stated, with sound reasons in their opinions, why gold could quite possibly go to a parabolic top of at least $2,500 an ounce - to even as much as an unimaginable $15,000 - before the bubble finally pops! In fact, the majority (65) maintain that $5,000 or more for gold is likely. Words: 789 |
| Gold in Canadian Dollars: The Impact of Interest Rates Posted: 08 Jan 2011 11:19 PM PST Zecco submits: By Richard Bloch There was a comment left by Papli at Seeking Alpha on my post about the price of gold in euros and other currencies: Complete Story » |
| December NFP and the Tug-of-War Economy Posted: 08 Jan 2011 09:37 PM PST Max Fraad Wolff submits: Friday we received the December 2010 nonfarm payrolls. The nonfarm payroll increase for December 2010 was a disappointing 103,000. Consensus was for a 150,000-175,000 increase. However, there was a large drop in the unemployment rate from 9.8% to 9.4%. The Household Survey gives us the unemployment rate. The Establishment Survey gives us the change in employment, 103,000. There are always anomalies during the holidays, particularly in the Household Survey. The rate of unemployment fell as the size of the workforce fell. Some of the decline in the unemployment rate seems to have come from discouraged workers. The number of Americans classed as not in the labor force- and therefore not counted in the survey- increased by 1.5million between December 2009 and December 2010. The U-6, broad measure of unemployment, slipped slightly to 16.7% from 17%. Local government total employment fell by 268,000 jobs between December 2009 and December 2010. State governments reduced total employment by 140,000 positions over the last year. 20,000 net jobs were lost at the local government level over the last month of 2010. The December Jobs report fits into the general dynamic of today’s US economy. We have a tug-of-war scenario between good and bad news. This is creating a situation where inflection and focus profoundly color how people see the conflicted news flow. We are witnessing a tug-of-war between economic strength and economic weakness. Weakness out of Europe- over the last year and again today- is partially offset by strength in much of the developing world. Lower income Americans, indeed the bottom 60% of income earners in the US, remain deeply mired in recession. Upper income Americans are over a year down the road to recovery. We see high-end retailers surprising to the upside with their 2010 holiday sales. We see retailers to lower income folks struggling to meet expectations. Stimulus has come in large, unevenly distributed doses. Most recently the Federal Reserve embarked on a $600B Quantitative Easing (QEII) program that many of us argued was a fiscal policy of sorts. QEII seeks to keep interest rates low and keep the quantity of debt available to Uncle Sam up and the cost of the debt down. There is a tug of war here too. Rates have been drifting up, but remain low. In December 2010 Congress joined in with another $700+Billion tax and spending stimulus program. This program extends unemployment insurance, Bush Tax cuts on income tax, capital gains and estates. Despite the stimulus from the Federal Government, state and local governments are in real duress. Their pension plans are under budgeted by around a trillion dollars. Multibillion dollar budget problems define the circumstances in most states. Local governments are in even more dire shape and rely on states for over 30% of their budgets. Thus, states and localities are giving us an austerity program as the Federal Government gives us stimulus. More tug of war. Equity markets have recovered the levels they had achieved just before the Lehman Brothers collapse. Labor markets most certainly have not. The fourth quarter of 2010 is likely to be one for the corporate profit record books. It is a tug-of-war.
Complete Story » |
| Weather Causes Price Volatility Posted: 08 Jan 2011 09:22 PM PST Soybeans And Corn To Open Higher On Hot Argentina. Weather Concerns As Corn And Wheat May Rally.
Inflation, skidding dollar, wild weather and higher demand all conspire to drive grain prices higher. We have an ETF for shares traders and of course our 2011 soybean spreads coming soon. We will also be hunting for futures positions after the holidays are concluded and routine trading resumes. This week volumes are thin and unstable. Bullish grain forecasts from the majors are coming daily.
"Soybean futures may open 5 cents to 8 cents a bushel higher on the Chicago Board of Trade as dry weather threatens yields in Argentina, said Doug Bergman, a grain broker at Advantage Traders Group in Chicago. Soybean-meal futures may open $2 to $3 higher per 2,000 pounds, and soybean oil is expected to open steady to up 0.1 cent a pound." "Corn futures are forecast 2- 4 cents/bushel higher in Chicago on supply concerns in Argentina." "Wheat futures may open 5 cents to 8 cents a bushel higher on the CBOT, the Kansas City Board of Trade and the Minneapolis Grain Exchange as global supplies of high-quality grain trail demand following adverse weather in Russia, Ukraine, Canada and Australia, Bergman said." -Jeff Wilson Bloomberg.net 12-28-10
        This posting includes an audio/video/photo media file: Download Now |
| The Gold Standard - Perspectives in the Austrian School Posted: 08 Jan 2011 04:00 PM PST Mises.org |
| Peter Schiff on Why the American Economy Is Broken – and What to Do About It Posted: 08 Jan 2011 10:00 AM PST The Daily Bell is pleased to present an exclusive interview by Peter Schiff. Peter is CEO of Euro Pacific Capital, a full-service registered broker/dealer, member FINRA/SIPC, which specializes in foreign securities. He is recognized for his knowledge of the foreign securities markets as well as the currency and gold markets. Mr. Schiff delivers lectures at major economic and investment conferences, and is quoted often in the print media, including the Wall Street |
| Pound Sterling / Gold Sovereign & the Historic GSR Posted: 08 Jan 2011 09:02 AM PST In one of the final posts in the closed "Wild Gyrations" thread it was mentioned by Argentos that "pound" (as in British £) referred to a pound of silver (and I hope this was not the reason for the thread being closed, though I doubt it). It's true, but there's a little more to the story... and the story kept changing throughout history, not to mention the need to decipher several systems of weight to get the whole picture. According to my research, originally "Pound" referred to the weight of 240 silver pennies as first created by Offa, King of Mercia (south central England) sometime in the second half of the 8th century. What amount of gold this related to I have not yet discovered. It was NOT the Gold Sovereign, as those would not appear for several hundred years still to come. Each original Mercian silver penny weighed 30 tower grains of fine silver, or 22.5 of the later troy grains (about 1.5g). The Mercian system mimicked that of Charlemagne's Frankish Empire (240 denarius equaling one "libra" in the Carolingian system). The tower pound weight of the period (12 tower oz) would be about 11-1/4 troy oz. "Fine" silver simply meant as pure as was possible at the time. I seriously doubt that means .999, though I also disagree with some sources claiming that this was the origin of sterling silver (.925)... that term coming into use much later and intentionally alloyed as such. At any rate, Gold Sovereigns, nominally minted as £1 coins, were not first issued until 1489, some 700 years after the first silver pennies. By that time the silver penny had been debased, most definitely using .925 silver, and ultimately weighing nearly half that of the original Mercian penny. At the time sovereigns were first issued, they contained 240 troy grains of 23 carat gold (95.83%), or one-half troy ounce. However, shortly thereafter the penny was drastically further debased, containing .333 silver and weighing only 8 grains (0.52g), far from 240 of them equaling a pound. Somewhere around the same period Henry VIII reduced the Gold Sovereign's content to 22K. As well, the weight of the sovereign was repeatedly reduced until being replaced by the Unites in 1604. The sovereign was ultimately revived after the Great Recoinage law of 1816. With this, sovereign production resumed (actually in 1817) and its gold content finally fixed at the present 0.2354 troy oz (7.322g). At that time a gold standard was officially adopted and the silver standard reduced to 66 shilling (i.e 3.3 pounds, meaning British silver coins did not contain their actual value in silver as it related to the Gold Sovereign £1). Shillings of the time had an ASW of 0.1682 troy oz, creating a prescribed GSR of the time approaching 16:1. Consider though, that with both gold and silver coinage circulating, the ratios were necessarily fixed by issuing rulers, governments or banks. Monetary systems simply did not work well if the value of minor coins floated against gold ones. Therefore, to assume that these historical GSR's reflect any true or inherent value of one metal against the other is folly. While it is certainly interesting to note the changes, I can't say I honestly believe this has any real bearing on the expectations we should hold for the future of the GSR. |
| Posted: 08 Jan 2011 08:30 AM PST This past week in gold By Jack Chan at www.simplyprofits.org 1/08/2011  GLD – on sell signal.  SLV – on sell signal.  GDX – on sell signal.  XGD.TO – on sell signal. Summary Disclosure
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| Posted: 08 Jan 2011 08:22 AM PST
This essay is based on the Premium Update posted on January 7th, 2011 This past week we saw gold have its biggest two-day drop since February of last year ending the third longest streak of trading above its 50-day that the yellow metal has had since 2000. The first streak ended in 2002 with 124 trading days and the second in 2008 with 143 trading days. No bull market goes up in a straight line. What was the trigger? Could it have been investors rebalancing their portfolios for the New Year? Worries that an economic recovery will curb demand for the metal as a haven? Reports that U.S. companies added almost three times more jobs in December than analysts forecast? Was it the dollar rising for three days against a basket of major currencies? We are likely to see much volatility in 2011 as investors swing from fear to greed and back again. There is a relatively new phenomenon mostly discussed on trading floors and by professional managers. It's called "Risk On – Risk Off." It goes something like this. Investors either believe the future is good and risk appetite is ON; or else they believe the future is doom and gloom and risk is OFF. What is different since the Subprime fiasco of 2008 is that there doesn't seem to be much of a middle ground. Exuberant optimism and gloomy pessimism oscillate nervously within the markets and the prices of a variety of assets move up and down with them. On this see-saw, when risk is on, equities and commodities rise and credit spreads narrow and the Japanese yen falls. When risk is off, they switch. Correlations between various asset classes that historically hardly moved together are now highly polarized, either strongly positive or strongly negative. If in normal market conditions the price of any given asset is driven by a variety of forces and factors, in today's markets many assets are being driven by the Risk On – Risk Off phenomenon. As far as Risk Off side of the equation, there are plenty of worries to keep even a normally sound-sleeping investor awake at night. We have covered them in previous Premium Updates – quantitative easing, sovereign debt, currency wars, euro zone problems, a housing market where one-in-seven mortgages is delinquent or in foreclosure, inflation, deflation, hyperinflation, etc. Speaking of hyperinflation, if you want to read something that might keep you awake at night read an article by long-time trader and author Victor Sperandeo in the latest issue of Barron's. Sperandeo has traded for many top investors, including George Soros. He writes that investors in U.S. debt around the world are growing closer to a "psychological breaking point" that could force a "run on the bank" against Treasuries. Hyperinflation has a single cause: It occurs when a government cannot borrow money because its debt has risen so much that investors believe they will never be paid back with close to the same purchasing power. As a consequence of this flight of confidence, such a government is forced to print money to meet its obligations. This further undermines the value of its currency, often culminating in a frenzied collapse. That is hyperinflation, and only governments and central banks cause it. U.S. government debt is now over $13.7 trillion (not including estimated states' debt of $2.8 trillion and agencies' debt of $3.0 trillion). The average rollover period for the debt is 49 months. With recent deficits running over $1 trillion a year, the Treasury issues new debt and refunds old debt at a rate of about $4.3 trillion a year. A nation needs to inspire a lot of confidence to keep that Ponzi scheme alive. Unfortunately, markets know that even the U.S. government will print money to meet expenses when necessary. Investors know that the tiny gap between what they are paid to hold Treasury debt versus the inflation rate can quickly turn into a loss. If the gap narrows by too much, there is no longer any compelling incentive to hold the debt. Investors will rush for the doors not wanting to be left holding the bag. Meanwhile, there are many voices out there screaming "breakdown in gold", "get out", and "the rally is over". Given such a positive fundamental situation for gold, one would need to be particularly convinced that lower prices are likely before deciding to sell their holdings. Do charts really provide necessary evidence? Let's take a look (charts courtesy by http://stockcharts.com). The above GLD ETF chart provides a medium-term view back to early 2008. Gold is seen to be holding above the long-term rising support line. Consequently, the trend remains up, and thus higher prices are still likely from here. The volume levels have been high lately along with lower prices in the yellow metal, which is generally a bearish signal. Still, it is very much in tune with what we've seen previously during gold's corrections, which were not followed by a serious plunge – they were followed by rallies. For the above reasons, the sentiment has not turned from bullish to bearish and the price decline was definitely something unexpected. There is always such a possibility, however at this time it can be considered as anomaly. What about gold from the non-USD perspective? In this week's Gold:UDN ratio chart (the average of gold priced in currencies other than the U.S. Dollar), we see further confirmation of points made earlier from our regular USD perspective. In the past month, as in most of last year, the 50-day moving average has provided support, typically being tested at points coinciding with local bottoms for the past 12 months. This is where we find gold's price today, indicating that a bottom is at hand or is quite close. The signs are not such that a great deal of excitement should manifest itself at this time, at least not until a breakdown is seen. Since current price levels are not below the levels of recent highs, the breakdown has not yet materialized. Some intra-day price volatility to lower levels has been seen but should not be regarded as significant at this time. We now look at gold's price relative to corporate bonds in our final gold chart this week. This index level continues to consolidate at levels above previous highs and therefore the bullish implications, which were discussed in last week's Premium Update still stand. Summing up, although much has happened this week, the situation and the outlook for the yellow metal has changed little. Although there may seem to be increased risk with volume levels increasing and gold's price declining, other signals from a technical analysis standpoint appear bullish. The target level of $1,600 still holds and the upside potential is actually even greater than what has been seen in recent weeks. All-in-all, the risk-reward ratio is pretty much unchanged. To make sure that you are notified once the new features are implemented, and get immediate access to my free thoughts on the market, including information not available publicly, I urge you to sign up for my free e-mail list. Sign up today and you'll also get free, 7-day access to the Premium Sections on my website, including valuable tools and charts dedicated to serious PM Investors and Speculators. It's free and you may unsubscribe at any time. Thank you for reading. Have a great and profitable week! P. Radomski * * * * * Interested in increasing your profits in the PM sector? Want to know which stocks to buy? Would you like to improve your risk/reward ratio? Sunshine Profits provides professional support for precious metals Investors and Traders. Apart from weekly Premium Updates and quick Market Alerts, members of the Sunshine Profits' Premium Service gain access to Charts, Tools and Key Principles sections. Click the following link to find out how many benefits this means to you. Naturally, you may browse the sample version and easily sing-up for a free weekly trial to see if the Premium Service meets your expectations. All essays, research and information found above represent analyses and opinions of Mr. Radomski and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. 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| Can a monetary "deflation" happen in a world of floating exchange rates and no gold standard? Posted: 08 Jan 2011 05:42 AM PST Itulip |
| “Bring Us Sugar!” U.S. Inflation And the Rest of the World Posted: 08 Jan 2011 04:29 AM PST Yesterday I set up a Google alert for "inflation," expecting to turn up the occasional article on monetary policy and such. Instead I got deluged with stories from around the world about how rising prices are causing everything from "political pressure" to food riots.
Some thoughts:
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| Gold and Silvers Daily Review for January 7th, 2011 Posted: 07 Jan 2011 07:05 AM PST Gold Forecaster |
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