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- Gold and Silvers Daily Review for January 10th, 2011
- Reference Point: Gold - Update #1
- Gold Has More Room to Fall
- The Mechanism of China's Silver Accumulation
- 2 Stocks With Bullish Insider Buying: Lincoln Educational, Dollar General
- Hi-Ho Silver: How SLV and PSLV Differ
- BulletShares High-Yield Indexes Debut
- 3 ETFs to Watch This Week: FXE, ALUM, SMH
- Goldrunner: This Week's Outlook For PM Stocks, Gold and Silver – and Beyond
- Why You Should Have Silver in Your Portfolio – As Well As Gold
- California Stumbles Closer To Bankruptcy
- Silver Demand Surges 6 Fold in India and Worlds Richest Man Enters the Silver Market
- 'Not Owning Gold is a Form of Insanity': Chartist
- Gold - Bottom or Breakdown?
- Trader alert: These stocks are set to make huge moves soon
- Credit Suisse: The best way to profit from rising interest rates
- View From the Turret: Welcome to Earnings Season!
- Judge orders Fed to deliver gold records for her review
- Play the Investor I.Q Game
- Silver Joins Gold as a Currency Now that Gold Prices Become More Costly
- New Year Silver Sale
- LBMA - Forecast 2011 Predicts Price Of $1,457 For Gold
- The JGB cliffhanger
- Silver Bears Back For Round Three, Explaining Two Key Recent Developments In Silver
- Will Gold, the Dollar or the Euro Collapse?
- Silver Market Update
- Gold Market Update
- Bring us Sugar! US Inflation and the Rest of the World
- Trading Comments, 10 January 2011 (posted 09h15 CET):
- Economic Aspects of the Pension Problem: Part Two
- 14 Eye Opening Statistics Which Reveal Just How Dramatically The U.S. Economy Has Collapsed Since 2007
- Mainstream Hacks Deny Gold its Fundamentals
- ZH Bears Explain Silver Manipulation - Part 3
- More Wars Without Shooting
- An Exquisite Recipe (for a Price Disaster)
- The Silver Bears are back for round three discussing silver
- Old Axiom Proven True: A Fool And His Money...
- Silly Kitco Question
- Raiding the Treasury(s)
- Metals Little Changed after Falls Last Week
- Silver Demand Surging in India
- Outlook 2011: Fear & Love in Gold Trading
| Gold and Silvers Daily Review for January 10th, 2011 Posted: 10 Jan 2011 06:44 AM PST | ||||||||
| Reference Point: Gold - Update #1 Posted: 10 Jan 2011 06:42 AM PST | ||||||||
| Posted: 10 Jan 2011 06:13 AM PST Sean Hannon submits: Investor psychology is fascinating. Studies have shown that when faced with an impersonal decision such as picking investment A or investment B, people usually act in a rational manner. However, when an emotional attachment is involved, we are much more vested. Whether it be a person unwilling to sell a stock inherited from grandparents, or someone who tends to view a stock through a certain prism because he loves the product (examples include companies like Amazon.com (AMZN) and Apple (AAPL) whose users are extremely loyal), set beliefs are difficult to overcome. Attachment to ideas is prevalent across all investments, but no more so than when it comes to gold. Just mention the yellow metal and the opinions begin flying. Believers, most commonly referred to as “gold bugs”, stress that over the centuries gold has served as a store of wealth, is “true” money, and that over time the experiment in manipulated fiat money will eventually collapse, as history has shown it always to do, and the holders of gold will be the last men standing. Those who look down upon gold seize upon John Maynard Keynes’s view that the metal is a “barbaric relic” that yields nothing, has little industrial use, and is worth only what people will pay for it. With such staunch views on each side, it is not surprising that debating the merits of investing in gold triggers constant bickering. Complete Story » | ||||||||
| The Mechanism of China's Silver Accumulation Posted: 10 Jan 2011 05:59 AM PST Harold Goodman submits: I was gratified to see how well my recent article (Is China Behind The Big Silver Short Dec 25th, 2010) was received, when over 50 websites worldwide picked it up in the first 24 hours. But I am afraid that a fair bit of confusion was created by that article, which I want to clarify here. First, I am not presenting this as fact. I am presenting this as a theory that explains the observable facts. Complete Story » | ||||||||
| 2 Stocks With Bullish Insider Buying: Lincoln Educational, Dollar General Posted: 10 Jan 2011 05:57 AM PST StreetAuthority submits: by David Sterman As part of your ongoing investment research, it pays to periodically check in with company insiders. When they are buying or selling a company's stock, you'll get a first-hand suggestion on whether shares are a bargain, or possibly ripe for a fall. Complete Story » | ||||||||
| Hi-Ho Silver: How SLV and PSLV Differ Posted: 10 Jan 2011 05:55 AM PST Kid Dynamite submits: I should have given this post a hysterical, hyperbolic title like "Physical Silver Trust Admits to Not Owning Physical Silver!" But as usual, my goal is to educate, not spread hype, fear and misinformation. From Sprott Asset Management, which manages PSLV, today:
Complete Story » | ||||||||
| BulletShares High-Yield Indexes Debut Posted: 10 Jan 2011 05:44 AM PST Michael Johnston submits: Accretive Asset Management LLC announced last week the launch of a family of high-yield bond indexes that could soon be the basis for a new suite of exchange-traded funds. The BulletShares USD High Yield Corporate Bond Indices are maturity-targeted benchmarks that measure the performance of U.S. dollar denominated non-investment grade bonds. Each index includes junk bonds scheduled to mature in a certain year, meaning that securities seeking to replicate the performance will have a cash flow profile similar to that of an individual held-to-maturity bond. The new suite consists of 10 indexes, beginning with the BulletShares USD High Yield Corporate Bond 2012 Index and running through a 2021 version. “We are excited to bring the BulletShares methodology to the high yield sector of the corporate bond market,” said Darrin DeCosta, head of product development for Accretive Asset Management. “The remarkable success of investment products based on our existing investment grade corporate bond indices suggests to us that financial advisors and investors see value in our approach to indexing bonds, which seeks to combine the best attributes of individual bonds and bond funds.” Complete Story » | ||||||||
| 3 ETFs to Watch This Week: FXE, ALUM, SMH Posted: 10 Jan 2011 05:38 AM PST Michael Johnston submits: Equity markets were range-bound last week, struggling to make significant moves in either direction. Gold took a big tumble early in the week, dropping well below the $1,400 mark as concerns over the health of the global economy subsided. Wall Street also rallied in the middle of the week following a round of positive jobs and non-manufacturing data. Treasuries were flat for the most part as well, with the iShares Barclays 20+ Year Treasury Bond (TLT) finishing the week lower by just 1.8%. Yet, domestic markets took a small hit on Friday following the disappointing unemployment report, which showed a decline in the national unemployment rate – as a result of people giving up on the search for work – as fewer jobs were added than expected. This week, investors will be kept busy with the start of earnings season after the market closes on Monday, and a round of economic data hits the street towards the end of the week, including jobless claims, readings on inflation from both the producers and consumers, consumer sentiment, and releases by two key European central banks -- all of which should make the following three ETFs investors will want to keep an eye on as January continues: Complete Story » | ||||||||
| Goldrunner: This Week's Outlook For PM Stocks, Gold and Silver – and Beyond Posted: 10 Jan 2011 04:31 AM PST I think this week of January 10th should be very interesting... IMO, we have reached, or have almost reached, the most likely bottoming point on many of the PM charts I am watching. Thus, I think the bottom occurred last week, or will come in over the next few days, with the edge in the next few days for the PM stocks, but not necessarily for Gold. Words: 1039 | ||||||||
| Why You Should Have Silver in Your Portfolio – As Well As Gold Posted: 10 Jan 2011 04:31 AM PST Silver has had quite a run the last couple months so it's no surprise that it has gained much attention and interest from investors – even more so than gold. It is extremely volatile, however, and tends to rise or fall in spurts so I'd like to focus on its attributes as compared to gold, make a case for holding some, and discuss some ultimate price possibilities. Words: 1541 | ||||||||
| California Stumbles Closer To Bankruptcy Posted: 10 Jan 2011 04:20 AM PST Observing the California economy is like watching a train-wreck in slow-motion. Indeed, this "slow-mo" effect is such that when glancing back at my archive of commentaries, I had no idea it had been well over a year since I had last written on this economic catastrophe. The other aspect to this pathetic melodrama which tends to have an hypnotic effect on observers is the way in which California's political "leaders" seem perfectly content to merely sleep-walk toward implosion. This is an economy which has been in an admitted "economic crisis" since 2007. Yet in a new piece discussing the nightmare of the current fiscal year – a $19 billion budget-gap (plus $6 billion in unpaid bills from last year) – was the revelation that this is composed of a $10 billion collapse in revenues + $9 billion in spending increases (inherited from the "fiscal conservatives" known as Republicans). To already be hopelessly insolvent, and then to ratchet-up spending is the obvious behavior of a deadbeat. Sadly, the combination of massive corruption and political gridlock is severely compounded by the refusal of U.S. governments to "govern". In what is purely the abdication of responsibility, California (like most U.S. states) has deliberately chosen to "tie its own hands" when it comes to economic (mis)management. Even if total political gridlock didn't make it impossible for state "leaders" to take the first "baby steps" in controlling exploding debts/deficits, the choice of U.S. states to permanently entrench unsustainable spending and permanently entrench inadequate taxation into their budgets must result in bankruptcy. "Thanks" to the reader who forwarded a wonderful clip, which took an historical look at the economic policies which existed in the U.S. when it was at its peak of prosperity: maximizing wages for the middle class and a 90% income-tax rate for the highest earners. The historian, Michael Hudson, who discussed this era in the U.S. (which ended after World War II), noted that even with high wages the U.S. was able to out-compete low-wage jurisdictions in manufacturing, and even with a 90% tax-rate, the very rich got much richer. This totally contradicts the economic gibberish of modern economic charlatans (i.e. "experts"): that the way to be "competitive" is to slash the wages of workers, and that high tax rates on the wealthy "harm" an economy. Indeed Hudson noted that those who preach this nonsense the loudest are now given a Noble Prize for their economic "genius". Who would have thought that after a mere 60 years of doing the exact opposite of what produced U.S. prosperity that most of its citizens would have been impoverished, and all levels of government made hopelessly insolvent? Understand that European nations are currently being pummeled by Wall Street's economic terrorists (via credit default swaps) for attempting "austerity", and (predictably) failing. These nations are failing because they are duplicating the same failed policies that have brought Western nations to the brink of economic suicide: squeezing those on the bottom (who have already been squeezed dry), while refusing to even touch the vast hoards of wealth accumulated by those on top. Conversely, in the Ponzi-scheme economies of the U.S.'s local, state, and federal governments, these deadbeats are already so hopelessly insolvent that merely attempting austerity (as is being done in Europe) would cause all levels of the U.S. economy to immediately implode. Even without attempting the slightest bit of fiscal restraint, the only way that the U.S. government is able to postpone an immediate collapse of the U.S. economy is to keep U.S. interest rates at an insanely artificial level – by printing up trillions of new Bernanke-bills to buy any/every U.S. bond in sight. This brings us back to California. | ||||||||
| Silver Demand Surges 6 Fold in India and Worlds Richest Man Enters the Silver Market Posted: 10 Jan 2011 03:27 AM PST | ||||||||
| 'Not Owning Gold is a Form of Insanity': Chartist Posted: 10 Jan 2011 01:59 AM PST | ||||||||
| Posted: 10 Jan 2011 01:00 AM PST | ||||||||
| Trader alert: These stocks are set to make huge moves soon Posted: 10 Jan 2011 12:06 AM PST From Bespoke Investment Group: As we do prior to the start of each earnings season, below is a table of the most volatile stocks on their earnings report days. We gather the info for this list from our Interactive Earnings Report Database that has quarterly earnings data for all U.S. stocks going back to 2001. The stocks below all have at least eight quarterly reports in our database and have an average absolute change on these report days of more than 12%. As shown, Fuel Systems Solutions (FSYS) is the most volatile stock with an average change of +/-21.48% on its 10 earnings report days! FSYS doesn't report until... Read full article (with chart)... More trading ideas: Three ideas for safely buying stocks today If you're thinking of buying stocks today, read this first This could be the best buying opportunity in gold all year | ||||||||
| Credit Suisse: The best way to profit from rising interest rates Posted: 10 Jan 2011 12:04 AM PST From Pragmatic Capitalism: In a recent strategy note, Credit Suisse analysts noted the risk of rising interest rates and the potential beneficiaries in such an environment. In their opinion, the No. 1 trade in a rising interest rate environment is not an inflation or hyperinflation hedge, but rather a high beta growth equity market – Japan. Based on data compiled by Credit Suisse, they’ve found a near 1:1 correlation between Japanese equities and U.S. interest rates over the last decade. The rational is rather simple – because rising rates tend to be accompanied by periods of higher growth Japan’s volatile high beta market tends to be a significant beneficiary. In addition, after years of deleveraging rising interest rates put less pressure on... Read full article... More on interest rates: Marc Faber: The bear market in bonds is just beginning Why rising interest rates could be super-bullish for gold This could be the most important financial news of the entire year | ||||||||
| View From the Turret: Welcome to Earnings Season! Posted: 09 Jan 2011 11:07 PM PST
By the end of the week, we will have heard from heavyweights Lennar Corp. (LEN) - homebuilding, Intel Corp. (INTC) – technology, and JPMorgan Chase (JPM) – financial… a handful of influential reports before the virtual flood of press releases in late January and early February. It's important to note that as we enter an important season of reporting and issuing guidance, the majority of investment professionals are exceedingly optimistic, and apparently quite complacent. Over the weekend, Barron's noted the unbalanced state of this market – both in terms of price action along with the expectations of "professional" analysts:
If history is any guide, we are treading on thin ice. In the fourth quarter of 2010, volatility all but dried up. On the surface, the markets appeared tame, with the major indices plodding ever higher with few bumps along the way. Of course, we know that there were a number of underlying sectors trading in their own bearish patterns. The broad complacency may very well prove to be the calm before the storm. Heading into the week, premarket futures are soft, with concerns from Europe as well as China weighing on sentiment. The dollar is gaining traction, and the early indications favor a "risk-off" environment to begin with. That's just fine with us as we have a number of pending and active bearish trades in place – ready to take advantage of the shifting cross-currents. So let's take a look at the trades we are tracking this week… Base Metals On Deck Alcoa's announcement after the close should affect the entire base metal area. The 2010 performance will not be overlooked, but analysts will be much more interested in what management has to say about current demand for industrial metals – and the expectations for the coming year. China is the driving force behind demand for these products, and the whole world is watching to see how the Red Dragon will continue to foster growth, while simultaneously fighting rampant inflation. Over the weekend, Jack noted the strong possibility of China "ringing a bell" at the top of the market – along with a number of risks that could challenge economic growth – and optimistic equity valuations. Last week, a number of base metal miners began to roll south, and we took an initial position in Rio Tinto (RIO) as documented in the Mercenary Live Feed. The stock briefly broke to a new recovery high Monday, before closing red on the day. RIO continued to slide throughout the week, and will be especially vulnerable if Alcoa fails to provide a sufficiently optimistic outlook.
Vale SA (VALE) is a Brazilian mining company which also broke to a new recovery high last week. Analysts expect that the company generated 197% earnings growth in 2010 as higher asset prices drove profitability. Growth is expected to slow to a still respectable 46% rate in 2011, but of course this growth hinges on the health of emerging market demand. If China focuses more on the inflation side of the equation – sacrificing economic growth for more stability – the entire market for metals will be affected. Technically, VALE in a dangerous spot after breaking above a key resistance area at $35 and then failing to hold above the line. Bullish institutional investors along with breakout and momentum players will find themselves trapped in a losing position if VALE does not make a stand here. Ultimately, these impulsive buyers could add fuel to a decline, exiting positions as broad sentiment shifts.
 Shun Risk, Embrace Safety As the European debt crisis once again grabs headlines, global investors are viewing the US dollar as a safe haven – increasing their exposure and driving the dollar higher. Sure, the greenback has its own issues, but a currency crisis for the US dollar would be much farther down the road than a crisis for the Euro – and in today's market, traders (and policymakers) are reacting primarily to what is directly in front of them. "Do not worry about tomorrow, for tomorrow will worry about itself…" Live Feed beta testers, trading alongside Mercenary portfolios, bought the ProShares UltraShort Euro (EUO) on January 5th as the ETF gapped higher and began to pick up traction. We were able to quickly lock in a breakeven risk point as momentum builds, and early indications for this week point to more concern – and continued weakness – for the Euro.
On a related note, US Treasury securities are also seeing demand – viewed as a safe reserve for parking short to medium-term capital. A week ago, we elected not to issue a broad "forecast" for 2011. Instead, Jack noted Twelve Major Risks for 2011 as first outlined by Niels Jensen. Right now, the outlook appears relatively stable, with only a small chance of any one of these risks actually occurring in the coming year. But if each of these 12 risks has a small percentage chance of actually happening, the cumulative effect of all of these risks is quite sobering. The iShares 7-10yr Treasury Fund (IEF) chart indicates that managers are beginning to allocate more capital away from risk assets and into more stable treasuries. A breakout above the last few weeks of consolidation would indicate that the shift is clearly underway.
An alternative way to play this trend, would be to short the Direxion 10 yr Treasury Bear 3X (TYO). Shorting this instrument could benefit from both a rise in treasury prices as well as from the volatility decay which is a feature of the leveraged instrument. Solar Remains Bright Despite the bearish undertones to this market, the energy sector remains relatively robust. Oil price trends remain robust, and higher prices for fossil fuel energy creates a more attractive playing field for solar energy. Last week I noted our interest in ReneSola Ltd (SOL) with an attractive consolidation pattern. On Tuesday, we entered long positions in both SOL as well as Trina Solar (TSL) which was breaking out from a similar pattern.
Both positions have quickly gained traction, and we were able to quickly lock in a breakeven risk point for the trades. This week, we will be stalking our Half Profit Targets, looking for an opportunity to take some gains off the table and keep our exposure tight. We're "looking good in the neighborhood" as we kick off the second week of trading this year. We've got the opportunity to pour on some nitro and press our position this week. So stay alert, nimble, and in-touch with the cross currents. Trade 'em well! | ||||||||
| Judge orders Fed to deliver gold records for her review Posted: 09 Jan 2011 11:00 PM PST GATA | ||||||||
| Posted: 09 Jan 2011 11:00 PM PST USA Gold | ||||||||
| Silver Joins Gold as a Currency Now that Gold Prices Become More Costly Posted: 09 Jan 2011 10:19 PM PST Silver Joins Gold as a Currency Now that Gold Prices Become More Costly By Larry W. Reaugh Jan 7 2011 10:24AM www.reacompanies.com A new gold backed currency will be measured in fractions of a gram/$100.00 (US) As we begin 2011 gold is having another dramatic correction, followed by silver. This is a short term correction as the dollar strengthens and the gold price drops, the next move will see it trading at $1450/oz. with silver at $35/oz. It has been 25 months since I published my first issue of "Fundamental View on Metal Markets" - December 9, 2008, since that time (as predicted) we have seen a dramatic upswing in the consumption and price of metal commodities. At year end copper had broken it's all time high traded at $4.42/lb. from $1.36/lb. in December of 2008. A new high of $6.00/lb. in the next 24 months is a real possibility. Silver which has traded at a disconnect with gold for several years has regained its status as a precious metal and ended the year at $31.50/oz. Other metals traded well above their 2008 lows. Gold traded at $1420/oz. and is the leader here, closely followed by copper. Gold is the longest lasting currency in the world with a 5000 year history. Governments cannot create gold like they can other currencies from paper or linen. One only has to look back at the prolific increase in the supply of paper currency worldwide to ask 'when the value of such currencies does collapse, what will the new currency be?' Obviously gold, but trading and purchasing of goods and services on a world scale makes it impractical to be used as a means of exchange. Once again governments will issue new currencies directly backed by gold as was the case of the United States in 1932 or indirectly as evidenced by the bullion holdings of central banks worldwide. Those central banks have liquidated their bullion holdings over the past 15 years. This doesn't make sense does it? We all know where the gold sales came from, central banks, bullion banks' lending gold to producing gold mines (over 100 million ounces) at ridiculously low interest rates and the mining companies selling the gold forward to invest in bonds at 6%, thereby acting like investment banks while keeping gold prices low. As I said, we all know who the sellers were, but who knows who bought all this gold? Certainly we know countries like China, India, and Russia are increasing their gold holdings but were not doing so when all that gold was being sold at or near the cost of production from 1996 to 2002. Very smart investors hold that gold and when the free-world is forced to issue a new currency the smart-money will control the new gold backed currencies. Where does that leave the gold price? In 1932 gold was pegged at $32.00/oz. Every U.S. dollar was backed by gold. Populations have exploded since then with consumables multiplying in the thousands. I believe a new currency will be backed in the ratio of less than a gram for each $100 bill printed. The future price of gold will not be $1000/oz., $2000/oz. or $3000/oz. but somewhere north of $4000/oz. The dynamics are totally different now. The economies of the Western World survive by the printing of new money and the supply of cheap but durable goods from China. That is why we are not in hyper-inflation. Over the past 15 years, items we purchased in the 80's have reduced in price by 20% to 70% thanks to cheap imports. This cannot continue but bodes well for all the precious metals. For safety buy the precious metals, for speculative gains buy the shares in precious and base metal companies, the greater the risk the greater the potential gains. In my earlier letters I reported on several mine shut downs, most of those are back into production today. Companies that were loaded with debt and on the brink are now stellar performers. The markets went down rapidly and also increased rapidly over a short period of time. This is the nature of bull markets and is definitely the nature of this 30+ year bull. It is interesting that several deposits either shut down or were scheduled for shut down are now producing more ore than previously. As the price of the metals continues to rise the size of ore bodies keep expanding. Virtually all deposits that were uneconomic several years ago are now healthy producers, lowering cut-offs and increasing throughput has morphed seemingly depleted resources into ore grade in the 100's of millions of tons. This is true for precious, base and specialty metals. The best place to find new resources is to explore near shut down mines. The increased price of various commodities has increased the resources available for exploitation. This simple phenomenon has to be addressed when looking at the fundamentals of supply and demand. Tired brownfield projects have gained a new lease on life and in some cases companies are expanding their production facilities to maintain or increase their levels of production. This does not mitigate the need for new resources as eventually the lower grade material will be depleted as well. This is the era for low grade deposits whether it is precious, base or specialty metals. All metal prices will continue to head north, especially benefitting low grade deposits. Technology and mining methods beginning in the 1950's has enabled us to mine low grade deposits, specifically in gold and copper. The high prices of metals has expanded operations to exploit lower grade material; compounding the return on lower grade deposits only maintains the production side of the equation, new resources will have to come on line to meet the emerging BRIC (Brazil, Russia, India, China) countries demand for metals. As the year 2010 came to an end metal commodity markets moved up dramatically heralding in the best year yet in 2011. The caution here is there will be corrections through-out 2011, some mild, others severe, for a short time. The good news is prices will continue to climb for years to come. Prices are now over or near historical highs in precious and base metals with a ways to go for specialty metals as follows:  As is the case with rare earths, China controls the production of some of the specialty metals such as Electrolytic Manganese (97.5%), Vanadium (37%), Magnesium (85%) and Tungsten (81%) to name a few. Quotas have once more been put on rare earths by China and the policy to control molybdenum production in China morphs them from a net exporter to a net importer, this should start driving the moly price upwards. Chinese producers of electrolytic manganese (EMM) are currently establishing ventures offshore to facilitate the production of EMM. This is the result of scarce resources of carbonate ore within the country which has allowed China to produce it at a cost of about $1.00/lb. before 20% export duties. What we have to be concerned with is that China is the largest producer of rare earths, EMM and a large percentage of the specialty metals, and is also the largest consumer. It's not that China wants to cut exports, as their own industry becomes more technically advanced they require more and more of their own production. Remember that they are the largest producer as well as the largest consumer. It is time the mining industry and governments became pro-active and not reactive to looming shortages or the free world will be stymied by the lack of material such as rare earths and specialty metals currently controlled by China. The BRIC countries are the new emerging economies, with China's gross domestic product (GDP) rising 1506% and India GDP 455% since 1980. The U.S. and Europe's GDP has grown 110% and 75%. Since the last super cycle in metals beginning around 1950 world populations have exploded from 2.3 billion to a current 7 billion people with less developed countries accounting for the majority of that growth. The BRIC countries account for almost 3 billion of the new population which is driving the new "Super Duper Bull Market" we see in all commodities today. During the last Super bull the countries driving it primarily the U.S., Europe and Japan, populations were about 20% of the existing population in today's bull market. The U.S. still has the strongest GDP in the world but is a long way from the time it consumed over 70% of all world production. When we look at how the world scales have tipped, the metal demand only becomes stronger each year. Existing resources will not be able to keep up with demand from BRIC Countries especially China and now India is beginning to have an impact on metal consumption. As we move into 2011 precious, base and specialty metals will continue to strengthen as demand becomes relentless. Gold, silver and copper have broken their previous highs in this bull with aluminum, nickel, zinc, lead, molybdenum, manganese, magnesium and cobalt having a ways to go before reaching and surpassing their previous highs. As in the case with silver which traded at a disconnect from gold until the past three months junior metal stocks with good assets are being viewed positively for the first time since 2007. Gold and metal companies either in production or having large resources are becoming expensive for investors. A lot of juniors have smaller resources and trade like green field exploration plays. These companies have not had any appreciation for their assets and over the past few weeks the market has reached down and begun to accumulate these companies. The same holds true for those companies having resources in the specialty metal sectors. Bull markets are notorious for vicious swings on the upside and downside, but I do not see a major correction in metals in the next 4-5 months and view 2013 and 2014 as being the years in which we may see a corrections of any size. For the long term we still have at least 20 to 25 years of this metal bull. To my readers I wish you a Happy and Prosperous New Year. From time to time, I'll be updating this article, and if you'd like to receive those updates, please send an email to: lwreaugh@goldrea.com. Larry W. Reaugh January 6, 2011 http://www.kitco.com/ind/Reaugh/jan072011.html | ||||||||
| Posted: 09 Jan 2011 08:50 PM PST | ||||||||
| LBMA - Forecast 2011 Predicts Price Of $1,457 For Gold Posted: 09 Jan 2011 08:09 PM PST Perth Mint | ||||||||
| Posted: 09 Jan 2011 07:53 PM PST This is not a healthy situation for the holders of Japanese Government Bonds (JGBs). They've got to expect that sometime in the next ten years the government is going to run out of money... or investors will run out of confidence... and interest rates will rise. When they do, bond prices will fall... probably collapse... and JGB holders will lose beaucoup de yen. | ||||||||
| Silver Bears Back For Round Three, Explaining Two Key Recent Developments In Silver Posted: 09 Jan 2011 07:19 PM PST Zero hedge | ||||||||
| Will Gold, the Dollar or the Euro Collapse? Posted: 09 Jan 2011 07:14 PM PST
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| Posted: 09 Jan 2011 06:56 PM PST | ||||||||
| Posted: 09 Jan 2011 06:52 PM PST
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| Bring us Sugar! US Inflation and the Rest of the World Posted: 09 Jan 2011 06:25 PM PST Dollar Collapse | ||||||||
| Trading Comments, 10 January 2011 (posted 09h15 CET): Posted: 09 Jan 2011 06:15 PM PST Silver closed in New York below $29, which did indeed turn the silver chart bearish, as I suggested it would in my Jan 4th commentary. So the silver shorts got first prize on last week's | ||||||||
| Economic Aspects of the Pension Problem: Part Two Posted: 09 Jan 2011 04:00 PM PST Gold University | ||||||||
| Posted: 09 Jan 2011 03:35 PM PST 
Sadly, our economic situation is continually getting worse. Every month the United States loses more factories. Every month the United States loses more jobs. Every month the collective wealth of U.S. citizens continues to decline. Every month the federal government goes into even more debt. Every month state and local governments go into even more debt. Unfortunately, things are going to get even worse in the years ahead. Right now we look back on 2005, 2006 and 2007 as "good times", but in a few years we will look back on 2010 and 2011 as "good times". We are in the midst of a long-term economic decline, and the very bad economic choices that we have been making as a nation for decades are now starting to really catch up with us. So as horrible as you may think that things are now, just keep in mind that things are going to continue to deteriorate in the years ahead. But for the moment, let us remember how far we have fallen over the past few years. The following are 14 eye opening statistics which reveal just how dramatically the U.S. economy has collapsed since 2007.... #1 In November 2007, the official U.S. unemployment rate was just 4.7 percent. Today, the official U.S. unemployment rate is 9.4 percent. #2 In November 2007, 18.8% of unemployed Americans had been out of work for 27 weeks or longer. Today that percentage is up to 41.9%. #3 As 2007 began, there were just over 1 million Americans that had been unemployed for half a year or longer. Today, there are over 6 million Americans that have been unemployed for half a year or longer. #4 Nearly 10 million Americans now receive unemployment insurance, which is almost four times as many as were receiving it back in 2007. #5 More than half of the U.S. labor force (55 percent) has "suffered a spell of unemployment, a cut in pay, a reduction in hours or have become involuntary part-time workers" since the "recession" began in December 2007. #6 According to one analysis, the United States has lost a total of approximately 10.5 million jobs since 2007. #7 As 2007 began, only 26 million Americans were on food stamps. Today, an all-time record of 43.2 million Americans are enrolled in the food stamp program. #8 In 2007, the U.S. government held a total of $725 billion in mortgage debt. As of the middle of 2010, the U.S. government held a total of $5.148 trillion in mortgage debt. #9 In the year prior to the "official" beginning of the most recent recession in 2007, the IRS filed just 684,000 tax liens against U.S. taxpayers. During 2010, the IRS filed over a million tax liens against U.S. taxpayers. #10 From the year 2000 through the year 2007, there were 27 bank failures in the United States. From 2008 through 2010, there were 314 bank failures in the United States. #11 According to the U.S. Department of Housing and Urban Development, the number of U.S. families with children living in homeless shelters increased from 131,000 to 170,000 between 2007 and 2009. #12 In 2007, one poll found that 43 percent of Americans were living "paycheck to paycheck". Sadly, according to a survey released very close to the end of 2010, approximately 55 percent of all Americans are now living paycheck to paycheck. #13 In 2007, the "official" federal budget deficit was just 161 billion dollars. In 2010, the "official" federal budget deficit was approximately 1.3 trillion dollars. #14 As 2007 began, the U.S. national debt was just under 8.7 trillion dollars. Today, the U.S. national debt has just surpassed 14 trillion dollars and it continues to soar into the stratosphere. So is there any hope that we can turn all of this around? Unfortunately, the massive amount of debt that we have piled up as a society over the last several decades has made that impossible. If you add up all forms of debt (government debt, business debt, individual debt), it comes to approximately 360 percent of GDP. It is the biggest debt bubble in the history of the world. If the federal government and our state governments stop borrowing and spending so much money, our economy would collapse. But if they keep borrowing and spending so much money they will continually make the eventual economic collapse even worse. We are in the terminal stages of the most horrific debt spiral the world has ever seen, and when the debt spiral gets stopped the house of cards is going to finally come down for good. So enjoy these times while you still have them. Yes, today is not nearly as prosperous as 2007 was, but today is most definitely a whole lot better than 2015 or 2020 is going to be. Sadly, we could have avoided this financial disaster completely if only we had listened more carefully to those that founded this nation. Once upon a time, Thomas Jefferson said the following....
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| Mainstream Hacks Deny Gold its Fundamentals Posted: 09 Jan 2011 02:21 PM PST
First of all, Gold has been rising for ten years. It went down the twenty years prior. It is now in a structural bull market. This fact cannot be debated. There is no Gold "trade" unless you are trying to make a few points next week or month. It is a bull market. Repeatedly, the mainstream news makes this mistake. Moreover, find me a Gold bear that readily admits Gold is in a bull market. You can't because every bear refers to Gold as a trade, as if its advance is an extended aberration that needs correcting or is unsustainable. Secondly, there are real reasons for the bull market in Gold. Attributing "fear and confusion" to what is becoming a multi-decade bull market is borderline heretical. I understand that Wall Street stock jocks hate Gold. Fine. But let's get one thing straight. There are real driving forces here which can be sustained into the future. Sure Gold has been rising for 10 years but its outperformance since the start of the financial crisis must be explained. Currencies lose their value fastest when a nation cannot grow its way out of its debt burden. Western governments were already hugely indebted. Post-crisis, their debts have soared but their economies have struggled under the weight of those debts. As we've explained in past commentaries, marginal rises in interest rates will exacerbate these debt burdens. Hence, we've already seen the beginnings of debt monetization in the US, Japan and Europe. There is no way to grow out of this situation. The debt burden is too burdensome and rising interest rates will only make it worse. More monetization is coming. This is how and why debt crisis' become currency crisis.' Ultimately governments cannot take in enough tax revenue, interest rates rise and they are forced to print money to stave off default. Lost in the usual nonsense is the reasonable bearish argument for Gold. I'm not talking about the flimsy arguments like rising rates or deflation. I'm talking about how Gold is very much a speculation because in the present system, there is no need or use for it. Even though there are tremendously bullish driving forces at hand, the market is still "speculating" on the value of Gold and future value of various currencies. While the long-term trend is higher, if sentiment suddenly shifts, Gold could fall $200 or $300. While mainstream suits, stock jocks and traders misunderstand and underestimate Gold, some of those in the highest ivory towers actually do not. Last November, Robert Zoellick, the President of the World Bank said that leading economies should consider adopting a modified version of the gold standard. Among other things, Zoellick said: "The system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values. Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today." Furthermore, only days ago Fed Governor Thomas Hoenig called the gold standard "a legitimate system." In an interview with KingWorldNews.com, Jim Rickards who has worked with both the Fed & US Treasury responded to recent developments: "What Hoenig has done, as Robert Zoellick did before him, is to legitimize the debate. This is not the last word on gold and there is a long way to go both intellectually and mechanically before we get to a gold standard. What is important is that the discussion is now out of the shadows and in the main arena and it will take on a life of its own from here with participation from many sides. Hoening may have lost his vote on FOMC but he has not lost his voice." There are those who dismiss Gold entirely (like the source of the very first quotation) and then there are those who are equally as ignorant and see Gold in a bull market but think it is just a fad that will end as all bull markets do. That is simply not the case. The bull market in precious metals is one that will ultimately restore sound fundamentals and sound money to western economies. The bubble is in fiat currencies, consumer debt, government debt and persistent deficits. The bull market in precious metals is the correction to those bubbles. Yes, it will not rise forever and yes, mining companies will crash at the end of all this. But it is still very early. The recent gains in junior miners are only a hint of what is to come. As the fundamentals become more and more obvious, the Gold "trade" will only become larger and stronger. Many more participants soon will come on board. The gains in the junior miners will become larger, more extreme and truly spectacular. Our subscribers benefited in 2009 and 2010, but we are even more excited about 2011 and 2012. If you'd like to learn more about precious metals and how you can profit and navigate this historic bull market, then consider a free 14-day trial to our service. Good Luck! Jordan Roy-Byrne, CMT
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| ZH Bears Explain Silver Manipulation - Part 3 Posted: 09 Jan 2011 01:51 PM PST | ||||||||
| Posted: 09 Jan 2011 01:50 PM PST --The latest money and credit growth figures from China are due out later today. Then, later this week, Australian employment figures will be published. The two are related. As long as China keeps chugging along at near-double digit growth rates, Australian joblessness won't be a problem, at least not yet. --In the wider world, Brazil's finance minister Guido Mantega is making waves again. He was quoted in the Financial Times saying, "This is a currency war that is turning into a trade war." Brazil's currency the real has gone up almost 40% against the U.S. dollar in the last two years. --Normally, strength and soundness in your currency might seem like a good thing. But for an exporter like Brazil, when the real is appreciating against the dollar, and the Chinese Yuan is pegged to the dollar, a stronger currency means less competitive exports. And them is fightin' words. --Well, not real fighting. Not yet. But it does raise an interesting question: can China and America continue to force the rest of the world to bear the consequences for the test of wills between the world's two largest economies? --It's like a staring contest, except with currency manipulation. The Bernanke Fed pump and pumps and eases quantitatively, exporting inflation to China. Is Bernanke actually trying to force China to revalue by gunning the dollar as low as he can take it? And if that' what's happening, why are gold and silver correcting? --The year begins with a lot more questions than answers. One thing we know for sure about the dollar is that it's not the Euro. Europe returns from its leisurely Christmas break to deal with a sovereign debt problem that won't go away. Bond yields are rising and the cost of borrowing for governments is going up. --The Wall Street Journal reports that it's also a bank problem. "An area of concern is European banks. Share prices are sliding and in some cases the cost of borrowing money is rising. Because European banks hold hefty quantities of European Union government debt, they have long been seen as vulnerable to contagion from the sovereign-debt crisis." --Chicken, meet egg. Egg, chicken. --The banks are already weak because they own so much of each other. And all of them are exposed, to one degree or another, to the various bad property loans emanation from Ireland Span. But what makes it worse is that the banks are also capitalised by government debt, and even that isn't so flash. --By the way, this is why the Basel III agreement that banks should own high quality government debt in order to meet liquidity and quality requirements is a bit dubious. Government debt isn't the rock solid asset it used to be, especially in Europe. --The Euro debt problem is going to have the slightly disorienting effect of leading to a U.S. dollar rally. This despite the U.S. rapidly coming up on the statutory debt limit of $14.3 trillion. You'd think this would be dollar bearish. But euro weakness is disguising the coming dollar crisis. More on that tomorrow, along with free speech, guns, the Internet, and politics. Dan Denning | ||||||||
| An Exquisite Recipe (for a Price Disaster) Posted: 09 Jan 2011 12:32 PM PST Sunday, January 9, 2011An Exquisite Recipe (for a Price Disaster) I was chatting on the phone earlier this weekend with one of my readers about the shocking drop in the price of gold earlier this past week. We agreed that the mini-crash seemed to be the result of a well coordinated effort by some powerful bullion banks who, incidentally, are notorious for shorting gold. * Honestly, neither of us saw the Tuesday bear raid coming and our mining positions were flooded in a sea of red for the rest of the week. Perhaps yours were as well. * With noticeable disdain for the alleged perpetrators, my friend commented that it is really too bad this kind of manipulation is allowed to take place in the free markets, as lots of small investors are literally blind sided and ripped off when "da boyz" decide to "take down" the market. * And he particularly lamented that there was simply no way to know when they would strike. * This last comment struck me as interesting as I suspected this was not necessarily true. We decided to look at the gold continuous futures contract and see what the True Strength Index (TSI) indicator could tell us.
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But I was keenly tuned in to see when the "all clear" siren would be sounded and though it took a few days, I knew it when I saw it.
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| The Silver Bears are back for round three discussing silver Posted: 09 Jan 2011 12:32 PM PST | ||||||||
| Old Axiom Proven True: A Fool And His Money... Posted: 09 Jan 2011 11:13 AM PST Are soon parted. The other day I flushed out my secret places (I had to introduce new stock) and took inventory. GASP! Something's missing. 1918 20 peso....GONE! I looked all over, in all the places it might have worked itself into. I cleaned under things, moved furniture. I was feeling pretty down and decided maybe I'd had enough of pm's (I am fickle that way). There is about 700 down the tubes, just like that. I finally admitted to my wife what had happened. She made some suggestions that I thought were stupid. One was that it might have slid down the side of the waterbed mattress. She noticed I had laid out a bunch of it on the bed one day. Long shot I thought, I pull the mattress from the side and there is it....my daughters socks!! Dang. Wait, still in its plastic cover, there it really is... 20 pesos worth of redemption. As I write this my wife is sound asleep on that very bed, after a special back massage (with the door locked). Lesson learned. Don't play too much with this stuff. Yes, I play the giant from Jack And The Beanstock but that's foolish. Be very careful with this stuff. I think I will do some fortifying. | ||||||||
| Posted: 09 Jan 2011 10:49 AM PST I oughta know this, but in the evening NY time, which market is Kitco using to draw the green line on the chart, NY Globex, Hong Kong, or Sydney?  | ||||||||
| Posted: 09 Jan 2011 10:00 AM PST Some price weakness continued to remain manifest in gold, and to a lesser extent in other precious metals, as the second trading week of 2011 got underway overnight. The near 4% loss in gold's value last week is also being tied to euro woes. | ||||||||
| Metals Little Changed after Falls Last Week Posted: 09 Jan 2011 10:00 AM PST Gold is little changed to kick off the new week after falling almost $50 last week. Silver fell a sharp 7.3% last week amid a general liquidation of precious metals. | ||||||||
| Silver Demand Surging in India Posted: 09 Jan 2011 10:00 AM PST Gold should be well supported at the 100 day moving average and some analysts are saying that last Friday's sell off may mark the low for the year. | ||||||||
| Outlook 2011: Fear & Love in Gold Trading Posted: 09 Jan 2011 10:00 AM PST It's impossible to predict where gold prices will be 12 months from now but we think gold prices could double over the next five years. This would mean a 15% return, if you compounded it annually. However, it will by no means be a straight line. |
Today marks the unofficial start to earnings season with Alcoa Inc. (AA) leading off with their report card for the fourth quarter after the close.
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