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- No One Knows How Much Gold China's Central Bank Is Buying
- Sunday Reflections - Dr. Benjamin Carson speech goes viral
- So God Made a Banker
- An Explanation Of 3 Investment Ideas From Bill Gross's February Outlook
- American Capital Agency Shifts Gears To Profit From Fed MBS Purchases
- Growth In Sales, Profit And Dividends Make Diageo A Buy
- AIG - Buy It Today For Value And Sell Covered Calls For A 37.5% Annualized Yield Rate
- Adam Hamilton: GLD Cannibalizing Gold Stocks?
- Australians seek repatriation of Gold
- Yen's Fall Stopped by 'Oops' Moment?
- S&P 500 to plunge 27% and bonds to rally again this year predicts veteran guru Gary Shilling
- Pennsylvanias Ice Mine And the Lost Silver
- Gold and Silver in 63 languages
- First-ever spot gold trading on the DGCX planned for later this year, why not make it happen faster?
- Gold Market “Lacks Direction and Commitment”, Asian Physical Demand “Quiet” Ahead of Chinese New Year
- Gold, Bonds and the Dollar – Short- and Long-Term Implications
- The Tale of Three Silver Premium Spikes
- U.S. Economy likely grew in fourth quarter [on back of gold sales]
| No One Knows How Much Gold China's Central Bank Is Buying Posted: 10 Feb 2013 09:21 AM PST  By Tim Iacono: The lack of safe haven demand, driven by a perceived improvement in the global economy, has played a key role in keeping gold and silver prices range bound, however, the chart patterns that have developed in recent months are likely to be resolved with a big move up or down in relatively short order. This could attract the attention of hedge funds that have clearly lost interest in the metals lately, as the stock market has pushed higher. Fortunately for precious metals investors, demand from Asia remains strong as evidenced by record gold imports and record gold production in China along with reports of a surge in gold smuggling in India following duty hikes by the government, part of an ongoing (and, ultimately, futile) campaign to limit gold imports. A stronger trade-weighted dollar also contributed to the metals' sub-par performance in recent days, as ECB President Mario Draghi single-handedly Complete Story » |
| Sunday Reflections - Dr. Benjamin Carson speech goes viral Posted: 10 Feb 2013 09:10 AM PST Real Clear Politics sets up the video below: "Famed Baltimore neurosurgeon Dr. Benjamin Carson addressed the National Prayer Breakfast on Thursday morning on healthcare. Dr. Carson often criticized Obamacare and government intrusion in healthcare while President Obama sat in the audience. Dr. Carson encouraged a program where newborn babies are given health savings account as an alternative to Obamacare." Bravo to Dr. Carson, a man we have not been aware of until now, but plan to seek out more from him. The video has since gone viral on YouTube, approaching a million views with several different people having uploaded the speech. (Full size video on page 2. About 27 mins.)
Direct link to YouTube: http://www.youtube.com/watch?v=PFb6NU1giRA&feature=player_embedded Original Source - C-Span via YouTube on Real Clear Politics
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| Posted: 10 Feb 2013 08:29 AM PST A little comedic relief for our readers this weekend as we contemplate what America once was, and what it has become. And on the 8th day, God looked down on his planned paradise, and said I need a lender. So God made a banker. God said I need somebody to make a synthetic derivative, write [...] |
| An Explanation Of 3 Investment Ideas From Bill Gross's February Outlook Posted: 10 Feb 2013 07:40 AM PST By Learn Bonds: Bill Gross recently came out with his monthly investment outlook entitled "Credit Supernova." Below is a summary of the outlook, and my explanation of the 3 primary investment ideas he gives in the piece. So, what is a credit supernova? Google gives the following definition for a supernova:
Gross sums up why he is comparing our current debt situation to a supernova in the following paragraph and the chart below it:
Complete Story » |
| American Capital Agency Shifts Gears To Profit From Fed MBS Purchases Posted: 10 Feb 2013 06:59 AM PST  By Tim Plaehn: The 2012 fourth quarter earnings results from American Capital Agency (AGNC) dropped some very interesting tidbits into the agency mortgage REIT swimming pool. The company has shifted gears to take advantage of the MBS TBA markets, but at the same time there were several significant negatives in the quarterly earnings report. TBA Dollar Roll "Free" Money The TBA - to be announced - MBS market is a one to three-month forward market for the delivery of newly formed mortgage-backed securities. Money is made with a TBA dollar roll by purchasing the near or current month delivery and selling a later month TBA MBS. This "buying the roll" results in positive interest rate carry to the buyer. With the Federal Reserve buying $40 billion plus of MBS per month, this forward dollar roll trade has become quite profitable and American Capital Agency generated a nice boost to income in Complete Story » |
| Growth In Sales, Profit And Dividends Make Diageo A Buy Posted: 10 Feb 2013 06:05 AM PST By Today, I decided to take a look at the company that brings us amazing brands like Johnnie Walker, Smirnoff and Guinness: Diageo Plc. (DEO). Recognizable brands Diageo owns some of the most impressive brands in the alcoholic beverage industry. Let's take a look at some examples. Johnny Walker (click to enlarge) Johnny Walker is the best-selling Scotch whiskey worldwide. Over a million cases a year are sold in the US alone. Total yearly sales are more than 130 million bottles. The products range from the inexpensive Red Label to the 18-year-old Gold Label. Smirnoff Smirnoff is the no.1 premium spirit (by volume). It's sold in over 130 countries around the globe. It sells an immense variety of products, including its popular flavored vodkas like Smirnoff Raspberry and Smirnoff Pineapple. It even has flavors like caramel and marshmallow. Guinness Brewed in over 60 countries and sold in more than 100, Guinness Complete Story » |
| AIG - Buy It Today For Value And Sell Covered Calls For A 37.5% Annualized Yield Rate Posted: 10 Feb 2013 05:30 AM PST By American International Group, Inc. (AIG) is a powerhouse. The one strike against it is that little business of the 2008 financial crisis and its brink of total collapse. I may sound a bit flippant over such dire recent history but let us remember the rest of that story. The government of The United States of America, the globe's largest economic power and now the world's largest insurer against moral risk has determined AIG is too big to fail. That is worth repeating. The government of The United States has determined that AIG is too big to fail. That is a determination that can not be taken back so long as the structural facts remain true. AIG insures so many of the institutions and financial instruments that are an integral part of the world's economies and represent such a large portion of the asset value of those economies that it is Complete Story » |
| Adam Hamilton: GLD Cannibalizing Gold Stocks? Posted: 10 Feb 2013 04:00 AM PST Submitted by Adam Hamilton, Zeal: With gold stocks languishing near lows in a desolate sentiment wasteland, investors are wondering why this sector has fallen so deeply out of favor. One theory is capital that would have traditionally flowed into major gold producers has been diverted into the GLD gold ETF instead. Taken to extremes, this [...] |
| Australians seek repatriation of Gold Posted: 10 Feb 2013 03:35 AM PST Australians Seek Gold Repatriation – Bring Home Our Gold by |
| Yen's Fall Stopped by 'Oops' Moment? Posted: 10 Feb 2013 02:20 AM PST Maybe it was a "lost in translation" moment, or maybe it was the end of an epic run. Either way, comments today from Japanese Finance Minister Taro Aso on the yen's weakness are reverberating through the forex market. Even after Aso's comment that the yen had weakened "more than intended" was re-translated to "more than anticipated," the Japanese currency strengthened against the dollar and other currencies... Read |
| S&P 500 to plunge 27% and bonds to rally again this year predicts veteran guru Gary Shilling Posted: 10 Feb 2013 12:27 AM PST Perennial bear and long-standing bond bull Dr. Gary Shilling is sticking his neck out where few other commentators will dare to go at the moment and predicts a 27 per cent fall in the S&P 500 this year. His latest Insight newsletter concludes: 'We estimate that S&P 500 operating earnings will be $80 this year and that the P/E will drop to 13 in the global recessionary climate, about the average in past bear markets, and the S&P 500 index would fall to 1,040, a 27% decline from its 1,426 level at the end of 2012. Other major stock markets should show similar weakness, replacing the euphoria of the Grand Disconnect.' Great Disconnect The 'Great Disconnect' is the contradiction between low or no growth in the global economy and its soaring stock markets. Dr. Shilling demonstrates how financial leverage or borrowing is the cause of this disconnection in his latest newsletter. Public debt has replaced private debt in recent years. The problem is that this rocket fuel is having less and less impact on financial markets which must eventually return to earth, or shall we say fair valuation. And the flipside of this is a perhaps final leg in the great bond bull market that Dr. Shilling correctly called three decades ago. So not only is he one of the very few Wall Street commentators to call a crash, he is also not among those looking for a 'Great Rotation' from bonds to stocks, quite the reverse! What then will trigger this stock market crash? Dr. Shilling says: 'Forecasting specific jolts is hazardous, although we can list several possibilities, including a hard landing in China or an oil price leap, triggered by an Iran-related blow-up in the Middle East, or the failure of a major European bank or a US recession, which would be a major shock to bullish investors, especially since so many believe the American economy is on the mend.' All of the above? Or perhaps all of the above! ArabianMoney has recently highlighted severe doubts about the positive data coming out of China. Iran has just specifically rejected talks with the US on nuclear issues, what is the next step? European banks are still vulnerable to sovereign debt shocks. And the possibility of a US recession looms large after the contraction in Q4 last year. Could the world economy be about to succumb to a series of body blows precipitating a 1974 or 1987-style financial market meltdown? Dr. Shilling has been very right on bonds and mainly wrong on equities for sometime. But if you call a downturn for long enough it will usually happen, normally when everybody else is very complacent, like now. |
| Pennsylvanias Ice Mine And the Lost Silver Posted: 09 Feb 2013 10:30 PM PST coudy |
| Gold and Silver in 63 languages Posted: 09 Feb 2013 10:30 PM PST 24hgold |
| First-ever spot gold trading on the DGCX planned for later this year, why not make it happen faster? Posted: 09 Feb 2013 09:09 PM PST The Dubai Gold and Commodities Exchange will launch its first-ever spot gold contract later this year allowing UAE traders to buy and sell physical gold on a local exchange for the first time. Gold traders based in the City of Gold are ecstatic about this news reported in The National today. It's perhaps surprising that this has taken so long. Presently the DGCX only offers contracts based on the future price of gold, not the current or spot price. Positive reaction Traders are delighted by the news and they think it will do a lot to boost liquidity in the Dubai gold market by eliminating the need for offshore credit and collateral to trade in gold. The focus for Dubai is always on the physical trade in gold and the new spot gold contract hits that mark. Exchange traded gold products have not been as successful in Dubai as elsewhere in the world. However, the DGCX still has a lot of work to do before the contract can be launched. Officials said the contract would need the support of local and international banks and the gold refiners. 'We are still very much a cash settlement exchange, and in terms of the deliverability of the gold, we want to have the right infrastructure in place to enable us to do that,' CEO Garry Anderson told The National. Hot gold market One can only speculate on how the gold market will look by the time the DGCX gets its spot trading up and running. A huge increase in demand for the yellow metal from China this year and continued global central bank money printing augurs well for gold prices. It would be better if the DGCX could rap up its procedures in a few months in true Dubai style rather than drag this out for the rest of the year. Do such exchanges not work in real time? If there is a demand in the marketplace for a spot gold trading contract then why not make it happen now and not wait while other exchanges abroad snap up this business? |
| Posted: 09 Feb 2013 04:14 PM PST Gold Market "Lacks Direction and Commitment", Asian Physical Demand "Quiet" Ahead of Chinese New Year WHOLESALE MARKET gold prices hovered just above $1670 per ounce Friday morning, virtually unchanged over 24 hours despite some sharp moves yesterday as the Euro fell following the European Central Bank's monetary policy decision. "This sideways price action is characteristic of a market lacking direction, commitment or inspiration," says a note from technical analysts at bullion bank Scotia Mocatta. "We would like to think the market is building a base for another move back toward $1800, but we will not shift bullish from current neutral until the market closes back above $1700. A break below $1650 would shift us bearish looking for $1500." Heading into the weekend, gold looked to be headed for a second straight weekly gain by Friday lunchtime in London, although it was only a few Dollars up on last week's close. Silver by contrast was down 0.8% on the week, trading around $31.50 an ounce this morning. Stock markets edge higher Friday, along with industrial commodities, while US Treasuries gave up early gains. Dealers in India reported Friday that higher local gold prices were weakening demand after the Rupee fell to a one-week low against the Dollar. "We had some deals yesterday night after the Euro came down along with gold, but [today] there has not been any movement," one dealer at a state-run bullion importing bank told newswire Reuters today. "If the Rupee appreciates, we may see good gold demand." "Pre-holiday buying" ahead of next week's Chinese Lunar New Year has helped push gold higher this week, according to one Hong Kong-based dealer. "But it's pretty quiet on our side," the dealer adds. "Let's see what people think about gold after the holiday." China's trade surplus narrowed slightly last month, but was larger than the consensus forecast among analysts after both exports and imports grew more strongly than expected, official data published Friday show. Chinese consumer price inflation meantime fell to 2.0%, down from 2.5% in December. Earlier this week, the China Gold Association reported that China was the world's biggest gold producer for the sixth year running last year, producing 403 tonnes, an 11.7% annual increase. On the currency markets, the Euro traded just above $1.34 against the Dollar this morning, following yesterday's 1.5% drop that coincided with European Central Bank president Mario Draghi's press conference, following the ECB's decision to leave its interest rate on hold at a record low 0.75%. Draghi argued that the Euro's appreciation in recent months was "a sign of the return of confidence" in the single currency. The ECB president however highlighted "heightened credit risk" and "weakness in credit demand" towards the end of last year. Draghi also argued that inflation expectations "remain firmly anchored" in the Eurozone, interpreted by several commentators as increasing the likelihood the ECb could cut interest rates at a future meeting. "We suspect the Euro tailwinds have abated markedly after Draghi," says a note from Citi this morning. "Investors will be mindful of the fact that further excessive currency appreciation could trigger an ECB response before long. In addition, with risks in the periphery on the rise again, the Euro could become more vulnerable than before." "Exchange rate comments can be successful for as long as they're thought to be credible," points out Chris Scicluna, head of economic research at Daiwa Capital Markets Europe. "I'm not overly convinced that the ECB will get to a position where it will think about easing policy to offset the exchange rate." Gold in Euros touched a two-week high at €40,413 per kilo yesterday, and by Friday lunchtime in London was up 1.9% for the week. Elsewhere in Europe, leaders meeting at the European Summit in Brussels Friday agreed to cut the European Union's budget from €994 billion in the current cycle to €960 billion for the period 2014-2020 – down from the €1.047 trillion initially proposed. The Japanese Yen meantime has "weakened more than we intended" since last September, Japan's finance minister Taro Aso said Friday. Against the Dollar, the Yen has fallen from 78 to 90 in less than six months, accelerating its rate of decline after the election of Shinzo Abe as prime minister in December. Since Abe's election, the Bank of Japan has doubled its inflation target, with the BOJ's current governor due to step down next month. Ben Traynor Gold value calculator | Buy gold online at live prices Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK's longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics. Ben can be found on Google+ (c) BullionVault 2013 Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. |
| Gold, Bonds and the Dollar – Short- and Long-Term Implications Posted: 09 Feb 2013 04:10 PM PST
Based on the February 8th, 2013 Premium Update. Visit our archives for more gold & silver articles. In our previous essay we stepped back from the day-to-day price analysis in order to focus on the major event that happened recently on the silver market (the silver – JP Morgan manipulation lawsuit was dismissed) and today we would like to get back to the recent price moves, however, first, let's discuss the current situation on the bond market.
A trend is a trend until it stops. Could this be the case for bonds? Is the bond bubble about to burst? And if so, what are the implications for precious metals?
Anyone following the financial press can see that analysts are rumbling that bond prices will fall when interest rates rise and that it will happen sooner than later. And we generally agree – you can't lower interest rates below zero (who knows, maybe the Fed will surprise us calling that an unconventional but necessary move?) and since they are practically there, the ceiling is very close to the current bond valuations. The reason that bonds beat stocks over the past two decades is that interest rates have plunged making attractive the fixed income that bonds promise to pay. But the situation might as well change in the following years.
"Investors should be alert to the long-term inflationary thrust of such check writing" by the Fed, said Bill Gross, who runs the world's largest bond fund, in his January investment outlook. "While they are not likely to breathe fire in 2013, the inflationary dragons lurk in the 'out' years towards which long-term bond yields are measured."
Nearly 40% of the 32 investment strategists and money managers surveyed recently by CNNMoney think that interest rates will begin to rise in 2013, and another 30% say the shift will begin in 2014.
That would be even sooner than the Federal Reserve's projections. The central bank doesn't expect to raise the federal funds rate, the key interest rate that influences overall interest rates, until some time in 2015. The Fed said that it will keep its stimulus policies in place until the unemployment rate falls to 6.5%, which it doesn't think will happen before then. But whether that takes place this year or next, or in 2015, one doesn't want to be stuck with major investments in bonds when it happens.
Waves come and go. The current bull market in bonds must end at some time in the future, sooner or later, not until inflation or interest rates rise. So far, the economy remains sluggish, real unemployment is high and inflation is minimal. But, sooner or later, investors will experience either a loss of money, or at best meager returns. If inflation eats away the value of bonds, those who hold gold in their portfolios may be able to compensate.
Let's see how gold is performing this week. Let's begin with the analysis of the US Dollar Index as it will likely have a major impact on the price of yellow metal in the coming months. We will start with the long-term chart (charts courtesy by http://stockcharts.com.) No significant changes are seen this week and the long-term trend for the USD Index remains down. Thursday's rally did not take the index level above the long-term resistance line, so the outlook here from the long-term perspective remains bearish. In the medium-tern USD Index chart, virtually nothing changed this week, although a move to the upside was seen on Wednesday-Thursday's. The head-and-shoulders pattern is still not completed. A breakdown here below the neck level of the above-mentioned pattern – is quite probable and will likely lead to much bigger moves to the downside. These subsequent declines could stretch out for a period of weeks or even months. In the short-term USD Index chart, a rally above the medium-term declining resistance line based on the July-August and late-November highs last year was seen this week. As the beginning of the dashed line is at the Nov 2012 top (the one that created the medium-term support line) and the Jan 2013 high (the one that formed after prices tried breaking above the declining resistance line), it might be the case that this line represents the "how far too far can the index move and still go back down". It's simply our guesstimate based on two facts: each of the previous breakouts failed and the rally stopped right at the dashed line, thus confirming at least some significance thereof.
We still believe the next move seen here will be to the downside. With a cyclical turning point a bit more than a week away, sideways trading in the coming days will likely be quickly followed by a period of declines which could then trigger a rally in the precious metals sector.
At this point, let's have a look what's currently going on in the gold market. In the long-term gold chart the situation remains bullish. Gold prices consolidated after breaking out and the yellow metal is technically ready for a big rally. Comments made in our essay on the price of gold in February 2013 remain up-to-date:
The bottom was very likely formed here a few weeks ago when gold prices dipped below the 300-day moving average, which is a very important long-term technical development. Prices now appear to be simply consolidating a bit, which is also in tune with the historical patterns – the rally didn't always start in a volatile way after the final bottom was reached below the 300-day MA – but it happened eventually many times and on each occasion the rally was worth waiting for.
On a short-term note, it is encouraging that gold did not decline much even though the dollar rallied quite sharply on Thursday.
Finally, we would like to share an observation that one of our subscribers shared with us along with our comments:
Q: I note in 2006-07 it took 76 weeks to make a new high for gold and in 2008 it took 78 weeks to make a new high in gold. We are now at week 74 in the gold cycle. Do you feel this is significant? I feel when it does move it will be to almost 1900 before a short- or medium-term correction. "When time is up, price will reverse. Time is more important than price."–W. D. Gann (famous technical analyst.)
A: Yes, we feel this is significant and we expect to see a more volatile upswing in the coming weeks. We would like to add that the time factor may make this consolidation significant. Less than 40 years ago the correction took gold much lower – about half of the previous high – before the final rally in gold materialized. At this time we think that the prolonged consolidation might have been enough and gold doesn't have to move even lower – the lack of a rally might have been enough to make people throw in the towel.
Summing up, the situation in gold did not change much this week in terms of price and it remains bullish for the medium- and long term. To make sure that you are notified once the new features are implemented, and get immediate access to our free thoughts on the market, including information not available publicly, we urge you to sign up for our free gold & silver mailing list. Sign up today and you'll also get free, 7-day access to the Premium Sections on our website, including valuable tools and charts dedicated to serious Precious Metals Investors and Traders along with our 14 best gold investment practices. It's free and you may unsubscribe at any time. Thank you for reading. Have a great and profitable week! Przemyslaw Radomski, CFA * * * * * About Sunshine Profits Sunshine Profits enables anyone to forecast market changes with a level of accuracy that was once only available to closed-door institutions. It provides free trial access to its best investment tools (including lists of best gold stocks and silver stocks), proprietary gold & silver indicators, buy & sell signals, weekly newsletter, and more. Seeing is believing. Disclaimer All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA 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. Although the information provided above is based on careful research and sources that are believed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice. |
| The Tale of Three Silver Premium Spikes Posted: 09 Feb 2013 02:00 PM PST Our friend Chris Duane of Dont-Tread-On.me examines three recent premium spikes seen in physical silver, their causes, and what the spikes mean about the silver market. Duane examines the late 2008 spike caused by a massive paper silver sell-off during the 2008 financial crisis, the premium spike/shortage seen in March/April 2011 due to massive demand [...] |
| U.S. Economy likely grew in fourth quarter [on back of gold sales] Posted: 09 Feb 2013 06:23 AM PST  The economy likely expanded slightly in the fourth quarter as higher exports and a slump in oil imports narrowed the trade gap, suggesting a surprise drop in economic output reported last week was overstated. The U.S. report showed the country's trade gap narrowed to $38.5 billion in December, which was a much smaller deficit than analysts polled by Reuters had expected. U.S. exports increased $8.6 billion in December, boosted by sales of industrial supplies, including a $1.2 billion rise of non-monetary gold. |
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