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- Gold prices expected to rise in 2013; could hit $2,200
- London gold 19/12 - small recovery from New York downgrade
- Greg: Oil Reversal Is A Buy Signal For Gold
- Four top gold ETFs and their structural differences
- SilverFuturist: “Gold Bullion” Jewelry
- Harvesting profits from weak hands in the Silver market
- Bullion, Basel III & Bad Predictions
- Five U.S. states ranked highest for personal freedom
- Nine blue-chip stocks paying "high yield" dividends today
- How the U.S. could return to a real gold standard
- Gold Coin.com declares $20 Saint Gaudens as the Best Gold Coin Investment of 2012
- Silver Deceptions: Large Surpluses & Low Production Cost
- Where the Relationship between Gold and Oil Works and Where It Does Not
- China Gold to announce on African Barrick bid soon
- How to Buy Silver: The Best is Yet to Come in 2013
- Jim Roger Sees “Overdue Correction” Hitting Gold as Unleveraged Money Buys at 3-Month Lows
- Jewelery still accounts for 75% of total India Gold demand
- Gold, Basel III and Bad Opinions
- Rob Kirby: The Road to the Euro- Birth Pangs of Globalism
- Silver Chart Update 12.19.12
- S7: Silver & Unintended Consequences
- Buffaloes As Low As 94 Cents Over Spot!!
- Hard Assets Have Been the Leading Category For Most of the Past Decade
- JPMorgan Wins Approval for First U.S. Physical Copper ETF
- Gold price struggling to get back to the pre-election lows
- McAlvany: An American Reckoning
- Harvesting Profits from Weak Hands in Silver
- The 12 Gold Bugs of Christmas
- Burma achieves balance in Gold supply and demand in Dec
- The Doc: QE Reaching Afterburner Stage Globally
- It's That Time of the Morning for a Gold & Silver Waterfall
- Aussie scientists say termites may lead to Gold
- The Silver Doctors: Another Cartel Raid
- Jim Roger Sees "Overdue Correction" Hitting Gold
- Daily Nugget – Gold Price Is Suffering This Morning
| Gold prices expected to rise in 2013; could hit $2,200 Posted: 19 Dec 2012 02:53 PM PST Gold price targets of $2,000 an ounce and even higher are in sight as the global financial crisis and geopolitical concerns continue to foster short and long-term demand for precious metals. |
| London gold 19/12 - small recovery from New York downgrade Posted: 19 Dec 2012 01:13 PM PST Jim Rogers sees "overdue correction" hitting gold as unleveraged money buys at 3-month lows, but Japanese pension funds reportedly moving into the yellow metal |
| Greg: Oil Reversal Is A Buy Signal For Gold Posted: 19 Dec 2012 12:27 PM PST Today's Crude Oil Reversal Is A Buy Signal For Gold. By Gregory Mannarino ~TVR |
| Four top gold ETFs and their structural differences Posted: 19 Dec 2012 12:26 PM PST A comparison of some of the relative merits to the investor of four of the biggest gold ETFs and the location of their metal |
| SilverFuturist: “Gold Bullion” Jewelry Posted: 19 Dec 2012 12:23 PM PST silverfuturist: "Gold Bullion" Jewelry ~TVR |
| Harvesting profits from weak hands in the Silver market Posted: 19 Dec 2012 12:00 PM PST In financial market jargon, those investors described as having "weak hands" typically means that they cannot hold onto a position they have established for very long if it goes against them substantially. |
| Bullion, Basel III & Bad Predictions Posted: 19 Dec 2012 11:36 AM PST Ooops! Just when everyone said gold must go higher – immediately...! Markets are made of opinions, some better than others. There are always plenty of opinions about gold.  |
| Five U.S. states ranked highest for personal freedom Posted: 19 Dec 2012 11:01 AM PST From Debt Reckoning: The United States is more polarized than ever, divided along ideological lines into regions that may as well be entirely different countries. As if the antics in Washington D.C. aren't enough, millions of American families are stuck in the political crossfire and wondering where to turn. Some fear an impending collapse, while others simply want to provide a safe and free environment for their children. The best option for anyone feeling trapped in a web of government regulation may be to vote with his or her feet. These are the top five states for survivalists and the self-sufficient in 2013, based primarily on population density, sustainability, and citizen freedoms... More on liberty:       |
| Nine blue-chip stocks paying "high yield" dividends today Posted: 19 Dec 2012 11:01 AM PST From Dividend Growth Stocks: There is perceived safety in size. Giant corporations aren't randomly grown. Instead, they are carefully built through superior management and foresight. Often, these are more mature companies that also offer stability and predictability, usually at the expense of dynamic growth. These are your mega-cap stocks. There is no universal definition of mega-cap stocks. Many define mega cap as companies with a market cap exceeding $100 billion. Needless to say, most mega-cap companies are headquartered in the U.S., Europe, and Japan. The 2000's commodity boom resulted in many energy and resource companies achieving mega-cap status, while the financial crisis resulted in some of the financial institutions losing mega-cap status. Mega caps are generally viewed as a stable, safe haven for stock investors during times of uncertainty due to their size and industry dominance. The recent turmoil in Europe from debt concerns left investors fleeing the euro into dollar-denominated assets like Treasurys and mega-cap stocks. In a July 2012 New York Times article, Wallace Weitz, president of the Weitz Funds, said, "I've been doing this for more than 40 years, yet it still surprises me that people look away from good companies because they 'haven't done anything' for a long time." That's exactly where value-minded investors ought to be looking for attractively priced shares, he said. This week, I screened my dividend growth stocks database for stocks with a market cap over $100 billion and with a dividend yield above 3%. The results are presented below: Microsoft (MSFT), the world's largest software company, develops PC software, including the Windows operating system and the Office application suite. Yield: 3.4% | Market Cap: $228.1B More on dividends:    |
| How the U.S. could return to a real gold standard Posted: 19 Dec 2012 11:01 AM PST From Terry Coxon, Senior Economist, Casey Research: Many of us see hair-curling rates of price inflation not too far down the road. Today, inflation is hardly noticeable. But what's coming will be so painful and so disruptive that soaring prices will become the voting public's No. 1 complaint. How will the politicians respond? They will be responding to an audience for whom the idea of fiat money (even with a picture of a dead president on every bill) has been discredited. The obvious alternative to fiat money will be a return to a gold standard, and it's hard to imagine what competing proposals might get in the way. In such an environment, being pro-gold will be politically smart. Championing the idea of re-linking the dollar to gold would serve any politician nicely as an I-dare-you-to-disagree challenge to his competitors. And supporting such a proposal would be a convenient way for politicians to distance themselves from the mistakes of the past. I believe we are going to hear a lot of talk about a return to "the gold standard." But none of the talkers will be saying much unless he tells you what kind of gold standard he has in mind. There are different ways to link the dollar to gold. Each of them involves an official price for gold at which the government is committed to transact with any and all comers. But there are important differences... More on gold:    |
| Gold Coin.com declares $20 Saint Gaudens as the Best Gold Coin Investment of 2012 Posted: 19 Dec 2012 11:01 AM PST North America’s gold coin advisor, Gold-Coin.com has declared the $20 Saint Gaudens as the Best Gold Coin Investment Of 2012 based on its track-record, profitability and wealth preservation potential against the 4 best performing gold coins in the world |
| Silver Deceptions: Large Surpluses & Low Production Cost Posted: 19 Dec 2012 10:22 AM PST SRSrocco lets cartel shills Jeffrey Christian and Ned Schmidt have it in his latest MUST READ silver analysis. There are two misconceptions about the silver market that are still held by many investors in the precious metals community. One is … Continue reading |
| Where the Relationship between Gold and Oil Works and Where It Does Not Posted: 19 Dec 2012 10:04 AM PST
In the financial markets, gold is usually ascribed to the commodities category. In this group of assets you will find your good old friend, silver, along with several others metals like platinum, palladium, copper etc. Apart from that, commodities encompass a broad range of other products in the like of corn, but also crude oil, gas, minerals and other. Such groups of assets are usually traded on commodity exchanges specialized in this kind of products, for instance on the Chicago Mercantile Exchange or the London Metal Exchange.
Commodities differ from stocks or bonds in the fact that, usually they have significant importance for some industry. For example, silver is used in the production of electrical conductors and oil is used as fuel for various kinds of machines. The main difference from a financial point of view is that, other than bonds and stocks, commodities do not give you cash flows in the like of dividends, coupons or the principal. The only way in which commodities generate returns (excluding industrial applications) is when their price changes in the direction you bet on.
Since price changes are of crucial importance for commodities investors, relationships between these commodities are often examined in detail to establish if prices of one commodity can fuel prices of another. It is, for instance, almost universally acknowledged that there is a strong relationship between prices of gold and silver, where the price of silver strongly depends on the price of gold.
Most precious metals investors have probably analyzed the gold to silver ratio more than once in their investment career, but such relationships can be found not only between metals. It is argued that prices of gold and oil are also related. Higher price of oil would translate in higher prices of gold. Since there is no apparent intuitive connection between what happens with oil and what happens with gold, there is need for some explanations here.
The main idea behind the gold-oil relation is the one which suggests that prices of crude oil partly account for inflation. Increases in the price of oil result in increased prices of gasoline which is derived from oil. If gasoline is more expensive, than it's more costly to transport goods and their prices go up. The final result is an increased price level – in other words, inflation. The second part of the causal link is the fact that precious metals tend to appreciate with inflation rising (in the current – fiat – monetary environment). So, an increase in the price of crude oil can, eventually, translate into higher precious metals prices.
To see if this is actually the case, let's take a look at the chart below. It presents prices of gold and Brent crude oil in the 1987-2012 period. As it turns out, both commodities tend to trade in the same direction. The relationship is far from perfect but it seems to be there. We have measured this relationship by calculating the R-squared for gold and crude oil in the above-mentioned period. R-squared is a statistical measure, but you don't need to be a rocket scientist or have a Ph.D. in Mathematics to understand it. The basic idea is simply that if you have two quantities (e.g. price paths), R-squared shows you how much of the changes in one of those quantities can be explained by the other quantity. To put it simple, in our case R-squared shows you how much of the changes in the price of gold can be explained by changes in the price of crude oil. The result is 78.7% which, quite intuitively, tells you that, in fact, price levels of gold and crude oil are strongly related. This is further confirmed by another chart. On this chart, we have plotted prices of gold in relation to prices of Brent crude oil. This chart can be interpreted in the following way: the horizontal axis shows you the price of oil on a given day and the vertical axis shows the price of gold on the same day. So, if you look at the horizontal axis and find oil at, say, $70, looking up in a straight line will tell you what gold cost when oil was at $70. We see that the cloud of points is generally rising in the price of oil. This suggests, just as the previous chart did, that there is a relation between the two price levels: higher prices of oil coincide with higher prices of gold.
One puzzle here is that it usually takes some time for higher oil prices to materialize as higher prices in goods and services. But it does not seem to take too long for gold you have in your portfolio to trade in line with oil. One explanation can be that, once oil appreciates, precious metals investors discount the expected future higher prices o goods in the price of gold and gold goes up.
With such results on the table, it would be tempting to proclaim that you can trade this relationship. But to see if this is really the case, we'll turn to a different chart. This chart is similar to the previous one but it differs from it in two ways: we plot weekly gold and oil returns instead of prices and we shorten the analyzed period to start with the year 2002. The results here are completely different than before. The cloud of points does not seem to reveal any coincidence or relationship – it does not follow any visible trend and the points look like plotted randomly in the middle of the chart, around 0% returns for both gold and oil. R-squared suggests that 7.2% of the changes in gold returns can be explained by changes in oil returns. The conclusion might be that higher weekly oil returns don't necessarily imply anything meaningful for weekly returns of gold as far as long-term analysis is concerned. We have obtained similar results for daily, monthly and quarterly returns.
The main point is that, even though the general price level of gold evolves in a similar direction to oil, the relationship may not be tradable based on data for the long term. Over longer periods of time and on average, opening long speculative positions in gold based on expected appreciation of oil may simply not be profitable.
Having said that, it's still possible for short-term patterns to emerge occasionally. So, even though there seems to be no relationship between gold and oil returns over the long term, it may happen that a relationship unveils itself in a short period of time offering trading opportunities.
A popular way to analyze gold in terms of crude oil is the gold:oil ratio in which the price of gold is divided by the price of oil. We present historical levels of the ratio along with prices of gold on the chart below. Peaks in the ratio signalize periods when gold was expensive relative to oil. Troughs point out periods when gold was relatively cheap compared with oil. The ratio does not reveal any striking patterns or relationships. As is with charts, it can be interpreted differently by different persons. Quick calculations yield an R-squared of 3.4%, which suggests that the ratio on its own may not have any particular impact on gold prices at the same point in time.
In light of the mixed results obtained so far, we have checked the relationship between gold and oil price levels for stability. We have calculated R-squared values for gold and oil prices in a one-year window for each day in the 1987-2012 period (subject to data availability). The results are presented on the chart below. The red line shows the R-squared values calculated in a one-year window ending on the day for which the value is shown. The changes in the R-squared can be perceived as the stability of the gold-oil relationship. High values indicate that for a one-year period prior to the day for which the value is reported the link between gold and oil was relatively strong and they traded in the same directions. Low values indicate that for one year the relationship was questionable and gold and oil traded independently. We can see that the stability of the relation has been fluctuating dramatically for the last 25 years.
It is considerably difficult to find any apparent relationship between the behavior of R-squared values and the price of gold. To check for any such link, we have applied two thresholds to the R-squared values. The first threshold would be one that was broken when R-squared went up. The other one was one that was broken when R-squared was declining. We have checked for different values of the thresholds, values that would coincide with highest or lowest past returns of gold. Altogether, we have answered four questions:
The answers:
Even if the above might seem slightly complicated, they imply two straightforward points:
The above results do not imply that such relationships were tradable. But they point out that the degree to which gold and oil traded in the same direction could have had influence on gold returns.
To sum up, there seems to be a relatively strong relationship between gold and oil prices but not between gold and oil returns. The strength of the relationship between gold and oil coincides with high or low gold returns. This relationship may not be useful for speculation over the long term but it's possible that patterns emerge locally, in short time spans. Results of our analysis of the relationship between gold and oil show that if you are considering entering the gold market and the relationship between gold and oil is strong but deteriorating, you may want to double check the current situation on the market. Additionally, if you are to enter the market and the above-mentioned relationship is strengthening, this could coincide with considerable movements in gold to either side. You might want to check additional factors to confirm which side it might be.
If you would like to get more information on how oil can be related to precious metals, please read our gold, silver and oil trio report. If you want to get to know more about other topics connected to gold and silver, try our series of reports on gold and silver.
Thank you. Have a great and profitable week! To read the complete version of this study that is 12 times bigger. Go to gold & silver investment website SunshineProfits.com and sign up for free. You'll find it under Premium Updates. 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 best 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.
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| China Gold to announce on African Barrick bid soon Posted: 19 Dec 2012 10:00 AM PST An executive with the Chinese company says an announcement on its talks over buying a stake in African Barrick Gold will be made in the near future. |
| How to Buy Silver: The Best is Yet to Come in 2013 Posted: 19 Dec 2012 10:00 AM PST While gold gets most of the media attention, investors should be just as interested in how to buy silver. Silver turned in a solid performance in the second half of 2012, rising from a June 28 low of $26.13 an ounce to a recent reading above $33.00.  |
| Jim Roger Sees “Overdue Correction” Hitting Gold as Unleveraged Money Buys at 3-Month Lows Posted: 19 Dec 2012 09:59 AM PST PRICES to buy gold with Dollars rallied from their lowest levels since late August on Wednesday morning in London, recovering 0.7% from yesterday's drop to $1662 per ounce. The drop came as Greece was upgraded Tuesday by the S&P ratings agency from "selective default" to "junk" status, following payment of the latest €34.3 billion in new loans from Greece's Eurozone partners. Versus the Dollar the Euro leapt to its highest level since May. The gold price for Eurozone investors sank to €1255 per ounce – a 6-month low almost 10% beneath October's new record high. "Gold on any kind of historic market basis is overdue for a nice correction," CNBC was told by investment author and commodities-fund manager Jim Rogers overnight. "It's been correcting for 15-16 months now, which is normal in my view. It's possible that gold's correction is going to continue for a while longer." Tuesday saw a switch from January to February contracts in a large number of short (ie, bearish) bets on the gold price held by leveraged speculators in the US derivatives market. Holdings at physically-backed gold trust funds traded on the stock market rose to new all-time records, according to Bloomberg. Users of BullionVault also moved to buy the drop in prices, with previously quiet trade growing strong as gold fell Tuesday. "Good support is seen at $1672.50 [and then] $1661.64," says Commerzbank's Axel Rudolph in Frankfurt in his weekly chart analysis. "Failure at [those levels] would push the June high at $1641.01 back to the fore and neutralise our bullish outlook. Silver prices meantime bounced off a 6-week low at $31.40 per ounce Wednesday morning, as world stock markets reached 17-month highs on Reuters' data. Long-dated US bonds also ticked higher, nudging 30-year Treasury yields back below 3.00% per year. US Republican speaker Boehner meantime referred to a "Plan B" for $1-million earners in the ongoing argument over 2013′s looming fiscal cliff. A blog on The Economist website says Democrat president Obama has agreed to switch the Consumer Price Inflation index tracked by Social Security payments to a lower measure, resulting in slower benefit rises. Over in Japan, a small but growing number of pension funds are buying gold as a hedge against zero-bond yields and the long-term decline in equities, says a report in today's Wall Street Journal. "By diversifying currencies, we aim to reduce risks associated with them," the WSJ quotes Yoshi Kiguchi, chief investment officer at Okayama Metal & Machinery Pension Fund. It began investing in gold this March on behalf of the 260 small and mid-sized company pension schemes it runs. Adrian Ash Gold price chart, no delay | Buy gold online at live prices Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can buy gold and silver vaulted in Zurich for just 0.5% in dealing fees. (c) BullionVault 2012 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.  |
| Jewelery still accounts for 75% of total India Gold demand Posted: 19 Dec 2012 09:51 AM PST Gold investments accounted for 23 percent while industrial and decorative purposes accounted for the rest of 2 percent. |
| Gold, Basel III and Bad Opinions Posted: 19 Dec 2012 09:28 AM PST Ooops! Just when everyone said gold must go higher... |
| Rob Kirby: The Road to the Euro- Birth Pangs of Globalism Posted: 19 Dec 2012 09:26 AM PST By SD Contributor Rob Kirby: When sovereign gold is lent / leased – this is done through A BULLION BANK [like Goldman Sachs] whereby, physical bullion is sold into the market to raise cash balances which are then reinvested. LTCM inadvertently collapsed when they took a highly leveraged position in sovereign Russian bonds and Russia [...]Check out these similar articles: |
| Posted: 19 Dec 2012 09:04 AM PST |
| S7: Silver & Unintended Consequences Posted: 19 Dec 2012 09:03 AM PST Silver & Unintended Consequences from syyenergy7: ~TVR |
| Buffaloes As Low As 94 Cents Over Spot!! Posted: 19 Dec 2012 08:59 AM PST Doc's Deal Of The Day 1oz Silver Buffalo As Low As 94 Cents Over Spot!! Click Here or Call 614-300-1094 To Order!! 500+ oz Only 94 Cents Over Spot!! 100-499 oz Only $1.09 Over Spot!! 50-99 oz Only $1.29 Over Spot!! 1-49 oz Only $1.59 Over Spot!! ANY SILVER PURCHASE OF 100 OUNCES OR MORE [...]Check out these similar articles: |
| Hard Assets Have Been the Leading Category For Most of the Past Decade Posted: 19 Dec 2012 08:45 AM PST Here are two wonderful charts, courtesy of Nick Laird. Chart No. 1 shows how many ounces can be bought for $1,000 since 1718. Chart No. 2 chronicles the dollar's lost purchasing power, in percentage terms, during the same period. Really, both charts show exactly the same thing, but in different terms. Great work, Nick – we love your charts. There is some excellent analysis on the cause of yesterday's price drop in gold and silver from Ed Steer and Bill Murphy (LeMetropole Café). Check it out.
Palladium – I would wager that very few of you own any Palladium. Well, perhaps it's time that you buy some now. There are two bullish articles on Palladium and another one on Platinum. The first article from Kitco News covers Palladium. It is titled China Demand To Support Palladium Bull Run. The second is also about Palladium and it's from Money and Markets titled This 'Rodney Dangerfield of Metals' Deserves Your Respect. The third, on Platinum, is from Jeff Clark at GoldStockWire.com. It was published in January 2012 and he calls it An Even Better Deal than Gold. Our friend, and my personal stockbroker, Eric Angeli presents an alternative explanation on the manipulation of gold and silver. It can be found in the Mail Box section in our full newsletter. A worthwhile read. Every day we publish our "Difference in Gold Price from 1 Year Before" chart in our e-mail newsletter. Please note that gold is once again rocketing UP from where it stood, one year ago today. God WILL FINISH THE YEAR HIGHER than last year, probably around $150/oz. higher. That will be near the highpoint for the year. That will make 12 years in a row, folks. And the next several years will keep adding to the string of gains. I believe that you can take Jim Sinclair's $3,500 gold (absolute minimum) to the bank! I really do. Taking my suggestions since 2001 has worked out very well for my long-time readers. Over the next three or four years, I expect gold to at least double and silver to do better than gold. Platinum and Palladium could also outperform gold. Diversify your portfolio between these four precious metals, starting first with gold. I have found that the easiest way to grow your wealth is to direct most of your money into an ASSET CLASS that is in the early stage of a bull market (and precious metals have been in a bull market for over a decade and are still years away from peaking) and then to DIVERSIFY within THAT ASSET CLASS. We can't be sure which of the four precious metals will bring about the largest returns, but by owning some of each you will automatically own some of the right metal. Try it. You won't regret it.
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| JPMorgan Wins Approval for First U.S. Physical Copper ETF Posted: 19 Dec 2012 08:31 AM PST Blythe and Jamie appear to be tying up loose ends, as JP Morgan has reportedly won regulatory approval for the US copper ETF, the JPM XF Physical Copper Trust. JPMorgan Chase & Co. (JPM) won regulatory approval for the first U.S. exchange-traded fund backed by physical copper, which some industrial users said may disrupt the [...]Check out these similar articles: |
| Gold price struggling to get back to the pre-election lows Posted: 19 Dec 2012 08:29 AM PST Yesterday's take down in the gold price was pretty impressive. Oil was up, the dollar was down and yet the sellers managed to take gold down some 2.5% from top to bottom. Gold eventually closed out... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]           |
| McAlvany: An American Reckoning Posted: 19 Dec 2012 08:10 AM PST This Week: from mcalvanyfinancial: ~TVR |
| Harvesting Profits from Weak Hands in Silver Posted: 19 Dec 2012 08:09 AM PST The oppressed silver market has heard only dead silence from the CFTC, which is now celebrating its fourth anniversary of doing nothing about the ongoing silver market manipulation of which the regulatory commission has been repeatedly informed.  |
| Posted: 19 Dec 2012 07:55 AM PST Casey Research's Jeff Clark writes: While the price of gold has languished in a trading range much of the year, leaving some investors scratching their heads, many have been buying – and in some cases, really loading up. It's a tad puzzling that gold hasn't broken into new highs, despite enough catalysts to move a herd of stubborn mules. But that's the hand we're dealt right now. We can't get up from the table until the game reaches its conclusion. Besides, I think the stall in prices is giving us one last window to buy before prices break permanently into higher levels for this cycle. At least that's how a number of prominent investors and institutions are viewing the price action right now. Here's a sampling of this year's "gold bugs" and what they've been doing about precious metals recently. Jim Rogers, billionaire and cofounder of the Soros Quantum Fund, publicly stated last month that he plans to "sell federal debt and purchase more gold and silver."George Soros increased his investment in GLD by a whopping 49% last quarter, to 1.32 million shares. His stake is now worth over $221 million. Many investors don't realize that he also placed call options on GDX worth $9 million. The most logical explanation is that he thinks gold equities are undervalued and that there's big money to be made in them within a year. Marc Faber mocks those claiming gold is in a bubble. "It's nowhere close to that stage," he says. And even though he's already sitting on a huge gain, he won't take any profits. Why? "I keep a picture of Mr. Bernanke in my toilet, and every time I think about selling my gold, I look at it and I know better!" Brent Johnson, a San Francisco hedge-fund manager, believed in gold so much that he started his own gold fund, Santiago Capital, earlier this year. His latest video points out that there have been "278 global easing moves in the last 14 months." How does someone not own gold in that kind of environment? Don Coxe, a highly respected global commodities strategist, stated at the Denver Gold Forum that "now is the best climate I have ever seen for an increase in gold prices." He told fund managers, mining analysts, and mining executives to prepare for significantly higher gold prices and thus higher gold-mining-stock valuations. "The opportunities ahead are the best I've seen." He thinks a new gold rush is ahead for gold stocks, and that a "lustrous" rally will occur within a year. Jeffrey Gundlach, cofounder of DoubleLine Capital, predicts that deeply indebted countries and companies will default sometime after 2013. Central banks may forestall these defaults by pumping even more money into the economy – but at the risk of higher inflation in coming years. He recommends buying hard assets including gold, and also "gold-mining firms because we consider them to be bargains." Rob McEwen, CEO of McEwen Mining and founder of Goldcorp, is buying precious metals because he believes gold will someday hit $5,000 and silver $200. Savneet Singh, a former investment analyst at Morgan Stanley, was frustrated with the options available to acquire physical gold in an allocated, whole-bar format outside the banking system. He started Gold Bullion International, the platform service used by the Hard Assets Alliance, a service that virtually does away with the need to buy GLD. This is only a handful of individual investors who have made recent news with their bullion buying. But institutions, governments, and others are participating, too… Central Banks
These data suggest in and of themselves that dips in the gold price are likely being bought – and will continue to be bought – by central banks. They're not exactly short-term traders. Remember, central banks were net sellers as recently as 2009, so this reversal will likely play out for years. India. I tire of the reports that proclaim something like, "Indian buying dropped this month!" Let's be clear about India and gold: Imports have more than doubled in three years (through 2011), and investment demand has climbed almost fivefold. And all this occurred while prices were rising and from a nation that already has a strong cultural predisposition towards the metal. Further, silver demand is taking off: sales have jumped 24% this year over last. There is some government interference, but no slump in demand in India. This trend will continue and may even strengthen when inflation begins making front-page headlines. Germany. A precious-metals group recently reported that Germans are increasingly buying gold because of fears about economic uncertainty, and that a third of citizens are now considering gold as part of their investments. "There has been a significant increase in demand in recent months because of worry about actions taken by the European Central Bank and US Federal Reserve, as the two central banks seek to counter the euro zone crisis and slow US economic growth." Commercial Banks
None of these parties think the gold bull market is over, nor the price too high. They recognize the implications of a world floating on fiat currencies, and that government "solutions" to debt and deficit spending will significantly – perhaps catastrophically – dilute the value of currencies, the fallout of which has yet to materialize. As for me, I think that the longer the malaise continues, the more likely the breakout is to be both sudden and dramatic. We can all speculate about when the next leg up for gold will kick in, but the point for now is to take advantage of the weakness, like many of these gold bugs. When the price breaks out of its trading range, are you sure you won't wish you'd bought a little more? I say give you and your loved ones a lasting Christmas gift and call your favorite bullion dealer. Happy Holidays from your Casey Research Metals Team! December 16, 2012 (Source: Casey Research) http://www.caseyresearch.com/cdd/12-gold-bugs-christmas
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| Burma achieves balance in Gold supply and demand in Dec Posted: 19 Dec 2012 07:31 AM PST Association also attributed the positive development to grain and bean harvesting season, so rural buyers are traditionally in a position to invest in gold. |
| The Doc: QE Reaching Afterburner Stage Globally Posted: 19 Dec 2012 07:30 AM PST The Doc sat down with Rahul from AltInvestors.com again Tuesday night to discuss the latest gold and silver raid, QE4, and the outlook for the metals with quantitative easing reaching the afterburner stage globally. Full interview below: The 1 oz .999 Silver Bullet Silver Shield Trivium Medallion is available now from SDBullion at only [...]Check out these similar articles: |
| It's That Time of the Morning for a Gold & Silver Waterfall Posted: 19 Dec 2012 06:34 AM PST In the midst of yesterday's massive gold and silver raid, we remarked that it wouldn't surprise us to see the cartel attempt to induce a second consecutive annual loss for silver, which would require approximately a $5 haircut from current levels, and a yearly close under $28. While it still appears to be an outside [...]Check out these similar articles: |
| Aussie scientists say termites may lead to Gold Posted: 19 Dec 2012 06:33 AM PST The researchers found the termite nests contained high concentrations of gold, with levels five to six times higher than concentrations found more than 16 feet away from the mounds. |
| The Silver Doctors: Another Cartel Raid Posted: 19 Dec 2012 05:55 AM PST (1) We discuss today's gold + silver raid. from altinvestorshangout: ~TVR |
| Jim Roger Sees "Overdue Correction" Hitting Gold Posted: 19 Dec 2012 05:41 AM PST Prices to buy gold with dollars rallied from their lowest levels since late August on Wednesday morning in London, recovering 0.7% from yesterday's drop to $1,662 per ounce.  |
| Daily Nugget – Gold Price Is Suffering This Morning Posted: 19 Dec 2012 04:45 AM PST Christmas celebrations have left me feeling slightly worse for wear this morning and it seems the gold price is also suffering from the same affliction. Having hit a four-month low of $1,661 in the early hours, it has climbed a wee bit up to $1,675 at the time of writing....  |
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