End-of-the-week top gold news
Friday, 22-May-2015
Julie Verhage (Bloomberg) Bank of America: Markets Are in a ‘Twilight Zone’ and It’s Time to Hold More Cash and Gold “…the investment backdrop will likely continue to be cursed by mediocre returns, volatile trading rotation, correlation breakdowns and flash crashes. For this reason we continue to advocate higher than normal levels of cash, adding gold and owning volatility in mid 2015.”
Note: We have indeed seen quite a few clients booking profits in equities and moving that capital into gold.
Marcy Nicholson & Jan Harvey (Reuters) Gold hits 3-month high after run of downbeat U.S. data “Gold hit three-month highs on Monday, rising for a fifth session, as a run of soft U.S. data supported expectations that the Federal Reserve will hold off raising interest rates for the time being.”
Note: The bad news is mounting, and Q1 GDP will likely be revised to a negative number. And yet, there are still many investors that seem to believe a rate hike is still in the cards for this year.
Tommy Stubbington (Wall Street Journal) ECB Jolts Markets With Fresh Comments on QE “Just when it seemed the market impact of its stimulus was fading, the European Central Bank has reminded investors about the power of its bond-buying program. Comments by two ECB officials have jolted markets early on Tuesday. Benoît Coeuré said the central bank will moderately frontload its debt purchases to avoid too much buying in the quiet summer holiday period. And Christian Noyer added that the ECB is ready to go beyond its already announced stimulus in order to hit its inflation target, if necessary.”
Note: This is nothing more than the latest salvo in the currency war.
David Levenstein (Gold-Eagle) Demand For Physical Gold Remains Strong And Global Debt Explodes “McKinsey concluded that total global debt was $199 trillion and the little covered report was released in February – 3 months ago – meaning that the figure is likely over $200 trillion. With a global population of 7.3 billion this works out at over $27,200 of debt for every man, woman and child alive in the world today. Almost 29% of that debt – $57 trillion – has been accumulated in the relative short period since the financial crisis erupted in 2007 – just 8 years.”
Note: If you want to get out of a hole, the first thing you do is stop digging. This simple advise has been broadly ignored the world-over, which leaves the global economy even more vulnerable than it was ahead of the financial crisis.
Kira Brecht (KitcoNews) Remember, There Are Many Reasons To Own Gold “”Physical gold provides important non-correlated diversification within a well balanced portfolio. In fact, gold is unique in that it is the only primary asset that is not simultaneously someone else’s liability. An allocation to gold has been shown to protect and enhance returns, while reducing volatility,” added Peter A. Grant, chief market analyst at USAGOLD.”
Note: Words of wisdom from a smart guy!
