Monthly Archives: December 2018

Happy New Year

Wishing all a happy, prosperous
and healthy 2019!

from the staff at USAGOLD

 

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Posted in Today's top gold news and opinion |

An exceptional gold price historic chart

InvestingHaven/Taki Tsaklanos/12-30-2018

“What this 40 year gold price chart learns for 2019 and 2020 is that there is a fair chance that gold’s price will rise to the top of this channel provided that 1200 holds strong as a monthly close. That’s also what we have been repeating recently: the importance of $1200. As gold is getting a bid now we expect gold to rise to $1650 at a certain point where it will meet heavy resistance. This might happen in 2019 already but, for this, we need the lower timeframes.”

USAGOLD note: In this short but fundamentally sound study from Taki Tsaklanos published at InvestingHaven, he makes a point we have emphasized for many years here at USAGOLD: “First, market-wise, the gold price started trading ‘freely’ with an open market in 1971, on August 15th. That’s when President Nixon took the U.S. off the gold standard. So any historic gold price chart should be after that date, as before it was not really relevant.” That is why most of our work on the long-term outlook for gold includes charts beginning in 1970-1971.

Economic analysis should be split into two eras – BDL and ADL, before and after the 1971 delinking of the dollar and gold. (In a recent seminar, Grant Williams of Things That Make You Go. . ‘hmmm’ fame used a series of our long-term gold charts to make the same point.) Nixon commented at the time that “We are all Keynesians now.” The full implementation of Keynesian thought dreamed by academics had become an economic reality, and in the process cemented gold’s role as a long-term portfolio hedge.

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Posted in Gold and Silver Price Predictions from Prominent Players for 2019 |

El-Erian, like Trump, says Fed would benefit from ‘better feel’

Bloomberg/Ros Krasny/12-30-2018

“With the Fed and the European Central Bank tightening liquidity, ‘it’s no longer about buying every dip, it’s about selling every rally,‘ El-Erian said. ‘There’s a lot going on — and this is being amplified by computer trading.’”

[Emphasis added]

USAGOLD note:  It’s not just all about the numbers. . . . Wall Street is not going to like this assessment from one of the mainstream media’s star financial analysts. In a couple short sentences, El-Erian boils the market situation down to the essentials.

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Posted in Today's top gold news and opinion |

No COT report this week

due to federal government shutdown.

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Posted in Today's top gold news and opinion |

No COT report this week

due to federal government shutdown.

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Posted in COT Reports |

No DMR until January 2

Please check back though. We will update if circumstances warrant. . .

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Posted in dailyquotes |

No DMR until January 2

Please check back though. We will update if circumstances warrant. . .

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Posted in Today's top gold news and opinion |

Oil jumps 9% in surprise rebound after Christmas Eve rout

Investing.com/12-26-2018

“Has New Year salvation for oil come early? U.S. West Texas Intermediate crude rebounded forcefully on Wednesday as markets reopened from the Christmas holiday, surging 9% to recoup all of what it lost just before the break and more.”

USAGOLD note:  Odd that oil would jump so tellingly on the same day as stocks and near the end of the year.  It raises the prospect of short-covering – perhaps for both markets.

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Posted in Today's top gold news and opinion |

Back from the dead or dying gasp?

Bloomberg/Sarah Ponczek, Vildana Hajric and Elena Popina/12-26-2018

“’Bear markets always serve up some very nasty rallies,’ said Doug Ramsey, chief investment officer of Leuthold Weeden Capital Management, which manages about $1.2 billion. ‘There’s a saying that bear market rallies look better than the real thing so I’d expect at some point here a 3 to 4 percent up day. It’s not unusual at all to see that in a bear market.'”

USAGOLD note:  Everyone was surprised by this nearly 1100 point rally and it won’t be lost on market participants that the plunge protection team met after Monday’s close and probably went to work – feverishly – if today is an indicator.

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DMR–Gold, silver up sharply in early trading, beneficiaries of major, on-going capital rotation

DAILY MARKET REPORT

Normally, we would take a break from posting the DMR during this last week of the year, but given the unusual circumstances in financial markets and the large number of visitors to the site, we thought a few comments might be in order.

Gold is up another $11 at $1279 in early trading today as investors, including funds and institutions, continue to rotate capital out of stocks and into safe-haven alternatives.  Silver is up a steep 39¢ at $15.17 and solidly over the $15 barrier.  The climb began overnight in Asian and European markets and carried over to the New York COMEX open. Bonds are also a beneficiary amidst the shifting currents.

A detailed article in this morning’s Wall Street Journal points up something we have warned about for years on this page and what many see to be the primary influence in this stock market sell-off, i.e., the over-wrought presence and dominance of computer-based trading.  With respect to the ill-effects, our characterization remains the same: Live by the algo. Die by the algo.  And just as the momentum in a football game can turn on a single event, so too can it turn in financial markets. Massive capital that poured into stocks for a good many years will now be looking for a place to go.  To what degree, this capital tsunami will affect the much thinner gold market remains to be seen.

As we approached the holiday break last week, we learned of a meeting of the Working Group for Financial Markets called by Treasury Secretary Mnuchin and also his contact with several of the large banks on their liquidity levels.  Whether or not the plunge protection team can turn the tide will dominate Wall Street concerns over the next few days, and the rest of us will be watching closely as well.

Quote of the Day
“The speed and magnitude of the move probably are being exacerbated by the machines and model-driven trading. Human beings tend not to react this fast and violently.” – Neal Berger, Eagle’s View Asset Management, as quoted in today’s Wall Street Journal

Chart of the Day

Chart note:  This chart illustrates the changing sentiment in financial markets since early October of this year.  Stocks have suffered in the worst late year market performance since the Great Depression.  Gold has been a beneficiary as investors seek a safe haven.

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Posted in Daily Market Report, Today's top gold news and opinion |

Gold, silver up sharply in early trading, beneficiaries of major, on-going capital rotation

DAILY MARKET REPORT

Normally, we would take a break from posting the DMR during this last week of the year, but given the unusual circumstances in financial markets and the large number of visitors to the site, we thought a few comments might be in order.

Gold is up another $11 at $1279 in early trading today as investors, including funds and institutions continue to rotate capital out of traditional stock markets and into safe-haven alternatives.  Silver is up a steep 39¢ at $15.17 and solidly over the $15 barrier.  The climb began overnight in Asian and European markets and carried over to the New York COMEX open. Bonds are also a beneficiary amidst the shifting currents.

A detailed article in this morning’s Wall Street Journal points up something we have warned for years about on this page and what many see to be the primary influence in this stock market sell-off, i.e., the over-wrought presence and dominance of computer-based trading. With respect to the ill-effects, our characterization remains the same: Live by the algo. Die by the algo. And just as the momentum in a football game can turn on a single event, so too can it turn in financial markets. Massive capital that poured into stocks for a good many years will now be looking for a place to go. To what degree, this capital tsunami will affect the much thinner gold market remains to be seen.

As we approached the holiday break last week, we learned of a meeting of the Working Group for Financial Markets called by Treasury Secretary Mnuchin and also his contact with several of the large banks on their liquidity levels. Whether or not the plunge protection team can turn the tide will dominate Wall Street concerns over the next few days, and the rest of us will be watching closely as well.

Quote of the Day
“The speed and magnitude of the move probably are being exacerbated by the machines and model-driven trading. Human beings tend not to react this fast and violently.” – Neal Berger, Eagle’s View Asset Management, as quoted in today’s Wall Street Journal

Chart of the Day

Chart note: This chart illustrates the changing sentiment in financial markets since early October of this year. Stocks have suffered in the worst late year market performance since the Great Depression. Gold has been a beneficiary as investors seek a safe haven.

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Posted in dailyquotes |

Global chaos makes gold a holiday winner for hedge funds

Bloomberg/Joe Deaux/12-21-2018

“Forget frankincense or myrrh — chaos in global markets makes gold the holiday asset hedge funds are getting behind. . . . As financial anxieties heighten, investors have poured about $1.56 billion into exchange-traded funds backing precious metals over the past month, the biggest inflows among commodity ETFs. Open interest for gold futures is also on the rise.”

USAGOLD note:  Gold ETF holdings have been on the rise for quite some time as hedge funds move out of stocks and bonds and into other investments. There is a massive amount of capital liquidity on the books of funds and institutions looking for a home. Increasingly, it looks like gold and the rest of the commodities complex will be a destination for at least portion of it.  What analysts sometimes overlook is how paltry the supply of physical gold in the face of building cash tsunami.

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‘The worst is yet to come’: Experts say a global bear market is just getting started

CNBC/Yen Nee Lee/12-25-2018

“Bear markets — typically defined as 20 percent or more off a recent peak — are threatening investors worldwide. In the U.S., the Nasdaq Composite closed in a bear market on Friday and the S&P 500 entered one on Monday. Globally, Germany’s DAX, China’s Shanghai Composite and Japan’s Nikkei have also entered bear market levels.”

USAGOLD note:  Not what stock investors will want to hear as we wind up 2018 and head into the new year. The Christmas Eve 650-point plunge will likely be remembered as emblematic of the worst December stock market since the Great Depression – and, as you can see from below, the disaster was not confined to the United States alone, but a global event.

Charts courtesy of TradingEconomics.com

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Posted in Today's top gold news and opinion |

Rate futures market says Fed is all but done with hikes

Reuters/Dan Burns/12-25-2018

“The Federal Reserve is finished raising U.S. interest rates. That is the message emerging from the interest rate futures market as Monday’s full-blown flight from risk assets drove traders to price out nearly any prospect of further rate increases from the Fed, which raised rates again only last week.”

USAGOLD note:  Burns builds a pretty straight-foward case for the bond market forcing rates lower and pulling the Fed along with it.

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Posted in Today's top gold news and opinion |

Gold forecast through 2022 month by month

The Economy Forecast Agency/12-2018

This service also forecasts future prices for oil and silver plus a range of other assets.

USAGOLD note:  How anyone could make forecasts like this so far in advance and with such a degree of specificity is beyond us. . . .but we thought we would provide the link nevertheless.  Its forecasts for gold are within reasonable ranges, but will come off as restrained to a good many.  A lot of water is going to run under the bridge between now and 2022. . . . . . .

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Posted in Gold and Silver Price Predictions from Prominent Players for 2019 |

Gold specs raise bullish bets, USD Index specs trim bets

Tuesday, December 18, 2018
Charts and commentary courtesy of CountingPips.com
Tables courtesy of GoldSeek

Note:  Commitment of Traders reports are published Friday with data from the previous Tuesday.


Gold speculators continued to advance their bullish bets for 3rd week

Gold Non-Commercial Speculator Positions:
Large precious metals speculators increased their bullish net positions in the Gold futures markets this week, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday. The non-commercial futures contracts of Gold futures, traded by large speculators and hedge funds, totaled a net position of 75,960 contracts in the data reported through Tuesday December 18th. This was a weekly gain of 15,461 net contracts from the previous week which had a total of 60,499 net contracts.

This week’s net position was the result of the gross bullish position gaining by 12,568 contracts to a weekly total of 182,168 contracts compared to the gross bearish position which saw a decrease by -2,893 contracts for the week to a total of 106,208 contracts. The net speculative position has now risen sharply for three straight weeks and by a total of 74,089 contracts over that period. The current speculator standing is now at the most bullish level since July 10th when the net position totaled 81,434 contracts.

Gold Commercial Positions:
The commercial traders position, hedgers or traders engaged in buying and selling for business purposes, totaled a net position of -92,675 contracts on the week. This was a weekly shortfall of -15,307 contracts from the total net of -77,368 contracts reported the previous week.

Gold Futures:
Over the same weekly reporting time-frame, from Tuesday to Tuesday, the Gold Futures (Front Month) closed at approximately $1253.60 which was an advance of $6.40 from the previous close of $1247.20, according to unofficial market data.


Silver speculators raised bullish bets for 3rd week to 5-month high

Silver Non-Commercial Speculator Positions:
Large precious metals speculators increased their bullish net positions in the Silver futures markets this week, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday. The non-commercial futures contracts of Silver futures, traded by large speculators and hedge funds, totaled a net position of 19,831 contracts in the data reported through Tuesday December 18th. This was a weekly increase of 8,575 net contracts from the previous week which had a total of 11,256 net contracts.

This week’s net position was the result of the gross bullish position growing by 2,887 contracts to a weekly total of 74,023 contracts combined with the gross bearish position which saw a decline by -5,688 contracts for the week to a total of 54,192 contracts. The net speculative position has gained for three straight weeks and by a total of 30,797 contracts over that period. The current standing is now at the highest level since July 10th when the net position equaled 23,699 contracts.

Silver Commercial Positions:
The commercial
traders position, hedgers or traders engaged in buying and selling for business purposes, totaled a net position of -35,476 contracts on the week. This was a weekly loss of -7,597 contracts from the total net of -27,879 contracts reported the previous week.

Silver Futures:
Over the same weekly reporting time-frame, from Tuesday to Tuesday, the Silver Futures (Front Month) closed at approximately $1470.10 which was an advance of $7.30 from the previous close of $1462.80, according to unofficial market data.


Speculators trim USD Index bullish bets, raise GBP bearish bets

US Dollar Index Speculator Positions

Large currency speculators lowered their bullish net positions in the US Dollar Index futures markets this week while also adding to their British pound bearish positions, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday.
The non-commercial futures contracts of US Dollar Index futures, traded by large speculators and hedge funds, totaled a net position of 36,049 contracts in the data reported through Tuesday December 18th. This was a weekly decrease of -2,073 contracts from the previous week which had a total of 38,122 net contracts.

This week’s net position was the result of the gross bullish position declining by -3,362 contracts to a weekly total of 43,298 contracts compared to the gross bearish position which saw a decrease by just -1,289 contracts for the week to a total of 7,249 contracts.

The USD Index speculative position has now declined for five consecutive weeks and has dipped to the lowest bullish level since September 11th of this year.


*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) as well as the commercial traders (hedgers & traders for business purposes) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators). Find CFTC criteria here: (http://www.cftc.gov/MarketReports/CommitmentsofTraders/ExplanatoryNotes/index.htm).

––––––––––––––––––––––––––––––––––––––__________–––––_______––––––––––––

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Posted in COT Reports |

Something in the air as we approach holiday season

CHRISTMAS MESSAGE

Gold’s come off a bit from yesterday’s nearly $20 rise, but that is to be expected.  We mentioned late last week that the upcoming Fed Week might be different from the rest.  Little did we know how different it would be. One would have to reach deep into the memory banks to find a comparison if there is one.

 As the smoke begins to clear from the past week’s events, though, we sense that sentiment in the financial marketplace has been fundamentally altered – a significant and surprising overturning of a way of thinking that has driven markets for a very long time. One hesitates to suggest such a thing because that governing mindset has been with us for a very long time.

Yet it would be hard to deny that something is in the air, as very significant developments have begun to emerge in the political realm as well.  Today’s Chart of the Day featuring gold and volatility speaks to that shift in sentiment. So, as we bring 2018 to a close, the word change superimposes itself over our Christmas message  – change that likely will present challenges and test our skills in the year ahead. We will be called upon, it appears, to adjust and prepare as investors for what could be tumultuous times ahead.

Wishing you and yours the very best for the holidays from all of us at USAGOLD!

Quote of the Day
“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves money from the public treasury. From that moment on the majority always votes for the candidates promising the most money from the public treasury, with the result that a democracy always collapses over loose fiscal policy followed by a dictatorship. The average age of the world’s great civilizations has been two hundred years. These nations have progressed through the following sequence: from bondage to spiritual faith, from spiritual faith to great courage, from courage to liberty, from liberty to abundance, from abundance to selfishness, from selfishness to complacency from complacency to apathy, from apathy to dependency, from dependency back to bondage.” – Alexander Tyler, 18th-century historian and jurist

Chart of the Day

Chart note: High volatility in the past has preceded upward movement in the gold price. In an article this morning under the headline “Wild days return to stock market as VIX surges like never before,” Bloomberg points out that volatility now is running at levels not seen since the 2007-2008 breakdown and, in fact, “the biggest annual surge on record.” In yesterday’s Chart of the Day, we featured the lag in gold’s response to the early phases of the 2007-2008 financial crisis. The move upward came later after investors came to realize the full extent of the crisis and it culminated at all-time highs.

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Posted in dailyquotes |

DMR–Something in the air as we near the holiday season

CHRISTMAS MESSAGE

Gold’s come off a bit from yesterday’s nearly $20 rise, but that is to be expected.  We mentioned late last week that the upcoming Fed Week might be different from the rest.  Little did we know how different it would be. One would have to reach deep into the memory banks to find a comparison if there is one.

 As the smoke begins to clear from the past week’s events, though, we sense that sentiment in the financial marketplace has been fundamentally altered – a significant and surprising overturning of a way of thinking that has driven markets for a very long time. One hesitates to suggest such a thing because that governing mindset has been with us for a very long time.

Yet it would be hard to deny that something is in the air, as very significant developments have begun to emerge in the political realm as well.  Today’s Chart of the Day featuring gold and volatility speaks to that shift in sentiment. So, as we bring 2018 to a close, the word change superimposes itself over our Christmas message  – change that likely will present challenges and test our skills in the year ahead. We will be called upon, it appears, to adjust and prepare as investors for what could be tumultuous times ahead.

Wishing you and yours the very best for the holidays from all of us at USAGOLD!

Quote of the Day
“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves money from the public treasury. From that moment on the majority always votes for the candidates promising the most money from the public treasury, with the result that a democracy always collapses over loose fiscal policy followed by a dictatorship. The average age of the world’s great civilizations has been two hundred years. These nations have progressed through the following sequence: from bondage to spiritual faith, from spiritual faith to great courage, from courage to liberty, from liberty to abundance, from abundance to selfishness, from selfishness to complacency from complacency to apathy, from apathy to dependency, from dependency back to bondage.” – Alexander Tyler, 18th-century historian and jurist

Chart of the Day

Chart note: High volatility in the past has preceded upward movement in the gold price. In an article this morning under the headline “Wild days return to stock market as VIX surges like never before,” Bloomberg points out that volatility now is running at levels not seen since the 2007-2008 breakdown and, in fact, “the biggest annual surge on record.” In yesterday’s Chart of the Day, we featured the lag in gold’s response to the early phases of the 2007-2008 financial crisis. The move upward came later after investors came to realize the full extent of the crisis and it culminated at all-time highs.

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Posted in Daily Market Report, Today's top gold news and opinion |

Swiss gold exports to Asia climb further in November

Scrap Register/12-21-2018

“‘Gold exports to India nearly tripled month-on-month, while exports to China and Hong Kong soared by just shy of 60%,’ [Commerzbank] added.”

USAGOLD note:  China’s general economy might have slowed in recent months, but its appetite for gold has not.

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Posted in Today's top gold news and opinion |

Dollar set for biggest weekly drop in 10 months

Reuters/Saikat Chatterjee/12-21-2018

“The dollar consolidated overnight losses on Friday and is set for its biggest weekly drop in 10 months as the threat of a U.S. government shutdown and lower bond yields on the back of concerns of slowing economic growth weigh.”

USAGOLD note:  Quietly, while all eyes have been on global stock markets, the value of the dollar has been falling against its major competitors.

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Cramer feels ‘powerless’ after Fed hike, tells investors to buy gold

CNBC/Elizabeth Gurdus/12-21-2018

“CNBC’s Jim Cramer shares his frustration about the Federal Reserve’s policy decisions and tells investors there’s a bull market in gold.”

USAGOLD note:  The Mad Money host has come out in favor of gold ownership in the past.  Of late, he’s become more steadfast in that advocacy.

 

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Posted in Gold and Silver Price Predictions from Prominent Players for 2019, Today's top gold news and opinion |

Specs push gold bullish bets higher, sharply lift silver bullish net positions

Tuesday, December 11, 2018
Charts and commentary courtesy of CountingPips.com
Tables courtesy of GoldSeek


Speculators pushed their bullish bets higher this week

Gold Non-Commercial Speculator Positions:
Large precious metals speculators raised their bullish net positions higher in the Gold futures markets this week, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday. The non-commercial futures contracts of Gold futures, traded by large speculators and hedge funds, totaled a net position of 60,499 contracts in the data reported through Tuesday December 11th. This was a weekly rise of 11,498 net contracts from the previous week which had a total of 49,001 net contracts.

This week’s net position was the result of the gross bullish position sliding by -3,419 contracts to a weekly total of 169,600 contracts compared to the gross bearish position which saw a decline by -14,917 contracts for the week to a total of 109,101 contracts. The speculative net position rose for a second straight week and by a total of 58,628 contracts over that period. The current standing is now at the highest bullish position since since July 10th when the net position totaled 81,434 contracts.

Gold Commercial Positions:
The commercial traders position, hedgers or traders engaged in buying and selling for business purposes, totaled a net position of -77,368 contracts on the week. This was a weekly drop of -19,119 contracts from the total net of -58,249 contracts reported the previous week.

Over the same weekly reporting time-frame, from Tuesday to Tuesday, the Gold Futures (Front Month) closed at approximately $1247.20 which was an increase of $0.60 from the previous close of $1246.60, according to unofficial market data.


Speculators sharply lifted their bets into a new bullish position

Silver Non-Commercial Speculator Positions:

Large precious metals speculators increased their bullish net positions in the Silver futures markets this week, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday. The non-commercial futures contracts of Silver futures, traded by large speculators and hedge funds, totaled a net position of 11,256 contracts in the data reported through Tuesday December 11th. This was a weekly rise of 11,891 net contracts from the previous week which had a total of -635
net contracts.

This week’s net position was the result of the gross bullish position rising by 1,822 contracts to a weekly total of 71,136 contracts compared to the gross bearish position which saw a fall by -10,069 contracts for the week to a total of 59,880 contracts. The speculator’s selloff of their bearish bets pushed the new net position into bullish territory for the first time in eighteen weeks (since August 7th). The current standing is at the highest bullish position since July 10th when the net position totaled 23,699 contracts.

Silver Commercial Positions:
The commercial traders position, hedgers or traders engaged in buying and selling for business purposes, totaled a net position of -27,879 contracts on the week. This was a weekly shortfall of -12,461 contracts from the total net of -15,418 contracts reported the previous week.

Silver Futures:
Over the same weekly reporting time-frame, from Tuesday to Tuesday, the Silver Futures (Front Month) closed at approximately $1462.80 which was a shortfall of $-1.20 from the previous close of $1464.00, according to unofficial market data.


Speculators trim US Dollar Index bets for 4th week. Yen bets rise.

US Dollar Index Speculator Positions

Large currency speculators cut back on their bullish net positions in the US Dollar Index futures markets this week, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday.The non-commercial futures contracts of US Dollar Index futures, traded by large speculators and hedge funds, totaled a net position of 38,122 contracts in the data reported through Tuesday December 11th. This was a weekly lowering by -327 contracts from the previous week which had a total of 38,449 net contracts.

This week’s net position was the result of the gross bullish position advancing by 1,307 contracts to a weekly total of 46,660 contracts but being more than overcome by the gross bearish position which saw a lift by 1,634 contracts for the week to a total of 8,538 contracts. The speculative position in the USD Index has now declined for four straight weeks after a streak of seven weekly gains. The current standing remains in a strong bullish position but under the +40,000 net contract level for a fourth week in a row.


*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) as well as the commercial traders (hedgers & traders for business purposes) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators). Find CFTC criteria here: (http://www.cftc.gov/MarketReports/CommitmentsofTraders/ExplanatoryNotes/index.htm).

––––––––––––––––––––––––––––––––––––––__________–––––_______––––––––––––

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Posted in COT Reports |

DMR–Gold surges to higher ground on confluence of factors

DAILY MARKET REPORT

Gold’s surge to higher ground began overnight in Asia and Europe then carried over to early U.S. trading.  It is up $16 at $1260 as we post today’s DMR and now well over the $1250 psychological barrier.  Silver is up 16¢ on the day at $14.80.

To really get a feel for what is driving gold we would encourage you to read through the last two day’s posts and visit the links that gain your attention.  The current situation encompasses a confluence of factors including. . . . .

(a) gold’s strong upside bias over the past three years in the wake of the December Fed conclave (as illustrated in the graph posted in yesterday’s DMR), and

(b) the central bank’s open options approach to 2019 on interest rates – a more dovish stance that has been slowly put together by the Powell Fed over the last several weeks

Those two factors in turn are encouraging

(c) short-covering, in our view, among major market players though we won’t know that for certain until after the COMEX data comes public

(d) fresh purchases of physical and paper metal as a hedge against a complex set of unknown and unknowable economic and financial possibilities

Some will point to the sharp decline in the dollar overnight (see below) as the sole cause of gold’s upside, but that is the easy explanation.  What we just outlined could very well be – in fact is likely to be – only part of a more complex story. Stay tuned to USAGOLD as we will update as the situation comes into better focus.

Quote of the Day
“Why does the cycle move as it does? What causes these periodic alternations, this ebb and this flow, in the national priorities? If it is a genuine cycle, the explanation must be primarily internal. Each phase must flow out of the conditions – and contradictions – of the phase before and then itself prepare the way for the next recurrence. A true cycle is self-generating. It cannot be determined, short of catastrophe, by external events. Wars, depressions, inflations may heighten or complicate moods, but the cycle itself rolls on, self-contained, self-sufficient and autonomous. . .The roots of cyclical self sufficiency lies deep in the natural life of humanity. There is a cyclical pattern in organic nature — in the tides, in the seasons, in night and day, in the systole and diastole of the human heart.” – Arthur M. Schlesinger, Jr., The Cycles of American History

Chart of the Day

Chart note: As the chart above illustrates, gold does not always react to the start of a crisis as anticipated. As the credit crisis gained momentum in 2008, gold declined as the dollar rose – acting in much the same way it is reacting now to the emerging markets crisis and U.S.-China trade war. It was not until late 2008, when the full extent of the crisis became all too apparent, that it began to move higher. Thereafter, from 2009 to September 2011, it rose to its all-time high of $1895 – a 215% gain in three years.

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Posted in Daily Market Report, Today's top gold news and opinion |

Gold surges to higher ground on confluence of factors

DAILY MARKET REPORT

Gold’s surge to higher ground began overnight in Asia and Europe then carried over to early U.S. trading. It is up $16 at $1260 as we post today’s DMR and now well over the $1250 psychological barrier. Silver is up 16¢ on the day at $14.80.

To really get a feel for what is driving gold we would encourage you to read through the last two day’s posts and visit the links that gain your attention. The current situation encompasses a confluence of factors including. . . . .

(a) gold’s strong upside bias over the past three years in the wake of the December Fed conclave (as illustrated in the graph posted in yesterday’s DMR), and

(b) the central bank’s open options approach to 2019 on interest rates – a more dovish stance that has been slowly put together by the Powell Fed over the last several weeks

Those two factors in turn are encouraging

(c) short-covering, in our view, among major market players though we won’t know that for certain until after the COMEX data comes public

(d) fresh purchases of physical and paper metal as a hedge against a complex set of unknown and unknowable economic and financial possibilities

Some will point to the sharp decline in the dollar overnight (see below) as the sole cause of gold’s upside, but that is an easy explanation that leaves much to be desired. What we just outlined could very well be – in fact is likely to be – only part of a more complex story. Stay tuned to USAGOLD as we will update as the situation comes into better focus.

Quote of the Day
“Why does the cycle move as it does? What causes these periodic alternations, this ebb and this flow, in the national priorities? If it is a genuine cycle, the explanation must be primarily internal. Each phase must flow out of the conditions – and contradictions – of the phase before and then itself prepare the way for the next recurrence. A true cycle is self-generating. It cannot be determined, short of catastrophe, by external events. Wars, depressions, inflations may heighten or complicate moods, but the cycle itself rolls on, self-contained, self-sufficient and autonomous. . .The roots of cyclical self sufficiency lies deep in the natural life of humanity. There is a cyclical pattern in organic nature — in the tides, in the seasons, in night and day, in the systole and diastole of the human heart.” – Arthur M. Schlesinger, Jr., The Cycles of American History

Chart of the Day

Chart note: As the chart above illustrates, gold does not always react to the start of a crisis as anticipated. As the credit crisis gained momentum in 2008, gold declined as the dollar rose – acting in much the same way it is reacting now to the emerging markets crisis and U.S.-China trade war. It was not until late 2008, when the full extent of the crisis became all too apparent, that it began to move higher. Thereafter, from 2009 to September 2011, it rose to its all-time high of $1895 – a 215% gain in three years.

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Posted in dailyquotes |

Atlas Pulse upgrades gold to bull market for first time since 2012

Atlas Plus/Charlie Morris/12-20-2018

“The six-month, or 26-week, momentum signal could be struck anytime now. All gold needs to do is touch $1,270, which is a few dollars away, or stay at current levels while that six-month high keeps on dropping. Either way, the bears will have their shorts pulled down.”

USAGOLD note:  Morris goes through a well-conceived checklist – his first advisory in over a year – why we might be on the verge of a new bull market in gold. “$1776 anyone?” he asks.

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Posted in Gold and Silver Price Predictions from Prominent Players for 2019, Today's top gold news and opinion |

Powell noted ‘mood of angst’ and made it worse

Financial Times/Michael Mackenzie/12-19-2018

“Jay Powell and the Federal Open Market Committee had to strike a balance between slowing down the pace of interest rate tightening in 2019 while not unduly alarming an already febrile market with a downbeat assessment of the economy. Their attempt landed with a thud . . .”

USAGOLD note:  Mackenzie’s assessment seems to capture the essence of Wall Street’s initial reaction to yesterday’s goings-on at the Fed. Many will see the Fed’s stance as deliberately attempting to let some air out of the global stock market bubble – that what it didn’t do was as important as what it did.

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Posted in Today's top gold news and opinion |

The big story overnight was the dollar and gold

Charts courtesy of TradingEconomics.com

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Posted in Today's top gold news and opinion |

Gold ETF holdings hit the highest level since July

Scrap Register/12-20-2018

“U.S. President Donald Trump again ‘trashed convention’ and urged the Fed to not hike rates, SP Angel continues. ‘Global [ETF] assets expanded more than 10 tons to the highest since July, with investors seeking havens as equities founder, and expectations of hikes in 2019 recede,’ SP Angel added. ‘Gold snapped a six-month losing run in October, held its ground in November, and then gained this month as investors position themselves for 2019 by adding to worldwide holdings in ETFs,’ noted.”

USAGOLD note:  Among funds and institutions, the safe-haven trade in gold manifests itself – the other side of the interest rate coin.

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Posted in Today's top gold news and opinion |

An ‘expected obliteration’ of financial assets threatens to kill FIRE movement

MarketWatch/Shawn Langlois/12-19-2018

“Like Mike Tyson famously said:  ‘Everyone has a plan until they get punched in the mouth.’ Well, FIRE fans have certainly punched in the mouth, with the stock market this month tracking to the worst December since the Great Depression.”

USAGOLD note:  This article delves into the FIRE movement (Financial Independence, Retire Early) pushed against the ropes due to rapidly dropping markets.  A punch to the gut might not be far removed. . . . . . .

 

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Posted in Today's top gold news and opinion |

The year in money

Bloomberg/12-19-2018

“Trade disputes, exploding global debt and volatile stock markets were just the beginning. Here are the numbers behind the defining moments for global markets and economies in 2018.

USAGOLD note:  An interesting retrospective from Bloomberg on trends and events from this past year.  Some things you knew, other you probably didn’t. . . . . . . .

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Posted in Today's top gold news and opinion |