Author Archives: News

Turks Just Bought The Most Gold Ever As Lira Tumbles

Zerohedge/Tyler Durden/11-14-17

Since President Recep Tayyip Erdogan installed himself as ‘Sultan for life’, the Turks appear to have had a dramatic change of heart towards the barbarous relic…

The Turks have never imported a greater value of gold than in the last 12 months…

Addditionally, as Bloomberg reports, Bar and coin purchases, a measure of investment demand, were 47 metric tons so far in 2017, compared with 14.8 tons in the same period a year ago, according to a report from the World Gold Council published Thursday.

The weak lira and “President Erdogan’s pro-gold comments in November last year continued to lend support to the market,” the gold council said.

Posted in Gold News, Gold Views |

Gold hits one-week low as higher U.S. yields weigh

Reuters/Maytaal Angel/11/14-17

Gold hit a one-week low on Tuesday after U.S. Treasury yields touched fresh highs as investors priced in a rate hike next month, but the precious metal’s losses were limited by rising uncertainty over the U.S.
growth outlook.

…rising nearby yields flattened the U.S. treasury yield curve, in part reflecting market wagers that rising rates this year and next will eventually slow the economy.

These fears, coupled with uncertainty over the outlook for U.S. tax reforms, kept gold’s losses in check, hitting investor risk appetite and increasing gold’s appeal as a safe haven asset.

Posted in Gold News, Gold Price, Gold Views |

Morning Snapshot: Gold Pressured Within Range, Despite Weaker Dollar/Stocks

USAGOLD/Peter Grant/11-14-17

Gold is down in early New York trading, still well within the recent range. However, both the dollar and stocks are also weaker this morning, which should limit the downside for the yellow metal.

U.S. PPI came in hotter than expected in October. Both headline and core rose 0.4%, on expectations of +0.1% and +0.2% respectively. If CPI data beat expectations tomorrow, it will go a long way toward validating the exceedingly high expectations for a December rate hike.

However, if inflation really is picking up, that ultimately will be good for gold. The yellow metal is the classic hedge against inflation.

The dollar index is trading at a three week low on euro strength, after German GDP came in better than expected. While the German economy is humming along, it’s worth noting that German investors are hedging their bets by buying a lot of gold. Smart.

Posted in Gold News, Gold Price, Gold Views, Snapshot |

U.S. PPI +0.4% in Oct, above expectations of +0.1%, vs +0.4% in Sep; +2.8% y/y. Core +0.4, above expectations of +0.2%, vs +0.4% in Sep; +2.4% y/y.

Posted in Economic Data |

Gold lower at 1274,51 (-3.60). Silver 16.99 (-0.049). Dollar lower. Euro higher. Stocks called lower. U.S. 10-year 2.39% (-2 bps).

Posted in Gold Price, Markets, Silver Price |

Ray Dalio Goes On Gold Buying Spree, Adds 575% To GLD Holdings, Becomes 8th Largest Holder

ZeroHedge/Tyler Durden/11-13-17

Until last quarter, the world’s biggest hedge fund had, curiously, never held a position (according to our records) in any of the most liquid gold ETFs, whether the SPDR Gold Trust, the GLD, or the iShares Gold Trust, the IAU. That changed in the second quarter of 2017, when Bridgewater made its first tentative purchases in the gold ETF space, buying up 577,264 GLD shares, for $68.1 million, as well as 3.1 million IAU shares worth $36.8 million.

That was just the beginning, because as readers will recall, back on August 10 Ray Dalio urged investors to buy gold in case “things go badly.” This is what Dalio said:

When it comes to assessing political matters (especially global geopolitics like the North Korea matter), we are very humble. We know that we don’t have a unique insight that we’d choose to bet on. We can also say that if the above things go badly, it would seem that gold (more than other safe haven assets like the dollar, yen and treasuries) would benefit, so if you don’t have 5-10% of your assets in gold as a hedge, we’d suggest you relook at this. Don’t let traditional biases, rather than an excellent analysis, stand in the way of you doing this.
Posted in Gold News, Gold Views |

Trump era brings lowest stock market volatility since early 1960s

FT/John Authers & Joanna S Kao/11-13-17

The year after Donald Trump’s surprise victory in the US presidential election have been the quietest months for the US stock market in more than half a century.

“The longer a low volatility environment persists, the greater the average equity market drawdown when it ends.” — Jacob Mitchell

…the current Sharpe ratio would put this rally in the 0.3 percentile of the best times in history,” said Vincent Deluard, head of global macro strategy at INTL FCStone. “Let that sink in: this stock market is better than 99.7 per cent of the times since 1900.”

PG View: From this condition has sprung perhaps the most pronounced (and dangerous!) investor complacency of our lifetimes! Another pertinent quote appeared on the JSMineSet sight today:

‘The problem with bubbles is that they force one to decide whether to look like an idiot before the peak, or an idiot after the peak.’ — John Hussman

I would suggest that getting out of frothy investments early is far less an evil.

Posted in Markets |

BOJ to persist with monetary easing to boost inflation: Kuroda

Reuters/John Revill/11-13-17

The Bank of Japan will continue to persist with “powerful monetary easing” to nurture positive inflation developments, BoJ Governor Haruhiko Kuroda said in Zurich on Monday.

“Going forward, with the output gap improving steadily, firms’ stance is likely to gradually shift toward raising wages and prices,” Kuroda said in a lecture at the University of Zurich. “If further price rises come to be widespread, inflation expectations are likely to rise steadily.”

PG View: The BoJ has been saying the same thing for more than 20-years . . .

Posted in BoJ, Central Banks, Deflation, inflation, Monetary Policy, QE |

The Daily Market Report: Gold Recovers Modestly Within Range

USAGOLD/Peter Grant/11-13-17

Gold is edging higher within the range and has recouped a little more than half of Friday’s intraday losses. Gold came under pressure ahead of the London close on Friday, when 30,000 futures contracts were dumped in about a minute.

The fact that those losses stalled well shy of the range lows at 1263.00/1260.10 offers some encouragement. However, with gold so narrowly confined, a rebound above $1300 is really needed to stoke optimism and return focus to the high for the year set in early-September at 1357.50.

So what might be the catalyst to get that ball rolling? Weak October inflation data this week might do the trick. That may temper December rate hike expectations, which would weigh on the dollar and buoy gold.

Skepticism that Congress will deliver tax reform legislation to the President’s desk by year-end might prove to be a catalyst as well. Many agree that U.S. stocks are overvalued, but that condition is arguably acute if corporate tax cuts will be significantly delayed; or perhaps not happen at all. If stocks roll-over, gold will likely catch a safe-haven bid.

Finally, there are the geopolitical risks. The inflammatory rhetoric seems to have escalated once again in the waning days of President Trump’s diplomatic tour of Asia.

The President has said there would be a major announcement this week on North Korea. Meanwhile, South Korea is apparently concerned that another DPKR missile test is imminent.

Posted in Daily Market Report, Gold News, Gold Price, Gold Views |

How Germany got its gold back

FT/Claire Jones/11-10-17

Today, Germany is one of the biggest holders of gold in the world: it owns 3,378 tonnes, worth €119bn, second only to the US. But until recently, most of that gold was stored in New York, London and Paris. When the country decided to bring half of its gold back home, Mr Thiele was put in charge.

Over the past five years, he has masterminded the transportation of almost 54,000 gold bars — each with a value of just under $510,000 — to Frankfurt, Germany’s financial capital, moving $27bn (in today’s prices) from the vaults of the US Federal Reserve and the Banque de France…

Germany has a stronger relationship with gold than most nations. The country’s experience with hyperinflation between 1919 and 1923, during the years of the Weimar Republic, is ingrained in the national consciousness. Gold, above all, stands for stability.

Posted in Gold News, Gold Views |

North Korea ‘VERY CLOSE’ to dropping nuclear bomb on ‘ANY US target’ amid WW3 scare

UK Express/Joe Barnes/11-13-17

North Korea has continued with its development of a nuclear weapons arsenal despite international condemnation.

After the rogue state’s despot leader Kim Jong-un started a furious war of words with US President Donald Trump fears of the possible outbreak of World War 3 intensified.

…“The situation of the Korean peninsula is now on the worst phase of tension in which a nuclear war may break out any moment due to the US reckless moves for aggression on the DPRK.”

North Korea has also reportedly sent a letter to Russian President Vladimir Putin about a potential strike on the United States as the crisis threatens to boil over.

Posted in Geopolitical Risks, North Korea |

Internet Shutdowns Show Physical Gold Is Ultimate Protection

GoldCore, via GoldSeek/Mark O’Byrne/11-13-17

UNESCO is warning that the number of internet shutdowns is increasing worldwide. According to when reporting data provided by digital rights platform, “internet access has been curbed 116 times in 30 countries since January 2016.”

…Owning gold coins and bars either in one’s possession or in allocated and segregated storage will protect people and will be accessible and liquid should an internet shutdown be triggered in your country tomorrow.

Posted in Gold News, Gold Views |

Gold firms as U.S. tax reform uncertainty stokes risk aversion

Reuters/Jan Harvey/11-13-17

Gold recouped some of the previous session’s sharp price drop on Monday as uncertainty over a U.S. tax reform plan stoked risk aversion, pulling equities from their recent record highs.

However, prices remained hemmed in a narrow range as investors awaited more clues on the path of U.S. interest rates.

…”Geopolitical risks have been substantially higher in the second half of the year … and there have been record highs in U.S. equities, (which are) probably starting to make some investors nervous.”

Posted in Gold News, Gold Price, Gold Views |

Morning Snapshot: Gold Edges Up Within Range

USAGOLD/Peter Grant/11-13-17

Gold is up modestly, attempting to retrace Friday’s sharp intraday sell-off. Just about half of those losses have been recovered, but the yellow metal remains well contained within the recent range.

A softer dollar and weakness in stocks are offering support to gold. Focus remains on political uncertainty surrounding the House and Senate versions of tax reform legislation. There are concerns about the reconciliation process; what might ultimately reach the President’s desk and when that might happen.

Not much on the economic calendar today, but we have important inflation data coming out this week. October PPI is out tomorrow, with expectations calling for further slowing to 2.3% y/y. CPI is out on Wednesday. A small m/m increase is expected, which will likely result in a downtick to the annualized rate. Core CPI is expected to hold steady at 1.7% y/y.

The market continues to see a Fed rates hike next month as a given, despite persistently soft inflation. However, those expectations may be tempered if further weakness is evident in the October data. That would likely put the dollar under additional pressure, offering further support to gold.

Posted in Gold News, Gold Price, Gold Views, Snapshot |

Gold better at 1277.23 (+1.58). Silver 16.89 (+0.038). Dollar lower. Euro higher. Stocks called lower. U.S. 10-year 2.38% (-2 bps).

Posted in Gold Price, Markets, Silver Price |

Safeguarding Your Money in Uncertain Times

Tedx Talks/Simon Mikhailovich/10-31-17

When someone says “it’s not about the money, it’s about the money.” Simon discusses different ways to protect your money in these uncertain times. The key is not in predicting but instead in preparing for the future.

PG View: If you’re looking for some reassurance regarding your gold investments, Mikhailovich delivers in this critically important Ted Talk. He provides the evidence that we are indeed very much still in “uncertain times,” despite rampant investor complacency. Portfolio diversification and “savings insurance” in the form of gold, is arguably more important now than ever before.

Posted in Gold News, Gold Price, Gold Views |

Weekend Reading: It’s The Debt, Stupid Written

Real Investment Advice/Lance Roberts/11-10-17

Don’t be bamboozled by the idea that tax cuts and reforms will lead to sustained economic growth. There is simply NO evidence that such is the case over the long-term.

However, there is plenty of evidence to suggest that further costly reforms and run-away budgets will lead to an increase of the current national debt and the ongoing low-growth economy that has plagued the U.S. since the turn of the century.

In other words….“it’s the debt, stupid.”

You can’t solve a debt problem, by issuing more debt.
Posted in Debt, Politics |

The Daily Market Report: Gold Retreats in Repeat of Last Friday’s Price Action

USAGOLD/Peter Grant/11-10-17

Gold is down intraday after a large sell order hit the futures market, knocking the yellow metal back into its well defined range. Zerohedge reported that someone sold 30,000 contracts ($4.2 bln notional value) in just a 1 minute period.

That’s about 10% of the average volume for an entire day. We’ve seen this before though and as we’ve pointed out in the past, it smacks of agenda driven selling.

I’m comfortable saying that because we never see this sort of nonsense on the long side of the gold market. A real trader doesn’t dump 30,000 contracts in a minute if he or she is looking to short at the best price, or close out a big long position at the best price.

Today’s price action prompts me to point you to the Dave Kranzler article I posted yesterday: Gold And Silver: Something Different Is Occurring. Kranzler discusses the open interest situation that has developed that typically has lead to one of these “take-downs.”

Historically this is the signal that the Comex banks will implement what I call a “COT open interest liquidation” take-down of the gold/silver price using Comex paper to trigger hedge fund stop-loss positions. This enables the Comex banks to cover their shorts and print huge profits. It’s also illegal trading activity but that’s for another day.

As I pointed out earlier in the session, today’s price action was eerily similar to what unfolded last Friday around the same time. Kranzler commented on the 03-Nov price action:

Unloading on the price of gold like this on a Friday, after the rest of the trading world – and specifically the physical-buying eastern hemisphere markets – has closed for the weekend, is typical. What is not typical, however, is the reversal of the price of gold which occurred the next trading day (Monday).

Today’s intaday sell-off stalled well shy of last Friday’s low at 1264.70, perhaps lending credence to Mr. Kranzler’s overarching theme that “something different is occurring.” These assaults on the gold price are becoming less effective.

It’s going to be interesting to see what impact today’s selling had on open interest, and perhaps more importantly, if buyers once again view this action as a gift come Monday. With key U.S. inflation data on tap next week, there is some potential for further expansion of at least the range, within the range, within the range.

Posted in Daily Market Report, Gold News, Gold Price, Gold Views |

Gold retreats into the range, much like it did last Friday. Dollar and stocks remains soft.

Zerohedge reports: “Over 30,000 contracts ripped through gold futures – over $4.2 billion notional – in the space of a minute. That’s around 10% of a normal days’ volume.”

Posted in Gold News, Gold Price |

University of Michigan consumer sentiment (prelim) sank to 97.8 in Nov, below expectations of 100.7, vs 100.7 in Oct.

Posted in Economic Data |

Gold steady near three-week high amid U.S. tax reform concerns

Reuters/Vijaykumar Vedala/11-10-17

Gold prices on Friday held near a three-week high touched in the previous session, underpinned by uncertainty over U.S. tax reforms and on track for the first weekly rise in four weeks.

…”Further political uncertainty in the U.S. saw gold prices well supported. News that the Republican tax plan involved cuts being delayed until 2019 raised the ire of investors,” ANZ said in a note.

Posted in Gold News, Gold Price, Gold Views |

Morning Snapshot: Gold Adopted More Positive Tone Within Range This Week

USAGOLD/Peter Grant/11-10-17

Gold is slightly lower after having set 3-week highs in the previous 2 sessions. The yellow metal is garnering support from a modest pullback in the dollar and softer stocks, as doubt arose about the prospects for timely passage of the GOP tax reform legislation.

The Senate version delays the corporate tax cuts until 2019 and has more tax brackets than the House version. There is some concern that reconciliation is going to be contention and may prevent the legislation from reaching the President’s desk before year-end.

If the Trump administration fails to notch a significant legislative victory this year, any remaining momentum they have may be lost. That might put Republican congressional majorities in jeopardy next year, signalling the end of Trump’s pro-business, reflation agenda.

If that is the way things unfold, the U.S. stock market would be vulnerable to a serious correction. Safe-haven assets like gold would come back in favor and one might reasonably expect the Fed to reverse recent policy tightening.

Today’s U.S. calendar includes preliminary consumer sentiment for November and October Treasury budget. Next week’s data has October PPI and CPI. Both are expected to remain soft, which may raise some doubts about the true prospects for a December rate hike.

While gold adopted a more positive tone this week within the well-defined range, a convincing move back above $1300 is still needed to return a measure of confidence to the uptrend that has dominated most of this year. On the downside, support is well defined at 1263.00/1260.10.

Posted in Gold News, Gold Price, Gold Views, Snapshot |

Gold easier at 1285.00 (-1.30). Silver 17.05 (+0.045). Dollar steady. Euro better. Stocks called lower. U.S. 10-year 2.37% (+2 bps).

Posted in Gold Price, Markets, Silver Price |

Senate Tax Plan Has Delayed Corporate Cut, More Brackets

WSJ/Richard Rubin/11-09-17

Senate Republicans unveiled a proposal to overhaul the U.S. tax code Thursday that breaks in significant ways with a comparable House tax plan, including the level of top individual tax rates, the number of individual tax brackets, the timing of a corporate tax-rate cut and the particulars of estate tax changes.

The Senate bill, according to Senate ​Finance Committee ​aides, would delay a corporate tax rate cut until 2019. It would also double the estate tax exemption to a maximum of about $11 million per person, but it would leave the 40% tax itself in place for estates above that exemption level.

…The contrasts in the competing bills point to the challenge the GOP faces advancing the overhaul through Congress, which they aim to do by year-end.

PG View: If the GOP fails to get a bill to the president by year-end, they risk losing one or both majorities next year, which may well spell the end of the Trump administrations pro-business agenda. And as I suggested in today’s DMR, if that’s the way things shake out, stocks are “waaaaay overvalued.”

Posted in Politics |

Venezuela’s Debt Problems Are About to Get Even Worse

Bloomberg/Christine Jenkins/11-08-17

Venezuela is set to fall even further behind on its debt.

With the national oil company already at risk of triggering default-insurance contracts because bondholders haven’t received a $1.1 billion principal payment that was due last week, the state electricity utility now faces the end of a 30-day grace period for $28 million in interest that it owes. To make matters worse, buffers for an additional $280 million of obligations from the government and Petroleos de Venezuela expire over the weekend.

Posted in Debt |

Get Ready for a Washington Train Wreck in December

Bloomberg/Anna Edgerton/11-09-17

Republicans in Congress are so focused on passing a massive tax overhaul this year that they’re saying little publicly about another December deadline — the day the government would shut down if the GOP can’t reach a deal with Democrats on spending and other hot-button issues.

Current funding expires Dec. 8, and as hard as it is for Republicans and Democrats to agree on spending, they’ve made the situation worse by punting other difficult issues to December.

Posted in Debt, Politics |

The Daily Market Report: Gold Price Resilient, Despite Soft Demand Data

USAGOLD/Peter Grant/11-09-17

Gold is up modestly, reaching yet another 3-week high, but still well within the broader range that has been in place since early-October. A pullback in the dollar and a sharp drop in stocks are both helping to underpin the yellow metal today.

Further reports today that the Senate version of tax reform will delay the corporate tax cuts until 2019 — along with Democrat election wins earlier this week — have created some doubts that the tax package will get passed at all. If tax reform fails, GOP Congressional majorities are possibly in jeopardy next year.

If the GOP loses one or both houses of Congress in the 2018 elections, the pro-business Trump administration will be severely hamstrung. In which case, stocks are waaaaaaay overvalued.

Additionally, the debt ceiling is back in play a month from today and with everyone focused on tax legislation, the impending threat of a government shutdown is on the back-burner. Bloomberg warns that we should Get Ready for a Washington Train Wreck in December.

If what we’re seeing today is an early indication that volatility is returning to markets, the investor complacency that has held sway in recent years is likely to come to a screeching halt. In that environment, safe-haven assets like gold are going to be back in favor.

This quote from former Fed VC Fischer leapt to mind today, as it speaks to complacency. If these words of wisdom hold true for the world’s central bankers, they certainly hold true for the individual investor as well.

“…if I may be permitted a few final words on my way out the door, the watchwords of the central banker should be ‘Semper vigilans,’ because history and financial markets are masters of the art of surprise, and ‘Never say never,’ because you will sometimes find yourself having to do things that you never thought you would.”

The World Gold Council’s Gold Demand Trends for Q3 are getting a lot of play in the press today. An FT headline blared that it was a “tough quarter for gold as demand slides to 8-year low.”

The third quarter saw a 9% year-on-year (y-o-y) drop in gold demand to 915 tonnes (t). Year-to-date (y-t-d) demand was down by 12%. ETFs had another quarter of positive inflows, but at 18.9t, they fell far short of the 144.3t influx in Q3 2016. A softer quarter in the jewellery sector (-3%) accounted for 17t of the y-o-y decline. Demand from other sectors firmed: central banks bought a healthy 111t of gold (+25% y-o-y) while bar and coin investment strengthened by 17% (to 222.3t), albeit from a low base. — WGC

However, when you look at the price of gold, you wouldn’t necessarily deduce that demand is down. The price of gold is up 11.7% y-t-d and only down 2.7% versus the third quarter of last year. If you go back 8-years, gold ended Q3-09 at $1007.25. That means the yellow metal is up nearly 28% since the last time demand was this “low”.

In the face of recent dollar gains and the persistent march higher for equities, gold has actually proven to be remarkably resilient. The WGC pointed out that “gold remained an important risk-hedge, but the market lacked a catalyst.” While it may be too early to tell for sure, the catalyst that will drive gold through the upside of its range may in fact be emerging.

Posted in Daily Market Report, Gold News, Gold Price, Gold Views |

Gold And Silver: Something Different Is Occurring

GoldSeek/Dave Kranzler/11-08-17

…Something different – at least for now – is going on. Maybe it’s related to smart, big money knowing that the world is on the cusp of rampant, uncontrollable price inflation after the unprecedented money supply inflation of the last 9 years. And, in reality, the money supply inflation began with Greenspan in the late 1980s/early 1990’s. The U.S. money printing has been going on since Nixon closed the gold window and it went semi-Weimar in 2008-2014. The U.S. exported its inflation with the strong dollar policy and reserve status of the dollar. That has changed. The BoJ and the Peoples Bank of China have been printing money the last few years like a meth addicts on steroids. The ECB is a close third.

This monetary inflation was contained when it was just the Fed and maybe the BoJ printing in volume. Now the world is drowning in printed fiat currencies of every flavor. Price inflation is on the cusp of breaking out furiously in all currencies. This will translate into a furious break-out in the price of commodities, especially physically deliverable gold and silver bullion.

PG View: Something does indeed feel different: The price of gold has been quite resilient heading into year-end, despite very high December rate hike expectations, a stronger dollar and a stock market that continues to plumb record highs.

Posted in Gold News, Gold Price, Gold Views, Silver News, Silver Price, Silver Views |

U.S. wholesale sales +1.3% in Sep, above expectations of +1.0%, vs +1.7% in Aug; inventories +0.3%.

Posted in Economic Data |

Gold at 3-week high on dollar; palladium hits 16-year high

Reuters/Eric Onstad/11-09-17

A weaker dollar pushed gold prices to a three-week high on Thursday, the second such climb in successive days, while palladium rose to a 16-year peak as speculators resumed buying.

…”The dollar is moving a bit lower because yields are under pressure,” said Georgette Boele, commodity strategist at ABN AMRO in Amsterdam.

“There should be more upside. I expect it to move back towards $1,300 by the end of the year, in line with some further weakness in the dollar.”

Posted in Gold News, Gold Price, Gold Views |