Category: Gold News

The Daily Market Report: Gold Firm Within the Recent Range


USAGOLD/Peter A. Grant/01-18-17

Gold is trading modestly lower on the day, but remains generally well bid within the uptrend that has emerged since gold bottomed late last year. The yellow metal is being weighed by a firmer dollar, but haven interest is limiting the downside.

Gold has risen for seven consecutive sessions. There’s still a lot of trading day left, so we could still see and eighth today.

CNBC reports that GLD has risen 13 out of the last 15 sessions through yesterday. That’s something that hasn’t happened since the summer of 2011.

After holding steady on policy today, Bank of Canada Governor Stephen Poloz warned that rate cuts were still on the table, citing “significant uncertainties.” Poloz specifically mentioned “material” risks to the Canadian economy if U.S. trade policies become more protectionist under President Trump.

Silver has gotten a lift this week as well, regaining the $17 level for the first time since mid-December and setting a 9-week high yesterday at 17.32. The technical picture for silver has improved markedly this week, with the 100-day moving average now within striking distance at 17.53.

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

Brexit Plus Trump Equals Winning Streak for Gold During January

Bloomberg/Thomas Seal and Ranjeetha Pakiam/01-17-17

Bullion has risen every day except one in 2017, evidence that investors are pricing in a rocky year ahead. U.K. Prime Minister Theresa May confirmed Tuesday that she’ll leave the European Union’s single market while seeking a new arrangement on the customs union. Donald Trump is just three days away from being sworn in as the next U.S. president.

“As the inauguration of Trump draws close, I think people are realizing that potentially this could be a very stormy presidency and gold may well benefit from that,” said David Govett, an analyst at Marex Spectron Group Ltd. in London. “There is new money at the beginning of each year looking for a home and a lot of this seems to find its way into gold.”

PG View: Gold is slightly lower this morning as recent gains are consolidated, we’ll have to wait and see where we close today.

Posted in Gold News, Gold Views |

Gold prices could soar if Donald Trump says any one of these five things


MarketWatch/Nigam Arora/01-18-17

Gold prices could extend their gains after Donald Trump’s inauguration if he continues to make statements as president that prompt investors to enter safe havens.

As president-elect, Trump has angered China, India and Mexico, some NATO countries and, just this long weekend, Germany (over its luxury cars), to name a few. Gold prices in New York trading have risen 11.9% since Nov. 8.

However, the assumption is that once Trump takes office, he will either be more restrained or advisers around him will dampen whatever he says. Based on Trump’s more than two dozen tweets since Saturday, there is a high probability that that assumption is wrong.

PG View: Whether you find President-elect Trump’s unvarnished candidness refreshing or troubling, now may be a good time to bolster your gold holdings.

Posted in Gold News, Gold Views |

Morning Snapshot: Gold consolidates recent gains

USAGOLD/Peter A. Grant/01-18-17

Gold is generally consolidative at the high end of the recent range. The dollar is a little firmer today, which has the yellow metal trading slightly lower in the day.

December CPI was inline with expectation. Later this morning we have industrial production, NAHB housing market index, Beige Book, TIC data and FedSpeak from Yellen and Kashkari.

The Bank of Canada will also announce policy. Steady as she goes is widely expected.

Posted in Gold News, Gold Views, Snapshot |

The Daily Market Report: Gold Trends Higher as Dollar Drops


USAGOLD/Peter A. Grant/01-17-17

Gold surged to fresh 8-week high as the dollar took a double hit: One from President-elect Trump and one from a sharp rebound in the British pound. The yellow metal is now up more than 5.5% YTD, and more than 8% from the December low.

The dollar index tumbled to a six-week low after President-elect Donald Trump told the Wall Street Journal that the dollar was “too strong.” So, what might the new President do about that?

That question should give dollar bulls pause. As I stated in this morning’s Snapshot, perhaps the easiest first step would be to appoint a couple doves to the two open seats on the Fed’s board of governors. That could disrupt the expectations of two or three rate hikes this year, pushing the dollar lower in the process. That would bode well for gold.

Today’s rebound in Sterling put further pressure on greenback. The pound rallied nearly 3% versus the dollar and almost 3% against the euro. While PM Theresa May confirmed there would be a hard-Brexit, the currency rebounded in classic ‘sell the rumor, buy the fact’ fashion. Ms. May confirmed that her government would be aggressively looking to strike the best trade deals possible and Parliament will get to vote on any deal struck with the EU. That all seemed to offer some level of relief to markets, but this is still going to be a cumbersome process fraught with risk.

Those Brexit risks, along with Mr. Trump’s penchant for shooting from the hip will likely keep markets on edge for the foreseeable future. Gold should then continue to benefit from safe-haven flows.

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

Morning Snapshot: Gold surges to 8-week highs

USAGOLD/Peter A. Grant/01-17-17

Gold continues to charge higher, buoyed larger by renewed weakness in the dollar. The yellow metal has pushed to a new 8-week high of 1218.90. Silver has reclaimed the 17-handle.

In a Wall Street Journal interview, President-elect Trump said the dollar was “too strong,” adversely impacting the ability of U.S. companies to compete globally. Mr. Trump seemed to be particularly concerned about the Chinese yuan “dropping like a rock.” Unvarnished rhetoric like that ought to strike fear in the hearts of dollar bulls and monetary policy hawks alike.

Easier policy is a sure-fire way to knock the dollar lower. There are two vacant seats on the Federal Reserve Board of Governors that President Trump will be able to fill immediately and they will presumably contribute to the shaping of monetary policy moving forward.

The dollar was further weighed by a rebound in the British Pound in the wake of Theresa May’s Brexit speech. While there will apparently be a hard-Brexit, assurances that Britain was not turning inward and that Parliament will get to vote on any deal struck with the EU seemed to temper pessimism somewhat.

Posted in Gold News, Gold Views, Snapshot |

Gold price boosted by hard Brexit fears

The Week UK/01-16-17

Reports indicate that Theresa May will tomorrow signal the UK is to quit the European single market when it leaves the EU. This has worried the markets, with traders concerned about the destabilising consequences for the UK, EU and, ultimately, the world’s economies.

PG View: Gold surged back above £1000, setting a 10-week high of £1006.73.

Posted in Gold News, Gold Views |

Gold rises to 8-week high as traders focus on Trump and Brexit


MarketWatch/Victor Reklaitis/01-16-17

Gold briefly touched “an eight-week high of just shy of $1,210 per troy ounce as the new week of trading gets underway,” said Commerzbank analysts in a note. “This is due among other things to strong statements made by U.S. President-elect Donald Trump just a few days before his inauguration, and to new developments with regard to Brexit.”

Posted in Gold News, Gold Views |

Morning Snapshot: Gold Rises to 8-Week High

USAGOLD/Peter A. Grant/01-16-17

Gold rose in overseas trading to set a new 8-week high of 1208.58, despite a higher dollar this morning. The yellow metal remains underpinned by safe-haven demand, amid uncertainty ahead of the Trump inauguration and rising concerns over a hard-Brexit.

U.S. markets are closed today in observance of the Martin Luther King Jr. holiday. Look for trading activity to be muted after the European close as a result.

Posted in Gold News, Gold Views, Snapshot |

The gold market in 2017


World Gold Council/01-13-17

In 2016, investors around the world returned in large numbers to the gold market, as a combination of macroeconomic drivers and pent up demand kept interest in gold high. As we start the new year, there are some concerns that US dollar strength may limit gold’s appeal. We believe that, on the contrary, not only will gold remain highly relevant as a strategic portfolio component, but also six major trends will support demand for gold throughout 2017:

1. Heightened political and geopolitical risks
2. Currency depreciation
3. Rising inflation expectations
4. Inflated stock market valuations
5. Long-term Asian growth
6. Opening of new markets.

Posted in Gold News, Gold Views |

Physical Will Trump Paper Gold

Tocqueville Asset Management/John Hathaway/01-05-17

[T]here is a shortage of physical metal at current prices that promises to deepen, masked only by the supply of synthetic gold not backed by physical. Given full transparency, the shortage would argue for a much higher gold price based on price discovery unimpeded by synthetic-gold trading. The progressive hollowing out of the (mostly Western) synthetic price-setting mechanisms and institutions is not a headline-grabbing process. The only clue is the steady seepage of bullion from Western storage vaults into Asian hands, where it is welcomed at bargain prices and utilized within a far friendlier institutional and political context. Advocates of this point of view must have been cheered (as were we) by the fact that GLD, the largest gold ETF, resorted to borrowing 29 tonnes in Q1 2016 from the Bank of England to connect the inflow of money flows with the physical metal necessary to back the trust instrument (from the Q1 10Q). As Trump might tweet, “Not good!!!” With the passage of time, the disparity between real (physical) and imaginary (speculative) fundamentals continues to widen. The longer it persists, the greater the likelihood that it will be resolved in epic fashion. In the end, we fully expect physical gold to trump its feeble paper facsimile.

PG View: A thorough year-end look at the fundamentals by Hathaway that generally bode well for gold — particularly of the physical variety — over the longer-term. Once again, it would behoove investors to carefully consider the vehicle they choose to gain exposure to the gold market.

Posted in Gold News, Gold Views |

The Daily Market Report: Gold Poised For Third Consecutive Weekly Gain


USAGOLD/Peter A. Grant/01-13-17

Gold dipped modestly in early New York trading, but has since adopted a more consolidative tone just below $1200. The yellow metal appears poised to gain just over 2% this week, which would be its third consecutive weekly gain.

The surge earlier in the week to a 7-week high of 1206.93 lends considerable credence to the bullish technical tone that is developing. Gold is now comfortably above the 20- and 50-day moving averages, as well as the 20-week moving average. Momentum remains clearly to the upside.

We like the fundamentals as well: Physical demand in both the east and west is back on the rise. Recent U.S. economic data have been mixed, which is tempering the post-election optimism. This is also weighing somewhat on expectations that the Fed will hike 3 times this year.

The World Bank is forecasting 2.2% GDP growth this year. Atlanta Fed President Dennis Lockhart thinks it will be more like 2%, noting that it is difficult to predict what impact any fiscal stimulus might have at this point. That’s pretty anemic more-than 7-years into the recovery.

President-elect Trump chose not to elaborate on infrastructure spending during his highly anticipated press conference earlier in the week. That seemed to really disappoint investors.

The Dow has failed to satisfy the 20,000 objective, even as the national debt continues its unstoppable march to $20 trillion. Expansion of the money supply is accelerating as well.

It all paints a generally favorable picture for gold and hearkens back to January of 2016, where we saw a similarly impressive start to the new year. The 2016 rally lasted until midyear, wracking up gains in excess of 30% before the corrective pressure emerged.

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

Central-Bank Bashing Has Gold Only Asset Safe From Meddling


Bloomberg/Natasha Doff and Eddie Van Der Walt/01-12-17

Baring Asset Management’s Christopher Mahon has one major conviction about 2017: it will be the year in which central-bank bashing by politicians becomes the new normal, so he’s seeking shelter in gold.

“This year is the turning point,” Mahon said in an interview on Monday. “For seven years or so, central banks have largely escaped critique even though one could argue that their policies have been pretty inadequate in many senses. It’s very plausible now that politicians stand up and throw stones at central bankers.”

PG View: If faith in central banks is further eroded, gold is likely to be buoyed. “It retains its appeal as an asset that once underwrote the monetary system and it can’t be created at will like currencies and bonds,” said Matthew Turner, a Macquarie Group Ltd. economist.

Posted in Gold News, Gold Views |

Gold down from 7-wk high on dollar strength, technical swing

Reuters/Sethuraman N R/01-13-17

Gold fell on Friday after hitting a seven-week peak in the previous session as the dollar edged up and a technical correction set in, but it was still set to end higher for a third straight week.

…several Fed officials on Thursday cautioned that the fiscal and tax plans sketched out by the incoming Trump administration could spur a short-term economic boost that would result in longer-run inflation and debt problems.

Posted in Gold News, Gold Views |

Morning Snapshot: Gold consolidating recent gains

USAGOLD/Peter A. Grant/01-13-17

Gold is consolidating recent gains, trading slightly lower, just below the $1200 level. Even with the setback from yesterday’s 7-week high, the yellow metal is up more than 2% on the week.

December retail sales slightly missed expectations. The miss in retail sales ex-autos was more pronounced. PPI rose in line with expectations in December.

The dollar remains defensive as optimism over the Trump election has cooled somewhat more recently. If the dollar remains under pressure, it will likely provide a tailwind for gold.

Posted in Gold News, Gold Views, Snapshot |

The Daily Market Report: Gold Trades Above $1200 For First Time Since November


USAGOLD/Peter A. Grant/01-12-17

Gold surged overseas to trade above the 1200 threshold for the first time since late-November. The yellow metal set a new 7-week high at 1206.93 as U.S. yields and the dollar fell and stocks continued to struggle ahead of the 20,000 level.

Risk appetite dwindled in the wake of yesterday’s Trump presser; which was long on protectionist rhetoric and short on fiscal stimulus details. This seems to have led to a repricing of the economic optimism that developed in the wake of the November election.

I posted a couple articles this morning that suggest that gold is actually undervalued, even with the yellow metal up nearly-7% since the mid-December lows that were notched just before the Fed initiated their second 25-bps rate hike in more than a decade.

The article that suggests gold is “cheap” insurance no matter what the Fed does is prescient. The author believes that if more robust economic activity is in the offing, the Fed will likely be behind the curve on inflation. That means that real rates will remain negative, “or at best near zero.” That will bode well for gold.

Alternatively, if the economy falters, the Fed will likely be quick to ease monetary policy in reaction. In fact, the two rate hikes — and almost certainly the first one — were implemented to give the Fed some clearance above the zero-bound should this very thing happen.

[T]he case for gold as insurance and also as a solid long-term investment is as strong as ever. — Olivier Garret

This is a risk that I’ve written about many times over the past several years. “We are in the seventh year of economic expansion. Historically, we are overdue for a broad-based market contraction,” warns Mr. Garret.

In today’s Precious Metals Update from Capital Economics, analyst Simona Gambarini says, “We think that the case for gold as a strategic reserve asset remains strong.” While she is speaking about the official sector, the same can be said for the individual investor.

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

Gold Is Cheap Insurance No Matter What the Fed Will Do


NewsmaxFinance/Olivier Garret/01-12-17

Years of loose monetary policy—coupled with Trump’s infrastructure, de-regulation, and fiscal plans—could unleash a time of economic expansion which would likely include inflation. Based on the Fed’s past behavior, we expect them to be slow to hike rates and catch up. Real rates may turn negative. It would be very favorable for gold prices.

…Either inflation or negative real rates would definitely be a plus for gold prices.

…we believe real interest rates will remain negative—or at best near zero—in both scenarios. This makes a very strong case for holding gold at current prices.

PG View: This article makes a nice supplement to the previous post. It is not too late to buy gold.

Posted in Gold News, Gold Views |

Gold Is Cheap, Just Look At These Charts

Forbes/Stephen L. McKee/01-12-17

“Relative to stocks, gold is once again nearly as cheap as it has ever been the last couple decades.”

PG View: The message here is that even with the rise in the gold price since the December rate hike, it’s not too late to get on the bus.

Posted in Gold News, Gold Views |

Gold could blast off if King Dollar turns weak here!

YahooFinance/Kimble Charting/01-12-17

“Could that trend be about to change? The Power of the Pattern would say, a price point is in play, where a trend reversal could start to take place.”

PG View: The author presents a chart that shows the dollar/gold ratio may be at a key inflection point. If the ratio is indeed topping here, gold could indeed “blast off.”

Posted in Gold News, Gold Views |

Gold Surges Above $1,200 as Details-Shy Trump Weighing on Dollar


Bloomberg/Eddie Van Der Walt/01-12-17

Spot gold rallied as investors flooded back into funds backed by the metal and the dollar fell in the aftermath of Donald Trump’s heated press conference that provided little detail of his economic stimulus plans.

…“Gold is rising as question marks emerge over the consensus view that Trump would be great for the dollar and great for stocks on a grand, unfunded building plan,” Adrian Ash, head of research at online gold trading site BullionVault, said by phone from London. “Traffic has been pretty much all one-way for us, customers are buying.”

Posted in Gold News, Gold Views |

Morning Snapshot

USAGOLD/Peter A. Grant/01-12-17

Gold surged in overseas trading to reclaim the $1200 handle. A new 7-week high was established at 1206.93 as both U.S. yields, stocks and the dollar came under pressure.

Investor optimism has been tempered in the wake of President-elect Trump’s presser yesterday; where he seemed to focus on trade protectionism, while failing to offer specifics on his infrastructure spending plans. This has dimmed risk appetite, boosting both gold and bonds.

Initial jobless claims recouped much of the big drop in the previous week. Import prices rose 0.4% in December, below expectations of +0.7%.

Lots of Fedspeak coming up today. Yellen, Harker, Evans, Lockhart, Bullard and Kaplan are all slated to speak.

Posted in Gold News, Gold Views, Snapshot |

Gold at 7-week high as dollar falls after Trump speaks


Reuters/Marcy Nicholson and Pratima Desai/01-11-17

Gold rose to a seven-week high on Wednesday, turning positive as the dollar dropped and Treasury yields fell after U.S. President-elect Donald Trump spoke in his first formal news conference just days before taking office.

…”At the lows of the session, gold received a much-needed ‘Trump bump’ when the president-elect triggered an equity and dollar selloff,” said Tai Wong, director of base and precious metals trading for BMO Capital Markets in New York.

Posted in Gold News, Gold Views |

Gold moved within striking distance of $1200, setting a 7-week high of 1198.30.

Posted in Gold News, Gold Views |

The Daily Market Report: Gold Firm Following Trump Presser


USAGOLD/Peter A. Grant/01-11-17

Gold edged higher in overseas trading to set yet another 6-week high. While the yellow metal came under some pressure in advance of President-elect Trump’s press conference, those losses were quickly retraced as Mr. Trump began to speak.

Investors are hoping to glean clues as to what types of policies might be implemented in the early days of the Trump administration. They are understandably hoping that the post-election surge in confidence will be validated and perpetuated.

Whether Trump’s policies will be able to snap the U.S. economy out of its doldrums remains to be seen. The stock market seems to have liked what they heard, with the Dow trading back within 200 points of the magical 20,000 level.

After the U.S. national debt hit $19,952,808,638,850.59 yesterday, I asked this question: Will the national debt hit $20T before Dow hits 20k?

As each approaches their own big round “20”, I wondered just how big is the near-$20T national debt compared to our stock market. It is in fact larger than the market cap of the entire S&P500! The VisialCapitalist has a great infographic from last year on the topic.

Make note of the following as well: The The U.S. national debt is 155x larger than all gold mined globally in a year. In fact, all of the world’s physical currency, gold, silver, and bitcoin combined equates with just 65% of the national debt.

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

Gold holds near six-week peak on safe-haven demand

Reuters/Swati Verma/01-11-17

“With the impending inauguration of President-elect Donald Trump and possible safe-haven flows related to that, seasonal Chinese demand and a stalling equity rally and bond sell-off, January so far is poised to be another good month for the yellow metal,” said Alex Thorndike, senior precious metals dealer at MKS PAMP Group.

Posted in Gold News, Gold Views |

Morning Snapshot: Gold well bid, despite firmer dollar

USAGOLD/Peter A. Grant/01-11-17

Gold remains well bid, having set another new 6-week high overseas at 1191.32. The yellow metal is sustaining recent gains, despite a firmer dollar this morning. Short-term focus remains on 1200.

The U.S. economic calendar is light today with EIA data and the IBD/TIPP Economic Optimism Index. NY Fed President Dudley will speak on banking culture and regulation at 1:20 ET. President-elect Trump is holding a presser at 11:00 ET. There is a $20 bln 10-year note reopen today.

Posted in Gold News, Gold Views, Snapshot |

The Daily Market Report: Gold Surges to 6-Week Highs


USAGOLD/Peter A. Grant/01-10-17

Gold extended to the upside in early New York trading to reach a new 6-week high of 1190.61. The yellow metal has been buoyed by good physical demand early in the new year, with an additional tailwind provided by a dollar and stock market that may be looking a little toppy.

Coin News Net reports that first day sales of 2017 America Silver Eagles surged 36% versus last year. Silver Eagle sales reached 3,747,500 for that one day, surpassing last year’s total 2,756,500 coins; which marked the beginning of a pretty robust first-half of 2016.

First day Gold Eagle sales were 68,000 combined ounces. That marks a 13.3% increase over the 60,000 ounces sold on the first day of availability in 2016.

We noted late in 2016 that things seemed to be shaping up very similarly to last year, where the metals bottomed late in the year near a Fed rate hike. The rise seen since the mid-December lows and the impressive surge in America Eagle demand further validates that outlook. Gold is up more than 6% from the lows, while silver is up more than 8%. Both metals are trading comfortably above their 20-day moving averages. Gold slightly exceeded its 50-day moving average today, while silver has broken through convincingly as it moved within striking distance of $17.

In a SeekingAlpha article I posted earlier today, the author notes: “The reason why gold always moves higher over the long term is because the money supply is consistently expanding.” He goes on to say, “It’s the growth of M2 that ultimately determines how much gold is worth (in USD).”

So let’s take a peak at where gold is relative to M2:

Wow! If M2 growth is really the ultimate determinant of the price of gold in dollars, it sure looks like gold is grossly undervalued. The recent rebound in gold demand may be in part due to investors’ recognition of this reality. The acceleration in M2 growth also suggests to me that the dollar has become overvalued as a result of even modest monetary policy divergence.

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

Gold: The Fundamentals Matter

SeekingAlpha/SomaBull/01-10-17

Summary:

• As the assumption goes, gold and the dollar have an inverse correlation. The problem is, there is no long-term inverse relationship between the two.

• The precious metal will consistently move higher along with the money supply.

• The current rate of M2 expansion is much stronger compared to the last several years.

• The CBO is currently underestimating the level of interest rates in its forecast.

Posted in Gold News, Gold Views |

Gold hits highest in over a month on weaker dollar, Brexit concerns


Reuters/Swati Verma/01-10-17

Gold rose to its highest in over one a month on Tuesday, buoyed by a weaker U.S. dollar and as fears that Britain will not have a clean break with the European Union stoked safe-haven buying.

…”The comments on the UK around Brexit that impacted the pound saw some safe-haven buying,” said ANZ analyst Daniel Hynes.

Posted in Gold News, Gold Views |

Morning Snapshot: Gold remains firm near 6-week highs

10-Jan (USAGOLD) — Gold is consolidating at the high end of the recent range. The yellow metal eked out a new 6-week high overseas at 1187.64, with focus now squarely on 1200.

The NFIB Small Business Optimism Index rose to 105.8 in December. That’s up from 98.4 in November and is consistent with the general rise in economic and consumer optimism since the election.

Later this morning we’ll see November wholesale sales, JOLTS job openings for November and IBD/TIPP Economic Optimism Index. There is also a $24 bln 3-year note auction and a $45 bln 4-week bill auction.

Posted in Gold News, Gold Views, Snapshot |