Category: Gold Views

Gold books highest settlement in a month, 3rd straight weekly rise


MarketWatch/Myra P. Saefong & Rachel Koning Beals/05-26-17

Gold on Friday closed at its highest level of the month, lifting prices for a third week in a row as a fresh round of geopolitical jitters offset expectations for higher U.S. interest rates, which would otherwise be bearish for gold prices.

Investors were watching North Korea, this weekend’s Group of Seven meeting, the coming U.K. elections, and developments surrounding the Trump administration—all helping to boost gold’s appeal as a hedge against uncertainty.

“At the moment it’s increasing political uncertainty that is driving the gains rather than [Federal Reserve] speculation,” Colin Cieszynski, chief market strategist at CMC Markets, told MarketWatch.

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The Daily Market Report: Gold Jumps By More Than 1% Ahead of Holiday Weekend


USAGOLD/Peter Grant/05-26-17

Gold surged to pressure the four-week high 1270.38, buoyed by ongoing political and geopolitical concerns. These gains further improve the near-term technical picture and may be prompting short covering ahead of the long holiday weekend.

Geopolitical tensions ratcheted higher after President Trump pledged to solve the “Big problem” that is North Korea. NBC news is reporting that Jared Kushner, the president’s son-in-law and a senior advisers, has “come under FBI scrutiny in the Russia investigation.” With the FBI now probing the President’s inner-circle, the political uncertainty is on the rise as well.

The China Gold Association recently reported a 9.3% decline in Q1 gold production to 101.197 mt, versus 111.563 in the previous year. China is of course both the world’s largest producer and consumer of gold.

The production decline was attributed to China’s plan to consolidate and modernize its mining industry. China’s Ministry of Industry and Information Technology says they plan to shutter 150 mines by 2020, which would equate withe a reduction in capacity of about 40 mt.

However, China’s official news agency Xinhua contends that annual gold output will rise to 500 tonnes over that same period. Presumably as assets are shifted from lower producing and higher cost mining operations, new efficiencies will be achieved.

In the interim it appears that China is prepared to bridge the gap by increasing imports. Gold imports surged 64.5% to 10.467 mt in Q1, almost exactly matching the annualized drop in mining output.

Chinese gold demand was robust in Q1 at 304.14 mt, a 14.7% increase over Q1-16. If demand remains strong, but domestic production continues to be suppressed, the Chinese will have to increasingly turn to global markets for supply. That dynamic would likely have a positive impact on the price of gold.

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Gold Rises to Four-Week High

WSJ/Stephanie Yang/05-26-17

Gold prices rose to a four-week high Friday, boosted by increased demand for haven assets amid uncertainty about economic and political stability.

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Here’s What It Would Take for Gold to Hit $2,000

Madison.com/Scott Levine/05-26-17

Uncertainty in Washington, the absence of interest rate hikes, and a fall in the dollar are all factors tied, individually, to the rise in the price of gold. Should these three factors all occur concurrently, however, it could create a scenario which results in market participants racing to increase their positions in gold — a scenario that could very reasonably result in the metal breaking new ground, reaching $2,000.

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Gold Up, At 4-Week High, On Weak Greenback, Some Risk Aversion


Kitco News/Jim Wyckoff/05-26-17

Gold prices are posting decent gains and have hit a four-week high in early U.S. trading Friday. A weaker U.S. dollar index on this day is helping out the gold market bulls. Also, there is just a bit of risk aversion in the marketplace heading into a long U.S. holiday weekend. News that President Donald Trump’s son-in-law is being investigated by the FBI regarding Russia’s involvement in the U.S. presidential election is also adding some uncertainty to the marketplace.

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Morning Snapshot: Gold surges to 3-week highs

USAGOLD/Peter Grant/05-26-17

Gold charged to a new 3-week high amid resurgent geopolitical concerns. This seems to be overriding this morning’s better than expected U.S. economic data.

President Trump acknowledged to Japanese PM Abe that North Korea is a “big problem” and pledged that that problem will be “solved.” The markets seem to have interpreted that as a threat.

“It is very much on our minds… It’s a big problem, it’s a world problem and it will be solved. At some point it will be solved. You can bet on that.” — President Donald Trump

The first revision to Q1 GDP came in better than expected at +1.2%. Durable goods orders for April also beat expectations, falling 0.7% on expectations of -1.1%. March saw a significant upward revision to +2.3%, versus +0.7% previously.

This certainly keeps the June rate hike on the table. Minutes of the last FOMC meeting revealed that the Fed waffled a little in May. Today’s should renew confidence that there’s another 25 bps hike coming in several weeks.

The dollar firmed accordingly, but gold is maintaining its gains. Given the political and geopolitical uncertainty, traders may be reluctant to carry short gold positions into the long holiday weekend.

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The Daily Market Report: Gold Remains Confined to Last Thursday’s Range


USAGOLD/Peter Grant/05-25-17

Gold is trading modestly lower, well within the recent range. Price action has been contained to the 1265.01/1245.10 established last Thursday. This consolidation has taken the form of a symmetrical triangle, which is a continuation pattern. The takeaway is that gold should breakout in the direction of the trend . . . which remains positive.

Today’s wounding of former Greek prime minister and ECB VP Lucas Papademos in an Athens bombing is certainly tragic. So too is the overall economic situation there. The latest negotiations to secure the release of the next tranche of bailout funds collapsed and a new deadline of 15-Jun was set.

“Hopes for a breakthrough in negotiations for cash-strapped Greece were dashed again,” reported the AP. “Again” is the operative word here; this all feels very familiar, because it is. Greece has been in this position numerous times since the financial crisis, with their fate being largely decided by distant policymakers at the EU and IMF.

The Greek economy has shrunk by more than a quarter since the crisis and the keepers of the bailout funds want even more concessions. More austerity. As it is, Greece fell back into recession in Q1.

After nearly a decade of perpetual crisis, limping from bailout to bailout, Greek debt remains at €300 bln (179% of GDP). One has to wonder if Greece might be in a far better position had they initiated a Grexit.

That of course was unthinkable at the time, and yet Greece had far more to gain from leaving the EU than the Brits ever did. Will the Greek’s realize this at some point and try and extricate themselves from this seemingly endless cycle? If so, what are the broader European and global implications?

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Gold attempts rebound after back-to-back declines

MarketWatch/Rachel Koning Beals/05-25-17

Gold edged higher Thursday, after back-to-back losses, as a closely followed dollar index stalled. But gains could be limited in the lead-up to what’s widely expected to be another Federal Reserve interest-rate hike next month.

…“Traders made much of voting members saying it is ‘prudent to await evidence [that the first-quarter] slowdown is transitory,’ brushing off an otherwise familiar cautiously hawkish tone,” said Ilya Spivak, commodities and currency strategist with Daily FX. “The U.S. dollar dropped alongside front-end Treasury bond yields, boosting the appeal of anti-fiat and non-interest-bearing assets” including gold.

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Morning Snapshot: Gold consolidates within recent range

USAGOLD/Peter Grant/05-25-17

Gold continues to consolidate within the recent range, underpinned by political, geopolitical and growth risks, as well as a generally weak dollar. Capping the upside is persistently buoyant stocks and the belief that the Fed will still raise rates in June, despite the aforementioned risks.

Those rate hike expectations remain elevated above 80%, despite the FOMC minutes revealing that the Fed turned much more ambiguous at the May meeting. The Fed expressed concerns about weak growth, slowing inflation, elevated asset valuations and geopolitical tensions. While largely dismissed as transitory, they stressed the data dependency of further tightening.

Initial jobless claims edged higher to 234k last week, below expectations. The trade deficit expanded to -$67.5 bln in April. The Bloomberg Consumer Comfort Index and M2 are out later and we’ll hear FedSpeak from Brainard and Bullard.

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The Daily Market Report: Gold Consolidates Awaiting Fresh Impetus


USAGOLD/Peter Grant/05-24-17

Gold is consolidating within the recent range, buoyed by political and geopolitical concerns and a generally weaker dollar. Persistent expectations for a June rate hike are perhaps limiting the upside at this point.

As we’ve noted in the past, the yellow metal tends to soften into rate hikes and rally afterwards. Traders will be scouring the FOMC minutes of the May meeting later today in an effort to glean additional clues as to the likelihood of a June hike. Fed funds futures put the probability at 83%, which seems to make it a forgone conclusion.

Of course incoming data seems to suggest the Fed should be considering a pause. Minneapolis Fed President Kashkari noted yesterday that the inflation is going the “wrong way.” He wants to see more data before committing to further monetary tightening.

The PMI data that were released yesterday, suggested some downside risk to the May jobs data. Median expectations are presently for a gain of 190k nonfarm payrolls.

While there is some optimism about a Q2 rebound in growth. The Atlanta Fed’s GDPNow model is presently at 4.1%. Goldman Sachs just get their estimate to 3.0%. However, the last actual GDP print was 0.7% in Q1.

Gold may need some fresh impetus to extend the uptrend. That may come on the form of economic data, or new developments on the political/geopolitical front.

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Gold stays firm, Fed policy minutes in focus

Reuters/Vijaykumar Vedala/05-24-17

Gold held steady on Wednesday, after slipping in the previous session, as investors awaited cues on the U.S. Federal Reserve’s rate hike stance from the minutes of its last meeting due later in the day.

…”My expectations are that the pace of interest rate hikes will be kept steady and stable regardless of the short-term fluctuations in the U.S. economic data,” said Mark To, head of research at Hong Kong’s Wing Fung Financial Group.

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Morning Snapshot: Gold edges higher within recent range

USAGOLD/Peter Grant/05-24-17

Gold is edging higher within the recent range amid mixed fundamental inputs. While the underlying trend for the year remains favorable, a break of last week’s high at 1265.01 is needed to return focus to the high for the year at 1295.03.

The U.S. calendar features existing home sales and the minutes from the May FOMC meeting. We’ll also hear FedSpeak from Brainard, Bullard, Kaplan and Kashkari.

The Bank of Canada will announce policy today at 10:00ET. They are widely expected to hold the overnight rate steady at 0.5% based on ongoing concerns about “material excess capacity.”

Moody’s downgraded China from A1 from Aa3, citing concerns over growing debt and slowing growth. It was China’s first downgrade in 30-years.

“Looking ahead, we expect China’s growth potential to decline to close to 5% over the next five years,” said Moody’s. If that really happens, there will be considerable implications for the broader global economy.

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The Daily Market Report: Gold Choppy On Mixed Data and Mixed Messages


USAGOLD/Peter Grant/05-23-17

Gold was unable to sustain the earlier intraday rebound, falling back into the daily range. The choppy trade comes as a result of a mixed bag of economic data, dovish FedSpeak, much ado about President Trump’s budget proposal and ongoing concerns about his broader economic agenda.

Markit PMI data were mixed with services better than expected and manufacturing missing expectations. The Richmond Fed index tumbled to 1 in May, below expectations of 15, vs 20 in April. New home sales tumbled 11.4% in April, well below market expectations. It was the biggest drop since March of 2015.

Sales fell in every region of the country, led by a 26.3% plunge in the West, the biggest drop since October 2010. — AP

Minneapolis Fed President Kashkari noted today that inflation is going the “wrong way.” Rising inflation and inflation expectations was the main incentive for the Fed’s move to tighter policy. Kashkari wants to see more data before considering a further tightening of monetary policy in June.

Speaking at the Peterson Foundation Fiscal Summit, Treasury Secretary Mnuchin confessed that “we’re not going to get [tax reform] done by August.” While he’s still hopeful that it will get done this year, there are rumblings that the GOP may have to settle for tax cuts, rather than reforms, but even that may be a heavy lift. There is also talk of combining fiscal spending with any tax bill in an effort to garner support from Democrats.

The bottom line is that the economic agenda seems to be losing additional momentum, and the new budget proposal isn’t going to help the cause. President Trump’s $4.1 trillion budget seems to be overly optimistic about the growth prospects of the U.S. economy. While the budget targets 3% growth, some analysts suggest continued sub-2% growth is the more likely reality. Zerohedge also reported that the administration is perhaps overly-optimistic about how long the current expansion will last.

Given the cuts to entitlements, Democrats are already girding for battle. As that battle rages, the clock will continue tick toward the inevitable next recession. Since the Great Depression, the U.S. has suffered thirteen recessions. The periods of economic growth between recessions have been as long as 120-months, and as short as 12-months. The average is just over 59-months.

The time elapsed since the Great Recession “officially” ended in June 2009 presently stands right at 95-months. To think we can go more than another decade without an economic contraction just might be delusional.

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Gold’s golden cross: The metal just formed a chart pattern that can signal a breakout


CNBC/Gina Francolla & Fred Imbert/05-23-17

Gold is up nearly 10 percent this year and might be primed for more gains if a signal tracked by technical analysts triggered Monday is any guide.

A small gain was enough to push the metal’s 50-day moving average price above the average price of the last 200 days, forming what’s known as a “golden cross” in technical analysis circles. This is seen as a positive signal that demonstrates an asset is outperforming so well in the short-term that it may reverse a longer term downtrend.

PG View: The golden cross occurred in the spot market two-weeks ago, confirmation in the futures offers further encouragement.

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Morning Snapshot: Gold recovers from modest overseas losses

USAGOLD/Peter Grant/05-23-17

Gold dipped modestly in the wake of the Manchester terror attack as Sterling fell, pushing the dollar lower. However, market moves in the immediate wake of the attack have largely been reversed. Sterling is now slightly higher on the day, the dollar is back on the defensive and gold is back within striking distance of yesterday’s highs at 1263.76.

The negative dollar and positive gold trends remain intact. Fresh highs this week would shift the technical focus to the high for the year at 1295.03.

Geopolitical tensions rose after the Indian army fired artillery on Pakistani military posts across the “line of control.” The Times of India described it as a “punitive” artillery assault in retaliation for the Pakistan military aiding infiltrators to the Indian side.

The U.S. calendar has April home sales, Markit flash PMIs and the Richmond Fed index. We’ll hear FedSpeak from Kashkari and Harker, as well as ECBSpeak from Coeure.

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Gold steady as traders lock in profits after two weeks of gains

Reuters/Maytaal Angel/05-23-17

Gold was little changed on Tuesday as the dollar steadied near 6-1/2 month lows and traders locked in profits following two weeks of gains, shrugging off heightened political risk following a deadly suicide attack in Britain.

The blast, which killed at least 22 people, weighed on sterling versus the dollar, but the U.S. currency was flat versus a currency basket following recent sharp falls, leaving little to prompt investors to bet bullion higher.

“Gold is taking a breather once again, its struggling to make it out of this $1,245-$1,265 range,” said Ole Hansen, head of commodity strategy at Saxo Bank.

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Trump trouble and euro surge extend gold’s gains

Reuters/Peter Hobson/05-22-17

Gold on Monday extended its biggest weekly gain in five weeks as the U.S. dollar fell against the euro, while U.S. political turmoil fuelled demand for bullion as a safe haven and reduced expectations of rapid U.S. interest rate rises.

…The metal advanced by 2.2 percent last week as the furore over U.S. President Donald Trump’s alleged links to Russia and his firing of former FBI chief James Comey raised concerns about his ability to push through promised fiscal stimulus.

That caused a rush to safe-haven assets such as gold and drove U.S. stocks, the dollar and U.S. bond yields lower, reducing the opportunity cost of holding non-yielding bullion and making gold cheaper for holders of other currencies.

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The Daily Market Report: Gold Firms as Dollar Continues Its Slide


USAGOLD/Peter Grant/05-22-17

Gold remains generally well bid, with last week’s high at 1265.01 within striking distance. Above that — given the favorable technical posture — the high for the year at 1295.03 would be looking pretty attractive.

Political and geopolitical tensions are helping to keep the yellow metal underpinned. Continued pressure on the dollar is helping to buoy gold as well. The dollar index has extended to new 6-month lows toda, pushed by euro gains.

In answering a question as to why Germany continued to maintain a high trade surplus, Angela Merkel said that “the euro is too weak,” suggesting that ECB policy was too accommodative. With more hawkish rumblings emanating from the central bank this year, Merkel’s comment may have lent some credence to calls for some movement toward policy normalization later this year.

If Chancellor Merkel thinks the euro is too weak, and President Trump thinks the dollar is too strong, it seems like there may be a path of least resistance for that currency pair. That would bode well for gold, which is priced in dollars.

Uncertainty about U.S. growth prospects could put further pressure on the greenback if the Fed adopts a more dovish tact later in the year. Right now, markets remain fairly convinced that another 25 bps rate hike is coming in June. Fed funds futures put the probability back at 78%, but chances of an additional 25 bps in September at just 24.5%.

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James Rickards: Gold’s “Decisive Turn Around” – “Next Stop Is $1,300 Or Higher”

MarketOracle/James Rickards/05-22-17

On May 10, gold launched a decisive turnaround from its most recent decline.

This kept intact the pattern I’ve been writing about for weeks of “higher highs, and higher lows” as every retreat finds a footing higher than the one before and each new high reaches new, higher ground.

…Each time gold retreated from those highs, it found a new bottom at a higher price than the time before. The recent low was $1,218/oz on May 10. In this new spike, gold has now rallied to $1,251 as of early Friday.

If this pattern holds, the next stop is $1,300 or higher.

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Gold tries to add to recent gains as dollar eases, stocks steady


MarketWatch/Rachel Koning Beals/05-22-17

Gold prices firmed Monday, looking to add to the their largest weekly gain since mid-April, as declines in the U.S. dollar index and a modest rise in equities helped to support bids for precious metals.

…Gold scored a roughly 2.1% advance for last week, a trading stretch marked by rising volatility and political unrest in the White House. That was the largest such gain since the week ended April 13. The yellow metal has climbed in seven of the past eight sessions.

Still, “rhetoric suggesting the central bank remains on track to raise rates next month despite recent U.S. political jitters may weigh on gold” as the week goes on, said Ilya Spivak, currency and commodities strategist with Daily FX.

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Gold regains sheen on global cues, jewellers’ buying

Times of India/05-22-17

Marketmen said a firm trend overseas, as recent political events in the US continued to weigh on the greenback and boost demand for safe-have assets, coupled with pick up in buying by local jewellers at domestic spot markets led to the recovery in gold prices.

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Morning Snapshot: Gold firms and dollar continues to slide

USAGOLD/Peter Grant/05-22-17

Gold is edging higher, buoyed by new 6-month lows in the dollar index. Silver has regained the 17 handle, rising more than 1% to set new 2-week highs.

The euro jumped in overseas trading after Angela Merkel said the German trade surplus was so high because the “the euro is too weak.” She laid this at the feet of the ECB, which may lend some gravity to speculation about initial moves toward policy normalization later in the year.

The Chicago Fed National Activity Index rose to 0.49 in April, versus a negative revised 0.07 in March. That’s about it today, besides a full raft of FedSpeak from Harker, Kashkari, Brainard and Evans.

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The Daily Market Report: Both Technicals and Fundamentals Remain Supportive for Gold


USAGOLD/Peter Grant/05-19-17

The dominant trend in the gold market remains positive, despite the recent multi-week pullback. The yellow metal appears poised to end the week with a 1.8% gain, the biggest in more than a month.

The technical picture remains constructive with gold holding above key moving averages. The 50-day MA remains above the 200-day MA, sustaining the “golden-cross” that occurred late last week. When the 50-day moves above the 200-day moving average, it is typically interpreted as a rather bullish event, hence the name.

Gold is proving quite resilient today in the face of a rebounding stock market. Stocks were lifted by dovish FedSpeak, but heightened political and geopolitical risks are likely to continue underpinning the yellow metal.

St. Louis Fed President James Bullard acknowledged that both growth and inflation data have been pretty soft of late. “FOMC’s contemplated policy rate path is overly aggressive relative to actual incoming data on U.S. macroeconomic performance,” said Bullard.

I have maintained that the primary goals of the Fed’s tightening into weak growth, is to prick the stop market bubble and to replenish the central bank’s ammunition in case of more pronounced growth risks and/or deflationary pressures. Minneapolis Fed President Neel Kashkari warned this week that, “Monetary policy should be used only as a last resort to address asset prices, because the costs to the economy of such a policy response are potentially so large.”

So what is the Fed to do at the June 13-14 FOMC meeting, given still relatively buoyant stocks and the worsening risk that the economy stumbles in the face of the considerable headwinds now facing President Trump’s fiscal policy agenda? Rate hike expectations have ebbed recently, but there’s still several weeks to go before the FOMC convenes.

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Gold Set for Best Week Amid Geopolitical Turmoil


Bloomberg/05-19-17

In today’s “Futures in Focus,” Phil Streible of RJO Futures discusses the outlook for oil markets and gold. He speaks with Mark Barton on “Bloomberg Markets.”

“Gold looks fantastic at these levels.” — Phil Streible
“Gold/silver ratio at 74 right now, that’s historically on the high end of things. I think it will come back down in the 60s…I think silver could be your next move.” — Phil Streible
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Morning Snapshot: Gold recovers from overseas losses as focus remains on political and geopolitical tensions

USAGOLD/Peter Grant/05-19-17

Gold is trading modestly higher after failing to sustain overseas losses. The yellow metal initially dipped to 1245.10 as the dollar staged a rebound, but the gains in the greenback could not be sustained.

Today’s U.S. calendar is empty, so focus will remain squarely on U.S. political turmoil, which is threatening to derail President Trump’s reflation agenda. In the absence of promised fiscal stimulus, the U.S. economy will likely remain confined to tepid growth and perhaps sets the stage for recession.

This will raise doubts at the Fed, as to their next policy move. Continued rate hikes into weak growth certainly heightens the likelihood of recession. How close to the tipping point is the Fed willing to go?

Geopolitical tensions are heightened today as well after U.S. warplanes attacked a pro-Assad military convoy. Both Syria and Russia have condemned the attack. Reports suggest that there may have been Iranian embedded with the Syrians as well.

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The Daily Market Report: Gold Retreats Modestly From 2-Week Highs


USAGOLD/Peter Grant/05-18-18

Gold has turned modestly defensive intraday following a round of positive U.S. economic data that buoyed stocks. However, the shadow of U.S. political uncertainty continues to hold sway on markets.

The yellow metal remains above the 200-day moving average and more than 61.8% of the entire decline from 1295.03 to 1213.60 has been retraced. This presents a generally favorable technical picture, which bodes well for the underlying uptrend that emerged in the wake of last December’s Fed rate hike.

With new accusations against the Trump administration surfacing on a daily basis, the President’s economic agenda may be severely hamstrung. They will be spending an inordinate amount of time and energy defending themselves, rather than advancing key legislation.

The dollar has already retraced all of its post-election gains. It is not unreasonable to think stocks may suffer the same fate. That would equate with about another 13% decline in the DJIA from the present level.

As doubts about fiscal stimulus and tax reform grow, Fed rate hike expectations have steadily eroded. The CME’s FedWatch tool now puts the probability of a 25 bps hike in June at 64.6%.

Even as growth risks mount, the Fed announced yesterday that household debt grew to a record high of $12.73 trillion in Q1. The previous high was established in Q3-08, just as Lehman Brothers collapsed and the financial crisis really gained momentum.

At its core, the financial crisis was a debt crisis. Policymakers the world-over — and seemingly U.S. households as well — opted to paper over the crisis with more debt. When the next crisis erupts, I’m not so sure the policymakers will be able to pull us back from the brink because the debt loads are so significantly higher than they were in 2007-2008.

Be prepared. Buy gold.

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Gold edges lower after biggest rally since Brexit vote

Reuters/Jan Harvey/05-18-17

Gold eased on Thursday as a bounce in the dollar prompted some buyers to cash in gains after its biggest one-day rally in nearly a year, though uncertainty over the outlook for the Trump presidency underpinned the metal near two-week highs.

Gold surged nearly 2 percent on Wednesday, its biggest one-day jump since Britain’s June vote to leave the European Union, on reports that U.S. President Donald Trump had tried to intervene in an investigation into alleged Russian interference in last year’s U.S. election.

…”(Gold) is seeing a pullback after yesterday’s strong performance — it needs to take a breather,” said Heraeus precious metals trader Alexander Zumpfe. “It ran into resistance towards $1,260.”

PG View: Stocks recouped much of this morning’s follow-on losses after a round of generally favorable U.S. economic data, weighing on gold.

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Gold’s Haven Status Refreshed as Trump’s Turmoil Wounds Stocks


Bloomberg/Ranjeetha Pakiam/05-18-17

Gold traded near a two-week high as the disarray engulfing Donald Trump’s White House boosted the commodity’s allure as a haven, with equities in retreat and investors scaling back the odds of the Federal Reserve tightening policy next month. Other precious metals fell.

…Gold is benefiting as Trump faces the biggest crisis of his presidency after a series of damaging revelations, including reports he pressed FBI Director James Comey to drop a probe into former National Security Adviser Michael Flynn. As the potential implications of the claims reverberated through Washington, equities sank and the dollar traded near the lowest since November. While the White House has denied Comey’s version, there’s concern the administration won’t now be able to implement its economic agenda.

“People are now worried that he may get impeached,” said Brian Lan, managing director of Singapore-based GoldSilver Central Pte, referring to Trump. “So safe-haven assets are now back in.”

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Morning Snapshot: Gold remains generally well bid amid political turmoil

USAGOLD/Peter Grant/05-18-17

Gold remains generally well bid in the wake of yesterday’s solid gains. The yellow metal remains underpinned by haven demand amid ongoing U.S. political turmoil.

Stocks extended to the downside in pre-market trading, adding to Wednesday’s considerable losses as risk appetite continues to wane. As BusinessInsider’s Pedro da Costa put it, “the challenge to Trump’s political power has reached a level that means his economic agenda is off the rails.” That would suggest that the balance of the post-election stock market gains are vulnerable to retracement.

This morning’s U.S. data were generally constructive. Initial jobless claims for last week dropped 4k to 232k, below expectations of 240k. The Philly Fed index rose to 38.8 in May, beating expectations of 19.5 by a wide margin. Later this morning we’ll see leading indicators for April. A rise of 0.3% is expected.

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Paper Vs. Physical: The Amazing Amount Of Leverage In The Silver Market


ZeroHedge/Steve St.Angelo/05-17-17

While many precious metals investors realize the massive amount of paper trading leverage taking place in the gold market, they should see what is going on in the silver market. In a previous article, I provided data showing that an amazing $9.8 trillion of notional gold paper trading took place on the world’s exchanges in 2016 versus $42 billion in actual physical gold investment. This was a paper to physical ratio of 233 to 1.

However, the amount of paper trading leverage in the silver market is much higher than that.

… the paper notional silver trading ratio to physical silver investment was a whopping 517 to 1… double the 233/1 for gold.

PG View: You know the old adage: An ounce of silver in the hand is worth 517 in the bush . . .

Don’t settle for a paper or digital representation of gold or silver, only buy the real thing and take possession.

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