Category: Gold Views

The Daily Market Report: Gold Consolidates Recent Gains, Buoyed by Silver Strength

USAGOLD/Peter A. Grant/03-29-17

Gold continues to consolidate Monday’s solid gains, but the high for the year from February at 1263.87 remains intact. The trend remains favorable however, making further tests of the upside likely.

Both gold and silver are showing good resilience in the face of today’s good economic data and hawkish FedSpeak, which has served to lift the dollar. However, stocks remain well off their recent highs amid ongoing political uncertainty and perhaps the hawkish FedSpeak.

As we mentioned earlier this week, silver in fact may be the harbinger for further tests of the upside for both metals. The corresponding February high in the silver market is 18.48. While we’re still waiting for a cross of the 200-day moving average in gold, silver crossed that barrier on Monday and continues to sustain those gains.

Boston Fed hawk Rosengren, while a nonvoter, said that he would favor a rate hike at every other meeting this year. That would make a total of 4 hikes for 2017, which is more hawkish than the consensus. San Francistco Fed moderate dove John Williams (also a nonvoter) said he would not rule out more than 3 hikes. Chicago Fed dove Charles Evans took a more measured approach of 1 or 2 more hikes; expressing ongoing concerns about long-term inflation expectations.

The dollar firmed somewhat, with an additional boost from Brexit related Sterling weakness. The UK officially triggered Article 50 today, meaning that Brexit will proceed. The NASDAQ article I posted earlier today contends that gold will be a beneficiary of Brexit. The author sees gold as a currency and believes that some of the flows out of Sterling and the euro will find their way into gold. Given the relative size of the gold market to the $5 trillion average daily volume in the FX market, even a little shift could have a dramatic impact on the yellow metal.

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

Why Brexit Makes Gold A Buy

NASDAQ/Martin Tillier/03-29-17

Today is an historic day for the nation of my birth. Nine months after the surprise referendum vote to leave the European Union (EU), the U.K. Prime Minister Theresa May signed Article 50 of the E.U Charter, formally beginning the withdrawal from Europe, or Brexit as it has become known. As significant as the day is in historical terms, though, investors should be careful not to read too much into the news from a market perspective. The process may now be irreversible, but the actual terms of the withdrawal and of any trade agreements that follow are not yet known and they will determine the impact on stocks, both in the U.K. and elsewhere. There is, however, one market that could benefit as negotiations get underway and that is gold.

Gold is technically a commodity, but unlike most commodities it has very little practical use. It is therefore more accurate to think of the yellow metal, not as a commodity but as a currency, and it is in that role that gold stands to benefit from Brexit. The interbank currency markets, where I got my start in a dealing room and worked for nearly two decades, are huge. The average daily turnover is just north of $5 Trillion, making it easily the world’s largest market. In effect, foreign exchange is a massive pool of money looking for a home and if just a fraction of that cash finds its way into gold the precious metal is in for a strong bullish run.

PG View: A writer for NASDAQ acknowledging that gold is a currency! He’s right too, even if a fraction of the currency flows associated with Brexit find their way into gold, it will have a big impact.

Posted in Gold News, Gold Views |

Gold ticks higher as Brexit triggered

Reuters/Eric Onstad/03-29-17

Gold edged up on Wednesday, as uncertainty about Brexit talks, French elections and U.S. President Donald Trump’s economic policies boosted safe-haven buying and offset a firmer dollar.

“There are a lot of uncertainties regarding the Trump reflation trade after the failure last week to overhaul Obamacare and uncertainty in Europe with French elections coming up and the official start today of Brexit negotiations,” saidCarsten Fritsch, analyst at Commerzbank in Frankfurt.

The general picture is still positive (for gold) with dips seen as buying opportunities,” he said.

Posted in Gold News, Gold Views |

Morning Snapshot: Gold remains generally well bid

USAGOLD/Peter A. Grant/03-29-17

Gold is modestly higher, still within striking distance of the highs for the year at 1263.87 from February. This week’s challenges of this level have reinforced the resistance, but the yellow metal remains underpinned by political uncertainty, a soft dollar and lower U.S. yields.

A definitive push through this area would be a significant technical event as it would also constitute a breach of the 200-day moving average. Upside follow-through would be likely.

Pending home sales for February and EIA crude data are out later this morning. We’ll also hear FedSpeak from Evans Rosengren and Williams.

Posted in Gold News, Gold Views, Snapshot |

The Daily Market Report: Gold Backs-Off From Highs for the Year Again

USAGOLD/Peter A. Grant/03-18-17

Gold slipped back into the range after failing to take-out the high for the year at 1263.87. The yellow metal is being weighed upon by rebounds in the dollar and stocks. However, the greenback remains defensive for the month of March, and in fact going back to the beginning of the year when the dollar index peaked at 103.82. Since that time, the DX is off nearly 4%.

Silver remains resilient, holding gains above $18, which may bode well for the underlying trend in gold as well. Silver has definitely been leading on the upside since the healthcare reform bill failed to clear the House last week, raising concerns about President Trump’s broader agenda.

Janet Yellen spoke today in Washington, focusing on job training. She did not provide any queues as to monetary policy moving forward.

Vice Chair Fischer confirmed that the Fed is watching political developments closely and seems disinclined to count any ‘fiscal chickens’ before they’ve hatched. He thinks two more rate hikes this year seems reasonable.

Esther George and Robert Kaplan towed the company line, expressing some optimism about the economy, but reiterating that Fed tightening will be slow and steady. The Atlanta Fed’s GDPNow model calls for 1% growth in Q1. While the “Blue Chip Consensus” is higher, it has been trending lower since late-February and moved below 2% recently.

The economy remains far from robust. While Esther George noted that we are in the midst of one of the longest economic expansions in history, it has been tepid at best. One has to wonder what tools remain at the Fed’s disposal when the expansion ends. Because it will end . . .

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

CPM Group Eyes Gold at $1,300 as Market Sees Return of the Investor

KitcoNews/Daniela Cambone/03-28-17

For the gold market, 2016 marked the return of the “opportunistic generalist investor” – or more simply, the short-term-focused gold enthusiast who previously exited the market in late 2011 and early 2012 – this according to the latest findings of CPM Group.

“While net investment demand in 2016 at 27.4 million ounces was below the high levels seen between 2009 and 2012, it was a recovery from the reduced investor interest in recent years,” CPM said in its annual release of its coveted gold yearbook on Tuesday.

…Savant added that gold’s first leg up really started following Fed Chair Yellen’s dovish speech back in early March and the metal has since continued its ascent. He said the firm is forecasting the metal to be stronger in the second-half of the year, with prices moving into the $1,300-an-ounce territory.

Posted in Gold News, Gold Views |

Gold, Silver Firmer; Bulls Still Have Technical Momentum

KitcoNews, via Forbes/Jim Wyckoff/03-28-17

Gold and silver prices are trading slightly higher in early U.S. dealings Tuesday. The near-term technical postures for both precious metals have turned significantly more bullish the past few weeks. April Comex gold was last up $2.10 an ounce at $1,257.70. May Comex silver was last up $0.032 at $18.14 an ounce.

Global stock markets were mostly firmer Tuesday, on corrective bounces from recent selling pressure. Traders and investors are debating whether the recent downside pressure in stock markets is the end of the “Trump rally” that had been in place since the U.S. president was elected in November. Or, are the recent slides in stock indexes just normal corrective pullbacks in bull markets that still have more room to run?

Posted in Gold News, Gold Views |

Gold steady, investors focus on Trump agenda

Reuters/Pratima Desai/03-28-17

Gold prices held near one-month highs on Tuesday, supported by political and economic uncertainty in the United States and expectations of a lower dollar.

…Traders report more investor buying interest after U.S. President Donald Trump failed to push through healthcare reform last week, fuelling concern about his ability to implement his economic policies.

That worry also sent the dollar to a four-and-a-half-month low against a basket of currencies on Monday. This makes dollar-denominated gold cheaper for holders of other currencies, potentially boosting demand.

“The dollar has come under a lot of pressure and lifted gold,” said Julius Baer analyst Carsten Menke. “Changing perceptions of the outlook for U.S. interest rates will create volatility in gold.”

Posted in Gold News, Gold Views |

Morning Snapshot

USAGOLD/Peter A. Grant/03-28-17

Gold remains well bid after pressuring the high for the year yesterday. The yellow metal is higher this morning, within striking distance of resistance 1261.01/1263.87. The 200-day moving average is at 1258.87 today.

The dollar and stocks remain defensive and yields are still under pressure. This all conspires to keep gold underpinned.

Advance goods trade deficit narrowed to -$64.8 bln in February. The Case-Shiller home price index rose in January by 0.9%, above expectations. Later this morning we’ll see consumer confidence and the Richmond Fed Index.

Fed Chair Yellen speaks at the Community Reinvestment Conference in Washington at 12:30ET. There is also FedSpeak from Esther George, Robert Kaplan and Jerome Powell.

Posted in Gold News, Gold Views, Snapshot |

The Daily Market Report: Gold Surges, Buoyed by Lower Yields and a Weaker Dollar

USAGOLD/Peter A. Grant/03-27-17

Gold surged higher in overseas trading, buoyed by mounting concerns that the U.S. reflation trade is on the ropes. The high for the year at 1263.87 was pressured, but has successfully contained the upside thus far.

Nonetheless, a weaker dollar and lower yields should continue to underpin the yellow metal. The dollar index tumbled through important support at 99.23, establishing 4-month lows. Those losses lend some credence to the scenario that suggests the top is in for the dollar. That would be a positive for gold.

Certainly if the stock market rolls over — based on diminished optimism that President Trump will be able to advance his broader agenda — that too would be gold positive. If the delay of fiscal stimulus also causes the Fed to back-off from their anticipated 3 to 4 rate hikes this year, then gold could really be off to the races.

A sustained move to new highs for the year would also constitute a decisive breach of the 200-day moving average, returning considerable credence to the long-term uptrend. Further gains, or even consolidation at these levels, will continue to drag the 50-day moving average higher as well, toward a potential “golden cross.”

Keep an eye on silver as an indicator as well. Silver surged back above $18 for the first time in 4-weeks. Silver remained well bid, even as gold retreated into the intraday range, as the gold/silver ratio continues its retreat from above 71.00.

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

Gold eases after failing to clear the high for the year set in Feb at 1263.87, but the trend remains favorable.

Posted in Gold News, Gold Views |

New highs for the year in gold would also constitute a definitive breach of the 200-day moving average.

Posted in Gold News, Gold Views |

Gold Hits One Month High As Investors Retreat from Global Reflation Trade

TheStreet/Martin Baccardax/03-27-17

Gold prices jumped to a one month high Monday as the precious metal extended its rally since the U.S. Federal Reserve rate hike earlier this month amid a collapse in the dollar and increased global market uncertainty.

Spot gold was marked $13.70, or 1.1% higher at $1258.50 per ounce in early European trading, the highest since Feb. 28 and 5.15% higher than it traded on March 15 when the Federal Reserve lifted its key interest rate by 0.25%.

Monday’s rally is likely directly linked to the failure of U.S. President Donald Trump to push through a health care reform bill last week following the last-minute cancellation of a Congressional vote by House Majority Leader Paul Ryan.

Posted in Gold News, Gold Views |

Gold Is Back As Dollar’s Reserve Status Questioned

Barons/Shuli Ren/03-26-17

Gold futures jumped 0.7% in early Asian trading on Monday as the U.S. Dollar Index fell another 0.4%, leaving the gauge of the greenback’s strength hovering near a two-month low of 99.3.

The U.S. dollar has long enjoyed the status as the world’s reserve currency, but the greenback’s esteemed standing is increasingly being challenged as China and Russia show their eagerness to to diversify away from the U.S. dollar.

…The weakness in the U.S. dollar can be partly attributed to recent doubts about the reflation policies favored by U.S. President Donald Trump. Gold prices typically rise when the U.S. dollar falls.

Posted in Gold News, Gold Views |

Morning Snapshot: Gold surges to approach highs for the year

USAGOLD/Peter A. Grant/03-27-17

Gold is up sharply as Friday’s healthcare debacle threatens to delay and possibly delay President Trump’s entire agenda. The yellow metal jumped to within striking distance of the high for the year at 1263.87 from February.

Silver has reclaimed the $18 handle. With the gold/silver ratio back below 70, it may be time for silver to play a little catch-up.

The dollar came under pressure on the uncertain political backdrop and falling yields, as there is now considerable doubt as to whether the Fed will get the fiscal help they likely were anticipating. Additionally, Angela Merkel’s CDU party emerged victorious in regional elections, dispelling some concerns about her hold on power. The euro surged to 4-month highs, putting additional pressure on the greenback.

The U.S. calendar is light today with the March Dallas Fed Index and a $26 bln 2-year note auction. We also will hear FedSpeak from Evans, Praet and Kaplan.

Posted in Gold News, Gold Views, Snapshot |

The Daily Market Report: Gold Well Bid Heading Into Weekend

USAGOLD/Peter A. Grant/03-24-17

Gold is heading into the weekend trading slightly higher on the day and just off the three week high set yesterday at 1253.31. The yellow metal is presently up 1.8% on the week and appears poised for a second consecutive winning week.

Focus remains on Capitol Hill, where passage of the GOP’s healthcare bill remains very much in doubt. President Trump has reportedly asked for a vote today regardless, but I suspect Republican leadership is loath to risk such a defeat this early in the Trump administration.

However, even if they go back to the drawing-board to attempt more palatable legislation, it would suggest to markets — especially stocks — that the Trump agenda is probably way overbought. If stocks roll-over, gold will likely benefit from continued safe-haven flows.

“We should see some safe haven flows into gold if [Trump] can’t get it passed because it means all his other programs have a low probability of succeeding.” Societe Generale’s Robin Bhar

If the reflation trade is suspended, one has to wonder how the Fed will react. FedSpeak today continues to be rather optimistic, but I suspect they were actually hoping for a little fiscal help this year. If those hopes are diminished on the healthcare reform flop, the central bank may have to take a more dovish stance to ward off a stock market collapse and possibly even recession.

The Atlanta Fed’s GDPNow model now projects 1.0% growth in Q1. While that’s slightly better than the 0.9% forecast from March 16, it is hardly reflective of the “good clip” referenced by NY Fed President Dudley today.

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

Gold set for second weekly gain, eyes on U.S. healthcare vote

Reuters/Peter Hobson/03-24-17

Gold was on track for a second weekly gain on Friday as concern about the ability of U.S. President Donald Trump to push legislation through Congress held the dollar near 7-week lows, making bullion cheaper for holders of other currencies.

Spot gold was up 0.1 percent at $1,245.53 an ounce at 1131 GMT. The metal has risen 1.4 percent this week and on Thursday touched $1,253.12, its highest since Feb. 28.

…Gold, seen as a safe haven asset, has benefited from falls in the dollar, U.S. bond yields and stocks as Trump’s difficulty in passing healthcare reform has undermined faith that he can deliver on promises of tax cuts and investment.

Posted in Gold News, Gold Views |

Morning Snapshot: Gold remains firm at high end of recent range

USAGOLD/Peter A. Grant/03-24-17

Gold corrected modestly overseas before returning to unchanged on the day. The yellow metal appears poised to score a second consecutive higher weekly close on a weaker dollar and worries that healthcare reform may stall the broader Trump agenda.

GOP leadership opted not to put AHCA to a vote in the eleventh-hour yesterday because they didn’t seem to have the votes. They’ll try again today, but considerable doubts remain as to whether the votes are there.

The gold market seems nonplussed by the February durable goods orders. Later this morning we’ll see Flash Markit manufacturing and services PMI. FedSpeak is due from Evans, Bullard and Dudley today.

Posted in Gold News, Gold Views, Snapshot |

The Daily Market Report: Gold Underpinned as Focus Shifts to AHCA Vote

USAGOLD/Peter A. Grant/03-23-17

Gold remains generally well bid, although earlier tests above important resistance at 1250 have faltered. While continued weakness in the dollar should limit the downside in the yellow metal, a bit of a reprieve in the stock market is probably limiting the upside.

Everyone is keyed on the AHCA House vote today as a proxy for President Trump’s broader reflation agenda. The feeling being that as goes the AHCA vote, so goes deregulation, tax reform, trade deals and fiscal stimulus. Pretty much everything that had markets so excited in the wake of last November’s election results.

The best case is that the reflation trade gets delayed for some period of time as the GOP sorts out their differences on healthcare. The worst case would be a complete derailing of the Trump agenda.

The biggest casualty of such an outcome would probably be the stock market, which went from bubbly to positively frothy in recent months. We have already seen risk appetite dissipate this week, to the benefit of Treasuries and gold as safe haven buying ramped up. If AHCA fails to clear the house, those trends are likely to accelerate.

The most recent speculation suggest somewhere between 27 and 32 Republican representatives are either hard “no”, or leaning “no”. If accurate, AHCA will not pass. Rather than allowing that to happen, leadership would likely postpone the vote in the hope of building additional support.

However, that too would be seen as a negative outcome. Stocks would likely fall. Treasuries would rally, pushing yields lower. That would put additional pressure on the dollar. All of that would be positive for gold.

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

Gold’s Six-Day Winning Streak Ranks as Best Gain Since Brexit

Bloomberg/Eddie Van Der Walt/03-22-17

Gold prices are steadily climbing as equities retreat and concern deepens among investors that Donald Trump won’t deliver on pro-growth promises for the U.S. economy.

Bullion for immediate delivery has gained more than 4 percent in six days, heading for the biggest advance since the aftermath of the Brexit vote in late June.

Posted in Gold News, Gold Views |

Gold Price Rally Continues as Global Markets Wobble

TheStreet/Paul Whitfield/03-23-17

Gold has gained more than 2% since mid-March as economic fundamentals lined up to support a rally, and could be poised to gain again on Thursday if The Trump administrations reforms are rattled by a failure to push through plans to repeal and replace the Affordable Care Act.

Gold traded early in Europe’s session at €1,156.54 ($1247.30) in line with its Wednesday close and in relatively flat trading on Europe’s major markets. The metal is up 2.3% since March 14, the day before the Federal Reserve set up the rally by hiking interest rates but damped expectation of future increases by declaring that U.S. monetary policy will remain supportive for “some time.”

Posted in Gold News, Gold Views |

Morning Snapshot: Gold pushes to new 3-week highs on continued dollar weakness, jobless claims miss

USAGOLD/Peter A. Grant/03-23-17

Gold continues to track higher, establishing new three-week highs in the wake of this morning’s bigger than expected jump in initial jobless claims. With the dollar still under pressure, focus now shifts to the February high in the yellow metal at 1263.87.

Also on the calendar today is February new home sales and FedSpeak from Janet Yellen. However, the day’s big event will be the initial House vote on the new healthcare bill.

Despite the solid GOP majority in the House, infighting among Republicans makes passage questionable at best. If the AHCA fails to clear the House on this vote, there are legitimate worries that the entire Trump agenda will stall.

Posted in Gold News, Gold Views, Snapshot |

The Daily Market Report: Gold Edges Higher as “Reflation Trade” Seen in Jeopardy

USAGOLD/Peter A. Grant/03-22-17

Gold is edging higher, setting new three-week highs above 1250.00. U.S. yields are under pressure, which is dragging the dollar lower as well. Stocks remain defensive after dropping sharply on Tuesday.streaming movie Split

As investors pare their optimism on the great Trump reflation, one must wonder what they were really wishing for in the first place. The Fed has been trying to reflate the economy via extraordinary measures for nearly a decade, largely with little to no impact. That may have been because the central bank was getting no help on the fiscal side of the equation.

The election of Donald Trump, along with GOP majorities in both houses of Congress, triggered expectations that the long awaited fiscal stimulus was on its way. Those expectations have been tempered recently as initial efforts by Republicans to amend healthcare legislation may not have the necessary votes to clear the House tomorrow. Gennadiy Goldberg of TD Securities argued that such an event would spark “a significant risk-off event.”

The concern is that if healthcare gets bogged down, the broader reflation agenda is going to be delayed as well. Gold typically fares quite well in a risk-off environment.

But even if the reflation is successful, what will be the cost? The U.S. is currently $20 trillion in debt; that’s more than twice the $9.2 trillion national debt of a decade ago. “There is practically no chance that debt will stabilize or decrease,” wrote Gary Christenson for Sprott Money. Christenson suggests that devaluation of the dollar is the only option. Historic precedent is certainly on his side.

Debt will increase, currencies will devalue, and central banks will “print” to keep the financial systems moving and markets rising, if they can. How much more debt can the system accommodate? — Gary Christenson

That’s a good question. And he’s not just talking about America. Debt is on the rise the world over. It’s like we learned absolutely nothing from the financial crisis, which at its core was a debt crisis. In the subsequent years, governments just borrowed more to paper over the problems of the past. That can only go on so long.

Gold is the ideal hedge, whether we get the much anticipated inflation, or continued disinflation. Christenson thinks prices will bubble higher, “sooner rather than later.”

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

Peak Gold – Biggest Gold Story Not Being Reported

GoldCore, via GoldSeek/03-22-17

We have written about ‘peak gold’ and the ramifications of the underappreciated peak gold phenomenon for the gold market since 2008. The risk of falling gold production and a consequent reduction in supply are slowly percolating into the mainstream and analysts are asking whether 2015 or 2016 marked the year of peak gold production.

Byron King has written about this increasingly important supply factor in the gold market and brings together the views and research of Glencore CEO, Ivan Glasenberg, Thomson Reuters GFMS and others.

PG View: Goldman Sachs reports that “the collapse in South African gold production is the ‘classic canary in the coal mine’ and likely foreshadows the coming decline in global gold production.”

Posted in Gold News, Gold Views |

Gold hits 3-week peak as investors shun equities on Trump worries

Reuters, via CNBC/03-22-17

Gold strengthened on Wednesday, with the price touching its highest in three weeks as the dollar languished near six-week lows and bond yields sank on uncertainty over the economic policies of U.S. President Donald Trump.panduan android

…The lack of a concrete policy from the Trump administration is increasing gold’s attraction as a safe-haven investment, analysts and traders said.

“It seems that equity investors decided to take some money off the table, perhaps getting slightly wary about the progress in President Trump’s legislative agenda,” INTL FCStone analyst Edward Meir said.

Posted in Gold News, Gold Views |

Morning Snapshot: Gold remains firm

USAGOLD/Peter A. Grant/03-22-17

Gold remains well bid near three-week highs. The yellow metal remains underpinned by a weaker dollar, lower yields and defensive stocks.

On top of last week’s less hawkish than expected Fed, concerns continue mounting that the new healthcare bill might not fair so well when it faces its initial House vote tomorrow. If the AHCA stalls, the worry is that the rest of the Trump administrations agenda will bog down as well. Stocks in particular don’t seem to like that prospect.

The MBA mortgage market index fell 2.7% last week as rates rose into the FOMC meeting. The January FHFA home price index and February existing home sales are out later this morning.

Crude oil remains under pressure after a sizable API stock build. EIA data are out later this morning. If the OPEC production cut inspired rally is over and lower prices are in the offing, inflationary pressures that the Fed has been touting may fail to materialize.

Posted in Gold News, Gold Views, Snapshot |

The Daily Market Report: Gold Jumps as Dollar, Stocks and Yields Fall

USAGOLD/Peter A. Grant/03-21-17

Gold is extending to the upside, boosted by a falling dollar, stocks and yields. The 61.8% retracement level the decline from the February high — mentioned in this morning’s Snapshot — has been exceeded, lending additional confidence to the rebound that commenced with last week’s Fed decision.

There seems to be mounting concern that the GOP’s Obamacare repeal and replacement plan may stall in Congress, which in turn may derail the broader reflation agenda of the Trump administration. Republicans made significant amendments to the bill yesterday, hoping to shore up support within their own party. Obviously there will be little to no support from the other side of the aisle.

President Trump was on Capitol Hill today encouraging Congress to pass the AHCA so that he and they can move on. The market seems to be losing some of the confidence that built in the wake of Trump’s February 28th speech to a joint session of Congress. If Thursday’s House vote reveals a fractured majority party, quote a bit more of the post-election stock rally could be vulnerable to retracement as trade deals, deregulation, tax reform and infrastructure spending get backburnered until healthcare is sorted out.

FedSpeak from KC Fed President Esther George wasn’t terribly hawkish. She acknowledged that low rates can lead to imbalances, although she apparently didn’t mention anything specifically (like stocks!). Nonetheless, her softer tone and the fact that she tempered balance sheet normalization expectations is probably contributing to pressure on yields and the dollar.

Minneapolis Fed President Neel Kashkari took to Twitter in an #AskNeel segment, where he continued to defend his decision to dissent on last week’s rate hike:

I agree with him, that higher rates is not going to help the economy grow faster. In fact, GDP data for Q4-16 and Q1-17 seem to suggest higher rates are weighing on growth. That shouldn’t surprise anyone.

Kaskari also suggested that inflation is “much more likely” to be below 2%, noting that the Fed has “powerful tools to keep inflation from getting too high.” He also warned that when “inflation takes off, terrible economic outcomes” ensue.

Our own Mike Kosares wrote a stellar piece early in the month with the subtitle: Don’t look now but inflation and a new gold rush might be in our future. It is a must read and is linked below.

Will banks’ excess reserves fuel a new monetary crisis?

The prospect of the banks unleashing from $12 trillion to $36 trillion in currency and easily accessed deposits — presently held as excess reserves with the Fed — on the economy has got to keep a guy like Kashkari up at night . . .

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

Gold climbs near a 3-week high as dollar drops

MarketWatch/Myra P. Saefong & Mark DeCambre/03-21-17

Gold prices headed higher Tuesday, as the U.S. dollar declined, especially against the euro, as traders eyed the presidential race in France and the U.K. prepared its exit from the European movie The Lego Batman Movie 2017 now

“The political uncertainties over in Europe around French elections and Brexit are going to provide a lot of tailwinds for the gold rally,” said Naeem Aslam, chief market analyst at Think Markets.

Posted in Gold News, Gold Views |

Morning Snapshot: Gold buoyed by weaker dollar

USAGOLD/Peter A. Grant/03-21-17

Gold is consolidating near the high end of the recent range, buoyed by a weaker dollar. More than half of the decline from late-February into the FOMC meeting — driven largely by hawkish FedSpeak — has now been retraced. The 61.8% retracement level was pressured yesterday.

The rebound is being driven by the fact that the reality of the FOMC statement and projections did not live up to the hawkish hype. FedSpeak yesterday from Evans and Harker suggests the Fed is going to give this another go, and try to rebuild inflation and rate hike expectations. At least initially, investors don’t seem to be buying full Bastille Day 2016 film online

KC Fed’s Esther George and Cleveland Fed’s Loretta Mester speak later today. Both lean hawkish to begin with, so I would look for them to suggest four hikes remain on the table for this year.

U.S. Q4 current account gap narrowed to -$112.4 bln, well inside expectations of -$128.2 bln, vs revised -$116.0 bln in Q3 (was -$113.0 bln). This is likely to result in a positive Q4 GDP revision, but it strikes me as a bit odd. ZeroHedge noted that it was an 8 standard deviation miss! That’s pretty huge, so color me skeptical.

Posted in Gold News, Gold Views, Snapshot |

Gold hits two-week high as dollar falls after G20 trade message

Reuters/Maytaal Angel/03-20-17

Gold prices scaled a two-week peak on Monday as the dollar slid to a six-week low after a G20 weekend summit dominated by the U.S. administration’s protectionist stance on global trade.

The precious metal has been rising since Wednesday, when the dollar dropped after the U.S. Federal Reserve raised interest rates but stopped short of predicting a sharper acceleration in monetary tightening over the next two years.

…”Overall the geopolitical outlook still points to several hotspots … and we’re not going to see a focus on rate rises for the foreseeable future now, because that’s out the way. Over the next few weeks one has to favour the upside,” said Ole Hansen, head of commodity strategy at Saxo Bank.

Posted in Gold News, Gold Views |