Category: Silver Views

Gold And Silver: Something Different Is Occurring


GoldSeek/Dave Kranzler/11-08-17

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

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

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

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Morning Snapshot: Gold Edges Higher to Another 3-Week High

USAGOLD/Peter Grant/11-09-17

Gold is up modestly in early U.S. trading, buoyed by a weaker dollar and a drop in stocks. The yellow metal has set a new 3-week high at 1288.19. Silver remains narrowly confined within the recent range, trading just above $17.

The next minor tier of resistance for gold is at 1291.08. A breach of this level would bode well for further tests above $1300.

Initial jobless claims for last week were higher than expected. Later today we’ll see September wholesale sales. There will also be a $15 bln 30-year bond auction.

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Morning Snapshot: Gold and Silver Firmer Within Recent Ranges

USAGOLD/Peter Grant/11-08-17

Gold is higher in early U.S. trading, probing the high end of the range within the range within the range. That first tier of resistance is marked by last week’s high at 1284.20. Above that, 1306.04 and 1357.50 define the high ends of the broader ranges. The low end of the ranges are well defined at 1263.00/1260.10

Silver is higher, trading just above $17. Resistances to watch are at 17.26 and 17.47. The latter is likely a trigger for a push back above $18.

Today’s calendar is very light with only EIA crude data from last week. There is a $23 bln 10-year note auction as well.

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Morning Snapshot: Gold Ease Slightly Within Range

USAGOLD/Peter Grant/11-07-17

Gold is slightly lower today after yesterday’s late surge stalled shy of last week’s high at 1284.20. A breach of this level is needed to clear the way for renewed probes above $1300.

Continued dollar strength is helping to keep gold in check. The dollar index edged to a new 15-week high in overseas trading. Risk aversion associated with the Saudi corruption crackdown and President Trump’s trip to Asia are seen as underpinning the precious metals.

Silver gave back more than half of yesterday’s solid intraday gains overseas, but is back trading above $17 presently. The mid-October high at 17.41 is seen as key short-term resistance. Supports we’re watching at at 16.59 and 16.30.

Today’s economic calendar has JOLTs job openings for September, IBD/TIPP Economic Optimism Index and consumer credit. We’ll also hear FedSpeak from Janet Yellen and vice-chair Quarles.

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Morning Snapshot: Gold Up Slightly to Start the Week

USAGOLD/Peter Grant/11-06-17

Gold is up slightly to start the week, but still well contained within the recent range. The dollar index edged to a new 15-week high of 95.08, and this strength continues to limit the upside for the yellow metal.

Lower U.S. yields and mixed stocks suggest a tempering of risk appetite. That is seen as supportive to the precious metals.

Silver is consolidating at the low end of Friday’s range after failing to sustain last week’s push back above $17. The low end of the broader range remains well protected at $16.30.

The U.S. calendar is very light today, but we will hear Fed Speak from NY Fed President William Dudley. The press is reporting that Dudley will announce his early retirement as soon as today. Outgoing Fed Chair Yellen speaks tomorrow.

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Gold and silver retreat into their respective ranges as dollar firms after solid factory orders and services ISM offset the NFP miss.

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Morning Snapshot: Gold Edges Up Within Range Following NFP Miss

USAGOLD/Peter Grant/11-03-17

Gold is up slightly this morning, nonplussed by the NFP miss and still locked within the recent range. The dollar index remains narrowly confined as well near its 3-month highs, which is helping to limit the upside for the yellow metal. Silver is up as well, maintaining recent gains above $17.00.

U.S. nonfarm payrolls rose 261k in October, below expectations of +318k and whispers in the neighborhood of +400k. As I said in commentary yesterday, forecasters set a pretty high bar, creating the risk for disappointment. September NFP was revised higher from -33k to +18k, so at least the negative print is off the books. The unemployment rate ticked down to 4.065%.

So after a terrible number in September and a smaller than expected post-Hurricane rebound in October, how is it that the jobless rate ticked lower? Zerohedge explains:

…the number of people who exited the labor force soared by a near record 968,000 in October – the third highest on record – pushing the total number of people not in the labor force to a record 95.385 million, as the civilian labor force shrunk by whopping 765,000 in one month. — Zerohedge

Average hourly earnings came in unchanged for October, below expectations of +0.2%. The annualized rate of wage growth slowed to 2.4%.

Some are claiming this should be attributed to hurricane disruptions, but the chart presented by Bloomberg suggests that wage growth was meeting resistance ahead of 3% long before this hurricane season. This is something the Fed is likely to be watching very closely going into year-end, because if already tepid wage growth has stalled, it does not bode well for the inflation pressures that Fed keeps contending are just around the corner.

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Trump’s Tax Plan Could Boost Gold and Silver


Bloomberg/Luzi-Ann Javier/10-27-17

Politicians can keep arguing whether President Donald Trump’s tax plan will benefit the middle-income families and U.S. businesses, but there’s one sector that could be a clear winner: precious metals.

The tax plan being considered in Congress would inflate the nation’s budget deficit and expand the debt, Bart Melek, head of global commodity strategy at TD Securities in Toronto, said at the Silver Industrial Conference in Washington. That deterioration in the nation’s fiscal standing is a recipe for higher silver and gold prices, he said. From 1984 through 2012, gold rose as the federal debt climbed relative to gross domestic product, Melek said.

Silver will outperform gold, surging as much as 19 percent to $20 an ounce by the end of next year, as global growth boosts industrial demand for the white metal just as mine supply slows, he said.

PG View: The House is expected to reveal their tax plan tomorrow and the calculations to determine the implications for the national debt will follow quickly…

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Gold rises but U.S. rate expectations cap gains


Reuters/Maytaal Angel/10-10-17

Gold touched its highest in nearly two weeks on Tuesday, supported by a softer dollar and geopolitical tensions in Spain and North Korea, though gains were capped by expectations of another U.S. interest rate
increase.

…Fed funds futures showed traders were pricing in a nearly 90 percent chance of a December rate increase.

PG View: The article also points out that the gold-silver ratio suggests that “silver is undervalued” and that “Silver’s supply and demand dynamics are supportive of
higher prices in light of stagnating mine output and firming industrial demand.”

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Silver surges more than 2% after weak U.S. data to reclaim 16-handle for the first time since last week’s flash crash.

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The Reason Why Gold & Silver Have Frustrated Investors Since 2011


ZeroHedge/Steve St. Angelo/07-06-17

The biggest frustration to many precious metals investors, is why have the gold and silver prices under-performed the market since 2011? Actually, for gold it was since 2012. Even though gold hit a new record high of $1,900 in September 2011, its average annual price was higher in 2012 at $1,669 compared to $1,571 the prior year.

Regardless, the precious metals analysts back in 2012 were forecasting the market was going to experience even higher gold and silver prices, especially after the Fed announced QE 3 at the end of 2012. However, the precious metals community was taken by surprise as the gold and silver prices were hammered at the end of 2012 and into the beginning of 2013.

…“it appears that the markets have made a structural shift towards higher levels of complacency in the last six years.” Here, Kocic reverts back to his old, cautious self, warning that this decoupling will end in tears. This is how he frames it:

Current levels of complacency are alarming. This is what everyone is talking about. Despite growing uncertainties and tensions, the market volatility refuses to rise. Persistence of low volatility is increasing the penalty for potential dissent and reinforces one sided positioning. As a consequence, the risk of disorderly unwind is growing.

PG View: This is an important article. It’s perhaps understandable that speculators are frustrated by the performance of gold and silver. However, investors that buy gold and silver as a hedge know that it continues to do exactly what it is supposed to do. As gold corrected and then stabilized in recent years, their other assets appreciated. When that is no longer the case — when the current state of complacency eventually unwinds — those frothy other assets will correct and gold and silver will rise. It’s okay to be frustrated with the current mispricing of risk, but for heavens sake, don’t be complacent.

From Deutsche: The Market Broke In 2012, “This Is What Everyone Is Talking About”

And, if Kocic is correct, nothing will better define the mean reversion of this abnormal market volatility regime than the explosion of volatility as a result of nearly a decade of pent up “abnormalization” and the traders’ realization that just because bad news was ignored since 2012, it never actually went away, but was simply swept under the carpet by panicking central bankers.

When the mean reversion comes, and it will come, you’re going to want some gold.

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Gold and Silver Are “Asymmetric” Trades

MarketOracle/David Smith/06-23-17

An asymmetric trade is a situation where investing a relatively small amount of money holds the potential of yielding a profit many times the amount of the original sum at risk. In other words, where the risk to reward is skewed massively in the direction of reward.

This took place recently with Bitcoin (BTC). Is this conceptually different from bets made years ago on Microsoft, Cisco, Amazon, or Facebook, which yielded hundreds of percent profit to intrepid investors? Does it have relevance to the possible returns during the next few years for those who hold physical gold and silver?

I would answer “yes” and “yes.”

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Silver has edged higher to test the 17.65 Fibonacci resistance (61.8% retracement of the April/May decline).

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Gold and silver jump on payrolls miss as dollar slides along with expectations of rate hikes beyond June.

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On the mend: Silver was down 2% at 16.98 earlier, having been rejected from key resistance at 17.47/65. Now nearly 30¢ off intraday low.

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Silver To Trade Above $20 In Q4


Kitco News/Anna Golubova/06-01-17

Silver prices will surge in the second half of 2017, jumping above $20, led by the Federal Reserve’s slow tightening of monetary policy, weaker U.S. dollar, and economic and political risks, according to The Silver Focus 2017 report.

Analysts at Metals Focus, the firm behind the latest silver outlook, said they expect “the global macroeconomic environment to remain and indeed become more positive for precious-metals prices over the rest of the year and probably beyond. As a result, we forecast that the silver price will rally in the second half of 2017, with a breach above $20 looking likely in the fourth quarter.”

The key factor to watch in 2017 is the pace of Federal Reserve rate hikes.

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Is Silver a ‘Strong Buy’ Right Now? This Analyst Thinks So…


KitcoNews/Sarah Benali/05-18-17

While silver prices seem to be lagging, it may be time for investors to love the grey metal again, one analyst points out.

“Investment in gold (and silver even more so, are worthy of very careful consideration),” said Matthew Worley, research analyst and economic contributor for London-based World First, in a Seeking Alpha post Thursday.

“In an investment environment where central banks have flooded monetary reserves, equities are hitting all-time highs, 10 year U.S. Treasury yields barely eclipse 2%, and real estate markets show excesses internationally, take a long look at assets undervalued and unloved. It just makes sense.”

…“The disparity of the price of silver versus gold is what currently makes physical silver a strong buy,” he added.

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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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Why you should be buying Silver right now


USATODAY/05-15-17

Silver prices have been beaten up, more so than gold prices, according to David Yoe Williams, a panelist on TheStreet’s Trading Strategies roundtable. “If you’re going to do something in the next week to two weeks, buy a little silver and enjoy that ride,” he said. “Silver is actually very cheap right now.”

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Citi Does Not Anticipate Continued Rise In Gold/Silver Ratio


Kitco News/Allen Sykora/05-08-17

The gold/silver ratio should stabilize after recently higher levels, and there is potential for silver to bounce for a while even if gold doesn’t, says Citi. Analysts pointed out that the gold/silver ratio hit its highs for the year to date last week at around 75.5. This measures how many ounces of silver it takes to buy an ounce of gold. A higher number means underperformance by silver, and vice-versa. “The gold/silver ratio is likely to persist above the current YTD average of 70.3 [times], given ample room for silver money manager liquidation on Comex,” Citi says. “That said, the majority of the move lower in silver spot prices has likely taken place for this quarter and trading is unlikely to fall much below $16/oz; the 14-day RSI [Relative Strength Index] level has crashed below the oversold threshold to 19%. We therefore do not expect the gold/silver ratio to continue rallying too far from current levels and also see some downside risks for gold prices into June.” The bank says it expects the gold/silver ratio to average above 70 this year, which would be 10 to 12 points above the long-term mean.

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Morning Snapshot: Gold defensive, silver on the ropes ahead of Fed policy statement

USAGOLD/Peter Grant/05-03-17

Gold is edged to a new 3-week low ahead of today’s Fed policy statement. That announcement comes at 2:00ET and while no change in actual policy is anticipated, the market will be looking for clues as to the Fed’s intentions for the next meeting in June.

Silver has extended to the downside, convincingly negating support at 16.80. That puts silver at a 14-week low and the gold/silver ratio has probed above 75; nearly a 1-year high. These losses seem to be a result of the unwinding of the reflation trade as the Trump agenda seemingly has stalled.

The ADP employment survey for April came in at +177k, below expectations of +185k, versus a negative revised +255k in March (was +263k). April nonfarm payrolls is out on Friday, with median expectations running at +188k. The unemployment rate is expected to tick up to 4.6%.

Markit services PMI and services ISM are out later this morning. EIA data for last week are out as well, which may add to oil’s woes.

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Gold, Silver Are ‘Absolute Bargains’


Barron’s/Robert Guy/04-03-17

Matterhorn Asset Management’s Egon von Greyerz reckons prices for gold and silver are bargains and investors should be looking to buy given the risks in the global financial system.

In a new commentary, he’s taken a deeper look at the consequences of rising U.S. budget deficits, the growth in debt and the decline in the value of the U.S. dollar when measured against gold and currencies like the Swiss franc.

The next up leg in the metals has probably started and we could see $1,350 in gold and well over $20 silver in a relatively short time. I would not be surprised to see all-time highs in 2017. — Egon von Greyerz
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Morning Snapshot: Gold and silver pressure highs for the year

USAGOLD/Peter A. Grant/04-04-17

Gold is back within striking distance of key resistance at 1261.01/1263.87, where the highs for the year correspond closely with the 200-day moving average. Silver too is pressuring the high for the year set in February at 18.48.

Risk aversion seems to be driving the latest gains, with the dollar firm as well. U.S. stocks are called lower.

The U.S. trade deficit narrowed more than expected in February. Later this morning we’ll see Feb factory orders. ECB President Mario Draghi speaks in Frankfurt and we’ll hear Fedspeak from Governor Tarullo.

The RBA left its cash rate steady at 1.50%, as was widely expected. However, the statement implied that the RBA would like to keep the A$ weak.

The depreciation of the exchange rate since 2013 has also assisted the economy in its transition following the mining investment boom. An appreciating exchange rate would complicate this adjustment. — Philip Lowe, Governor

Does that make Australia a currency manipulator?

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The Daily Market Report: Gold Recovers From Earlier Losses, Led by Silver


USAGOLD/Peter A. Grant/03-01-17

Gold was under modest pressure to begin the U.S. session, weighed by a higher dollar and stock market. However, the pullback could not be sustained and the yellow metal quickly rebounded to trade higher on the day and more than $10 off the intraday low.

Stocks were encouraged by President Trump’s address to Congress yesterday; where he highlighted his plans to lower corporate taxes, deregulate and spend $1 trillion on infrastructure. While light on the details of how all this will be accomplished, stocks love that kind of talk.

The dollar took it’s cues from hawkish FedSpeak heard late on Tuesday, which upped the odds for a March rate hike and three hikes in total this year. San Fransisco Fed President Williams said he doesn’t “see any need to delay” raising rates further. Meanwhile, even NY Fed dove Dudley thinks the case for tighter policy “has become a lot more compelling” since the election of Donald Trump.Watch movie online The Transporter Refueled (2015)

The dollar index jumped to a seven week high as yields on U.S. Treasuries rebounded. However, the yellow metal continues to show good resilience in the face of this market action, likely on rising inflation expectations.

U.S. data were mixed again today: Personal income and manufacturing ISM came in better than expected. However, PCE and construction spending disappointed.

Silver is looking particularly good, keeping the pressure on 18.50. More than 50% of the entire decline from last summer’s high at 21.13 to the December low at 15.60 has already been retraced. With the 50-day moving average poised to cross above the 100-day and the 20-day MA attempting to cross the 200-day, we could see the dominant uptrend really validated.

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Paul Mladjenovic: Gold isn’t done climbing (and apparently neither is silver)


MarketWatch/Myra P. Saefong/02-09-17

Gold typically has an inverse relationship with the stock market but I believe this will change under Trump. I think that gold and quality stocks have a strong chance of both hitting new highs in due course.

Gold will go from being a “safe harbor” asset (financial/economic crisis) to an inflation hedge (too much spending/stimulus). As Trump spurs economic growth, this can ease some of the prior issues with potential crisis and replace the issue with expansive spending and trade competition, which can mean a weaker dollar and rising inflation. With rising inflation and economic growth, stocks and gold would have a bullish environment while it would become a bearish environment for the dollar.

…I believe that it will be a great year for precious metals. For reasons cited, I expect gold to go north of $1,300 later this year and I believe that silver should hit $25 before year-end. Because silver is experiencing another supply/demand deficit year, it has an outside chance of surpassing $40 in 2018.

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Silver Prices Surge as UK Prime Minister May Says Brexit Will Be Put to Parliamentary Vote


EconomicCalendar/Sam Bourgi/01-17-17

Market jitters sent precious metals soaring, with silver futures briefly touching their highest level since the Federal Reserve’s decision to raise interest rates on December 14.

The March contract for silver rose 23 cents, or 1.4%, to $17.00 a troy ounce at 7:49 am ET. It had reached an earlier high of $17.13 a troy ounce.

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Gold back above $1160, up more than $10 on the day

03-Jan (USAGOLD) — This morning’s sharp gains in oil have reversed course and crude is now sharpy lower on the day. Yields, stocks and the dollar have all backed off their earlier highs. Gold which held relatively steady in the face of those earlier gains is now on the rise, led by silver.

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Silver jumps following strong manufacturing data, now up more than 40¢ on the day (+2.6%).

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Gold set to snap three-year losing streak with 9% gain


Reuters, via CNBC/12-30-16

“Gold hit a two-week high on Friday on a weaker dollar and was set to close 2016 more than 9 percent higher, snapping three years of declines.

…Silver, up 0.2 percent at $16.18, was on track to end the year 17 percent higher.”

PG View: Late-year pullback not withstanding, it was still a pretty good year for the precious metals. Meanwhile, gains in the three major U.S. stock indexes will range “between 8% and 14%” according to CNNMoney.

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The Royal Flush


24hGold/Theodore Butler/12-15-16

“There is only one way to handle an event that is certain to occur, but at a time that can’t be pinpointed – by preparing for the certainty beforehand. JPMorgan’s downward manipulation of the silver price in order to accumulate the largest hoard of silver in history further assures the outcome. The whole manipulation is somewhat complex (until fully vetted), but the preparation for it is as simple as it gets – buy and hold silver, about as hard as falling off a log.”

PG View: JPMorgan holds more than half a billion ounces of physical silver and is still in accumulation mode. When they feel they have enough and lift their short positions in the futures market the price of silver will likely soar dramatically. It might be worth being along for that ride.

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