Gold drifts higher as dollar eases over Catalan relief

Reuters/Eric Onstad/10-11-17

Gold edged higher on Wednesday after Catalonia’s leader baulked at making a formal declaration of independence from Spain, sending the euro higher and the dollar down.

The dollar index fell to the lowest in over a week, making dollar-priced gold cheaper for buyers using other currencies.

“These concerns about the ramifications of the Catalan independence referendum are fading, giving some support to the euro and weakening the dollar,” said Jens Pedersen, senior analyst at Danske Bank in Copenhagen.

Posted in Gold News, Gold Price, Gold Views |

Morning Snapshot: Gold consolidates below $1300

USAGOLD/Peter Grant/10-11-17

Gold is consolidating below the $1300 level as traders await the minutes of the September FOMC meeting. Geopolitical tensions and a softer dollar are seen as being supportive to the yellow metal.

The Fed paused the recent tightening cycle in September amid persistently sluggish inflation. The minutes will perhaps provide some additional clarity as to just how concerned the members are and if current market expectations for a December hike are realistic.

Recent gains in the dollar index stalled well shy of the 100- and 200-day moving averages. The trend is still down and negation of this 92.90/88 support level would return considerable confidence to that trend, which should push gold higher.

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

U.S. MBA mortgage market index -2.1% in the week ended 06-Oct; purchases -0.1%, refis -4.2%.

Posted in Economic Data |

Gold steady at 1290.09 (+0.16). Silver 17.15 (-0.014). Dollar lower. Euro higher. Stocks called easier. U.S. 10-year 2.34% (-2 bps).

Posted in Gold Price, Markets |

The Market’s Got It Wrong

Daily Reckoning/Jim Rickards/10-09-17

Janet Yellen’s mantra is, “It’s transitory!”

That’s Yellen’s typical response to a long litany of data that shows the U.S. is in the grip of a powerful disinflationary trend that may lead to outright deflation — a central banker’s worst nightmare.

The Fed has a publicly announced 2% inflation goal, which they consider to be price stability. In fact, 2% inflation cuts the purchasing power of the dollar by 75% in the course of an average lifetime. The Fed would tell you to ignore that.

…The Fed has created $3.5 trillion of new money since 2008, yet there has been no appreciable amount of inflation for nine years.

PG View: Rickards believes that rate hike expectations will deteriorate in the months ahead and that Yellen will be reluctant to do another rate hike as her last act as Fed chair.

As market probabilities catch up with reality, the dollar will sink, the euro and gold will rally, and interest rates will resume their long downward slide. — Jim Rickards
Posted in Central Banks, Economy, Fed, Monetary Policy |

Opinion: It would take a 50% hike in income tax to fund our deficit

MarketWatch/John Mauldin/10-10-17

The projected total U.S. debt will be $30 trillion within 10 years, using the Congressional Budget Office’s own numbers. But the CBO also makes the rosy assumptions that there will be no recessions and that gross domestic product will grow at a 4% nominal rate.

Now, that’s possible; I’m inclined to haircut it a bit.

If you asked me to bet the “over/under” on the debt in 2027, I would bet the over at $35 trillion.

PG View: Mauldin concludes that Social Security becomes “impossible” under such a debt load. My big concern would be the dollar. The only way to service a national debt of this scale would be to severely devalue the dollar and the way to protect against that is to buy gold.

Posted in Debt |

Catalan leader proclaims independence, delays effects pending talks


Catalan leader Carles Puigdemont on Tuesday proclaimed the region’s independence from Spain but said the effects would be postponed to allow for talks.

“I assume the mandate that Catalonia should become an independent state in the form of a republic … I propose suspending the effects of the declaration of independence to undertake talks to reach an agreed solution,” Puigdemont told the regional parliament.

Posted in Europe, Geopolitical Risks |

Catalan Leader “Assumes Mandate” To Declare Independent Republic But Suspends It “For Dialogue”

The Spain Report/10-10-17

Posted in Europe |

The Daily Market Report: Gold Jumps as Risk Appetite is Tempered

USAGOLD/Peter Grant/10-10-17

Gold jumped back above $1290 in earlier trading, driven by strong physical demand from India and China. Risks appetite has been tempered this week by heightened geopolitical tensions and a loss of monetum for President Trump’s tax plan.

Catalan President Puigdemont was supposed to speak before the parliament about an hour ago, but that has not happened yet due to a reported disagreement about the text of the declaration. Speculation is that he will declare independence from Spain, or at least lay-out a path to independence. Spain is adamantly opposed to such a move and is prepared to arrest Puigdemont.

Despite the rising level of uncertainty — and the persistent unevenness in U.S. economic data — markets continue to believe the Fed will raise rates in December. It seems to be in the best interest of the Fed to stoke those beliefs in order to keep asset bubbles at least somewhat in check.

If markets get the sense that the economy is slowing and the Fed is going to remain on hold through year-end, the bubbles could continue to inflate leading to an untenable situation. The current situation where any news — good or bad — is good news for stocks, can’t go on indefinitely.

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

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

…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.”

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

Morning Snapshot: Gold more than $30 off Friday’s low

USAGOLD/Peter Grant/10-10-17

Gold extended to the upside in overseas trading amid rising geopolitical risks and mounting concerns that the President is going to have difficulties passing tax reform. The yellow metal is up more than $30 since hitting an 8-week low at 1260.10 on Friday.

Catalonian President Puigdemont is slated to address parliament today and is expected to declare independence from Spain, or at least a movement toward independence. Spanish PM Rajoy has vowed that “Spain will not be divided” and that he is prepared to employ “all means” within the law to preserve national unity.

Bloomberg has reported that Spanish National Police are in place and prepared to arrest Puigdemont. If the Catalan police attempt to shield Puigdemont, there is the risk of violence. However, it is the longer-term and broader implications for Spain and Europe that are of concern to markets.

The Hill reports this morning that based on recent rhetoric, Kim Jong Un may believe that a U.S. decapitating strike is imminent. That may prompt the North Korean leader to launch a preemptive strike.

There is growing concern that President Trump’s tax reform plan is losing momentum. This had been a big driving force in the stock market rally as investors salivated over the proposed corporate tax cut. This is a must-win issue for the President, given the failure of repeal-and-replace and the lack of progress on immigration reform and the the wall.

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

Catalonia’s future on the line as Puigdemont prepares to address parliament

CNN/Euan McKirdy, Hilary Clarke & Angela Dewan/10-10-17

Catalonia’s leader is due to address a specially convened session of the region’s parliament Tuesday, as he comes under growing pressure to stop short of declaring independence from Spain.

…Spanish Prime Minister Mariano Rajoy said he was determined to prevent a breakaway by the northeastern province in the wake of the October 1 vote.

“Spain will not be divided, and the national unity will be preserved. To this end we will employ all the means we have within the law. It is up to the government to make decisions, and to do so at the right moment,” Rajoy said in an interview with German newspaper Die Welt on Monday.

PG View: Bloomberg is reporting that Spanish authorities are reportedly ready to arrest Catalan President Carles Puigdemont

Posted in Europe, Geopolitical Risks, Politics |

U.S. NFIB small business optimism -2.2% to 103.0 in Sep (10-month low), vs 105.3 in Aug.

Posted in Economic Data |

Gold higher at 1290.36 (+7.01). Silver 17.20 (+0.227). Dollar lower. Euro higher. Stocks called higher. U.S. 10-year 2.36% (unch).

Posted in Gold Price, Markets |

Gold continues uptrend begun on Friday, silver shines

Gold continued an uptrend that began on Friday registering a nearly $8 gain today at $1283.83, but that only tells part of the story.  Since the yellow metal hit bottom early Friday at $1260, it is up almost $24 (+2%).  Silver recorded an even stronger gain from its early Friday bottom – up 67¢ at $16.93 (+4%).  It was up 14¢ today.  Both metals are trading higher in the overnight market.

We will stick with our long-stated view that most of the downside in both metals over the past nearly 30 days has been the result of technical trading.  Likewise, the past two days’ upside appears technical as well with support coming-in near the 200-day moving average at $1254.  In the meanwhile, opportunistic physical investors continue to load up.

Quote of the Day
“The really exciting thing is gold’s October seasonal bottom is the last one before this metal’s strongest seasonal rally of the year. On average gold’s winter rally propels it 9.5% higher in bull-market years by late February. That 9.5% winter rally well outguns the 6.9% average autumn rally that recently ended, and dwarfs the 3.8% average spring rally. We are right at gold’s most-bullish time of the year seasonally! Gold has real potential to enjoy a monster winter rally this year, especially if these insane stock markets start to roll over under the Fed’s just-unleashed quantitative-tightening juggernaut.” – Adam Hamilton, Zeal LLC

If you are new to the USAGOLD website, we invite you to kick back and stay awhile. Do a little interest-driven browsing. We launched this website in 1997 and it has dutifully been providing guidance and market information to investors ever since.
One of the most highly referenced and visited web portals in the gold business, this website goes deep. People are often surprised just how deep it goes. As a launchpad, we offer a quick website tour that hits the high points and suggests links, but it’s the depth, practicality and ease of use that will keep you coming back.
WELCOME!  And please keep us in mind for your next precious metals purchase.

Posted in all posts |

10 Factors to Propel Gold 10 Fold

GoldSwitzerland/Egon von Greyerz/10-06-17

Inflation is coming and it will have a major effect on the world economy and financial markets. This is one of the factors that will drive gold to levels which few can imagine today.

…Interest rates are critical to a world with $250 trillion debt plus derivatives of $1.5 quadrillion and global unfunded liabilities of 3/4 quadrillion. Minor increases in rates will have a catastrophic effect on global debt. Derivatives are also extremely interest rate sensitive. Also, derivatives represent an unfathomable amount that will blow up the global financial system when counterparty fails.

…We might see temporary dollar strength for a while after the strong fall this year. But the downtrend is very clear and the dollar will at some point within the next few months accelerate down very strongly. The Petrodollar is soon dead and so is the US dollar. The consequences will be disastrous for the US economy and will also lead to a rapid acceleration of US and global inflation.

…gold and silver resumed the long-term uptrend in January 2016. There are a number of factors that will fuel gold’s rise to levels that very few can imagine today.

PG View: One of the factors von Greyerz cites is that “The paper gold market will collapse leading to gold going “no offer” which means gold can’t be bought at any price.” Those investors seeking a true hedge should avoid ETFs, futures and options. Take delivery of the real thing.

Posted in Gold News, Gold Views |

The Daily Market Report: Gold Rebounds With Some Fed Officials Concerned About Jobs

USAGOLD/Peter Grant/10-09-17

Gold firmed in overseas trading as Chinese markets reopened after the long Golden Week holiday. Additionally, the North Korean situation seemed to be escalating yet again, providing a bit of a safe-haven bid.

U.S. markets are on a partial holiday, with the Treasury market closed today, but focus remains on the mixed data in recent jobs report. On Friday, the Labor Department reported that nonfarm payrolls dropped 33k in September. It was the first negative print in 7-years, but markets were quick to dismiss it as hurricane distortion and latch on to the uptick in wages and the drop in the unemployment rate.

Nonetheless, St. Louis Fed President Bullard called the negative number “startling.” As noted in my Friday commentary, the NFP data rolled over long before Friday’s negative print and the current hurricane season.

I’m sure the official Fed line will categorize weakness in payrolls as “transitory,” just as they have for inflation. Bullard thinks we need to see more data before committing to another rate hike and I suspect Minneapolis Fed President Kashkari will likely echo that sentiment when he speaks at a regional economic conference tomorrow.

Surprisingly, Fed funds futures as of Friday’s close continue to see a rate hike in December as all-but a sure thing. We’ll see if those expectations have tempered somewhat when that market reopens tomorrow.

For now, gold remains consolidative to corrective. The fact that losses seem to have stalled ahead of the 200-day moving average is encouraging, as is today’s move back above the 100-day MA. A rebound above $1300.00/1308.80 will further ease pressure on the downside and return a measure of confidence to this year’s uptrend.

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

Catalonia faces uncertainty as leader weighs independence declaration

CNN/Hilary Clarke & Angela Dewan/10-09-17

Spain faces a week of deep political uncertainty as the secessionist leader of Catalonia considered whether to make a unilateral declaration of independence, against the backdrop of a bitter standoff with the central government in Madrid.

Catalan President Carles Puigdemont had been expected to make a formal declaration at a specially convened session of the Catalan parliament on Tuesday.

Posted in Europe, Geopolitical Risks |

Unwinding QE could trigger financial crisis, warns JP Morgan

Telegraph/Lucy Burton/10-04-17

JP Morgan has warned that another financial crash could be round the corner as the decade of ultra-loose money comes to an end.

Central banks have purchased roughly $15 trillion (£11.3 trillion) of financial assets since the crisis, but the Wall Street bank’s head of quantitative and derivatives strategy Marko Kolanovic said this will start to unwind next year in a move that could “potentially cause a financial crisis”.

Dubbing the hypothetical crash the “great liquidity crisis”, he said that outflows – or lack of new inflows – from undoing stimulus could lead to “asset declines and liquidity disruptions” that in turn trigger a crash.

Posted in Central Banks, Markets, Monetary Policy |

Gold recoups previous week’s losses as dollar steadies

Reuters, via CNBC/10-09-17

Gold rose on Monday, erasing all of the previous week’s losses, as a steadier dollar and the resilience of a key chart level removed some downward pressure, while the return of Chinese buyers to the market also lent support.

Prices fell for a fourth week to hit a two-month low on Friday, after an upbeat reading of U.S. wage growth and unemployment supported expectations for a U.S. interest rate hike in December, pushing the dollar and Treasury yields higher.

Gold’s resilience above its 200-day moving average at $1,253 an ounce provided some reassurance to buyers, however, helping it rebound.

…”For the time being, gold may have bottomed out,” ABN Amro analyst Georgette Boele said.

Posted in Gold News, Gold Price, Gold Views |

‘Policy didn’t work!’: Trump tweets of North Korea after hinting at war

BusinessInsider/Alex Lockie/10-09-17

President Donald Trump on Monday morning tweeted another hint that he was nearing the end of his patience with North Korea.

“Our country has been unsuccessfully dealing with North Korea for 25 years, giving billions of dollars & getting nothing. Policy didn’t work!” Trump tweeted.

Trump’s tweet echoes a sentiment he expressed over the weekend that “only one thing will work” to solve the North Korea crisis.

…Mick Mulvaney, the White House budget director, later confirmed the meaning in an interview on NBC: Trump was “clearly telegraphing” military action against North Korea.

Posted in Geopolitical Risks, North Korea |

Morning Snapshot: Gold firms on geopolitical risks, “startling” drop in U.S. payrolls

USAGOLD/Peter Grant/10-09-17

Gold starts the week at a 5-session high after finding support on Friday at the 1260.00 level in the wake of September’s negative nonfarm payrolls print. Heightened geopolitical tensions are also providing support to the yellow metal.

St. Louis Fed President James Bullard called the negative NFP number “startling” and said more data were needed before committing to a December rate hike. Nonetheless, Fed funds futures continue to suggest the probability of a rate hike is all-but a sure thing.

There will be quite a bit of FedSpeak again this week. We’ll see if anyone else is troubled by the deterioration in the labor market. As noted in commentary on Friday, the trend in payrolls rolled over long before this hurricane season.

Geopolitical tensions are on the rise again amid expectations of an impending North Korean missile tests. The UK is reportedly developing a war plan as such a test may result in a U.S. military response.

The Treasury market and the Fed are closed today for Columbus Day. However, Chinese investors are back in the mix after the long Golden Week/National Day holidays.

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

Gold higher at 1283.34 (+6.52). Silver 16.95 (+0.143). Dollar lower. Euro higher. Stocks called higher. Treasuries closed.

Posted in Gold Price, Markets |

Gold Week in Review (Video), October 06, 2017

Related links:

CME FedWatch Tool

Germany’s golden decade

Gold Market Is In ‘Very Good Shape’ – Rick Rule

Posted in Gold News, Gold Price, Gold Views, USAGOLD TV |

ECB asks banks to set aside more cash for bad debt amid €1tn problem

The Guardian//10-04-17

The European Central Bank is attempting to put a lid on the near €1tn (£886bn) of bad debts stored in eurozone banks by asking lenders to be more prudent about the way they handle new customers falling behind on repayments.

…The ECB wants lenders to set aside 100% of the value of an unsecured loan within two years and gives lenders seven years to put aside the full amount of a secured loan, such as a mortgage.

Posted in Debt |

Questions arise on China’s plans as N. Korea war talk rises

ABCNews/Christopher Bodeen/10-06-17

Securing North Korea’s missile launchers and nuclear, chemical and biological weapons sites would likely be a chief priority for China in the event of a major crisis involving its communist neighbor, analysts say, although Beijing so far is keeping mum on any plans.

Despite China’s official silence, its People’s Liberation Army likely has a “vast array” of contingency plans involving military options, said Dean Cheng, an Asia security expert at the Heritage Foundation think tank in Washington…

…What’s less clear is whether and under what conditions China would commit troops as an occupying force should North Korean leader Kim Jong Un’s regime fall apart, Cheng said.

Posted in Geopolitical Risks, North Korea |

The Daily Market Report: Gold Rebounds From 8-Week Low

USAGOLD/Peter Grant/10-06-17

Gold has rebounded after falling to an 8-week low in the wake of this morning’s jobs report. The yellow metal is now higher on the day and more than $10 off the intraday low.

Nonfarm payrolls for September saw the first loss of jobs in 7-years. The NFP print was -33k, well below expectations of +87k, versus a positive revised +169k in August (was +156k). That low expectation was already deemed to have taken into consideration hurricane distortion, so today’s miss was pretty significant.

Nonetheless, the market was quick to dismiss the bad number as hurricane “noise” and latch on to the better than expected 0.5% rise in average hourly earnings. However, there is perhaps some reason to be suspicious.

Additionally, the trend in payrolls had rolled-over long before today’s negative print and long before this hurricane season.

Today’s intraday rebound in gold — and retreat in the dollar — may just be profit-taking ahead of the weekend, but it could also indicate that investors are taking a more discerning look at today’s data and eschewing that initial spin.

Speculation this morning that North Korea may stage another missile test as soon as next week has heightened risk aversion. A Russian diplomat recently returned from the DPRK told reporters that the mood in North Korea was “rather belligerent” and that they may have a missile capable of reaching the west coast of America.

With the additional risk that Catalonia may declare independence from Spain on Monday, risk appetite seems to be evaporating. How Spain might react to that declaration of independence and the broader implications for the EU present considerable uncertainties. I don’t believe Spain can allow this to happen, so I envision the police or military moving to block access to the Catalonian parliament or even detaining key politicians.

At this point, the Fed funds futures market sees a December rate hike as all-but a sure thing. However, December is still a long way off and those expectations can only be trimmed from here.

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

Gold stages turnaround on North Korea report

Russian new agency reports that North Korea is planning to test a missile capable of reaching west coast of United States. Unconfirmed.

Posted in all posts |

Gold has recouped post-NFP losses and is now trading higher on the day (more than $10 off intraday low).

So, is this short covering ahead of the weekend or have investors taken a more discerning look at today’s data?

Posted in Gold News, Gold Price, Gold Views |

Dollar hits 10-week highs, U.S. yields jump on strong wages data

Reuters/Jemima Kelly/10-06-17

The dollar rose to its strongest in 10 weeks on Friday and short-dated U.S. Treasury yields climbed to a nine-year high, after data showing the largest gain in U.S. wages since December 2016 bolstered bets on an interest rate hike by year-end.

…Though the headline payrolls figure showed a fall in U.S. employment in September for the first time in seven years, investors reckoned this was a temporary effect from Hurricanes Harvey and Irma, which left displaced workers temporarily unemployed and delayed hiring.

PG View: Hmmm, best wage data in 10-months, but the worst payrolls print in 7-years . . .

Posted in U.S. Dollar |