gold prices

China Gold Demand To Increase In 2014?

“Gold futures on Friday held below $1,300 an ounce as recent data showing a pickup in the U.S. economy helped draw some investors away from the metal and to the stock market, feeding a loss of roughly 3% in gold prices for the week…”

-MarketWatch.com, March 28

No doubt China exerts significant influence on the gold market.

In fact, on March 4, I blogged about HSBC Global Research’s claim of China’s buying of gold jewelry and bullion now being the biggest driver of prices, rather than investment demand from the West.

I also noted the World Gold Council expects China not only to remain the world’s largest consumer of physical gold (roughly 25% of global gold demand), but to increase its acquisition of the precious metal as well.

The WGC isn’t alone in thinking that.

Nat Rudarakanchana reported on the International Business Times website this morning:

Demand for gold in China, which broke consumer records in 2013, could reach new heights in 2014, according to some analysts…

New York’s CPM Group projects that net Chinese gold demand, which sums investment and consumer demand, will rise to over 44 million ounces in 2014, up from 41 million ounces last year…

“But the rate of growth is sharply lower,” in 2014 compared to last year, cautioned CPM Group commodities analyst Jeffrey Christian…

Since 2006, Chinese gold demand has risen at an annualized rate of 20 percent, according to Dundee Capital Markets economist Chantelle Schieven.

Lower average gold prices in Chinese yuan in 2014 could drive more purchases this year, as Chinese incomes rise, she said at a recent New York gold seminar. Schieven also expects Chinese demand to increase in 2014…

(Editor’s note: Bold added or emphasis)

Gold finished today higher after touching six-week lows under $1,300 an ounce.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

Source:

Rudarakanchana, Nat. “Chinese Gold Demand Could Rise In 2014, In Surprise Call, Though India’s Demand May Have Peaked Years Ago.” International Business Times. 28 Mar. 2014. (http://www.ibtimes.com/chinese-gold-demand-could-rise-2014-surprise-call-though-indias-demand-may-have-peaked-years-ago). 28 Mar. 2014.

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Peter Schiff: Gold Fundamentals ‘Great Right Now’ As U.S. Recovery A ‘Myth’

Euro Pacific Capital’s Peter Schiff appeared on the CNBC show Futures Now on March 20. The financial commentator and author talked about a number of issues, including the Federal Reserve, gold, and inflation. On gold, Schiff told viewers:

The fundamentals have favored higher gold prices all along. The fundamentals for gold were great at the beginning of 2013. They were great at the end. They’re great right now. It’s just that most people don’t understand how great they are. They believe the myth of the U.S. recovery. They believe that the Fed can actually unwind its balance sheet, that it can end QE, that it can raise interest rates, and that the economy is going to keep on expanding. None of that is going to happen. It’s all fantasy.

We’re going to have QE Infinity. There is massive inflation. And it’s going to manifest itself in substantially higher gold prices.

The ensuing short debate between Schiff and economist/investor/hedge-fund manager Mark Dow about inflation was also interesting to watch. Perhaps those two can set up something “official” down the road.


“Mark Dow vs. Peter Schiff on Gold, Inflation, Fed”
YouTube Video

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

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HSBC: China, Not Investment Demand From West, Now Steering Gold Prices

Sounds like China may be firmly in the driver’s seat these days when it comes to steering gold prices. Yue Li reported in The Wall Street Journal’s MoneyBeat blog this morning:

China’s buying of gold jewelry, coins and bars is now the biggest driver of prices, not investment demand from the West, according to HSBC Global Research.

“We would argue that physical demand trends in the emerging world will largely define gold’s price movements this year,” HSBC analysts James Steel and Howard Wen said in a research note.

China alone can take up the equivalent of half of the global gold mine output, while a possible recovery in Indian demand could also act as a boost for the yellow metal as long as the Indian authorities reduce import tariffs on gold.

Investment demand, typically coming from gold exchange-traded funds, had long been considered the sole reason behind the gold’s decade-long bull run…

(Editor’s note: Italics added for emphasis)

Long-time observers of gold have recognized China’s growing influence in this market.

A question that’s probably on their minds is, will Chinese demand continue to steer prices?

Consider what Jennifer Schonberger wrote on the FOX Business website back on February 21:

China overtook India last year as the world’s largest buyer of physical gold, according to the World Gold Council. In 2013, Chinese demand for gold bars, coins and jewelry soared 32% to a record high, as China imported 1,066 metric tonnes of the precious metal, or more than one third of the 2,968 metric tonnes of gold produced globally.

And last year’s record wasn’t a one-hit wonder. This year, the World Gold Council expects China to remain the world’s largest consumer of physical gold. While down slightly from last year’s record level, the research body projects China will still gobble up a robust 1,000 tonnes to 1,100 tonnes of gold in 2014. China accounts for roughly 25% of global demand for gold and is likely to boost its share in coming years. The stock of gold in China is less than half of India and consumption per head in China is still catching up to other markets.

The Chinese gold rush comes after China’s government lifted restrictions on gold ownership. Until 2002, Beijing barred citizens from owning gold bars and coins. Culturally there’s been an appreciation for gold for a long time in China, but citizens weren’t able to access it to the extent they have over the past 12 years. Now that China has lifted restrictions, the government has unleashed pent-up demand…

I blogged last April what the demand for the precious metal has looked like in China at times.

In the meantime, the financial mainstream media here in the West keeps running pieces about gold’s imminent demise. And no doubt plenty of Americans will keep believing it.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Sources:

Li, Yue. “China Now Biggest Driver of Gold Prices, HSBC Says.” MoneyBeat. 4 Mar. 2014. (http://blogs.wsj.com/moneybeat/2014/03/04/china-now-biggest-driver-of-gold-prices-hsbc-says/). 4 Mar. 2014.

Schonberger, Jennifer. “Going for the Gold: Chinese Demand Could Be Gold’s Long-Term Bid.” FOX Business. 21 Feb. 2014. (http://www.foxbusiness.com/investing/2014/02/21/going-for-gold-chinese-demand-could-be-golds-long-term-bid/). 4 Mar. 2014.

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Goldman Sachs Misses Big On 4 Of Last 5 Year-End Gold Price Predictions

Speaking of Goldman Sachs this evening, yesterday I caught their year-end price forecast for an ounce of gold. Jeff Morganteen wrote on the CNBC website Monday afternoon:

Bad news for “gold-bugs”- bullion’s current beginning-of-the-year rally will not only lose steam, but prices could drop sharply by the end of 2014, according to Goldman Sachs’ Jeffrey Currie.

Currie, Goldman’s head of commodities research, told CNBC on Monday he had an end-of-year price target of $1,050 per ounce for gold, a 16 percent drop based from current prices of $1,251. The main culprit? Economic recovery…

I used to blog about these “end-of-year price targets” for gold from the major financial institutions starting back in early 2007, when I ran Boom2Bust.com, “The Most Hated Blog On Wall Street.”

Not so much anymore.

Why’s that? I’m not sure. Perhaps it was because I felt the many forecasts I blogged about over time weren’t turning out to be too accurate.

After reading that Goldman Sachs year-end gold price prediction, I decided to dig up this particular financial institution’s forecasts- made almost a year in advance- for the last five years. What I found pretty much confirmed my suspicions:

2009 Goldman Sachs year-end gold price forecast? $795
New York spot gold price on December 31, 2009? $1,096.20
Goldman Sachs off (under) by $301.20

2010 Goldman Sachs year-end gold price forecast? $1,350
New York spot gold price on December 31, 2010? $1,421.60
Goldman Sachs off (under) by $71.60

2011 Goldman Sachs year-end gold price forecast? $1,690
New York spot gold price on December 30, 2011? $1,566.40
Goldman Sachs off (over) by $123.60

2012 Goldman Sachs year-end gold price forecast? $1,940
New York spot gold price on December 31, 2012? $1,675.20
Goldman Sachs off (over) by $264.80

2013 Goldman Sachs year-end gold price forecast? $1,800
New York spot gold price on December 31, 2013? $1,205.50
Goldman Sachs off (over) by $594.50

Except for its 2010 end-of-the-year gold price prediction, Goldman Sachs was off by more than $100 in its forecasts for the other four years.

Most striking was the 2013 prediction, where the New York City-based multinational investment banking firm was off by almost $600.

I’m not trying to give Goldman Sachs a hard time over these forecasts. If anything, I want to use this example to share with you a lesson I learned a long time ago observing gold, which is how incredibly difficult it is to successfully predict the price of an ounce of gold a long way out.

And to do it on a regular basis? Does such talent even exist?

I would think if it did, Goldman Sachs would employ it.

Down the road, I’ll look at other year-end gold price forecasts from other major financial institutions and do the 5-year comparison with them. Who knows? One of them might turn out to be relatively accurate with their predictions, and able to do it consistently.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Source:

Morganteen, Jeff. “Gold to tank in 2014: Goldman Sachs.” CNBC.com. 13 Jan. 2014. (http://www.cnbc.com/id/101331595). 14 Jan. 2014.

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Tuesday, January 14th, 2014 Commodities, Precious Metals, Recovery No Comments

Peter Schiff: ‘The Fundamentals For Gold Have Never Been Better Than They Are Now’

Euro Pacific Capital CEO and Chief Global Strategist Peter Schiff appeared on FOX Business Network’s Markets Now show on January 3. Schiff, who correctly-called the recent U.S. housing bust and global economic crisis, shared the following about gold with viewers:

Well, I’ve been buying gold now for 14 or 15 years. And out of the last 13 years, it’s been down once, which was in 2013. Did I anticipate a 28 percent decline in 2013? No. But the fact that it happened doesn’t change anything. What’s amazing is that you have this big down year, and yet hardly anybody views it as a buying opportunity. They think 2014 is going to be just as bad. Because the fundamentals for gold have never been better than they are now. The fact that so many people can’t see that, just makes me even more bullish.

Rogers reportedly “ultra bullish” on gold long-term. Schiff “even more bullish” on the precious metal than he was before.

When asked if gold’s price could rise in 2014 and by how much, Schiff, who’s also the CEO of Euro Pacific Precious Metals, said:

We had a pretty big down year in 2013. So I would expect a pretty good year upwards in 2014. Is it possible that we could have two down years in a row for gold? It’s possible. You know, but I don’t think it’s probable.


“A Fed Induced Phony Recovery is Bullish For Gold”
YouTube Video

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

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Jim Rogers ‘Ultra Bullish’ On Gold Long-Term

While a good amount of “dislike” has been directed at gold lately, it really ramped up to a new level starting December 30. Later that afternoon I noticed the headlines on the financial mainstream media websites emphasizing (extra big and bold in a number of cases) the price of gold getting pummeled in 2013. For example, there was this on the Financial Times (UK) website Friday:

8:58am On Wall Street from MARKETS
Gold bulls lose faith in bullion’s allure
Last year’s losses battered the metal’s reputation as a store of value
• Gold funds lose lustre
• Gold miners braced for reserve cuts
• Little glitter for gold in 2014
• Gold set for biggest drop in 30 years

All that in one section of the site. The above is pretty typical of what I’ve been seeing the last couple of days across the Internet.

And reading all the negative press, I have to wonder if now might not be a good time to acquire gold. Especially as “crash prophets” Marc Faber, Jim Rogers, and Peter Schiff are bullish on the yellow metal in the long run.

According to a recent report in a prominent international, web-based publication focusing on all aspects of the mining sector, Rogers, a well-known investor, author, and financial commentator, is actually “ultra bullish” on gold in the long term. Alex Williams wrote on Mineweb.com on New Year’s Eve:

Rogers prefers gold over gold mining shares and divisible coins over bullion, but says “there’s nothing in precious metals that I’m tempted to buy at the moment.” Indian import tariffs he views as the single biggest drag on the gold market currently…

For early 2014, Rogers is therefore long inflatable equities and neutral on gold, but longer term, he expects to short junk and government bonds and is ultra bullish on gold. “Gold will become one of the only refuges around,” he says. “That’s not this quarter.”

(Editor’s note: Italics added for emphasis)

It’s no secret that the Singapore-based investor sees gold doing well over the long haul. Back on August 5, I noted that Rogers had recently appeared on GoldSeek.com Radio’s The Gold and Silver Review show. Speaking to Chris Waltzek on the August 2 show, Rogers predicted the following for gold:

Eventually, we will make a new low, whether it’s this year, next year, or the year after. And then, of course, the bull market will resume. And we’re off to the races and wonderful new highs will be made. But it may be a few years from now.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

Source:

Williams, Alex. “Bernanke has set the stage for the Fed’s collapse- Jim Rogers.” Mineweb.com. 31 Dec. 2013. (www.mineweb.com/mineweb/content/en/mineweb-political-economy?oid=222934&sn=Detail). 3 Jan. 2014.

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Peter Schiff Bashes QE, Taper Lite, Gold Bears

“Gold Set for Worst Annual Tumble Since ‘81”

-FOX Business website headline, December 23, 2013

“Gold’s safe-haven role is over: strategist”

-MarketWatch.com headline, December 23, 2013

“I wouldn’t buy gold with my worst enemy’s cash: Strategist”

-CNBC.com headline, December 22, 2013

Not only have I been waiting to hear Euro Pacific Capital CEO Peter Schiff’s take on last week’s “taper” of the Federal Reserve’s quantitative easing program, but also his opinion on the latest bout of gold selling.

Schiff, who correctly called the recent housing crash and 2008 global economic crisis, just uploaded a new entry to The Schiff Report, his YouTube video blog. Schiff told viewers on December 20:

We have never had more stimulus- both monetary and fiscal- than we have right now. This is record-breaking, Keynesian stimulus. And it’s barely working. Yes, it’s inflating a stock market bubble. It’s inflating a real estate bubble. But it’s not creating genuine economic growth. And it never will. It is not raising living standards for the vast majority of Americans. And it isn’t creating productive, high-paying jobs. And it never will. And Ben Bernanke doesn’t understand that.

Like fellow “crash prophet” Marc Faber, Schiff believes the Federal Reserve will eventually pursue more, not less, bond-buying in the future. He explained:

Why did gold sell off? “Because everything is great.” “Because the Fed has done the impossible.” “It’s tapered and it hasn’t hurt anything.” This is what everybody believes. That the Fed has accomplished its goal. It hasn’t done anything. It’s talked about doing a tiny bit. But again, as far as I’m concerned, monetary policy is even easier now than it was before they announced this trivial taper lite. And the rest of the taper is probably never going to happen because the Fed is going to have to buy more bonds, not fewer bonds, to keep this whole house of cards from imploding.

Now, is gold going to continue to fall? I don’t know. My gut is that it’s probably still finding a bottom around 1,200. There is plenty of legitimate support for gold all around the world. Yes, all the speculators who are convinced that everything is great. The same people that thought it was great in 2007. Or it was great in 1999. That crowd, completely clueless about actual economics, is convinced that there is no reason to own gold. And so, they’re going to sell it, they’re going to short it. But there is a larger community around the world, particularly I think a lot of the emerging markets, central banks, China in particular, that see it differently. And they’re using this opportunity to buy as much gold as they can so that when the speculators and the investors figure out how wrong they’ve got it, and they realize that they need to be buying gold not selling it, there won’t be any gold left to buy because they would have already sold it. And the people who bought it from them aren’t going to sell it back. The gold that China bought- they’re never going to sell it. I don’t care how high the price of gold goes. They want that gold as reserves for their currency because they know the dollars that they have in reserve are eventually going to be Monopoly money. It’s going to be confetti. So they need something real to back up their own currency, and they want gold.

And so, I think that we need to be taking advantage of this opportunity. And don’t be worried about all the negativity that’s out there and all the professionals who are writing gold’s obituary. They’ve written it before, they’ll write it again. But I still think that the bull market has a long way to go. Ultimately, we are still heading for a currency crisis.


“Taper Lite: Bernanke Tightens Monetary Policy by Easing it!”
YouTube Video

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

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Signs Of The Time, Part 72

If there’s one thing the growing masses donning rose-colored glasses despise, it’s gold.

Gold stocks included.

Myra Saefong reported over at the MarketWatch website this morning:

Many major gold companies have lost at least half their value this year after a more than 25% plunge in gold prices, but analysts aren’t convinced that miners have hit bottom — and tax-loss selling may further the declines.

The Philadelphia Gold and Silver index XAU lost 51% as of Thursday year to date and the NYSE Arca Gold Bugs index XX:HUI declined 57%. Shares of Barrick Gold Corp. ABX, the world’s largest gold-mining company, has dropped by 56% this year.

Among exchanged-traded funds, the Market Vectors Gold Miners GDX, which provides exposure to publicly-traded companies involved primarily in gold mining, sank this week to its lowest level in about five years. It’s down 55% this year.

The losses for the gold miners aren’t much of a surprise given the hefty declines in gold prices, which are poised to log their first loss in 13 years. But shares of the gold miners have suffered a drop that’s roughly double the year’s price loss for the metal.

(Editor’s note: Italics added for emphasis)

For many of those who recognize the true economic health of the nation and larger financial system and consider the so-called “sheep” as reverse indicators, the precious metal probably looks mighty attractive right now.

Downright gorgeous for plenty of veteran gold mining stock investors, I’d have to guess.

After all, it can be argued gold’s fundamentals really haven’t changed much since recent times when the gold price was up significantly higher.

Which brings to mind the following. Almost exactly a year ago, The Wall Street Journal published a surprisingly bullish article about gold stocks. Brett Arends wrote back on December 7, 2012:

In Gold Investing, Forget the Metal and Focus on Stocks

Want to buy some cheap gold? Consider gold-mining stocks.

Shares of the leading precious-metals companies have lagged behind the price of physical gold bullion so steeply in recent years that they now trade for significantly less than the value of the companies’ gold reserves, say analysts. In fact, the gap is among the widest ever seen, analysts say…

I wonder what the folks over at the Journal think about “paper gold” today?

Sequel, Mr. Arends?

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

Source:

Saefong, Myra P. “Gold miners drop over 50% with no bottom in sight.” MarketWatch. 6 Dec. 2013. (http://www.marketwatch.com/story/gold-miners-drop-over-50-with-no-bottom-in-sight-2013-12-06). 6 Dec. 2013.

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Peter Schiff: ‘The U.S. Is Entering Another Recession,’ ‘Big Wake-Up’ For Gold Price Coming

Speaking of gold tonight, Peter Schiff of Euro Pacific Capital was patched into the CNBC Futures Now TV show this past Tuesday, where he issued a recession warning and gold price forecast to viewers. Schiff addressed the price of gold first, and said:

I think it’s going a lot higher. I mean, certainly five or ten years from now it will be much higher than it’s going to be a year from now. But does that mean that gold can’t be lower? No. I mean, obviously, anything can happen in the short run. I think gold should be a lot higher than it is right now. But a lot of people don’t agree with me, and that’s why it’s lower. You have a lot of people selling gold. You have a lot of traders who are shorting gold because they don’t understand the macroeconomics. Again, they believe in this U.S. recovery. It’s an illusion. They believe that tighter monetary policy is around the corner. It’s not. Looser monetary policy is around the corner. The U.S. is entering another recession. And look how weak the economy is. Look how weak the recovery was. And now we’re going back into recession again, and interest rates are already at zero. All they can do is dial-up the size of the QE. And when people get their hands around that- when they realize QE hasn’t actually helped, it’s actually hurt. And we’re going to get more of it because it doesn’t work, and it’s never going to work. And the economy is going to continue to deteriorate, and we’re going to try and paper it over with a flood of money- that’s going to be a big wake-up for the price of gold. And I think the price is going to go straight up. And I think people who aren’t in it are going to be disappointed. And the people who are short- it’s going to be more than disappointment. It’s going to be a lot of pain there when people watch the price of gold go straight up and they sold it lower.

You can watch the segment here on CNBC’s website.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

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Central Banks Net Purchasers Of Gold For 11 Consecutive Quarters

Earlier today, Janet Yellen, the American economist and Vice Chair of the Board of Governors of the Federal Reserve System who is President Obama’s nominee to succeed Ben Bernanke as Chairman of the Fed, participated in her confirmation hearing before the U.S. Senate Banking Committee. Victor Reklaitis wrote on The Tell blog on the MarketWatch website this afternoon:

At Yellen’s confirmation hearing on Thursday, [U.S. Senator from Nevada Dean] Heller asked the Fed chair nominee whether she follows gold prices and what causes them to rise or fall.

“Well, I don’t think anybody has a very good model of what makes gold prices go up or down,” Yellen responded.

“But certainly it is — it is an asset that people want to hold when they’re very fearful about potential financial market catastrophe or economic troubles and tail risks. And when there is financial market turbulence, often we see gold prices rise as people flee into them.”

(Editor’s note: Italics added for emphasis)

I had to chuckle when I read that. Here’s a central banker linking the acquisition/possession of gold with fear, yet as I pointed out back in July 2011, central banks were by then holding onto and even accumulating the precious metal after years of selling.

As a matter of fact, the London-based World Gold Council, the gold industry’s market development organization, issued a press release today which demonstrated central banks around the world continue to amass the yellow metal. From the release:

Net central bank purchases totalled 93t, 17% down on Q3 2012. Central banks have now been net purchasers of gold for 11 consecutive quarters.

“Net purchasers of gold for 11 consecutive quarters.” Something to remember next time someone brings up that “barbarous relic” claim (if gold is so barbaric, why does it continue to play a role in the modern global banking system?).

There’s also this from Nat Rudarakanchana, writing on the International Business Times website on October 30. He reported:

-Collectively, central banks have bought about 218 tons of gold so far in 2013
-Central bank holdings are up about 1.7 million ounces this year
-France, Germany, Italy, and the United States maintain more than 80 percent of their foreign reserves in gold

Ms. Yellen mentioned in her confirmation hearing that gold is “an asset that people want to hold when they’re very fearful about potential financial market catastrophe or economic troubles and tail risks.”

Does that apply to central bankers as well?

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Sources:

Reklaitis, Victor. “Yellen on gold: “People want to hold (it) when they’re very fearful.” The Tell. 14 Nov. 2013. (http://blogs.marketwatch.com/thetell/2013/11/14/yellen-on-gold-people-want-to-hold-it-when-theyre-very-fearful/). 14 Nov. 2013.

“Gold continues its journey from West to East as buoyant consumer markets balance investment outflows.” World Gold Council. 14 Nov. 2013. (http://www.gold.org/media/press_releases/). 14 Nov. 2013.

Rudarakanchana, Nat. “Perspectives On Central Bank Gold Buying: Gold Experts.” International Business Times. 30 Oct. 2013. (http://www.ibtimes.com/perspectives-central-bank-gold-buying-gold-experts-1448444). 13 Nov. 2013.

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Marc Faber: Crude Oil Probably ‘The Most Attractive Commodity’ Among Industrial Commodities

“Doctor Doom” Marc Faber was recently interviewed by The Economic Times (India). In a November 8, 2013, video segment on the Times website, the Swiss-born investment advisor and fund manager shared his thoughts on gold and crude oil:

The price of gold at this level is not terribly high compared to the wealth creation in the world compared to the expansion of the central banks’ balance sheets compared to the tech explosion and so forth and so on. So ja, I continue to recommend people that they allocate some of their money to gold. I prefer physical gold, but I have to say that numerous gold mining shares are now very inexpensive. Crude oil is probably, among the industrial commodities, the most attractive commodity because the supply of oil could be interrupted at some point.

Source:

“Prefer buying physical gold: Marc Faber.” The Economic Times. 8 Nov. 2013. (http://economictimes.indiatimes.com/et-now/commodities/prefer-buying-physical-gold-marc-faber/videoshow/25453685.cms) 10 Nov. 2013.

By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

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Marc Faber Talks Gold Prices, Gold Stocks

I want to talk money the rest of the evening. First up is none other than good old “Doctor Doom” Marc Faber. The publisher of the monthly investment newsletter The Gloom Boom & Doom Report was interviewed by Barron’s last week, and had this to say about gold:

Well, basically, it’s been a very good investment until September 2011 when it peaked out at $1,921 and since then, it’s been in a correction mode. We have a lot of bearish sentiment, a lot of bearish commentaries about gold. But the fact is that some countries are actually accumulating gold, notably China. They will buy this year at the rate of something like 2,600 tons, which is more than the annual production of gold. So I think that prices are probably in the process of kind of bottoming out here, and that we will see again higher prices in future. I think the gold shares are also not terribly expensive at this point.

When asked about gold mining stocks, the Swiss-born investment advisor and fund manager replied:

Yes, the gold shares. The miners. The exploration companies. I think numerous exploration companies will not make it. So if you buy exploration companies you should buy the ones that have already raised capital or that have sufficient reserves that they’ll survive another few years if there is no upturn in prices. Because at this price of gold, very few projects will get done.


“Marc Faber on Gold, Miners, and China”
Barron’s Video

By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

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Quote For The Week

“If you didn’t notice, gold shot higher by 4% in the wake of Congress announcing its non-solution to the government shutdown and the debt ceiling. The circus clowns did nothing more than agree to temporarily raise the debt ceiling and push the fight back a few months. The gold market sees this for what it is: a continuation of the same American fiscal imprudence that got us to this place to begin with. Nothing ever changes in Washington. Same crap; different day. Gold prices have come down in the last year because the speculators fled and the price fell to its natural level. But want to know why the price hasn’t crashed? Look no further than your local congressional chimp.”

-Erika Nolan and Jeff Opdyke in the October 20 issue of the Sovereign Digest, a weekly publication from The Sovereign Society, a Delray, Florida-based organization which provides its global membership trusted sources of information about overseas investing, asset protection, and currency trading

(Editor’s note: I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

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Marc Faber: ‘Gold And Silver, In My View, Are Relatively Inexpensive’

CNBC managed to interview Swiss-born investment advisor and fund manager Marc Faber on Wednesday at the SkyBridge Alternatives (SALT) Conference in Singapore. “Doctor Doom” addressed a number of topics, including where he thought equities and precious metals prices were going. Faber told viewers:

Well, I think in the long run, we have a huge bull market in gold. 1999 to 2011 we peaked out at 1,921. We went down to 1,180. We’re now slightly above 1,300. I think gold, and especially gold equities, is relatively- again, relatively-inexpensive. You understand, with zero interest rates, you misprice all the assets. It’s very difficult to make a judgment what is a cheap asset in absolute terms. Nothing is inexpensive in the asset markets anymore. But gold and silver, in my view, are relatively inexpensive. The S&P is relatively high.

(Editor’s note: Italics added for emphasis)


“Marc Faber: Chinese growth may slow to 4%”
(Segment on equities/precious metals starts at 6:49)
CNBC Video

By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

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Peter Schiff: Fed’s Bullard ‘Came Out To Lie’ About October Tapering

“The Federal Open Market Committee, of which [St. Louis Fed President James] Bullard is a voting member, surprised many market participants on Wednesday by maintaining its $85 billion in monthly bond purchases, defying expectations for a small reduction of around $10 billion. The S&P 500 and the Dow Jones Industrial Avergage rallied to all-time highs after the decision, while Treasury yields tumbled…

Describing the September decision as ‘close,’ Bullard said a small taper in bond buys is possible in October.”

-MarketWatch, September 20, 2013

After St. Louis Federal Reserve Bank President James Bullard made that statement about a possible October “tapering” of stimulus, precious metals got clobbered after a huge move up when the Fed decided to maintain the present level of quantitative easing. Frank Tang over at Reuters.com reported Friday afternoon:

Gold sank 2.5 percent on Friday as institutional investors sold aggressively after the Saint Louis Fed president said the U.S. central bank might move next month to reduce stimulus spending that has bolstered bullion for years.

Silver tumbled 5 percent and platinum group metals fell more than 2 percent.

Gold all but erased the 4.5 percent rise posted on Wednesday after the Fed said it would continue its massive bond buying program.

The thing is, while Bullard might be telling the truth about a small tapering, as I’ve mentioned quite a bit lately I don’t believe the Federal Reserve is in any position to implement any significant “tapering” to the massive amounts of stimulus that’s keeping the U.S. economy afloat.

And then there’s Peter Schiff, CEO and Chief Global Strategist of Euro Pacific Capital.

Schiff, who correctly-predicted the U.S. housing bust and “Panic of ’08,” just added a new installment to The Schiff Report video blog on YouTube.com. Addressing the Fed’s non-move on QE last Wednesday and Bullard’s follow-up, Schiff told viewers Saturday:

During the entire day of Wednesday afternoon and all through Thursday, everybody in the financial community was beginning to wonder about the economy. What does the Fed know that we don’t? In fact, I think the Fed was so concerned about doing damage control that they sent James Bullard out to do an interview, who is the President of the Federal Reserve Bank of St. Louis. He came out, and he basically went out to put some spin on it, to do some damage control.

In other words, he came out to lie.

And what he said was, “You know, we almost tapered. It was a real close call, ah, and we didn’t taper. But you know what? We might do it in October.” And that was all the markets needed. And then you had a big sell-off in gold- gold dropped about 40 bucks- all of it based on the idea that, “Wait a minute, maybe the Fed is going to taper after all?”

But it’s all B.S. They’re not going to taper.

First of all, Bullard said it was a close-call. That they almost tapered.

The vote to not taper was 9 to 1.

Yeah, real nail-biter that one was. A squeaker.

You know, Bullard himself voted with the majority. He voted not to taper. As did Janet Yellen, who is most likely to be the Chairman of the Federal Reserve after Ben Bernanke steps down.

And of course, what does he mean they’re going to taper in October? Why? I mean, what’s going to change?


“Fed’s Non-Taper Damage Control”
YouTube Video

By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)

Source:

Tang, Frank. “PRECIOUS-Gold sinks 2.5 pct on new fears Fed may reduce stimulus.” Reuters. 20 Sep. 2013. (http://www.reuters.com/article/2013/09/20/markets-precious-idUSL3N0HG1DF20130920). 24 Sep. 2013.

(Editor’s note: I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein)

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