gold prices
CNBC Tries Calling Out Peter Schiff Over Gold Price
Anyone remember those “Peter Schiff Was Right” YouTube.com videos that went viral right after the U.S. housing bubble popped and the global economic crisis really reared its ugly head in the fall of 2008?
Here’s probably the most popular one out there.
Well, I’m convinced a clip or more of Thursday’s installment of the CNBC show Futures Now, hosted by CNBC Reporter Jackie DeAngelis, will be included in a future “Peter Schiff Was Right About Gold” YouTube video. From an exchange between DeAngelis and the CEO and chief global strategist of Euro Pacific Capital:
SCHIFF: You’re talking about investors’ demand for gold going down. I would disagree. Because I own a gold company too, Euro Pacific Precious Metals. And we’ve never had more demand from our clients in the history of my company than we have now. I would say speculators, speculative demand, is what went down. I think a lot of people who came late to the gold rally were speculating in gold. They were simply buying it because the price was rising. They wanted to hop on that train. They use ETFs. They use futures markets. So I think the speculators have been flushed from the market in this pullback. But the investors- they’re still there. Because all of the reasons they’ve been buying gold for the past 10 or 12 years- those reasons have never been stronger. And so investor demand continues. We’ve flushed away the speculative demand. But I think the speculators will come back in the next rally.
DEANGELIS: Alright. Well, Peter, let’s step back for a second because you kind of jumped in there on the conversation we were having and I definitely appreciate your opinion on that. But I want to talk about the gold price that we’re looking at right now. $1,383.60. That is the price that we’re looking at at this point. We’ve had you on the show multiple times before, you said that gold was going to skyrocket, you say it’s going to be a bumpy ride and you can’t tell us exactly how we’re going to get there. But tell me today, Peter, why have you gotten it wrong?
(Editor’s note: Bold added for emphasis)
SCHIFF: I don’t think I have gotten it wrong. You just said I said it would be a bumpy ride. Look, it’s been bumpy, but I’ve been on this ride since gold was under $300 an ounce. It’s not like gold is down from that point. It’s off its highs. But I think what’s going on right now is you’ve got a false narrative out there that the U.S. economy is improving. It’s not. All the data points have been negative. A deluge of negative data came out today. The only evidence of a rebounding economy, is the stock market going up, or the real estate market going up. But that’s not because the economy is sound. That’s because of all the cheap money created by the Fed. That’s the same reason why stock and real estate prices were going up in 2006 or 2007. It is a bubble. The economy, meanwhile, is actually getting worse. And all this talk about the Fed getting ready to take away the punch bowl is all talk. They’re going to spike it even more. They’re going to up the size of QE. But people who are speculating of an early end are getting it wrong. Gold is going through a correction. All bull markets have a correction. It is a buying opportunity.
“Schiff: Gold a Generational Buy”
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.)
Deutsche Bank, BNP Paribas Cut Gold Price Forecasts
Some major global financial institutions aren’t very bullish on gold these days. First, there’s the German banking and financial services company Deutsche Bank. According to a Reuters piece picked up on The Economic Times (India) website earlier today:
Deutsche Bank cut its forecast for gold prices in 2013, 2014 and 2015 on Friday, citing the sharp price correction in gold last month and upgrades to its US dollar outlook.
The bank lowered its 2013 gold outlook 6 percent to $1,533 from $1,637. It downgraded its 2014 gold outlook by 17 percent to $1,500 and its 2015 gold outlook by 25 percent to $1,450.
On November 14, 2012, I blogged:
Back in December of last year, Deutsche Bank predicted that gold prices would hit $2,000 an ounce in the second half of 2012.
The highest London P.M. gold spot price recorded last year turned out to be only $1,791.75.
The third largest bank in the world, BNP Paribas, isn’t too hot about precious metals’ prospects in the near-term either. Here’s what the Dow Jones Newswires had to say about the Paris-headquartered banking group and gold on the FOX Business website Thursday:
BNP Paribas Friday cut its outlook on gold prices for this year and next, but said it expects the metal to trade back above $1,600/oz in six months.
The bank now sees gold averaging $1,580 a troy ounce this year, down 5% on its previous forecast. In 2014, it expects gold to average $1,520/oz, also down 5% on its earlier outlook.
In my opinion, the fundamentals supporting higher gold prices appear intact.
Which they have for quite some time now.
By Christopher E. Hill, Editor
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)
Sources:
“Deutsche Bank cuts 2013 outlook for gold prices.” Reuters. 10 May 2013. (http://economictimes.indiatimes.com/news/international-business/deutsche-bank-cuts-2013-outlook-for-gold-prices/articleshow/19989072.cms). 10 May 2013.
“BNP Paribas Cuts Gold Outlook, But Sees $1,600/oz Retaken in 6 Months.” Dow Jones Newswires. 10 May 2013. (http://www.foxbusiness.com/news/2013/05/10/bnp-paribas-cuts-gold-outlook-but-sees-1600oz-retaken-in-6-months/). 10 May 2013.
Jim Rogers Predicts Gold ‘Will Go Much, Much Higher’
I just got done reading an insightful article on the London branch website of U.S.-based investment research firm Morningstar. Legendary investor Jim Rogers was being interviewed by Morningstar’s Chris Menon concerning his thoughts about investing in gold. Here is an excerpt from their exchange:
MENON: Over what time horizon should investors expect to make money by investing now?
ROGERS: Certainly, over the course of ten years gold will go much, much higher because I don’t see any possibility that governments are going to stop printing money in the next decade. And as long as that’s going to happen then gold is certainly going to go higher and probably much higher.
The former investing partner of George Soros also shared his views on purported gold manipulation, whether or not gold’s recent plummet in price is a buying opportunity, and the various vehicles for investing in the precious metal.
As for Rogers himself? He tells Menon he likes coins (something I’ve blogged about before)
You can read the entire interview on the Morningstar (UK) site here.
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.)
Peter Schiff On GDP Calculation ‘Makeover,’ Delaying Our ‘Day Of Reckoning,’ And Gold Speculators
Lots of catching up going on around here today. I just got finished watching Peter Schiff’s latest entry on The Schiff Report YouTube video blog. The CEO/Chief Global Strategist of Euro Pacific Capital zeroed-in on the “makeover” in calculating U.S. gross domestic product, delaying our “financial reckoning day,” and the situation small speculators may find themselves in after helping fuel gold’s price drop the other week. Regarding GDP, Schiff pointed out the following in yesterday’s video blog post:
When the government gets around to delivering the news for the second quarter, the U.S. economy is going to be quite a bit larger than it was during the fourth quarter. Now, it’s not going to be because we’re actually more productive, it’s because the government is going to launch a brand new methodology for computing the GDP. They’re going to change the way they’ve been doing it all these years. And they’re going to start to include a bunch of things that in the past, they never included. They’re going to include things that no other country includes when they calculate their GDP. And as a result of this makeover, these brand new additions, I think instantaneously the U.S. economy is going to be 3 percent larger. That’s a big number. It’s like 4 or 500 billion dollars of GDP is going to be conjured out of thin air just based on the change in the methodology for computating GDP.
You know, this is what the government does. They change the way they compute statistics. Unemployment’s too high? Okay, we’ll calculate it another way. Now it’s not as high. Inflation’s too high? Wait a minute, let’s find another way to calculate the inflation rate. Oh look, we’ve solved the inflation problem- there’s not that much inflation.
Now, the government wants the economy to appear bigger. Why? Well, because it makes the debt-to-GDP look smaller. A lot of people are talking about debt-to-GDP now. Well, if they can make the GDP larger by figuring out another way to calculate it, well now they can make that ratio appear better.
Also, people are talking about government spending as a share of GDP. Okay, let’s make the GDP larger, and that means that government spending has now come down as a share of this larger number.
Schiff, who correctly predicted the U.S. housing bust and “Panic of ’08,” had this to say about the coming U.S. financial crash:
The fact of the matter is, governments are borrowing too much, they’re printing too much, they’re spending too much, and it’s all in a vain attempt to try to artificially stimulate an economy that’s been overstimulated, and to delay the “day of reckoning.” And the problem is, the longer they delay it, the more we have to reckon with. And, ultimately, we’ve going to have to pay a huge price for the fact that we didn’t deal with these problems sooner, rather than later.
“Slow ‘growth’,GDP makeover, Keynesians demand more debt and inflation”
YouTube Video
Finally, Schiff, who’s also the CEO of Euro Pacific Precious Metals, talked about gold’s recent price drop, who he thought was behind it, and what may be in store for them. From the video post:
I think the major selling in the metals market has come from the small speculator that trades on the futures market, that trades on the ETF. That’s where all the selling has been. The small speculators. I don’t think the larger investors have cashed in. They’re probably holding on. And the real buyers, the buyers in the physical market- who are not just trying to jump on a moving train to try and catch a small move because they want to get in on something that’s going up- the physical demand has been ongoing and consistent for years. But you have had some of the “Johnny Come Lately” hot money among smaller speculators. They’ve jumped on, they’re the ones that have sold, they cashed out. In fact, I think you have a lot of small speculators that are now short gold, that sold into the lows, and that are holding onto these positions with losses. And we’ll see how long they can hold those losses as the price moves higher and we turn up the heat. I think a lot of those people that were quick to short the market are going to end up covering at much higher prices.
Good insights as usual from this “crash prophet.”
By Christopher E. Hill, Editor
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)
Gold Price Takedown Leads To Buying Frenzy
“My view is that the US Federal Reserve and the Bank of Japan ’caused’ the gold crash. The rest is noise…
The world is still in a contained depression. Sliding commodities tell us global money is if anything too tight. ‘There is a threat of deflation almost everywhere. A lot of central banks will have to follow the Bank of Japan, whatever they say now,’ said Lars Christensen form Danske Bank.
The era of money printing is young yet. Gold will have its day again.”
-Ambrose Evans-Pritchard, The Telegraph (UK), April 17, 2013
Since I started blogging nearly six years ago, if I had a dollar every time I read somewhere “gold is toast,” I’d be a millionaire by now.
Fine. I’d have a hell of a lot of singles.
And a raised eyebrow from my girlfriend.
Seriously though, what is it with people who absolutely detest the precious metal?
I’m not a big fan of paper assets, but I don’t make it my life’s mission to crucify them whenever I get the chance (website and blog comments come to mind here).
My take on investing is- keep an open mind. Lest you squander major money making opportunities. Certain asset classes simply perform better than others at different points in time.
There’s a time for stocks, bonds, currencies, what have you.
And for a number of global investors, now is the time for gold.
Sure, the precious metal really got hammered in the price department the other week. But this resulted in a buying frenzy of the physical bullion. John Noble reported on the Financial Times (UK) website on April 22:
Asia is witnessing one of the strongest waves of physical gold buying in 30 years, with bargain hunters using the drop in prices to secure jewellery and gold bars.
The feverish buying has left many of Hong Kong’s banks, jewellers and even its gold exchange without enough yellow metal to meet demand. In Shanghai, the gold exchange saw volumes – often seen as a proxy for demand – rising to a record on Monday, while queues formed outside some jewellery shops in Beijing.
To give you an idea of just how crazy the demand is in China, Noble, who’s writing from Hong Kong, added:
Haywood Cheung, president of the Hong Kong Gold & Silver Exchange Society, said the exchange had effectively run out of most of its holdings as members looked to meet a shortfall in supply amid rampant retail demand for gold.
“In terms of volume, I haven’t seen this gold rush for over 20 years,” he said. “Older members who have been in the business for 50 years haven’t seen such a thing.”
The Times piece noted demand for the yellow metal is also strong in India. Something Biman Mukherji and Debiprasad Nayak confirmed on the Wall Street Journal website on April 23. They wrote:
Indian gold retailers are paying more in order to meet immediate demand, as customers scoop up every gold bar they can lay their hands on in the wake of a plunge in international prices.
Indian retailers say they are paying premiums of $8-$10 an ounce over the international gold price, which is around $1,425 a troy ounce. That’s four or five times the premium retailers usually pay for imported gold during periods of peak demand in India, according to traders.
“We have not seen this kind of premium on gold imports in years,” said Suresh Hundia, president emeritus of the Bombay Bullion Association.
Gold demand is not too shabby in nearby Australia either. Jake Lloyd-Smith reported on the Bloomberg website tonight:
Australia’s Perth Mint, which refines nearly all of the nation’s bullion, said that demand has jumped to the highest level in five years after prices plunged, with the factory kept open through the weekend to meet orders.
There’s been strong interest, including from the U.S., with buyers speculating that the metal will rebound from the decline, Ron Currie, sales and marketing director, said in a phone interview from Perth…
“We haven’t seen levels like this since the 2008 global financial crisis,” Currie said yesterday. “Compared to March sales, April sales have doubled or tripled,” he said, without providing figures.
On Friday, April 12, the afternoon fix gold spot price was $1,535.50 per ounce. The price tumbled to $1,380 an ounce by Tuesday, April 16. Today, the London P.M. fix was back up to $1,467.50.
By Christopher E. Hill, Editor
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)
Sources:
Noble, John. “Asian bargain hunters pile into gold.” Financial Times. 22 Apr. 2013. (http://www.ft.com/intl/cms/s/0/56244496-ab39-11e2-ac71-00144feabdc0.html#axzz2RuiP9ndw). 29 Apr. 2013.
Mukherji, Biman and Nayak, Debiprasad. “India Gold Premiums Soar as Demand Outstrips Supply” Wall Street Journal. 23 Apr. 2013. (http://online.wsj.com/article/SB10001424127887324874204578440242906344734.html). 29 Apr. 2013.
Lloyd-Smith, Jake. “Perth Mint Works Through Weekend as Gold Demand Surges on Price.” Bloomberg.com. 29 Apr. 2013. (http://www.bloomberg.com/news/2013-04-30/perth-mint-works-through-weekend-as-gold-demand-surges-on-price.html). 29 Apr. 2013.
Central Banks Continue To Stockpile Gold
Despite the price of gold getting pummeled recently, a number of the world’s central banks continue to acquire the precious metal. Sungwoo Park reported on the Bloomberg website yesterday:
The Bank of Korea added 20 metric tons in February, raising its gold reserves by 24 percent to 104.4 tons, it said in a statement today. Holdings rose about $1.03 billion by value to $4.79 billion at the end of last month, equivalent to 1.5 percent of total foreign exchange holdings, according to the statement. Prices advanced.
Russia and Kazakhstan expanded bullion reserves for a fourth straight month in January.
On February 11, I blogged that Russia is now the world’s biggest gold buyer, adding 570 metric tons of the precious metal to their holdings over the past decade.
Glenys Sim wrote on Bloomberg.com back on February 25:
Russian holdings climbed 12.2 metric tons to 970 tons last month after gaining 8.5 percent over 2012, according to International Monetary Fund data. Kazakhstan’s hoard grew 1.5 tons to 116.8 tons, following last year’s 41 percent expansion, data on the IMF website showed…
Central banks will again be strong buyers this year after they boosted purchases 17 percent to 534.6 tons last year, the most since 1964, according to the London-based World Gold Council.
The gold haters are out in full force these days. Yet, central banks keep stockpiling the yellow metal. Hmm.
Diversification? Or “something wicked this way comes?”
And there’s no shortage of stories in the American media of how poorly gold is doing. Even though it’s setting record highs in other countries. Brett Arends wrote on the MarketWatch website yesterday:
You won’t hear about it in the usual places. Everywhere you turn these days, all you hear is that gold is down, it’s finished, it’s heading for something called a “death cross,” which sounds terrifying. But away from the headlines, gold just rocketed to a new, all-time high.
In places like Argentina, Brazil, Iceland, India, and Japan.
Not bad for a “barbarous relic,” huh?
By Christopher E. Hill, Editor
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)
Sources:
Park, Sungwoo. “Korea Joins Russia, Kazakhstan in Boosting Gold Holdings.” Bloomberg. 6 Mar. 2013. (http://www.bloomberg.com/news/2013-03-05/bank-of-korea-boosts-gold-reserves-as-central-banks-buy.html). 6 Mar. 2013.
Sim, Glenys. “Russia, Kazakhstan Increase Bullion Reserves for Fourth Month.” Bloomberg. 25 Feb. 2013. (http://www.bloomberg.com/news/2013-02-25/russia-kazakhstan-expand-gold-reserves-for-fourth-month-1-.html). 6 Mar. 2013.
Arends, Brett. “The secret bull market in gold.” MarketWatch. 6 Mar. 2013. (http://www.marketwatch.com/story/the-secret-bull-market-in-gold-2013-03-06). 6 Mar. 2013.
Gold Price Forecasts Gone Schitzo
Seeing that gold prices are somewhat schizophrenic these days, I thought I’d surf the Internet to see what some of the “big” financial institutions are predicting concerning the direction the precious metal might take. I found there to be no shortage of gold price forecasts out there. From the MarketWatch blog The Tell on Tuesday:
Goldman slashed its three-month gold-price forecast to $1,615 an ounce from $1,825, its six-month forecast to $1,600 an ounce from $1,805 and its 12-month forecast to $1,550 an ounce from $1,800…
Also on Monday, a BofA Merrill Lynch Global Research report said the larger bull trend for gold remains intact. “From the perspective of contrarian opinion analysis, a bottom and bullish turn in gold is close at hand.”
And Morgan Stanley said gold prices are “nearing the bottom of their trading range of US$1,540/oz to US$1,800/oz.”
At UBS, analyst Julien Garren said a major gold rally is coming in the third quarter.
Last week, though, Citi was talking price hibernation for gold, as news that George Soros and another big hedge fund were backing off gold.
There’s also this from Bloomberg on the Taipei Times (Taiwan) website yesterday:
An inevitable unwinding of gold’s 12-year bull market has begun, Credit Suisse Group AG said on Thursday in a report.
Geez. Even these forecasts are all over the place.
As far as I can tell, the underlying fundamentals behind gold’s generally steady rise are still intact. The world’s central banks have the printing presses going at full speed in what some are calling a new global currency war. And just this Tuesday Federal Reserve Chairman Ben Bernanke reaffirmed his support for the central bank’s $85 billion bond-buying program, or what’s come to be known as QE4.
Yep, the yellow metal still has some glimmer left to it it seems
By Christopher E. Hill, Editor
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)
Sources:
“Gold forecast melee: Goldman joins in, slashes forecast to $1,550.” The Tell. 26 Feb. 2013. (http://blogs.marketwatch.com/thetell/2013/02/26/gold-forecast-melee-goldman-joins-in-slashes-forecast-to-1550/). 27 Feb. 2013.
“Gold’s price cycle likely to have turned: analysts.” Bloomberg. 27 Feb. 2013. (http://www.taipeitimes.com/News/biz/archives/2013/02/27/2003555794). 27 Feb. 2013.
Billionaire Investors Divided On Gold As Demand Hits Record Value Level In 2012
We’re on a roll today. Consider it make-up material for yesterday. Anyway, let’s turn our attention over to money. “Real” money like gold, that is. The precious metal had another solid year in 2012. From a press release today issued by the London-based World Gold Council, the gold industry’s market development organization:
2012 sees gold demand hit record value level
Q4 2012 up 4% year-on-year as India, China and central banks drive demand
In value terms, gold demand in 2012 was US$236.4bn – an all-time high. Gold demand in value terms for the final quarter of the year was 6% higher year-on-year at US$66.2bn, marking the highest ever Q4 total.
Global gold demand in Q4 2012 was 1,195.9 tonnes(t), up 4% on the same quarter in 2011. In Q4 2012, the average gold price reached a record level of US$1,721.8/oz, up 1% on the previous record average price in Q3 2011. The average price during 2012 was US$1,669.0/oz, up 6% from US$1,571.5/oz in 2011.
The key findings from the report are as follows:
• Whilst Indian full year demand was down 12% on the previous year, the market performed strongly in the final quarter with total demand at 261.9t, an increase of 41% on the same period last year. Both jewellery and investment demand reached their highest levels for six quarters. Demand for jewellery was up 35% year-on-year to reach 153.0t, and strong retail demand led to 108.9t of investment buying. In India the prospect of duty increases, which came in to force in January 2013, may have added to strong buying in the final quarter to beat the anticipated price rises.
• Chinese demand was flat year-on–year, reflecting the impact of economic slowdown. However looking at Q4, total demand was up 1% on the previous quarter to 202.5t. Jewellery demand was137.0t up 1% on Q4 2011 and investment demand was 65.5t, up 2% on the previous year. These increases may reflect the fact that the economic slowdown in China appears to have been shorter than expected.
• Central bank buying for the full year rose by 17% compared to 2011, totalling 534.6t, the highest level since 1964. Central bank purchases stood at 145.0t in Q4, up 29% on the corresponding quarter in the previous year, making this the eighth consecutive quarter in which central banks have been net purchasers of gold.
• Global investment in ETFs in 2012 was up significantly by 51% on the preceding year, though Q4 was down 16% to 88.1t when compared with the high levels recorded in Q3 2012.
“Gold Demand Trends: Full year and Q4 2012″
WGC Video
However, the price of gold hasn’t glimmered too much lately. Debarati Roy and Phoebe Sedgman reported on the Bloomberg website this evening:
Billionaire investors George Soros and Louis Moore Bacon cut their stakes in exchange-traded products backed by gold last quarter as futures dropped the most in more than eight years. John Paulson maintained his holding.
Soros Fund Management LLC reduced its investment in the SPDR Gold Trust, the biggest fund backed by the metal, 55 percent to 600,000 shares as of Dec. 31 from three months earlier, a U.S. Securities and Exchange Commission filing showed yesterday. Bacon’s Moore Capital Management LP sold its entire stake in the SPDR fund and lowered holdings in the Sprott Physical Gold Trust. Paulson & Co., the largest investor in SPDR, kept its stake at 21.8 million shares.
Roy and Sedgman noted gold prices fell 5.5 percent in the fourth quarter of last year, the most since the second quarter of 2004. Renewed optimism in the U.S. economy was the reason given by a number of observers cited in the piece.
Now, why is it that the “crash prophets” who saw the 2008 global economic crisis and “Great Recession” coming, such as Marc Faber, Jim Rogers, and Peter Schiff, are sounding the alarm about more hard times ahead of us, while those finance- and investing-types who never saw the financial storm approaching until it bit them and their clients in the rear-end are the same ones now predicting “all’s well” for the U.S. economy? Are they not aware of the financial manipulation that’s been required to get us this short-term, artificial prosperity?
My guess is that it registers, but they’re incapable of seeing the big picture.
All I know is this. While I’ll keep an open mind, I’m inclined to cast my lot with those guys who correctly-called the “Panic of ‘08” and have a knack of being correct on a consistent basis.
You can read the entire WGC press release on their website here.
By Christopher E. Hill, Editor
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:
Roy, Debarati and Sedgman, Phoebe. “Billionaires Soros, Bacon Cut Gold Holdings on Decline.” Bloomberg. 14 Feb. 2013. (http://www.bloomberg.com/news/2013-02-14/billionaires-soros-bacon-reduce-gold-holdings-as-prices-slump.html). 14 Feb. 2013.
Behold The Golden Bear: Russia Now World’s Biggest Gold Buyer
For years I’ve heard the term “Russian Bear” being used to describe Russia and its might.
For example, “NATO better not put too many missiles in Eastern Europe, or they’re going to anger the Russian Bear.”
After reading this morning about Russia acquiring literally tons of gold over the last ten years, perhaps they should be referred to as the “Golden Bear” going forward.
Scott Rose and Olga Tanas reported on the Bloomberg website this morning:
When Vladimir Putin says the U.S. is endangering the global economy by abusing its dollar monopoly, he’s not just talking. He’s betting on it.
Not only has Putin made Russia the world’s largest oil producer, he’s also made it the biggest gold buyer. His central bank has added 570 metric tons of the metal in the past decade, a quarter more than runner-up China, according to IMF data compiled by Bloomberg. The added gold is also almost triple the weight of the Statue of Liberty.
(Editor’s note: Italics added for emphasis)
I’m starting to see what legendary investor Jim Rogers was getting at regarding Russia.
While a number of “developed” countries are selling the precious metal these days- including economically-troubled France, Portugal, and Spain- “developing” nations are acquiring it with a fervor. Rose and Tanas added:
Quantitative easing by major economies to support financial asset prices is driving demand for gold in the emerging world, said Marcus Grubb, head of investment research at the World Gold Council. Before the crisis, central banks were net sellers of 400 to 500 tons a year. Now, led by Russia and China, they’re net buyers by about 450 tons, Grubb said by phone from London, where his industry group is based…
“That’s a very significant switch, and obviously a very positive one for the gold market,” Grubb said.
(Editor’s note: Italics added for emphasis)
Meanwhile, the price of paper gold is taking a hit this morning. Barbara Kollmeyer and Myra Saefong reported this morning on the MarketWatch website:
G-7 nations could release a statement this week reaffirming a commitment to “market-determined” exchange rates, responding to heated talk about a currency war…
The Group of 20 nations will meet later in the week, with currencies expected to be at the top of the agenda.
As gold has benefitted from currency devaluations, traders are wary of these developments.
In addition, light volumes due to Asia’s observance of the Lunar New Year and a lack of economic data being released today are fueling downward pressure on the gold price.
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
Sources:
Rose, Scott and Tanas, Olga. “Putin Turns Black Gold to Bullion as Russia Outbuys World.” Bloomberg.com. 11 Feb. 2013. (http://www.bloomberg.com/news/2013-02-10/putin-turns-black-gold-into-bullion-as-russia-out-buys-world.html). 11 Feb. 2013.
Kollmeyer, Barbara and Saefong, Myra. “Gold hit on worry of possible G-7 currency salvo.” MarketWatch. 11 Feb. 2013. (http://www.marketwatch.com/story/gold-edges-higher-as-dollar-weakens-2013-02-10). 11 Feb. 2013.
Jim Sinclair Predicts Gold Is ‘Going To And Through $3,500’
This morning the talking heads on CNBC are saying that a number of gold mining shares are approaching or are at 52-week lows.
I’ve been interested in gold and other precious metals for a long time. And I started reading Jim Sinclair’s MineSet- free gold commentary provided by veteran precious metals expert Jim Sinclair- even before I departed the public sector to do independent research.
Sinclair is being talked about in a number of financial/investing circles this week because of something he wrote on his blog last Thursday about the gold banks manipulating the paper gold market in an attempt to drive down the price of gold- and how holders of the yellow metal should respond . From a January 24 post:
Please do not fall for this classic manipulation. Please do not make the gold banks happy by giving away your physical. Please do not throw away gold shares because the hedge fund have worked black PR so well that they even have convinced some well known community physical gold merchants of their bear position of shares…
Fundamentally we are approaching the period in gold when it will move up the most points in the shortest period of time. The paper gold market is being used to shake the bullish tree harder this time than any time before because of what is to come. Fear is the most powerful emotion in markets and it is being used perfectly to enrich the grand names of finance at your expense…
Clearly the gold banks will try to get gold into a capitulation point. Hear me: We are right in front of that time when the market performs a classic bottom both in shares and physical. From this point gold is going to and through $3500. That is why what happened today is happening in the first place.
(Editor’s note: Italics added for emphasis)
The post is nothing short than a declaration of war against what Sinclair sees as gold price manipulation. As well as the latest forecast from a long-time gold observer.
A good read- possibly even a classic one, if Sinclair turns out to be correct- which can be found in its entirety on Sinclair’s blog here.
(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)
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
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