Gold Weakness from the Top is Impulsive

Daily Bars

Prepared by Jamie Saettele, CMT

“The decline from the high in gold is impulsive (5 waves) but that decline could just as well complete a flat. As such, it is best to refrain from the short side until a drop below last week’s low (1752).” A drop below would shift to 1715 and probably quickly given the crowded nature of this market.

LEVELS: 1715 1737 1752 1770 1780 1790

Last Updated : 25 September 2012 at 22:40 IST

Gold, Silver remain safe haven assets in this troubled world

Source :Silver-Coin-Investor.com

Basically, precious metals allow investors to engage in a new way of thinking, where investment priorities are anchored to real value and permit advance planning for troubled times. 

By Dr Jeffrey Lewis
The reasons for holding precious metals as a relatively safe haven for one’s personal wealth are numerous.  One common investing thesis for buying precious metals is that these intrinsically valuable commodities can hold their value in times of rising price levels. This characteristic can help American savers keep pace with credit expansion and paper currency debasement.

Diversify out of the Dollar

For example, precious metals can provide a safe haven in terms of the diversification they offer relative to holding U.S. Dollars in cash or Dollar-denominated assets.

Physical gold and silver investments can take up a core position in an investment portfolio since they offer an easy way to have some wealth stashed out of Dollar-denominated assets. These hard assets also provide a viable alternative to holding foreign currencies or foreign equities.

Basically, precious metals allow investors to engage in a new way of thinking, where investment priorities are anchored to real value and permit advance planning for troubled times.

When the Dollar bubble bursts

In much the same way that market bubbles have been blown in various asset classes over the last 40 years, largely via Fed sanctioned interest rate manipulation, the overvalued U.S. Dollar seems like yet another bubble waiting to burst.

Basically, the value of silver has been artificially deflated in U.S. Dollar terms via price control implemented using contracts traded at global futures exchanges.The symbolic investigation of this so-called conspiracy by the CFTC just passed its fourth year.

Underpriced assets like silver will eventually lead the way back to what will very likely be the largest bubble the world has ever seen. The U.S. Dollar and the U.S. bond market appear destined for a long overdue crash.

Various factors point to this outcome. They include such things as: intrinsically worthless paper wealth, high frequency trading, a world where MF Globals can exist, the threat of taxation, and rampant money printing — otherwise known as Quantitative Easing.

Competing with the banks for credit

Major international banks have benefited disproportionately compared to the individual investor from credit expansion in recent years. Banks enjoy better profits from cheap money and can buy future cash flows very inexpensively.

Meanwhile, consumer credit has contracted leaving consumers holding the bag in many cases. People are also unable to consume as much because of a rise in general price levels and the failure of the troubled financial system to purge itself of bad debt.

If at any point the American consumer and banks are equalized with additional credit infusions, the tide will then begin to turn. Consumers can then free up more discretionary income as America goes back to work.

Nevertheless, until the two groups are made equal, credit will neither expand nor contract. Instead, credit supplies will stay constant, although prices will continue to rise relative to consumer incomes.

Precious metals provide a safe haven investment that can often help compensate an investor for such price rises. Furthermore, if at any point the system balances and allows for credit expansion to extend to Main Street, then precious metals investors will typically benefit.

For more articles like this, and to stay updated on the most important economic, financial, political and market events related to silver and precious metals,  visit http://www.silver-coin-investor.com 

Closing Gold & Silver Market Report – 9/25/2012

Morning Gold & Silver Market Report – 9/25/2012

Gold Daily And Silver Weekly Charts - End Of Quarter

The fundamentals for gold look formidable. The long lull of summer may be coming to an end. Read More

1,170,000,000,000 Reasons To Buy Precious Metals

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Last Updated : 25 September 2012 at 08:00 IST

Silver to outperform Gold in coming quarters: Morgan Stanley

Source :Commodity Online

  Silver has outperformed gold since speculation over QE3 (a third round of U.S. quantitative easing) emerged in early September this year

  NEW YORK (Commodity Online):  Silver to outperform gold in the coming quarters, said Morgan Stanley in a weekly commodities research note.

According to Morgan Stanley, Silver has outperformed gold since speculation over QE3 (a third round of U.S. quantitative easing) emerged in early September this year.

“While the risk-on rally in the first quarter of the year underpinned a strong performance from silver, uncertainty in global macroeconomic policy steered investors toward gold in 2Q and 3Q,” they added.

“For the next several quarters, however, we think silver will again outperform gold,” Morgan Stanley concluded.

Global gold prices ended the United States day session lower on Monday as risk aversion was the order of the day to start the new trading week.

The key outside markets were in a bearish posture for the precious metals Monday as the U.S. dollar index was higher and crude oil prices were lower.

December gold last traded down $13.70 at $1,764.40 an ounce on the Comex division of the New York Mercantile Exchange. Spot gold was last quoted down $10.70 an ounce at $1,762.75. December Comex silver last traded down $0.678 at $33.96 an ounce.

Gold Drops but Remains Constructive

240 Minute Bars

Prepared by Jamie Saettele, CMT

The decline from the high in gold is impulsive (5 waves) but that decline could just as well complete a flat. As such, it is best to refrain from the short side until a drop below last week’s low (1752). Also, the chart shown today highlights a common bullish setup in which RSI slips to new lows while price makes higher (although barely in this case) closes. Focus would shift to 1715 in the event of a 1752 break.

LEVELS: 1715 1737 1752 1780 1790 1800

Closing Gold & Silver Market Report - 9/24/2012

Mid-Day Gold & Silver Market Report – 9/24/2012

Last Updated : 24 September 2012 at 20:00 IST

Gold has the potential to rise to $3500-4000: Sharps Pixley

Source :Commodity Online/Sharps Pixley

The central issue with respect to the third round of quantitative easing is whether it would lead to more jobs. Gold has the potential to rise to $3500 to $4000 levels as the size of the US Fed balance sheet keeps on risiing, according to Ross Norman, Chairman of Sharps Pixley, London

LONDON (Commodity Online):  Gold has the capacity to rise to $3500 to $4000 an ounce depending on the increasing size of the US balance sheet, according to Ross Norman, CEO of  Sharps Pixley, London.  The Fed balance sheet which has grown four-fold from pre-crisis levels is set to double again.

“If gold is to maintain its run rate - and why wouldn't it - and if prices were to correlate with the size of the US monetary base, this would suggest that the gold price rally is also only roughly half way there (arguably it would outperform as confidence in the US dollar evaporates). In other words gold has the capacity to rise to between $3500 and $4000 - something we have maintained for some time. Furthermore, this level would see the dow/gold ratio marking a fall to 2.5:1 as we also forecast,” Ross Norman said.

The central issue with respect to the third round of quantitative easing is whether it would lead to more jobs.

“The biggest crisis in our view is less of under-employed people than under-employed money (or investment fuel). Some have coined QE3 as " QE Infinity" on the basis that the Fed will be purchasing $40 bn/month in MBS for perpetuity - bringing to mind that line from Buzz Lightyear " To infinity and beyond" - others might reflect on the latest policy move and call it " to insanity and beyond" .”

Sharps Pixley  maintains its bullish outlook with the best of prices yet to come, Ross Norman added. 

 

 

Morning Gold & Silver Market Report – 9/24/2012

Gold retreats from 6-1/2 month high as dollar firms

Monday, September 24th 02:27 PM IST

Can Gold perform in all scenarios

Many analysts predicted the gold to hit the coveted $2000 mark next year. However the diversity of analyst predictions also mirrors the uncertainties in the global markets.

 

LONDON(BullionStreet):  Gold gained more than 15 percent so far this year from $1530 an ounce to $1770 by late September.

What is the forecast for the gold price 2013 and beyond?

At the beginning of 2012 the gold price had increased on an annual basis in each year for a decade. Will the 10-year upwards trend of the gold price continue in 2013?

The overarching driver of the gold price for the year 2013 and beyond will be the development of global financial crisis. The levels of debt piled up by Western governments and often also corporate/private sectors are still not sustainable.

There is basically one scenario to get rid of this burden: disciplined deleveraging or reduction of debts. The alternative, which was pursued over the past years, is to create more debt. This could eventually lead to inflation levels significantly above the inflation rates witnessed during the last decade in Western currencies.

Either way, both a deleveraging, which will probably be long and painful ('the lost decade'), or a reduction of the real debt pressures by means of higher inflation will potentially preserve gold as an attractive insurance asset or store of value for many conservative investors in 2013 and beyond. Geopolitical risks, e.g. in relation to Iran, will support this position of gold as a 'safe haven' further.

Many analysts predicted the gold to hit the coveted $2000 mark next year. However the diversity of analyst predictions also mirrors the uncertainties in the global markets.

An interesting fact about gold is that it often performs well in scenarios of deflation (for instance driven by global debt reductions) but also in scenarios with higher than usual inflation rates (which could potentially occur as public debt level increases further).

Gold therefore tends to perform positively in times of economic uncertainties as well as in acute crises. Unfortunately, the global financial problems are not yet sorted out. Some credible commentators expect several more years of uncertainty and painful deleveraging, which could end only when we are approaching the next decade.

Thus, in the foreseeable future a moderate allocation to gold will remain the imperative for many investors and could result in a positive trend of the gold price 2013 and beyond.

Portfolio diversification, i.e. the allocation of funds to different asset classes and investments, should remain an imperative for safety-orientated investors over the coming years. 

Last Updated : 24 September 2012 at 14:05 IST

India's recent physical Gold demand encouraging: UBS

Source :Commodity Online

 

Physical gold demand from India has been encouraging of late and based on our physical flows to the country, the week is so far shaping up to be the best we’ve seen since mid-July

 

  MUMBAI (Commodity Online):  There are signs of a pick-up in Indian physical gold demand, which has been described as soft for much of the year in large part due to a weak rupee, said the Union Bank of Switzerland (UBS) in a commodity research note. India is the world's biggest gold consumer.

“On the physical front, demand from India has been encouraging of late and based on our physical flows to the country, the week is so far shaping up to be the best we’ve seen since mid-July,” the Swiss bank added.

“Volumes aren't huge, but it’s clear that demand is quick to emerge on local price pullbacks. This is a very slight improvement to this year’s physical story,” the Zurich based bank concluded.

India's benchmark gold price dropped to a two-week low of 31,281 rupees per 10 grams, as the rupee continued to rally and climbed to a 4-1/2-month high.

India is gearing up towards the festival and wedding season, which will peak at the Hindu festival of lights in November. Gold is an essential component of dowry and gifts presented during the festival celebrations.

Last Updated : 21 September 2012 at 19:05 IST

Gold to break $1,900/oz by end of October, if QE history repeats: Deutsche Bank

Source :Commodity Online

 

NEW YORK (Commodity Online): Gold prices to break $1,900 an ounce level by the end of October this year, if QE history repeats, according to Deutsche Bank in a weekly commodity research note.

According to the German bank, the recent gains in gold have been comparable to the price appreciation immediately following the first two rounds of quantitative easing in the U.S.

“In fact, if gold prices continue to track what happened in those episodes, it implies gold prices hitting USD1,900/oz by the end of October,” Deutsche Bank added.

The metal has rallied in recent weeks after news of a third round of QE in the U.S., as well as news of bond-buying intentions by the European Central Bank and more QE from the Bank of Japan.

Deutsche Bank earlier this week put out a report forecasting $2,200 gold by next year.

“We expect the sector will continue to benefit from negative real interest rates, a weaker U.S. dollar, central-bank buying and the prospect of further rounds of QE by the Fed,” Deutsche Bank concluded.