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Category Archives: Japan

GOLD and SILVER – Is the Bull Exhausted Yet?

05 Tuesday Oct 2010

Posted by jschulmansr in banking crisis, banking crisis banks bear market bull central deflation depression economic trends economy financial futures gold inflation crash Markets precious metals price protection recession safety silver plati, banks, bear market, Bernanke, bonds, bull market, central banks, China, commodities, crash, Credit Default, Crude Oil, Currencies, currency, Currency and Currencies, deflation, depression, dollar denominated, dollar denominated investments, Dow Industrials, economic, Economic Recovery, economic trends, economy, Euro, Fed Fund Rate, Federal Deficit, federal reserve, Finance, financial, Forex, Fundamental Analysis, futures, futures markets, GLD, gold, Gold Bubble, Gold Bullion, Gold Investments, hard assets, How To Invest, How To Make Money, hyper-inflation, inflation, Investing, investments, Japan, Jschulmansr, Latest News, Make Money Investing, market crash, Markets, Moving Averages, oil, Options, PAL, Paladium, PALL, palladium, physical gold, platinum, PPLT, precious, precious metals, price, prices, Quantitative Easing, recession, risk, Risk Reversal, run on banks, silver, SLV, sovereign, Sovereign Debt, spot, spot price, stagflation, Stimulus, stock market, Stocks, TARP, Technical Analysis, The Fed, Treasury, U.S., U.S. Dollar, U.S. Government unfunded Debt, U.S. Treasury Dept

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Maybe…. Depending on who you are talking to. Today’s rally took me a little bit by surprise, thanks to Japan. The market totally shrugged off Moody’s potential downgrade of Irish Banks and Ireland.

The recently released report of the causes of the “Flash Crash”  showed that derivatives actually was one of the major causes of the crash. Well guess what? Right before the collapse of Lehman, and the ensuing crash and crisis; banks were holding all time record levels of derivatives. Currently once again, banks are holding all time record high levels of derivatives!

So today’s rally can be totally attributed to Japan’s central bank. The Japanese Central Bank while slashing interest rates to basically 0%, also announced that they would be buying Japanese assets (Bonds, Reits, Mortgages, Equities), thereby fueling speculation that the Fed would do the same thru QE2 here in the United States.

However, I think it’s about time for a correction in the GLD, SLV, FXE, SPY, UUP.
Looking at the charts this has all of the appearance of an exhaustion gap. Not that I don’t think that we have a real shot a $1500 Spot Gold by the end of this year.

So even though I was stopped out of my GLD puts this morning I am seriously thinking about jumping back in and buying more GLD and SLV puts. I will let you know on stock talks  (Seeking Alpha), when I do.

That being said, I don’t think the correction for GLD and SLV will be more than 5-7% before resuming their march to $1500 (Gold) and $25 (Silver). Another note: I expect Silver to perform even better than Gold. The gold/silver ratio is approximately 60/1, if we see a return to what used to be the norm of 30/1 gold/silver ratio; then Silver could potentially run as high as $35-$50/oz.

Finally, as they do another quantitative easing (QE2) here in the US (currently not official QE), this continues to put pressure on Europe and Japan to devalue their currencies  and keep the printing presses running. Long term this is going to create a very hyper inflationary climate long term. So being the Gold and Precious Metals Perma Bull that I am, I think that you should be buying and stockpiling (bullion, rounds,  coins; as much as you can get; to lock in the value of your money now. Events are truly starting to line up and set the stage for a potential worldwide collapse and depression.

===================================================

Claim a gram of FREE GOLD today, plus a special 18-page PDF report;

Exposed! Five Myths of the Gold Market and find out:

  • · Who’s been driving this record bull-run in gold?
  • · What Happens When Inflation Kicks In?
  • · Why most investors are WRONG about gold…
  • · When and How to buy gold — at low cost with no hassle!

Get this in-depth report now, plus a gram of free gold, at BullionVault

====================================================

– Trend Analysis Revealed –

Substantial moves like the ones that we have recently witnessed present opportunities to succeed or fail in the markets.

Traders who stayed on the correct side of the trend were rewarded substantially.

Serious questions effecting your portfolio still remain:

– Have we seen the Indexes bottom or top?
– Is a reversal in the near future?
– Is it too late to go short?

Stay on the correct side of the market. Let our Trade Triangle technology work for you. It’s free, It’s informative, It’s on the money.

Free Instant Analysis delivered to your email inbox. Analyze ANY Stock, Futures, or Forex symbol.

Click Here For Your Free Analysis

Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments. –  jschulmansr

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Scammed Again By Uncle Sam?

18 Wednesday Mar 2009

Posted by jschulmansr in 10 year Treasuries, 20 yr Treasuries, Bailout News, banking crisis, banks, bear market, central banks, China, Copper, Currencies, currency, Currency and Currencies, depression, dollar denominated investments, economic, Economic Recovery, economic trends, economy, Fed Fund Rate, Federal Deficit, federal reserve, Finance, financial, follow the news, Forex, Fundamental Analysis, futures, futures markets, gata, GLD, gold, Gold Bullion, Gold Investments, gold miners, Gold Price Manipulation, hard assets, How To Invest, How To Make Money, hyper-inflation, IMF, India, inflation, Investing, investments, Japan, Jschulmansr, Latest News, Long Bonds, majors, Make Money Investing, manipulation, Market Bubble, market crash, Markets, mid-tier, mining companies, mining stocks, monetization, oil, palladium, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, recession, Saudi Arabia, Short Bonds, silver, silver miners, Silver Price Manipulation, spot, spot price, stagflation, Stimulus, Stocks, TARP, Tier 1, Tier 2, Tier 3, TIPS, Today, U.S., U.S. Dollar

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Today Gold dropped $27.70 down to support at the $885 – $890 levels. We need to ask ourselves why? I would like to propose that we are absolutely being “Scammed by Uncle Sam!”. Let me explain… Again today Gold Lease Rates (1 month) are negative. “So what’s the  big deal about that?” you are asking. The big deal is this, when the lease rate is negative it means that someone will actually pay you a fee in addition to giving a Gold loan. Now you or I or anybody with a sane mind is not going to make a loan to you for a fee (they have to pay), to borrow Gold from them. This doesn’t even count the risk of never being repaid and losing the Gold! However, (and you can read more detail in today’s first article); this provides a way for someone to supress Gold prices if they wanted to, and you guessed who – “Scammed Again By Uncle Sam”. While the first article today explains “the how”, I am going to venture the “why”. Right now if you pay attention to what is going on, the U.S. and the Fed desperately need to appease some large holders of our debt and dollars by making a way for them to convert their dollar holdings into Gold. They also realize that their current (US) monetary policies are going to force Precious metals prices (especially Gold) much higher than today’s $1000 level while at the same time deteriorating the value of the U.S. dollar. By supressing the price of Gold temporarily the Fed and Treasury will benefit as follows. First as the foreign holders sell off their Treasuries and Bonds this creates a demand for U.S. Dollars to fulfill the transactions. This in turn brings those Dollars back into our economy helping to create more liquidity. Now depending on the velocity of money, that can be in itself inflationary. However with the velocity of money being dependent on Capital Investment, what are we currently seeing? Right now there is no real demand for new goods and services, which means that there is no real incentive to invest in New Factories, Expanding current production levels, or even opening new businesses. So then what happens? The holders instead of sitting on their dollars look for safe places to park those dollars until the economy turns around again. Where do they park the money, banks have proven to be risky?, the stock market? even riskier still, so they park their money in a “safe haven”, buying up Treasuries and Bonds. This helps to offest the selling pressure on Treasuries caused from the original U.S. Debt holder’s sales, and it also creates further demand for U.S. Dollars. With the unprecendented spending currently going on by Mr. Obama and cohorts, the Fed and the Treasury needs to create an increased demand for all of the new Debt Issuances coming into the market. ( They are also creating further false demand buy buying up their own new debt  (300 Billion purchase just announced today). In my mind these purchase in the long term will also create more inflation. So currently the U.S. government has every reason to keep trying to artificially depress the Gold Prices. Sooner or later however their Gold price manipulation will explode in their faces as already seen in a smaller degree,  the demand for Gold is snatching up all of the physical gold being dumped. That is why we will bounce off of these price levels for the fourth time. When it breaks and when inflation (already here- currently running 8% to 15%) is officially acknowledged,watch out Gold will shoot up like the latest Space shuttle launch! Use this limited time frame to keep adding to and accumulating your long positions in Precious Metals- Good Investing! – jschulmansr

ps- For complete details and Information on how Gold Prices are being manipulated and the Silver market also- go to GATA.org.

pps-****NEWS FLASH****

Gold is now up $26.60 New York Spot at $942.50 after Fed Announcement of Leaving Interest Rates Unchanged!

 =========================================================

Claim a gram of FREE GOLD today, plus a special 18-page PDF report; Exposed! Five Myths of the Gold Market and find out:

·        Who’s been driving this record bull-run in gold?

·        What Happens When Inflation Kicks In?

·        Why most investors are WRONG about gold…

·        When and How to buy gold — at low cost with no hassle!

Get this in-depth report now, plus a gram of free gold, at BullionVault

=========================================================

A new site that is in pre-launch state that will become a virtual world – chat, shop, play, videos, etc. Anyways they are giving free shares (that should become actual company shares) to anyone who signs up and more shares if you refer people. To Sign up (Free) and receive your shares click here.

 Follow Me on Twitter and be notified whenever I make a new post!

 

 

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=========================================================

 

 

 Gold Price Manipulation More Blatant- Numismaster.com

By: Patrick A. Heller of Numismater.com

On Friday, March 6, gold lease rates turned negative for the day. What that means is that anyone who wanted to lease gold would actually be paid a fee in addition to getting a free gold loan.
No sane person would choose to lose money loaning physical gold, in addition to the risk of never getting the gold back from the other party. However, if someone (such as the U.S. government) wanted to suppress the price of gold, this is one tactic to try to accomplish that purpose.
I can come to no other conclusion than that a large quantity of physical gold surreptitiously appeared on the market on March 6 with the sole purpose to drive down the price of gold. The quantities were large enough that they almost certainly could not come from private parties. With most of the world’s central banks now being net buyers of gold reserves, they would not be the source of this gold. By process of elimination, the suspicion falls upon the U.S. government as the ultimate party responsible for this blatant action to manipulate the price of gold.

Of course, the U.S. government would not want to be identified as the cause of this leasing anomaly. Instead, such manipulation was almost certainly conducted by multiple trading partners of the U.S. government.

This sledge hammer tactic worked at driving the price of gold further away from the $1,000 level – at least temporarily. Last week, spokesmen for a number of troubled U.S. companies were suddenly issuing statements about a return to profitability (such as Citigroup and JPMorgan Chase) or not needing further government bailouts (such as General Motors). Stock values climbed as gold’s price retreated.

But (and there was always a but), these massive efforts to suppress the price of gold seem to be running out of steam. First off, these “positive statements” had serious qualifiers such as the chairman of Citigroup claiming that, ignoring extraordinary items like bad loans, the bank earned an operating income in the first two months of 2009.

Then insurance company AIG bowed to pressure and revealed that a huge portion of the $150+ billion in bailout funds it had received had really been passed along as bailout money to other companies (including Citigroup and JPMorgan Chase). In fact, almost all of this money was redirected to the U.S. government’s trading partners who probably have been complicit in the manipulation of the gold price.

Once the public learned that such companies have received more federal government bailout money that previously revealed, the stock market rally stalled. The price of gold started to recover. Unless the U.S. government can come up with another tactic quickly, I expect the price of gold to generally rise over time.

In the meantime, demand for physical gold has taken off again. The U.S. Mint is so far behind at meeting demand for bullion gold and silver American Eagle issues that it last week announced an indefinite suspension of plans to strike 2009-dated proof and uncirculated versions for collectors. Even further, the U.S. Mint also announced that it would not even accept orders from primary distributors for any gold or silver Eagles this week.

On the wholesale market, supplies of gold and silver American Eagles quickly disappeared. The premiums of these coins shot upward. Some retailers now have to decline orders as they don’t know when they might be able to fill them or what premiums they will have to pay to acquire merchandise. My earlier prediction that by the end of April it would become almost impossible to find any physical gold or silver bullion-priced items for reasonable delivery is starting to come true.

At the American Numismatic Association’s National Money Show in Portland, Ore., this past weekend, demand for U.S. gold $10s and $20s was still solid. With some such collector coins now trading at all-time high prices, however, some dealers are advising their customers to consider selling or swapping for gold bullion. As a consequence, I think most of the surge in prices has already occurred. It might be a good time to take a profit.

 

 

 

=========================================================

My Note: Very Interesting Advice! “take profit on collector coins and buy bullion”-jschulmansr

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What’s Another $1.5 Trillion? – Seeking Alpha

By: Tim Iacono of Iacono Research

The Federal Reserve announced today that they will join the central banks of England and Switzerland, printing money out of thin air to buy long-term government debt so as to keep interest rates low and boost lending in their ongoing attempt to revive an economy that is faltering badly due to an orgy of credit and debt a few years ago.
Apparently the gold market and currency markets have heard the news (the chart to the right will be updated as needed over the next hour or so – update #1 from $925 to $932 already complete).
The printing presses will be working ’round the clock to fund purchases of up to $300 billion in long-term Treasuries over the next six months which, in combination with an increase in purchases of mortgage backed securities and agency debt also announced today (an additional $850 billion total), should see the Fed’s balance sheet swell to once unthinkable levels.

Lest anyone think that any of this is getting a bit out of control, the central bank also provided assuring words that they will keep an eye on the “size and composition” of their balance sheet in light of economic developments.

In what appeared to be just an afterthought, relegated to the third paragraph after occupying the top spot for years, the Fed also announced that short-term interest rates will be left at the freakishly low level of between zero and 0.25 percent and that they won’t be going up anytime soon.

And if this doesn’t work, we might just see the Fed’s balance sheet hit that $10 trillion level that someone mentioned the other day.

 

 

=========================================================

“Nothing will unnerve the paper gold shorts more quickly and do more to undercut their confidence than to strip them of the real metal and force them to come up with more hard gold bullion to make good on deliveries. “Stand and Deliver or Go Home” should be the rallying cry of the gold longs to the paper gold shorts.” –Trader Dan Norcini
 
 

 

=========================================================

My note: Only one answer to being scammed buy more! Please take advantage of the price now, they may try to bump it down one more time, but we are going back and testing all time highs $1050 level, if a “short squeeze” develops then $1250. Jump aboard now! -Good Investing – jschulmansr

=========================================================
Claim a gram of FREE GOLD today, plus a special 18-page PDF report; Exposed! Five Myths of the Gold Market and find out:

·        Who’s been driving this record bull-run in gold?

·        What Happens When Inflation Kicks In?

·        Why most investors are WRONG about gold…

·        When and How to buy gold — at low cost with no hassle!

Get this in-depth report now, plus a gram of free gold, at BullionVault

=========================================================

A new site that is in pre-launch state that will become a virtual world – chat, shop, play, videos, etc. Anyways they are giving free shares (that should become actual company shares) to anyone who signs up and more shares if you refer people. To Sign up (Free) and receive your shares click here.

 

========================================================= 

Follow Me on Twitter and be notified whenever I make a new post!

Schedule automatic tweets, Thankyou for following me messages and much more! Be More Productive- Free signup… TweetLater.com

 

========================================================= 

Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments. –  jschulmansr

 

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Going For The Gold!

20 Friday Feb 2009

Posted by jschulmansr in banks, bull market, capitalism, central banks, China, Comex, Copper, Currencies, currency, Currency and Currencies, deflation, diamonds, dollar denominated investments, economic, Economic Recovery, economic trends, economy, Fed Fund Rate, Federal Deficit, federal reserve, Finance, financial, Forex, Fundamental Analysis, futures markets, GDX, GLD, gold, Gold Bullion, Gold Investments, gold miners, How To Invest, How To Make Money, hyper-inflation, IAU, inflation, Investing, investments, Iran, Israel, Japan, Jeffrey Nichols, Jim Sinclair, Jschulmansr, Junior Gold Miners, Latest News, majors, Make Money Investing, market crash, Markets, mid-tier, mining companies, mining stocks, oil, palladium, Peter Grandich, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, silver, silver miners, small caps, sovereign, spot, spot price, stagflation, Stimulus, Stocks, TARP, Technical Analysis, Tier 1, Tier 2, Tier 3, Today, U.S. Dollar, XAU

≈ Comments Off on Going For The Gold!

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ANV, Austrian school, AUY, Bailout News, banking crisis, banks, bear market, Bollinger Bands Saudi Arabia, Brian Tang, bull market, CDE, central banks, China, Comex, commodities, Copper, Currencies, currency, deflation, Dennis Gartman, depression, DGP, dollar denominated, dollar denominated investments, Doug Casey, economic, economic trends, economy, EGO, Federal Deficit, financial, Forex, FRG, futures, futures markets, gata, GDX, GG, GLD, gold, gold miners, hard assets, HL, hyper-inflation, IAU, India, inflation, investments, Jeffrey Nichols, Jim Rogers, Keith Fitz-Gerald, majors, Marc Faber, market crash, Markets, Michael Zielinski, mid-tier, mining companies, monetization, Moving Averages, NGC, NXG, PAL, palladium, Peter Grandich, Peter Schiff, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, protection, recession, risk, run on banks, safety, Sean Rakhimov, silver, silver miners, SLW, small caps, sovereign, spot, spot price, stagflation, Technical Analysis, TIPS, U.S., U.S. Dollar, volatility, warrants, XAU

As I write Gold today has touched a high so far of $1000.30! If it breaks this level and holds then $1025-$1050 will be the next stop. At this point I would buy on any dips. This run is going to take us at least to $1050 oz. cont…

**********We officially just broke the $1003 all time high! *************** ******************Market up $28.50 to 1005.00!!!***********************

cont…

After that then we will probably see a retracement potentially down to previous resistance levels now support levels.

I would not be worried at all if we go as low as $940 – $960. That would be normal market action. However a note of caution, as Gold is not necessarily following normal market action as evidenced by the dramatic run to $1000 and then down to $690 approximately.

I am still a buyer on any dips and at this point I am holding my physical gold and still getting in to some of the Gold and Silver producers who are still selling at or near book values. As far as DGP goes I am still holding my position and will let you know when I exit that trade.

Remember in the worst case scenario with Gold, you are still locking in the “buying power” of your current dollars. With Bernake running the monetary printing presses at full steam, we will see inflation return. Already the true (not government manipulated figures) inflation rate is running at 6% – 9% depending on who you are following. However, when I go to the grocery story and see a package of hot dog buns that I could buy a few months ago at $1.00 for a package of 8, now selling for as high as $4.00 for the same package; it would seem that the true inflation rate is way higher up around 12% – 18% already!

So I am still looking at “protecting my dollars”,  by converting them into Gold. You would be wise to do the same, because soon the manipulated value of the dollar will come crashing down; along with all the other major currencies as all of the central banks are printing money and trying to flood their markets with liquidity. 

As I mentioned in yesterday’s post  Gold is on a major Bull Market run and all of the movement is based on current financial pressures, still without any major news like a new war/conflict especially in the Middle East (i.e. Israel taking out Iran’s nuclear reactor), or major terrorist act. Buy gold “wholesale” thru Comex, take physical delivery, if we all do this we’ll be putting major pressure on the “shorts” and potentially cause a “short squeeze”! Then you see Gold bid up to some amazing levels and be able to jump in and make some quick profits.

“Nothing will unnerve the paper gold shorts more quickly and do more to undercut their confidence than to strip them of the real metal and force them to come up with more hard gold bullion to make good on deliveries. “Stand and Deliver or Go Home” should be the rallying cry of the gold longs to the paper gold shorts.” –Trader Dan Norcini

Otherwise, hang on to your hats as the “Gold Express” has left the station and is barreling down the tracks! – Good Investing! – jschulmansr

Here is where I buy my Bullion, get one free gram of Gold just for opening an account! Catch the New Bull! – Buy Gold Online – Get 1 gram free just for opening account!, no minimums – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

==================================

Gold Pole Vaults to $1000 – Market Watch

 

 

 

 

By Polya Lesova, MarketWatch
Last update: 10:07 a.m. EST Feb. 20, 2009
NEW YORK (MarketWatch) — Gold futures topped the key $1,000 mark for the first time in nearly a year on Friday, as global financial and economic worries boosted the safe-haven appeal of the precious metal.
In recent action, gold for April delivery traded at $995.30 an ounce, up $19.50, or 2%, on the day. It earlier touched a high of $1,000.30.
Stocks fell to fresh bear-market lows in early action on Wall Street, with the Dow Jones Industrial Average ($INDU:
“There is a risk here of a panic sell-off in stock markets and the next leg down in the stock bear market looks imminent, as the ills of the global financial system virulently infect the global economy,” said Mark O’Byrne, executive director at Gold and Silver Investments Limited, in a research note.
“While gold has become overbought in the short term, its medium and long term fundamentals are as sound as ever,” he said.
Gold for February delivery, the front-month contract which registered very little volume, was last up $19.30, or 2%, at $995.40 an ounce on Globex. The February contract expires on Feb. 25. Earlier, February gold hit an intraday high of $999.50 an ounce.
On Thursday, the Dow industrials finished at 7,465.95, down 89.68 points to end at the weakest level since Oct. 9, 2002.
“The price slide of U.S. equities, with the Dow Jones Industrial Average falling to its lowest level since October 2002, should result in a continued positive mood of investors on gold,” said Eugen Weinberg, an analyst at Commerzbank.
Also on Globex Friday, March silver futures rose 46 cents, or 3.3%, to $14.39 an ounce, and April platinum futures gained $12.50, or 1%, to $1,089.00 an ounce.
March palladium futures gained 40 cents, while March copper futures fell 5 cents, or 3.5%, to $1.42 a pound. End of Story
Polya Lesova is a New York-based reporter for MarketWatch.
==============================
Gold has a “True Bull Run” – Financial Post
Source: MineWeb.com

 

 

Gold was, at the time of writing, close to $1,000 again. It would seem this level is inevitable sooner rather than later and this time the yellow metal may spend rather more time in the four figure area.

Author: Lawrence Williams
Posted:  Friday , 20 Feb 2009

LONDON – 

As this article was commenced, the gold price was at $997 and seemingly inexorably headed towards breaching  the US$1,000 level once again.  Indeed by the time you read this it may well already have done so.  April futures had already marginally gone through the $1,000 level.

The big question is, assuming spot gold does push through $1,000, will this be third time lucky for the gold bugs?  Gold has breached $1,000 twice beforehand and on each occasion its climb into the four figure level was shortlived.  This time it may well be a different situation with the likelihood that the price is poised to go higher still – and maintain its position above $1,000 for some little time to come.

Gold’s dollar high of $1,033.90 was achieved seemingly a very long eleven months ago but only remained at this exalted level for a few days , before crashing back.  Indeed as stock markets began to collapse and then plunged in the second half of the year, much confidence was lost in gold as an ‘insurance policy’ as it fell back to the high $600s at one stage, but the realisation came about that the main reason for the price decline was that funds and institutions were having to liquidate any tradable assets to meet their commitments, and gold s nothing if not tradable at any price.

Gold soon recovered and started a steady run back up to current levels despite rising markets and a strong dollar – usually both signs of a likely weakness in the gold price.  Indeed gold broke new price records in virtually all currencies other than the US dollar and now it looks highly likely to do so in terms of the now not-so-mighty greenback itself.  Meanwhile stock markets in general have started to fall back again as the world realises that the various stimulus packages worked out by clutching-at-straw governments are unlikely to improve matters drastically and much of the world heads for depression – or something approaching one.  There is no doubt we are already in recession in the West and depression is just the next, and infinitely more dangerous, phase of the current reality.

Gordon Brown has certainly not saved the world, and Barack Obama’s deification status is already tarnished after only a few days in office.  It is becoming apparent that what the politicians and economists with clout feel could be remedies to what is facing us ahead are nothing but untried and unproven stopgaps which patently are not working – or not at least yet.

Meanwhile banks are digging themselves further and further into the mire with more collapses and nationalisations likely, countries will default on their commitments and matters will continue to deteriorate unless some financial miracle happens.

Indeed the only world saviour may yet be China, but at what cost?  There are indications that the Chinese may have been in part responsible for the depth of the fall in commodity prices by halting industrial plants and infrastructure spending ahead of the Olympic Games and not resurrecting it afterwards as it could see an advantage in keeping prices down.  But the Chinese did not foresee the collapse in the western financial system exacerbating the situation dramatically and the global downturn came back to bite the Chinese in the bum as its exports crashed and huge numbers of people were thrown out of work – a potential cause of serious unrest.

Beijing has since taken steps to resurrect its infrastructure programmes.  Projects which were lying idle are at full swing again, but this is too little too late for much of the rest of the world. It may serve to keep China itself out of recession – and perhaps throw a lifeline to commodity producers to help them maintain output and support prices, but it’s definitely too late for much of the rest of the global economy which is in a frightening downward spiral.

But – with regards to securing commodity supplies and controlling future markets we are seeing China, with its huge funding capabilities, tieing up supplies, making major strategic investments in mining and metallurgical companies – and also in some other important western entities – and also providing loans to enable what they see as potential strategic partners stay in business.  But again, as we saw in yesterday’s European Nickel announcement on finance, there are China-benefiting clauses in most of these ‘strategic’ agreements.

It was Alfred Lord Tennyson in one of his Arthurian epic poems who used the phrase “The old order changeth, yielding place to new” and that is extremely apposite phraseology for what is happening now.  US economic imperialism has started to be replaced by a Chinese version.

But what has this to do with the gold price?  Because the Chinese were perhaps too late in re-implementing their own stimulus, which could have mitigated the global downturn at an earlier stage and possibly eased its speed, depth and perception, the realisation that gold could actually be the best way of protecting one’s assets began to filter through to previous unbelievers in the yellow metal. 

This has shown itself in the unprecedented inflow into metal purchases and ETF holdings which seem to be accelerating as the crisis deepens.  Never mind the fall-off in Eastern investment grade jewellery demand and the big rise in gold scrap sales.  ETFs are picking all this up (and global gold production is falling anyway).  But no matter, investment strength is always driven perhaps more by perception than by fundamentals (at least in full-scale bull or bear markets) and the current thought seems to be gaining more and more ground that gold is about the only serious safe haven out there.  The dollar may have proved to be a good bet of late, but everyone knows that pumping out money will ultimately be inflationary – and gold is traditionally a great inflation hedge too.

Indeed what gold is doing now is demonstrating that all western currencies are weak, rather perhaps than that gold fundamentals are strong, and the currencies are all devaluing against gold which is regaining its position as ultimate money – a position which believers say has never gone away!

So what of the performance of gold while this article was being written.  Well the price pulled back a little from the brink of bursting up through the $1,000 level and is, at the time of writing, sitting at $994 again, but the overall upwards drive for the moment seems unstoppable as financial news elsewhere continues to deteriorate.  Once gold goes through $1,000 this time it is not unreasonable to suggest it should perhaps stay there for a lot longer than last time – and maybe there is the prospect of a far higher peak.  Gold metal, ETFs, stocks and funds could have a way to run yet.

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Have A Great Day! – Good Investing! – jschulmansr

Catch the New Bull! – Buy Gold Online – Get 1 gram free just for opening account!, no minimums – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

========================

Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments. –  jschulmansr

 

 

 

 

Gold has a ‘true bull run’

This ‘bubble is still being blown up,’ analyst says

Jonathan Ratner, Financial Post  Published: Thursday, February 19, 2009

 

 

 

 

 

 

 

 

 

Safe-haven demand and a lack of investment alternatives continue to help gold break from its traditional trading relationships, rising toward a new record, despite a strong U. S. dollar and weak crude oil prices.

In fact, analysts at Genuity Capital Markets noted that gold has been trading more than US$200 per ounce above its normal value relative to the greenback. The firm also pointed out that the opportunity cost of holding bullion has diminished, with treasury yields at record lows and demand fundamentals deteriorating in the broader commodity and equity markets.

“Gold’s run since autumn, 2008, has been a true bull run, rising despite the strength of the U. S. dollar and outperforming virtually every other commodity and currency class,” said Canaccord Adams analyst Steven Butler. He told clients that bullion has set recent new highs in euros, pounds and Canadian dollar currency terms, among others.

Canaccord raised its peak gold price by another US$150, to US$1,100, now that gold has broken through the firm’s previous target of US$950.

“It is fair enough that gold may be in a bubble, but we think the bubble is still being blown up,” Mr. Butler said.

While credit risk has fallen from its recent highs, he noted that it is as elevated as during gold’s first peak last March, which coincided with the collapse of Bear Stearns. However, gold is still below the US$1,003 high set about a year ago.

Meanwhile, inflation may not be registering yet in terms of near-term expectations, but Canaccord believes that it and a general devaluation of paper currencies will be the result of the concerted monetary and fiscal policies to reflate the global economy.

Gold is known as a measure of real assets value because of its ability to preserve value during inflationary times. However, during disinflationary times like these, the current global growth and demand landscape also supports the notion of too many dollars chasing too few gold ounces, according to Ashraf Laidi, chief market strategist at CMC Markets in London.

He noted that the equity/ gold ratio has fallen about 85% from its 1999 peak, which occurred when gold stood at 20-year lows and equities reached their highs at the top of the dot-com bubble. Just as the equity/gold ratio stands at 18-year lows, the ratio of total financial assets to physical gold is near the low end of its historical range.

Mr. Ashraf also pointed out that the world’s available gold stock stands at only 5% to 6% of total global stock and bond market valuation.

Sustained investor interest in gold throughout 2008 helped push U. S. dollar demand for bullion to US$102-billion, a 29% annual increase, according to the World Gold Council. Its Gold Demand Trends report said identifiable investment demand for gold, which incorporates exchange-traded funds (ETFs), bars and coins, rose 64% last year. This is equivalent to an additional inflow of US$15-billion.

Genuity noted that holdings of the largest gold ETF, SPDR Gold Trust (GLD/NYSE), have increased by 26% since the beginning of 2009. So while bullion held in depositories on behalf of gold ETFs continues to grow from record levels, price volatility is an important consequence on both the upside and downside.

The ease of investing in gold via ETFs is matched by the ease of disinvestment, said Jeffrey Nichols, managing director of American Precious Metals Advisors.

“Just as quickly as gold-ETF depository holdings have grown, so might they shrink when sentiment changes,” he told clients.

This has already contributed to short-term volatility and may do the same for the long term, given that gold’s ultimate peak could be much higher than many had expected.

jratner@nationalpost.com

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Catch the New Bull! – Buy Gold Online – Get 1 gram free just for opening account!,

no minimums – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

======================================

 

Gold stocks are flavour of the month again amongst major analysts – MineWeb

Source: MineWeb.com

 

The recent strong performance of the gold price vis a vis weak stock markets in general is again making gold stocks attractive to institutional and individual investors.

Author: Steve James and Euan Rocha – Analysis
Posted:  Friday , 20 Feb 2009

NEW YORK (Reuters) – 

The prospects for equity markets and numerous sector indexes have dimmed during the global recession, but gold and the companies that mine it have not lost their luster.

With gold prices nudging their all-time high and energy and other costs falling, mining company profit margins are widening, making their shares attractive, analysts said on Thursday.

“Within the next year, we will see the gold stocks sell at significant premiums to traditional earnings measures or net asset value measures,” said Robert Lutts, chief investment officer of Cabot Money Management in Salem, Massachusetts, which manages $400 million of client assets.

“I have owned Barrick Gold for one reason only — because it has the biggest pile of gold in the ground,” Lutts said of the world’s biggest gold producer, Canada’s Barrick Gold (ABX.N Quote)(ABX.TO: Quote).

“New interest continues in this increasingly attractive sector,” JPMorgan analyst John Bridges wrote in a note. “We feel all funds should have a core long position in the metal or the equities.”

Moreover, analysts expect acquisitions in the gold sector to accelerate, as larger players pounce on their cash-strapped smaller colleagues, in a bid to grow their asset base.

“I believe in investing in both bullion and stocks,” said Jeffrey Nichols, managing director of American Precious Metals Advisors. “Large companies with strong cash positions are in a good position to take advantage” of a higher gold price.

Lower fuel, raw materials and equipment costs, combined with weaker Canadian and Australian dollars and a flight to gold as a safe haven, have spurred gold miners’ stocks recently.

The gold and silver index , which comprises major U.S. and Canadian gold mining stocks, has more than doubled over the last four months. Spot gold was selling for $978.80 per ounce in New York on Thursday, closing in on its all-time high of $1,030.80 from last March 17.

“At these levels, we’d encourage new investors to begin by buying a little Newmont,” Bridges wrote, after Newmont Mining Corp (NEM.N: Quote), the world’s No. 2 gold producer, reported better- than-expected fourth quarter results.

Since most major gold players no longer hedge production, they stand to gain from the recent run-up in gold prices.

Nichols touts Barrick and its Canadian peer, Goldcorp Inc (G.TO: Quote). “In general, I like Barrick and Goldcorp because they are well managed, with management you can trust, providing a good return on investment.”

Credit Suisse analyst David Gagliano saw Newmont as an attractive investment after its solid fourth-quarter results.

“Newmont is entering the sweet spot,” he wrote in a research note noting higher production, lower costs and lower capital expenditures due to the proposed start-up of Boddington, which will be Australia’s biggest gold mine.

“Add to this the favorable gold backdrop and declining raw material costs, and we believe Newmont is set up nicely for a strong 2009,” wrote Gagliano.

Peter Spina, who operates Goldseek.com, a website for investors, said now is the time to invest in gold miners.

“I think mining companies are looking a lot better,” he said. “With costs down, the profit margins are expanding and people are saying: ‘Where should I invest in this market?’ The gold mining companies are the place to be.”

Spina noted that capital markets appear to be opening up.

“We are now seeing more competition for capital where three months ago it was impossible,” he added.

Spina likes the junior players, such as Denver-based Gold Resource Corp (GORO.OB: Quote), which is developing projects in Mexico.

Genuity analyst Tony Lesiak expects larger gold players to swoop in on some of the smaller miners.

“Merger and acquisition activity in the gold sector could be poised to accelerate,” Lesiak said.

He cited the improved outlook for precious metals, the disconnect between larger companies and cash-starved juniors, and a paucity of internally available quality growth projects.

Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier, favored unhedged miners.

“Most producers have an unhedged book, but rising production, such as at Goldcorp and Kinross (Gold Corp (KGC.N: Quote)(K.TO: Quote,) are what come to mind,” he said.

(Reporting by Steve James, Euan Rocha and Frank Tang in New York and Cameron French in Toronto; Editing by Andre Grenon)

© Thomson Reuters 2008. All rights reserved.

==========================

In a previous post I gave you a partial list of Tier 1, Tier 2, and Tier 3 mining companies and their websites. Then in another post I gave you questions you should ask when you are doing your due diligence before making any investment in the stocks of these companies and those mentioned in today’s post. Clicks on the links to view.- jschulmansr

Catch the New Bull! – Buy Gold Online – Get 1 gram free just for opening account!, no minimums – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

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Gold Sector: Mergers and Acquisitions Set to Soar – Seeking Alpha

Source: FP Trading Desk

The gold sector could see a flurry of takeover activity in the coming months, according to Genuity Capital Markets analysts Tony Lesiak, Christine Healy and Michael Gray. With that backdrop, they have broken down a number of potential targets.
They believe that 2009 could be a big year for gold M&A for a number of reasons: rising bullion prices, the growing valuation disconnect between juniors and seniors, recent financings by the seniors, and a shortage of internal growth projects for the seniors.
So who could get bought? The analysts ranked 10 junior gold producers and 20 junior development companies on the unusual measure of estimated total acquisition cost per attributable, recoverable ounce.

 

On that basis, the top three producer targets are Allied Nevada Gold Corp., Mineral Deposits Ltd., and Kirkland Lake Gold Inc. (KGLIF.PK), while the top junior development targets are Andean Resources Ltd. (ANDPF.PK), Colossus Minerals Inc. (CSIMF.PK), Comaplex Minerals Corp. (CXMLF.PK), Gabriel Resources Ltd. (GBRRF.PK), and Osisko Mining Corp. (OSKFF.PK).

 

“We recommend a basket approach to investing in any of these names given the speculative and single-asset nature of the companies,” they wrote in a note to clients.

With the exception of Gabriel, these are all companies that are often considered takeover targets. Gabriel has problems with NGO opposition in Europe, but the analysts figure that if the company can ever get government approval for its Rosia Montana project, it would be a logical target for Newmont Mining Corp. (NEM).

The most likely North American buyers in this market include Newmont, Barrick Gold Corp. (ABX), Kinross Gold Corp. (KGC), Eldorado Gold Corp. (EGO), and Alamos Gold Inc. (AGIGF.PK), they wrote.

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Decoding What Gold is Telling Us – Seeking Alpha

By: Simit Patel of Informed Trades.com

Well, gold bugs around the world have been having a good chuckle of late, as the market is re-affirming the often eccentric and practically religious views of gold bugs: gold is up over 11% for the year in US dollars, and up over 4% over just the past five trading days. Which begs the question: why? There are a few possible answers to this question:

1. Deflation. This crisis is global, and everyone is flying to safe stores of wealth. Over the big picture of human history, gold has served as the best store of wealth — and thus gold is rising. In many ways this is the classic “gold is money” argument, one typically championed by Austrian economists. Robert Blumen has offered an excellent explanation of this argument.

2. Inflation. Gold is typically a hedge against inflation concerns, and as the US federal government continues to aggressively “stimulate” the economy, the rally in gold may be a reflection of increased concerns regarding inflation.

So which one is it?

In my opinion, both. With that said, I view inflation as the larger concern, as I have said many times before. If the environment were truly deflationary, Treasury bonds would be the true recipients of flight to quality, as well as dollar holdings in FDIC insured banks. Instead, 20+ year Treasury bonds have fallen by more than 13% thus far (as measured by TLT). Negative correlation between TLT and precious metals suggests inflation, not deflation. The chart below illustrates.

click to enlarge

Deflationists will point to the fact that the US dollar may be strengthening relative to other fiat currencies — although this is not necessarily a reflection of deflation, as it could simply be interpreted as weakness of all global currencies, all of which are falling against gold. More relevant may be the rise in PPI and energy prices in January of 2009. While one month alone does not provide sufficient evidence for a substantive reversal in macroeconomic trends, it is not consistent with deflation, and may suggest that the Fed’s inflationary actions in the second half of 2008 may be kicking in.

Conclusions for Trading

The recent activity in the market has led me to make the following revisions:

1. The forex market is increasingly a trader’s environment, perhaps even a daytrader’s environment.

2. Gold and silver may retrace, perhaps even by several hundred dollars, though I would view it as an opportunity to buy on dips. The global economy is getting worse and conditions are being aggravated by the actions of central bankers. As a result, the fundamental case for gold and silver will get stronger.

3. Counterparty risk is rising — this strengthens the argument for increasing the physical delivery portion of one’s precious metals portfolio.

4. Because of inflation concerns, my bias is against short positions in all asset classes. If I were a trader of stocks or commodities, I might look into shorting positions relative to a broader index (i.e. short a particular stock while going long the sector ETF, under the rationale that the stock will do worse than the entire sector).

5. Oil’s behavior has been quite peculiar; I’ve yet to find a convincing explanation for why it’s moving the way it is. As it escapes my fundamental analysis, and as I find it less appealing than currencies from a technical analysis perspective, I’ll stay away from oil.

6. As gold becomes too expensive for many, silver will grow in appeal. And as silver fell more than gold during the second half of 2008, it may be set for a larger rally.

Disclosure: Long gold and silver.

 

 

 

 

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Short Stories: Anglo American, Rio Tinto, Xstrata, Alcoa – Seeking Alpha

By: Jessica Johnson of Short Stories

Anglo American (AAUK), the mining and natural resource company, presents its results today and according to the Financial Times, its CEO, Cynthia Carroll, may face some tough questions. Falling platinum, diamond and copper prices have taken their toll on Anglo’s profit margins, and analysts will be looking for signs of progress from Ms. Carroll’s cost-cutting drive.
As you can see from this graph of Anglo’s shares outstanding on loan (%SOOL), there has been a recent increase in the short position of the stock, which, over the last ten weeks, is up from 1% to 2.2%. However, this is still a small percentage, compared to Xstrata (XSRAF.PK) (for example), which has just under 10% of its SOOL. Xstrata and Anglo’s other rival Rio Tinto [RIO/LSE] (RTP) have recently used a rights issue and a cash injection from China to shore up their balance sheets, whereas Anglo has manageable debt levels. RIO currently has 1.5% SOOL, which is up from 0.7% in January and down from 2.7% in December.

 

 

Anglo American:

click to enlarge

Anglo American

Xstrata:

click to enlarge

Xta

Rio Tinto (UK Listing)

click to enlarge

Rio plc

The S&P 500-listed stock Alcoa Inc. (AA), which produces aluminum (partly through the mining industry), has seen a rise in its %SOOL. It is up from 2% in October, but down from 8% ten days ago and currently stands at to 6%. This is in line with a fall in its share price, which over the last six months has fallen from $30 to $7. A particularly severe fall in price occurred between September and October when the stock fell from $30 to $10. Since that time, short investors have continued to take profits as the price ebbs around the $10 mark.

click to enlarge

Alcoa

Disclosure: None

=======================

My Note: With the exception of Alcoa, I think some of these Short traders are going to lose their shirts especially as Gold continues it’s Bull Stampede!- jschulmansr

Catch the New Bull! – Buy Gold Online – Get 1 gram free just for opening account!, no minimums – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

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Third time lucky for gold – the ultimate money? – MineWeb 

 

 

 

 

Dow Jones Industrial Average
S&P 500 Index

$INDU 7,336.68, -129.27, -1.7%) off more than 100 points, or 1.5%, at 7,357, and the broad S&P 500 index ($SPX: $SPX 764.48, -14.46, -1.9%) down 10 points, or 1.4%, at 768.

METALS STOCKS

Gold tops $1,000 for first time in nearly a year!

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Catch Me If You Can!

18 Wednesday Feb 2009

Posted by jschulmansr in 10 year Treasuries, 20 yr Treasuries, banking crisis, banks, bull market, central banks, China, Comex, commodities, Currencies, currency, Currency and Currencies, DGP, dollar denominated, dollar denominated investments, economic, Economic Recovery, economic trends, economy, Fed Fund Rate, Federal Deficit, federal reserve, Finance, financial, Forex, Fundamental Analysis, futures, futures markets, gata, GDX, GLD, gold, Gold Bullion, Gold Investments, gold miners, hard assets, How To Invest, How To Make Money, hyper-inflation, IAU, IMF, India, inflation, Investing, investments, Japan, Jschulmansr, Junior Gold Miners, Latest News, majors, Make Money Investing, market crash, Markets, mid-tier, mining companies, mining stocks, monetization, palladium, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, Saudi Arabia, silver, silver miners, spot, spot price, stagflation, Stimulus, Stocks, Technical Analysis, The Fed, Tier 1, Tier 2, Tier 3, Today, U.S., U.S. Dollar

≈ Comments Off on Catch Me If You Can!

Tags

Austrian school, Bailout News, banking crisis, banks, bear market, Bollinger Bands Saudi Arabia, Brian Tang, bull market, central banks, China, Comex, commodities, Copper, Currencies, currency, deflation, Dennis Gartman, depression, DGP, dollar denominated, dollar denominated investments, Doug Casey, economic, economic trends, economy, Federal Deficit, financial, Forex, futures, futures markets, gata, GDX, GLD, gold, gold miners, hard assets, hyper-inflation, IAU, India, inflation, investments, Jeffrey Nichols, Jim Rogers, Keith Fitz-Gerald, majors, Marc Faber, market crash, Markets, Michael Zielinski, mid-tier, mining companies, monetization, Moving Averages, palladium, Peter Grandich, Peter Schiff, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, protection, recession, risk, run on banks, safety, Sean Rakhimov, silver, silver miners, small caps, sovereign, spot, spot price, stagflation, Technical Analysis, TIPS, U.S., U.S. Dollar, volatility, warrants, XAU

As I write this Gold is taking a breather and consolidating at the $960 level, this is before I believe the next launch to test the $1000 mark+ which can easily come in the next few days. Gold is certainly saying “catch me if you can!”. Todays articles include several different vehicles with which to cash in on gold! Good Investing – jschulmansr

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Jschulmansr Recommended:

Here is where I buy my Bullion, get one free gram of Gold just for opening an account! Catch the New Bull! – Buy Gold Online – Get 1 gram free just for opening account!, no minimums – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

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Riding the Gold and Silver Uptrend with ETF’s – Seeking Alpha

By: The Sun of The Sun’s Financial Diary

As I mentioned earlier, gold has had a tremendous run lately. The main force behind the gold rally is the deterioration of economies around world. Despite the passage of the $789 billion economic stimulus package over the weekend, gold price has continued to climb since the holiday.

Currently, spot gold is traded at $967 an ounce, up more than $10 from last Friday’s close, breaking the key $950/ounce level. That’s the seven-month high for gold. Also, major stock benchmarks are likely to test the November lows amid jitters in the financial sector.

 Even though there are predictions that gold could back fall after the stimulus plan became a law, that hasn’t happened. In contrast, investors are increasing their holdings of gold as a safe haven to preserve their wealth while the stock market continues to decline. Right now, gold is trading well above its 50- and 200-day moving averages, a clear indication of the uptrend of gold. (click to enlarge)

Gold rally

Investors’ appetite for physical gold, such as bars and coins, has driven up share prices of exchange-traded funds (ETFs) specializing in precious metal as well. For instance, take a look at SPDR Gold Trust Shares (GLD), the world’s largest gold-backed ETF. GLD gained 3% in 2008 and 6.9% so far in 2009.

The reason investors are also chasing GLD is that it offers investors an easy way to invest in the bullion without having to hold the metal themselves (you will have many more things to consider, such as storage and insurance, if you want to hold physical gold yourself). If you invest in GLD instead, your investment will reflect directly the price of gold because GLD’s share price is determined based on 1/10th of an ounce of gold. SPDR Gold Trust buys and stores physical gold to back GLD prices. In fact by tracking holdings of SPDR Gold Trust, you can get a sense of the demand for gold. Currently holding 985.86 tonnes of gold, a record level for GLD, the indication is that demand is strong.

If you are interested in investing in precious metal ETFs, check out these funds in gold and silver:

  • SPDR Gold Shares
  • iShares COMEX Gold Trust (IAU)
  • Market Vectors Gold Miners ETF (GDX)
  • PowerShares DB Gold (DGL)
  • iShares Silver Trust (SLV)
  • PowerShares DB Gold Double Long ETN (DGP)
  • PowerShares DB Precious Metals (DBP)
  • PowerShares DB Silver (DBS)

Among them, GLD has the largest daily trading volume according to Morningstar data, followed GDX and SLV. Remember, volume matters when trading an ETF. Not only because of the bid/ask spread, but also for the survival of the fund.

Stock chart from INO Stock Analysis

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My Disclosure: Long DGP and GLD – jschulmansr

Catch the New Bull! – Buy Gold Online – Get 1 gram free just for opening account!, no minimums – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

======================================

Want a Way Out of the Economic Stupidity? Buy Gold – Seeking Alpha

By: Adam Lass of Wave Strength Options Weekly

For every analyst arguing one side of the above arguments, you have another analyst strongly arguing the opposite. And often you have the majority of analysts taking one position in the above arguments and then flip-flopping like a politician to the opposite position just two months later if things move the opposite way from their predictions.

Make 203% as Washington becomes a global laughing stock

According to our nation’s new “Intel Czar,” the economy is the number one threat to the U.S. right now.

In testimony before the Senate Intelligence Committee, National Intelligence Director Dennis Blair warned that: “The longer it takes for the recovery to begin, the greater the likelihood of serious damage to U.S. strategic interests.”

Now, one ought to keep in mind that Blair was addressing the committee just a day or so before Congress would be disgorging the bolus known as the 2009 Stimulus Act. As such, Blair, with his 49-page statement, was just one more player in the administration’s full court press.

Our Own Worst Enemy

Still, Blair does make some interesting points: Suddenly, al-Qaeda is no longer the top-listed actor. Indeed, most of the “Axis of Evil” has fallen several notches down the old hit parade.

North Korea’s current or Iran’s future nukes? Still salient, but not “Number One with a Bullet,” as old Casey Kasem used to say. Russian territorial belligerence and Chinese currency intransigence? Worrisome in the long run, but still not the top threat.

No, Washington’s Numero Uno spy tells us that our worst problems stem from the rot within. Or, to quote the ever-so-sage Walt Kelly: “We have met the enemy, and he is us.”

Our Newest Secret Weapon: The Dollar Bomb

The grand economic downturn (wow, that is such an elaborate way to avoid saying “depression”) presents two key security issues. The first seems obvious enough: We need cash to fully fund our military.

I suspect that this is less of a problem than it seems at first blush. Coming up with more dollars these days is actually remarkably easy: Washington just prints as many as it wants.

In fact, this may even turn out to be a bit of a blessing in disguise (okay, it’s a really good disguise, but bear with me here). A great way to get more bang for your newly imagined bucks would be to hand them off to military contractors, who could then hire more workers to build more armored troop carriers, which could then be blown up in Afghanistan. Then we just do it all again!

Bingo: You’ve cut unemployment and sopped up excess industrial capacity in one fell swoop! Hey, it worked for LBJ and Nixon, right? Right? Hey, stop throwing those “Whip Inflation Now” buttons at me!

The Price of Weakness

Let’s move on to issue two: The longer this debacle continues, the more folks in odd corners of the world might get the idea that maybe those “‘Mericans ain’t so smart after all.”

Much like Britain in its day (an apt comparison, since we pretty much bought our empire used from the Brits at the end of WWI), global control pretty much depends on the projection of the image of power. When that image falters, suddenly café agitators round the world have a much easier time persuading recruits to run around with Kalashnikovs and C4 undergarments.

And indeed, if you dig deep into Admiral Blair’s report, he does mention that al-Qaeda’s successful recruitment of Westerners over the past two years is making it increasingly difficult to play “Spot the Terrorist” at airports.

Hard to March When You’ve Shot Yourself in the Foot

But a mere economic downturn could not make us look but so dumb. Seriously, these things happen all the time, without risking national security. No, what makes us look inane and weak is the way in which our ineptitude has exacerbated a downturn into a full-blown crisis.

An example: Over the past few days, Justice and I have both bemoaned the current Secretary of Treasury’s glacial pace. It’s not so much that we want to see trillions in funny money dumped on us. It’s just that we wish they would rip the damn bandage off and move on already.

After weeks of promising to reveal his latest scheme, the best we got was a promise to come up with a schedule for formulating a plan, along with some vague threats to further “stress test” banks that have obviously already failed any sort of common sense test.

“It’s the Other Guy’s Fault. Oh Wait, I Am the Other Guy”

After calming down a bit, I actually went so far as to check with some connections I have in Washington as to why Geithner is moving so slowly. The current excuse coming out of the Treasury? The “New Team” has been unable to hire adequate expertise to figure out what to do next.

As I pointed out last week, the “New Team” is pretty much the “Same Old Team” that screwed things up in the first place. Indeed, the whole reason we were told to tolerate them was because their prolonged exposure supposedly ensured their expertise on the topic.

No wonder folks outside our borders are beginning to think we are stupid.

Turning Ineptitude Into Gold

There is one place where they are treasuring our fiscal inanities. Canada is enjoying a (relative) boom at our expense. Whereas the benchmark drop for most of the world’s markets has been hovering around 7.3% so far in 2009, Toronto’s TSX composite is down a mere 2.7%.

What’s propping things up north of the border? Gold, my friends.

Barrick Gold (ABX) and 11 of their fellow miners are up some 5.2% as a group this year. And it looks like this boom is nowhere near clapped out.

And why should it be, when guys like Euro Pacific Capital’s Peter Schiff are calling for gold to increase another 60% before the dust settles. Think that’s a speculative call? Heck, you can make a pure value argument for these guys.

After being bludgeoned by 14 months of recession and a 47% share price crash, one might imagine that U.S. stocks ought to be pretty darned cheap right now. And despite all this damage, the S&P 500’s trailing P/E is hanging out around 29.1, some 40% higher than at the market’s absolute top back in October 2007. Barrick’s P/E of 18.88 beats that by some 35%!

Now if you were looking for a way to turn our foolishness into treasure, you could simply do as the Canadians do, and buy shares of ABX. That increase in gold ought to bump up the share price some $20 between now and mid-summer.

If you were interested in a bit of leverage, you could easily pick up mid-dated ABX call options. That same $20 spike would offer you gains as high as 203%.

Disclosure: no positions- Adam Lass

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My Note: Of course I agree with the above article but “no positions?”. You gotta play if you want to get paid!… – jschulmansr

Catch the New Bull! – Buy Gold Online – Get 1 gram free just for opening account!, no minimums – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

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The following is a Very Interesting Article! – jschulmansr

In Today’s Enviroment, Neither Technical Nor Fundamental Analysis Alone Will Work-Seeking Alpha

By: J.S. Kim of SmartKnowledgeU

 

In an extremely difficult investment environment, it is often difficult to know who to believe. Deflation or inflation? Have financial stocks bottomed or do they have much more to fall? When gold corrects sharply, is the gold bull over or still alive? Is oil heading to $20 a barrel or $80 a barrel?

For example, when we look at oil prices, oil has plunged from $147 a barrel to less than $35 a barrel in 7 months! During this time, the deflationists have been out en masse in the mainstream media, claiming that plunging oil prices were directly attributable to plunging demand worldwide from economies that were stagnant. For example, here’s a link to a story that seems to infer that plunging oil prices are caused primarily by plunging U.S. demand and growing U.S. inventories. Though it would be ignorant to ignore the effect of a slowing global economy on demand for crude oil and its effect on lower crude oil prices in the futures markets, it would be equally ignorant to attribute the majority of crude oil’s plunge to a shrinking global economy as well.

How many people really believed that when we had $147 a barrel crude oil prices that this price was solely attributable to skyrocketing demand?

Instead, I can assure you that these stories have been planted to distract you from the real culprit of plunging oil prices –fraud, manipulation of crude oil futures, and political scheming to try to save the U.S. dollar. The plunge in oil prices, after the fraud that caused the run-up to $147 a barrel, is most likely more significantly attributable to the root of this global crisis – a monetary crisis – than slowing GDP rates of world economies. There is much more to the story of any continuing and extended weakness in the United States Oil Fund, LP (NYSE:USO) than just sluggish demand from slowing world economies. Has global demand really shriveled so drastically to account for a 76% free fall in crude oil futures prices?

I’ve taken the stance for a long time now that the extreme volatility we have experienced in gold, silver, and oil futures markets is most likely nearly entirely driven by Wall Street manipulation and free market interventions executed by the U.S. Treasury and the U.S. Federal Reserve. For years, I’ve argued that Central Bank and government intervention into these markets have created massive distortions. In fact, the free-market interventions are so obvious now that even mainstream investment figures such as Donald Coxe, chairman and chief strategist of Harris Investment Management in Chicago, have made similar claims in recent months.

Unfortunately, if you rely solely on technical analysis and fundamental analysis in today’s investment arena without accounting for or anticipating government and Central Bank interference into free markets, you will not understand how to make money. The problem with U.S. regulatory agencies is that they have been asleep at the wheel for the last decade and have been non-responsive to those individuals that have been awake. Repeated requests to investigate fraud in stock markets and commodity markets have been ignored over the past decade by top U.S. regulatory agencies, even when the requests were accompanied by overwhelming evidence.

U.S. Representative Gary Ackerman [D, NY] demonstrated his understanding of the worthlessness of these regulatory agencies when he berated the SEC for aiding and abetting massive fraud in U.S. Securities markets. (Click to view)

I strongly believe that fraud on a similar scale is taking place right now and has taken place for years on the COMEX gold and silver futures markets. In the future, if U.S. Congressmen finally realize this, you will see U.S. Congressional hearings of a similar contentious nature occur with the U.S. Commodity Futures Trading Commission. Currently, there is a mountain of circumstantial evidence of very large players attempting to manipulate gold and silver futures contract prices, even during this recent spike in gold and silver futures prices.

Remember, Harry Markopolos presented evidence of the Bernard Madoff $50 billion fraudulent Ponzi scheme to the SEC over a period of 9 years and was repeatedly stonewalled and ignored by the SEC (Securities Exchange Commission). Markopolos stated in testimony before the U.S. Congress that the SEC was protecting fraudsters instead of prosecuting them and “that’s why they shy away from the big cases.”

Asked by lawmakers if his warnings to the SEC could have been more explicit, Markopolos said, “I even drew pictures so I don’t know how I could’ve been more explicit.” He added the agency “roars like a lion and bites like a flea…The SEC was never capable of catching Mr. Madoff. He could have gone to $100 billion” without being discovered, Markopolos testified. “It took me about five minutes to figure out he was a fraud.”

Just like Markopolos, it did not take me long to conclude that massive fraud is and has been occurring in the New York-based gold and silver futures COMEX markets. And just like Markopolos, I also presented what I believed to be strong evidence of this fraud to the commissioners of the overseeing regulatory agency, the Commodities Futures Trading Commission [CFTC]. While my efforts were acknowledged by the CFTC, in their own words, as “great info”, no action has been taken upon my request for an investigation into fraudulent activity in the gold futures markets. I felt that I certainly presented enough compelling circumstantial evidence enough to warrant an investigation, but so did Markopolous, and he was ignored for nine years.

On the other hand, Ted Butler’s tireless efforts in presenting fraudulent COMEX activity to the CFTC has resulted in an internal investigation but as of yet, there still has been zero action as a result of this investigation. In the end, all investigations are ultimately worthless to the common investor unless the investigations are sincere. As Markopolos stated in recent U.S. Congressional testimony, he believes that the regulatory agencies’ intent will never be sincere until a drastic overhaul of the agencies occurs.

Markopolos hit the nail on the head for the biggest reason why the efforts of people such as myself and and many others to expose fraud in certain markets is being ignored by regulatory agencies: “What you’ll see is the [regulatory agencies are] busy protecting the big financial predators from investors and that’s their modus operandi right now.” In the case of gold and silver futures markets, when the agencies involved in the fraud most likely include the U.S. Treasury and the U.S. Federal Reserve, you will never see a true investigation materialize. So if, as investors, we are all fighting an uphill battle against fraud that has been imprinted within the “system” for a while, what is my point, right? My points are the following:

(1) Fraud has been part of the system for a while now, it will continue to be part of the system, and every investor needs to anticipate fraudulent activity to be profitable in these markets. Reliance on technical and fundamental analysis only will most likely lead to poor analysis.

(2)During periods of great economic crisis such as the one we are facing today, fraudulent activity will increase.

(3) Fraudulent activity manifests itself in the form of great distortions in stock markets and commodity markets. Why do you think you have seen financial stocks bounce around from $40 a share one month to $85 two months later, back down to $30 a share six months later, and up to $90 a share one month later? Why do you think you’ve seen gold plunge from over $1,000 an ounce in futures markets to $680 an ounce and then climb right back to more than $950 an ounce?

So the lessons to be learned are these:

(1) Volatility, due to massive fraud and free market intervention, is here to stay.

(2) To know how to play this volatility, you have to be able to analyze the situations properly and understand if fraudulent schemes are sustainable over the long-term or if they are only sustainable over the short-term.

(3) By taking step (2) into consideration above, you will know if rising financial share prices are a house of cards ready to tumble again or if they are a good long term play; if tumbles in gold prices should be interpreted as the end of a gold bull or a great buying opportunity; if oil prices are likely to remain low for a while or if a rapid spike in prices is likely in the future; and so on.

Do this, and you can make volatility your friend and not your enemy, because for now, volatility is here to stay.

My Note: I highly Recommend visiting SmartKowledgeU and signing up for the free newsletter, I did… – jschulmansr

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One other note: In Comex Silver it is a few large banks which represent over 90% of the short interest, and Gold has a similar situation where the shorts there are in on an average around $750 – $850oz, where the short positions where initiated. How long will they be able to hang in there? If Comex actually follows thru along with the CFTC in their investigation and these positions come to light… Wow what a potential “Short Squeeze”! We could see a frenzy where Gold will shoot to $1500 and Silver to $25-$50 oz  easy. – We will see… – jschulmansr

Catch the New Bull! – Buy Gold Online – Get 1 gram free just for opening account!, no minimums – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

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Gold Around the Globe: Setting Records – Seeking Alpha

Source: Monday Morning

Gold’s performance in 2008 could look like a real yawner.

After all, it only managed to eke out a 5.7% gain. Not the kind you’d normally brag about over cocktails.

As we rang in the 2009 New Year, gold at $850 an ounce (in U.S. dollars) was roughly 15% below its all-time record high, set in March 2008.

But everything in life is perspective. In a year when oil lost 59%, the Standard & Poor’s 500 Index was down 38%, and the Dow Jones Industrial Average gave back 30%, things could certainly be worse for gold bullion investors. Much worse, in fact. Just ask the typical investor about his portfolio: He’s likely to grumble, and change the subject.

As it turns out, 2008 marks the eighth consecutive year that gold has clocked a positive annual return. It’s now starting to look like the trade of the decade.

Truth be told, many are disappointed with gold’s behavior during the October-November stock-market panic, too. But here again, it’s all relative. When we compare the Standard & Poor 500 Index (a proxy for the market) with the SPDR GLD Trust (an ETF proxy for Gold) (GLD), we know where we’d rather have our money.

As this chart shows, from September to December, gold, despite its volatility, ended essentially flat in U.S. dollar terms, yet shows a marked recovery since the end of November. The S&P, on the other hand, looks like an Alpine ski hill heading for Jackson Hole. The divergence between the two is remarkable.

During last fall’s violent stock market downdraft, the U.S. Dollar Index (USDX) put on a spectacular, unprecedented two month – 15% rally. Spectacular, because to get even a 10% move over an entire year is a big deal for any major currency.

But gold is still (mistakenly) considered by many as the “anti-dollar.” So its behavior during a U.S. dollar rally does not come as a complete shock in hindsight.

Yet the gold price we see is misleading in two significant ways.

First, try going out there and buying an ounce of physical gold. In normal times, the average coin dealer will charge in the neighborhood of 3% above spot price. This past November, that premium shot up by 3-5 times, with many charging 10%-15% above spot, plus eight weeks or more for delivery. So when buying an ounce of gold, how realistic is the spot price, especially during a panic? In the midst of the mayhem, one larger Canadian precious metals dealer, Kitco, saw its list of products shrivel overnight from about 16 items to merely three, due to a lack of supply.

Second, gold is quoted in U.S. dollars around the world. But India is the single-largest gold market, with the rest of Asia showing a strong affinity for the universally cherished yellow metal. Throw in Europe and Latin America, and you can see how most of the world looks at gold through entirely different lenses – through their own currencies.

To be fair, let’s gain some distance from our own provincial viewpoint by taking a small trip around the globe. This way, we can get a handle on how the price of gold has behaved elsewhere.

Euro Gold

During the anomalous spike in the U.S. dollar last fall, the European euro lost considerable ground against it. So gold priced in euros shot up. March saw the record of near € 650 gold bettered in September by € 670 gold. Europeans were clearly happy with gold’s behavior, which currently sits around an all-time euro high of € 720.

UK Gold

Gold priced in British pounds sterling has performed astoundingly well. Brits saw gold at £500 per ounce in March, then £530 in September, and £600 by year’s end. Gold, now at £650, is still setting new record levels, dating back to 1717 when they began keeping records.

Canadian Gold

Canadian gold investors have few gripes. In March of last year, gold was trading at C$1,003; by late September, the price was up by nearly C$50. And right now, it hovers at a record C$1,160 level. Despite the amazing strength the Canadian dollar has shown in recent years, gold has performed very well in this resource-based currency.

Brazilian Gold

Brazil is the most populous country in Latin America. And gold’s performance in the Brazilian real did not disappoint either. The record set in March at R$ 1,719 per ounce was easily surpassed in September with a sharp spike to R$2,069. Today, it sits at R$2,115; which is R$415, or 24%, above its March levels.

Indian Gold

India’s currency is the rupee (INR). And for traditional, cultural, and even practical reasons, Indians are the biggest gold investors on the planet. As in much of the rest of the world, gold set a record near INR41,000 in March. It then pulled back in July, but spiked to a new record near INR43,000 in September. At roughly INR45,800 today, gold is priced way above its previous March and September 2008 record levels.

Chinese and Japanese Gold

If anyone should be disappointed with the performance of gold over the past year, it is investors in China and Japan. Gold’s record in March, at CNY (yuan) 7,050, has not been bettered yet. September saw a spike back near the CNY6,250 level, and gold currently rests at a price of roughly CNY6,400 per ounce.

Japan’s gold price hasn’t fared much better. The March record near ¥100,000 per ounce remains unchallenged. Gold managed a rally to ¥95,000 in September, but has since fallen back to the ¥84,850 level.

So as the U.S. dollar rose late last year, the Chinese yuan and Japanese yen were the two major currencies that tagged along, making gold investors relative losers in those nations. The Chinese and Japanese 2008 gold experience differs little from the American one. And yet, gold in U.S. dollars is currently just 8% shy of its all time record at $1,023.50.

Despite the recent American, Chinese and Japanese gold experience, most of the rest of the world’s gold investors are a happy lot. When converting the price back into their home currency, those investors are basking in its glow, while gold sits at or near all-time record highs.

For now, however, gold is still priced in dollars for many market participants. The same is true for all other commodities. I expect that will change over the next several years. Scores of foreign central banks have indicated their intentions to lower levels of dollar-denominated reserves to reduce exposure. Meanwhile, Kuwait has dropped its dollar peg, opting instead for a basket of currencies. And Iran already trades some of its oil for non-U.S. dollar currencies.

As the U.S. dollar continues to lose value – and hence, its influence – on the world stage, commodities are increasingly likely to be priced either in local money, or to be quoted in a variety of currencies.

Heck, commodities may even be priced in quantities of gold before this is all over. Gold investors can only hope. For now, as new price records are regularly being established, most aren’t complaining about the value of their gold.

With their sights set on breathtaking new heights to come, American, Chinese, and Japanese gold investors are sure to see their patience rewarded, as have already so many of their fellow investors the world over.

Original post

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Catch the New Bull! – Buy Gold Online – Get 1 gram free just for opening account!, no minimums – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

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 In yesterday’s post I included a partial list of tier 2, tier 3 junior mining companies to check out, and after doing your due diligence; potentially invest in. Some Bargains in there at or near book values.

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Look to Junior Miners as Gold Feeding Frenzy Ensues – Seeking Alpha

By: James West of Midas Letter

Ever seen what happens to a piece of meat thrown into a tank full of vicious piranhas?  

The water is whipped into a froth and within seconds the meatless bone sinks to the bottom. There’s virtually nothing left.

The same thing is about to happen in the gold bullion market.

After some apparent weakness in Asian markets, gold powered higher Monday as news of the Japanese economic rout sent global markets into freefall. The only thing that stopped it from happening in the Unites States was the mixed blessing of a holiday keeping markets closed.

I say mixed, because a second day of selling overseas means the American market will have two days of pent up selling pressure to be unleashed as the market opened Tuesday morning.

The news keeps getting worse out of global G7 economies, and that has investors flocking to gold in recognition of its safe haven role.

ETFs are the biggest consumers of physical gold right now, and last week global ETFs took down the equivalent of 5% of the annual world gold production in just one week.

SPDR Gold Trust GLD.PGLD.A, popularly known as GLD, said the gold bullion it owned rose by more than 100 tonnes to 970.57 tonnes as of Thursday, which marked the biggest weekly gain in the history of the gold-backed exchange-traded fund.

One does want to bear in mind that all ETFs are not created equally. There are very few, in fact, that hold their full portfolio worth completely in physical bullion. It is incumbent upon the investor to read carefully the information provided by ETF vendors. While there has yet to be an instance of ETF-related fraud (that I’m aware of), ETFs are nonetheless a paper representation of the physical bullion, and therefore presents the opportunity for subterfuge.

This is the phase of the secular gold bull that silences all gold critics, and puts smiles on the faces of gold bugs that is so wide their heads threaten to fall in half! This is also the phase where the herd mentality starts to get folks looking around for the nearest bandwagon to jump on. Most of the bandwagons have rattled off into the sunset, though, so there will be a lot of head scratching as the left behind try to figure out how to get in the game.

Investors need to beware though. As gold demand increases so will volatility, as the sheer number of investors means profit-taking is likely to cause same-day leaps and drops by as much as $100 per ounce.

That’s because there are a lot of investors who will be taking profit off the table as the price ratchets higher, and the see-saw effect threatens tender hearts with life-threatening cardiac sincerity.

If you’re late to the game, the trick might be to a look a little further down the road than where the vultures are already fighting over the last few American Eagles or Krugerrands to what will inevitably be the next meal for the hungry mob – mining companies.

In particular, mining companies that boast near-to-production Canadian National Instrument 43-101 compliant resources. There are more than a few of them out there. With the intense interest that will follow a gold price spike, these companies will be able to raise a lot of capital at premium levels, and that will speed up the timeline to production in a lot of cases.

Other companies are not going to themselves go into production, and instead are developing huge deposits for joint venture or outright sale to major and mid-tier mining companies. Important here is the existence of agreements with aboriginal groups (if applicable) and stable democratic jurisdictions. Projects in Canada, the United States, Australia, and Mexico rank highest, with those in Peru, Chile, Colombia and Argentina, followed by African nations. Highest risk are those with socialist governments or military regimes, such as Ecuador, Venezuela, Russia, Mongolia.

Information is the key to successfully investing in the juniors, and keeping abreast of developments on a day-by-day basis is the secret to not losing your shirt.

Investing in juniors is risky, but in the current environment, investing in blue chip stocks, treasuries, mutual funds and financials is far riskier.

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Gold Set To Rise Even Higher – Seeking Alpha

By: Mark O’Byrne of Gold and Silver Investments

After another strong week last week (both gold and silver were up some 3%) despite falling stock markets, gold continues its outperformance of other asset classes due to safe haven demand. It has surged again overnight in Asia and is now at 7 month highs and looks very likely to target its record high of $1,000/oz in the coming days.

Resistance at $950/oz was sailed through very easily overnight and the next level of resistance is $980/oz prior to a likely challenge of $1,000/oz in the coming days.

click to enlarge

With the global economy slowing very sharply, international demand remains very strong as seen in gold coin, bar, certificate and exchange traded fund demand. ETF holdings of the world’s largest gold-backed exchange-traded reached a record 985.86 tonnes as of February 13, up 15.29 tonnes or 1.6% from the previous day. The trust’s gold holdings are up a very significant 205 tonnes, or 26% in just the first six weeks of the year (see chart below).

Besides increasing retail, pension and institutional demand, many central banks are increasingly favourable to gold. Russia’s central bank has increased gold’s share in reserves, and plans to continue this trend in 2009, first deputy chairman told Reuters in an interview on Monday. The ECB Eurosystem’s reserves of gold and gold receivables increased EUR 1 million to EUR218.320 billion in the week ended Jan. 30.

Gold’s strength in recent days is particularly impressive as it comes in conjunction with a stronger dollar. However, this “strength” is more a function of a weakening in most fiat currencies internationally versus the dollar.

Gold has risen above £675/oz and €760/oz reached new record highs in many other currencies such as the South African rand and the Canadian dollar.

This bodes well for gold prices in the coming weeks as when the dollar begins to weaken again in the coming weeks, which seems very likely, then gold should rise even more sharply and target levels above $1,200/oz in the coming months.

Importantly, the commonly quoted COMEX gold price is actually lagging considering the extent of international demand as seen in the charts above.

And this marked rise in demand comes at a time when world gold production is actually falling.

While investment demand remains very strong and is increasing, there are growing fears about the declining supply of gold – the world’s mine gold supply has been falling in recent years and it fell to 2,385 tonnes last year, down 3.6 per cent from 2007 (despite the rise in prices in recent years).

This is a recipe for markedly higher prices in the coming months and the inflation adjusted high of some $2,400/oz looks more and more likely in the next few years.

Disclosure: no positions

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Gold -“Catch Me If You Can” – Whichever way you invest remember to do your due diligence especially if investing in the “junior” gold mining companies. I usually only invest in those companies which have production or are set to start producing in the very near term future…       – Good Investing! – jschulmansr


Catch the New Bull! – Buy Gold Online – Get 1 gram free just for opening account!, no minimums – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

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Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments. –  jschulmansr

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Wake Up Call!

16 Monday Feb 2009

Posted by jschulmansr in 10 year Treasuries, 20 yr Treasuries, Bailout News, banks, Barack Obama, bear market, bull market, capitalism, central banks, China, Comex, commodities, Copper, Currencies, currency, Currency and Currencies, depression, dollar denominated, dollar denominated investments, economic, Economic Recovery, economic trends, economy, Federal Deficit, federal reserve, Finance, financial, Forex, Fundamental Analysis, futures markets, GDX, GLD, gold, Gold Bullion, Gold Investments, gold miners, hard assets, How To Invest, How To Make Money, hyper-inflation, inflation, Investing, investments, Japan, Jschulmansr, Junior Gold Miners, Latest News, majors, Make Money Investing, market crash, Markets, mid-tier, mining companies, mining stocks, monetization, palladium, Peter Brimelow, physical gold, platinum, platinum miners, precious metals, price, prices, producers, production, rare earth metals, recession, resistance, risk, run on banks, safety, Saudi Arabia, silver, silver miners, small caps, spot, spot price, stagflation, Stimulus, Stocks, The Fed, TIPS, Today, U.S. Dollar, uranium

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Austrian school, Bailout News, banking crisis, banks, bear market, Bollinger Bands Saudi Arabia, Brian Tang, bull market, central banks, China, Comex, commodities, Copper, Currencies, currency, deflation, Dennis Gartman, depression, dollar denominated, dollar denominated investments, Doug Casey, economic, economic trends, economy, Federal Deficit, financial, Forex, futures, futures markets, gata, GDX, GLD, gold, gold miners, hard assets, hyper-inflation, India, inflation, investments, Jeffrey Nichols, Jim Rogers, Keith Fitz-Gerald, majors, Marc Faber, market crash, Markets, Michael Zielinski, mid-tier, mining companies, monetization, Moving Averages, palladium, Peter Grandich, Peter Schiff, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, protection, recession, risk, run on banks, safety, Sean Rakhimov, silver, silver miners, small caps, sovereign, spot, spot price, stagflation, Technical Analysis, TIPS, U.S., U.S. Dollar, volatility, warrants, XAU

The U.S. Markets are closed today yet something very interesting is starting to happen. Can you sense it? The shift from deflation to inflation. The “smart money” big investors are sensing it and starting to jump into Gold in a big way! Gold Prices are holding steady overseas above the $935 support level. Todays articles show the why and how of this move by big money into Gold, read on… and Good Investing! – jschulmansr

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 Something still stirring in precious-metals pond – Market Watch

By: Peter Brimelow of Market Watch

With some wild swings, gold gained about 3% on the week, closing Friday at $941. The Phx Gold Silver Index (XAU:

Technicians were impressed. Long-term chartist Martin Pring is deflationary-minded at present. Two weeks ago, he remarked that if certain trend lines were broken, “I would be dragged kicking and screaming into the bullish camp”. But now he simply says in his recent weekly Intermarket Review: “Not much to add to my recent bullish comments. Both the metals and shares recently broke out of giant patterns … With our Global Gold Index at a new all-time high – enjoy the ride!”
Pring also flags a powerful conceptual reason for the gold move. Discussing a chart of the inflation proofed Treasuries, and using the iShares:Lehm TIPS TIPT as a proxy, Pring says: “Here we see the inflation protected bonds, or TIPs. Who needs these in a deflation? But look, the price just broke to the upside … and volume is expanding! When we look at the longer term we see it’s still in a primary bear market … However this week’s breakout suggests a turn is likely.”
In other words, the bond market is getting seriously concerned about inflation. See Website
The Privateer, being Australian, is even more direct in its weekly remarks: “Why is gold going up? It is certainly not in spite of the global mania for bailout programs now sweeping the world. It is because of these programs. The more ‘liquid’ the global financial powers that be make their money — by creating it in ever larger swathes — the more they run the risk that the world starts to look elsewhere for a viable and trustworthy way to exchange goods and services.”
The Privateer’s invaluable $US 5X3 point and figure chart has now broken above its last downtrend, although its proprietor would like more progress: “This week the chart got up to and just above the second of the two downtrends. The ‘poke’ above the line which came with Gold’s close above $U.S. 945 on Feb. 12 is not yet decisive, a close above $U.S. 960 would be.” See Website
Silver, which I reported last week was exciting the gold bugs by showing unusual leadership characteristics, persisted — rising 3.5% on the week, including on Friday despite gold’s fall, and pushing the Gold/Silver ratio to 68.9 from last week’s 69.5.
But the star of the week was the reported bullion holdings of Spdr Gold Trust. (GLD:
GLD is regarded with deep suspicion by the radical gold bugs who think the metal’s price is manipulated. But at the least it has to been seen as a measure of the Western Hemisphere investment appetite for gold.
In contrast, Le Metropole Cafe monitors Indian gold imports and reports that, unusual in the past few years, the world’s largest gold consumer is standing aside for now. See Website
Interestingly, two sentiment indicators did not react much this past week. Mark Hulbert’s HGNSI on Friday stood unchanged at 60.90%. MarketVane’s Bullish Consensus actually lost a point on Friday to 78%, gaining only 3 points on the week. See Website
In serious gold moves, MarketVane excursions into the 90s are reportedly common.
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Here is where I buy my Bullion, get one free gram of Gold just for opening an account! Catch the New Bull! – Buy Gold Online – Get 1 gram free! – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

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Major Investors Piling into Gold – Seeking Alpha
By: James West of Midas Letter

Endeavour Financial Corp (TSX:EDV) closed a $100 million equity offering last week, and several other “bought deal” financings point to a strengthening trend: major investors are piling into gold.

The Offering was underwritten by a syndicate co-led by GMP Securities L.P. and Canaccord Capital Corporation (the “Underwriters”). Endeavour will use the funds to support its investment activity in the mining sector with an emphasis in the short term on precious metals.

The first quarter of 2009 has seen well over $1 billion flow into near term and existing mining companies, which is a reflection of the strong gold price amid safe haven demand. With estimates of U.S. government spending reaching as high as $2 trillion, large value investors are increasingly deterred by U.S. Treasury related securities in favour of precious metals.

  • Newmont Mining (NYSE:NEM), one of the world’s largest gold mining companies, raised US$1.7 billion in a combined common share/convertible debt deal which it will use primarily to fund the acquisition of the remaining 33.33% interest in the Boddington project in Western Australia that it does not already own and the additional capital expenditures that will result from its increased ownership in the Boddington project, as well as for general corporate purposes. Citigroup Global Markets and J.P. Morgan Securities led the placement.
  • Freeport McMoran Copper and Gold (NYSE:FCX) raised US$740 million through the issuance of 26.8 million common shares at $28 per share;
  • Kinross Gold Corporation (KGC) announced a “bought deal” financing for US$360 through the issuance of 24,035,000 million common shares US$17.25 per common share. The underwriters were led by UBS Securities Canada Inc.;
  • Osisko Mining Corporation (OSKFF.PK) entered into another “bought deal” led by Thomas Weisel Partners and BMO Capital Markets. The offering of 77 million units at $CA4.55 a share will gross CA$350.4 million. Osisko is developing the 6.28 million ounce Canadian Malartic Project Quebec.

Smaller deals are becoming more common for junior emerging gold companies as well. Among the recent actions:

  • Centamin Egypt (CELTF.PK) raised $CA69 million through the issuance of 106.2 million shares at CA$0.65 per share for development and construction of the Sukari Project in Egypt. This financing was led by Thomas Weisel Partners and Cormark Securities.
  • Romarco Minerals Inc. (TSX.V:R) announced a bought deal Friday worth $20 million for the development of the Haile Gold Mine in South Carolina. Romarco issued 54 million units at $0.38 each. The financing was led by a syndicate of underwriters led by Macquarie Capital Markets Canada Ltd. and including Paradigm Capital Inc. and GMP Securities L.P.
  • International Tower Hill Mines (THM) sold 2 million common shares at $2.50 per share for gross proceeds of CA$5 million, which will be directed towards further development of its projects in Alaska and Nevada. The placement was a “bought deal” led by a syndicate of underwriters led by Canaccord Capital Corporation and including Genuity Capital Markets and GMP Securities L.P.
  • Exeter Resource Corporation (AMEX:XRA) raised CA$25.2 million at $2.40 a share for development of its assets in Argentina and Chile.

And it isn’t just gold that is attracting big financing. On February 10th, Uranium One (SXRZF.PK) announced a $270 million investment by a Japanese Consortium comprised of Tokyo Electric Power Company, Incorporated (TKECF.PK), Toshiba Corporation (TOSBF.PK), and The Japan Bank for International Cooperation.

Concurrently with the execution of the subscription agreement, Uranium One has also entered into a long-term off-take agreement and a strategic relationship agreement with the Japanese consortium, both of which will become effective upon closing of the private placement.

The off-take agreement provides the consortium with an option to purchase, on industry-standard terms, up to 20% of Uranium One’s available production from assets in respect of which Uranium One has the marketing rights.

Junior Uranium company First Uranium Corp. (FURAF.PK) was also the beneficiary of a bought deal financing led by Macquarie Capital Markets this week, which saw First Uranium place 20.5 million units of its shares at $3.00 per unit for gross proceeds of $61.5 million. First Uranium will direct the funds towards the development of the Ezulwini Mine in South Africa.

Endeavour Financial is followed by many analysts and newsletter writers for its robust project pipeline.

Brien Lundin, who publishes the Gold Newsletter, says one of the main reasons he follows Endeavour Financials is because of management – especially Mr. Frank Giustra. He says this team now senses a market bottom, as they are raising capital to go after assets that now cost a fraction of what they did last year, or even six months ago. He intimates strongly that his subscribers should do the same, using Endeavour as their proxy. A mix of entrepreneurial expertise and value investing, he outlines what the smart money is doing now.

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Here is where I buy my Bullion, get one free gram of Gold just for opening an account! Catch the New Bull! – Buy Gold Online – Get 1 gram free! – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

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Gold: Now Demonstrating Trust in Obama – Seeking Alpha

By: Boris Sobolev of Resource Stock Guide

Gold is Starting to Believe the Obama Administration

Despite making loud headlines about stimulating the economy, the US government has been unable to raise the level of optimism among the general public, while the stock market seemed to drop into a deep state of apathy.  

 

Last week we received the long-awaited economic stimulus packet as well as the so-called plan for the rescue of the US financial system. We have already voiced our skepticism regarding the structure of the stimulus and its potential effect on the economy in a prior article.

 

As far as the size of the $787 billion package, it is clear that it is too small and too spread out into 2010 and beyond to be called a stimulus. $787 billion is just 5.6% of the GDP and when spread over two years will account for just 2.8% at a time when many industrial economies around the world are contracting by 5-10% per year. It can only be called a life support package, not a stimulus.

Japan, which got into a deflationary spiral as a result of a real estate bust, spent much more than 100% of its GDP since 1991 just to see its economy stagnate. Construction related investment alone ate up $6.3 trillion of public funds over the 17 years since 1991. Infrastructure spending accounted for $350 billion to $400 billion per year for the first half of the 1990s for an economy half the size of the United States.

The results of the Japanese fiscal stimulus were unimpressive, although it could be argued that without this stimulus, it could have been much worse.

With the United States facing similar post bubble dynamics as Japan did twenty years ago, how can we expect greater effectiveness of the Obama stimulus plan when it is insufficient and much of is clearly misdirected?

In reality, this economic stimulus package has to be viewed as only the first one of many yet to come. By having the US dollar as a world reserve currency, the US government can be much more effective than its Japanese counterpart in printing its own currency.

We will soon be quantifying the size of the government stimulus plans in trillions rather than in billions. Within the next 3 to 4 years, government spending can easily reach $10 trillion, doubling the size of the US government debt.

One of the main problems with this crisis is that the majority of the debt bubble is related to residential real estate, which does not produce cash flow, but only seems to eat it up. As home prices decline and unemployment rises, debt serviceability is worsening dramatically.

In order to avoid social unrest and to maintain popularity, the Democratic majority will face two realistic options which could begin to address the economic disaster:

  1. Forgive portions of mortgage debt which cannot be serviced. But who will pay for the losses – clearly not the weak banks. Uncle Sam would pick up the tab by printing more currency.
  2. Print new dollars to increase the nominal income of the indebted population through tax cuts, job creation, jobless benefits and various social spending.

There is no other politically possible way out of this mess other than to run the printing press. The way of the free market via bankruptcies is not popular so there is no sense to even discuss it.

Within hours President Obama will sign the stimulus into law, but we are sure that this is just the beginning of the government spending campaign.

As far as the US banks, the new US Treasury Secretary seems to be mimicking his predecessor, Hank Paulson. The essence of the announced “plan” is as follows: “We are absolutely sure that we will save our banking system, but are yet unsure of how we will do so. We will find out very soon, however. Stay tuned”.

While not knowing what to do with the banking system, the government is trying to temporarily act as one. The only specific point in Geithner’s announcement is the plan to increase the Term Asset-Backed Securities Loan Facility (TALF) facility from $200 billion to $1 trillion. This joint initiative with the Federal Reserve expands the resources of the previously announced, but not yet implemented TALF.

In essence, TALF will support the purchase of loans by providing the financing to private investors. In theory, this should help unfreeze and lower interest rates for auto, small business, credit card and other consumer and business credit. Treasury will use $100 billion to leverage $1 trillion of lending from the Federal Reserve. The TALF, which will potentially have greater effect than the stimulus plan, passed in a blink of an eye without any debate.

The markets around the world have deteriorated in deep state of indifference to the first round of actions of the new US government. Only gold is starting to demonstrate its trust in the Democratic majority. Since the inauguration, investors poured $6 billion into gold purchases through GLD alone. This is an increase of 210 tonnes in gold holdings or 24% in less than a month.

click to enlarge

Huge investment demand around the world has put an end to a steep gold correction of the second half of 2008. Most intermediate and long term technical indicators for gold have turned decisively bullish. A test of new highs by gold is very probable this spring.

In sum, gold investors are starting to believe that the Obama Administration sees one way out of economic problems which will for sure resurrect inflation.

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My Note: Did you catch that? They’re believing alright, not that Obama will get the situation fixed, just that he will cause inflation; yes even hyper-inflation , maybe even stagflation! Jump into Gold now before it’s too late… -jschulmansr

 

Here is where I buy my Bullion, get one free gram of Gold just for opening an account! Catch the New Bull! – Buy Gold Online – Get 1 gram free! – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

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Moody’s, S&P Dole Out Global Downgrades – Time to Go Gold? – Seeking Alpha

By: Mark O’Byrne of Gold and Silver Investments

 Gold rose again on Thursday, briefly rising above $950/oz and was up 0.6% on the day. Determined selling on the open in Asia saw gold fall and profit taking has seen gold fall in Asia and in early trading in London. This is to be expected as gold had risen by more than 15% in less than a month.

 

 

US, UK Credit Ratings Look Set to Be Downgraded

The credit rating agency Moody’s has said that the UK and US credit ratings were being “tested”. In a novel and somewhat bizarre departure, Moody’s has split various “AAA” sovereign countries into three categories based on their strength in weathering the economic storm, denoting Ireland and Spain as the weakest, with the UK and US somewhere in the middle and Germany, France, Canada and the Scandinavian nations at the top.

This will in time be seen as gimmickry. Standard and Poor’s have already downgraded Spain to AA+ and did not create sub grades within the credit rating system.

Some have criticized Moody’s for being “unfair” to Ireland, Spain, the UK and US and have argued that these agencies previously gave almost everybody good ratings, and underestimated risks, but were now going to the other extreme.

This is errant nonsense and the unfortunate fact is that Moody’s, the other credit rating agencies and the vested interests in the financial services industry continue to underestimate risks, as they have done for months and years.

Given the massive deterioration in the public finances and economies of these nations, by right they should be downgraded and unfortunately in the coming months they will inevitably be downgraded.

But Moody’s and all the rating agencies realize that this would compound an already disastrous financial and economic crisis. Many pension funds internationally have mandates or investment guidelines to only invest in “AAA” rated government bonds and if these countries bonds were downgraded, they would be forced to sell those bonds en masse. This would likely see a crash in the already very overvalued government bond markets and see long term interest rates rise quickly and sharply.

The creditors of the US in Russia and China have rightly criticized the ratings agencies for their highly irresponsible practices in recent years and are increasingly nervous about their US denominated assets.

Ratings agency Standard and Poor’s in January downgraded Spain’s sovereign debt rating to “AA+” from “AAA” in January, citing insufficient means to deal with weak growth and a ballooning budget deficit. As they did the sovereign rating of New Zealand. The fiscal position in the UK and US is arguably much worse than in these two countries (Martin Wolf of the Financial Times recently said that major US banks, with their humongous Wall Street liabilities, are insolvent) and thus it seems inevitable that the UK and US will be downgraded in the coming months.

If the US is downgraded, then in effect the reserve currency of the world is being downgraded and this has huge implications for the international monetary system. Not surprisingly there have been op-ed pieces in the Financial Times and the Wall Street Journal calling for a return to some form of gold standard.

The governments of the world are nationalizing and socializing the meltdown in the shadow banking system and the international system with potentially disastrous consequences for us all.

Conditions are set to get markedly worse before they get better and the experience of Argentina and other previously wealthy South American countries may be instructive. The IMF is called in and there are structural adjustments, social services are affected or discontinued, banks nationalized, savings inaccessible, food and energy insecurity rise.

This is a potential reality for large western economies, especially if governments keep trying to inflate their way out of the current crisis. This is leading to massive currency debasement and will potentially lead to very significant stagflation and maybe even what could be called hyper stagflation.

Now more than ever, it is essential that individual savers and investors, companies, pension funds and sovereign wealth funds have an allocation to and directly own actual physical gold bullion. Paper exchange traded funds with all the attendant counter party, custodian, sub custodian, auditing and indemnification risk are speculative trading vehicles and not physical gold.

In these unprecedented economic times, it is irresponsible and extremely high risk not to have an allocation to gold bullion in an investment portfolio.

Disclosure: no positions

==========================================

My Note: No Positions??? Mr. O’Byrne I think you need to follow your own advice above! Here is where I buy my Bullion, get one free gram of Gold just for opening an account! Catch the New Bull! – Buy Gold Online – Get 1 gram free! – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

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Is Gold the only salvation from this Financial Armageddon? – MineWeb

Source: MineWeb

Indications are that the global financial situation could yet get far worse before it starts getting better – particularly in Europe – and gold may again prove to be the only real way of protecting wealth in a continuing global financial meltdown.

Author: Lawrence Williams
Posted:  Monday , 16 Feb 2009
LONDON – 
 

 

“It ain’t over ’til its over” is one of the best known quotations from baseball catcher and coach Yogi Berra and as the global financial crisis unwinds it is very apposite yet again.  We ain’t anywhere near the end yet and possibly the worst is yet to come as far as European banks in particular are concerned.  Markets have breathed sighs of relief as various banks have been bailed out and stimulation packages are being approved if not already implemented. 

 

But, one gets the feeling that any relief is premature.  The debt situation in a huge number of debtor nations – virtually the whole of Eastern Europe falls into this category – is dire and has not really yet fallen into the sights of the investment world – but bankers must be quaking in their shoes as surely they are aware of the potential financial Armageddon that still lies ahead. 

And this time it is the already shaky Western European banking sector that is most at risk.  US Banks, accused of starting this all, maybe far less vulnerable to the times ahead.  True the US financial sector may have got us into this mess, but European bankers followed suit and, in the event, may be shown to have behaved far more recklessly than their American counterparts.  It would seem that some of the potential shortfalls being faced would be beyond the financial ability of Central Banks, Governments and transnational agencies like the IMF to sort out.  The system is like a house of cards.  One major failure could bring the whole house tumbling down. 

This is the kind of situation that leads to global nightmares – wars even.  Radical extremists get elected to positions of power – as with the rise of National Socialism in Germany after the crash of the Weimar Republic with its hyperinflation.  We could be in for a very sticky time ahead as the real implications, and depth, of the financial meltdown catch up with us. 

The problems ahead may not be beyond the wit of man to devise a solution which can ‘save the world’, but that is unlikely to come from UK Prime Minister Gordon Brown who appears to have laid claim to this cachet in a freudian moment of rhetorical madness.  Don’t forget this is the same Gordon Brown who decimated the UK’s gold reserves by selling half of them off (395 tonnes) at gold’s low points from 1999-2002 – amounting to some $12bn at today’s prices – a sum the UK treasury would give its eye teeth for in the current financial crisis, although this is small beer relative to the sums squandered by the UK banks.  But it is an indicator of Gordon Brown’s acumen, or lack of it, in dealing with global financial trends. 

Indeed Gordon Brown’s thinking is probably echoed by many others in the European and perhaps the US financial hierarchy which doesn’t bode well for any rescue package that will actually work to stem the flow of toxic debt which has built up all around the world and may almost certainly amount in total to a greater sum than all the world’s financial reserves combined,  But then that is the nature of banking.  It only takes a run on almost any bank to bring the whole institution crashing down, and to allow any country to fail – and there are signs that the European Central Bankers may let some Eastern European states go under, thus triggering a domino effect of defaults worldwide, to bring the world banking system to its knees – or worse.  There are even fears that past high flyers like the Irish Republic could be forced to default on its debts, and undoubtedly the situation for, say, the Baltic states is far worse still. 

What solution is there out there.  Printing money on an unprecedented scale will expose the world to huge inflationary pressures for years to come, but this may be the only way forward using more conventional solutions.  Perhaps a huge revaluation in the price of gold could help bolster some treasuries and bring some confidence back into the system.  And, as with any bank run it is confidence which is needed to stem the tide, not necessarily actual money! 

But where does all this leave the investor?  Not in a happy position.  The logic of further financial collapses and bank failures would be to knock the markets down and down, which in turn takes wealth out of the system and decimates pensions upon which an increasingly aging society is dependent. 

Buy gold may be an answer to protect oneself, but as we saw last year, gold too can be vulnerable as in times  of reduced liquidity funds and individuals have to sell any liquid assets to cover their positions.  But then gold is probably not as vulnerable as other assets – again as we have seen over the past year.  Those who were invested in gold at the beginning of 2008, for example, and did not sell during the year, at least maintained the value of their holdings while virtually all other investment options crashed, although this was not true of most gold stocks. 

Now we are seeing professional and institutional investors moving into gold in a big way just to try and protect their, and their clients’  wealth.  As we have pointed out here frequently, gold ETFs are seeing an unprecedented inflow of funds, although there are those out there who would say it is better to hold physical gold than any form of paper gold because of a growing distrust of financial institutions and paper solutions. 

And perhaps rather gold than other precious metals – notably silver.  Silver would be sure to be dragged up on gold’s coattails, but perhaps not as much  this time – even though history tells us that silver’s volatility leads it to perform better than gold in percentage terms on the upside and worse on the downside.  We are in a different situation with silver not really a monetary metal any longer.  Industrial demand pressures on silver may well mitigate any price rises here. 

Gold’s performance, though, is perhaps also dependent on investment demand outstripping a fall off in the jewellery market and an increase in liquidation of such holdings into the scrap sector.  If the big Asian economies like India and China, where mark-ups on gold jewellery are minuscule compared with the West, falter significantly then reduced demand and increased supply from this sector will need to be soaked up by the investment sector.  At the moment this seems to be capable of doing this hence the recent gold price strength, but unless sentiment changes in India in particular, where buyers seem to be waiting for lower prices, the fall in gold purchases there may limit global gold price growth.  If liquidity becomes a problem in the North American markets again, this could also dent upward movement. 

But overall, physical gold, gold ETFs and selected gold stocks would seem to be the best wealth protectors out there.  As commentators have pointed out, prices may remain relatively volatile, but currently the overall price trend tends to be upwards movement, followed by stabilisation, before the next upwards resistance levels are tested.  Gold does look to be steadily climbing back towards the psychological $1,000 an ounce level but it has had trouble sustaining increases beyond this level in the past.  Perhaps it will be third time lucky for the gold bulls.

=================================

My Note: Prudence dictates at least 10% of your portfolio should be in Gold. Personally, I have that and also a lot of my discretionary funds invested in precious metals Stocks, ETF’s, Bullion…jschulmansr

Here is where I buy my Bullion, get one free gram of Gold just for opening an account! Catch the New Bull! – Buy Gold Online – Get 1 gram free! – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

=======================================

Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investments. –  jschulmansr

 

 

 

GLD

GLD, , ) GLD . These rocketed a startling 13.7% to 985 tonnes, setting records each day.

XAU

Delayed quote dataHUI, , ) added 1.36% to 311.16. The stock market, in case you missed it, lost ground.

Commentary: Gold’s gains for week catch bugs’ interest

By Peter Brimelow, MarketWatch
NEW YORK (MarketWatch) — Something was indeed stirring in the precious metals pond, as I reported a week ago. Key investment letters say it still is. See Feb. 8 column

 

Here is where I buy my Bullion, get one free gram of Gold just for opening an account! Catch the New Bull! – Buy Gold Online – Get 1 gram free! – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

 

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Can’t Keep A Good Investment Down?

10 Tuesday Feb 2009

Posted by jschulmansr in 10 year Treasuries, 20 yr Treasuries, Bailout News, banking crisis, banks, bear market, bull market, capitalism, central banks, Comex, commodities, Copper, Credit Default, Currencies, currency, Currency and Currencies, dollar denominated, dollar denominated investments, economic, Economic Recovery, economic trends, economy, Fed Fund Rate, Federal Deficit, federal reserve, Finance, financial, Forex, Fundamental Analysis, futures, futures markets, GDX, GLD, gold, Gold Bullion, Gold Investments, gold miners, How To Invest, How To Make Money, hyper-inflation, inflation, Investing, investments, Japan, Jschulmansr, Junior Gold Miners, Latest News, Make Money Investing, market crash, Markets, mining companies, mining stocks, Moving Averages, palladium, Peter Grandich, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, silver, silver miners, small caps, spot, spot price, stagflation, Stimulus, Stocks, Technical Analysis, TIPS, U.S. Dollar

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As I write Gold has come screaming back like a rocket to the moon! Currently Gold is up $20 oz back to $913 an oz. Today we here from Peter Grandich on new all time highs for gold are just around the corner. We’ll take a look at Silver, oh we can’t forget about Platinum too! There’s still time but the Precious Metals Bull Train is about to leave the station-Hop aboard! – Good Investing – jschulmansr

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Gold All Time Highs – Not If But When – Grandich Blog

By: Peter Grandich of Grandich Blog

February 10th, 2009

They say in life only death and taxes are guaranteed. They send you to jail if you guarantee an investment and it fails. With both things in mind, I believe we “should” make a new, all-time nominal high in gold before too long.

After putting a strong bottom in at $700, gold has made a series of higher lows while the $930-$940 area remains resistance. Despite an incredibly strong physical market, the paper market at the Comex seemingly trades to a different “drummer”. That’s okay as physical demand eventually overtakes paper markets.

Gold continues to be my most favorite play, followed by being long the Canadian dollar and then oil. But remember, I was also a NY Jets fan for 35 years.

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Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

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What’s Going on With the Dollar and Gold? – Seeking Alpha

By: Tim Iacono of Iacono Research

 

Those of you who have noticed that the U.S. dollar and gold have been moving in the same direction over the last few weeks are not alone. In fact, the two have moved together eight days in a row and nine out of the last ten, something that is quite unusual.
IMAGE When looking at the PowerShares DB U.S. Dollar Index Bullish ETF (PCX:UUP) and the SPDR Gold Shares ETF (PCX:GLD), it’s clear to see how different the last couple weeks have been as compared to earlier in the year.

 

 

Based on the data for these ETFs (which, unfortunately only goes back to early 2007 for UUP), the two have moved in the same direction on just 150 out of 490 days – about 30 percent of the time.

 

As shown in the chart below, the recent surge to much higher levels has not happened in at least two years, probably much longer.
IMAGE

The only other time that something similar happened was back in January of 2008.

 

What else happened in January of 2008?

Ahhh… How soon we forget…

From the St. Louis Federal Reserve website:

January 11, 2008

Bank of America announces that it will purchase Countrywide Financial in an all-stock transaction worth approximately $4 billion.

 

January 18, 2008
Fitch Ratings downgrades Ambac Financial Group’s insurance financial strength rating to AA, Credit Watch Negative. Standard and Poor’s place Ambac’s AAA rating on CreditWatch Negative.

January 22, 2008
In an intermeeting conference call, the FOMC votes to reduce its target for the federal funds rate 75 basis points to 3.5 percent. The Federal Reserve Board votes to reduce the primary credit rate 75 basis points to 4 percent.

January 30, 2008
The FOMC votes to reduce its target for the federal funds rate 50 basis points to 3 percent. The Federal Reserve Board votes to reduce the primary credit rate 50 basis points to 3.5 percent.

 

This was the really steep part of the rate reduction cycle – 125 basis points in just over a week.

 

Whether any of this has any real significance remains to be seen, but, the fact that, last time around, the gold price then surged to over $1,000 an ounce should not be ignored.

I, for one, will be happy to see the inverse relationship between the dollar and gold go the way of the dodo bird, never to affect twitchy traders again.

As noted here on many occasions before, there is no fundamental reason for this relationship to exist. If the dollar strengthens against the euro, why should that make the gold price go down? Because gold, priced in dollars, has become more expensive in Europe?

Despite hearing that ad nauseum in the financial media, that really doesn’t make any sense when you think about it.

 


Full Disclosure: Long GLD, no position in UUP
======================================
Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com 

======================================

Silver Surges but Remains Undervalued Compared to Gold – Seeking Alpha

By: Mark O’Byrne of Gold and Silver Investments.com

 

Gold fell some 1.5% last week as investors tookgl profits with gold having been up some 10% in the previous three 3 weeks. But the short and medium term prospects look sound in the light of strong fundamentals and some important indicators – silver was up by another 4.2% last week and the gold mining indices were also higher (XAU +4.6% and HUI +2.3%). The mining indices are often a leading indicator and silver usually underperforms gold in the early stages of rallies and outperforms in the latter. Silver’s recent strength (up by some 15% since the start of the year) may be a prelude to higher gold prices in the coming weeks.

 

The recent sharp rally in the US dollar appears unsustainable and the USD Index was down 0.64% last week and US bonds also fell again – the 10-Year bond sold off again and the yield rose another 4.75% (from 2.9% to 2.979%). As ever, the bond market remains of fundamental importance and nervousness about the humongous size of the Obama bailout and stimulus packages and talk of central banks printing money to buy government bonds is not helping sentiment here. And government debt issuance is set to surge in the coming weeks and there is a real concern that there simply will not be enough buyers – meaning that bond prices may fall from their lofty heights and long term yields and interest rates begin to rise again.

The gold/silver ratio has fallen to around 70 ($905oz/$13/oz = 69.6) today from around 80 in mid January. The long term historical average is 15:1 and this is because it is estimated that geologically there are some 15 parts of silver in the ground for every one part of gold. It is important to note that silver, unlike gold, besides being a safe haven investment is also used in industry and it is believed that since the dawn of the industrial revolution some 95% of the world’s silver has been used up in industrial applications. Because of gold’s much higher value, it gets recycled and all the gold mined in the world ever is still with us but photography and other industrial uses makes silver like oil – when used it is gone forever.

The 1970s saw an average gold to silver ratio of around 25:1 and fell below 20:1 when silver rose to over $45/oz nominally. Thus it seems very likely that in the coming years, silver may well return to its long term historical average of closer to 15:1. This means that silver is likely to continue to outperform even gold in the coming weeks and months. Silver may return to its recent highs of over $20/oz in 2009 due to very strong supply demand fundamentals. It is also important to note that the CFTC investigation into artificial manipulation and suppression of the silver market could potentially lead to a massive short squeeze.

All investors should diversify within the precious metals allocation in their portfolio and own silver as well as gold. Gold remains the ultimate safe haven while silver is a safe haven but has the potential for very significant returns and growing wealth in the coming months.

Stock position: None.

==================================

Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

=================================

Bullish for the Short Term But Consider Gold, Platinum as Well – Seeking Alpha

By: Jeffrey Saut of Raymond James

 

Excerpt from Raymond James strategist Jeffrey Saut’s latest essay, published Monday (February 9th):

 

…[I]n last Tuesday morning’s verbal strategy comments we noted that since the inception of the S&P 500 futures contract there have been five instances when the futures slid by 2% (or more) on back-to-back days and then gapped lower by 1%+ the following session. On EVERY one of those occasions the S&P 500 (SPX/868.60) was at, or within one day, of beginning a decent rally. Further, last November we opined that at the November 20, 2008 “price low” the DJIA was 34% below its 200-day moving average [DMA] and consequently very oversold.

According to Susan Berge, of the Berge Report, that reading was greater than the momentum low occurring in October 1974 of 27%, as well as the 24% reading during the 1987 crash. Even after the rally we have experienced since the November “lows” during the recent downside re-test of those November’s “lows” the differential was still a massive 25%. Subsequently, we advised buying the exchange-traded fund [ETF] of your choice, which in our case was the recommendation of the ProShares Ultra S&P 500 (SSO) that is “geared” two-to-one on the upside. We further suggested that the more timid types might want to consider hedging these positions to minimize the downside.

Accordingly, the Dutiful Dow sprinted 141 points in Tuesday’s session, but gave back most of those gains on Wednesday’s wilt (-121). Therefore, in Thursday morning’s strategy comments, we said that if our upside rally “call” was going to play ,the equity markets would need to shake off Thursday’s worse than expected employment claims number, as well as the anticipated worse than estimated employment numbers on Friday. BINGO, for indeed the late week numbers were much worse than expected, yet the DJIA shook them off and rallied. How far the rally will carry is anyone’s guess, for while we are bullish on a short-term basis, it would take a closing price above 8375 on the DJIA to turn us merely “neutral” on an intermediate-term basis.

However, if the DJIA (8280.59) can close above its January 6, 2009 closing high of 9015.10, with a like close by the D-J Transportation Average [DJTA] (3203.70) above its 1/6/09 closing high of 3717.26, it would be a Dow Theory “buy signal” according to our interpretation of Dow Theory; and should be viewed as a pretty bullish occurrence. Moreover, as stated in previous missives, so far what we have seen is a downside non-confirmation, with the DJTA breaking below its November 2008 “low” without a similar breakdown by the DJIA; and, you should read that bullishly.

Meanwhile, there was an interesting rotation last week with the Commodity Research Bureau Index “up,” the Dollar Index “down,” bond prices “down” (read: higher interest rates), and Dr. Copper “up” nearly 11%. This action, if it continues, suggests the potential for the return of inflation and the potential for a stronger economy. If so, in addition to our recommendation on gold, participants might want to consider investments in platinum. Indeed, unlike gold, platinum is not only a precious metal, but is used heavily in industry due to its tensile strength characteristics…

Typically, platinum sells at a substantial premium to gold, but because of the collapse of the auto industry platinum is approaching parity with gold for the first time since the early / mid-1990s. Investors, therefore, might want to consider platinum in addition to their gold positions, for they will be purchasing a relatively “cheap” metal with a “call” on an auto industry rebound. Our vehicle of choice for this theme is the iPath Dow Jones AIG Platinum ETF (PGM).

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Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

================================

Late Breaking Intelligence Report…

MineWeb Gold News – Japan Investors Turn To Gold! – MineWeb

Source: Reuters

 

 

TREND SPREADING

Japan investors turn to gold

Online traders are turning to commodities from FX, stocks and gold is the most popular commodity product for online retailers.

Author: Chikako Mogi
Posted:  Tuesday , 10 Feb 2009

TOKYO (Reuters)  – 

Japanese retail investors are stepping up their online gold investment in a trend that is unlikely to be reversed, an executive at a top online commodity trading firm said on Tuesday.

As the country’s retail investors catch up with global trends of asset diversification, they are hunting for alternative investments to enhance returns, and the trend is spreading outwards from the rich to engulf ordinary people.

Japan’s risk-averse retail investors are estimated to hold an eye-popping $16.4 trillion, more than half of it in cash and deposits, Mizuho Bank, the country’s second-largest lender, says.

Although the global financial crisis hit the real economy and battered commodities directly linked to the economy, gold remains unscathed by such declining industrial demand while retaining merit as an asset.

“Given its relatively stable value, interest in gold will persist for a while and the market will remain bullish,” Naoaki Kurumada, chief executive of Dot Commodity, Inc, told Reuters.

“Gold is our main commodity product — by purchasing gold, investors can start including commodities in their portfolios.”

Since its establishment in 2005, the company has grown as Japan’s top online commodity trading firm, with about 20,000 accounts against some 50 initially, and assets of 8 billion yen ($87.45 million) by October. It is also second in the online commodity trading industry in volume terms.

The company is drawing interest from seasoned online traders who are turning to commodities for high returns, as Japanese stocks have plunged and the yen has strengthened.

“I expect online accounts to increase, given the strengthening appetite for asset diversification and more people finding commodity trading interesting,” Kurumada said.

There are two key kinds of investors who use the firm’s services. One of them has experience in trading currency or stocks online and can analyse technical charts or moves in other markets to aim for high returns amid price fluctuations.

“Some are day traders, others more longer term, like a few weeks. They are largely in their 30s and 40s,” Kurumada said.

The other type is non-traders interested in commodity investment who buy gold as a start, he said.

Reflecting the popularity of the yellow metal as an investment, the open interest in the gold mini contract, launched in July 2007, hit a record high 83,428 contracts on Jan. 8, according to Tokyo Commodity Exchange Inc (TOCOM), exceeding that of the standard gold contract.

TOCOM will extend trading hours of all derivatives contracts later this year to boost liquidity after Japan’s main commodity market launches upgraded trading systems in May.

Kurumada said this would help attract more investor interest to commodity investment and trading, as it would allow players to cut losses timely or swiftly react to overseas market moves.

“We hope that the environment will be set so traders can reap profits just like in currency and stocks,” he said.

While Japanese retail investors are waking up to the attraction of commodity investment, the pace of growth may be moderate.

About 20 percent of those investing in gold, for instance, are investing in TOCOM’s gold mini contract and about 10 percent are actively trading. The rest are investing in such products as gold savings plans, Kurumada said.

“Retail investors jumped on the gold mini contract a year after its launch. It takes time for them to catch up,” he said. ($1=91.48 Yen) (Editing by Clarence Fernandez)

© Thomson Reuters 2009 All rights reserved

==================================

Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

==================================

That’s It for Now- I close with this quote below- Good Investing! – jschulmansr

“Nothing will unnerve the paper gold shorts more quickly and do more to undercut their confidence than to strip them of the real metal and force them to come up with more hard gold bullion to make good on deliveries. “Stand and Deliver or Go Home” should be the rallying cry of the gold longs to the paper gold shorts.” –Trader Dan Norcini

==================================
Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investments. –  jschulmansr

 

 

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