RSSCategory: Articles: Gold Silver Prices

Gold is coming to a fork in the road…

Gold is coming to a fork in the road…

The multipoint trendline resistance that I have touched on in the recent posts on the blog has indeed been “concrete”.  Gold has also been making higher highs at the same time, and the pattern is pinching to a point where one side of supply or demand is likely to run the other over.  There is no way to predict which way it goes.  I only care about positioning myself on the winning side, or with the strong hands of the current “Open Interest” once gold enters the next phase of “vertical development”. The picture of the daily chart, right hand side below, is one of “extreme tension”.  Any swing/position trade, long or short, being placed inside this pattern is […]

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US Dollar Looks Strong

US Dollar Looks Strong

The rally in the US Dollar continues not out of any particular set of strong fundamentals in the US but rather out of a general aversion to the Euro and by consequence, to the European currencies. While the Fed seems to be basically standing pat for the immediate moment, the Bank of England has announced another round of its bond buying program while the ECB has lowered rates. Given that backdrop and the lingering fears and uncertainty over the bailout mechanism put in place by the European finance ministers and political leaders, traders continue to bid up the Dollar. This buying is a reflection of the unease among traders over current […]

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Gold Bullion will be Supported By Loose Monetary Policies

Gold Bullion will be Supported By Loose Monetary Policies

Gold Bullion rose to $1597 per ounce Tuesday morning in London – its highest level so far this week – as stock markets also ticked higher following news that Spain should receive some financial assistance for its banks later this month. Silver Bullion also gained, climbing as high as $27.61 per ounce, while other commodities were broadly flat. US, UK and German government bond prices fell, while on the currency markets the Dollar gave back early gains against the Euro, with the latter rallying back above $1.23. “Loose monetary policies, with a scope for more aggressive balance sheet use in the US and Europe, will keep real [interest] rates in most reserve […]

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Fragile Sentiment Leaves Gold Prices Unsure Which Way to Go

Fragile Sentiment Leaves Gold Prices Unsure Which Way to Go

Gold Prices held above $1580 per ounce during Monday morning’s London trading – broadly in line with where they ended last week – while most European stock markets were broadly flat on the day, with the exception of Spain’s. Gold Prices ended down last week, falling back below $1600 on Friday, following the release of June’s US nonfarm payroll data, which showed the economy added 80,000 private sector jobs last month. Although this was lower than many analysts’ forecasts, it was higher than a month earlier. April and May’s nonfarms figures were revised higher, while unemployment held steady at 8.2%. “[Last week was] the ninth consecutive week where gold has alternated between […]

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MidWest US Drought Fueling Talk of Soaring Food Prices

The fierce drought that has gripped the lower section of the US corn belt and has been ravaging both corn and soybeans in the region has sent corn futures limit up today and soybeans for the front month July contract to a new all time high. That has sent shudders through the minds of some traders who are convinced that it is only a matter of time before all of this feeds through to the supply chain. REsult – higher grain prices meaning higher food prices in general. This phenomenon has gotten hedge funds back to buying commodities across the board this morning even with the equity markets careening lower. […]

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The gold and silver price: the week till 6 July 2012 in review

Gold and silver had a very strong start of the week, but they’ve lost all gains during the second half of the week after Independence Day on Wednesday.  The gold price saw a loss of approximately 1.5% over the week in US dollar. Gold in closed on 1584.80 dollar an ounce and 1286.46 euro. Gold saw his high during the week slightly above 1620 dollar. The silver price closed the week on 27.13 US dollar per ounce (some 2.5% lower than the close of one week earlier). In euro terms, silver closed the week at 21.99 euro. Technical view Both gold and silver have been hovering around their critical 20 and 50 day […]

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German debt problems

German debt problems

Somewhat counterintuitive action in the precious metals markets yesterday, with gold and silver coming under selling pressure despite news of easing from a trio of major central banks. As expected, the Bank of England announced a further £50 billion of quantitative easing yesterday (the UK’s own “QE3”), which will bring the BoE’s total QE since 2008 to £375bn. Elsewhere, the European Central Bank and the People’s Bank of China cut interest rates. The ECB cut its short-term lending rate to a record low of 0.75% – down from 1.0% – while the PBC announced a 0.31 percentage-point cut in its one-year yuan-lending rate, to 6% (which seems like a crazily […]

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Payrolls Number Disappoints – Risk Off

Payrolls Number Disappoints – Risk Off

If you recall one month ago, when we got that abysmal jobs number, gold initially moved lower, only to then rebound with a ferocity that caught market watchers and traders completely off guard. Risk off trades were being slammed on as longs bailed out and bears began pressing the downside. Literally, on the drop of a dime, the entire complexion of the market reversed with the bears running for their lives as new longs entered the fray. The reason – the number was so crappy that everyone just “knew” that the Fed was going to immediately launch the next round of QE. In other words, the more rotten the economic […]

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Currencies Don’t Make Gold Look Good

Currencies Don’t Make Gold Look Good

Let’’s start by stating that the title of this essay refers to the current situation on the gold market – not to the long-term fundamental picture. In fact, up to this day, no paper currency has survived in its original form while gold has been used as money since time immemorial. Every fiat currency since Roman times has ended in devaluation and eventual collapse, of not only the currency, but often of the host economy. The usual course of events is that paper currencies are inflated away until worthless. The purchasing power of the US dollar, for example, has declined by 90% since 1950, also true for most currencies. The […]

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Investors Urged to Buy Gold Ahead of QE3

Investors Urged to Buy Gold Ahead of QE3

US dollar prices to Buy Gold fell from a new 2-week high of $1624 per ounce Thursday lunchtime as New York returned from the Fourth of July holiday, easing 0.5% lower as the Euro currency fell hard following a weakening of central-bank policy in Frankfurt, London and Beijing. The European Central Bank today cut its key lending rate by 0.25% to a new record low of 0.75% as widely expected. It also cut the interest rate paid to commercial banks holding cash on deposit at the ECB to zero. European stock markets rose and commodity prices jumped on the news, pushing Brent crude oil back above $100 per barrel. Silver Prices retreated 1.2% […]

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Worldwide Interest Rate Cuts Could Spur Second Half Rally In Gold and Silver

Worldwide Interest Rate Cuts Could Spur Second Half Rally In Gold and Silver

Gold is consolidating after hitting a two week high.  Investors are witnessing renewed strength in precious metals after the Fed announced the expansion of Operation Twist until at least the end of the year. Similarly, gold and silver have been recently moving higher based on the Eurozone stocks breathing a sigh of relief as the summit came up with a purported solution to reduce funding costs particularly for Italy and Spain worth a $149 billion.  This may stimulate the Eurozone in addition precious metal investors appear to be optimistic as the European Central Bank and the People’s Bank of China concurrently will ease interest rates to stimulate global growth in the […]

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Silver, Gold and The Coming Deflation

Silver, Gold and The Coming Deflation

Historically gold has made its significant gains, relative to other assets (as well as nominally), not during inflation, but during deflation (Note: I am using the terms inflation and deflation very loosely in this case). These significant gold rallies historically occur when value flees instruments such as stocks and certain commodities. Since the 1920s there have been three major gold rallies (1930s, 1970s and the current rally). All three major gold rallies came after a significant top in the Dow and the Dow/Gold ratio (1929, 1966 and 1999). A great portion of the 1930s and 1970s rallies occurred when the Dow was falling significantly. In fact, the biggest rise in […]

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The gold price could be preparing its flight

The gold price could be preparing its flight

The summer is there, time for a well deserved holiday. Most people booked their flight … but what about the gold price ? It could be it is preparing its flight as well. We read on Forbes.com an interesting article, concluding that gold could be setting up for a major move. Based on technical analysis, the author showed that the gold price is on a critical juncture. As we are in secural bull market, the technical indicators should be signaling a powerful move up (not down). One of the most respected newsletter writers on this planet, Richard Russel, published a similar conclusion earlier this week. His opinion was based on a […]

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Monetary stimulus chatter helps gold

Monetary stimulus chatter helps gold

US markets are of course closed today for the 4th of July, but elsewhere in the world traders are still going about their merry business. Gold and silver posted strong performances yesterday on the back of – yes, you guessed it – market excitement about the prospect of more cheap money from central banks. Weak manufacturing data from America on Monday, combined with growing expectations of a rate cut from the European Central Bank and the belief that China will ease have all given growth assets a leg-up. Meanwhile in the UK, amid the Libor drama, the Bank of England is said to be gearing up for more money printing. […]

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