For the week commencing March 23d, some economic data are scheduled to be announced but there is no central bank decision planned, as seen in the table below. Mr. Draghi and Mr. Yellen will have each one a speech during the week, but they are not announcing a decision from the central bank. CPI in the U.S. and new home sales are scheduled on Tuesday; unless the CPI will be very surprising, these are not the type of economic data that are moving precious metals prices. However, the U.S. GDP data on Friday have the potential to create some volatility in markets and metals.
Tag: economic analysis
Investors started off 2015 with a slow global economy, low oil prices, a strong Dollar, and a deflationary Europe with great uncertainties on the progress of the US economy and the recent launch of Europe’s quantitative easing. The question is, what opportunities lie ahead? This article highlights the main topics covered in an interview between Mr. Frank Suess with the globally renowned Swiss fund manager, Mr. Felix Zulauf.
If you do not own it now, you are playing a game of [irresponsible]risk. For those who already own precious metals, even for prices at the highs, accept it and be glad you own either or both. The insane banker’s world in which we live will come to an end, and likely a disastrous one. Keep on stacking, keep on staking. On a relative scale, price should be your least concern.
What I find extremely annoying is the fact that while these banks commit just about every financial crime imaginable, the regulatory bodies refuse to prosecute any banker and continue to harass hard working individuals instead. And, many of these individuals have merely taken precautionary measures to protect their wealth against corrupt governments as well as bad monetary policies.
The US government has consistently increased its expenses from 1980 as shown and since 1913, not shown. SNAP (food stamp) program costs increased erratically and inevitably. This program alone consumes the entire official US gold hoard every four years. Really? Gold prices have increased erratically and exponentially since 1971. Given the exponentially increasing government debt and ongoing military adventures, gold prices will inevitably reflect the declining value of fiat currencies and rally much higher.
Liberty is a fundamental human right and the cornerstone of our existence. But in our current world, liberty is being attacked from all directions, whether through higher state control or individuals themselves. Liberty is in search for its protector. Those that value and actively promote the ideals of freedom and liberty are few in such an enclosing environment. In the following article, Claudio Grass, Managing Director at Global Gold Switzerland, ventures into a discussion with one of the vanguards of liberty, former President of the Czech Republic, Prof. Ing. Václav Klaus.
The race to the bottom continues unabated in the currency wars. And, no matter where you live, if you are stupid enough to believe the rhetoric being spewed out by politicians then you deserve to suffer the consequences. Unfortunately, you have to have a financial insurance policy that will save you from the actions of the current financial and political elite. While there are lots of great options available, owning physical gold and especially silver should be an essential part of this policy.
For the week commencing February 9th, there is a very limited number of economic data coming out. No central bank announcements are planned. If gold and silver will be moving, it will not be because of economic or monetary data. As the table below indicates, retail sales will be released in the U.S. on Thursday, while Germany will publish their GDP growth on Friday. The precious metals are vulerable lately. That is, in our opinion, not because of economic data, but because of futures positions in the COMEX market. As we have shown a week ago, commercials have accumulated short positions at an astonishing rate. That is the real reason why gold’s rally is “capped.”
We do not know what the future entails when our existing monetary and financial systems break down, but we are convinced that gold and silver will offer security (at least) in the transition period. If we look at the gold purchases by the East, it also reveals how emerging markets have set their minds on gold. This further supports our conviction that a form of gold standard might regain a prominent status and take over once again. However, the prevailing monetary experiment called “fiat currency” is likely to persist for some time to come.
Jakobsen argues that in the current economic environment that what a metals trader needs to focus on is deflation. When deflation bottoms out, which is something likely to happen during Q1 of 2015, it will be the biggest buy signal for metals. Jakobsen’s base scenario is that Q1 and Q2 will become the worst part of the business cycle with the lowest inflation expectation, the lowest growth, the lowest ability to do anything and increasing volatility at the same time. But he believes that as this low energy, as these low interest rates and as the terms of trade for Europe improve, we will see a better second half than we’ll see a first half.
Given the data points discussed in this article, it is fair to say that Japan is on track for a devastating bust at some point in the future. The unknown factor is timing. When the inevitable will take place is anyone’s guess. The fate of countries like Japan is really in the hands of central bankers. However, central planners are not able to manipulate markets infinitely. At a certain point, something has to give. That is when the markets will give up and disbelief will replace trust. Readers should remember that in such a bust scenario, people flee down the Golden Pyramid of asset classes to their safe haven, being gold.
The dollar’s strength is helping to push commodity prices down, as many commodities are priced in dollars, including gold and oil, which in turn doesn’t help the efforts of the European Central Bank and the Bank of Japan to boost inflation in their countries. As more people become aware of what is really going on, they will accumulate physical gold and silver, and the prices will have to adjust to the real fundamentals and will no longer be determined by a handful of speculators. So, I expect to see prices trend higher in the New Year.
The first one of the QE Central Banks that attempts to exit QE will be flooded with capital inflows with the accompanying strong currency appreciation. Indeed, such currency appreciation will crush the economy via the export sector, whilst it will import price disinflation. This falling inflation will in turn give the central bank the cover to renew again any QE policies. This is the so-called boom and boost inflation-deflation cycle that central bankers create with their bias towards expansionary policies.
For the week commencing November 17th, there are some key central bank announcements, coming from the U.S., Japan and the European Union. Below is a more detailed calendar of economic data in key markets, but, more importantly, formal central bank announcements. They are not necessarily driving gold and silver prices, but could cause price volatility. As evidenced by the calendar, the second half of the week could be very volatile.
Bitcoin’s correlation with gold has started to reverse, moving to +0.76 from a high last week of +0.88. This makes forecasting future bitcoin price movements more difficult if it is beginning to act less like gold, who’s behavior has become well-understood in relation to the US economic narrative of growth and Federal Reserve tightening. Right now, the bitcoin market remains very stochastic and open to market manipulation. There are no clear demand-side factors that we can rely on for sustained demand of the currency.