China is buying natural resources and hard assets globally and investing in infrastructure in Africa and West Asia in order to extract these natural resources. China is importing unprecedented amounts of physical gold and senior Chinese policy makers and officials have gone on record regarding how they view gold as in important strategic and monetary asset. Full Story
By: Julian D. W. Phillips, Gold Forecaster - Global Watch - 30 May, 2014
There are reports out there that say that there is a gold deficit of around 4.35 tonnes a week, meaning that more gold is being bought than produced. That’s why the SPDR sales are important if the gold price is to be held at current levels. This makes the fall this week even more difficult to understand. The lack of visible physical sales of gold from speculators and the investors, tells us that there is very little momentum behind the downward path of gold and it can turn around in a heartbeat. We therefore attribute the fall to a temporary drop in demand due to wholesalers looking for lower prices. But they can only do this for a short while. Full Story
By: Chintan Karnani, Insignia Consultants - 30 May, 2014
Yesterday the fall in US first quarter GDP numbers failed to affect bullion positively. Traders are expecting that US growth will pick up in the April to June quarter. I expect US growth to fall in the third quarter beginning July. Energy prices are still high and could be a huge drag on US economy. Full Story
“Then people will say gee, I better get some gold, and they’ll find out they can’t get it because the big guy will get it. You know, like central banks and sovereign wealth funds will be able to get the gold. The typical investor will run down to the coin shop and they will be sold out, and the U.S. Mint will say sorry, we’re not shipping.”
“You’re going to find out you can’t get it because the whole thing is set up for massive shortages in supply.” Full Story
By: Julian D. W. Phillips, Gold Forecaster - Global Watch - 29 May, 2014
The fall in the gold price and silver continued confirming that this is the strong move that we have been expecting for some time now. We can also confirm that this fall is not reflecting the fall of the euro as the euro has remained unchanged in the last day. We see that Asia has not followed through with increased demand because of the lower price. This has allowed dealers to let prices slide. Once again there were no reported sales or purchases from the U.S. based gold ETFs as their holdings at 785.279 tonnes in the SPDR gold ETF and at 164.02 tonnes in the Gold Trust. Full Story
Tonight I would just like to look at some random PM charts, in no special order, to get a feel of where we are in the near to long term look. As you know the PM complex finally broke down from their two month consolidation patterns which is part of a bigger 10 month consolidation pattern. In most cases the consolidation patterns have a down slopping look to them that tells me the price action wants to head lower. In a normal downtrend a consolidation pattern will form sideways like a triangle or rectangle or will slope up against the downtrend such as a bear flag that has a higher high and higher low before it gives way to the downside. Full Story
By: Manan Somani, Insignia Consultants - 29 May, 2014
A daily close below $1264 tomorrow will be bearish for gold for the month of June. A daily close below $18.90 tomorrow will be bearish for silver for the month of June. Traders will start taking positions for the month of June after the release of US GDP numbers today. Full Story
A return to value is the result of a bear market, but as long as fear remains heightened the bear market can perpetuate and produce even greater value until the fear is dissipated. So a loss of momentum in the gold bear market is a potential catalyst for the end of the bear. We're at a critical juncture and even though fear is ramping up again in the gold sector, in reality the bear has work to do to keep going. Full Story
"For us (Russia and China) it is important to deposit those (gold and currency reserves) in a rational and secure way," he said. "And we together need to think of how to do that keeping in mind the uneasy situation in the global economy."
Putin also said China and Russia will consider further steps in order to use national currencies in bilateral transactions according to Reuters. Full Story
By: Julian D. W. Phillips, Gold Forecaster - Global Watch - 28 May, 2014
We saw a stronger fall in gold of 2.25% than in silver of 1.5% yesterday. Will silver fall further to catch up or did gold fall too far? We should see some reactions in the next day or so. We remember in the past that Asia is not rapid in its reactions, so we expect to see that come by week’s end. However, we have to question the ability of this fall to hold lower levels. Why, because there were buyers of gold into the U.S. based SPDR gold ETF of 8.386 tonnes [not sellers!]. Full Story
Another catalyst is the news that the Chinese central bank has granted approval to the Shanghai Gold Exchange (SGE) to launch a global gold trading platform. Full Story
Two week ago I first called for patience regarding Gold’s expected Investor Cycle (Investor Cycles run 24 weeks) decline. Since then, Gold has continued to chop sideways in a largely lifeless and apathetic manner. The few price spikes we've seen have typically come during thinly traded markets, with little follow-through and prices that close near where they opened. Full Story
Banks, global producers, refineries and mints will be hesitant to embrace the new Chinese exchange, especially in the short term. However, once the new exchange achieves critical mass in China and Asia, the exchange will be embraced by western institutions and could become the most important gold exchange in the world. Full Story
By: Julian D. W. Phillips, Gold Forecaster - Global Watch - 26 May, 2014
The European elections over the weekend have left the majority parties unchanged. While those parties have retained power, the parties objecting to austerity or who want out of the E.U. made very strong gains. Whether this is enough to place the movement towards fiscal and monetary union in jeopardy, we doubt. What it does tell us is that the prospect of Britain’s referendum on whether to stay in the E.U. points to its leaving and the overall unity of Europe to weaken, as the E.U.-objectors increase in number until the next elections. This precedent could precipitate others following in later years. But it does not fundamentally affect the future of the euro or the Eurozone. The national levels of cooperation with the E.U. may falter as voters become more vociferous, but this will not alter the policies currently being followed there, in the short to medium term. Full Story
By: Manan Somani, Insignia Consultants - 26 May, 2014
US data this week include (a) Consumer Confidence on Tuesday (b) Preliminary GDP on Thursday (c) Personal spending on Friday. Traders will also start taking position for next weeks US May nonfarm payrolls. Full Story
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