By: Scott Wright, Zeal Intelligence LLC - 3 February, 2006
The turn of the century has brought upon a change of guard for the financial markets. The general stock markets peaked and a new secular commodities bull was born. Even though many have had to endure the pain of a bursting stock-market bubble, the global economy has been thriving since the turn of the millennium and I suspect those in the future will look back on the 21st century and tag it as the Consumption Age. Full Story
We suspect that rising inflation expectations were part of the fuel behind the gold rally on Thursday, as the softer than expected US productivity number is thought to signal an increase in pricing pressures within the US economy. However, the decline in productivity might also reduce the Fed's patience in the face of any renewed inflation signals. As usual, the gold market saw persistent support from fund buying and with the stock market also tossing around the rumors of a terrorist warning from the Homeland Security Department, it is likely that gold saw some flight to quality buying. Full Story
Gold started off mixed in Asia and then rose in London and climbed up near $575 in New York before it fell off a bit, but it still ended with a decent gain to end at a new 25 year closing high. Silver jumped higher in Asia and climbed over $9.90 in London before it fell off a bit in New York, but it also ended with a decent gain to end within a penny of its 18 and ¾ year closing high set on Tuesday. Full Story
A new year has changed little. That is, nothing that would alter the long-term optimism for Gold. The state of the U.S. financial system did not change suddenly and miraculously in January. Those trend we identified, now over five years ago, that were seen as sending $Gold to over US$1,200 are still in place. What was not foreseen is that our patience would be rewarded with a new, wonderful Chairman of the Federal Reserve. A leader has been appointed for the U.S. central bank that will not hesitate to destroy the value of the U.S. dollar when the Mortgage Bubble collapses. Investors in Gold and Silver could not have found a better friend if they had done the selection. Full Story
Most of the time it is very difficult to beat an index. The key here is ‘index’. Unfortunately in the Resource sector there are too few tradeable indexes. Sure there is the HUI and the XOI. And there are many proprietary indexes. But most investors are picking stocks for themselves, especially in the Junior sector, where there are very few tradeable indexes or funds. Full Story
On balance, the month of February has been a month of consolidation since 1984. Since 1995, the XAU has seen a gain for the month of February in six years, a loss in three years and was essentially neutral in two years. Of the three losing years (1996, 1999, 2003) the declines were relatively minor and volatility wasn't a huge factor. Another observation that can be made is that over the past decade, whenever the XAU's dominant interim 90-day moving average is declining entering the month, February tends to be either a negative or at best a neutral month of trading. When the XAU enters February after a sustained run-up, as in February 1996, the month is often used as a period of consolidation (as in Feb. ‘96 and ‘02). Full Story
After a minor setback yesterday, gold traded to new highs overnight and appears ready to resume its uptrend this morning. The gold market exhibited significant volatility early in the session yesterday, swinging from early weakness into an early rally that failed to hold through the scheduled economic numbers in the morning. At times the Dollar was quite strong, and we assume that element discouraged a few would-be buyers and allowed the market to slide aggressively. The press continues to carry reports of ongoing investment demand for gold and some traders continue to point to the prospect for increased central bank buying of gold. Full Story
Gold traded in a range of about $1 to $5 lower in Asia and London before rising to find slight gains in early New York trade, but it then sold off over 1% in late morning trade and fell near $563 before it rebounded into the close and ended just slightly lower on the day to fall from 25 year highs. Silver followed a similar rollercoaster ride and ended at about the middle of its trading range to fall from near 19 year highs. Full Story
There has been much recent speculation that the Barclay’s Silver ETF is about to be approved by the Securities and Exchange Commission (SEC) and about how this coming event has bulled prices to near 20-year highs. Make no mistake, as I wrote last year, in The Coming Silver ETF?, this is big news for the silver market, whether it is approved or not. Full Story
Certain writers boldly proclaim a single chart being the end all, the one quintessential significant chart which tells the entire story. Well, here is another. It exposes the erroneous GDP statistic, and reveals its extreme massage for a clear overstatement. The “real GDP” is really at least 4% lower than the officially reported figure. The CPI is fully 3% lower than the calculation used before 1992, called the “pre-Clinton” statistic by a shadow group before distortions were introduced and engrained. Full Story
Well folks, thanks to the opaque policies of central banks where precious metals [gold and silver] are concerned – [even when clued in] one really has to “really dig” and connect a few dots to get to the core or truth of matters in this regard. In an un-backed fiat monetary system – with central banks around the world working in concert toward a common end [covertly selling, leasing, double counting and otherwise misreporting their stocks of metal] – it’s no wonder the average Jane and Joe have little idea as to the fraud, namely unchecked, deliberate, uncontrolled printing of money being foisted upon them. Full Story
The gold market is expected to see a wider trading range today as cross currents buffet the market. While some might discount the Fed dialogue as the primary cause for the weakness in gold today, due to the delayed reaction of the setback, we have to think that the somewhat hawkish stance of the Fed has inspired some of the profit taking being seen in the overnight action. In a supportive development overnight, Russia indicated that they would see a 1.2% decline in 2006 gold production and that reiterates the potential for ongoing tightening of the gold supply and demand condition. Full Story
Gold climbed higher in New York Access trade late yesterday and held near $570 in Asia and London, but it then fell off to near unchanged in early New York trade before climbing back up to new highs by the close of trade in New York to end at a new 25 year high. Silver traded up near $9.90 in Asia and London before it fell off a bit in New York, but it still closed higher to end at a near 19 year high. Both metals are trading lower in after hours trade in reaction to the fed’s statement, but losses are minor. Full Story
All kinds of theories have been floated over the past few years to explain the rapidly rising price of oil. But few analysts have noted that expensive crude might not be a function of supply and demand, but rather a simple function of inflation. Full Story
Gold finished on Friday at $558, up about $3 while Silver sky rocketed up to $9.57, up near $.70! An incredible move for the metal. In my last, Weekly Market Update, I suggested that silver had not confirmed gold's new 25 year high and that until silver climbed above its trading range, the precious metals bull would stall. Right on cue, the silver market did in fact break out to the upside, this week, with phenomenal momentum. Full Story
When talking about defense against inflation, there is reason to have a solid strategy of protection against the enemy. But what exactly is the enemy? How does the enemy operate? Why is the enemy inflation? How can wealth be defended against it? When inflation is reported in mainstream media, lots of numbers are spewed forth and acronyms like CPI are often made reference to. What is the CPI and is there truly an accurate measure of inflation? Lets start with a working definition of inflation. Full Story
Another one of my long term subscribers wrote me recently with his insights on how Fannie Mae and Freddie Mac have transmogrified the offering of simple mortgages into something one would expect to find at a Las Vegas casino. Their financial innovations have facilitated the growth of home ownership on one hand but have set up America for a financial meltdown should the Fed increase interest rates beyond the tipping point. All this begs the questions "Are we there yet?" Full Story
It is February 1, 2006 and I’d like to review Madison Minerals with you. This is such a compelling story and yet in the big picture, we haven’t even scratched the surface understanding the full potential of the properties involved here. News and events have been unfolding over the last six months in what I consider to be a very positive direction. Madison is involved with two projects, one in Lander County, Nevada called the Lewis Project and one in Papua New Guinea called Mt. Kare (pronounced Karey). Full Story
Typically the presence of rising interest rates is viewed as a dampening effect for gold but under the current conditions, the investment interest seems fixated on a longer term theme. Apparently investors are concerned about the inability to control energy prices and with the political uncertainty last week expanding from Iraq and Iran to include the Palestinian situation, we can understand the steady flow of money into gold and other precious metals. Some traders are even concerned that a Natural Gas situation between Russia and some of its former satellite countries might erupt into something significant. Full Story
Gold jumped about $3 in Asia before falling back near $560 in London, but it then turned back higher and climbed upwards in New York to close near its highs of the session at a new 25 year closing high. Silver also jumped higher in Asia before slumping a bit in London, but it then recouped those losses in New York and ended at a new 18 and ½ year closing high. Full Story
By: Julian D. W. Phillips, Gold-Authentic Money - 30 January, 2006
Last week saw zero Central Bank selling by the Central Bank old Agreement signatories, the first time under this agreement, confirming our belief that the strongest gold price driver is lack of selling! This came on the back of ½ tonne sale from the week before. Can we read more into this than a simple slowdown in sales? That there is a change in Central Bank views on gold [South Africa, Russia and possibly China] is a matter of public record, but the processes required to alter gold selling programmes is long and complicated. Full Story
By: Joe Ferrazzano, Trade The Cycles - 30 January, 2006
Reliable lead indicator NEM's Elliot Wave 4 probably began on 1-17-06 (see latest 1 year chart), while HUI/XAU made higher cycle highs last week thanks largely to the Fed's massive $73.50 Billion in Repos (Repurchase Agreements) during the six day stretch from 1-18 until 1-26, with $17 Billion in Repos on January 23/24, and a massive $23 Billion in Repos on January 26, which fueled index fund traders and led to a spike move last week (see 5 day HUI chart, second chart). Full Story
The run-up in the gold stocks since the bottom last May has been both exciting and rewarding, leaving the mining stocks among the better performing sectors on an intermediate-term basis. It’s almost surreal to see the gold stocks being treated as a "momentum play" by the growing number of investors whose interests normally lie outside the gold sector. But in this day and age it’s all about chasing momentum (which of course only serves to feed it) and the leading gold and silver shares are having their day as bona fide momentum plays. Full Story
The gold market appears to be coiling and with the rest of the metals showing impressive upside action of late, we can understand at least a part of the bull camp becoming a little concerned. However, as can we seen in the latest COT figures, the gold market actually reduced its net spec long in the last week by 8,700 contracts, with the combined spec and fund long coming in at 177,000 contracts. With the Chinese on an extended holiday this week, we suspect that the overnight action in the metals understates the potential volatility that might be seen in the US session today. Full Story
Gold fell off in Asia before climbing higher in London to up around $563 in early New York trade, but it then fell off into the close and ended near its lows of the session with a slight loss. Silver followed a similar rollercoaster ride and climbed up near $9.80 in London before falling off in New York, but its still ended slightly higher to close at a new 18 and ½ year high. Full Story
This was a momentous week on the JSE. It again soared to new all time highs, but that was not the real event. Sure the gold shares took off as the quarterly reports detailed massive gains in profits relative to the past four quarters, but once again that was not the main feature as far as I am concerned. So what was this momentous occasion? Full Story
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