January has been an exciting month in the precious metals markets. Gold and silver have reached highs not seen since 1987. It’s been a over a month since my last article “No Correction Yet?” so I thought it was about time to put my silver market thoughts on paper again. The strength of this bull market the past few months has been quite impressive. For long-term investors of physical silver it shouldn’t matter if we have a correction in the near future or not, but if you are trading silver I still see signs that we should be cautious. Full Story
By: Adam Hamilton, Zeal Intelligence LLC - 10 February, 2006
On November 18th, 2004 the first gold exchange-traded fund in the United States started trading. Known as GLD, this trust spearheaded by the World Gold Council granted American stock investors the opportunity to buy a stock-like asset designed “to track the price of gold”. If you follow the gold world closely, you will remember the enormous controversy the launch of this ETF generated. Some folks were thrilled that this gold ETF would open up gold to broader investor participation while others were convinced that it was a Trojan horse designed to suppress gold by shunting capital away from physical gold into yet another form of paper. GLD divided the gold camp like few other events, and very intelligent hardcore pro-gold people joined both sides of the raging debate. Full Story
What does the well known constellation we all learned to look for in the night sky have to do with the gold market? Answer – Nothing except it sounded like a catchy title for a short missive on the recent doings in the gold market! On Tuesday, February 7, 2006, gold experienced the biggest single day decline in price in dollar terms since August 1993. From a closing price of $574.30 basis April the previous day, gold closed down $19.50 at $554.80. This price drop came on the heels of the yellow metal making a new 25 year high at $579.50, a mere 3 trading sessions earlier. Full Story
The way Hathaway sees it, you can divide a bull market into four phases: the beginning, the end of the beginning, the beginning of the end, and the end. Right now, we are in the ‘end of the beginning’ phase. The ‘beginning’ phase - also known as the ‘stealth’ phase – is now over. In the stealth phase, the market moves higher, but no one really knows why, so the press doesn’t really discuss it, and the public at large doesn’t notice. Then you see a few fireworks – like we’ve had in the gold market over the last few months – and suddenly everyone sits up and pays attention. That’s when you know the stealth phase is over. Full Story
In the early 1890s, gold was discovered near Kalgoorlie, in Coolgardie, Western Australia. One of history’s largest gold rushes was on, and at age 22, Herbert Hoover lied about his age to get a mine manager’s job there (the age requirement was 35). Hoover spent the next 18 months in Kalgoorlie, exploring the bush by camel. He came across the Sons of Gwalia mine (which is a long camel ride from Kalgoorlie in the heat), and brokered a deal to buy it. He developed the mine, and became, according to the San Francisco Chronicle, “the richest man of his age in the world.” Full Story
By: Steven Saville, Speculative Investor - 10 February, 2006
China's State Administration of Foreign Exchange recently said that one of its targets for 2006 was to "improve the operation and management of foreign exchange reserves and to actively explore more effective ways to utilise reserve assets". This statement generated a great deal of discussion about the possibility of China selling some of its US$-denominated reserves and increasing its gold reserves, actions that would potentially have huge impacts on the currency, bond and gold markets given the enormity of China's US$ reserves. Full Story
While the long term outlook for gold remains bullish, the market has entered a period of high volatility in the wake of reaching new 25 year highs this week. For the second time in a week, strong gains in the Yen sparked new rounds of gold selling in Asia. The Yen gained ground after strong economic data out of Japan helped renew speculation that the Bank of Japan may begin to pursue a tight monetary policy. Japanese investors are becoming more cautious, especially with what appears to be a major bottom developing in the Yen, and this is a concern to the bulls because they have been a key supporter of gold in this rally. Full Story
Gold surged nearly $10 in Asia to about $560 before falling off near $555 by the opening of trade in London. It then held between $555 and $560 in London and traded around $560 in early New York trade before it broke above $560 in afternoon New York trade and ended near its highs with a 2.67% gain. Silver followed a similar pattern in the $9.45 to $9.55 range before it broke above $9.60 in New York and ended near its highs with a 2.34% gain. Full Story
Lets be honest, how many of us have bought at the TOP and sold out at the BOTTOM? At least one of us! Me. To make matters worse, I KNEW that the market was topping but I still plunged in. Ahh, emotions. They make you do funny things. Thankfully, that was a few years ago. I’ve tried very hard to refine my trading style to stop me from making those irrational mistakes – no doubt I’ll continue working on this for my entire trading career. Full Story
The gold market rebounded overnight after falling to its lowest level in almost three weeks yesterday. The market found strong buying interest by the funds but also on news that a suspected nerve agent forced the evacuation of the US Senate Office Building Wednesday evening. However, gold held its gains overnight even though the vapor that caused the alarm tested harmless. The bounce extended to other precious metals as well. Full Story
Gold traded near $550 in Asia and fell in London to around $445 before rebounding in New York and finding slight gains at one point, but it then fell back off to end slightly lower. Silver traded around 5-10 cents lower in Asia and London before it rebounded in early New York trade and remained near its highs into the close to end decently higher. Full Story
By: Peter Grandich, Grandich Publications - 8 February, 2006
I think at this point, at least one test of the $537-$542 area in gold is a logical assumption. While the $20 whack in a day was a stunner to many, the fact is most people assume it’s just a blip on the RADAR and have not lowered their bullishness or even increased it (if that’s possible). When you have several days of 90% bullish readings according to Market Vane, history suggests the correction is not over in a day or two. In fact, there have been only two similar cases for gold where 90%-plus reading for about a week occurred—mid-December 2005 and January 2003. Full Story
I had just finished the latest issue of my newsletter when I experienced a "This Just In" event. Gary North's latest Reality Check missive had been sent out and the subject was "Buy Silver or Gold?” This was all rather providential as the main subject of my newsletter was "Gold or Silver?” But whereas I was more bullish on silver than gold for the foreseeable future, Gary North took the opposite view and went with gold as the prime investment of the two. Since the subject was fresh in my mind, now was an opportune time to reply to some of North's arguments. Full Story
Okay Smarty Pants you took some magnificent profits on your gold stocks. Now what? You wait, that's what. Corrections of this magnitude are not over in a day. Line up your next targets for the next big Buy-In. You sold to the Newbies - those that just had to finally get in at any price. The greed of others rewarded you. Their greed has now turned to fear. But you know better. And now you want to buy back those stocks you sold to them, albeit at a much more attractive (lower!) price. Full Story
By: Rick Ackerman, Rick's Picks - 8 February, 2006
We’ve steered clear of mining shares for the last month or so, queasy about the toppy look of some of our favorite stocks, including Newmont, and of physical gold itself. The good news is that it probably won’t be long before we can try a little bottom-fishing. Corrections in powerful bull markets are usually punitive but fleeting, and we don’t expect this one to be any different. To be specific, if April Gold were to retrace 0.618 of the rally begun two days before Christmas from around 496, that would bring it down to 528.20. If so, then this correction is already nearly half over, price-wise. Full Story
The gold market broke hard yesterday on mostly profit taking and some panic selling after the market had gotten overbought and had failed to advance on the 25-year highs it posted last week. Overnight in Asia the markets extended yesterday's declines in New York, but came back as the lower prices encouraged some physical buying from jewelers and investors in Asia and the Middle East. It is not surprising that the market sold off given its $83-dollar gain since mid December. Full Story
Gold remained around $570 for most of trade in Asia before dropping a bit in London, but it then fell off markedly in New York to under $550 at one point before rebounding just slightly into the close. Silver also held near unchanged in Asia before falling a bit in London, but it also fell off over 3% in New York and dropped near $9.30 before rebounding slightly into the close. Gold had its largest one day drop in dollar terms since August 1993 and in percentage terms since January 2004. Full Story
This article attempts to establish the notion that as the gold price rises, the mine production industry will not bring significantly more gold to market. In addition to other obstacles, they will be stymied by hedge book losses, sure to drain valuable funds. They will face large obstacles from rising costs, such as for energy and construction materials. They must overcome labor shortages. In the year 2005, the gold industry has produced a mere 2% more gold than the previous year. Full Story
By: Axel Merk, Merk Hard Currency Fund - 7 February, 2006
Given a current account deficit in excess of 6% of gross domestic product (GDP), many fear the US dollar must decline. At the World Economic Forum in Davos, policy makers disagreed as to the severity of the risk, its causes and cures. In a nutshell, the United States does not export enough to the rest of the world to balance its own appetite for cheap Asian imports. The American consumer spends too much and saves too little. As a result, dollars are leaving the US in return for goods and services. Unless those dollars are reinvested in US denominated assets at a rate in excess of $2 billion a day, the dollar will decline. Full Story
The gold market has been consolidating since making new 25-year highs last Thursday. It gained a little bit of support yesterday over the Iran nuclear issue and the protest over the political cartoons portraying the prophet Mohammed, but it failed to mark any significant advance, despite the return of Chinese traders after last week's Lunar New Years holidays. US dollar gains have been a limiting factor, and they got a further push yesterday from comments by the Dallas Fed president that reinforced expectations for another interest rate hike. Full Story
Gold jumped about $5 higher in Asia and then fell off a few dollars in London, but it then surged to new highs above $573 in New York before falling off once again to end with moderate gains. Silver followed a similar pattern and ended slightly higher. Both metals remain near their recent 25 and 18 and ¾ year highs. Gold and silver equities gained about 2% in the first hour of trade and remained at about that level for most of the rest of trade before gaining a bit more in the last minutes of trade to end with near 3% gains. Full Story
By: Julian D. W. Phillips, Gold Forecaster - Global Watch - 6 February, 2006
This week he (Putin) supported a proposal to cut the V.A.T. on purchases of gold ingots (up to 1 kg) by Russians. "Tax cuts, primarily VAT, for Russian citizens who purchase precious metals and invest in them are worth considering," he said in response to a proposal made by Russia's Polyus gold mining company to cutting V.A.T. from Russian gold prices. This was after the Polyus President Yevgeny Ivanov said gold could become an alternative investment tool for Russians together with the U.S. $ and the € but, the 20% V.A.T. on ingot purchases still stood in the way. Full Story
By: Joe Ferrazzano, Trade The Cycles - 6 February, 2006
Thanks partly to massive Fed lending to index fund traders during much of the major upcycle's (since 5-16-05, see latest 1 year charts) Elliot Wave 3 minor intermediate term upcycle (since 10-20-05 for HUI/XAU), HUI rose to the top of my original long term cycle high target range during Wave 3, peaking very near 350 on 1-31-06. HUI's long term cycle high target range, likely to occur in the major upcycle's Elliot Wave 5, is now 400-450 vs last week's 370-400 and 330-350 originally, which was purposely conservative. Full Story
On this weeks online radio broadcast, radio.goldseek.com, I had the pleasure of chatting with Dave Morgan, from www.silver-investor.com. Dave told us that he thinks the ultimate peak in precious metals is at least 4 years away and that prices in excess of $100 for silver is very possible. In fact, Daves peak price for silver is around $125. He expects the silver market to rally until at least 2010 and perhaps peak by 2014. Dave recommends dollar cost averaging into the bull market. Full Story
Mounting tensions over the Iran nuclear standoff underpinned the market overnight and could spur safe haven flows into gold through the course of the week. As expected, the International Atomic Energy Agency on Saturday referred its case regarding Iran's violations to the UN Security Council, and as promised, on Sunday Iran ended snap UN checks of its nuclear sites and announced it was resuming uranium enrichment. This of course has the world on edge, especially regarding potential threats in the near term to oil flows. Full Story
By: Dr. Richard S. Appel , Financial Insights - 5 February, 2006
Before you dismiss this prediction as either hype, poor judgment or the misguided forecast of an aging, overzealous, and perennial believer that the importance of gold’s discipline to mankind will outlive us all, please bear with me for at least the next few paragraphs. First, I am not saying that this event is imminent. Yes, I do believe that there is at least a 40% to 50% probability that it will occur by year-end 2006, and an 80% to 90% chance that it will appear before the year 2007 ends. Full Story
Gold and silver remained mixed and near unchanged in Asia and London and found slight gains in early New York trade, but they then both sold off about 1% in midmorning trade and remained near their lows into the close to fall from recent 25 and 18 and ¾ year highs. Gold and silver equities dropped about 3% in the first hour of trade and remained near that level for the rest of the day. Full Story
By: David Chapman, Union Securities - 5 February, 2006
Considerable debate has surrounded the US savings rate. In a recent story on Forbes (www.forbes.com) they noted that not only did consumer spending rise at a “rapid pace” in December, far “outpacing” income growth, it helped push the “savings rate for the year down to lowest level since the Great Depression”. (Forbes – Savings rate at lowest level since 1933, January 30, 2006). The story noted that the savings rate for all of 2005 was pushed into negative territory at a minus 0.5%. They noted that it was lowest annual savings rate since a decline of 1.5% in 1933. Full Story
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