Gold jumps, heads for biggest 2-day gain since October
reuters.com / By Josephine Mason and Jan Harvey / May 18, 2012
Gold rose more than 1 percent on Friday, on track for its largest two-day gain since October, boosted by investors’ consolidation of positions ahead of the weekend and a stronger euro.
The second day of gains helped bolster confidence, which had been shaken by gold’s fall earlier this week to a four-month low at $1,527 an ounce, near critical long-term support levels.
But traders remained cautious given how the escalating crisis in Europe has driven the single currency lower this month.
“There is still no conviction in the market. If gold was a safe haven, it should be higher. Physical demand is mediocre and the Europeans want the dollar, which is why it is so strong,” a physical U.S. gold trader said.
The psychologically important $1,600-per-ounce mark remained elusive.
It got close, hitting an intraday high of $1,597.4 an ounce in late morning, before meeting technical resistance and easing back to around $1,590.
Spot gold was up 1 percent at $1,588.96 an ounce at 2:06 p.m. EDT, while U.S. gold futures for June delivery settled 1.08 percent higher at $1,591.9.
That takes gold up 0.6 percent on the week, snapping two weeks of losses, and brings it back to positive territory year-to-date, with a 1.5-percent rise.
While it was a far cry from the 14-percent gain in February when prices came close to $1,800 an ounce, bullion outpaced the U.S. equity market after Facebook’s much-anticipated debut stumbled after a delayed opening.
Trading on Friday returned to familiar trends, tracking the euro, which recovered from four-month lows against the dollar, though concerns over a Greek euro exit and instability in the Spanish banking system weakened confidence.
The Coin Analyst: Extremely Rare 1870-S $3 Gold Coin To Be Auctioned on June 2 in Georgia – Real or Fake?
oinweek.com / by Louis Golino / May 16, 2012
The 1870-S $3.00 gold coin is one of the great rarities of American numismatics. It is/was until recently believed that only one such coin existed and that it was struck to be placed in the cornerstone of the U.S. Mint building in San Francisco.
But according to a report by Fox News online , an auction company in Alpharetta, Georgia has another specimen of the coin which was apparently discovered embedded in a souvenir book at a bookstore in San Francisco (see image below). It is to be auctioned off on June 2.
Steve White, who is the owner of the Four Seasons Auction Co., says that the coin is one of two or three specimens of this rare gold coin. He estimates that it will sell for up to $4 million.
He also invited interested parties to see the coin in person and according to the Fox story, “bring an independent expert to authenticate the piece.”
The coin has not been graded or authenticated by any of the recognized Third Party Grading services such as PCGS, NGC or ANACS, which is highly unusual for such a rare coin, especially one which is believed to be either unique or one of only two or three such coins.
Editors Note: We have had multiple numismatic experts contact CoinWeek expressing their opinion that while the story is interesting, they do not believe the coin is authentic. Potential bidders would be well advised to seek the guidance of a US Gold expert to examine the coin.
‘Silver may shoot up from $28/oz to $36 in 2012′
Silver has been called the most volatile of metals. But volatility produces opportunity, according to Chris Thompson, a top-ranked StarMine analyst with Haywood Securities. In this exclusive interview, Thompson forecasts a strong year-end for the silver, despite price weakness so far in Q2/12, and shares the names of a select group of companies that stand to profit.
The Gold Report:Chris, Haywood Securities’ estimated silver price for 2012 is $36/ounce (oz), but the “devil’s metal” has averaged less so far in 2012, closing above $36/oz only once. Are you expecting a significantly stronger second half for silver?
Chris Thompson: Silver performed relatively well in Q1/12. We hope that the silver price will find support at current levels of ~$28/oz through Q2/12 and Q3/12, with potential for a strong Q4/12.
Looking at the silver price right now, I see that it’s struggling to hold its head above $28/oz. If we do see a significant breakdown from $28/oz, it may somewhat compromise our forecast for this year averaging $36/oz.
Capacity Utilization Rate In April 2012 At 79.2% Pointing To Inflation
seekingalpha.com / by Katchum / May 18, 2012
In my previous article I pointed out how important it is to follow the capacity utilization rate to estimate the prices of gold and silver going forward. When the capacity utilization rate plummeted in 2008, we knew for sure that commodities would plunge with it. So what happened recently?
The capacity utilization rate for total industry for April 2012 came out at 79.2%, up from 78.4% the previous month (Chart 1). This number is the highest since July 2008, and bodes well for commodity prices, especially gold and silver (which had a very significant correction in the last months). Both mining, utilities and manufacturing came out higher in capacity utilization than the previous month. There was a concern the previous month that capacity utilization would come down in April, but it didn’t. So gold (GLD) and silver (SLV) prices should find support in the coming months.
Gold’s correlation to euro since end of March rises to nearly 70%: Deutsche Bank
NEW YORK (Commodity Online): Since the end of March, gold’s correlation to the euro against the dollar has risen to a multi-year high of nearly 70%, said Deutsche Bank, the largest bank in Germany, in a weekly commodities report.
According to the German bank, until the latter part of this week, gold had fallen with the single European currency. As a result, increasing speculation of a Greek exit from European Monetary Union and the short-term implications for the euro means downside risks for gold.
Analyst with Deutsche Bank stated that, “Perversely, we would see an actual Greek exit as ultimately bullish the euro so long as the ECB (European Central Bank) can succeed in limiting contagion to other euro area countries. In any event, we would expect the recent uptick in gold implied volatility will continue in the run-up to Greek election on June 17th.”
The weakness in the U.S. economy would be another potential catalyst to boost gold due to the possibility of additional Federal Reserve action to stimulate growth, Deutsche Bank concluded.
Deutsche Bank has a large presence in Europe, the Americas, Asia-Pacific and the emerging markets.
Bond Issuers Headed for ‘Collision With Reality’?
cnbc.com / By: Patrick Allen / Published: Friday, 18 May 2012 | 7:37 AM ET
How much interest would you want back if you lent to huge amounts of money to someone on an unsecured basis, and if that person had unaudited accounts and a history of playing dirty when the chips are down?
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That’s the question being asked by Societe Generale strategist Dylan Grice in relation to the bond market, who warned that the artificially low cost of borrowing for some governments will come back to bite them.
“Maybe I’m missing something, but 150 basis points sounds on the low side to me,” Grice said, drawing a comparison to what he sees as the artificially low yields on some governments’ bonds.
In a research note this week, Grice made the point that if you applied the same rules to governments as you did people, then the cost of borrowing for many governments would be far higher than it currently is.
Grice questioned why the rules of economics do not seem to apply to governments. The nasty truth, his note explained, is that those governments — and their electorates — don’t want them to.
“Our demands are infinite, but the resources we have at our disposal to satisfy them are finite. And the thing is, scarcity is annoying. We don’t like not having. Bumping up against our budget constraint is no fun. It means we have to do something unpleasant like work harder, sell something we own, or go without. Riots in Greece, protests in Madrid, governors recalled in Wisconsin, governments toppled in Rome, Paris, and now Amsterdam … it all attests to the pain of a head-on collision with reality,” he said.
One relatively easy way to avoid that reality, Grice said, is to misrepresent your financial health, and he sees some major sovereign lenders doing just that.
Why Gold & Silver & the Mining Shares will be Impelled Even Higher, and Soon
“When the Federal Reserve took its first steps down the road of debt monetization with the first quantitative easing program (QE1), we knew there were going to be more. QE2 followed QE1. QE lite – the Fed promised to keep interest rates low until the end of 2014 – followed QE2. And QE3 is on the way…
“It’s going to happen – as surely as we’ll see QE4, QE5, and on and on and on.
“That’s the problem with reckless money printing. It’s like jumping into a swimming pool. You can’t ever ‘un-jump.’
“So now it’s just a question of timing the announcement for maximum impact….”
“Traders Prepare for More Money Printing”, Jeff Clark,
The Growth Stock Wire, 05/15/2012
Old news it is to most readers, that a Cartel (Note 1) of Mega-Bankers and Allies has for years, and is, engaged in Ongoing Price Suppression of Gold and Silver and their Miners’ shares.
Increasingly wide acknowledgement of Gold and Silver as the Ultimate Stores and Measures of Value (i.e. Real Money) would further devalue their Paper Treasury Securities and Fiat Currencies, and diminish their immense power. Thus their ongoing Price Suppression intensifies.
Indeed, it is no surprise to us that The Cartel has successfully (thus far) waged a battle against pro-Gold and Silver Sentiment since last September, 2011, and especially since the end of February, 2012. And they have been helped recently by Fears of Economic Deflation arising from of the Eurozone Crises.
Specifically, Greece moves ever nearer to Default and Spain and Italy are too Big to Bail, but both the latter are at increasing Risk of Economic Meltdown, as reflected in their 10yr Treasury Securities Yields moving back up over the Toxic 6% level.
Finding Opportunity in Silver, the Devil’s Metal: Chris Thompson
Silver has been called the most volatile of metals. But volatility produces opportunity, according to Chris Thompson, a top-ranked StarMine analyst with Haywood Securities. In this exclusive interview with The Gold Report, Thompson forecasts a strong year-end for the devil’s metal, despite price weakness so far in Q2/12, and shares the names of a select group of companies that stand to profit.
The Gold Report: Chris, Haywood Securities’ estimated silver price for 2012 is $36/ounce (oz), but the “devil’s metal” has averaged less so far in 2012, closing above $36/oz only once. Are you expecting a significantly stronger second half for silver?
Chris Thompson: Silver performed relatively well in Q1/12. We hope that the silver price will find support at current levels of ~$28/oz through Q2/12 and Q3/12, with potential for a strong Q4/12.
Looking at the silver price right now, I see that it’s struggling to hold its head above $28/oz. If we do see a significant breakdown from $28/oz, it may somewhat compromise our forecast for this year averaging $36/oz.
TGR: Do you think investors shy away from the silver space given its overall size and susceptibility to manipulation?
CT: Silver is often referred to as the most volatile of all precious metals. In that sense, it’s not for the faint-hearted investor. However, with volatility comes opportunity as long as timing is right. The benefit that silver provides is that it finds value as a store of wealth, as well as an ingredient used in industrial applications, so it offers investors a dual benefit where silver fundamentals benefit from economic growth as well as economic uncertainty.
‘Crowded’ Gold Trade Needs to Lose ‘Weak Hands’ Investors
Benchmark prices to buy gold for London settlement rallied more than $10 an ounce off new five-month lows beneath $1,528 on Wednesday morning, bouncing as the euro, world stock markets and commodity prices also paused this month’s sharp liquidation.
Spanish and Italian bond yields also eased back but remain over 6% after Spain’s prime minister Mariano Rajoy told the parliament in Madrid there is “a serious risk that the markets won’t lend to us or lend only at astronomical prices.”
Over in Greece – where the daily “bank run” of withdrawn euro deposits is now totaling some €700m per day – president Karolos Papoulias meantime appointed a judge to act as interim prime minister and set the date for an election re-run as June 17.
“[Gold] selling continued in Asia today across all exchanges,” says Swiss refinery and finance group MKS in a note.
“Market participants have given up waiting for a bounce,” says a Singapore dealer. “The market will do what it needs to do to clean out the weakly margined before it becomes healthy once again.”
Hedge-fund legend George Soros opted to buy gold in the first quarter of 2012, reversing previous sales according to new data from March 31 released yesterday and showing his fund more than trebling its position in the $60 billion New York-listed SPDR gold ETF.
India discovers 19.8 million tons of major PGE prospects
bullionstreet.com / May 18, 2012
According to country’s Geological Survey of India (GSI), a total of 19.8 million tons of Platinum Group of Elements (PGE) ore were found in the exploration conducted by it for the last five years.
NEW DELHI(BullionStreet): India announced major discovery of Platinum Group of Elements (PGE) spread across the country.
According to country’s Geological Survey of India (GSI), a total of 19.8 million tons of Platinum Group of Elements (PGE) ore were found in the exploration conducted by it for the last five years.
Major findings were reported from the Eastern State of Odisha and Southern States of Karnataka and Tamil Nadu.
GSI has carried out investigation for PGE in the states of Tamil Nadu, Karnataka, Andhra Pradesh, Maharashtra, Odisha, Meghalaya, Uttar Pradesh, Jharkhand, Kerala, Madhya Pradesh, Manipur and Nagaland, said India’s Mines Minister Dinsha Patel in a written reply to country’s lower house of Parliament.
The exploration carried out so far by GSI has resulted in identification of the following four major PGE prospects in the country:
GSI has taken steps to find out more quantity of PGE in other parts of the country which includes to undertake state of art baseline data (ii) to explore minerals having poor resource cum reserve base like PGE in locales of favourable geological milieu (iii) to augment existing resource position with special emphasis on deficient and scarce minerals like PGE through continuous integrated multi-disciplinary exploration (iv) to delineate new target areas through syntheses of multi-disciplinary earth science data in vast tract of areas, for which potential is yet to be established.
Gold Stock Jigsaw Puzzle
321gold.com / Morris Hubbartt / May 18, 2012
- Germany, France, and Greece are three European nations that have had elections recently. Not all of these elections were for top posts, yet they all point to the same conclusion; austerity is being voted down.
- The most recent vote was in Germany. A self-described “social, liberal, and progressive” group won the election. They will likely be harsh critics of the sitting government’s austerity programs. If a government’s “solution” is not austerity it is usually money printing. Governments use money printing to renege on their obligations.
- The dollar is benefiting from the euro debt crisis. In the short term, the temporary strength in the dollar could continue, although yesterday Ms. Merkel strongly implied that she is willing to support printing money for Greece.
- The falling stock market could help the dollar temporarily, but a great currency does well when the nation’s other assets do well. Our dollar only rises now if other assets are sold in a panic. Is that a great currency? Gold is the strongest currency in the world and it’s the only one that is debt-free.
READ MOREBlinder and Kudlow on Gold
24hgold.com / by Tim Iacono / May 18, 2012
Yesterday, the Federal Reserve took another baby step toward safe and sane monetary policy by raising the overnight bank lending rate from 3.5 percent to 3.75 percent. The policy statement acknowledged the devastation caused by Hurricane Katrina, but indicated that accommodation would continue to be removed at a “measured” pace.
While noting that core inflation has been low, that underlying inflation is expected to be contained, and that longer-term inflation expectations remain contained, they acknowledged that higher energy prices have inflationary potential.
Whew!
That’s a lot of talk about inflation – for a moment there it looked like they were going to tell us that we actually had some.
Gold as Kryptonite
It is not often that we tune into CNBC – it is best taken in small doses, abstinence is ideal. Yesterday, we did happen to catch a portion of Ron Insana’s panel discussion after the Fed policy announcement. Former Fed vice chairman and devoted Greenspan worshipper Alan Blinder was one of the guests.
A chart of the historical relationship between real oil and real gold prices was shown. The chart clearly showed the decades long correlation between these two commodities and indicated in a not-so-subtle way that gold would be closer to $1000 than $500 if this relationship had not broken down over the last few years. Barry Ritholtz over at The Big Picture had this chart up the other day – apparently Ron showed this chart last Friday as well.
Hmmm… Perhaps Ron owns some of the yellow metal. Or, maybe he’s just curious.
After a few words about commodities and inflation, Insana asked Blinder a long and tortured question about the Federal Reserve and gold. Here is the discussion that followed:
Blinder: So, I’m not sure what the question was. Are you asking should the Fed be talking about the price of gold?
Insana: Should it be looking at the price of gold as an inflation indicator. Yeah.
State of the Silver Market MAY 2012 – David Morgan Interview Part 1
New Jersey Man Has $20k Stolen From Him by Tennessee Police
Dramatic Turnaround For Silver?
silverseek.com / By Hubert Moolman / May 18, 2012
The silver chart is currently showing some promising signs.
Below, is a 6-year chart of silver (generated at fxstreet.com):
On the chart, I have indicated two similar patterns (marked 1 to 5).This comparison suggests that silver could rise significantly over the next couple of months. This would mean that a dramatic turnaround in the price of silver is coming (it might have started already).
I have also drawn some red lines at the $10, $20, $30, and $50 level. These levels appear to have acted like key levels, where the price of silver has found support or resistance.
Five reasons to think twice before buying Facebook stock
sovereignman.com / by Simon Black / May 18, 2012
When you think about it, it’s easy to understand why financial markets and media have been so fixated on the Facebook IPO.
The creation of so many billionaires and millionaires overnight is certainly cause for good cheer, and given the debacle in Europe coupled with America’s looming ‘fiscal cliff’, Facebook may be the ONLY bit of good news in the entire financial system.
But a $100 billion valuation…? 100+ times earnings? This certainly seems excessive, at least for now.
What we’re supposed to believe about Facebook is that the company is going to continue to revolutionize advertising in the way that it stratifies users by demographic, geography, interests, etc.
True, this is really beneficial for advertisers; if you’re a company that manufactures surfboards, for example, you can target your ads to men between the ages of 20 and 30 who live in coastal California and “like” surfing or Laird Hamilton.
This is much more effective than some radio ad or billboard which is seen by the general public, 90% of which will not be the target market.
But there are a few issues with Facebook’s model-
Charles Schumer Tells Americans They Can’t Leave So Easily
dollarvigilante.com / Thursday, May 17, 2012 at 1:29 PM
We wrote about Facebook co-founder, Eduardo Saverin, defecting from the US last week (“The Great Defection From The West“). Apparently we weren’t the only ones to notice.
Today, Lyin’ Chuck Schumer held a news conference to unveil the “Ex-PATRIOT” – “Expatriation Prevention by Abolishing Tax-Related Incentives for Offshore Tenancy” – Act to respond directly to Saverin’s move, which they dub a “scheme” that would “help him duck up to $67 million in taxes.”
Parasites don’t like it when their host can leave so quickly and easily. Schumer plans to use violence to re-impose taxes on expatriates like Saverin even after they flee the United States and take up residence in a foreign country. Their proposal would also impose a mandatory 30 percent tax on the capital gains of anybody who renounces their U.S. citizenship. And, perhaps most importantly, the plan would bar individuals like Saverin from ever reentering the United States again.
TDV Correspondent, Menno Troyer contacted us today to state the following:
“Somehow, as an involuntary citizen of the US, this proposed legislation frightens me more than all of the US’s previous, rapidly escalating police state moves combined.”
We agree. This bill, if passed, would take the state of affairs between the US Government and the people they deem to own to an entirely new level. To say the least, Schumer’s financial terrorist attacks today show the US Government for what it really is… and shows US citizens as the tax slaves that they are.
Patriot News Hour Podcast
Friday, May 18, 2012
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Silver Market Morning
silverseek.com / By Julian D. W. Phillips / May 18, 2012
New York bounced back to $1,573.70 and Asia continued to take it higher, with London running it up to Fix at $1,588.00. The euro was weaker at €1: $12693, where it was when the morning Fixing took place. In the euro it Fixed at €1,251.083 €34. Ahead of New York’s opening gold looked stronger at $1,591.23 and in the euro, which also continued to slip, €1,253.43 while the euro was at €1: $1.2695.
Silver Today – Silver closed at $28.02 in New York and rose in London opened at $28.41. Ahead of New York’s opening it stood at $28.49.
Silver (very short-term)
Silver should have a stronger bias, today in New York today.
JPMorgan unit has $100 billion in risky bonds
gata.org / By cpowell / May 18, 2012
The unit at the centre of JPMorgan Chase’s $2 billion trading loss has built up positions totalling more than $100 billion in asset-backed securities and structured products — the complex, risky bonds at the centre of the financial crisis in 2008.
These holdings are in addition to those in credit derivatives that led to the losses and have mired the bank in regulatory investigations and criticism.
The unit, the chief investment office (CIO), has been the biggest buyer of European mortgage-backed bonds and other complex debt securities such as collateralised loan obligations in all markets for three years, more than a dozen senior traders and credit experts have told the Financial Times.
The bank has said its derivative activities were intended primarily to help balance risks on its overall balance sheet, but the revelation that it has built up other large, risky positions is likely to raise further questions about the CIO’s remit.
Bloomberg Interview GoldCore on Chinese and Global Gold Demand
goldcore.com / May 18, 2012
Gold’s London AM fix this morning was USD 1,588.00, EUR 1,251.08, and GBP 1,005.13 per ounce. Yesterday’s AM fix was USD 1,547.00, EUR 1,217.44and GBP 974.00 per ounce.
Silver is trading at $28.53/oz, €22.55/oz and £18.12/oz. Platinum is trading at $1,465.00/oz, palladium at $603.80/oz and rhodium at $1,300/oz.
Gold climbed $34.30 or 2.23% in New York yesterday and closed at $1,573.70/oz. Gold began trading sideways in Asia then climbed over 12 points reaching a high of $1,589.31. Gold edged off a bit in Europe and is now trading near the $1,587/oz level at 1055GMT.
Gold rose for its 2nd day on concerns that Europe’s debt crisis is growing and the yellow metal is once again seeing increased demand as a safe haven asset.
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