Gold and silver both surged some 4% yesterday from oversold levels as the dollar weakened and oil surged. We said some weeks ago that the recent sell off in precious metals was likely to end around election day and believe that this has indeed happened and that gold will resume its secular bull market in the coming weeks.
Gold was up marginally yesterday despite further strength in the dollar and a further sharp fall in the oil price.
ARROYO GRANDE, Calif. (via MarketWatch) -- A record 130 million voters are predicted to head to the polls Tuesday. The bad news: 65 million, roughly 50% of all voters, will be miffed, mad at, angry with, even hate the new president ... no matter who wins! Half against Obama, half against McCain. Either way, half of America will be angry, for at least four years. And that 50% will get even angrier as the recession deepens, sweeping aside all the grand upbeat promises of the campaign. Think things are bad now? Just wait, they'll get far worse before a recovery. Washington's in hock $11 trillion. Next, pile on all the gluttonous bailout billions and lost revenues and soon we'll be pushing $15 trillion even $20 trillion as this global meltdown spreads. Worse yet: All that debt's guaranteed to force new taxes and huge cutbacks, no matter what the winner promised. Last week I predicted this dark future, a "Great Global Depression" by 2011. Fortunately, there are still optimists out there. See previous Paul B. Farrell. For example: In a story in the latest Newsweek, "Nightmare on Pennsylvania Avenue: The Scary Challenges Facing the Next President on Day One," Richard Haass, president of the Council on Foreign Relations and author of "Opportunity: America's Moment to Alter History's Course," had this warning for the next president: "This is not the world you've been discussing on the campaign trail," that was a "caricature." But he added, the "American people are ready to be leveled with" -- even ready for the pain of moving in a bold new direction. After warning of domestic dangers in his Newsweek "Memorandum to the President Elect," New York's Mayor Michael Bloomberg hit a high note about the future: "This is a competition we should relish, because we continue to enjoy all sorts of advantages: the best universities, the most advanced factories and health care, the most entrepreneurial workers and the best quality of life. But like a champion who has gotten complacent and sloughed off on workouts, the federal government -- paralyzed by partisan gridlock and special-interest pandering -- has let America slip out of top fighting form." McCain? Obama? The 535 members of Congress? Plus 42,000 special-interest lobbyists? Maybe they'll "level with" you. Don't count it. Besides, it doesn't matter. Campaign's over. "They" got the power. For the next four years the only person you can control is you. Try shifting into survival mode. What if you're stranded on a mountain climb in a storm? Marooned on a desert island? Lost in a jungle? Shipwrecked, drifting in the Pacific? For the next four years! It's not "you versus them." Not "you versus nature." Surviving is "you versus you." Laurence Gonzales has been researching how people behave in accidents for 35 years, and he tells us in "Deep Survival: Who Lives, Who Dies, and Why." He discovered "an eerie uniformity in the way people survive seemingly impossible circumstances. Decades and sometimes centuries apart, separated by culture, geography, race, language, and tradition, the most successful survivors -- those who practice what I call 'deep survival' -- go through the same patterns of thought and behavior, the same transformation and spiritual discovery, in the course of keeping themselves alive. Not only that but it doesn't seem to matter whether they are surviving being lost in the wilderness or battling cancer, whether they're struggling through divorce or facing a business catastrophe -- the strategies remain the same." And we are clearly facing a historic political and economic catastrophe today, so listen closely: We can adapt Gonzales' incredible "12 Rules of Adventure" as a road map for Americans, especially investors, in the uncharted waters ahead for four years with the new president. Yes, he calls it an adventure: "Survival should be thought of as a journey, a vision quest of the sort that Native Americans have had as a rite of passage for thousands of years. Once you're past the precipitating event -- you're cast away at sea or told you have cancer -- you have been enrolled in one of the oldest schools in history. Here are a few things I've learned that can help you pass the final exam." The 12 tips that will work if you want to avoid a deep depression, both personally and as a nation: 1. Attitude: 'perceive and believe' Economist Nouriel Roubini predicts "the worst is yet to come," with stocks going over a cliff, along with currencies, next year.
Gold and silver have risen in Asian and early trading in Europe today. Last week saw gold fall some 1.4% while silver rose 4.9%. The performance of the precious metal mining shares may be an indication that we are at or near a low in this sell off as the HUI and XAU mining indices were up sharply last week - up 14.4% and 14.95% respectively. They tend to be a leading indicator of a trend reversal in the precious metals. Similarly the reversal in the dollar's recent strength and stabilisation of oil in the mid to high $60s could also signify that we are close to lows.
Rollover is the story of faded Hollywood siren Jane Fonda who inherits a multi-million dollar company after her powerful bank president husband is murdered. While trying to find her dead love's killer, she runs his corporation with the help of charming banker Kris Kristofferson in the weeks before a worldwide currency and financial collapse. It was the 1981 movie Jane Fonda "got made" after her exploration of the dangers of nuclear power in the "China Syndrome" back in 1979. She was driving to tell the story of real money - gold and how people throughout the world value gold as real money while most Americans and people in western societies don't understand gold and have forgotten its importance and value. The plot line is about wealthy Arab investors not rolling over their certificates of deposits (CDs) in American banks and buying gold in order to hedge themselves against a fall in the dollar and paper currencies ... and what the loss of those foreign investments means to the financial establishment in New York and the international financial and monetary system. Rollover: Financial Apocalypse This movie was a "financial thriller" and there are not many of these movies made. Movies need bank financing, and banks usually won't finance anything that makes them look bad or stupid. They show "It’s a Wonderful Life" with Jimmy Stewart on TV only once a year now because it shows "run on the bank" at the Bailey Savings and Loan - not something the financial establishment wants Americans to even think about.
Gold continues to surprise to the downside on the COMEX and the futures markets in spite of huge physical demand, increasing supply issues and surging premiums on bullion products. Speculative paper players using huge leverage continue to exit positions for the relative safety of cash due to margin calls on other bets and some investment banks continue to short gold despite the incredibly strong fundamentals for bullion itself.
Gold rose nearly 2% yesterday as the Federal Reserve decreased the fed funds rate by 50 basis points to 1.00%. Other central banks internationally are also slashing interest rates and there is increasing speculation that the Bank of England and the ECB may cut interest rates aggressively as early as this week and possibly even today in an effort to prevent international financial contagion causing a sharp global recession. NB Please note that our Performance Table is in euros (EUR) today.
Seeking Alpha has an interesting article regarding Silver Bullion premiums, though this is at the moment somewhat irrelevant since the market for 100oz bars is nearly non-existent.
Gold continues to tread water after its recent sharp falls and there are very determined sellers in the futures market at the $740 to $750/oz level. The Gartman Letter, expressing some respect for gold's relative performance, points out that there "...
After rising yesterday, gold is up some 1.5% again today and has continued to consolidate in the $700/oz to $760/oz range. Further consolidation is likely necessary after the sharp fall in recent days. Bearish sentiment towards gold remains at extremely high levels with the usual uninformed suspects calling for further falls in the gold price.
It was déjà vu in the Comex gold market yesterday as the recent sharp selloff continued. Bearish sentiment remains at extreme levels and all notions of fundamental value are being thrown out the window as the financial crisis morphs into a global economic crisis. Stock, commodity and many currency markets internationally are in meltdown on panic selling. Both gold and silver are off another 4.3% and 8% today on massive deleveraging and wholesale panic selling in financial markets.
COMEX gold's recent sharp selloff has continued and even the most ardent gold bulls are getting nervous. Bearish sentiment is very prominent and the level of fear in the precious metal markets suggests that a low is likely in the coming days.
COMEX gold continues to stink up the room after sharp falls in recent days as the dollar has strengthened considerably and oil prices fallen sharply.
Today's Daily Mail has a rare picture of the Bank of England's Gold Reserves You are looking at the room most likely to weather the credit crunch, a vast vault filled with the final word in financial security: gold. As stocks and shares tumble, house prices crash and previously unassailable institutions crumble into dust, the sight of several thousand 28lb bars of 24-carat gold stored in the Bank of England's massive underground
COMEX gold continues to surprise to the downside despite the incredibly strong fundamentals of gold bullion itself with increasing shortages, delayed deliveries and premiums soaring for physical bullion in Asia, Europe, the US and internationally.
In a very interesting video about the gold market today, Stephen Flood of Gold and Silver Investments is interviewed by Javier Blas of the FT .
Gold has rallied 2.5% this morning after falling some 8% last week as the "dash for cash" and the deleveraging of the international financial system gathered pace. In the process, gold gave up most of the gains of the last 5 weeks in just one week. Gold was trading at some $740/oz on September 11th and subsequently surged to over $924/oz as Lehman Brothers collapsed and the global financial crisis deepened. Gold is wrongly being treated as just another commodity akin to pork bellies or lead.
It's only Thursday and the Treasury has gone to the credit markets for $194 Billion so far this week for short term paper alone. Let's say they only borrow another $6 Billion tomorrow and end up at 200 Billion. Let's do the math. 200 Billion times 52 weeks is ..........$10 Trillion 400 Billion Dollars. This coincidentally equals the amount of the current national debt.
Gold fell some 4% yesterday with forced selling being seen as hedge funds continue to deleverage and pension funds and other passive investors sell the various commodity indices.