Gold Surprises for the Week - Silver Also Up

Gold once again pushed past the $1,300 per ounce mark this week, surprising most of the market. Silver followed suit, closing in on the $17.50 level.

Short and Long-term Outlook for Gold and Silver

Jack Chan's weekly precious metals update.

 

Gold Positioned To Jump As Markets Fall Apart

With economies around the world slowing down, currencies plummeting, and the commodity sector beaten down, there is more to the stock market correction, then, well, being a correction. That's good news for those that have been waiting for gold prices to gain some momentum.

There of course is also the tough decision ahead for the Federal Reserve, which until recently, was almost sure to raise interest rates. That's more than in question at this time, as global markets take a big hit.

Even if the Fed decides to boost interest rates, gold is still looking good, as there are just too many negative catalysts out there to make that the determining factor in the price of gold.

Not only that, but there is a growing number of people that believe not only won't the Fed raise interest rates, but the global and domestic U.S. economy may be far worse than it is, which points to the possibility of another round of quantitative easing. And we all know how gold prices would jump in case of that event. If the Fed decides to hold off for now, that is also positive for gold. So whatever way you look at it, gold prices will start to rise, and will continue to do so over the next year at least; possibly further out as well.

Safety is going to be a dominating part of the investment landscape, and gold will be one of the leading assets investors seek to protect their capital.

Gold About to Rally Big Time?

It looks like a lot of negative catalysts are coming together to provide the foundation for a major gold rally.

Emerging markets are in disarray, as are developed markets like Japan. Asia as a whole is under enormous pressure, and the latest Empire State Manufacturing report revealed U.S. manufacturing is slowing down as well, partly from the strength of the U.S. dollar.

With a currency war going on in Asia, as countries compete to boost exports, it's difficult to see how American exports can gain any traction.

Media stocks have also been taking a pounding, based primarily upon Disney's (DIS) ESPN losing a "moderate" amount of subscribers. That most likely points to a period of even more disruption, which many investors have been monitoring since the growth of the streaming video market.

Many retailers have also underperformed, especially those with a presence in malls; although Wal-Mart (WMT) has been getting crunched as well.

Add to that the underemployment in the U.S. and dubious employment numbers, and you have the makings of another perfect storm that could push the price of gold above the $2,000 an ounce market - possibly much higher, depending on how the parts of the whole hold up.

Gold and silver could be poised for a major move. I don't see how this weak economy can hide the devastating impact of endless quantitative easing, or how GDP can continue to improve when major trading partners are under economic siege.

I don't think this time around the strength of the U.S. dollar will be able to hold back the upward move once it takes hold. We could even see measures taken - possibly in the form of more quantitative easing (to hide the fact the Fed is once again entering the currency wars) - to lower the value of the dollar against competing currencies.

Either way, gold is beckoning, and it's a matter of when, not if, it starts to soar once again. I'm positioned for it in my portfolio. Are you?

Battle for Gold Floor Continues On

There are a lot of theories floating around out there making a case for or against the price movement of gold. Recently I made the case for the robust demand for physical gold in the form of jewelry and coins, as well as by central banks - especially central banks in China and other Asian countries - providing price support for the precious metal.

While that is real and is part of the equation, other elements are in play which could pressure the price of gold down even further. In other words, we may not have found a floor yet, even with the robust demand for physical gold.

continue reading on the downside risk for gold

 

Gold May be About to Break Out, Here's Why

Gold could be about to soar after recent heavy downward pressure, based upon the probability the huge number of shorts will be forced to cover their positions, resulting in a huge, upward move in the yellow metal.

Gene Arensberg, editor of the Got Gold Report, noted this in an email:

“The producer merchants, the category that includes the natural hedgers, are at their lowest net short position since 2008 at the same time that the managed money traders, the funds, are record short and at their lowest net long position since Nov. 18, 2008.

“I have not seen the COT ‘rubber bands’ so over-stretched in opposite directions as they are now,” Arensberg said, noting that extreme lows for the managed money net long positions are “usually associated with important bottoms for the price of gold.”

Arensberg added that together, funds have slashed their long gold positions by almost 36 percent to a 42,810 contract net long position.

It is also thought the short position is much larger because this data only represents Tuesday of last week.

Gold for April delivery settled Monday at $1,586.60 an ounce  on the Comex division of the New York Mercantile Exchange, up $13.80, or 0.9%. That's the largest one-day move for gold futures in February.

Gold Will Rally in 2013 with or without Inflation says Analyst

Senior economist at Longview Economics, Harry Colvin, said gold will rally from $300 to $400 an ounce in 2013 whether inflation comes or not.

Colvin said this in an interview on CNBC:

Everyone is always bearish at the lows, that's the time to buy it, we're going to get a good rally this year I think.

When challenged on there not being much in the way of inflation by Bob Parker, senior advisor at Credit Suisse, Colvin responded with this:

We don't need inflation  for a gold price rally. We haven't had inflationary pressures in recent years. The only inflationary pressures we have is from QE pushing commodity prices up.

Gold's gone sideways for sixteen months, that's because the balance sheet in the Fed has gone sideways for the last sixteen months. The balance sheet is about to expand rapidly. And with that we're going to get a rally in the gold price, it's going to go hard this year and probably into the next.

If he's correct, we'll see gold approaching the $2,000 an ounce mark this year.

China Growth Down for Sixth Straight Quarter

Growth in China fell for the sixth quarter in a row, dropping to 7.6 percent for the period. That's the lowest level since the first quarter of 2009.

While it was a little better than the market had concerns over, it was still down enough to keep the inevitable stimulus for that country alive, even as Europe and the United States will soon implement another round of quantitative easing.

That's good news for gold, silver, and some other commodities, as it certainly will push up the price of the metals in a big way, rewarding patient investors.

Gold and silver are positioned well with the economic decline, as they'll go up in price without a doubt because of the resulting fall in the value of the U.S. dollar, and the assumption the buying up of more bonds will help the economy.

It won't. But many traders will use it for an opportunity to push up the value of silver and gold, which will pull up the prices of base metals as well.

Some are spinning this as a triumph, which has taken the pressure off of China's need to aggressively stimulate its economy.

Assuming the numbers are fairly accurate, China, as do a number of nations, faces the problem of overestimating the health of their economy, which would result in its taking too long to respond to a weakening economy.

If that's what happens, the stimulus measures taken by a number of governments would be even more robust than before.

China has lowered interest rates and significantly cut back on imports in response to the slowing economy (some of that is related to stockpiling commodities in the prior months), suggesting their real assessment of their economy is it'll continue to slow down, as recent comments by Chinese official confirm when talking about declining exports, which are reflective of the weak global economy.

Is Gold About to Soar?

It may be time to get into gold again before the hoard starts pushing up the price and we end up chasing it for a much higher entry point.

This isn't built upon the idea of a possible stimulus happening sometime soon - although that would give it a nice push upwards - but rather upon how gold has been performing against major currencies.

Usually when gold is up against the majors, historically, not long afterwards it enters into a positive growth stage in price.

That has just happened over the last month, so gold should be poised for another upward run.

The good news is people are still largely negative on gold other than in relationship to the inevitable and upcoming implementation of QE3. But by time that happens everyone will be throwing money at gold and those late in the game will lose a lot of profits.

Obviously the key to making more money is to get in early.

With gold certain to soar again based upon stimulus measures alone, the inclusion of this currency signal, which has been historically wildly accurate and predictable, we could be on the verge of a huge upturn in gold.

And when the stimulus comes soon afterwards, it's unknown how high it could potentially go.

The currencies that gold is up against are the yen, U.S. dollar, British pound and the euro.

Newmont (NEM) (AUY) (HMY) (NYSE:KGC) Close Mixed as Gold, Silver Break Records

Newmont Mining (NYSE:NEM), Yamana Gold (NYSE:AUY), Harmony Gold Mining (NYSE:HMY) and Kinross Gold Corp (NYSE:KGC) closed mixed Thursday as gold and silver prices broke all-time records.

Gold prices shot up while silver prices popped Thursday as investors bought the metals against a weak dollar and higher inflation expectations.

Gold for June delivery settled $14.10 higher at $1,531.20 an ounce at the Comex division of the New York Mercantile Exchange. The gold price soared to a record intra-day level of $1,538.80 an ounce while the spot gold price rose $6.90.

Silver prices for July moved up $1.55 to settle at $47.54 an ounce.

Spot silver jumped almost 4 percent Thursday to an all time high at $49.51 an ounce, surpassing the previous record set in 1980.

The ICE Futures U.S. Dollar Index was down 0.4 percent. The collapsing greenback aided dollar-denominated gold and silver by making them less expensive for foreign buyers, generating more demand.

Gold $5,000 Says (UXG) (MAI) Chairman

Rob McEwen, Chairman of Minera Andes (MAI) and US Gold Corp (UXG), says he says gold is probably going to reach $5,000 an ounce in the next 3 to 4 years, citing demand from investors and central banks.

The price of gold may hit $5,000 an ounce, nearly three times current levels, in three to four years, as demand from sovereign states, central banks and exchange-traded funds (ETFs) rises, the chairman of two Canadian gold mining companies said.

"Gold is used as insurance for bad governments," Rob McEwen, chairman and chief executive of Minera Andes Inc and US Gold Corp, told Reuters on the sidelines of the Mines and Money conference in Hong Kong on Wednesday.

Gold is traditionally used as a hedging tool against inflation and economic uncertainty. The yellow metal has also been a favourite investor hedge against loose monetary policies in the wake of the global financial crisis.

McEwen said gold was in the middle of a super cycle that could end by 2015, adding that the length of the gold super cycle and the $5,000 forecast were based on historical gold prices and the ratio of the Dow stock index against gold since 1970.




Source

Barrick (NYSE:ABX), Goldcorp (NYSE:GG), Newmont Mining (NYSE:NEM) Push Up as Gold Prices Break $1,400 Again

Since December 6th gold mining companies have been on a downward trend, as investors took profits and focused on what appears to be a decent Christmas season for retailers. Major gold miners like Barrick Gold (NYSE:ABX), Goldcorp (NYSE:GG) and Newmont Mining (NYSE:NEM) all started their drop on the 6th of December, and today have finally made a nice rebound as gold prices soared past $1,400 an ounce, pulling the share prices up with it.

Most of this is connected to the fall in value of the U.S. dollar again, but also, as mentioned, decent Christmas retail sales, which may have brought to the remembrance of investors the very real threat of inflation, and probably lowering the perceived risk of deflation.

As of 12:13 PM EST, gold prices continue to hold, and the usual sell-off after a rise in price earlier in the trading session hasn't emerged yet, and as far as spot gold stands at $1,405.20 an ounce, up by $21.10 on the day.

Gold for February delivery surged $18.30 to $1,400.70 an ounce at the Comex division of the New York Mercantile Exchange earlier in the day.

Goldcorp was trading at $45.36, up $0.88, or 1.98 percent, as of 12:14 PM EST.Newmont Mining was at $61.68, up $1.59, or 2.65 percent. Barrick Gold was trading at $53.03, up $1.43, or 2.77 percent.

Gold Prices Today Up on Korean Military Tensions

Military tension between North and South Korea have pushed up the price of gold today, as gold futures on the Comex division of the New York Mercantile Exchange increased by $16.40, or 1.2%, to $1,374.40 an ounce.

It underscores the skittishness of investors in volatile times, as the bailout of Ireland revealed and the news Greece may still be hiding the depth of its deficit problem.

The European Union sovereign debt crisis is worsened by the fact there is little to trust in assertions made by many political leaders who are under enormous pressure domestically, having made promises they aren't able to meet, as socialism always results in.

They've also created a culture of entitlement, which those receiving the entitlements rise up in anger over when they're cut back because there has never been the money to pay for them.

For gold, these and many other factors like the quantitative easing put into play again by the Federal Reserve will support gold for some time to come.

The fall in value of the euro against the U.S. dollar is all that has been keeping gold from skyrocketing even further.

Spot gold was trading at $1,377.90 an ounce, up by $11.50.

Gold Prices Today Pressing Toward Largest Gain in Two Weeks

The anticipated and expected drop in the value of the U.S. dollar is playing a big part in the increase in gold prices today, as it dropped, pushing up the price of commodities, and gold in particular.

Gold futures for December delivery on the Comex in New York rose to $17.70, to $1,354.60 an ounce at about 11:20 AM EDT. That is the largest gain since November 4, if it is able to close at that, or higher.

Spot gold prices were up by $18.30, rising to $1,354.10 an ounce at 1:49 PM EDT.

The only reason the U.S. dollar was stronger recently was because its move up against the euro, which was again under pressure because of the seemingly endless sovereign debt crisis, which is far from over, and is still hidden in obscurity and dishonesty in some countries, making it difficult to ascertain the depth of the crisis.

Greece's recent announcement they had understated the extent of their deficit is a case in point.

The question for gold now is if the correction is over or if there is more room to go down.

Barring unforeseen circumstances, it seems gold prices may be ready to take off again, but only time will tell if that's the correct assessment.

Why Agnico-Eagle (NYSE:AEM) and Eldorado (NYSE:EGO) Are So Attractive

When gold prices continue to break record after record, and the Federal Reserve and Ben Bernanke continue to cooperate by printing more and more money, gold miners like Agnico-Eagle Mines (NYSE:AEM) and Eldorado Gold (NYSE:EGO) are great ways to participate in the ongoing gold bull market.

Why companies like Agnico and Eldorado Gold are so good, is they are among the leading companies in controlling costs.

This is important because the more costs are under control, the more flexibility a company has, and the more they're able to profitable operate under conditions where gold prices aren't as high.

Agnico and Eldorado are far from the only gold miners positioned strongly, but they are good examples of well-run companies which should do well in strong and weaker economic conditions.

Those gold miners that are heavily leveraged and don't have solid cost controls in place, will only do well as long as gold prices do well. Once that is over, they could have value drain off extremely quickly.

This isn't to say it is expected anytime soon, but over the long term solid gold companies with operational costs under control will be prepared for whichever way the market goes, and have more opportunities to grab up weakened companies for future growth.

Low debt and low costs will do more for gold investors than just about anything else, all other things, especially gold prices, being equal.

Will Potential Gold Bubble End up Being a Silver Rally?

While I don't think a gold bubble is coming any time soon, as there are too many elements involved to support the ongoing increase in the price of gold unrelated to the herd mentality, which will as some time kick in, but probably not for a few years, if not more, depending on the economy and actions of central banks around the world.

What that means for silver investing is the incredible heights gold will probably reach will start to weigh on a large number of investors who simply can't afford to invest in it any longer, or at least perceive they can't.

That inevitably leads to a run on silver from an investment perspective, and should drive the price of silver up to astronomical levels, although that will take time.

Of course silver is driven by industrial use as well, which will also continue to drive up the price of silver because existing mines won't be able to keep up with supply.

Add these two scenarios together and you see a perfect storm for silver prices to rise, and silver has been already making the beginning of a number of major moves reinforcing its coming surge.

Kinross (NYSE:KGC), AngloGold Ashanti (NYSE:AU), Harmony (NYSE:HMY) Explode Upward on Rising Gold Prices

Kinross Gold Corp (NYSE:KGC), AngloGold Ashanti (NYSE:AU), Harmony Gold Mining (NYSE:HMY) are moving up in a major way in response to the explosion in gold prices and the overall response of the broader gold market.

All of this is the result of the misguided move by the Federal Reserve to inflate, or as they like to describe it now: implement a new round of "quantitative easing."

Consequently the U.S. dollar plummeted in value as expected while the price of gold rose, also as expected.

Kinross moved up to $18.64, gaining $0.83, or 4.66 percent at 1:56 PM EDT. AngloGold Ashanti Ltd. traded at $48.95, rising by $2.36, or 5.07 percent. Harmony Gold soared to $12.24, increasing by $0.83, or 7.27 percent.

Almost every gold miner, or mining company with significant exposure to gold have risen today.

Barrick (NYSE:ABX) Receives Mixed Ratings Ahead of QE Announcement

Barrick Gold (NYSE:ABX) will almost always have the challenge of moving up significantly over a short period of time because of their size, and that seems to affect the ratings companies like Mackie and BMO Capital put on the gold mining giant, which went in opposite directions on Friday.

Mackie downgraded Barrick from "Buy" to "Accumulate," while BMO Capital upgraded them from "Market Perform" to "Outperform."

It all depends on how most financial institutions look on valuation and how a company the size of Barrick will be able to grow.

If gold prices are the sole or key indicator used to measure the growth of a gold miner, then it will definitely be viewed strongly, although how management controls operational costs is right there alongside of it, at least it should be.

Barrick closed Friday at $48.09, gaining $1.07, or 2.28 percent. BMO increased their price target on them from $55 to $60.

Barrick should benefit from the expected quantitative easing announcement the Fed is about to make, as should the vast majority of gold and commodity miners.

Newmont (NYSE:NEM), Barrick (NYSE:ABX), Goldcorp (NYSE:GG), AngloGold Ashanti (NYSE:AU) Move Up on QE Anticipation

Gold prices rebounded at the end of the week, and major gold miners like Newmont Mining (NYSE:NEM), Barrick Gold (NYSE:ABX), Goldcorp (NYSE:GG) and AngloGold Ashanti (NYSE:AU) moved up with gold prices in anticipation of an announcement by the Federal Reserve that they'll start another round of quantitative easing.

Quantitative easing or printing money, is an inflationary event which also lowers the value of the U.S. dollar, or any other currency where a country has their central bank throw more money into the market, and the result is gold prices will rise in order to protect against inflation and the debasing of the currency.

That's about to happen again in the U.S., and many gold mining companies and those that own shares in them will benefit strongly.

The only question is how much the market has already price quantitative easing into the price of gold. We'll have the obvious surge in gold price and share prices of gold miners immediately after the announcement, but the support underlying that surge is what is important to investors.

AngloGold Ashanti closed the week at $47.11, gaining $0.67 on Friday, or 1.44 percent. Barrick Gold rose to $48.09, gaining $1.07, or 2.28 percent. Goldcorp ended the week at $44.59, increasing by $0.30, or 0.68 percent, and Newmont Mining surged to $60.86, climbing $1.05, or 1.76 percent.

Goldman (NYSE:GS) Economic Report Support Gold Price Moving Up

Almost everything reported concerning the U.S. economy today confirms the ongoing recession, and Goldman Sachs (NYSE:GS) believe there's no doubt the Federal Reserve will inflate via quantitative easing, adding more support to gold, although that's probably priced into the price of gold at this time.

How much it's priced in will be determined by what the Federal Reserve does and to what extent.

There's no doubt the U.S. dollar will continue to weaken, which will benefit gold, and lower interest rates will remain in place.

News today that the sovereign debt of Greece had been understated and will have to be upwardly revised for the last several years is good for gold, as well as the downgrade of Ireland debt by Fitch Ratings and is being watched closely by Moody's (NYSE:MC), mostly on concerns over the cost related to the banking sector in the countries.

Private employers in America also reported they cut 39,000 jobs in September, where analysts were looking for an increase of 24,000 for the month.

Currencies in other countries continue to weaken against gold as well, confirming there is no bubble in gold, and nothing is out there which would suggest that should or will change any time soon.