What to watch in metals market in 2018

FT/Neil Hume & Henry Sanderson/12-21-17

With a gain of almost 10 per cent, gold has had a decent year even if its gains were overshadowed by those for US stocks. After rising above $1,350 a troy ounce in early September, the highest in just over a year, the precious metal has since retreated to about $1,260.

…As we go into 2018, gold bulls will take some comfort from data that suggest investors have remained loyal to the precious metal.

PG View: I would anticipate that that loyalty will be reward once broad investor complacency is challenged and volatility returns to markets. That may happen in 2018 . . .

Posted in Gold News, Gold Price, Gold Views |

Republicans still don’t have a plan to avoid shutdown

CNN/Deirdre Walsh, Lauren Fox & Ashley Killough/12-21-17

As House Republicans spilled out of a closed-door meeting Wednesday night, it was clear that things hadn’t gone well. Members gave wildly varying accounts of the proposal that’s being cobbled together to keep the government open ahead of Friday’s shutdown deadline.

Most importantly: Do they have the votes to pass a bill?

“I don’t know,” said Rep. Ryan Costello, R-Pennsylvania. “I don’t think anyone knows.”

Posted in Politics |

Morning Snapshot: Gold Consolidates Gains Notched Earlier in the Week

aloepole74/Peter Grant/12-21-17

Gold is down slightly after having established a new 2-week high at 1268.29 overseas. A slightly firmer dollar and continued strength in stocks may be limiting the upside for the yellow metal, but political and geopolitical uncertainties continue to support.

This morning’s data has had little impact on the market. U.S. Q3 GDP was revised down slightly to 3.2%. The Philly Fed index for December jumped significantly. U.S. initial jobless claims jumped 20k to 245k last week, above expectations of 232k.

Later this morning, we’ll get November leading indicators. Median expectations for LEI is +0.4%.

Market action is likely to taper heading into the long Christmas weekend, but remember that tomorrow is the deadline for a budget deal (temporary or otherwise) to avert a government shutdown. Eleventh-hour negotiations last night reportedly did not go well. There are some risks heading into the weekend.

Posted in Gold News, Gold Price, Gold Views, Snapshot |

U.S. Q3 GDP revised down to 3.2%, below expectations of 3.3%, vs 3.3% previously and 3.1% in Q2.

Posted in Economic Data |

U.S. Philly Fed index surged to 26.2 in Dec, well above expectations of 20.5, vs 22.7 in Nov.

Posted in Economic Data |

U.S. initial jobless claims +20k to 245k in the week ended 16-Dec, above expectations of 232k.

Posted in Economic Data |

Gold easier at 1264.20 (-2.76). Silver 16.13 (-0.07). Dollar better. Euro higher. Stocks called higher. U.S. 10-year 2.49% (-1 bp).

Posted in Gold Price, Markets, Silver Price |

Gold, silver up solidly from December lows


Gold continued its push higher today finishing up $3.87 at $1265.33.  Silver finished up 6¢ at $16.16.  In the December issue of News & Views, we pointed up the ghosts of Decembers past.  “In each of those years (2013 through 2016) December began poorly,” we wrote, “but appropriately by Christmas-time things began to look brighter. By the end of January in the following year, the star over the gold market shone still more brightly. . . ”  As of today, gold is up $23.43 from its December 11th low of $1241.90.  Silver is up 47¢ from its December 11 low of $15.69. It’s just five days ’til Christmas. . . . . .

Quote of the Day
“The current combination of monetary debasement, populism and social unrest is neither a new phenomenon nor a coincidence. The late Roman empire shaved silver coins as it disintegrated; Henry VIII replaced silver coins with copper to pay for wars against France and Scotland; the British empire allowed double-digit inflation to erode bondholders’ wealth following the War of Independence; the Weimar Republic precipitated an inflation spiral. Comparing these examples to QE may sound extreme. Yet the biggest debasement in history may be the one we are experiencing now under the form of a $20tn central bank experiment, which is de facto depreciating money by boosting the price of all assets it can buy.” – Alberto Gallo, Algebris Investments

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If the time has come for you to begin or extend your gold and silver ownership plans – if you are raising the red flag – we invite you contact us and find out why thousands have chosen us as their gold firm.

Posted in all posts |

The US and China are preparing for all hell to break loose in North Korea

BusinessInsider/Alex Lockie/12-20-17

• Both the US and China have been taking unprecedented steps as tensions ramp up along the Korean Peninsula.

• China has prepared refugee camps and information for citizens to help them survive nuclear attacks and has expanded its offensive capabilities with its air force.

• The US has stepped up military drills, practiced air raids, and reportedly started preparing to seize North Korea’s nuclear weapons by force.

Posted in Geopolitical Risks, North Korea |

The Daily Market Report: Gold Sets Two-Week High, Nears Important Resistance

aloepole74/Peter Grant/12-20-17

Gold is trading at two-week highs, buoyed by a softer dollar and persistent political and geopolitical uncertainties. Limiting the upside is continued strengths in stocks and yields at the long-end of the curve in anticipation of tax reform legislation getting passed.

The House is presently taking a second vote on the tax plan, over a procedural issue that arose yesterday, but it is widely anticipated that the votes needed are still there. At that point, the bill will be sent to the President for his signature.

President Trump is already planning a press conference for later this afternoon, despite reports earlier in the day that he might delay signing the bill into law until after the first of the year. This potential delay revolves around the deficits that are likely to result from tax cuts that would trigger automatic spending cuts. Mr. Trump would like to see those budget rules waved.

Stocks and the dollar slumped in reaction, helping gold to notch fresh intraday highs. The next tier of resistance is 1267.60/1269.36, where the 200-day moving average and the halfway back point of the decline from late-November converge.

Both the U.S. and China appear to be escalating preparations for war on the Korean peninsula, according the BusinessInsider. “We’re not committed to a peaceful resolution — we’re committed to a resolution,” said National Security Advisor H.R. McMaster.

Meanwhile, President Trump continues to rattle the saber as well. “America and its allies will take all necessary steps to achieve a denuclearization and ensure that this regime cannot threaten the world . . . It will be taken care of,” said the President.

In times of geopolitical uncertainty, gold is a favored safe-haven. Along with North Korea, Iran, Russia and China are deemed to be geopolitical hot spots.

Posted in Daily Market Report, Gold News, Gold Price, Gold Views |

GOP Tax Plan: Trump’s Tax-Bill Signing Could Be Delayed Into January

Dow Jones, via FoxBusiness/12-20-17

President Donald Trump may wait until next year to sign the tax bill Congress is likely to approve Wednesday if lawmakers don’t separately pass a provision to waive certain budget rules that trigger automatic spending cuts.

At issue are so-called “pay as you go,” or “pay-go,” budget rules that could be triggered by deficits in the tax bill. Congressional Republicans are preparing a separate fix to waive the rules after they finish the tax bill, but if they don’t do it before Congress adjourns for its year-end recess, one way to delay the automatic cuts would be to sign the bill in January.

Posted in Politics |

U.S. existing home sales +5.6% to 5.81M pace in Nov, above expectations of 5.50M, vs positive revised 5.50M in Oct.

Posted in Economic Data |

Cramer’s charts reveal bitcoin is not replacing gold anytime soon

CNBC/Elizabeth Gurdus/12-19-17

…the $2.4 trillion global gold market is very deep. Millions of investors own a piece of the pie in the form of bullions, jewelry, coins or other investments. In comparison, the entire digital currency market is worth $600 billion, with bitcoin only accounting for about half.

…Garner was skeptical that gold is falling because bitcoin is soaring. Gold pulled back below $1,250 an ounce four times this year and managed to bounce back, and no one blamed the declines on bitcoin, she said.

Moreover, gold’s charts suggest its value could go higher. Historically, gold tends to decline in early December, then buyers come in and drive the precious metal to rally until March.

PG View: Garner also cited COT data and the dollar chart as further evidence of upside potential in gold.

“…gold is not being supplanted by bitcoin as the go-to alternative to actual currency, and the charts, as interpreted by Carley Garner, suggest that gold might be ready to make a comeback. And while I won’t discourage anyone from buying bitcoin — just know the risks, know your limitations — I’m with Carley when it comes to the precious metal, not the precious keystroke.” — Jim Cramer
Posted in Cryptocurrency, Gold News, Gold Price, Gold Views |

Buy Gold As Strategic Hedge – World Gold Council

KitcoNews/David Lin/12-18-17

Gold should be seen as a strategic asset that investors use to weather the storm, says Juan Carlos Artigas, Director of Investment Research at the World Gold Council.

Artigas told Kitco News that gold, as an insurance, should be consistently held in a portfolio and not bought only when there is an equities market correction. “If you look at history, you’ve seen these [equities] corrections happen.

If you wait until the last minute to protect your portfolio from that correction, you may actually miss it,” he said.

PG View: In fact, the quiet periods in between stock market corrections and periods of economic duress are the ideal time to be accumulating gold.

Posted in Gold News, Gold Price, Gold Views |

Morning Snapshot: Gold Remains Firm as Tax Reform Moves Down the Homestretch

aloepole74/Peter Grant/12-20-17

Gold is up modestly in early U.S. trading, establishing fresh 2-week highs. A softer dollar is helping to keep the yellow metal underpinned, despite continued buoyancy in stocks and yields as the tax bill moves down the homestretch.

Despite the impending legislative win on tax reform, the U.S. faces a government shutdown at the end of the week. There is little hope that Congress will pass a budget before midnight on Friday, so they will likely try to pass another stopgap funding measure that will kick the can into the new year.

With Democrats perhaps feeling a little stung from the tax reform process, they may be a less amicable on the budget negotiations. The resulting uncertainty may be contributing to recent gains in gold.

The U.S. calendar is light today with existing home sales and EIA crude inventory.

Silver is up at 2-week highs as well, trading comfortably back above $16 and near the 38.2% retracement level of the decline from the mid-November high. A rise above 16.50 would further ease pressure on the downside.

Posted in Gold News, Gold Price, Gold Views, Snapshot |

House to vote again on tax bill; Trump on verge of win

Reuter/David Morgan & Amanda Becker/12-20-17

The Republican-controlled U.S. House of Representatives on Wednesday was expected to give final approval to a sweeping tax bill and send it to President Donald Trump to sign into law, sealing his first major legislative victory in office.

In the largest overhaul of the U.S. tax code in 30 years, Republicans in mere weeks steamrolled over the opposition of Democrats to slash taxes for corporations and the wealthy, while offering mixed, temporary tax relief to working American individuals and families.

Posted in Politics |

Gold better at 1265.20 (+3.14). Silver 16.22 (+0.06). Dollar and euro steady. Stocks called higher. U.S. 10-year 2.49% (+2 bps).

Posted in Gold Price, Markets, Silver Price |

Gold Prices Inch Lower Ahead of Tax-Bill Vote

WSJ/Amrith Ramkumar & Christopher Alessi/12-19-17

Gold prices were slightly lower Tuesday, closely tracking the dollar ahead of a House of Representatives vote on a tax-overhaul bill.

…Gold prices are back near their November trading range, up nearly 10% for the year but roughly 6.5% off their year-to-date highs from early September.

Analysts have said geopolitical uncertainty and hesitation among Fed officials about a gradual pace of interest-rate increases could continue to support gold prices. Many investors favor gold and other haven assets when they believe markets might turn rocky.

Posted in Gold News, Gold Price, Gold Views |

A Fed official who has been voting against rate hikes thinks he knows why wages aren’t rising faster

BusinessInsider/Pedro Nicolaci da Costa/12-181-7

“Why aren’t wages picking up?” Kashkari asked in a blog post explaining his latest dissent. “In my view, the two most likely explanations are that the job market is not as tight as the 4.1% unemployment rate suggests and that people’s expectations for future inflation have fallen, which can become self-fulfilling.”

Kashkari believes low labor-force participation and other underlying pockets of weakness are still leaving workers in too precarious a situation to bargain for higher wages.

“One measure of the labor force — the participation rate for workers between 25 and 54 years old, typically called ‘ prime age’ — suggests that there could be more than a million workers still on the sidelines,” Kashkari said.

PG View: Kashkari has the same doubts about the so-called “transitory” nature of low inflation: “…the longer it persists, the more tenuous the transitory factors story becomes.”

Posted in all posts, Central Banks, Economy, Fed, Monetary Policy |

Gold holds firm as dollar wilts ahead of U.S. tax vote

Reuters/Jan Harvey/12-19-17

Gold held firm above $1,260 an ounce on Tuesday as caution over the passage of sweeping tax legislation in the United States weighed on the dollar, supporting the precious metal after two days of gains.

But moves in the metal were muted, as market players were wary of taking new positions before the holiday season. Gold is on track to post its narrowest trading range of any quarter in a
decade in the last three months of the year.

PG View: I would suggest that the narrow trading range in Q4 reflects the resilience of gold in the face of record stock gains, Fed interest rate hikes and a somewhat firmer dollar. The market may be “coiling” in advance of a breakout, which typically comes in the direction of the underlying trend. The trend for the year is up.

Posted in Gold News, Gold Price, Gold Views |

McMaster: ‘I don’t think we can tolerate’ a nuclear North Korea

The Hill/Mallory Shelbourne/12-19-17

National security adviser H.R. McMaster said in a Tuesday morning interview that he does not believe the world can allow North Korea to develop nuclear weapons.

“I don’t think we can tolerate that risk. The world can’t tolerate that risk,” McMaster told “CBS This Morning” when asked if the United States and a nuclear North Korea can “co-exist.”

PG View: McMaster stops short of saying how far the U.S. is prepared to go to prevent nuclear armed North Korea, but the threat seems pretty clear. The associated geopolitical risk should continue to underpin gold.

Posted in Geopolitical Risks, North Korea |

Morning Snapshot: Gold Remains Firm Ahead of House Vote on Tax Bill

aloepole74/Peter Grant/12-19-17

Gold is up slightly as markets awaits today’s anticipated House vote on tax reform legislation. In the mad scramble to get this piece of legislation to the President’s desk before the end of the week, the market seems to be ignoring the fact that the current short-term spending bill expires on December 22.

While neither party seems to have the stomach for a government shutdown, the window to get something done before the Christmas recess begins is small. Continually kicking the can with short-term continuing resolutions is no way to run a government, and yet this seems to be the only way to avert a government shutdown these days.

The inability of the dollar to build on last week’s bounce is helping to underpin gold. Meanwhile, stock market gains associated with an expectation of impending corporate tax cuts, have limited the upside for the yellow metal.

Rising geopolitical tensions are also seen as supportive to gold. The U.S. has blamed North Korea for a cyber attack earlier this year. Meanwhile, National security adviser H.R. McMaster said he doesn’t think the U.S., nor the world, can “tolerate” the risk of a nuclear armed DPKR.

Posted in Gold News, Gold Price, Gold Views, Snapshot |

U.S. housing starts +3.3% to 1.297M pace in Nov, above expectations of 1.250M, vs 1.256 man in Oct.

Posted in Economic Data |

U.S. Q3 current account gap narrowed to -$100.6 bln, inside expectations of -$116.8 bln, vs revised -$124.4 bln in Q2.

Posted in Economic Data |

Gold better at 1262.36 (+0.70). Silver 16.17 (+0.03). Dollar lower. Euro higher. Stocks called mixed. U.S. 10-year 2.42% (+3 bps).

Posted in Gold Price, Markets, Silver Price |

Rocket ride higher today


Gold accelerated higher today finishing up $6.91 at $1262.08.  Silver also climbed higher up 16¢ and back over the $16 level at $16.12.  Over the past several months, the waterfall drops have been balanced with rocket ship recoveries – the action over the past few days being another example of the rocket ride half of the equation.

One impetus for gold’s good showing today is something that was largely overlooked.  In an article headlined “Japan Tiptoes out of Radical Experiment in Monetary Policy,” the Wall Street Journal reported this morning that “Japan’s central bank has been the world’s poster child for radical monetary easing. Next year, its stance is poised to change.”  The Bank of Japan, says the Journal, “is likely to raise one or more of its key interest-rate targets in 2018.” Such a move would likely boost the yen against the dollar, something that might be enough to tip the scales in gold’s favor if  becomes a mainstay in 2018. Over the past several months,  gold and the yen have demonstrated a strong trading correlation often rising and falling in tandem.

Quote of the Day

“. . .[T]he decay of capitalism and free markets should raise concerns for anyone’s market thesis, bullish, bearish or agnostic. What stops a central bank from manipulating asset prices? When do they cross a line from marginal manipulation to absolute price control? Unfortunately, there are no concrete answers to these questions, but there are clues.

Global central banks’ post-financial crisis monetary policies have collectively been more aggressive than anything witnessed in modern financial history. Over the last ten years, the six largest central banks have printed unprecedented amounts of money to purchase approximately $14 trillion of financial assets. . . Before the financial crisis of 2008, the only central bank printing money of any consequence was the Peoples Bank of China (PBoC).” – Michael Lebowitz, Real Investment Advice

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Posted in all posts |

Get Ready, Gold Showing Signs It’s headed to $1,700 or Higher – Analyst

KitcoNews/Daniela Cambone/12-18-17

…”The last three days have reconfirmed by commitment for a much higher gold price in 2018. We are making higher lows for the year – the recent behavior made me nervous, but something very telling happened in the last three days,” Lanci said in an interview on Thursday.

“On Tuesday we had a short covering rally. And Wednesday there was a 10,000 contract increase in December – that’s very unusual, that is an over 2.3% increase in open interest,” Lanci explained. The point Lanci stresses is that gold is now back in a “safe area” between $1250-$1275 an ounce. “The $1,700 call I believe in is going to come to fruition- [if gold gets] above $1275 I will double down on a momentum bet.”

PG View: Lanci has made note of the cyclical pressures that have lifted gold and believes they will come to bear in a more significant way in 2018.

As an aside, Lanci see the marketing of bitcoin as the new digital gold as a “disaster waiting to happen.”

Posted in Gold News, Gold Price, Gold Views |

The Daily Market Report: Gold Rises, Despite Surging Stocks

aloepole74/Peter Grant/12-18-17

Gold is up, having established a 7-session high at 1263.97. A breach of minor chart resistance at 1264.10 would favor a short-term challenge of the 200-day moving average 1268.83.

This is a critical week for the GOP and the Trump administration. Tax reform is expected to be voted on early this week with the plan to deliver the bill to the President’s desk before the Christmas recess. However, the budget and debt ceiling issue has to be dealt with before December 22 as well.

A partial government shutdown may hang in the balance, although neither party seems inclined to press the issue. Consequently, we may see that can get kicked into the new year.

One thing is certain, the debt ceiling is going to have to rise. The tax bill is expected to add the maximum $1.5 trillion to the national debt over the next decade. However, that may be conservative based on perhaps too optimistic growth projections.

With the Fed both raising rates and tapering their balance sheet, the cost of financing the massive and growing debt are likely to rise as well. That is going to provide an additional headwind to those growth prospects.

Consumer debt exceeded the $1 trillion milestone earlier this year, but MarketWatch contends more consumer debt is “One sure-fire prediction for 2018.” Perhaps not surprisingly, delinquencies are expected to rise in the year ahead as well. This is another significant impediment to growth.

Despite the risks, stocks love the prospects for tax cuts. However, I’m wondering if this will end up being a classic case of ‘buy the rumor, sell the fact.’ Yale economist Stephen Roach cautions that “the CAPE ratio has been higher than it is today only twice in its 135-plus year history – in 1929 and in 2000. Those are not comforting precedents.”

The implication of course it that stocks are really overvalued and we know what happened in 1929 and 2000. A little portfolio balancing into year-end, seems like a prudent strategy.

Posted in Daily Market Report, Gold News, Gold Price, Gold Views |

Danish central bank head issues stark warning on ‘deadly’ bitcoin

Reuters/Stine Jacobsen/12-18-17

Potential investors in bitcoin should steer clear of a dangerous gamble and not complain to financial regulators if things do go wrong, Denmark’s central bank governor warned.

…The comments echoed concerns of a bubble about to burst made by other market participants and central bankers after the price of bitcoin rocketed more than 1,800 percent since the start of the year.

Rohde said that if people decide to ignore his warnings, they should realize that they are pretty much on their own.

Posted in Cryptocurrency |

Gold extends rally as dollar wobbles, but stock gains keep metal in check

MarketWatch/Rachel Koning Beals/12-18-17

Gold futures ticked higher Monday as the dollar index slipped, building slowly on what was the yellow metal’s first weekly gain in a month last week.

…The dollar slipped against most other major currencies, with the ICE Dollar Index DXY, -0.56% down 0.3% at 93.70. The greenback advanced on Friday on increased optimism the Republican tax bill will get approved before Christmas. Gold typically moves inversely to the dollar and stocks, as investor appetite for riskier assets tends to lure investors away from the haven of gold.

Accordingly, gold’s upside Monday was held in check in part as risk-on investment sentiment persisted, leaving major stock indexes on track for new records. Such optimism was the result of tax-policy progress. Speaking on several Sunday talk shows, Treasury Secretary Steven Mnuchin said he has “no doubt” that the GOP’s tax bill will make it to the desk of President Donald Trump this week.

Posted in Gold News, Gold Price, Gold Views |