Precious Metals – Silver, Gold, Gold Miner Stocks On The Rise?
March 30, 2012 by Chris Vermeulen · Leave a Comment
By Chris Vermeulen, TheGoldAndOilGuy
The past couple months investors have been focusing on the equities market. And rightly so with stocks running higher and higher. Unfortunately most money managers and hedge funds are under performing or negative for the first quarter simply because of the way prices have advanced. New money has not been able to get involved unless some serious trading rules have been bent/broken (buying into an overbought market and chasing prices higher). This type of market is when aggressive/novice traders make a killing cause they cannot do anything wrong, but 9 times out of 10 that money is given back once the market starts trading sideways or reverses.
While everyone is currently focusing on stocks, its important to research areas of the market which are out of favor. The sector I like at the moment is precious metals. Gold and silver have been under pressure for several months falling out of the spot light which they once held for so long. After reviewing the charts it looks as though gold, silver and gold miner stocks are set to move higher for a few weeks or longer.
Below are the charts of gold and silver charts. Each candle stick is 4 hours allowing us to look back 1-2 months while still being able to see all the intraday price action (pivot highs, pivot lows, volume spikes and price patterns).
The 4 hour chart is one time frame most traders overlook but from my experience I find it to be the best one for spotting day trades, momentum trades and swing trades which pack a powerful and quick punch.
As you can see below with the annotated charts gold, silver and gold miner stocks are setting up for higher prices over the next 2-3 weeks. That being said we may see a couple days of weakness first before they start moving up again.
4 Hour Momentum Chart of Gold:
4 Hour Momentum Chart of Silver:
Daily Chart of Gold Miner Stocks:
Gold miner stocks have been under performing precious metals for over a year already. Looking at the daily chart we are starting to see signs that gold miner stocks could move up sharply at the trade down at support, oversold and with price/volume action signaling a possible bottom.
Daily Chart of US Dollar Index:
The US Dollar index has formed a possible large Head & Shoulders pattern meaning the dollar could fall sharply any day. The size of this chart pattern indicates that if the dollar breaks down below its support neckline the we should expect the dollar to fall for 2-3 weeks before finding support.
Keep in mind that a falling dollar typically means higher stock and commodity prices. If this senario plays out then we should see the market top late April which falls inline with the saying “Sell In May and Go Away”.
Precious Metals Conclusion:
Looking forward 2-3 weeks precious metals seem to be setting up for higher prices as we go into earning season and May. Overall the market is close to a top so it could be a bumpy ride as the market works on forming a top in April.
Chris Vermeulen
www.GoldAndOilGuy.com
Rebutting the Recovery
March 30, 2012 by goldguru · Leave a Comment
By Jeff Nielson, Bullion Bulls Canada
In the topsy-turvy world of U.S. “newsertainment”, it is common knowledge that comedian Jon Stewart of The Daily Show is one of Americans’ “most admired journalists”. Regrettably, the U.S. mainstream media has chosen to compete with Stewart…by producing comedy.
Their favorite front-man is famed stand-up comedian, B.S. Bernanke. Bernanke became famous for such immortal one-liners as “the Goldilocks economy”, “the soft landing”, “the exit strategy”, and his most oft-repeated joke: “the U.S. economic recovery.”
As is often the case with popular humor, “the U.S. economic recovery” has been repeated ad nauseum by the mainstream media. Inevitably, the joke quickly became boring, and is now just very, very annoying.
The U.S. recovery is like one of the Simpsons episodes featuring mythical daredevil “Captain Lance Murdock”. After performing one of his heroic stunts, and inevitably ending up with his shattered body in a crumpled heap, he shakily raises one hand to give the “thumbs up” sign, and then we hear in the background the announcer proclaim, “He’s all right!”
Observe the following crashes, and the “recoveries”(?) that followed:
However, even clever Simpsons’ humor ceases to be funny if one is forced to watch/listen to the same joke, day after day, for nearly three years; and the U.S. mainstream media is not nearly as clever/funny as the Simpsons.
More articles from Bullion Bulls Canada….
Norway’s sovereign wealth fund to reduce European exposure
March 30, 2012 by goldguru · Leave a Comment
GATA
By Balazs Koranyi and Joachim Dagenborg
Reuters
Friday, March 30, 2012
http://www.reuters.com/article/2012/03/30/norway-wealthfund-idUSL6E8EU2U…
Norway’s $610 billion sovereign wealth fund, Europe’s biggest equity investor, plans to sharply reduce its European exposure while raising investments in emerging markets and Asia-Pacific, the finance ministry said on Friday.
Of its entire bond, fixed income and real estate portfolio, European investments will be “gradually” reduced to 41 percent from 54 percent, while Asia-Pacific’s share will rise to 19 percent from 11 percent, Finance Minister Sigbjoern Johnsen told a news conference.
“We’re reducing our European exposure because we see that economic development in the global economy is changing and this should also be reflected in our investment strategy,” Johnsen said. “Most likely we’ll have to sell some assets in Europe.”
As a result, the share of emerging markets in the fund’s total portfolio will rise to 10 percent from 6 percent and the share of the Americas and Africa will rise to 40 percent from 35 percent.
“It is just not possible to say how long this will take … it should be gradual and taking into account market circumstances,” ministry State Secretary Hilde Singsaas said.
Johnsen added that a previous rebalancing took two years.
The fund, which now holds over $120,000 per man, woman, and child in Norway, is forecast to grow to 5.86 trillion crowns or $1.03 trillion by the start of 2020 as it collect the country’s lucrative oil and gas revenues.
It had a return on investment of 4.4 percent in the fourth quarter of 2011 and -2.5 percent in all of 2011 as it remained heavily exposed to Europe amid its market turbulence.
Shares from developed Europe, now making up 47 percent of the Fund’s equity portfolio, will be reduced to 38 percent. In the fixed-income portfolio, developed Europe’s weight will be cut to 40 percent from 60 percent.
In fixed income, developed Asia-Pacific’s share will be lifted to 11 percent from 5 percent while its share of the equity portfolio will rise to 15 percent from 11 percent, the finance ministry said.
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Bank of Korea cuts dollar reserves by 3%
March 30, 2012 by goldguru · Leave a Comment
GATA
By Eunkyung Se
Bloomberg News
Friday, March 30, 2012
http://www.bloomberg.com/news/2012-03-30/bok-s-dollar-holdings-fell-to-6…
SEOUL, South Korea — South Korea, Asia’s fourth-largest economy, pared the share of dollars in its foreign-exchange reserves to the lowest level since the global financial crisis erupted in 2007.
Dollar holdings dropped to 60.5 percent of foreign- exchange reserves at the end of last year from 63.7 percent in 2010, the central bank said in its annual report for 2011 released today.
The drop underscores a shift among reserve managers to diversify assets, with China’s yuan and Australia’s dollar among the beneficiaries. South Korea’s government earlier this year announced plans to invest in Chinese equities as well as bonds as the yuan’s international role increases.
“The move to diversify reserves away from U.S. dollars and the euro accelerated last year, largely on weaker fiscal fundamentals and subdued economic conditions in developed markets,” Wai Ho Leong, a senior regional economist at Barclays Capital in Singapore, said in an e-mail. “At the same time, it marked a move into gold, and bonds of stable emerging-market economies, particularly those with better longer-term prospects and currency appreciation potential.”
The central bank boosted the proportion of equity investments to 5.4 percent last year from 3.8 percent, it said. Holdings of foreign government bonds rose to 36.8 percent from 35.8 percent in 2010, the BOK said.
While the proportion of dollar holdings declined to the lowest since 2007, when the central bank began to disclose details about its asset portfolio, the change doesn’t reflect a lack of confidence in the currency, Kang Sung Kyung, a director at the bank’s Reserve Management Group, told reporters in Seoul today
Other currencies held by the BOK include the euro, yen, pound, and Canadian and Australian dollars, Kang said. The central bank holds government bonds issued mostly by the U.S., Japan, Canada, Australia, the U.K., Germany, and France, he said.
Foreign-exchange reserves climbed by $4.46 billion to a record $315.8 billion at the end of February as the euro and pound strengthened against the dollar and the central bank made gains by managing assets, according to a central bank statement on March 5.
Choo Heung Sik, the director general of the Reserve Management Group, said in an interview in January that the yuan “has the potential to become a key reserve currency in the long term and thus we are building a channel to invest there.”
The BOK said that month it received approval from the People’s Bank of China to buy bonds and obtained a license as a Qualified Foreign Institutional Investor, or QFII.
“Central banks need to look for higher returns,” said Frances Cheung, a strategist at Credit Agricole CIB in Hong Kong. “Their sterilization programs used to mop up liquidity is creating the pressure for them to look for assets with better returns.”
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Canada will scrap the penny this year; nickel next?
March 30, 2012 by goldguru · Leave a Comment
GATA
Canada to Scrap the Penny This Year
By Steven Chase
The Globe and Mail, Toronto
Thursday, March 29, 2012
http://www.theglobeandmail.com/news/politics/ottawa-to-scrap-the-penny-t…
Canada is scrapping the penny, ending production of the country’s smallest unit of currency this spring.
The 2012 federal budget, unveiled Thursday, announced the government will jettison the one-cent coin this year — a casualty of Ottawa’s drive for efficiency and thrift.
Finance Minister Jim Flaherty, whose department described the penny as a “nuisance” in budget documents, said the coin is now more trouble than it’s worth.
“Pennies take up too much space on our dressers at home,” Mr. Flaherty said to the Commons. “They take up far too much time for small businesses trying to grow and create jobs.”
This means Canadians must get used to rounding off cash transactions if they’ve got no pennies on hand — an arrangement the federal government says it’s leaving to consumers and businesses to work out.
“The penny is a currency without currency in Canada,” Mr. Flaherty told reporters.
The last one-cent coin will be minted this April, ending close to 150 years of the issuance of Canadian pennies. This unit of currency was first produced in 1858 although Canadian-based minting of the coin began only in 1908.
The Royal Canadian Mint will stop distributing pennies to financial institutions in the fall of 2012 and the government will work to withdraw one-cent coins from circulation.
The Harper government said the production cost of each penny exceeds its face value. “It costs taxpayers a penny and a half every time we make one,” Mr. Flaherty told the Commons. “Therefore we will stop making them.”
Ottawa will save $11 million annually by scrapping the one-cent coin, an amount that reflects the cost of supplying the economy with both new and recirculated pennies.
The Royal Canadian Mint produced 660 million pennies in 2011, federal officials said.
The Harper government says savings for business and consumers will vastly exceed what Ottawa recoups by killing the penny.
A study by one Canadian bank, Desjardins, has estimated the economic costs of the penny for the private sector total $150 million annually. This includes counting, storing, and transporting the coins.
The penny will continue to be Canada’s smallest unit of currency for pricing goods and services. Canadians who use credit or debit cards to make purchases won’t have to worry about rounding-off transactions.
The Canadian government is hardly alone in scrapping the penny. Federal officials noted that 17 other countries have ceased production of low-denomination coins over the past four decades.
The Finance Department recommends businesses cope with the demise of the penny by rounding off the value of cash transactions to the nearest five-cent increment.
This would take place after tax has been added to the price.
Ottawa says it won’t be policing consumer-business transactions, but added that “businesses are expected to round prices in a fair, consistent, and transparent manner.”
It couldn’t guarantee that consumers would be better off but cited a 2005 Bank of Canada study that concluded the inflationary impact of eliminating the penny would be “small or non-existent.”
The Canadian government had no estimates Thursday on how many pennies remain in circulation, including those piling up in jars or cans. It noted a Desjardins Group study that estimated Canadians could be hoarding several billion pennies.
Federal officials said more than 35 billion pennies have been minted in Canada in the past 104 years. This, they noted Thursday, would weigh 94 million kilograms — or as much as 1,500 Leopard 2 tanks.
The federal government says it will encourage charities to collect pennies from Canadians and redeem them through banks and the Mint as a fundraising venture.
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Gold has bottomed at $1,650, silver at $32, Turk tells King World News
March 30, 2012 by goldguru · Leave a Comment
GATA
6p ET Thursday, March 29, 2012
Dear Friend of GATA and Gold:
GoldMoney founder and GATA consultant James Turk tells King World News tonight that gold has bottomed at $1,650 and silver at $32. Turk adds: “Sentiment is near rock-bottom as everyone’s patience is being severely tested, even the old-timers’. That is another reliable sign that we are near an end of this correction. The longer the correction, the bigger the base that is formed. The bigger the base, the more prices will soar when they finally start heading higher.” From Turk’s lips and the King World News blog to the Great Market Manipulator’s ear, and we don’t mean Bernanke:
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/3/29_Ja…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
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Fed’s pervasive market meddling will end disastrously, Norcini says
March 30, 2012 by goldguru · Leave a Comment
GATA
2:53p ET Thursday, March 29, 2012
Dear Friend of GATA and Gold:
Futures market analyst Dan Norcini today tells King World News that the Federal Reserve is now messing with markets so pervasively that the result is “havoc” that will “end disastrously.” An excerpt from the interview is posted at the King World News blog here:
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/3/29_No…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
A Rare Opportunity with Collectible Gold Coins
Whose Premiums Are Far Below Normal
Sovereign debt problems in the United States as well as Europe will worsen this year. The mainstream financial media may never report about the likely inflationary consequences of bailouts and “quantitative easing,” nor are they likely ever to recommend tangible assets for financial protection. But at Swiss America Trading Corp. we believe that it is no longer a luxury to own gold and silver coins but rather a necessity.
At the moment the public is showing little interest in Double Eagle U.S. $20 gold coins, so the price premiums above the intrinsic melt values (.9675 ounce of gold in each coin) are historically low. The ratio of price to bullion content for these coins has been 2:1 but today it is only about 1.25:1.
This is a real opportunity. So give us a call or e-mail and we will be glad to discuss the potential of these coins and how to use a ratio strategy to increase your gold ounces without money out of pocket.
In the January edition of his Early Warning Report, Richard Maybury writes: “As they are inherently in very limited supply, I believe that high-quality numismatics will become tulips, eventually rising a thousand percent or more in real terms, when money velocity goes into mid-second stage. In late stage, who knows — 2,000 percent? 3,000?”
All inquiries will receive without charge (while supplies last) our latest book, “The Inflation Deception,” as well as our newsletter “Real Money Perspectives.”
– Tim Murphy, [email protected]
– Fred Goldstein, [email protected]
Telephone: 1-800-289-2646
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Free Month Subscription to Market Force Analysis for GATA Supporters
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US Mint Silver Coin Sales Slow, Star-Spangled Banner Commemorative Leads
March 30, 2012 by goldguru · Leave a Comment
Numismatic silver coin products moved slowly for a second straight week, per the latest U.S. Mint sales report. The leaders of the group were individual commemorative coins, and similar to prior weeks, the proof Star-Spangled Banner Silver Dollar was the clear front runner. 7,237 of the orders were for the proof Star-Spangled Banner dollar, and […]
Related posts:
- Star-Spangled Banner Commemorative Coin Images Released
- 2012 Star-Spangled Banner Silver Dollars Opening Sales
- Star Spangled Banner Silver Dollars Coins
Gold Bullion in an Iran Event
March 30, 2012 by goldguru · Leave a Comment
Gold bullion shines as a currency and store of wealth in the most dire situations because paper currencies and methods of exchange break down. When the world is topsy-turvy business as usual breaks down. While this is not something that one should actively invest in, because such situations are by their very nature completely unpredictable, it has happened several times in recent human history at least.
Most people remember stories of the Second World War and the amazing role gold played in the lives of people migrating throughout the world, Europe specifically. Crossing borders, keeping police at bay, and storing wealth while currencies defaulted and disintegrated were all accomplished with the help of gold bullion.
The reason for this is the inherent value of gold. You cannot change the fact that gold is a valuable substance no matter what is happening in the world and this makes gold one of the best investments to make at any time. We know gold is valuable now and that it will be valuable in the future. That’s why it appreciates.
Right now the USS Enterprise, America’s most renowned aircraft carrier is on its way to the Arabian Gulf, or the Persian Gulf as it is known in the rest of the world. While there has been saber rattling between the West and certain Arabian powers for some time, it does not change the fact that geopolitical instability is still a very serious concern that needs to be considered by all investors.
In the event of a major conflict between Iran and the West, whether that manifests as a simple standoff or as a full-fledged military conflict of some sort, gold will immediately skyrocket in value as a safe-haven asset. This accounts for a portion of the demand in the market. Because gold is relatively sheltered from market activities, many investors prefer to enhance and hedge their portfolio with gold because it will benefit when other investments experience difficulties.
This is the basis for a gold rise on any kind of escalation in the Middle East. Even economic and diplomatic sanctions boost the gold market because they limit other markets and increase volatility.
Exactly how the current conflict in the Middle East will play out cannot be known, but we can know that there is a conflict and that gold bullion is the best way to protect yourself and accumulate your assets at this time.
Read more….
U.S. Jobless Claims Total 359,000 In Latest Week
March 30, 2012 by goldguru · Leave a Comment
MarketWatch.com
By Jeffry Bartash
March 29, 2012
WASHINGTON (MarketWatch) – The number of Americans who filed requests for jobless benefits fell by 5,000 last week to a seasonally adjusted 359,000, the U.S. Labor Department said Thursday. The latest data includes the government’s annual seasonal-adjustment revisions extending back five years, which have resulted in a small increase in weekly claims. The number of new applications for benefits last week, for example, was originally reported at 348,000. The revisions now put last week’s level of claims at 364,000, a 4.6% increase. Economists surveyed by MarketWatch projected claims would fall to 345,000 in the week ended March 24, but those estimates did not factor in the revisions. The average of new claims over the past four weeks, meanwhile, dropped by 3,500 to 365,000, a four-year low. Continuing claims decreased by 41,000 to a seasonally adjusted 3.34 million in the week ended March 17, the Labor Department said. About 7.15 million people received some kind of state or federal benefit in the week ended March. 10, down 131,488 from the prior week. Figures for continuing claims and total claims were little changed under the government’s revised formula for calculating the data.
Read more….
