For all of the silver bulls out there, a new page:
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AND
Live prices as well!!
This page complements our popular Today’s Gold Coin Prices page.
A useful and practical addition to the USAGOLD website, we think you will appreciate.
Sep 7 (Bloomberg) — Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., talks about European Central Bank President Mario Draghi’s bond-buying proposal, the U.S. economy and investment strategy. He speaks with Stephanie Ruhle, Adam Johnson and Alix Steel on Bloomberg Television’s “Lunch money.
Sep 7 (Reuters) — Gold raced to a six-month high on Friday, heading toward $1,730 per ounce, after U.S. jobs growth slowed more than expected in August, possibly paving the way for the Federal Reserve to announce additional stimulus for its sluggish economy.
Gold bulls went on the offensive after the numbers showed nonfarm payrolls increased only 96,000 last month, below expectations for a 125,000 rise.
“Gold is going through the roof because this negative data makes QE3 more likely now,” said Daniel Briesemann, commodities analyst at Commerzbank in Frankfurt.
“There is a chance that Bernanke will announce QE3 already next week, that means pumping more money into the market so gold becomes a more attractive investment due to inflation fears.”
The market had seen giddy price action on Thursday, rushing to its loftiest since early March after the European Central Bank unveiled a new and potentially unlimited bond purchase plan to lower borrowing costs of debt-laden nations, in the latest effort to fight the euro zone debt crisis.
Central bank cash printing raises the inflation outlook and adds to gold’s attraction as a hedge against rising prices.
Sep 7 (MarketWatch) — And even though the unemployment rate fell to 8.1% from 8.3%, the decline was due to a smaller labor force, not more jobs. Twelve million Americans are looking for work, and another 7 million want a job but aren’t even looking.
Other details of the report were equally discouraging: Weekly earnings have fallen two months in a row and have risen just 2% in the past year, only slightly faster than prices have risen.
That’s a tragedy for the American people, and it’s frustrating for the leaders in Washington who are supposed to help the economy move at full stream.
No one can be satisfied with this economy.
The decision by the Fed to buy more government bonds from investors (also known as QE3) could come as early as next week. Last month, the Fed policy committee said that it would act unless it saw significant and sustainable acceleration in job growth.
JK Comment: Gold’s $30+ rally today is indicating the same sentiment….
7 Sep (MarketWatch) by Brett Arends
According to the World Gold Council, Russia has more than doubled its gold reserves in the past five years. Putin has taken advantage of the financial crisis to build the world’s fifth-biggest gold pile in a handful of years, and is buying about half a billion dollars’ worth every month.
But there’s another way to look at gold: As the most liquid reserve in times of turmoil, or worse.
On the other hand, we may be about to enter a much more turbulent and dangerous era of power politics and international competition.
Not long ago, world gold reserves were mainly in the hands of the U.S. and the Europeans, which accumulated their holdings during their centuries at the top. The U.S. has 75% of its currency reserves in gold. Many other first world powers have comparable proportions.
But that’s beginning to change. According to the World Gold Council, China, Saudi Arabia and Russia are now in the top five. Western European countries have been selling gold. If the current financial crisis gets any worse, they may yet sell more.
Emerging markets have been buying. In most cases, gold remains a very small percentage of their total reserves. China, despite its recent buying, holds less than 2% of its currency reserves in gold.
But you have to wonder how long emerging countries will want to hold their reserves in any currency that is controlled by someone else. Vladimir Putin clearly doesn’t want to. Gold now accounts for 9% of Russia’s reserves, and that figure is rising.
6-Sep (Bloomberg) — Gold futures rose to the highest since March as European Central Bank President Mario Draghi said policy makers agreed to an unlimited bond-purchase program to help stabilize the region, boosting demand for the metal as a store of value.
Draghi said the ECB will have a “fully effective backstop to avoid destructive scenarios with potentially severe challenges for price stability in the euro area.” U.S. jobless claims declined last week and companies added more workers than forecast in August, reports showed today before monthly payrolls data tomorrow. In August, gold jumped 4.5 percent, the most since January, on speculation that the Federal Reserve and the ECB will increase steps to bolster their economies.
“Expectations of inflation rising after Draghi’s statements are supporting gold,” Adam Klopfenstein, a market strategist at Archer Financial Services Inc. in Chicago, said in a telephone interview. “Tomorrow’s jobs data will be crucial as that will be one of the leading indicators about the health of the economy.”
Gold futures for December delivery gained 0.6 percent to $1,703.50 an ounce at 9:59 a.m. on the Comex in New York, after earlier jumping to $1,716.90, the highest for a most-active contract since March 12.
Gold will be at $1,840 by the end of 2012, Jeffrey Currie, head of commodities research at Goldman Sachs Group Inc., said in a Bloomberg Television interview today.
Sep 6 (MarketWatch) — Gold futures added to gains Thursday after European Central Bank President Mario Draghi detailed a plan to buy bonds from struggling euro-zone countries.
Gold futures for December delivery GCZ2 +0.80% rose $10.50, or 0.6%, to trade at $1,704.50 an ounce on the Comex division of the New York Mercantile Exchange.
6-Sep (MarketWatch) — European Central Bank President Mario Draghi on Thursday said the central bank is prepared to buy government bonds in unlimited quantities in order to eliminate harmful distortions in financial markets fueled by fears of a euro breakup, but reiterated that participating countries must promise to abide by strict conditions.
The new Outright Market Transactions, or OMT, program “will enable us to address severe distortions in government bond markets which originate from, in particular, unfounded fears on the part of investors of the reversibility of the euro,” Draghi told reporters at his monthly news conference.
The OMT will allow the central bank to buy government bonds with maturities of one to three years in unlimited quantities, though purchases will be “sterilized,” or offset by draining an equivalent amount of money from the financial system, in order to avoid a potential rise in the money supply.
“The ECB’s insistence to sterilize the bond purchases means the ECB can only buy bonds as long as demand for euro T-bills remains,” Zangana said in emailed comments. That’s because the ECB absorbs the extra liquidity put into the financial system by its bond purchases by selling T-bills.
“If demand dries up, as it did [under the ECB’s previous bond-buying program] at the start of the year, then the bond purchases would be halted,” Zangana said. “In that sense, Draghi may be overreaching when he said the ECB would ‘backstop’ the monetary union.”
Draghi also stressed that the ECB would withdraw bond-buying support for countries that fail to abide by terms of the conditions attached to help.
Unlike the previous bond-buying program, known as the Securities Market Program, the ECB will publish a detailed monthly breakdown of the duration of bonds purchased and what country they come from. Under the SMP, the ECB only published the total amount of bonds purchased.
JK Comment: Here we go…….
Financial Post (Sept 5) — The price of gold is expected to increase over the next four months as investors demand a safe haven amid concerns over a euro-zone break up according to a new report from Capital Economics.
“We would continue to emphasize that our forecast of a rise in price to $2,000 per. oz by year-end does not rely on the launch of a third round of qualitative easing (QE3). Rather it is mainly based on an exception that a break up of the euro-zone will boost the demand,” said economist John Higgins.
JK Comment: So if gold’s rise to $2000 doesn’t depend on QE3, what will happen to the price if Bernanke does press forward? The specter of combined European and US easing is certainly creating a bigger, perhaps even a ‘perfect’, storm for gold. Maybe it is the fact that gold doesn’t ‘need’ QE3 to get to $2000, yet QE3 seems like such a strong possibility, that is prompting a spike in $2000 price predictions/expectations:
Here’s a few…….
Merrill Lynch
Economist Shayne Heffernan
Afshin Nabavi, head of trading at MKS Finance
Marketwatch (Sept 4) — Wake up gold bugs, your time has arrived. Dust off your prospecting equipment because it is time to look for some investments.
You’ve survived naysayers. You’ve survived a sizeable rally in the U.S. dollar. And you even survived what should have been the final nail in the coffin when the market made a significant technical breakdown in May.
Kudos.
And late last month, things started to get exciting as gold moved above the top of the giant triangle pattern that contained it since September of last year. At the time of this writing in late August, it was not yet a significant breakout, but it was a breakout nonetheless.
Marketwatch (Sept 5) — The euro erased a loss versus the U.S. dollar Wednesday after a news report said European Central Bank policy makers would consider buying distressed government bonds in unlimited quantities, but would sterilize the purchases in order to ease worries about boosting money supply.
Under a blueprint to be considered by the ECB at its Governing Council meeting on Thursday, the bank wouldn’t set a public cap on yields, but would pledge to buy unlimited amounts of government debt that would be sterilized, Bloomberg News reported Wednesday.
Sterilization refers to the practice of draining an equivalent amount of reserves from the financial system in order to prevent growth in the money supply.
JK Comment: Just as the Federal Reserve is considering implementing its own version of ‘unlimited QE’, the ECB is now adding the ‘unlimited’ tag to its bond buying plans.
Silver ended the month of August up an impressive 13.2%, and follow-on gains early in September has put the white metal above $32 for the first time since April. Gold by comparison — the far larger, more liquid of the precious metals — posted a monthly gain of 4.8% for August.
The two markets tend to be pretty tightly correlated, but I often look to the gold/silver ratio for technical clues. Given the aforementioned August price action, the fact that the ratio has retreated from the upper 50s to the low 50s in recent weeks should come as no surprise. It now takes fewer ounces of silver to buy an ounce of gold. I view this as a generally positive harbinger for the precious metals complex as silver tends to lead when inflation expectations are on the rise. While both gold and silver have performed admirably in the recent deflationary environment, the precious metals really perk up when inflation expectations do.
The national average gasoline price hit a new Labor Day record of $3.83 a gallon on Monday, besting the old record of $3.69 a gallon from 2008. Meanwhile food commodity prices continue to soar as a result of the drought affecting much of the United States. On top of that, it appears that both the Fed and the ECB are on the verge of even more accommodative monetary policy, which is further stoking inflation expectations.
Please note: I am on vacation for the remainder of this week, and will return with new morning reports next Monday.
04-Sep (Bloomberg) — European Central Bank President Mario Draghi said the bank’s primary mandate compels it to intervene in bond markets to wrest back control of interest rates and ensure the euro’s survival.
Mounting his strongest case yet for ECB bond purchases, Draghi told lawmakers in a closed-door session at the European Parliament in Brussels yesterday that the bank has lost control of borrowing costs in the 17-nation monetary union. Bloomberg News obtained a recording of his comments, some of which were published by Italian news agency AGI yesterday.
“We cannot pursue price stability now with a fragmented euro area because changes in interest rates affect only one country, or two countries at most,” Draghi said. “They have no importance whatsoever in the rest of the euro area.”
[source]
Monetary Policy Expectations and Technicals Underpin Gold
04-Sep (USAGOLD) — Gold continues to edge higher, establishing new 25-week highs and threatening to regain the $1700 level for the first time since March. A weak US manufacturing ISM print for August in conjunction with a July construction spending miss have further amplified Fed easing expectations. Those expectations are already running quite high in the wake of last Friday’s speech by Fed chairman Bernanke at the Jackson Hole Symposium.
While some doubts remain as to what new measures might be employed by the ECB when they announce policy on Thursday, the general consensus seems to favor a resumption of their bond buying program. The Germans remain opposed to this approach, as the ECB is not suppose to be in the business of financing governments. The German Constitutional Court is slated to weigh in on this matter next week.
The technical picture as outlined in my commentary on 09-Aug and updated on 29-Aug remains broadly constructive with initial measuring objectives nearly attained, but the potential suggested by the larger symmetrical triangle shows possible further upside.
03-Sep (New York Times) — It is, Julio Vildosola concedes, a very big bet.
After working six years as a senior executive for a multinational payroll-processing company in Barcelona, Spain, Mr. Vildosola is cutting his professional and financial ties with his troubled homeland. He has moved his family to a village near Cambridge, England, where he will take the reins at a small software company, and he has transferred his savings from Spanish banks to British banks.
“The macro situation in Spain is getting worse and worse,” Mr. Vildosola, 38, said last week just hours before boarding a plane to London with his wife and two small children. “There is just too much risk. Spain is going to be next after Greece, and I just don’t want to end up holding devalued pesetas.”
…“It’s sad,” he said. “But I just don’t think there is a future for me in Spain right now.”
[source]
03-Sep (Financial Times) — The head of the Swiss National Bank has vowed to continue its policy of halting rises for the franc against the euro and has warned that a stronger currency would be a “substantial threat” to Switzerland’s export-dependent economy.
Thomas Jordan, in a speech in Zurich on the challenges for Switzerland as a financial centre, warned of the negative effect of the eurozone crisis and the damage to the Swiss economy that a stronger franc could create.
“In the current situation, a further appreciation of the Swiss franc would constitute a very substantial threat to the Swiss economy and would carry with it the risk of deflationary developments,” Mr Jordan said.
“With this in mind, we will continue to enforce the minimum exchange rate with the utmost determination.”
[source]
PG View: But when the SNB forces the franc lower, it is simultaneously forcing another currency (in this case the euro) higher. And there’s the rub; Europe’s collective economy is very dependent on exports as well and they would love a weaker currency too. This is how a currency war gets started. So, where’s the push to label the Swiss currency manipulators?
02-Sep (Bloomberg) — Federal Reserve Chairman Ben S. Bernanke says the U.S. economy is “far from satisfactory.” His colleagues are moving to embrace policies that will stay in place until he’s satisfied.
Four Fed presidents have come out in favor of an open-ended strategy for bond buying, with three calling for the program to begin now. Rather than specify a fixed amount of bonds to purchase by a certain date, such a strategy would leave the Fed able to announce a pace of purchases that it could adjust as the economy gets closer to Bernanke’s goals.
“You would be able to react to the incoming data in an incremental way and not be in a situation where you have to either drop the bomb or do nothing,” St. Louis Fed President James Bullard said in an interview last week during the Fed’s annual monetary policy symposium in Jackson Hole, Wyoming.
…Such a program would be more effective because it “would emphasize the unlimited nature of the Fed’s balance sheet and that they’re willing to do as much as necessary.”
[source]
03-Sep (USAGOLD) — Gold remains well bid in the wake of last week’s solid gains. The yellow metal surged on heightened expectations in the wake of Ben Bernanke’s Jackson Hole speech, that the Fed is on the verge of additional accommodations. The move may come as soon as the next FOMC policy announcement on 13-Sep.
Early in August ECB chief Mario Draghi’s pledged that he was prepared to do “whatever it takes” to preserve the euro, assuring the world that whatever exceptional measures he had in mind would “be enough.” This assurance gave doubters just enough pause for policymakers across the eurozone to scatter for their normal three to four week August holidays. Ah, but holiday’s come to an end and while most of us return to way too many emails and voicemails that must be dealt with, EU policymakers return to a eurozone still teetering on the brink of economic calamity.
There are expectations that Draghi will announce a resumption of the ECB’s sovereign bond buying program on Thursday, as well as speculation as to whether the ECB will at some point use its new powers to grant the ESM bailout facility a bank license. Of course, Germany’s Constitutional Court must still rule on whether or not Germany can legally participate in the permanent bailout fund. That’s not supposed to happen until next week.
In a Reuters article, UniCredit’s chief economist said, “If they were to surprise us by striking down Germany’s participation, I would think it’d be an utter bloodbath in markets.” Such a move would indeed be a surprise, as few expect the court to outright reject the ESM.
It seems fairly certain though that any new ECB or bailout facility largesse to financially troubled member states will have many more strings attached. This may prevent these nations from asking for assistance in a timely manner, requiring even greater aide — and commitment to even greater conditions — as a result. Conceivably one might even wait until it’s too late, and they are un-savable.
Amid all of this political and policy uncertainty, there is an unmistakable bias that the central banks will do what they perceive is necessary to prevent broad-based market turmoil. This should help keep gold underpinned.
• US and Canadian markets closed in observance of Labor Day holidays.
• Switzerland retail sales (real) +3.2% y/y in Jul, vs negative revised +3.3% y/y in Jun.
• Switzerland SVME Manufacturing PMI fell to 46.7 in Aug, vs 48.6 in Jul.
• Eurozone Markit Manufacturing PMI revised to 45.1 for Aug, vs 45.3 previously; France and Germany revised lower as well.
• Italy Markit Manufacturing PMI fell to 43.6 in Aug, vs 44.3 in Jul.
• UK CIPS Manufacturing PMI rose to 49.5 in Aug, above expectations of 46.0, vs negative revised 45.2 in Jul.
• South Korea CPI +1.2% y/y in Aug, vs +1.5% in Jul.
• Australia TD-MI Inflation Gauge +0.6% in Aug, vs +0.2% in Jul.
• Australia retail trade -0.8% in Jul, vs positive revised +1.2% in Jun.
• China HSBC/Markit Manufacturing PMI fell to 47.6 in Aug, vs 49.3 in Jul.
03-Sep (Financial Times) — Only a quarter of Germans think Greece should stay in the eurozone or get more help from other countries in the currency union, a Financial Times/Harris poll has found.
The overwhelming verdict highlights Angela Merkel’s domestic dilemma as she comes under pressure in Europe to agree more time or money for Greece to get its €174bn second bailout back on track.
[source]
by Martin Feldstein
9/03/12
“Inflation is now low in every industrial country, and the combination of high unemployment and slow GDP growth removes the usual sources of upward pressure on prices. Nevertheless, financial investors are increasingly worried that inflation will eventually begin to rise, owing to the large expansion of commercial bank reserves engineered by the United States Federal Reserve and the European Central Bank (ECB). Some investors, at least, remember that rising inflation typically follows monetary expansion, and they fear that this time will be no different.
Investors have responded to these fears by buying gold, agricultural land, and other traditional inflation hedges. The price of gold recently reached a four-month high and is approaching $1,700 an ounce. Prices per acre of farmland in Iowa and Illinois rose more than 10 per cent over the past year. And the recent release of the US Federal Reserve Board’s minutes, which indicate support for another round of quantitative easing, caused sharp jumps in the prices of gold, silver, platinum and other metals.”
01-Sep (Economist) — SOMEBODY must have put on the wrong film. In late July Mario Draghi, president of the European Central Bank, came out looking like a tough sheriff ready to take on bond-market speculators while others cringed. The euro was irreversible, he declared. “The ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough.”
Yet instead of a great shoot-out, Mr Draghi later said he was mulling only a limited holding action. And now he has ducked out of sight, cancelling his appearance in cowboy country this weekend at the annual get-together of central bankers in Jackson Hole, Wyoming. Gary Cooper would never have cried off because of his “heavy workload”.
With the power to create money, Mr Draghi owns the biggest gun of all.
[source]
PG View: It’s a ‘big gun’ to be sure, but Germany seems inclined to withhold the ammo…
Gold Surges on Heightened QE Expectations
31-Aug (USAGOLD) — Gold charged to 22-week highs on indications from Fed chairman Bernanke that fresh accommodations were in the offing. Bernanke’s Jackson Hole speech was widely expected to be less than revealing in advance of the September FOMC meeting, but the contents were broadly interpreted as saying further Fed measures were all-but assured.
Bernanke expressed particular concern about the unemployment rate, reiterating the Fed’s “mandated objectives of maximum employment and price stability.” With inflation seemingly in check, at least as measured by CPI, the implication was that the Fed would move in an effort to bring down the jobless rate. Bernanke went on to say that, “Unless the economy begins to grow more quickly than it has recently, the unemployment rate is likely to remain far above levels consistent with maximum employment for some time.” To fulfill their mandate, the Fed is obliged to try and do something to prevent that.
The chairman expressed some concern that a further ballooning of the Fed’s balance sheet would result in a loss of “public confidence” in the central bank’s ability to withdraw accommodations at the appropriate time, which sparked a brief intra-speech sell-off in gold. However, let’s be honest here, the Fed probably hasn’t seriously thought about exit strategies since the Obama administration declared “recovery summer” in 2010.
The yellow metal appears poised to confirm a monthly gain of more than 4.5% for August. Nearly 61.8% of the decline from 1790.64 (29-Feb high) to 1526.80 (16-May low) has now been retraced. A short-term break of this Fibonacci level at 1692.32 would offer further confirmation that the influence of the long-term secular bull market in gold are returning to the fore.
30-Aug (Financial Times) — Is it time for some eurozone governments to start selling that metaphorical family silver? Or, more specifically look at their all-too-real gold reserves, to find a solution to Europe’s crisis?
That is a question which has recently been buzzing around in some policy making and investing circles. For as autumn looms, it is clear that the eurozone remains under profound stress. However, it is also unclear whether the European Central Bank – let alone the eurozone politicians – will really be able to do anything soon to ease market fears and lower those borrowing costs.
Thus, as unease builds, the World Gold Council – or the body that represents the gold industry – has recently lobbed a new idea into the fray: it thinks it is time for eurozone governments to start using gold in a creative manner, particularly in places such as Italy, to cut those interest rates.
[source]
PG View: While the WGC reminds us that “The gold holdings of the crisis-hit eurozone countries (Portugal, Spain, Greece, Ireland and Italy) represent only 3.3 per cent of the combined outstanding debt of their central governments,” I would stress that that is true at these prices.
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Author key: MK - Michael J. Kosares; GC - George Cooper; PG - Peter A. Grant; JK - Jonathan Kosares The opinions posted by all guests at this forum are expressly their own and do not necessarily represent the views of the management or staff of USAGOLD - Centennial Precious Metals. The hosting of this forum shall therefore not be construed as equivalent to endorsement by USAGOLD - Centennial Precious Metals of any of the opinions posted here. Permission to reprint is hereby granted where the USAGOLD name is cited along with our web address, mailing address and phone number. For electronic reproductions, citing the post heading and the http://www.usagold.com/cpmforum/ website address as the source is sufficient. Saturday September 8 |
