Gold took a beating on Wednesday, amid media chatter about the mythical notion of tighter monetary policy from the Federal Reserve. Evidence for this appears no more convincing than at anytime since the start of the Fed’s QE programmes back in 2009, but that hasn’t stopped the speculation, with one trader telling WSJ that Wednesday’s Fed minutes were “concerning for commodities across t... read more
"We are well into the financial crisis. Everyone’s trying to keep it together, even though it would appear from the reading of the economy things are not going well at all here. And everyone's ignoring things.
But I think, in their hearts, the Central Bankers must know what they’re doing is totally irresponsible. And the tell of that irresponsibility – which is the debasing of the... read more
Since the end of December 2012 my firm has been writing about the coming bottom in precious metals. Our forecast for 2013 was to see a low in Q1 and then continued consolidation until the end of the summer in which gold could be in good position to break $1800. That forecast remains largely intact, although it appears the mining stocks will bottom quite a bit lower than we thought two months ag... read more
The past year has tested the worldview, and sometimes the sanity, of precious metals investors. But it has also given us another chance to load up at what might turn out to be dirt-cheap prices, says Carsten Ringler, managing director of German financial firm TASS Wertpapierhandelsbank GmbH. Here's an excerpt from a long conversation we had this week, in which he laid out the reasons for optimi... read more
The alarmist media always seeks to sell papers or broadcast ratings, built on the unswerving fear that followed the financial meltdown, the banking establishment profits from the debt liquidation panic. The lack of stability in fiscal confidence certainly abounds, but the schemes to paper over the mountain of liability obligations, develop at even a more rapid pace. The implied result of a real... read more
People are focusing on equities, so precious metals aren’t getting much attention.
The latest data from the World Gold Council shows the demand for gold has hit its lowest mark in three years. The council’s managing director, Marcus Grubb, has gone on record saying he doesn’t expect to see a spurt in demand this year.
But gold bugs? They’re a different breed.
Not only are they... read more
The Reasons for Gold Ownership
1. Asset Price Relativity
When we speak of asset prices we speak of them as if they are expressed in a fixed unit: the fiat currency we are used to dealing in. But fiat currencies are not fixed units. As an American I buy assets using dollars, and so it is easy for me to mistake the dollar for a fixed unit. However this is a mistake... read more
The financial markets have begun 2013 in remarkably similar fashion to how they began 2010, 2011 and 2012. In each of these preceding three years the average market participant became optimistic about global economic growth during the first quarter, leading to weakness in gold relative to the industrial metals. Here we go again.
As illustrated by the following chart of the gold/GYX ratio (GY... read more
The financial press is tossing the term “currency war” around with more abandon than partiers circulating punch at a New Year’s bash. Most commentators tell us we’re having such a war right now, though at least one denies it. James Rickards has published a book on the subject that’s become a hot seller. So what exactly is a currency war and why are nations engaging in it?
Wikipe... read more
Gold miners have responded to recent falls in the price by concentrating on the highest quality deposits, scrapping extraction of more marginal material. This will cause a "significant decline" in global production of gold, according to Angelos Damaskos, who runs the Junior Gold fund.
"A shift in gold market dynamics in the near future could result in a supply crunch," he said.
"Investors h... read more
