Gold and What Moves it.

by Cecilia Jamasmie:

US Federal Reserve Bank Chairman, Ben Bernanke, seems to be sticking to his monetary policy as he showed no signs of the Fed ending its bullion-friendly bond buying program any time soon, as his opening statement reads.

The document, released to the media a couple of hours ahead of his testimony in front of Congress, indicates the Fed’s monetary stimulus is helping the U.S. economy recover, as the high costs of unemployment and inflation continue to run below the central bank's target.

"Monetary policy is providing significant benefits," Bernanke says in his testimony, reiterating that the Fed was prepared to either increase or reduce the pace of its bond buys based on economic conditions.

“In particular ...

Weakening investor sentiment towards gold has caused many market participants to question the sustainability of the bull-run.

LONDON(BullionStreet): Barclays said it expects recovery on gold as fabrication demand such as jewellery, industrial and dental demand particularly from India and China will likely pick up.

Barclays revealed “Compass”, the Wealth and Investment Management monthly research dedicated to providing investment advice and recommendation to investors across the globe.

Furthermore, we do not envisage any change in centralbank buying activity (which accounts for approximately 10% of total demand). While there could be some sales, we are of the view that central banks will likely remain net buyers, overall, this year.

But with much uncertainty in the gold market at present, prices will likely be rangebound as investors grapple with the recent fragility of the market. Although ETF holdings have ...

On the heels of recent volatility in the gold and silver markets, the Godfather of newsletter writers, Richard Russell, writes about a worrying situation he hasn’t seen in his six decades in this business.  Russell also discusses gold and silver, stocks, bonds, the Fed, and where the mining shares are headed.

Richard Russell: “To be honest, I'm outright bullish on the market myself.  Strange, I woke up Sunday morning with this dream.  Bear markets are meant to clean out the financial garbage, and put the fear of God into investors and politicians.  The crash of 2008-09 failed to do that, mainly because the Fed stepped in and reputedly saved the US and the world from disaster.

Furthermore, bear markets are supposed to put the fear of God into just about everyone.  The crash of 2008-09 failed to dampen the speculative ardor of a good many investors.  Here we are, about 5 years after the 2008-09 crash, and speculative juices are back again.

Here's my fantasy -- the stock market opens one morning, and there are absolutely no bids.  Unexplainably, everyone is frightened at the same time, and everyone ...

Stephen Leeb tells Eric King:

If we look at the Middle-East, you have Russia sending missiles to protect Syria against blockades and no fly zones.  It also suggests that Russia will do the same for Iran.  Of course all of this has to do with oil.  Since 2007 the Russian economy has been a mess and it is in Russia’s best interest to keep the oil prices elevated.  Continued uncertainty in the Middle-East feeds into that objective.

While this may be bad news for the world, it’s certainly good news for gold.  Higher oil is good for gold, and so is continued economic uncertainty.  Right now the West is doing everything it can to keep gold from being recognized as a currency.  But as soon as gold becomes recognized as a currency, not just a de facto currency but a real currency, it’s game over for the US dollar.

So this is what the West is fighting.  Earlier today ...

“We don’t have to worry about a recession — we are in a depression,” says James Rickards.

“If you take the classic definition of a sustained, long-term downturn with economic growth below trend, then we are in the midst of a depression,” says the senior managing director of Tangent Capital and author of “Currency Wars.”

Rickards doesn’t see Fed Chairman Ben Bernanke as having the solution to the economic malaise gripping the county.

“Bernanke’s not a trader, so doesn’t think like a trader; he has no exit plan,” Rickards points out.

With quantitative easing, Bernanke has put on a $3 trillion trade, and while some governors on the Federal Reserve believe he should pare back the $85 billion monthly injections, no one is saying the Fed should reverse course.

“There’s a good possibility I may never see another rate hike in my lifetime,” says Rickards. ...

The Board said it would be difficult for the gold price to go down for five years, because gold is not only held as a reserve it is also a speculative commodity.

BANGKOK(BullionStreet): Thailand's National Economic and Social Development Board said decline in the global gold price will be only temporary and comes on the back of speculation that Italy and other countries in Europe could sell gold reserves for debt repayment.

The Board said it would be difficult for the gold price to go down for five years, because gold is not only held as a reserve it is also a speculative commodity.

The current decline in its price was because some countries in Europe have insufficient cash reserves to make debt repayments. ...

George Soros, John Paulson, and Steve Cohen, who in aggregate control over $60 billion dollars, have been aggressively buying the most speculative vehicles associated with gold: call options on gold mining stocks.

Hong Kong and Singapore buyers are paying premium of $5 per oz for a gold bar. Dubai buyers are paying a premium of $7-10 per Kg. Turkey was reportedly paying a premium of $25 an oz over London price.

By Manisha Gupta
Gold has seen a lot of physical buying interest as its price witnessed the sharpest fall in last four years. Hedge funds have made record shorts in gold trade.

Reports that George Soros has cut his holdings in the past quarter are also putting pressure on the prices. And there is another report from Goldman Sachs predicting more declines in the near term. The regional presidents at the US Federal Reserves, who are asking for reduction in stimulus, are also keeping investors jittery. 

Gold prices have declined 19% in the current calendar year.

While paper gold is getting liquidated and the ETFs are seeing redemption, interest in physical gold has picked up. The demand is so strong that now investors have to pay a premium to buy physical gold. The delivery comes with a waiting period. ...

According to Xinjiang Geology and Mineral Resources Bureau, with gold reserves of at least 53 tons, the mine in Xinyuan county in the Ili Valley is expected to have an economic value of 20 billion yuan ($3.2 billion).

BEIJING(BullionStreet): World's largest gold producer China discovered yet another large gold mine in the Xinjiang province.

According to Xinjiang Geology and Mineral Resources Bureau, with gold reserves of at least 53 tons, the mine in Xinyuan county in the Ili Valley is expected to have an economic value of 20 billion yuan ($3.2 billion).

Covering a length of 3 km and depths of 60 to 300 meters, the mine also holds 31,200 tons of copper, said the Bureau. ...

Quantitative Easing: The New American 'High'

Hello, 
Is there anybody in there? 
Just nod if you can hear me 
Is there anyone home? (Comfortably Numb – Pink Floyd)

The stock market has now reached a place where no market has gone before and yet very few Americans understand the level of Federal Intervention that has gotten us here. We are being “eased” ladies and gentlemen with waves of “quantitative” cash intended to stimulate spending, lending and investment.

In four Quantitative Easing events since 2008, the Fed has credited its own account to purchase Treasury bonds and bank CD’s to juice Money Markets to record levels. The theory is that a flood of liquidity will encourage lending institutions to give money more freely while also boosting the markets and making us all feel incredibly comfortable and astonishingly numb.

This delusion of prosperity has literally kept the good times rolling and the champagne corks popping on Wall Street where investment bankers are riding high and investors are eagerly embracing a cavalier “eggs in one basket” approach to their retirement and savings accounts.

The Fed knows all too well that markets are driven by cash and confidence and that the rally-hungry populace will slurp up short-term gains with reckless abandon. But they also know ...

Tyler Druden Concludes:

... Perhaps the biggest insult here to sentient creatures everywhere, is that people have now become merely lab rats in the greatest behavioral conditioning experiment of all time, not only as regards to buying stocks on both bad and good news, or any utterance out of Bernanke's mouth, but an experiment designed to force everyone to simply stop thinking logically - the logic being that since every central bank is engaged full bore in reflating everything, than the economy left on its own is simply horrendous ...

This doesn’t make it easy to understand for investors who bought gold stocks and have now seen them go down in price…

But while the prices of gold stocks have pulled back significantly this year, demand for physicalgold bullion has gone through the proverbial roof.

The U.S. Mint had to halt the sales of its most-sold 1/10-ounce gold bullion coin. In Australia, the Perth Mint is working in overdrive to fill rising orders. The British Mint reports British consumers’ buying of gold has accelerated as well.

In the first quarter of 2013, total demand for gold bullion from ...

Ed Steer writes:

All we can do is wait it out.

At the moment, gold and silver prices are miles below their current 20-day moving averages...the first moving average of any consequence [according to Ted] as far as the mega-short technical funds are concerned.  But sooner or later it will be pierced, either by price action or the passage of time, and then the technical funds who use this average as a target, will start heading for the exits.

Full ore production in the mine is expected in November 2013, when gold will be produced at an average rate of 110,000 ounces per annum.

PERTH(BullionStreet): Closing in on Barrick Gold's Yilgarn South group of mines, the 89 percent Zijin-owned Norton Gold Fields, Ltd. opened its latest open cut gold mine, Enterprise in Western Australia's Pilbarra.

Norton Gold Fields is also looking to acquire gold assets and this could include assets put up for sale by Barrick Gold Corp in Western Australia.

Analysts said this is a triumph of the symbiotic partnership between the Fujian-based Zijin and its Australian partner Norton, as shared knowledge and expertise literally prove their worth in gold.

The move suggests that forward looking Chinese operations with low cost capital and high technological capacities are stepping up activity ...

What is going to happen when the greatest economic bubble in the history of the world pops?  Themainstream media never talks about that.  They are much too busy covering the latest dogfights in Washington and what Justin Bieber has been up to.  And most Americans seem to think that if the Dow keeps setting new all-time highs that everything must be okay.  Sadly, that is not the case at all.  Right now, the U.S. economy is exhibiting all of the classic symptoms of a bubble economy.  You can see this when you step back and take a longer-term view of things.  Over the past decade, we have added more than 10 trillion dollars to the national debt.  But most Americans have shown very little concern as the balance on our national credit card has soared from 6 trillion dollars to nearly 17 trillion dollars.  Meanwhile, Wall Street has been transformed into the biggest casino on the planet, and much of the new money that the Federal Reserve has been recklessly printing up has gone into stocks.  But the Dow does not keep setting new records because the underlying economic fundamentals are good.  Rather, the reckless euphoria ...

April 23 (Bloomberg) -- Ron Paul, Former Congressman from Texas, discusses his views on gold, central banks, and the weakened Republican Party. He speaks on ...

... Just as one can never trust the mainstream media to report any truth about the real reasons behind the rapidly growing economic suffering of people all over the world, one can never trust the mainstream media to report any truth about gold and silver markets as well. This is the point of this article. If you develop your beliefs about gold and silver by sourcing mainstream media news, everything you believe about gold and silver will always be wrong.

Here is a portion of the text from a Reuters article released early yesterday, with an obvious anti-gold bias filled with many lies: “Gold fell on Tuesday for the eighth of nine sessions, hurt by a firm dollar and persistent outflows from exchange-traded funds, pointing to more downside pressure on the metal…Gold has been hit by a ...

Platinum is a precious metal, as is palladium, though to a lesser degree. However, like silver, both are also industrial metals. Unlike silver, it's their industrial use that is the primary price driver for both platinum and palladium – and that use is undergoing a fundamental shift.

The largest source of demand for platinum and palladium is the automotive industry, for use in autocatalysts. In turn, the fortunes of the auto industry are sensitive to the health of the world's major economies. We've been bearish on platinum-group metals for years, primarily because we weren't convinced a healthy – much less roaring – world economy could be sustained when so many governments continue spending beyond their means.

We reconsidered the market last year, when strikes in South Africa – home to 75% of global platinum production and 95% of known reserves – threatened supplies. But as we wrote last December, the strikes ended without great impact on long-term supply.

Since then, however, the fundamentals of this market have changed. Others may disagree with our economic outlook, which is still bearish, but it's due to supply issues ...

By now everyone who follows the metals pretty closely is aware of the stunning reversal the metals made today after the blatant smash in the silver market at yesterday evening's commencement of global electronic paper futures trading.  A massive number of silver contracts were sold into the Globex electronic trading system, taking the entire market by surprise and wiping out a whole series of stop-loss orders there set below the market.  The silver market was driven down $2.10 (9.5%) in less than 4 minutes.  It was without a doubt  the motivated, premeditated operation of someone who was trying to completely disrupt the silver market.  It was someone who was operating without any fear of being investigated by the market regulatory branch of the Government.

But a funny thing happened.  Once the initial shock had quickly worn off.  The market slowly moved higher the rest of the night.  By 10:00 a.m. Denver time, about 18 hours later, the price of silver was even with its Friday close.  Once that occurred, the market started to quickly run higher in frenzied short-covering.  As I write this, silver is up 2.4% from Friday's close and gold is up 2%.

So what happened?  To begin with, the enormous appetite for physical gold and silver was fueled even ...