Gold and What Moves it.

Falling prices helped to drive up consumer demand for gold and silver jewelry. This demand climbed higher across the globe including in the U.S. (+22%), India (+27%) and China (+20%).

By Jason Hamlin
Global gold demand for the first quarter of 2013 declined both in terms of tonnage (-13%) and dollars (-16%).

The volume decline was driven primarily by 177 tonnes of outflows from ETFs, versus inflows of 53 tonnes last year. If we remove this component from the mix, total global demand actually increased by 8% during the first quarter.

It is somewhat odd to see that investment demand in the form of bars and coins climbed by a healthy 10.3%, while ETF investment demand turned negative and total holdings dropped by over 7%. Some of this divergence can be explained by investors exiting paper positions in precious metals in favor of taking possession of the physical metal. This decision stems from a growing distrust of the banks and financial institutions that act as custodians for the popular gold and silver ETFs. Many precious metals investors do not believe that the funds actually hold all of the physical to back up the paper claims. ...

Gold extraction grew by 6.34 per cent to 29.33 tons, while gold output from scrap and waste processing rose 5.87 per cent to 2.036 tons.

MOSCOW(BullionStreet): World's fourth largest gold producer, Russia refined 35.235 metric tons of gold in January-March 2013, up 4.37 per cent from a year earlier.

According to Russian Gold Industrialists Union the output also included gold extracted by gold miners and gold from the associated output of non-ferrous metals. ...

Analysts said premiums on physical gold eased due to some supply from bullion importing agencies.

NEW DELHI(BullionStreet): Two days after hitting as high as $20 an ounce, gold margins have come down to $5 an ounce in Indian markets Thursday.

Analysts said premiums on physical gold eased due to some supply from bullion importing agencies. Nominated agencies like MMTC, State Trading Corp. and PEC are controlled by the trade ministry.

Indian authorities have been taking steps to lower the demand for gold as part of their efforts to reduce the country's trade and current-account deficits.

The government increased the import tax on the metal to 6% from 2% over the last year-and-a-half hoping that it would increase prices for local buyers and in turn reduce demand. ...

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 ...

Is the coming financial collapse going to be inflationary or deflationary?  Are we headed for rampant inflation or crippling deflation?  This is a subject that is hotly debated by economists all over the country.  Some insist that the wild money printing that the Federal Reserve is doing combined with out of control government spending will eventually result in hyperinflation.  Others point to all of the deflationary factors in our economy and argue that we will experience tremendous deflation when the bubble economy that we are currently living in bursts.  So what is the truth?  Well, for the reasons listed below, I believe that we will see both.  The next major financial panic will cause a substantial deflationary wave first, and after that we will see unprecedented inflation as the central bankers and our politicians respond to the financial crisis.  This will happen so quickly that many will get "financial whiplash" as they try to figure out what to do with their money.  We are moving toward a time of extreme financial instability, and different strategies will be called for at different times.

So why will we see deflation first?  The following are some of the major deflationary forces that are affecting our economy right now... 

In the aftermath of continued propaganda from the Federal Reserve, today King World News spoke with one of the top economists in the world about what the Fed is really planning.  Michael Pento spoke candidly about the frightening situation the US faces and how the Fed is trapped, despite mainstream media and Fed misinformation. 

... “The stupidity of the Federal Reserve is so blatant here.  In 2007 the Federal Reserve took interest rates to 5 1/4%, and the economy cratered because we had $48 trillion in debt, and a Debt/GDP ratio of 353%.  Interest rates rose and the economy cratered. 

We were entering a Great Depression.  Bernanke lowered interest rates to 0%, and debt increased all the way up to $54 trillion.  So why would anybody believe, Mr. Tepper or anybody else, that if the Federal Reserve stopped buying all of our issued debt, if they started to raise interest rates and unwound their balance sheet, and rates went anywhere near 5%, why wouldn’t the same thing happen again?  ...

Norcini has been stunningly accurate in his predictions of the movement in the gold and silver markets.  Now the acclaimed trader discusses these incredibly important developments in key markets:  “Yesterday was one of those days in which the Chairman of the US Federal Reserve made a point of saying everything he needed to say in order to cover all of the bases.  No matter who was listening they were sure to hear what they wanted.  

He had to let the market know that the Fed was mindful of not pulling the plug on the QE program too soon.  He chose those words to start his talk.  The effect was immediate – the precious metals markets roared to life and stock markets shot to yet another all-time high.  Even crude oil did its upward levitation act by surging higher on those initial comments....

Top Citi analyst Tom Fitzpatrick’s team sent King World News three extraordinary gold charts illustrating why gold is headed for a massive $2,000+ gain from current levels.  KWN is pleased to share this information with with our global readers.  Below is what top Citi analyst Fitzpatrick’s team had to say along with three very powerful charts.

Fitzpatrick’s Team:  “On a medium-to-long-term basis we remain very bullish on Gold.  However, it remains too early to call this correction lower as over, and we still believe that a lower low close to $1,260 can be seen.  If so, we suspect that will be a platform for a much higher move in the months and indeed years ahead.  The Equity market may also be instrumental in this story.

That low (in gold) was hit at $682 in October 2008, and within 3 years Gold had rallied to $1,921.  A similar fall and rally would see Gold at $1260 near-term and then above $3,500 by 2016.  That $3,500 number resonates with us for a number of reasons.  When Gold rallied in 1970-1980, it went from $35 to $850 (It multiplied over 24 times). ...

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. ...