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Commodities Head for Biggest Quarterly Loss Since 2008

Posted on 01 October 2014 by VRS  |  Email |Print

Corn futures tumbled to a five-year low, gold is the cheapest since January and copper extended this year’s decline as raw materials posted their worst quarter since 2008. The Bloomberg Commodity Index fell as much as 1.5 percent today, the biggest intraday loss since June 2013.
U.S. corn inventories before the start of this year’s harvest were bigger than analysts forecast, the government said today. Holdings in bullion-backed exchange-traded products are near the lowest in five years amid waning investor demand………………………………………..Full Article: Source

India: Commodity super cycle turning downward, says RBI

Posted on 01 October 2014 by VRS  |  Email |Print

The Reserve Bank of India (RBI) has said global commodities prices have already touched inflexion points and are now on a downward path. The central bank’s statement is based on data on commodity prices, both energy and non-energy, for the past five decades. “Since 1894, four super cycles have been identified, with the last starting in the late 1990s and attributed to rapid and sustained industrialisation and urbanisation in China and other emerging economies,” RBI said.
In the latest commodity super cycle, inflation adjusted prices of commodities rose 60-500 per cent between 1999 and 2010. Oil price rose 467 per cent, metals 202 per cent and the prices of agricultural commodities 77 per cent, the steepest price increases among the four commodity super cycles (after adjusting for inflation)………………………………………..Full Article: Source

OPEC Fizzles: Caught Between a Rock and a Shale Boom

Posted on 01 October 2014 by VRS  |  Email |Print

Things just aren’t the way they used to be. Four decades ago, King Faisal of Saudi Arabia snapped his fingers and nearly brought the West to its knees. It happened in 1973, right after he met with Egyptian president Anwar Sadat and they agreed to use their oil as a weapon.
It worked… a little too well. I imagine my veteran readers can recall scenes like the one to the right. The effects were catastrophic as oil prices surged threefold. Faisal became Time’s Man of the Year a year later. Oh, how the times have changed. OPEC’s power has diminished substantially since the 1970s, and the tables are quickly turning………………………………………..Full Article: Source

Stay Liquid for the Coming Gold Boom

Posted on 01 October 2014 by VRS  |  Email |Print

I believe we have two different markets. One is an honest market for physical metal. The other is a market that has increasingly become less than honest. The latter is a paper market, primarily in London and New York, and it is used to muddy the waters of price discovery with gold and silver. This paper market price is assumed to be the real price of gold. I don’t think that’s true.
There is a need on the part of Wall Street, and the ruling elite within the Anglo-American empire, to keep people uninterested in honest money and real gold because dishonest enterprises must keep people from knowing the truth. What we have essentially is a fiat currency system that is devised to allow those in charge of the monetary system to profit at the expense of the real producers of wealth: the miners, the manufacturers, the farmers, the inventors………………………………………..Full Article: Source

Silver losing its luster?

Posted on 01 October 2014 by VRS  |  Email |Print

Silver continues to “lose its luster” as new highs in the U.S. Dollar again weigh heavily on the precious metals. Both silver and gold made new contract lows this morning in the December contract as the dollar continues to tear higher.
Provided the market continues to put in new contract lows, there’s not much that can be gained in terms of potential support targets by looking at the December chart and those looking for longer term support should consider using a continuous chart. There are a few structural points at 17.325 and 17.440 that could provide initial resistance to any corrective strength in the silver market………………………………………..Full Article: Source

Will gold fall off the $1200 precipice?

Posted on 29 September 2014 by VRS  |  Email |Print

As I write the gold price is sitting at around US$1225, but it fell at one time yesterday to around US$1206 and it may not take much to drive it down below the key US$1200 psychological support level. If it breaches this level the price could well fall sharply further with computer based stop loss sales coming in strongly. The fall could then become something of a rout.
And with gold bears like Jeffrey Currie at Goldman Sachs getting in there keen to generate further downwards momentum so his end- year US$1050 gold price might actually come about, then who’s to say it won’t freefall to US$1100 or below………………………………………..Full Article: Source

India: Driven by demand gold imports likely to double this October

Posted on 29 September 2014 by VRS  |  Email |Print

India’s gold imports are likely to double in October, driven by demand from consumers who purchase jewellery during the festival season. But investment demand, usually in the form of coins and bars, is likely to be less this year, which in turn may reduce the volume of gold entering the country through illegal routes, say industry executives.
The bullion industry pegs gold imports at 80 tonnes next month. “Last year during October, we had imported around 35-40 tonnes of gold. Gold availability was under pressure due to the 80:20 rule,” Prithviraj Kothari, vice-president of the Indian Bullion & Jewellery Association, told ET………………………………………..Full Article: Source

How Commodity Traders Are Making One Big Bet

Posted on 26 September 2014 by VRS  |  Email |Print

A number of years ago, I worked as an equity portfolio manager at a Commodity Trading Advisor that used trend following models. While I knew nothing about the specifics of their models, I knew that the traders next door appeared white-knuckled at the end of the day. Even though they were diversified across many different contracts, the trading system often steered them into a single big macro bet.
The bet might be characterized as a directional exposure to interest rates, or currencies, etc. It was then I realized that the application of trend following models on commodity, bond and currencies was picking up directional economic trends - but that’s another story………………………………………..Full Article: Source

Some Traders See Potential For ‘Severely Oversold’ Silver To Now Outperform Gold

Posted on 26 September 2014 by VRS  |  Email |Print

Some traders and analysts are wondering if the gold/silver ratio got out of whack after silver was beat up worse than gold during a recent downdraft in the two precious metals. If so, there might be potential for silver to now outperform or at least hold up better than the yellow metal going forward. Traders who share this view could try to exploit this in a ratio trade, they say.
Others, however, look for silver to keep underperforming as long as the precious metals complex remains in a downtrend. The gold/silver ratio measures how many ounces of silver it takes to buy an ounce of gold. As the ratio falls, it means silver is outperforming gold, and vice-versa………………………………………..Full Article: Source

A Rational Look At Gold

Posted on 26 September 2014 by VRS  |  Email |Print

The fundamentals that drive Gold prices higher are in full force and improving. Central banks are buying more of the precious metal — to reinforce their reserves — while countries that are known to be big consumers of gold bullion post increased demand. According to the India Bullion & Jewellers’ Association, India’s monthly gold bullion imports are expected to rise by as much as 50% in the coming few months — in the range of 70 to 75 tonnes per month compared to an average of 50 to 60 tonnes now.
That is mainly due to the festival/wedding season fast approaching in India. If India continues to import 70 tonnes of gold bullion each month, then the total imports just to India will be 31% of all world gold mine production (based on 2,700 tons in annual mine production)………………………………………..Full Article: Source

Why you should have commodities in your portfolio

Posted on 25 September 2014 by VRS  |  Email |Print

Commodities have been a major revelation this millenium and several investors have added it to their portfolios for a variety of reasons. One key factor has, of course, been the outstanding returns commodity investments have given since the year 2000. Secondly, globalization has opened the doors to true diversification in India.
Usually financial advisors recommend an allocation between 5% and 20% in commodities. This is because if you look at returns over the last forty years or so, data shows that commodities offer diversification and good returns with similar volatility as equities. This information usually takes one by surprise as commodities are perceived to be more volatile and therefore more risky………………………………………..Full Article: Source

Gold Speculation Interest Rising - Gold Price Falling

Posted on 25 September 2014 by VRS  |  Email |Print

Recent Seeking Alpha articles take very opposite postures on gold commitments, but the more optimistic, flamboyant, promotional approach seems to draw larger attention. Old saying: You catch more flies with honey than with vinegar.
When I started in the late 1950s just out of B-school as an investment researcher for one of the top NYC investment counsel firms my assignment was the metals stocks. It was apparent then, as it has continued to be since, that making forecasts about gold and gold stocks was an entertainment activity graced with results drawn from a random number table………………………………………..Full Article: Source

How low can gold and silver go?

Posted on 25 September 2014 by VRS  |  Email |Print

A word of warning – if you’re a gold or a silver bug, you’re not going to like what I have to say. Gold looks absolutely awful. It’s up the proverbial creek and there’s no paddle in sight. Silver looks even worse.
Just how much more ugly can all this get? What’s the worst-case scenario for silver? We’ll start with silver. Last week, Reuters reported that silver holdings in exchange-traded funds (ETFs) were at all-time highs. That is incredibly bearish – and it was worrying me a few weeks back………………………………………..Full Article: Source

China’s long term gold plans

Posted on 22 September 2014 by VRS  |  Email |Print

The launch of Shanghai Gold Exchange trading yuan denominated contracts in the China (Shanghai) Pilot Free Trade Zone Thursday, which has enabled foreign investors to invest in China’s physical gold bullion market, is yet another one of China’s overt moves to dominate the global gold sector long term.
It may make a slow start but aims to become the world’s biggest physical gold exchange and is thus is in itself a move towards reducing the influence of COMEX and the LBMA on global gold trade and pricing and move the centre of gravity for this eastwards. Similar moves to set up new international gold contracts in Singapore and Hong Kong will further accelerate the move in gold trade to east Asia………………………………………..Full Article: Source

Commodities: Back On A Steady Course‏

Posted on 19 September 2014 by VRS  |  Email |Print

Overall, we are looking for higher global economic growth next year - however, recently worries have emerged that economic growth in China is slowing down. In turn, the acceleration of growth expected in Q3 has failed to materialise and we could see a further decline in growth in Q4.
However, we expect the Chinese government and central bank to keep growth stable next year. Besides the renewed focus on the risk of lower growth in China, the main factor driving commodity markets currently is abundant supplies, in particular in the global energy and grain market. Overall, we expect commodity markets to remain well supplied in 2015. However, low prices may begin to be an issue for producers as they take their toll on profits……………………………………..Full Article: Source

What’s Caused The Commodity Bull Market To Derail?

Posted on 19 September 2014 by VRS  |  Email |Print

The commodities market started the year like a rocket. Since July it has lost almost all its gains. Like the market I started the year bullish on precious metals stocks. I turned defensive in June. I have since turned more bearish and am net short gold and silver stocks.
The commodity complex is in free fall. Agriculture products are falling out of bed. Metals are moving to yearly lows. Even copper has broken down which is the best gauge of world growth……………………………………..Full Article: Source

New Silver Fix Still Irks This Mining CEO

Posted on 18 September 2014 by VRS  |  Email |Print

In a bid to heighten transparency, the mining and silver industries have taken steps towards improvement for investors, but First Majestic Silver Corp.’s Keith Neumeyer isn’t buying into it. Speaking with Kitco News at the 25th Denver Gold Forum, Neumeyer, president and chief executive officer of First Majestic, doesn’t see an improvement.
“Any transparency is healthy and the mining industry needs to put out numbers that make sense to the market,” he said. “Adversely, all-in sustaining cash costs don’t make sense to the market…………………………………….Full Article: Source

How long would Scotland keep sterling?

Posted on 18 September 2014 by VRS  |  Email |Print

I have watched the debate over Scotland’s independence with a certain déjà-vu. In 1995, I along with everyone else in Canada watched nervously as Quebecers voted on whether to separate. Like Scotland’s separatists today, Quebec’s then said they would continue to use the old country’s currency. Jacques Parizeau, the separatist leader, traveled in a bus decorated with the Canadian dollar and insisted that Canadian objections could not stop Quebec from using it.
Yet for a new country to keep another’s currency is, on its face, an odd decision. It robs a country of many tools of autonomous economic policy: monetary policy, of course, but to a great extent fiscal policy as well since monetary policy is no longer available to cushion expansionary or contractionary fiscal shocks. ……………………………………Full Article: Source

Why Goldman Sachs Is Wrong On Gold

Posted on 17 September 2014 by VRS  |  Email |Print

Wall Street powerhouse Goldman Sachs has recently reiterated its negative view on gold, which it has held for the past year. However, it is now doubling down on this view and advising clients to actually go short the metal. Jeff Currie, head of commodity research at Goldman noted “Our target is really driven by the view that we think that the Fed will ultimately be the dominate force here and put more downward pressure [on prices]“.
While I am in agreement with Goldman that the Fed will be the dominant force behind the price of gold, I believe the central bank will soon be back into the QE business, rather than raising interest rates and crushing the dollar price of gold………………………………………Full Article: Source

New gold contract to set Singapore up as a global gold hub?

Posted on 16 September 2014 by VRS  |  Email |Print

Singapore continues its push to be a global gold hub. Further details emerged at the weekend about the planned launch by Singapore of a new 1kg physically deliverable gold contract for the Asian wholesale gold market.
This new gold contract differs from others in that as well as acting as a price discovery benchmark for 1kg gold bars in the Asian region, it has been specifically designed to actually deliver gold to wholesalers, because settlement of the contract is in gold 1kg bars and not in cash. A 1kg gold bar is 32.15 troy ounces………………………………………..Full Article: Source

We Continue To Like Our Buy View For Commodities

Posted on 15 September 2014 by VRS  |  Email |Print

Our expectation for rising prices of the commodity market is a result of the improvement in the global economy. The last few months have been dominated by the stabilization in the global economic cycle and reduction in system risk. We have seen signs of improvement in labor market figures, capital expenditure, consumer spending, and business confidence.
This has created a broadly friendly environment for cyclical assets, as investors become comfortable with the durability of the expansion. As a result, we are still comfortable about our current bullish view on the commodity market………………………………………..Full Article: Source

Gold Industry Needs ‘Cleansing’ of Weakest, Fidelity Says

Posted on 15 September 2014 by VRS  |  Email |Print

The gold industry, recovering from the worst slump in prices in 30 years, needs more mergers to help improve investor returns and eliminate unprofitable mines, Fidelity Investments said.
About a third of gold production is probably money-losing when the price of the metal is lower than $1,250 an ounce, said Joe Wickwire, who manages more than $1.8 billion of assets including the Fidelity Select Gold Portfolio. (FSAGX) With gold trading at about $1,230, it “might not be a bad thing” if the number of producers was reduced by a third………………………………………..Full Article: Source

September is the time to buy gold, history suggests

Posted on 12 September 2014 by VRS  |  Email |Print

For those who like to follow investment trends there is a new one that is growing in popularity – buying gold in September. Over the past 20 years, as the chart below shows, the gold price tends to shine in September. On average bullion has delivered returns of over 3pc, which is by far the best performing month for the precious metal.
Fans say there is a good reason for the trend - September marks the start of India’s gold gifting season. During September a huge amount of gold jewellery is bought by Indians as gifts for family members during the Diwali festival………………………………………..Full Article: Source

3 Reasons the Gold/Silver Ratio “Will Fall” as 2014 Ends

Posted on 11 September 2014 by VRS  |  Email |Print

The gold/silver ratio is set to fall as 2015 draws near, according to data consultancy and analysts Metals Focus, with silver outperforming gold prices for 3 reasons. Tracked by some analysts and traders to see which metal is performing better, the ratio simply divides the price of gold by the price of silver. If it rises, then gold has become more expensive in terms of silver.
Although the “lack of investor conviction in gold is likely to continue,” says Metals Focus – and while that “does not bode well for silver prices” – the consultancy now expects the gold/silver ratio “to consolidate at around current levels before edging lower [ie, silver outperforms gold] as we move into next year.”……………………………………….Full Article: Source

Gold may be a ‘buy’ as investors turn ever more bearish

Posted on 11 September 2014 by VRS  |  Email |Print

Gold is finally getting close to a bottom in prices. That is the surprising conclusion of contrarian analysis, which for months now has stubbornly refused to turn positive on gold — even as the yellow metal has suffered a death by a thousand cuts. Just this week, for example, bullion hit a fresh three-month low — among indications that gold’s recent decline has violated some key technical levels.
But what contrarians focus on is market sentiment, and on that front there has been a big change: For the first time in a long time, a large number of short-term gold timers have decided to throw in the towel………………………………………..Full Article: Source

Four Ways To Trade Silver Near Support

Posted on 11 September 2014 by VRS  |  Email |Print

With silver trading near a major support level, here are four ways to trade it using ETFs and stocks. The iShares Silver Trust (SLV) is currently trading near support level of a large descending triangle that has been in place since July 2013. The longer-term trend is down, so it’s quite possible the $17.75 to $18 support region will eventually give way to the downtrend.
If that occurs, the downside target is near $12.75, attained by subtracting the approximate $5 height of the triangle from the support zone. For those who believe silver is forming a bottom here, the $17.75 to $18 region offers a low risk buying opportunity if a stop-loss is placed just below support………………………………………..Full Article: Source

Bearish bets on gold building, market eying $1,200/ounce

Posted on 09 September 2014 by VRS  |  Email |Print

Gold market participants are turning increasingly bearish, with a raft of recent analyst notes adding to the negative outlook for the precious metal. “Gold suffered a sharp lurch downwards September 2 after the US ISM manufacturing reading came out at the highest since 2005, a catalyst that triggered stops all the way down to $1,263/oz, the 61.8% Fibonacci retracement of the June-July uptrend,” Mitsubishi analyst Jon Butler said.
Gold fixed Monday morning in London at $1,267.25/ounce. A week ago, gold fixed at $1,287.25/oz. Looking at speculative bets on gold, UBS strategist Edel Tully said in a note the September 5 Commitment of Traders Report showed “gold net specs were washed out further in the week to September 2………………………………………..Full Article: Source

Goldcorp CEO Jeannes Sees “Peak Gold” in Sector This Year or Next

Posted on 09 September 2014 by VRS  |  Email |Print

Miners have reached “peak gold,” in which production of the precious metal has hit its high as easy-to-mine gold deposits become harder to find, said Chuck Jeannes, chief executive of Goldcorp, the world’s largest gold miner by market capitalization.
Mr. Jeannes said in an interview that a falloff in supply will support the gold price, but make mining it even harder and lead to further consolidation in the industry. Still, the Vancouver-based miner played down investors’ expectation that Goldcorp itself is poised to make a takeover bid following the rejection of its most recent attempt to buy a rival miner………………………………………..Full Article: Source

Gold: Not such a safe haven after all

Posted on 05 September 2014 by VRS  |  Email |Print

Gold pays no income, so it’s a losing bet if the returns from cash or equities are strong. Gold is often described as a safe haven investment but its recent price collapse shows that it can also be highly dangerous. The gold price soared in the wake of the credit crunch, when the global financial system teetered on the edge of collapse, to top $1,900 an ounce three years ago.
Some investors predicted it could hit $3,000 or $4,000, but the price dropped 28% last year as the global economy showed signs of recovery. With the price hovering at around $1,300, anybody who bought at the top of the market will have learned to their cost that gold does not always glister………………………………………..Full Article: Source

Supercycle not over, but certain commodities oversupplied – Glasenberg

Posted on 04 September 2014 by VRS  |  Email |Print

Ivan Glasenberg, ceo of Glencore, said the supercycle is far from over, but added that oversupply in certain commodities is killing the bull sentiment for these commodities.
Demand is “better than ever”, he added during a press briefing in Johannesburg. “Why would the supercycle be over? We have a great supercycle………………………………………..Full Article: Source

Gold price flounders under $1,300/oz

Posted on 04 September 2014 by VRS  |  Email |Print

A stronger dollar and U.S. economic data are being blamed for dismal performance of the price of gold over the past day. The spot gold price dropped some 1.6 percent to around $1,265 an ounce mid-day yesterday and has since muddled along, mostly between $1,265 and $1,270. The latest drop adds to a string of downsteps for gold since early July when the price of gold was looking up. In late May and early June gold surged from similar levels in the mid $1,200s to the mid-$1,300s in early July, when its latest decline began.
Generally analyst commentary pointed to U.S. economic data as driving the down the price of gold Tuesday. “The metal continued its decline further, to a low of 1262.00/1263.00 – a level last seen in mid-June, as it broke through a key technical support level on a day that also saw crude oil prices tumble and the dollar index touch a 13-month high after U.S. manufacturing data surpassed expectations and supported speculations that the U.S. Fed would raise interest rates earlier than anticipated.”……………………………………….Full Article: Source

A Golden Fall For Gold And Silver Bullion Bulls?

Posted on 03 September 2014 by VRS  |  Email |Print

September is the hottest month of the year for gold prices, rising on average 3% over the past 20 years. As the yellow metal tests hovers off 2-month-lows, Bloomberg notes that “Indian jewelers and dealers will be stocking up in the coming weeks,” ahead of the festival period, which runs from late August to October (andis followed by the wedding season) when bullion is bought for part of the bridal trousseau or in jewelry form as gifts from relatives.
As GoldCore’s Mark O’Byrne notes, “a lot of traders are aware of this trend towards seasonal strength… They tend to buy and that creates momentum.” The pattern of trading in precious metals changed for the better this week. After London’s bank holiday on Monday, for the first time in a long time the market opened in London’s pre-market with higher prices………………………………………..Full Article: Source

A Look At Various Commodities And Weather

Posted on 29 August 2014 by VRS  |  Email |Print

In a world captivated, or should I say “cap-sized”, by the exasperating events in Gaza, Ferguson, Ukraine and now most recently by ISIS, it’s almost not worth talking about where the opportunities have been and where they might be in the financial markets. There are far greater concerns about the nature and safety of our planet.
We began the year with one of the most impressive bull markets in natural gas in recent memory, brought on by the polar-vortex, which uncharacteristically made its way south “without” the assistance of a negative AO/NAO index (warm blocks over the arctic and Greenland)………………………………………..Full Article: Source

Check Out Silver For A View On Gold

Posted on 29 August 2014 by VRS  |  Email |Print

For gold traders, the last few months have been challenging to say the least, with the precious metal lurching higher and lower driven by fear, the US Dollar, a singular lack of any inflation and seasonal supply and demand. At times like this it can help to look at related or associated markets for an alternative view.
One such is silver, which has been more measured in its price action over the last few weeks, remembering as always, that silver is not a precious metal, but an industrial one, and the daily chart for the December futures contract delivers some interesting insights………………………………………..Full Article: Source

Let’s talk diamonds

Posted on 29 August 2014 by VRS  |  Email |Print

Let’s talk diamonds for a change. Often it seems that gold gets all the fun when I write and speak about precious metals and minerals. But Vancouver-based Lucara Diamond, which we own in both our Gold and Precious Metals Fund (USERX) and World Precious Minerals Fund (UNWPX), has been turning heads here at U.S. Global Investors lately for a number of reasons, the most notable being that it continues to report stellar returns.
The company reports that, in its second quarter, it achieved tender proceeds, or profits, of $95 million from sales of 111,900 carats of diamonds, amounting to $849 per carat. Compared to last year’s second quarter, profits are up an impressive 93 percent………………………………………..Full Article: Source

The Continued Strive of Market for Gold Bullion

Posted on 28 August 2014 by VRS  |  Email |Print

For a lot of business-minded people and investors, establishing and owning of solid gold bullion stores is considered as one of the best ways to secure finances for future use. With today’s unpredictable and mostly unstable economy, currency has often dealt with weak and vulnerable hand pushing investors alike to invest in gold coins hoping to gain a more stable strength as well as market independence from the currency that is holding their assets.
US Mint, for example, has found a reliable indicator of gold, silver as well as platinum demand in the country. However, sales in here have recently shown diminishing interest from present as well as potential business owners………………………………………..Full Article: Source

How The Coming Silver Price Bubble Will Develop

Posted on 27 August 2014 by VRS  |  Email |Print

What is an asset bubble? An asset bubble occurs when a large number of buyers, normally not usually prone to speculate in an asset, bid the price of that asset much higher than underlying valuations would support, most often fueled by leverage or borrowed money. Typically, towards the terminal phase of the bubble the most compelling reason for continuing to buy the asset is due to the rising price itself, as all caution is thrown to the wind amid the collective belief that prices can only move higher still.
Then, when the last possible speculator has purchased the asset, the inevitable occurs and the price of the asset collapses as previous buyers turn into sellers and attempt to get out………………………………………..Full Article: Source

Cutting edge: Incorporating forex volatility into commodity spread option pricing

Posted on 27 August 2014 by VRS  |  Email |Print

In this article, Joseph Yechong Chen extends Kirk’s formula to spread option pricing when forex is a stochastic factor and is multiplied to one leg in the payoff formula. The article illustrates the importance of forex risk factors and the need to include them in the business strategies of asset acquisitions and divestitures
Several different forms of spread options are used in energy markets. The most popular ones are European call options on the spread of energy price pairs. If we consider energy prices in different locations and times as individual commodities, a spread option can be generally considered as the right to exchange one unit of a commodity for a certain amount of units of another commodity at given strike price………………………………………..Full Article: Source

Can Gold and Silver still meet the previous price forecasts?

Posted on 22 August 2014 by VRS  |  Email |Print

Today, our prediction for the high side in 2014 is $1,350/oz for gold and $22/oz for silver. In other words, we see silver potentially trading up to $22/oz this year but do not imply in any way that we expect silver to average $22/oz this year.
We think gold and silver have performed relatively well this year and showed strength toward the end of the second quarter. My feeling is that stronger gold and silver prices that we have seen earlier than anticipated this year is a reflection of global political tensions and maybe just a reminder that we are not out of the woods as far as U.S. economic performance is concerned. Earlier is better, and so we look for gold and silver prices to retain most of their gains in the third quarter………………………………………..Full Article: Source

Is the LBMA Silver Price more transparent than the Fix? Not yet!

Posted on 22 August 2014 by VRS  |  Email |Print

So now we have had three days of the new LBMA Silver Price – the new name for the London Silver Fixing given that the term ‘Fix’ is somewhat discredited in modern-day parlance. The banks involved in the old system, which had fallen to two, wanted to withdraw from it, in part because they felt the process, even if it was a totally honest system, which it probably was, could lay them open to having to defend expensive, and probably spurious, lawsuits and the London Bullion Market Association took upon itself to go out and set up some kind of new silver benchmarking process at very short notice.
And is this new process any more transparent than the old one – one of the main charges laid against the old Silver fixing process. The answer so far is probably not!……………………………………….Full Article: Source

Here Comes Cheaper Oil: Why Prices Are Set to Fall

Posted on 21 August 2014 by VRS  |  Email |Print

I learned from Art Laffer that government is the 800lb gorilla in the economy and that investors can profit from changes in government policies. But a practitioner has to accept the framework – that government policies drive incentives as much or more than any other single driver. The charts that follow should prove that out.
They show how a proposed change to the RFS ethanol mandate drove corn prices down 30% almost instantaneously. Similarly, in 2008, oil prices plunged at the mere suggestion that a moratorium against drilling on the outer continental shelf (OCS) might end………………………………………..Full Article: Source

Why Silver Prices Could Easily Double Or Triple

Posted on 21 August 2014 by VRS  |  Email |Print

Jim Rogers once quipped that he waits to invest until “there’s a pile of money just sitting there in a corner and I can walk over and pick it up.” In other words, an asset that’s deeply undervalued, widely ignored, with potent fundamentals ready to kick in. Is there such an opportunity in any of the precious metals right now?
One could make a case for all of them, given the likelihood of high inflation and the mainstream largely ignoring the industry. But there’s one metal in particular that I think will deliver the most fireworks………………………………………….Full Article: Source

Why You Should Buy Silver Before It’s Too Late

Posted on 20 August 2014 by VRS  |  Email |Print

Too often silver falls in the shadow of its flashy, favored cousin gold, but the precious metal grabbed headlines last week when a 117-year-old tradition came to an end. Until last week, the price of silver had been decided, or “fixed,” each day at noon in London by representatives from three different banks. The process was conducted in private and it was all very secretive.
Now, regulators have finally dragged the silver “fix” into the 21st century in an effort to improve transparency and reduce the risk of price manipulation. The new system, called the London Silver Price, is run by CME Group and Thomson Reuters. It uses trading on the over-the-counter market and determines the price through an algorithm………………………………………..Full Article: Source

Why Chinese Citizens Invest In Gold

Posted on 19 August 2014 by VRS  |  Email |Print

The US$ price of gold has soared +377% from 2001 to date. That’s a compound annual growth rate (CAGR) equal to 13.4%. Contrast gold’s monumental appreciation with the pathetic performance of the Shanghai Stock Exchange Index and the miserly return of US Treasuries.
“A major report published recently by the World Gold Council, “China’s Gold Market: Progress And Prospects” suggests that private sector demand for gold in China is set to increase from the current level of 1,132 tonnes per year to at least 1,350 tonnes by 2017. Following the record level of Chinese demand in 2013, which saw the country become the world’s largest gold market, the report suggests that while 2014 is likely to see consolidation, the succeeding years are likely to see sustained growth………………………………………..Full Article: Source

3 Reasons Why I Am Bullish on Silver

Posted on 19 August 2014 by VRS  |  Email |Print

Global stock markets continued to be wracked by rising volatility because of a range of economic and geopolitical events that are fueling greater concern among investors. This is generating renewed interest in precious metals, including gold, silver, and platinum, as investors seek safe-haven investments to avoid this volatility.
Economic and geopolitical crises are gripping the globe. Earlier this year, emerging markets plunged as the Argentine peso was sold off; now Argentina has defaulted yet again on its debt, and there is growing concern that Portugal’s banking system is nearing collapse………………………………………..Full Article: Source

7 Reasons to Like Silver

Posted on 19 August 2014 by VRS  |  Email |Print

When considering the catalysts for silver, let’s first ignore short-term factors such as net short/long positions, fluctuations in weekly ETF holdings, or the latest open interest. Data like these fluctuate regularly and rarely have long-term bearing on the price of silver.
I’m more interested in the big-picture forces that could impact silver over the next several years. The most significant force, of course, is what I stated above: governments’ abuse of “financial heroin” that will inevitably lead to a currency crisis in many countries around the world, pushing silver and gold to record levels………………………………………..Full Article: Source

Commodities are flashing a warning sign

Posted on 18 August 2014 by VRS  |  Email |Print

Commodities have been getting crunched and I believe it has rather serious implications for both the global economy and worldwide monetary policies. The withering of commodity-based price increases is likely to have a significant impact on headline inflation.
Oil is dropping particularly hard, but copper is at multi-month lows; agriculture commodities such as corn, wheat and soybeans have tumbled and broad-based commodity indices are on their backs………………………………………..Full Article: Source

Why Oil Prices That “Should” Be Going Higher Are Going Lower

Posted on 18 August 2014 by VRS  |  Email |Print

The world has changed. Even two years ago, with a war going on by proxy between Russia and Ukraine, we’d have seen a ten dollar rally in the price of crude, not prices below $97, like we’re seeing today. Add to that the Iraq crisis in the North, the continuing Syrian conflict, the destabilization in the oil producing countries of Libya and Egypt and you’d have been shocked - at least in 2011 - to see prices go decisively under $100 a barrel and act badly there. What’s going on here?
One long-term trend in the oil market and one very short-term trend have made the difference between a price that ’should’ be higher, but is in fact going lower. We need to really understand those changes to track where oil prices will go next and where those underlying oil stocks are headed………………………………………..Full Article: Source

Concerns Remain Ahead of New Silver Benchmark Debut

Posted on 15 August 2014 by VRS  |  Email |Print

With the unveiling of London’s shiny, new silver benchmark Friday, metal producers and traders are hoping to head off lingering concerns about the credibility of the market. But as the price-setting process undergoes the first major overhaul in more than a century, there are signs the revamped process isn’t quite ready.
“The overall impression I get from this is that everyone is a little unsure of how it’s all going to work—just because it’s something new,” said David Govett, head of precious metals at brokerage firm Marex Spectron. “The bullion market is quite a staid market, shall we say, and a lot of the people in it, especially the traders, have been around for a long old time.”……………………………………….Full Article: Source

Citi: Cost Cuts Help Gold Names Now, But Trouble Looms

Posted on 14 August 2014 by VRS  |  Email |Print

Citigroup’s Johann Steyn and Craig Irwin have a note out today, adjusting their gold outlook to reflect industry trends, but they remain bearish on the sector overall. They note that global gold on mine unit costs fell 5% year-over year, while notional cash expenditure fell 24% and all-in costs dropped 23% in the March 2014 quarter.
Clearly, austerity moves have helped gold firms navigate through a lower price environment, and Steyn and Irwin estimate that only 40% of the global gold cost curve is burning through cash, nearly half the 75% in the March 2013 quarter………………………………………..Full Article: Source

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