WHOLESALE LONDON gold tumbled more than $20 per ounce in quiet trade Thursday morning, falling with world stock markets after the week’s “three-day rally [in gold] prompted some profit-taking” according to one dealing desk.

“The fact that India,” said investor, fund manager and best-selling author Jim Rogers to BullionVault overnight, “which has been the largest buyer, has reduced its buying a lot is one of the main factors that’s causing gold prices to go down.”

Currently blocking imports with high duties and strict re-export rules, “[India] can probably tolerate $30 billion worth of import of gold,” said C.Rangarajan, chief of the Indian prime minister’s Economic Advisory Council, to an economics conference in Delhi today.

“As inflation comes down and as financial assets become more attractive, perhaps part of the demand for gold can come down too.”

Indian gold imports have totaled nearer $50 billion over the last 12 months, and are blamed by the Economic Times today for “inflating India’s current account deficit to a historic high of 4.8% of GDP in 2012-13.”

Noting plans to “mobilize” existing consumer gold holdings, “If the Indian politicians somehow get their people to sell gold, whoo!” said Jim Rogers to BullionVault.

“Who knows how low gold could go?”

Adding that he’s hedged a portion of his personal gold holdings against further price falls, but not his silver position, Rogers says the US budget deal means “the government is under no constraint. Central banks can [also] print as much as they want.

“With all this staggering amount of currency debasement, gold has got to be a good place to be down the road once we get through this correction.”

This week’s US budget deal will meantime “add pressure on gold and silver,” reckons a note from Standard Bank’s commodity team in London.

Although “tiny, miniscule” according to some commentators, the deal between Republican and Democrat politicians to avert a repeat of the debt-ceiling shutdown early next year now means “another hurdle to economic growth in the US has been removed,” writes analyst Walter de Wet, “and this increases the probability that the US Fed may start to reduce their asset purchases this month.”

So “from a tactical perspective,” Standard Bank’s de Wet concludes, “we still believe that gold should be sold into rallies.”

Right now, says Jim Rogers, “I’m not buying either gold or silver…but if I had to buy one today, I’d buy silver because it certainly has gone down more than gold.

“So on a historic priced-basis if nothing else, I’d rather own silver.”

If the two precious metals do fall sharply from here, he added, “I hope I’m smart enough to buy more.”

Adrian Ash

BullionVault

Gold price chart, no delay | Buy gold online

Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can fully allocated bullion already vaulted in your choice of London, New York, Singapore, Toronto or Zurich for just 0.5% commission.

(c) BullionVault 2013

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

990% in four years… 

That’s how much the price of silver-dollar coins soared during the coin bull market from 1976 to 1980, according to David Hall in his 1987 book A Mercenary’s Guide to the Rare Coin Market. 

The value of silver dollars corrected from 1980 to 1982. Then, these particular coins soared again from 1982 to 1985 – rising 188.6%. 

In short, silver dollars can soar when a bull market gets going. I believe a new bull market in these coins could get started soon. Based on history, the right silver coins could easily soar by triple digits. It’s a trade you want to be a part of right now…

Now, it wasn’t just any old silver dollars that delivered 990% gains. They were silver dollars in MS65 grade… These coins are semi-rare – exactly the kind of coin I’m interested in today. 

I call them “hybrid” coins… They are more valuable and harder to find than standard bullion coins selling for around melt value. They also have collectible value – and trade for much more than the value of the metal they contain. But they are not one-of-a-kind… There are enough around that you can buy them with ease.

This is exactly the kind of coin I’m interested in buying today… 

You see, I spoke with my good friend Van Simmons, who knows as much about rare coins as anyone on the planet. Van is actually one of the founders of the Professional Coin Grading Service (PCGS) – the benchmark for quality in coin grading. 

I asked Van about MS65 Morgan silver dollars. He said, “Steve, you nailed it. I’ve been buying these for myself. The Morgan dollar is without question one of the most loved coins. And right now, it is just ridiculously cheap.” 

Van told me that in 1986-1987, his dealer cost on these particular coins was near $1,000 per coin. That was 27 years ago. Today, these coins retail for less than $200! 

The story is simple: The price of silver has soared since then. But the price of Morgan silver dollars in MS65 grade has barely budged, creating an incredible opportunity. 

Morgan silver dollars are near their all-time best value relative to the price of silver. 

You see, since the price of silver has gone up and the price of the coins has gone basically nowhere… the premium for the Morgan dollars has shrunk to record levels in recent years. 

Take a look…

While these coins traded for a 1,500% premium throughout the 1990s and early 2000s, today’s premium is way below that now. Our opportunity is the best it has been in decades. 

And as the chart shows, the premium is now rising for the first time in years. As premiums continue to rise, our gains will pile up. I think premiums could double – even if silver prices go nowhere. 

Silver has been carving out a bottom over the last six months. And after a fall from grace, I believe investors have mostly given up on silver. I doubt we’ll see much lower prices. But importantly, we don’t have to see higher prices to make money on this trade. 

You see, we’ll make money in Morgan dollars as the coin’s premium-over-melt value rises up from record lows, or as silver prices rise. 

Those two circumstances aren’t just possible… they are likely. And if they happen, these MS65 Morgan silver dollars can double. 

The easiest way to make the trade is by buying the Morgan silver dollar coins in MS64 grade. While the gains I presented were based on MS65 grade coins, the MS64 coins are easier to buy. They are not as “perfect,” and they trade for around half the price. But they should still soar alongside MS65s. 

I suggest dealing with Van Simmons of David Hall Rare Coins. Keep in mind – I get nothing for recommending Van. But he has done a fantastic job for me and my readers over many years. You can reach Van at 800-759-7575 or info@davidhall.com. 

Two other coin dealers that have treated my readers well over the years are Dana Samuelson and his team at American Gold Exchange (800-613-9323, info@amergold.com) and Rich Checkan at Asset Strategies International (800-831-0007, rcheckan@assetstrategies.com). 

If you’re interested in silver, this is the best way I know to invest today. We have a real shot at triple-digit gains, even if silver prices go nowhere. That’s a bet I’ll happily make today. 

Good investing, 

Steve Sjuggerud

…continue reading HERE

As Prices Successfully Retest Cycle Lows For First Time

Fed tapering may already be priced in.

Gold and silver rebounded notably this week amid a combination of short covering and physical buying. Last week, gold and silver reached as low as $1,211 and $18.90, respectively—just above the cycle lows of $1,180 and $18 put in during July.

When prices failed to move any lower on Monday, shorts began covering their positions and buyers who had been waiting on the sidelines began to enter the market as well. Bulls should be encouraged by this first successful retest of the July cycle lows. It’s a positive first sign that the Fed’s upcoming tapering may already be priced into the market. 

The Federal Reserve may finally act—or at least hint that action is imminent—in its next meeting on Dec. 18. If precious metals shrug off the news, that may spark another round of short covering and physical buying that sends gold above $1,300 and toward $1,400. 

GOLD (YTD)

SILVER (YTD)

PLATINUM (YTD)

PALLADIUM (YTD)

….read page 2 HERE

In early November we made the case that precious metals were in danger of a final plunge before a bottom. The decline that ensued has abated in recent days. It appears that a short-term rally is underway. The bear market is very close to ending but we can’t say definitively just yet.

 The chart below shows all of the worst bear markets in gold stock history. For the current bear market (black) we replaced the HUI Gold Bugs index with the XAU index. The reason is the XAU is a better reflection of the historical Barron’s Gold Mining Index (BGMI). The HUI is more volatile. This chart suggests that if the gold stocks have not bottomed yet, they are damn close.

(Ed Note: I have done a bit of searching and found that if you go here the charts are much more visible)

A similar conclusion can be made upon examination of the monthly chart of the HUI Gold Bugs Index and GDM Index (father of GDX). GDM bounced from a level of support that dates back to 2004.

While the mining stocks by themselves appear to be very close to a major bottom, the metals are creating some uncertainty. I know that some will be quick to call a double bottom but I would be more cautious. A double bottom typically explodes off the second bottom. Part of the reason is the first rally typically isn’t so strong and the market then declines without interruption to the double bottom. That is not the case here. Gold has strong resistance at $1350 and $1400. To validate a double bottom Gold would need to immediately rocket higher and through $1400. I don’t see that happening.

In looking at the history of cyclical declines in Gold we find that the shorter declines tend to end with a strong selloff as was the case in 1976 and 1985. The current decline is most similar to those two.

The bulk of the evidence leads me to believe that we probably have not seen the bottom though we are very close. In contrast to Gold, the mining stocks appear to have very limited downside potential. It’s difficult to make a case that they can move much lower. Gold, on the other hand, which last closed at $1261 doesn’t have strong support until the 50% retracement at $1085 and the 12-year trendline slightly above $1100. The worst is over for the mining stocks but we don’t know that to be the case with Gold.

Bottoms can happen in an instant or develop through a basing process. Huge immediate rebounds originate from extreme oversold conditions. We don’t have that at the moment. The corollary is that precious metals spend the next few months in a basing process. The bottom line is there is no need to aggressively buy yet unless the market becomes extremely oversold and plunges to a new low. Wait for that to happen and if it doesn’t, then a base is likely developing. Another thing to note is that the gold stocks started the bull market in November 2000 while Gold bottomed three months later. If you’d be interested in more of this analysis and the companies poised to rocket out of this bottom then we invite you to learn more about our service.

Good Luck!

Jordan Roy-Byrne, CMT

Jordan@TheDailyGold.com

About The Daily Gold

Jordan Roy-Byrne, CMT is a Chartered Market Technician and member of the Market Technicians Association. He is the publisher and editor of TheDailyGold Premium, a publication which emphasizes market timing and stock selection for the sophisticated investor, as well as TheDailyGold Global, an add-on service for subscribers which covers global capital markets. From 2010 through September 2013 The Daily Gold Premium Model Portfolio was up 83% compared to GDX (-39.2%) and GDXJ (-52.0%). The Model Portfolio which focuses entirely on gold and silver stocks also dramatically outperformed the S&P 500 (+48.5%) in spite of the S&P 500 dramatically outperforming gold and silver stocks.

Contact: Jordan @ TheDailyGold.com