Gold & Precious Metals

Capitulation by the Gold Bulls?

Posted by Martin armstrong - Armstrong Economics

on Monday, 14 October 2013 13:53

GC60-72M

“look at the above chart of monthly cash gold. In January 1970, gold fell BELOW the fixed Bretton Woods value of $35 reaching $34.70. The fundamentalists said then gold could never fall below the gold standard price. They were dead wrong then as well and you will see them dead wrong right here and now for they are always wrong. Markets move to extremes and MUST do so. The fall below $35 takes place before the bull market can begin. We MUST see this same thing right now. The Goldbugs MUST be totally devastated in order to create a REAL bull market.”

….read the whole post HERE

Precious Metals Sentiment

Posted by Carl Swenlin via Financial Sense

on Saturday, 12 October 2013 14:26

One of the best sentiment gauges for precious metals is whether investors are paying a premium, or if they are buying precious metals at a discount. How do we determine this?

Central Fund of Canada (CEF) is a closed-end mutual fund that owns gold and silver exclusively — the metals, not stocks — at a ratio of about 45 oz. of silver to 1 oz. of gold. Closed-end funds trade based upon the bid and ask, without regard to their net asset value (NAV). Because of this, they can trade at a price that is at a premium or discount to their NAV. By tracking the premium or discount we can get an idea of bullish or bearish sentiment regarding precious metals.

Very recently CEF has been selling at about a -7.5% discount to the net asset value of the gold and silver it owns. Considering that CEF has experienced a -54% decline from its 2011 top, that is a remarkably small discount when compared historical discounts of -15% to -20%. Even more remarkable it the fact that after the -50% CEF correction in 2008, CEF was still selling at about a +15% premium!

cef-10-oct-2013

Conclusion: Obviously precious metals sentiment is somewhat bearish, but not so much so that we can detect a buying opportunity based upon it.

Technical analysis is a windsock, not a crystal ball.

 CLICK HERE to subscribe to the free weekly Best of Financial Sense Newsletter .

Rumours of a massive sell order hitting the gold futures market on the Chicago Mercantile Exchange early Friday morning actually led to a halt in trading. Apparently 5000 contracts (500,000 oz.’s of gold) hit the market just after 8:40 EST and took away all buyers to test the market liquidity. Gold dropped 25 dollars an ounce in the matter 2 minutes. 

Click here to read more.

Robert Levy

Border Gold Corp.

rlevy@bordergold.com | 1.888.312.2288

www.bordergold.com

 

 

European central banks sold 5.1 metric tons of gold in the fourth year of an accord that originated in 1999, the lowest on record, according to data from the World Gold Council.

Germany sold 5 tons and an unidentified bank disposed 0.1 ton in the year through Sept. 26, the cpuncil, a London-based producer-funded group, said in a report on its website. That’s the lowest annual total since European central banks agreed to limit sales in September 1999. Germany’s Bundesbank sells a small amount each year to mint coins.

Central banks, which own 18 percent of all the gold ever mined, will add as much as 350 tons valued at about $15 billion this year, the council estimates. They purchased 535 tons in 2012, the most since 1964. Gold fell to a 20-year low in August 1999 as Switzerland, Netherlands,Austria and U.K. prepared to sell gold. Gold rose from 2001 through 2012.

In the article below, Pimco CEO Mohamed El-Erian writes on the needed change in direction from the US Federal Reserve. Particularly, setting policy to levels of unemployment has become outdated as the employment rate fails to capture shortcomings in the American labour market (i.e.: declining participation rate and structural problems in the youth employment scene).

El-Erian also discusses the road ahead for Janet Yellen, and what role she needs to play as the Chair of the US Federal Reserve.

Click here to read more.

 

Robert Levy

Border Gold Corp.

rlevy@bordergold.com | 1.888.312.2288

www.bordergold.com