End-of-week top gold stories

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Published : March 12th, 2016
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Julie Verhage (Bloomberg) HSBC says ‘Cash is king’ Despite some recovery in the world’s equity markets following a turbulent start to the year, strategists at HSBC Holdings Plc are urging caution when attempting to buy a dip in stocks. ‘Cash is king in a world with [debt] overhangs,’ the team, led by Global Head of Asset Allocation Fredrik Nerbrand, said in a note published late on Thursday.’

MK Note: Of course, the king of cash is gold, and silver the queen.

Ese Erheriene (WSJ) Gold Buoyed by Prospect of Fed Rate-Rise Delay On Friday, a strong U.S. jobs report weighed on the metal. However, the “unexpectedly weak wage growth in February already lent the price buoyancy a short time later, as this gives the U.S. Federal Reserve no arguments in favour of further rate hikes,” said analysts at Commerzbank AG in a note. This positive market sentiment continued on Monday.

PG Note: Gold set a new high for the year a week ago and eked out a new 13-month high overseas today. Despite a lower close on the week, the dominant trend is still perceived to be bullish.

Elena Holodny (BusinessInsider) 10 countries hoarding enormous piles of gold Last week, the shiny metal officially entered a bull market, defined as a 20% rally off recent lows.

But investors aren’t the only ones feeling gold: central banks just can’t get enough of the shiny metal either.

According to the latest report from the World Gold Council, central banks added 336.2 tonnes of gold to their reserves in the second half of 2015, up from 252.1 tonnes in the first half of the year.

PG Note: Central banks are buying gold to diversify their reserve holdings. Individual investors, who very frequently are 100% exposed to a single currency — dollars for instance — should be moving to diversify their holdings as well.

Adam Hamilton (24hGold) Massive Gold Investment Buying Gold’s powerful surge in 2016 has been driven by utterly massive investment buying. This is a marked sea change from recent years, where investors relentlessly pulled capital out of gold. But with that dire sentiment reversing, they are rushing back in with a vengeance. Major investment capital inflows into gold are an exceedingly-bullish omen, as they are what transform a mere gold rally into a new bull market.

PG Note: You may recall that we were pointing out the massive negative sentiment and short position in gold late last year, even as growth and disinflation risks were mounting. Our clients that took that opportunity to establish or bolster their gold positions are sitting pretty now . . .

Michael J. Kosares (USAGOLD) Record inflows at gold ETFs Keep in mind that ETFs, despite the strong volumes, still represent essentially a paper gold position, in that the requirements for delivery are onerous for most. The SPDR Gold Trust is a favorite among hedge funds. John Paulson & Co is still the largest single holder of the fund, followed by First Eagle Investment Management, then Morgan Stanley and Bank of America. Private investors generally seek the comfort of physical delivery in coin and bar form stored nearby. That said, the chart above is indicative of the change in sentiment at work in the paper gold market, as stated in a previous post, the main determinant in the choppy, upward trend on the gold chart.

PG Note: Physical delivery of actual gold coins and bars is in fact the only way to gain all the benefits of the safest of safe-haven assets.

John Shmuel (FinancialPost) Don Coxe sees pension funds driving gold prices higher in bondholder backlash “Why should someone want to own a five-year bond with a negative interest rate? I believe this is the single biggest new argument about why gold is going to be re-valued.

. . . Pension funds are going to look for something [to invest in]; you’re telling me gold is riskier than a negative yielding bond?”

PG Note: Nope! In fact I’ve been saying for years that yields (or lack there-of) on bonds are a gross miss-pricing of risk.

Paul R. La Monica (CNNMoney) Gold rush! The yellow metal is in a bull market Gold is now in a bull market. The yellow metal has soared 20% so far this year.

It’s a stunning rally — all the more so because gold has continued to do well even as oil prices and the stock market have stabilized in recent weeks.

PG Note: Of course, the king of cash is gold, and silver the queen.

Valentin Schmid (EpochTimes) China’s Global Gold Strategy Gold expert Willem Middelkoop explains how much gold China really controls and what it intends to do with it.

[The Chinese] are planning for the next phase of the financial system where gold plays are a more dominant part of the system. I think the Chinese think gold prices will go much higher.

PG Note: I agree with Middelkoop when he says the Chinese “see gold as a hedge against the financial system and the reserve holdings they have right now.” Of course the existing reserve holdings are primarily dollar denominated.

Eddie Van Der Walt (Bloomberg) Gold’s best start since 1974 shows not just inflation hedge For an asset touted as a hedge against inflation, gold’s doing pretty well right now. The metal is off to its best start to the year since 1974 even as expectations for gains in consumer prices are near their weakest since the global financial crisis seven years ago.

MK Note: We’ve been singing gold’s praises as a disinflation and deflation hedge for a long time now. (For full details, please see here) If gold proved anything from its performance in the period 2008-2011 – a distinctly disinflationary period rife with systemic risks (when it went from +/- $725/tr oz to +/- $1900/tr oz), it is that its capabilities stretch far beyond simply hedging inflation to a variety of negative economic circumstances.

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Source : www.usagold.com
Data and Statistics for these countries : China | All
Gold and Silver Prices for these countries : China | All
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Michael J. Kosares is the founder of USAGOLD-Centennial Precious Metals, Inc., the author of "The ABCs of Gold Investing: How to Protect and Build Your Wealth with Gold", and numerous magazine and internet articles and essays. He is also writes a popular weekly Client Letter on the gold market. Mr. Kosares is frequently interviewed in the financial press and is well-known for his on-going commentary on the gold market and its economic, political and financial underpinnings. He has over 30 years experience in the gold business. USAGOLD-Centennial Precious Metals is one of the oldest and most prestigious gold firms serving private investors in the United States, Europe, Canada and Australia.
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