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.
