Showing posts with label Collapse. Show all posts
Showing posts with label Collapse. Show all posts
Thursday, April 25, 2013
Monday, April 22, 2013
Gold Buying Surges on Price Correction
This Article comes to us from Economics Fanatic on SeekingAlpha.com
As reported, investors and ornament lovers in India mopped up 10-15 tonnes of gold within three days of decline in the precious metal. Readers might argue that buying gold in India is more an ornament consideration than an investment consideration. However, the buying would not be rampant if a further decline in gold prices was perceived. Further, there has been buying of gold coins and bars, which underscores the point that Indians are increasingly looking at gold as an investment or currency.
In the United States, Zero Hedge reported that the U.S. mint sold 63,500 ounces of gold in a day, which happens to be a record. According to the website -
Therefore, even investors in the U.S. are looking at the current correction as a buying opportunity than considering it to be an end to the bull market for gold. Commodity guru, Jim Rogers also considers the correction healthy and is looking to buy gold on further correction.
The important point I am trying to make through these examples is that the global appetite for gold has not declined after the crash. Instead, investors are taking the correction positively and looking to buy further instead of panic selling. Considering this buying momentum, I don't expect another major downside from these levels. I had written an article, which discussed the probability of a 10-15% correction in gold. For me, that target is achieved and I would consider buying some physical gold at these levels.
I would also like to offer the views of the World Gold Council on the recent decline in gold prices. The comments by the WGC underscore my points stated above. According to the WGC -
Surely, for long-term investors, it is the time to accumulate gold. Of course, gold should be just a part of the portfolio and diversification is needed in order to avoid sharp erosion of capital due to the volatility witnessed. Talking about volatility, the movement in all asset classes subsequent to the crisis has been associated with a large degree of volatility. Therefore, diversification in asset classes and regions globally is essential.
For gold, investors can consider this as one of the best opportunities to buy and hold for long-term. I am not sure about the short-term trend. For the long-term, I can say with a lot of conviction that gold will trend much higher than its previous high.
As reported, investors and ornament lovers in India mopped up 10-15 tonnes of gold within three days of decline in the precious metal. Readers might argue that buying gold in India is more an ornament consideration than an investment consideration. However, the buying would not be rampant if a further decline in gold prices was perceived. Further, there has been buying of gold coins and bars, which underscores the point that Indians are increasingly looking at gold as an investment or currency.
In the United States, Zero Hedge reported that the U.S. mint sold 63,500 ounces of gold in a day, which happens to be a record. According to the website -
According to today's data from the US Mint, a record 63,500 ounces, or a whopping 2 tons, of gold were reported sold on April 17th alone, bringing the total sales for the month to a whopping 147,000 ounces or more than the previous two months combined with just half of the month gone.
Therefore, even investors in the U.S. are looking at the current correction as a buying opportunity than considering it to be an end to the bull market for gold. Commodity guru, Jim Rogers also considers the correction healthy and is looking to buy gold on further correction.
The important point I am trying to make through these examples is that the global appetite for gold has not declined after the crash. Instead, investors are taking the correction positively and looking to buy further instead of panic selling. Considering this buying momentum, I don't expect another major downside from these levels. I had written an article, which discussed the probability of a 10-15% correction in gold. For me, that target is achieved and I would consider buying some physical gold at these levels.
I would also like to offer the views of the World Gold Council on the recent decline in gold prices. The comments by the WGC underscore my points stated above. According to the WGC -
It has become increasingly clear over the course of the past week that the fall in the gold price was triggered by speculative traders operating in the futures markets. Their short-term view of generating a trading profit is in stark contrast to the views of long term investors in gold, as evidenced by the massive wave of physical gold buying that began over the weekend and accelerated following Monday's further decline. The surge in gold purchases is spanning markets from India and China to the US, Japan and Europe. Buyers are viewing this as an opportunity to purchase gold at prices not seen in the past couple of years.
Surely, for long-term investors, it is the time to accumulate gold. Of course, gold should be just a part of the portfolio and diversification is needed in order to avoid sharp erosion of capital due to the volatility witnessed. Talking about volatility, the movement in all asset classes subsequent to the crisis has been associated with a large degree of volatility. Therefore, diversification in asset classes and regions globally is essential.
For gold, investors can consider this as one of the best opportunities to buy and hold for long-term. I am not sure about the short-term trend. For the long-term, I can say with a lot of conviction that gold will trend much higher than its previous high.
Wednesday, April 10, 2013
Comex Gold Inventories Collapse by Largest Amount Ever on Record
This article comes from Patrick MontesDeOca on SeekingAlpha.com
For the last few months, I have been warning my subscriber base to take a serious look at the reality of the unfolding collapse in the monetary system as we know it. It's happening in front of our eyes and you need to be aware and prepare for what is coming. I've published numerous articles, particularly for the gold and silver markets, on this subject matter.
The past couple of years have been a real test and challenge to my personal convictions and my skills based on the evidence and research I have done. One of the most difficult skills to accomplish in trading is the ability to break away from the herd. It's human nature, and most of us want somebody else to take the responsibility to deal with the challenges and find the solutions to our problems.
In a previous report I commented,
That is exactly what the general consensus seems to have adjusted to. Or, I should say, addicted to - the idea that our government is going to solve our problems and find the solutions through its distribution of wealth template - which has proven to be the formula to destroy the middle class and in doing so the old American Dream. I am not a gloom and doom person or an extremist. But I have been around the block enough times, and as a student of the market for more than 30 years I personally can tell you, I have never seen this set of circumstances come together as they are currently unfolding in the world financial markets.
The Cyprus situation is the canary in the coal mine. The fact is that this action has never been taken by any central bank previously - to essentially steal money from depositors - will have serious socio-economic consequences and sets the stage for the last act of this financial crisis. The collapse of the monetary system (U.S. dollar) as we know it, and the resumption of the long-term secular bull market in gold and silver.
On a recent phone interview, I asked Eric Sprott (Sprott Asset management) if the Cyprus crisis was the "Black Swan" of the eurozone? He said, "This is a Black Swan."
This is a template that is going to be applied on a global basis. The general consensus by the central bank leaders is to unleash the most aggressive monetary policies ever. Which is to print as much fiat currency necessary to band aid the system, with severe long-term inflationary if not hyperinflation consequences globally. .
There has never been a more profound reason to shift back to real money like gold and silver in order to weather the storm or the economic tsunami that's under way. The problem is that it may not be enough of the real thing to go around (Comex Gold Inventories Collapse By Largest Amount Ever On Record).
Over the last 90 days without any announcement, stocks of gold held at Comex warehouses plunged by the largest figure ever on record during a single quarter since record keeping began in 2001 (roughly the beginning of the bull market). See chart below.
Total drainage of physical inventories reached nearly 2 million ounces of gold, which at today's prices represent roughly $3,000,000,000.
Large speculators have the biggest short position on record. Interest by speculators in silver has waned in the past few months, as reflected by Commodity Futures Trading Commission data. In the March 26 weekly commitments of traders report, the most recent data, money managers' net-long position for silver sits at a mere 632 contracts for futures and options combined in the disaggregated report.
This is a dramatic fall from this year's high of 29,580 net-long contracts reached on February 5. Since reaching that high, the net long position for silver speculators fell each week. Meanwhile, the gross short position for speculators has risen to 22,382 as of March 26, from 2,922 as of February 5.
Extreme lows for the managed money net long positions are "usually associated with important bottoms for the price of Silver," said Karl Schott, a bullion specialist with EMA. I urgently recommend you to open your eyes and see that this is a life changing opportunity to accumulate gold and silver at current levels and buy as much as you can, converting fiat currency to old and real money like gold and silver in order to protect and maintain purchasing power. Don't wait, act now before it's too late. This is an explosive set of unusual circumstances for gold and silver markets.
Additional disclosure: The information in the Market
Commentaries was obtained from sources believed to be reliable, but we do not
guarantee its accuracy. Neither the information nor any opinion expressed
therein constitutes a solicitation of the purchase or sale of any futures or
options contracts.
Disclaimer: Trading derivatives, financial instruments and precious metals involves significant risk of loss and is not suitable for everyone. Past performance is not necessarily indicative of future results.
For the last few months, I have been warning my subscriber base to take a serious look at the reality of the unfolding collapse in the monetary system as we know it. It's happening in front of our eyes and you need to be aware and prepare for what is coming. I've published numerous articles, particularly for the gold and silver markets, on this subject matter.
The past couple of years have been a real test and challenge to my personal convictions and my skills based on the evidence and research I have done. One of the most difficult skills to accomplish in trading is the ability to break away from the herd. It's human nature, and most of us want somebody else to take the responsibility to deal with the challenges and find the solutions to our problems.
In a previous report I commented,
U.S. debt continues to increase. In the first two months of the current fiscal year that began on October 1st, the U.S. national debt has grown $320 billion. That is $21 billion more than the same two-month period last year, which illustrates that the growth of the national debt continues to accelerate. The reason of course is the federal government's huge operating deficit, which is not getting any smaller.
That is exactly what the general consensus seems to have adjusted to. Or, I should say, addicted to - the idea that our government is going to solve our problems and find the solutions through its distribution of wealth template - which has proven to be the formula to destroy the middle class and in doing so the old American Dream. I am not a gloom and doom person or an extremist. But I have been around the block enough times, and as a student of the market for more than 30 years I personally can tell you, I have never seen this set of circumstances come together as they are currently unfolding in the world financial markets.
The Cyprus situation is the canary in the coal mine. The fact is that this action has never been taken by any central bank previously - to essentially steal money from depositors - will have serious socio-economic consequences and sets the stage for the last act of this financial crisis. The collapse of the monetary system (U.S. dollar) as we know it, and the resumption of the long-term secular bull market in gold and silver.
On a recent phone interview, I asked Eric Sprott (Sprott Asset management) if the Cyprus crisis was the "Black Swan" of the eurozone? He said, "This is a Black Swan."
This is a template that is going to be applied on a global basis. The general consensus by the central bank leaders is to unleash the most aggressive monetary policies ever. Which is to print as much fiat currency necessary to band aid the system, with severe long-term inflationary if not hyperinflation consequences globally. .
There has never been a more profound reason to shift back to real money like gold and silver in order to weather the storm or the economic tsunami that's under way. The problem is that it may not be enough of the real thing to go around (Comex Gold Inventories Collapse By Largest Amount Ever On Record).
Over the last 90 days without any announcement, stocks of gold held at Comex warehouses plunged by the largest figure ever on record during a single quarter since record keeping began in 2001 (roughly the beginning of the bull market). See chart below.
Total drainage of physical inventories reached nearly 2 million ounces of gold, which at today's prices represent roughly $3,000,000,000.
Large speculators have the biggest short position on record. Interest by speculators in silver has waned in the past few months, as reflected by Commodity Futures Trading Commission data. In the March 26 weekly commitments of traders report, the most recent data, money managers' net-long position for silver sits at a mere 632 contracts for futures and options combined in the disaggregated report.
This is a dramatic fall from this year's high of 29,580 net-long contracts reached on February 5. Since reaching that high, the net long position for silver speculators fell each week. Meanwhile, the gross short position for speculators has risen to 22,382 as of March 26, from 2,922 as of February 5.
Extreme lows for the managed money net long positions are "usually associated with important bottoms for the price of Silver," said Karl Schott, a bullion specialist with EMA. I urgently recommend you to open your eyes and see that this is a life changing opportunity to accumulate gold and silver at current levels and buy as much as you can, converting fiat currency to old and real money like gold and silver in order to protect and maintain purchasing power. Don't wait, act now before it's too late. This is an explosive set of unusual circumstances for gold and silver markets.
Disclaimer: Trading derivatives, financial instruments and precious metals involves significant risk of loss and is not suitable for everyone. Past performance is not necessarily indicative of future results.
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