Gold & Precious Metals

  1. In the gold market, there may be a “perfect storm” of bullish fundamental forces converging now. First, gold jewellery companies in China are reporting phenomenal increases of 15% – 50% in sales, for the Chinese New Year buying season.
  2. Late in 2013, many bank economists lined up to claim that the 1000 tons of gold demand that occurred in China in 2013 was a onetime event, unlikely to be repeated in 2014. It’s still early in the year, but there’s no question that Chinese citizens are buying gold jewelleryaggressively. Do the bank “econs” now have a little egg on their faces? I think so, and that egg is golden.
  3. For gold investors and gold dealers alike, the 2014 calendar year is clearly off to a fabulous start. 
  4. Janet Yellen, who I’ve labelled a “gold bull shark”, makes a key speech before congress today, and again on Thursday. Dr. Yellen is rumoured to be seriously concerned about the low official inflation rate. 
  5. If she raises those concerns in her speech to congress, it could cause an institutional stampede into gold stocks.
  6. Arguably, that stampede is already underway. Please click here now . The huge volume on this key daily GDXJ chart is what I would call “ultra-bullish”. 
  7. Note the position of my stokeillator (14,7,7 Stochastics series), at the bottom of the chart. Buy signals that occur near the 50 or 60 area tend to be momentum-oriented. Powerful moves to the upside often follow these types of buy signals. 
  8. There is also a bullish inverse head and shoulders bottom pattern in play, with a $55 upside target.
  9. Since the year started, junior gold stocks have outperformed all market sectors. They have risen on days when bullion has fallen, and when the Dow has fallen. 
  10. Volume must be respected, and no other market shows the bullish volume that is clearly apparent on a myriad of junior gold stock charts.
  11. Please click here now . That’s the hourly bars gold chart. There’s a bullish symmetrical triangle breakout in play, with an upside target of about $1320. 
  12. The daily chart looks equally bullish. To view it, please click here now . Note the beautiful stokeillator buy signal in play.
  13. The monthly chart suggests that the current rally in gold may be just starting. Please click here now . Double-click to enlarge. If you look closely, you can see that gold has staged a tentative breakout to the upside, from the thin blue downtrend line that I’ve marked on the chart.
  14. Many senior bank technicians have stated they would turn bullish on gold if it rose above that line to trade above $1478, and it just did that.
  15. While most of the indicators and oscillators look good, I’m particularly impressed with the action of the 4,8,9 series MACD.
  16. Also, there’s a potentially enormous head and shoulders bull continuation pattern forming on that monthly chart. The technical target is about $2800. 
  17. While a move to $2800 may seem unlikely, more fiction than fact, fundamentally-oriented investors should remember that the entire nation of India is essentially in “handcuffs”. Narendra Modi is the front runner in national election polls. This man has been weighed in silver, a ceremony reserved for Hindu priests. He’s publicly stated that he doesn’t want to stifle the goldsmith industry. He wants to develop it.
  18. If Modi gets elected, pent-up Indian demand could swamp supply, and create a temporary “super-spike” in the gold price. Smuggling is also beginning to rise there, and if Modi doesn’t win the election, the amount of smuggled gold going into India could increase dramatically.I feel it could rise by hundreds of percent above the (estimated) 15 tons a month being smuggled into India now. That’s because most Indian gold demand is based on religion, making it essentially inelastic.
  19. Also, Shinzo Abe and Haruhiko Kuroda are promoting a QE program in Japan that dwarfs American QE, and Japanese inflation has already started to rise because of it. Japan is the world’s third largest economy. Inflation there will be exported around the world, probably fuelling significant institutional buying of gold and gold stocks.
  20. I know that many investors in the Western gold community also love silver. It hasn’t really shown much upside action in 2014, but I think that’s about to change. 
  21. To understand why that is, please click here now . The $20.60 area has limited the upside action recently, but a move above there is likely to attract significant hedge fund buying. Also, Janet Yellen’s speech could be a “game changer”. 
  22. Ever since the Western super-crisis began in the year 2000, American citizens have been living under a cloud of almost perpetual asset destruction. Late in the fall of 2013, I forecast that a “QE taper caper” would occur, and it would shock the gold community by being bullish for gold stocks. Now I’m forecasting that the era of deflation is going to be officially ended by Dr. Yellen’s speeches.  
  23. Along with the yen, I use sugar as a key leading indicator for silver prices. On that note, please click here now . Look at the buy signal being flashed by my stokeillator now, on this key weekly sugar chart. 
  24. Institutional money managers who can flock to gold stocks are far more interested in the inflation rate than they are in the size of the money supply. A significant rise in food price inflation is being forecast by that sugar chart right now. Is the Western gold community ready, for Dr. Yellen to potentially usher in the return of inflation, and a new gold bull era? I hope so!

Feb 11, 2014
Stewart Thomson
Graceland Updates
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Tuesday Feb 11, 2014
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Stewart Thomson is no longer an investment advisor. The information provided by Stewart and Graceland Updates is for general information purposes only. Before taking any action on any investment, it is imperative that you consult with multiple properly licensed, experienced and qualifed investment advisors and get numerous opinions before taking any action. Your minimum risk on any investment in the world is 100% loss of all your money. You may be taking or preparing to take leveraged positions in investments and not know it, exposing yourself to unlimited risks. This is highly concerning if you are an invetor in any derivatives products. There is an approx $700 trillion OTC Derivatives Iceberg with a tiny portion written off officially. The bottom line:

Intl Buying & Your Shot at 1,000% Gains

Posted by Jeff Clark, Senior Precious Metals Analyst

on Tuesday, 11 February 2014 10:17

As a gold investor in North America, it sometimes feels like I’m living in some far-off land where everyone believes in fairy tales and unicorns.

Most people around me don’t seem to see anything wrong with the Fed creating $65 billion a month out of thin air—hey, it’s not $85 billion anymore, what a relief! It’s business as usual for the US government to spend billions more than it takes in, and a public debt hovering at $17.2 trillion—up from $7 trillion just 10 years ago—seems no more alarming than a rainbow.

No surprise then that these people don’t feel any need to own assets that might help them in times of crisis. Hard assets like… gold.

I’m reminded of a visit I made to China several years ago. One night, I awoke in the middle of the night—something was crawling under the bed sheet. I shot up like a cannonball, trampolined out of bed, and hit the light switch. I searched and searched for whatever bug had made its way under the sheet, but never did find the little vermin. Still, I was so creeped out, I spent the rest of the night on the couch.

I told the staff the next morning what happened—and they did nothing. They just stared at me. They spoke English, so it wasn’t that they didn’t understand me. It was just that none of them seemed to think it was a big deal. One of them even chuckled. They obviously didn’t appreciate the potential health hazard and had no sense of customer service. I left bemused, wondering how people could accept bedbugs as normal—or even if they did, how they could not care about a customer’s experience. It was like being on another planet.

I have some of those same feelings when I think about mainstream investors today. How can they not appreciate the potential financial hazard inherent in something as obviously dangerous as today’s unprecedented levels of money printing? How can they not care that they have nothing solid, like gold, at the core of their investment portfolios? It’s like these people think they live on Planet Sesame Street.

Most people seem to really believe that today’s heavy-handed government interventions are not only the right course of action, but will have no negative fallout. Massive currency dilution, unstoppable tides of rising debt, and never-ending fiscal imbalances are hardly a way to cure decades of money mismanagement, and certainly aren’t consequence-free. How is it that this is not obvious to all?

I honestly don’t know. Perhaps people are aware at some level, but the truth is just too awful to face, and so people don’t.

Very few of my friends and neighbors own any gold. Rarely am I asked about it anymore, even by those who know what I do for a living. The doctor I saw last month gave me the distinct impression I could be doing better things with my money. Most of the mainstream media ignore gold, while many of the big banks loudly proclaim their latest short position as if they had some sort of divine insight.

I’m starting to feel like the proverbial lone voice in the woods…

But We’re Not Alone!

As deluded as most Americans seem to be, that is definitely not the case for everyone in the world—the Japanese, for example, are much more prudent and levelheaded.

I wonder if my fellow citizens would feel differently if they lived in any of these countries where people have witnessed economic insanity firsthand, and are acting accordingly:

Japan was a net importer of gold in December, the first time in almost four years. Net purchases totaled 1,885 kilograms (60,604 ounces). It was only the tenth time Japan was a net monthly buyer since the end of 2005. There are reports that Japan’s pension funds, which hold the world’s second-largest pool of retirement assets, are buying gold.

Dubai gold jewelers just reported the strongest gold sales in seven years. Pure Gold Jewelers, one of the largest dealers in the country, reported a 25% increase in gold jewelry sales during the Dubai Shopping Festival this year.

The state of Gujarat in India reported that silver bullion imports hit a five-year record from April 2013 to January 2014. Imports were more than 450% higher than the same period a year ago. The Indian government has since hiked the import duty on silver to 15%, the same rate as gold, and official imports in January subsequently fell. Smugglers will surely add silver to all those secret luggage compartments they’ve been using for gold.

Australia’s Perth Mint said gold sales jumped 41% and silver 33% in 2013. In January, gold demand was up 10% and silver 8%.

Mexico’s pension funds are now investing in gold after strict investment regulations were recently lifted. The World Gold Council says it spoke to 10 of the country’s most influential pension fund managers (with over $160 billion in assets) and was told that they began investing in gold and commodities in 2013.

Central banks were once again big buyers last year. Of those that have reported so far…

 

  • Turkey purchased 150.4 tonnes (4.83 million ounces)
  • Vietnam 110 tonnes (3.53 million ounces)
  • Russia 57.3 tonnes (1.84 million ounces)
  • Kazakhstan 24.16 tonnes (776,762 ounces)
  • Azerbaijan 16.02 tonnes (515,054 ounces)
  • Sri Lanka 6.51 tonnes (209,301 ounces)
  • Nepal 6.22 tonnes (199,977 ounces)
  • Ukraine 6.22 tonnes (199,977 ounces)
  • Indonesia 4.04 tonnes (129,889 ounces)
  • Venezuela 1.87 tonnes (60,121 ounces)

 

And of Course, There’s China…

ChineseGoldImportsin2013ARecord1139Tonnes

Last year’s record import number is impressive enough, but it’s the pace that’s mind-blowing. 1,139 tonnes is…

 

  • More than 2011 and 2012 imports combined.
  • Over 42% of global mine production last year.
  • Roughly twice as much as the amount GLD sold in all of 2013.

 

Meanwhile, Back in the Good Ol’ US of A…

Gold coin demand for 2013 jumped 24%. Some headlines have pointed out that January 2014 gold and silver coin sales were down compared to a year ago—but January 2013 was the all-time record for single-month sales. Further, Eagle and Buffalo gold coin sales were more than double December’s sales, and were the highest since last April. Silver coin sales in January were almost four times more than in December.

There, now I feel better.

Even if you sometimes feel like a lone wolf investing in this market, understand that worldwide demand for gold and silver bullion continues unabated. If you live in the US, realize that people in many other countries are seeing more positive headlines about gold, have more friends who own gold, and heck, could even walk into a bank to buy gold.

I don’t think the people in these other countries are stupid. Whatever consequences result from the historic levels of currency dilution across the globe, they seem as sure as I do that they’ll be good for gold.

What should you buy? I first recommend buying gold and silver bullion to establish a financial safety net. And then, to maximize gains on the more speculative end of your portfolio, you should look at Louis James’ just-released “10-bagger List for 2014” in the February issue of International Speculator. A 10-Bagger is a stock with the potential to gain 1,000% or more—that’s not a typo, we really did make 10 times our money on junior gold stocks the last time the sector rebounded, and Louis thinks that’s about to happen again.

For example, one of those prospective 10-Baggers is a junior with a multimillion-ounce gold project that’s run by one of our Explorers League honorees. This company is on the verge of securing the funds needed to build its exceptionally high-margin gold mine, but it’s on sale. Speaking of the potential, Louis said: “If the company delivers, it’d be easy to see these 40-cent shares trading for $4” by 2015.

Investing in these stocks—and there are nine of them on Louis’ list—could quite literally make you a fortune, but the opportunity to get in on the ground floor is fading fast. Click here to learn more aboutLouis’ 10-Bagger List for 2014—or watch the recording of our just-aired one-hour video event “Upturn Millionaires” to learn why the time to act is now.

 

After years of costly mistakes, the new chief executives of Barrick Gold Corp. and Kinross Gold Corp. have ushered in an era of austerity in the precious metal sector.

The results of their labour will be on display when Canadian mining companies report fourth-quarter earnings this week.

Investors are already expecting gold producers to reduce their bullion reserves, write down more assets and record lower profits.

But the bad news may soon be ending with companies adjusting to the lower gold price.

“The worst is over,” said John Ing, president of investment firm Maison Placements Canada Inc. in Toronto.

….read full article HERE

* Weak U.S. jobs data give boost to gold for second day

* Busy week ahead with Fed’s Yellen, economic data

* China 2013 demand tops 1,000 tonnes for the first time (Updates prices, adds comment)

By Clara Denina

LONDON, Feb 10 (Reuters) – Gold rose on Monday after a weak U.S. jobs report last week raised questions over economic recovery, which could potentially slow the pace of the Federal Reserve’s stimulus tapering.

Attention this week will switch to the first testimony from the new head of the Federal Reserve, Janet Yellen, to U.S. lawmakers hoping for reassurance that policy will stay loose for a long time to come.

Yellen will address the House Financial Services Committee on Tuesday and the Senate Banking Committee on Thursday.

…read more HERE

Gold rose to a two-week high in the longest rally since August in New York, as U.S. jobs data missed estimates and Chinese buyers returned from a holiday. Silver futures headed for the longest winning run in almost six months.

….full article HERE