Gold & Precious Metals

Believe It or Not: Gold’s 8-Year Cycle Still on Track

Given gold’s retreat during 2013, it would seem the Midas Metal’s best days are behind it, at least for a while.

But nothing is further from the truth. The strong demand for gold has not gone away.International investors, central banks and corporations are all looking to buy gold and these low Summer months are likely providing the best price.

Asian investors, especially in China and India, are buying coins and bullion like mad. Sales are up 22% annually in China and 52% in India.

Gold analyst Jim Willie said it best when he said, “The migration of gold from West to East is the grand story of the decade.”  They know, as our dear friend Richard Russell recently reminded us, that gold and international power still go hand in hand.

Ed Note: Much more HERE including an explanation of this chart:



Is Silver Good As Gold?

Much has been written about the myriad industrial applications for silver, and even more since announcements from China and Japan of plans to accommodate increased reliance on solar power by 2015 in satisfying their growing energy needs.

Last month, according to Jeff Clark of Casey Research:

China raised its target for solar generating capacity to more than 35 gigawatts (G W) by 2015, a stunning increase of 67% above its previous target.

Take note: I am not a financial planner, adviser, accountant, economist or alchemist. I started investing late and I’m not a millionaire. I am a logical thinker looking for answers. I won’t spin a bunch of numbers, won’t argue shrinking global mine output, and I will not talk Fed money printing, however this article does intend to make a case for silver surpassing gold in future demand.

I know, you might think I wear a tin foil hat, but add this to your thought process. Silver remains the most reflective, heat resistant and electrically conductive material on earth. Its beauty and resilience makes it perfect for jewelry, and the shiny metal enjoys rising popularity among retail investors because of its close relation to money and value as a hard asset.

Silver has something special going for it

The Casey Research chart below does not include future silver demand associated with the new solar panel initiative. It only illustrates industrial demand in year 2012.

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… more HERE

Gold’s miserable 2013 has been devastating for gold stocks.  This sector, arguably the best performing over the 2000s, has quickly become the pariah of the markets.  And no group of gold stocks has seen more carnage than the junior explorers.

Descriptive of their name, junior gold explorers are small mining companies that explore for gold.  And within this sub-sector is a wide spectrum of exploration stages, from early-stage to advanced-stage.

Early-stagers are either in the process of looking for a gold deposit, or are in the beginning stages of delineating one.  In some cases they’ve moved to resource definition, but any inventory estimates are still rough due to their deposits not yet seeing enough drill holes.  Resources would be categorized as “in-house” or “inferred” (as measured by NI 43-101 standards), and they’re nowhere near reliable enough to build an operating and/or economic model.

Advanced-stage junior gold explorers already have gold deposits.  And these deposits have seen enough drill holes to give a greater confidence in their depth/breadth and resource estimates.  In this stage resources are categorized as measured and/or indicated, and in some cases proven and/or probable reserves.

….read much more HERE

Gold futures quickly recovered from their overnight weakness Friday after the government issued a weaker-than-forecast U.S. jobs report.

The metal initially slid overnight largely when sell stops were triggered on a break below $1,300 an ounce, with the initial impetus being the idea that stronger U.S. economic data in recent days pointed to a probability of the U.S. Federal Open Market Committee scaling back on its bond-buying program this fall, observers said.

However, at the start of the New York trading day, a Labor Department report said non-farm payrolls climbed by 162,000 in July. This was below consensus forecasts of 175,000 to 185,000, enabling gold to pop higher.

As of 8:50 a.m. EDT, gold for December delivery was up $4.60 to $1,315.80 per ounce on the Comex division of the New York Mercantile Exchange. It was at $1,285.30 five minutes prior to the jobs report.

September silver was up 50.1 cents to $20.125 an ounce. The contract was at $19.385 just ahead of time.

“We got a bounce on the jobs data because it’s all about the dollar and whether stimulus will be less or not,” said George Gero, vice president and precious-metals strategist with RBC Capital Markets Global Futures.

Presumably, less-robust jobs growth means less chance of some stimulus being withdrawn in the foreseeable future. The euro was up to $1.3269 from $1.3209 late Thursday.

Sterling Smith, futures specialist with Citi Institutional Client Group, said the jobs data was soft enough to help gold avoid any further weakness for now. There were some so-called “whisper” numbers that the payroll number could have been as much as 220,000, he said.

“That might be sparking a little buying interest,” he said of the softer data.

However, he attributed much of the bounce to short covering ahead of a weekend.

Gero said, however, that he looks for gold to remain range-bound for now due to not enough worries in the market about inflation, especially with other commodities such as copper and grains down for the year so far.

Overseas traders said gold’s decline accelerated overnight in Asian trading on the break of $1,300 an ounce, triggering sell stops. These are pre-placed orders triggered when certain chart points are hit. The $1,300 area had offered nearby chart support for gold over the last two weeks, as the December futures climbed through this level on July 22 and held above it until overnight trading.

Whereas gold poked its head back above $1,300 after the data, Smith said a failure to close above here could portend further technical weakness.

The overnight move was encouraged by stronger-than-forecast U.S. data in recent days that included second-quarter gross domestic product and the Institute for Supply Management’s manufacturing survey, analysts said.

Gartman: Gold is going ‘several hundred dollars higher’

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Gold Chart Screenshot Above taken at 6:05 am PST


The sell off in gold has run its course, and the precious metal is set on an upward trajectory thinks Dennis Gartman. Gartman is a closely followed commodities trader and founder of The Gartman Letter.

The low that gold prices hit a month ago will stand as the bottom for “a fairly long period of time,” Gartman told CNBC on Friday (July 26th).

“I had been agnostic and modestly bearish of gold until about three and a half weeks ago,”  “Then I wrote what I call ‘a watershed commentary’ that gold was going to go several hundred dollars higher.”

Ed Note: Here is a quotation from Mark Leibovit’s August 1st VR Gold Letter concerning Dennis Gartman:

“Dennis Gartman insists that there are no conspiracies in gold

Wednesday’s “Talking Numbers” program by CNBC and Yahoo Finance concocted a silly pillow fight between two talking heads, commodity letter writer Dennis Gartman and UBS and CNBC analyst Art Cashin, over “gold conspiracy theories,” Cashin having remarked this week, if a bit incoherently, that something seems to be wrong in the gold market.

Gartman disagreed today, insisting that there are no conspiracies in gold. So apparently Gartman would have investors believe, just for starters:

1) The Federal Reserve has no secret gold swap arrangements with foreign banks, since such undertakings among two or more entities would define conspiracy, and Fed Governor Kevin M. Warsh was lying when he admitted such secret arrangements.

2) The Bank for International Settlements is not constantly and secretly trading gold, gold futures, gold options, and other gold-related derivatives on behalf of its members, which are exclusively central banks — again, action undertaken secretly in concert by two or more entities, or conspiracy — and that admissions of such trading, including the BIS’ own annual reports and Power Point presentations, are lies or forgeries.”