Tag Archives: gold coins

“Buy” Signals Are Appearing Everywhere In Gold

The prediction I presented in the last Mining Stock Journal to subscribers about gold is developing even before the new year.

Although it seems like the precious metals sector has experienced another down year, the
HUI index is still up 48.6% from its 12/31/15 close and it’s up 65% from its low on January
19th this year.

The technicals in the gold market never been set up better than they are now for a contrarian move higher. On the assumption that gold closes on Friday lower for the week than last week, it will mark seven straight weeks in which gold has closed lower on a weekly basis. This has never happened before.

The premiums for physically delivered gold in China have never been higher. Egon Von Greyers, in Switzerland, reported in his latest King World News interview that there are reports that Swiss refiners have been paying a premium to buy gold. My suspicion is that the Chinese are willing to pay $30+ premiums to world gold in order to keep the supply from Swiss refiners flowing, which is why Swiss refiners are willing to pay premiums to acquire dore bars and scrap.

This illustrates the growing disconnect between the price of gold being paid by the markets in which physical delivery is a requirement vs. the price being paid by the paper gold markets (NYC, London) in which physical delivery (i.e. removed from the exchange and received into private hands) is highly limited, if not outright discouraged or considered a peculiarity.

The above analysis is an excerpt from the latest issue of the  Mining Stock Journal.  In thi s issue, I present several technical indicators which suggest gold is poised for a big move higher.  The mining stocks have been telegraphing this since late November – I detail this point in the MSJ

The MSJ is a bi-weekly subscription-based newsletter delivered to your inbox every other Thursday. The focus is primarily junior exploration mining companies, which have provided the best upside returns since January. Bloomberg featured an article – LINK – which explained that in-ground reserves at the large gold producers are dwindling. This will make small exploration companies with demonstrated gold/silver resource in the ground a lot more valuable going forward. You can access the MSJ here:  Mining Stock Journal Subscription Info.

I am a subscriber to both of your journals.  I just want to say “WOW” to this post on your site. Thank you for all your work.  As a financial professional of 28 years’ experience, I can tell you why there is no churn in your journal subscriptions. Your work is extremely sound and well done even in a massively manipulated environment.  – Kevin B.

New subscribers receive all of the back-issues (via email) plus a glossary of terms which help explain mining technicals.  The latest issue, released yesterday, has a junior explorer that has a proved resource on the largest copper-gold deposit discovered in recent years. This stock is worth at least twice it’s current market price based on the fundamental value of the deposit.

Does Gold & Silver Care Who Wins?

Short answer:   No.

A local financial advisor texted me today asking what I thought gold would do if Hillary wins today. Obviously he’s been reading the pedestrian analysis on the topic that has flooded the mainstream media.

But gold doesn’t care who wins.  The United States is beset with unsolvable financial and economic issues that will require a systemic reset.  The amount of funded Treasury debt outstanding since Obama took office has doubled to $20 trillion.  So much for his claim that he reduced the spending deficit.  But the result would have been the same if McCain had won in 2008 or if Romney had won in 2012.

Stocks and bonds are historically overvalued.  While the accounting standards have been substantially liberalized thereby enabling companies to artificially boost earnings with gimmicks, using comparable accounting rules to compare now to any other market top in history would show that current valuation ratios are significantly higher than at any other time in the history of U.S. markets.   The bond argument is easy:  interest rates are at or near all-time lows.  Rates can only go higher which means bond prices can only go lower (unless artificially taken negative by the Fed, which would cause gold to go parabolic) .

With fiat paper assets at historically overvalued levels, gold and silver are highly undervalued relative to financial assets and in relation to the quantity of paper money, where the quantity paper money is currency issued plus credit outstanding.  The latter is included because debt functions exactly like currency until it’s repaid.  Guess what?  This country has not reduced the cumulative public and private debt outstanding in the post-World War Two period.  The small “blip” indicating overall debt declined in 2010 reflects massive banking sector write-offs and debt-forgiveness, both of which were monetized by the Fed.  As long as the level of debt increases, credit outstanding needs to be included in the money supply.

The bottom line is that gold is going to move much higher in value relative to the dollar regardless of which candidate or which party controls the political process.  The laws of nature and economics remain constant throughout history.   When the Central Bank and Government market intervention eventually fails and these laws reassert their force – which they always do – the “money” that floods out of stocks and bonds will flood into physical gold silver.

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Propaganda And Precious Metals

As gold reaches for higher prices and gains more attention, the propagandists are flooding the news outlets with articles on the virtues of investing in the stock market and the evils of precious metals – Silver/devil. The Ponzi must continue at all costs. The U.S. dollar, at present the worlds reserve currency, is a corrupt, blood-soaked instrument of debt. The privately owned Federal Reserve, who gets it’s marching orders from the Treasury Secretary, is working overtime to destroy the value of the dollar, enabling the elitists to use it as wealth confiscation tool. We find ourselves in the end game for this currency. How long can the end game continue? As long as it suits the corrupt banking cabal and corrupt politicians. Once these two groups of criminals have themselves positioned properly outside the U.S. dollar, the plug will be pulled. Until then, gather as much gold and silver as your budget will allow.

Guest Post: Donald Trump Apparently Likes Gold

…One More Reason For The Establishment To Hate Him

Eric Dubin – The News Doctors

Naturally, Donald Trump likes currency, but he also likes money (bragging rights go to all those that know the difference).  It turns out that he accepted 3 kilo bars of gold as a security deposit from American Precious Metals Exchange.  APMEX is renting the 50th floor of the Trump Building at 40 Wall Street for the next ten years.  The gold has a U.S. dollar nominal value of about 120 grand.

The New American magazine broke the story.  Amusingly enough, their website was attacked this morning, and the page hosting the story had a redirect programmed into the page.  Anyone that clicked on the story was redirected to a pediatric hospital’s website based in Argentina, with an “object not found” page displayed.  Someone doesn’t want you reading this article…Read the rest of this article here:  The News Doctors

The NY Times Tries To Demonize Gold

Right now it is $1,390 an ounce, but before the events in New York and Washington it was $280 an ounce,” he wrote. He added, “If the price of gold reaches $1,500 or a little over before you get this message, it’s still all right to buy it.NY Times quoting Bin Laden

Some of you may remember back in like 2003 or 2004 when gold’s move up was starting to catch the eye of the mainstream media and CNBC’s Bob Pisani made the comment from his theatrical perch on the floor of the NYSE that “gold is the currency of terrorists.”

Enter the New York Times – where the truth goes to die.

The mainstream media has an obsession with demonizing gold.  It’s the metal of terrorists; it’s a pet rock; you can’t eat it;  it doesn’t pay interest…and now the NY Times is connecting the ownership of gold with Bin Laden.  Why even bring this up?   Bin Laden has been dead since 2002 (kidney failure) 2011.

Of course, the NY Times has morphed into little more than a propaganda mouthpiece for the elitist interests that control it.  In that regard, the NY Times article associating Bin Laden with gold ownership reflects the growing concern of the elitists over the slow but steadily growing interest in precious metals ownership by the public.

But the U.S. Government’s policy of eradicating the legitimacy of gold as currency goes back the 1970’s.  Discussion and education about gold as a currency was systematically eliminated from the educational system in the early 1970’s after Nixon removed any connection between fiat currency and gold.

As an economics major in undergrad (1981 – 1985), I took some financial economics courses.  Gold was never mentioned.  I studied financial theory at the U of Chicago B-school (1989 – 1991) from the same professors who wrote the finance textbooks I used in undergrad.  No mention of gold in any respect, not even for historical perspective.

Now that gold’s long term bull market is beginning to re-emerge, articles which disparage if not vilify gold are appearing in  “respectable” mainstream media publications like the NY Times and Wall Street Journal.

But if gold is no big deal, how come the Fed refuses to answer any inquiries about its dealings on gold:  “Smith then asked Dudley whether the Federal Reserve has swapped gold with the governments or central banks of other countries. Dudley replied:  “‘I can’t comment on individual customer kind of transactions.'”  GATA.org

Perhaps if the NY Times et al were interested in digging up real news about gold, these publications would looking into the dealings by the U.S. Treasury and the Federal Reserve with respect to the 8,100 tonnes of gold allegedly held in storage at Federal Reserve vaults. If gold is no more than a “pet rock” that “just sits there doing nothing” (Warren Buffet’s comment about gold) why is the Fed intentionally non-transparent with respect to its trading activities in gold?  After all, the Fed publishes daily disclosures about its trading activities in its U.S. dollar fiat currency.

These are of course rhetorical questions.  In fact I would suggest that the anti-gold propaganda will increase in direct correlation with the next leg up in the gold bull market, which began in mid-January.   After all, a properly informed and educated public is dangerous to the Government…

Would the New York Fed respond with such contempt to a similar inquiry from, say, The Wall Street Journal, New York Times, Reuters, Bloomberg News, or the Financial Times? The possibility of such critical and specific questioning about the Fed’s surreptitious intervention in the markets probably does not worry Fed officials in the slightest. At least such questioning has never happened before.  – GATA

SoT – Peter Schiff: The U.S. Is One Gigantic Bubble Economy

The admission that the economy is so weak that it needs more QE is going to destroy the narrative that the U.S. economy is in great shape and it’s no longer going to be the safe haven for capital around the world…it’s going to prick the bubble in the dollar…and people are going to realize that we’ve never recovered from anything, the economy is sicker than ever, the Fed’s going to make it even sicker with more of its toxic monetary policy, the dollar’s going to tank and the price of gold is going to skyrocket – and people need to prepare for that now.  – Peter Schiff on the Shadow of Truth

When Mt. Vesuvius blew, no one knew when it would happen or how big the eruption would be.  Everyone knew a volcanic event was going to occur and yet, the magnitude of the event caught a lot of people by surprise. The eruption destroyed two Roman cities and several surrounding settlements.  It killed an estimated 16,000 people.  The question is, how come more people didn’t leave the area surrounding Vesuvius when they knew that something was going happen at some point?

The United States financial system – including the viability of the U.S. dollar – is analogous to the eruption of Mt. Vesuvius.  A lot of people know something is wrong – evidenced by the growing support for the Trump candidacy – and yet 99.5% of the population is ignoring the warning signs of a systemic eruption of unknown magnitude.  It’s an event that draws closer with each passing day.

The warning signals of the coming financial markets collapse are in full view.  The warning signal from the junk bond market, triggered by but not limited to the collapsing energy sector, is beginning to spread into and infect the rest of the financial markets like an uncontrollable virus. If you are an investor or a professional money manager, what more of a warning do you need that this:

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That chart resembles a giant tsunami that has coiled offshore and is getting ready to slam into the the nearby beach. Only in this case millions of people remain on the “beach” to watch the horror show unfold without leaving for safer ground. It’s as if everyone knows a catastrophe is about to occur and yet most remain embalmed with the hope that it can’t really happen.

The willingness of people to park their paper in financial assets like bonds is simply a function of their lack of understanding of the problems that exist and their false confidence in Central Banks.  – Peter Schiff

The systemic causes of the financial crisis that hit in 2008 – and which was really a de facto financial system collapse – were never properly treated. Rather, they were medicated by heavy doses of money printing and free money, the latter which is otherwise known as ZIRP. The moral hazards of this monetary policy have fomented in impending systemic eruption which will be the financial market’s equivalent of the historic Mt. Vesuvius volcanic blast. The timing of this is just as unpredictable as the consequences.

The Shadow of Truth hosted a conversation with Peter Schiff to discuss to discuss the impending financial market eruption and the inevitable dollar crisis, which will ultimately rip apart the U.S. financial and economic system:

SoT #63 James Turk: Gold/Silver – “This Thing Could Blow”

What we’ve got now with Central Banks and their financial repression with zero interest rates and destruction of fiat currencies, they’re destroying the inherent nature of capitalism itself:  the inherent nature of the accumulation of capital by the productive middle class – this is all being destroyed...one way or another, the world is going to go back to gold and silver [as the primary form of currency] – it’s just a matter of time.  –  James Turk on the Shadow of Truth

Gold and silver appear to have found their final bottom in the nasty 4-plus year price correction that began in May 2011.   Too be sure, this “correction” was largely a product of Central Bank intervention which was implemented to prevent gold and silver from signalling to the world that Governments globally, especially the U.S. Government, are in the process of destroying middle class wealth through the incessant debasement of paper currencies.

Since late July/early August, gold has moved up over 9% from its bottom ($1085, futures basis) and silver is up 14.5% from its bottom ($14.07, futures basis).  Of course, it remains to be seen if this is going to be more than a dead-cat bounce before the metals head back to re-test their bottom or set new lows, but specific market signals are suggesting that there’s a strong probability that the precious metals have embarked on the the long-awaited resumption of their secular bull market.

One of the primary signals is the persistent price “backwardation” observed in the London gold market since 2013.  As Turk explains in the podcast:

Backwardation shouldn’t happen in the gold market. The arbitrage opportunity should take it away. But we saw it 1999 for a couple of days when gold was its low and we saw in 2008 for a couple of days when gold reached its low then. We’ve seen backwardation more often than not since January 2013 when the Fed’s QE3 program started.

While backwardation occurs when there’s a shortage of physical gold available for immediate delivery on a “wholesale” basis – i.e. very large quantities – it also reflects that fact that investors prefer to hold onto the gold they have in possession rather than lend it to the market in exchange for the market’s promise to re-deliver that gold in the future at a lower cost to the investor.

In addition to backwardation, Mr. Turk discusses some other indicators which are signalling the likelihood of much higher gold/silver prices going forward plus his views on the “re-monetization” of gold – i.e. the market’s push to insert gold into the global financial system as a currency (it’s always been used as an asset).  Or, as Mr. Turk prefers to say, “the re-currencyzation” of gold:

There’s always a higher risk in fiat currency than there is in gold because gold can not be created out of thin air like paper currency can be created out of thin air. – James Turk, Shadow of Truth

India Expected To Import At Least 100 Tonnes Of Gold In March

Unofficially India imported about 25 tonnes in February, as buyers waited to see if the Government would reduce the 10% import duty imposed by the previous Government in July 2013.   But Bloomberg is reporting that “snap-back” demand could boost India’s imports to 100 tonnes in March as India heads into another festival season – Bloomberg link.

As John Brimelow of JB’s Gold Jottings avers:

India in November demonstrated an ability to import prodigious quantities of gold legally even with duty at an effective 10.3%. This could happen again with weak world gold or, just as possible, a strong rupee. For the immediate future the question is if Indian demand really was inhibited by the prospect of lower duty…

That last sentence references the fact that including smuggled gold, it’s not clear if the 10% import duty actually reduced the amount of gold that entered India either officially or “unofficially.”   Of course, the World Gold Council will only use the official numbers and will completely disregard any reference to smuggled gold.

Meanwhile India announced plans to try and monetize India’s gold stock by introducing gold deposit accounts that would pay interest on gold deposited into the accounts and by introducing a “sovereign gold bond” which would be gold-backed bonds that pay interest and would be redeemable in cash.  It’s my view that this “monetization” scheme will be fail miserably, as Indians – more than any other culture – demand gold that is delivered to their possession in the form of coins and jewelry.

I really can’t figure out the motive of the Indian Government in introducing this “monetization”  idea other than, despite being a BRICS member, India’s Government occasionally plays the role of a lap-dog to the U.S. and England.  The Bank of England and the Fed have been aggressively pushing a fractional gold system on India for quite some now.  Clearly the west desperate to divert as much global capital as possible away from buying deliverable physical gold and into paper gold derivatives.  This plan in India will be a colossal failure.