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Gold continues 2014 run higher

  • Up another 1% this morning, gold takes out a new high for the year at $1,275 per ounce (about 6% higher than it started 2014). A possible catalyst today is the reopening of China's markets after having been closed since January 31 for the Lunar New Year.
  • Looking ahead, there's tomorrow's Congressional testimony from Janet Yellen - her first appearance in front of lawmakers since taking the Fed reins from Ben Bernanke. Plenty of weak macro data has boosted the yellow metal this year, but look for a quick retreat if Yellen is more upbeat about growth than the recent (maybe weather-related) numbers suggest.
  • GLD +0.6%, IAU +0.6%.
  • ETFs: GLD, IAU, PHYS, SGOL, UGL, DGP, GLL, DZZ, UGLD, DGL, DGZ, AGOL, GLDI, DGLD, TBAR, UBG
Comments (9)
  • David at Imperial Beach
    , contributor
    Comments (3598) | Send Message
     
    Yellen can be as "upbeat about growth" all she wants and it won't change a thing. I don't expect her to announce an acceleration of tapering under any circumstances. But if she starts talking like she's going to stop tapering and start another round of QE again, then all bets are off.
    10 Feb, 11:22 AM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2759) | Send Message
     
    Possible catalyst?

     

    Regarding China:

     

    Feb. 10 (Bloomberg) -- Gold consumption and production in China expanded to records as prices that slumped into a bear market spurred sales of jewelry and bars, underlining a shift in global demand from west to east. Bullion increased.
    Usage surged 41 percent to 1,176.4 metric tons in 2013 from the year before, according to data from the China Gold Association today. Output rose 6.2 percent to 428.16 tons, making China the largest producer for a seventh year, the Beijing-based association said in an e-mailed statement.
    China probably overtook India as the largest user last year, according to the producer-funded World Gold Council, which highlighted the eastward shift in global demand as holdings in exchange-traded products contracted by a record. Gold posted the biggest annual drop since 1981 last year as the U.S. Federal Reserve prepared to scale back monetary stimulus that boosted asset prices while failing to stoke inflation.
    10 Feb, 11:29 AM Reply Like
  • DeepValueLover
    , contributor
    Comments (8304) | Send Message
     
    EM currencies are still wobbly and getting wobblier.

     

    Now that the so-called "taper" is in effect, yields continue to fall as the curve flattens.

     

    Chinese equities aren't exactly winning votes of confidence on the Mainland.

     

    Chinese banks are NOT looking healthy.

     

    Paper gold shorts have begun to sweat after partying hardy in 2013.

     

    If you didn't cover your paper gold short around Christmas then you may be S out of luck in 2014.
    10 Feb, 11:30 AM Reply Like
  • Brian Bobbitt
    , contributor
    Comments (1899) | Send Message
     
    Don't get your knickers in a knot just yet with gold's recent positive moves. Looking at the technical side, there are barriers to cross and they will likely be formidable. I do see gold much higher percentage-wise than all other investments (not counting futures).
    There are minefields and trenches ahead for sure.
    This could be a continuation of the bull phase for gold, but again, there are things ahead such as deflation, governments and good news which all could serve to mitigate the price rising a lot.
    My hope is gold (& Ag) continues on up nice and quiet. I don't want any big deal for it to collapse upon itself and make profiteering any more difficult that it already is.
    I am going to continue to trade into high value, very rare, coins and when that run is over, perhaps back into PM's or cash as the atmosphere dictates at that time in the future.
    In any regard, I feel we will not see $1150 gold again nor $18.50 Ag. So, perhaps use that for a guide. It is below the combined producer prices, and although anything is possible, lower numbers aren't too likely.
    Go for the gold! (buy the dips, ur gonna have them)
    Capt. Brian
    The Lost Navigator
    10 Feb, 11:43 AM Reply Like
  • 6151621
    , contributor
    Comments (1174) | Send Message
     
    "There are minefields and trenches ahead for sure." I sure hope not! losing money is okay but getting blown to pieces not so much.
    10 Feb, 04:59 PM Reply Like
  • nooseah
    , contributor
    Comments (363) | Send Message
     
    With the greatest respect, this constant concern over deflation is somewhat mis-guided. While the over-riding forces in a credit bust are indeed deflationary and we could well experience a short period of real deflation in the coming months/years, Central Banks (virtually without exception), are minded to 'fight' deflation i.e. print as much money as it takes. Why is this the case? Well, global banking system solvency is threatened by deflation (asset prices fall, liabilities stay the same). Additionally, most developed world countries now have debt levels that are unsustainable and continuing to rise i.e. inflation is the ONLY way out (other than a hard default). So, inflation is coming, like it or not. The tricky bit from Central Banks' standpoint is to make sure inflation is high enough that it's meaningful to debt reduction but not so high that it's damaging to the economy and the social fabric. This is a much trickier task than any Central Banker would be prepared to admit. The chances of success are actually very small, particularly as you have several independent CBs all pulling levers at the same time. For investors not to have gold in their portfolios over the next few years is bordering on suicidal.
    10 Feb, 05:00 PM Reply Like
  • Brian Bobbitt
    , contributor
    Comments (1899) | Send Message
     
    NOOSEAH: Well, the central bankers were smart enough to get into this mess, I'm sure they will figure it out after they have done everything possible wrong, and only the right path is left.
    Let me tell you, this is a mess. I don't know where, when nor how they ever will fix it.
    I guess the market is like Mother Nature. Not good to upset her. I think the markets are in total disarray. Somehow, and somewhen, the markets will correct. I say DOW and indices down, and PM's up. BIG TIME.
    I think the NGM's have overplayed their hand(s). I think what ever Powers that be have also mis-figured EVERYTHING. How they ever figured that giving a home to someone with no job, no down payment and no credit would pay for the house. Was it really a plan, and it want awry? I dunno, but I can tell you this, it ain't fixed by a long shot and it is why I keep recommending gold.
    Just ignore the salt addled brain of this ole captain. What the heckers do I know.
    Capt. Brian
    The Lost Navigator
    10 Feb, 11:35 PM Reply Like
  • The Geoffster
    , contributor
    Comments (4011) | Send Message
     
    Central Banks are financial engineers. Their infrastructure is built with contracts secured by promises. Their collateral is someone else's promises. Many of these promises are already in default, but the CBs own them, bought and paid for with more promises. Who are the counter parties ? What is the collateral. How many times has it been rehypothicated? Got gold?
    10 Feb, 10:15 PM Reply Like
  • BJLMD
    , contributor
    Comments (72) | Send Message
     
    I believe I see something different taking place. We are seeing a finalization of the bankers efforts to eliminate a gold standard. Not the governments gold standard, that went away years ago, but rather the remnants of the peoples cultural hold to the concept that gold should have value. Those that support the concept of Modern Monetary Theory, need us old screw balls to go away so that they can continue to print money endlessly. Us gold bugs are a becoming farther and fewer between. Those that believe in MMT see dollars like points on a scoreboard, something that is conceptually limitless and need not have any restraints. In a digital world it is easy to believe this. Its like when the communists came in to China they had to inflict a new order with new beliefs that the party was supreme. So the communists marched through the villages and burned the temples. In time, only the old floks remembered the old ways. Thats what they have been doing with gold this past year. I believe it is intentional. Its been bashed left and right, but maybe people are starting to see through this, if not in our own country at least in places like china. You cant fool people for ever.

     

    If we were on a pure gold standard there would not be enough gold in the world to support the massive expansion of money and economy that has occurred in the past 50 years. So there is some merit to MMT in so much as it enables rapid expansion of economy. My problem is not with MMT theory, but rather in human nature as in the end, just like communism, nothing is so altruistic and somebody gets greedy and when people figure out that they are getting cheated of something, theory falls apart and people run for something they can get there hands on.
    Its like musical chairs. When the music is playing, (ie the stock markets are humming, and people are making money) everyone runs circles around the chairs and nobody is bothered that there aren't enough chairs for all the people when the music stops. While the music is playing we are indifferent to the obvious inevitability that the music always stops eventually.
    I hold gold as insurance not investment. Hope mine is never worth much in my lifetime. Hope that my other real investments are. But because I know that there is always the obvious inevitable likely hood that in my lifetime the music will stop for at least a period of time, I hold gold. So don't tell me that gold has no value. That it is just a hunk of nothing. I dont care if you see it that way cause I know that you do only because the music is playing and those that stand to profit from the current paradigm have turned the music way up loud. Good luck to all.
    11 Feb, 06:48 AM Reply Like
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