Gold to 6-month high amid Ukraine worries


Quiet amid the macro rumblings of the last 24 hours, gold all of a sudden gets jiggy, popping 0.8% to $1,383 per ounce, the highest price since September.

The move comes as talks between John Kerry and his Russian counterpart Sergei Lavrov enter a third hour.

Putin is prepping to "invade eastern Ukraine," says Estonian Defense Minister Urmas Reinsalu. "The Russian Federation only accepts force ... A clear message needs to be sent that an attack will cost the aggressor dearly.”

Silver is higher by 2.4% to $21.72 an ounce.

PM ETFs: GLD, SLV, AGQ, IAU, PHYS, SIVR, USLV, ZSL, SGOL, UGL, DGP, GLL, DZZ, UGLD, DSLV, DGL, DBS, GLDI, DGZ, AGOL, DGLD, SLVO, TBAR, USV, UBG, GLDE, GYEN, GEUR, GGBP

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Comments (24)
  • Doug Eberhardt
    , contributor
    Comments (4771) | Send Message
     
    Putin in a top...

     

    Love my puns...

     

    My latest for those that might not have read (called for about a $50 further rise in gold from a couple days ago, then decline):

     

    We Are Not Off to the Races Yet With Gold

     

    http://bit.ly/O863kA
    14 Mar 2014, 09:16 AM Reply Like
  • losbronces
    , contributor
    Comments (992) | Send Message
     
    Well, it doesn't seem likely that Russia will sell US treasuries (another idle threat in the war of words imo), but gold price is moving up more so than with other recent global crisis. An interesting situation is certainly developing.

     

    I hope you are right about another decline in price as I've taken profits on my gold miners during this run.
    14 Mar 2014, 09:45 AM Reply Like
  • filipo
    , contributor
    Comments (4649) | Send Message
     
    I appreciate you article(s) more and more, Doug.
    Indeed, as you say, you don't write them often, but when you write, it is spot on.
    The only issue I disagree with you is I don't think there will be a new low this year to come. There are too much parameters that favor gold for years to come, imo.
    14 Mar 2014, 10:21 AM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (4771) | Send Message
     
    filipo,

     

    Thanks...

     

    More from a Market Maker perspective than the many, many, parameters that behoove investors to have a position in gold.

     

    The precious metals market can be whipped around quite easily with so much paper money thrown at it. I don't discount that at all.

     

    The HUNT brothers did it quite easily before paper instruments were introduced.

     

    Naturally, their is an end game, which I address in the article. I simply try and think like a Market Maker and it hasn't hurt me so far with my writings.

     

    losbronces, I don't think your timing is off by much. But will you go long DUST? I like it in the $16's. For a trade of course. More so than NUGT right now.
    14 Mar 2014, 10:32 AM Reply Like
  • losbronces
    , contributor
    Comments (992) | Send Message
     
    I use (DUST) only for day trades. You never know when a crisis can erupt overnight to push the gold price up $50/oz. And there are many possible crisis situations that could jump the gold price up: South China sea, an attack on Saudi oil facilities, civil war in Pakistan, and the list goes on.

     

    Of course, some people have made big money with DUST over longer periods of time--its just not for me. (NUGT) is another one that swings hard and I have never used it at all.
    14 Mar 2014, 10:51 AM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (4771) | Send Message
     
    Exactly losbronces....Why I said "for a trade of course." These are not long term buys whether NUGT or DUST. And not for everyone. But swing trades are good. 615 who comments here (don't know rest of his digits, lol)....just scored big on NUGT. Have to take profits though. Ukraine I think was a gift but this move up should not signify we are "off to the races" just yet in my humble opinion.

     

    Very interesting times indeed.
    14 Mar 2014, 11:22 AM Reply Like
  • 6151621
    , contributor
    Comments (1172) | Send Message
     
    @Doug: Yeah, these miners are still running and I'm hanging on to what I've got left. I'm looking to see if we can test 1434?! in gold but today looks like it could be a potential blow-off top action which would lead me to possibly reduce even more. I guess miners will get more and more volatile but many individual names are still performing very well (maybe too well but maybe not when one considers how oversold they were).
    14 Mar 2014, 12:34 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (4771) | Send Message
     
    Nice 615...Monday might be a "sell the news" day. The vote is a pre-gone conclusion. Think DUST is the better play now. Not sure what else will spark gold higher. 10 year at 2.66% = no real fear here. S&P will probably shoot higher next week. Job numbers came out ok. Media making Ukraine issue more than it is (like the U.S. can do anything or will do anything).

     

    Today combined with $25 move a couple days ago might be the blow off top. Been waiting patiently for it. DUST trying to push higher as we speak.
    14 Mar 2014, 02:45 PM Reply Like
  • ltsgt1
    , contributor
    Comments (1630) | Send Message
     
    Filipo,

     

    I also think there may not be a new low for gold this year since demand from China is unlikely to wane and GLD is no longer leaking physical. However, I will not be surprised one bit if gold does hit a new low either and that is why I still have dry powder for $1100.
    14 Mar 2014, 03:53 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (4771) | Send Message
     
    Yeah, it's interesting when all the right reasons are there for what any normal, intelligent person would figure to be the logical next move, but unfortunately, and you can almost "bank" on this; the opposite occurs. Knowing this, and playing with the market, can at least give a trader opportunity to profit.

     

    A holder of physical gold doesn't give a hoot.
    14 Mar 2014, 05:09 PM Reply Like
  • 6151621
    , contributor
    Comments (1172) | Send Message
     
    @Doug, I don't purport to know why but momentum is up in gold and gdx and yet we are entering prior resistance band for 1380-1434 for gold so I'm watching gold and miners closely (intraday structure) for signs of reversal.

     

    Oh, I also read those expecting a golden cross in gold (likely) but since the cross will be in the 1300 flat range and it's healthy to get a pullback to crossover level we could be setting up for 6% gold pullback even as YTD momentum continues potentially longer term.

     

    Dollar still hanging in near lows of 2 year range, will it break down? Are you still Dollar long?
    15 Mar 2014, 08:32 AM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (4771) | Send Message
     
    615, am I still dollar long? I am not investing in the dollar long, but I have been consistent in my bullishness of the dollar. We should see the Euro start to crack later this year. Can the dollar go a bit lower short term? Sure. But I don't think it has much short term left. Yen is weak. Euro will get weaker. Draghi has a huge mountain to climb with all of the banking issues they have across the pond. He's even trying to work a deal with the banks to force them to lend any future money given to them rather than shore up their own balance sheets like our banks are here. I don't think that's realistic. I do watch the dollar closely, as well as the 10 year. The 10 year tells me there is no fear. The dollar is just a reflection on mostly the Yen and Euro and Pound/Canadian dollar. Nothing more.

     

    Fun stuff right now!
    15 Mar 2014, 12:09 PM Reply Like
  • 6151621
    , contributor
    Comments (1172) | Send Message
     
    Yeah. EUR action is an enigma to me but that and JPY recent strength have been what's hurting dollar index.

     

    China weak relative to Dollar based on recent defaults.

     

    Currencies seem to love testing channel boundaries and reversing (except when they don't). If the rule holds USD as measured by the Dollar index should go higher soon.
    17 Mar 2014, 12:49 AM Reply Like
  • minecanary
    , contributor
    Comments (1240) | Send Message
     
    Kerry couldn't negotiate a ceasefire at a peace rally. Unless he says Putin can keep Crimea, 1/2 of east Ukraine, and throw bananas at Obama gold will be at $1450 Monday morning.
    14 Mar 2014, 09:52 AM Reply Like
  • T-time
    , contributor
    Comments (967) | Send Message
     
    Why gold / silver would pop over a crisis in Ukraine just proves how irrational these markets can be - and if baffling to me. I think precious metals could/should go up, but over this??

     

    The thinking must go like this "there is a crisis 5000 miles away that is mostly political - let's take our money out of high yielding growth stocks and put it in barely surviving miner stocks and devalued ETF's" - makes perfect sense.

     

    How about the fact that silver is an industrial metal where demand will soon overcome supply? - or that tons and tons of gold is being massed by China's big banks in an attempt to gain support as the world's currency? How about that fact it takes 1000s of gallons of water and hundreds of dollars of labor and energy just to get one ounce of gold from the ground? No, instead - we invest in gold over a political scuffle in a far away poor country that is billions in debt and has less people than the state of Texas. All makes sense to me!
    14 Mar 2014, 11:39 AM Reply Like
  • David at Imperial Beach
    , contributor
    Comments (4382) | Send Message
     
    The piece you're missing to your puzzle is that the Crimean region of the Ukraine has pipelines running through it, plus Russia is nearly landlocked. The Crimea has very valuable Black Sea ports giving shipping access to the ports of Europe.

     

    If those critical pipelines were to get disrupted, energy flowing from Russia into Europe would get cut off, forcing the Europeans to bid up the price of Brent Crude. The price of WTI Crude would also rise. That would raise fuel prices throughout the world and thus cause a round of inflation whether people are able to pay the prices or not. It could cause a worldwide recession.
    14 Mar 2014, 01:09 PM Reply Like
  • WMARKW
    , contributor
    Comments (10787) | Send Message
     
    There are other factors as well. China and the potential for slow down and or for credit type event. There is a huge group of very wealthy people in China who have a long, long history of owning gold (and silver for that matter). IF there is a potential issue regarding credit blow out or a potential for a significant decline in growth, there could be a trend for moving a portion of wealth into their perceived long term storage vehicle - that is gold.

     

    I will tell you that spending a weekend in Hong Kong and watching the action at the Chow Tai Fook jewelry stores is absolutely mind blowing. There are stores on every corner with 20-30-40 patrons in them buying and buying. They are always busy and staffed in a way that makes an American store look abandoned. The patrons are buying and gold is the primary thing they are buying.

     

    Last visit there (2 weeks ago) there was an article in HK paper about HK people looking to China to place travel restrictions on mainlanders visiting HK. Too many people coming from mainland, buying too much stuff. They raise the prices for the mainlanders, don't serve the locals (Cantonese speakers) and the locals don't like it.
    14 Mar 2014, 01:38 PM Reply Like
  • filipo
    , contributor
    Comments (4649) | Send Message
     
    WMARK,
    Is it allowed for a foreigner, US or European, to buy gold in HK and export it ?
    14 Mar 2014, 03:13 PM Reply Like
  • WMARKW
    , contributor
    Comments (10787) | Send Message
     
    I am pretty sure I can go into Chow Tai Fook and buy anything I want. When returning to US, the Customs and Border Patrol form you used to have to fill out required disclosure if bringing in >$10,000 financial assets: Here is CPB site explanation....after you read it tell me if it makes sense to you....you would think someone could write explicitly and clearly on the subject when posting to their own website:

     

    "What are the regulations for importing gold coins, medals, and bullion into the U.S.?

     

    Gold coins, medals, and bullion may be brought into the U.S. However, under regulations administered by the Office of Foreign Assets Control, such items originating in or brought from, Cuba, Iran, and Sudan* are prohibited entry.

     

    Copies of gold coins are prohibited if not properly marked by the country of issuance. The importation of counterfeit coins is prohibited.

     

    There is no duty on gold coins, medals or bullion but these items must be declared to a Customs and Border Protection (CBP) Officer. Please note a FinCEN 105 form must be completed at the time of entry for monetary instruments over $10,000. This includes currency, ie. gold coins, valued over $10,000. The FINCEN definition of currency: The coin and paper money of the United States or any other country that is (1) designated as legal tender and that (2) circulates and (3) is customarily accepted as a medium of exchange in the country of issuance."

     

    So to me the question is "bullion".
    16 Mar 2014, 11:38 PM Reply Like
  • filipo
    , contributor
    Comments (4649) | Send Message
     
    Tnx, WMARK, for your elaborate question.
    Next time I'm in Shangai I'll be looking for a golden panda bear.
    17 Mar 2014, 02:05 AM Reply Like
  • WMARKW
    , contributor
    Comments (10787) | Send Message
     
    Incidentally, when you fly in to SEA they now have automated kiosks for CPB. I don't remember if they ask the same questions exactly the same way. I will have to remember to look more closely next time.
    17 Mar 2014, 05:52 PM Reply Like
  • filipo
    , contributor
    Comments (4649) | Send Message
     
    WMARK,
    Where were my thoughts ?
    I wrote "elaborate question" instead of "elaborate answer".
    Apologies....
    Anyway, tnx for the info. I'm planning a trip to HK as a stepover on the way to Australia next year.
    18 Mar 2014, 09:24 AM Reply Like
  • WRC_168
    , contributor
    Comments (139) | Send Message
     
    Nice try filipo, but the Chinese want all the physical gold that they can lay their hands on for themselves only.
    14 Mar 2014, 09:28 PM Reply Like
  • T-time
    , contributor
    Comments (967) | Send Message
     
    You don't have to go to China and not sure it would be any cheaper than buying coins here from a reputable dealer. Interesting - I lived overseas and realized that in some countries you can buy gold bullion bars at the bank. In Switzerland, for example, you can buy gold one or ten ounce bars right there at the teller... at more or less spot price... (might have to have an account)...
    18 Mar 2014, 12:51 AM Reply Like
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