Gold has certainly had a rough summer, facing withering selling pressure from record futures shorting. The resulting new secular lows have greatly exacerbated the already-extreme bearish psychology long plaguing this metal. But considering the howling headwinds gold has suffered in recent years, it has actually proved amazingly resilient. This indicates strong latent demand due to accelerate as sentiment shifts.
The consensus view on gold today is overwhelmingly bearish, with virtually everyone convinced it is doomed to spiral lower indefinitely. They argue that gold yields nothing, so therefore why bother owning it? Especially with the first Fed rate hikes in over 9 years looming! As interest rates begin inexorably mean reverting higher, rising yields will leave gold even farther behind. Keynes’ “barbarous relic” can’t compete.
The graph below shows 100 years of silver and crude oil prices on a log scale using the annual average of daily prices. Example: The price of silver peaked in 1980 at about $50 but the smoothed annual average was about $16.
– Perth Mint sees surge in demand and cannot keep up with demand
– “Our biggest restriction is the amount of unrefined gold we’re getting in from producers”
– Very high demand for Perth Mint coins, bars coming from Asia, U.S. and Europe
– U.S. Mint sees highest sales of gold coins in over 2 years
– U.S. Mint restrictions on silver coins due to very high demand
– Gold sentiment has moved from despondency to depression (see chart)
– Current negative sentiment despite strong demand is good contrarian indicator
Larissa James writes:As the Chinese stock market continues to crash, things on the home front are doing just fine. While we’ve seen industry averages drop slightly over the past few months, we still remain on a positive upward trajectory over the past five years. If you haven’t yet regained confidence after the 2008-2009 crisis, now is the time to get back in the game. And if you’re looking for a place to start, the following banking stocks should be top on your list:
As always in June, Incrementum AG (an independent asset management & wealth management company based in the Principality of Liechtenstein) published its annual “In Gold We Trust” report, the extended version of which can be downloaded here. We know that it was published one month ago; however, it took a while to dig through the 140-page text. Because it offers many interesting insights into the current global economy and the gold market, we provide a short summary for you today.
Gold and silver remain close to their lows for the year, discouraged as usual by dollar resilience. Precious metals appear to be in limbo: speculative buyers are discouraged above all by their disappointing performance during the Greek crisis, and the possibility that a Chinese stock market crash might lead to forced selling of gold by Chinese speculators. So far, the latter concern has proved unfounded with public demand in China accelerating on lower prices and exceeding global mine output on its own.
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"Pride goes before a destruction, and arrogance before a fall." Prov 16:18
This was a fairly lackluster day in US equities.
Sentiment is now back to somewhat complacent as the VIX has fallen back to a 12 handle.
Another FOMC statement and another swing at the law of probability. Some banks are considering the probability of a September Fed hike to be as high as 70%. Others prefer to hedge themselves with more appropriate qualitative means of referring to September as a “high probability outcome as long as….”, citing the two upcoming jobs report and their average hourly earnings components. But even if the next two jobs reports are accompanied by robust hourly earnings, the inflation objective remains in doubt. We’ve long mentioned in previous pieces how the 20% decline in oil since early May will further retard any recovery in price growth, which has prompted the Fed to drop its phrase in the FOMC statement that “energy prices have stabilized” discussed here.
Jenna Cyprus writes: As anyone with significant investments in silver knows, prices have been on a steady decline for the better part of four years now. In fact, you have to go all the way back to the beginning of 2012 to find prices above $40. Since then, the trajectory has firmly pointed downwards. Currently you can purchase an ounce of silver for less than $15. Analysts suspect this won’t be the case for long. While ‘experts’ have predicted for months now that silver is finally positioned for growth, there seems to be more tangible proof for today’s predictions. Things finally appear to be looking up and now may be the time to diversify your portfolio.
Dr. Kent Moors writes: Despite limitations, solar has reached grid parity in a number of regions in the U.S. That means sun power is as cost efficient as electricity utilizing more conventional sources like coal and natural gas. But it still has some limitations that prevent it from becoming the main source of power.
Usually the discussion of how solar energy will develop centers on improving the inversion process or combining greater efficiency in generation with a better battery technology to store what is produced.
Sean Brodrick writes: So Europe brought Greece to heel like an unruly dog, eh? And the government of that sad-sack nation got stuck with the same onerous debt terms it was trying to avoid when it held a referendum?
German bankers win, life goes on… right?
Charles Hugh Smith writes:
You’ve probably read that there is a “war on cash” being waged on various fronts around the world. What exactly does a “war on cash” mean?
It means governments are limiting the use of cash and a variety of official-mouthpiece economists are calling for the outright abolition of cash. Authorities are both restricting the amount of cash that can be withdrawn from banks, and limiting what can be purchased with cash.
Mark Mateski writes: Even today, few deny the long arm of US military might. After all, the US military exhausted the Soviet Union, crushed Saddam Hussein, and drove Osama bin Laden’s al Qaeda into hiding.
To what should we attribute these triumphs? Some would say US planning and foresight. Others would mention the hard work and dedication of US soldiers, sailors, and airmen. Still others would point to the application of superior technology. All would be correct to some degree, but each of these explanations disregards the fact that for more than a lifetime, the United States has wildly outspent its military competitors.
My Globe Asia column in May was titled “Greece: Down and Probably Out.” Well, it’s out. Yes, Greece descended from drama to farce rapidly.
If all goes according to plan, the left-wing Greek government will come to an agreement with the so-called troika – the European Commission (EC), the European Central Bank (ECB), and the International Monetary Fund (IMF) – over the details of a third bailout program by August 20th. This rescue package will probably be worth €86 billion (U.S. $94.5 billion). So, since 2010, Greece will have received three bailouts worth a whopping €430 billion (U.S. $472.2 billion). This amounts to a staggering €39,000 (U.S. $42,831) for every man, woman, and child in Greece.
– “Physical gold is a non-digital asset. You can’t attack it with cyberwarfare” – Rickards
– Greek crisis was necessary step towards fiscal unity in Europe
– “Euro creators want to force common fiscal control – Eurobonds”
– Currency wars between U.S. and China may resume next year
– Rickards emphasises importance of holding physical gold
– Eschews “paper gold” in the form of ETFs, futures or unallocated storage
– Gold insurance against “catastrophic event” … “on the horizon”
Someone in Twitter’s front office is sitting back and watching the company’s stock go up and down, thinking, “Make up your damn mind, Wall Street!” 2015 has already been a wild ride for the social media company. Shares spiked 28.2% in February on the news that the company had a breakout in terms of solving revenue concerns. The stock rode fairly high until April’s earnings report, which once again highlighted the company’s user growth problems. It plummeted 25.5% in a matter of two days. It didn’t help that longtime CEO Dick Costolo resigned midway through the year without any specific plans for the company’s management, giving investors reason to wonder about the future.
Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,140, and profit target at 1,980, S&P 500 index)
Our intraday outlook is bearish, and our short-term outlook is bearish:
Intraday outlook (next 24 hours): bearish
Short-term outlook (next 1-2 weeks): bearish
Medium-term outlook (next 1-3 months): neutral
Long-term outlook (next year): bullish
The more well informed you think you are about the Middle East, the more likely you are being manipulated by the media. Just because a lie or a semi-truth is repeated millions of times, doesn´t mean it´s true.
Here are the 5 biggest lies and myths about the Middle East today:
Raymond Matison writes:Since 2009, the world has been made acutely aware of Greece’s troubling debt problems. At that time commentators and analysts noted that its debt was too large to be paid off, yet Greece was given a multibillion dollar bailout loan. Soon thereafter another large loan was extended that further increased Greece’s previously acknowledged, unpayable debt level. If Greece was deemed unable to repay its debts of $113 billion in 2009, then six years later with a shriveling economy, capital controls, and the addition of $242 billion in additional debt (or a tripling of its debt), it is clearly even less able to repay such a sum. Even the IMF now suggests that some debt forgiveness has to be considered in order to make its debt repayable.