Gold Price Due for a Setback?

Now that we have had a chance to see how the dust settled after this historic day in the markets, there are some observations I would like to make.
I want to start out first with the junior mining shares, as evidenced by the GDXJ. The readers know that I have expressed concern over the fact that this group has been lagging the performance of the actual metal. Typically, in a strong upside run in gold, that is not the case as this index tends to outperform the metal itself.

Euro-zone ‘QE already Working’ Says IMF Lagarde

Today, ECB president Mario Draghi announced his much awaited QE program that will allegedly save Europe from the imaginary perils of price deflation. See Deflation Bonanza! (And the Fool’s Mission to Stop It).
Stocks are up a bit, the dollar is up a bit, the yen is up a bit, and gold is up a bit. Oil is down a bit.
The details are more or less along the lines most thought, not the celestial “big bang” that everyone hoped.

This Is What Gold Does In A Currency Crisis, Euro Edition

Today the European Central Bank acknowledged that the currency it manages is being sucked into a deflationary vortex. It responded in the usual way with, in effect, a massive devaluation. Eurozone citizens have also responded predictably, by converting their unbacked, make-believe, soon-to-be-worth-a-lot-less paper money into something tangible. They’re bidding gold up dramatically.

Is 1.2 Trillion Euros The Right Answer To The Wrong Question?

Good News Or Bad News?
Once upon a time something good happened for Europe.  The price of oil went down dramatically.  When the oil price halved in the last months of 2014, there was no way for the European Central Bank (ECB) to fulfill its mandate of keeping price growth close to 2 percent a year.  The ECB painted itself into a corner by targeting headline inflation, not core inflation, which excludes food and energy.  Left with no choice, the ECB announced on 22nd January 2015 that it would begin printing digital money in large quantities, ie, start Quantitative Easing or QE in the near future.  Contrary to popular myth, QE doesn’t fight ‘deflation’, it rather causes it by keeping zombie banks alive.  Why? Quantitative easing simply buries money in commercial bank vaults, by bolstering their balance sheets, when it is cash in circulation that is desperately needed. 

Gold New Bull Beginning?

Gold ended 2014 essentially breakeven, being slightly down (1½%). It was a choppy year for gold and a bad year for gold shares.
But it looks like the bear market may now be coming to an end. In fact, it could happen at any time.
The seemingly never ending fall in the oil price, the plunging euro and petro currencies, and weaker stocks all pushed safe haven buying to bonds and gold as the new year got started.

ECB and EU LTRO and QE for Dummies: Or, Make These Trades

Shah Gilani writes: Pssst! Do you want to make some money trading some initials? Real easy money?
For real. I just made my subscribers 382% trading these initials. And we’re not done. After closing out our 382% gain, we’re in the same trade again, and we’re up 180% in just a few weeks – and still going.
We’re also in a conservative trade, trading the same initials mind you, and we’re up 41% there.

Debt and Deflation: Three Financial Forecasts – There’s More Than Falling Prices

Editor’s note: You’ll find the text version of the story below the video. Join Elliott Wave International’s free State of the U.S. Markets online conference to get prepared for the major moves in U.S. stocks, commodities, gold, USD and more for 2015 and beyond. Register now and get instant access to a free video presentation from market legend Robert Prechter and regular email updates with insights from our most recent publications and presentations from our key analysts.

Market Should Not Doubt’ Mario Draghi ECB QE

Larry Fink, CEO and Chairman of BlackRock, spoke with Bloomberg TV’s Erik Schatzker and Stephanie Ruhle today at the World Economic Forum’s annual meeting in Davos, Switzerland. Fink discussed the European Central Bank’s asset-purchase plan and the outlook for the euro-dollar exchange rate, Federal Reserve policy and the U.S. economy. He also spoke about the Swiss National Bank’s decision to abandon its currency cap.
Reacting to the ECB’s quantitative easing announcement, Fink said: I think we’ve seen over the last few years you have to trust in Mario…the market should not doubt Mario. He’s been able to pull this through…This monetary policy is going to keep the euro weak. And I think a weakened euro will allow European companies to improve. So I do think the European economies will be marginally better this year than last year."

Francs, Bonds, Barrels, and Bail-Ins

As recently as a few weeks ago, the European Union directed its member nations to draft their own independent legislation for dealing with the resolution of a failed G-SIFI (Globally Significant Financial Institution). At the same time, we have all sorts of seams opening in the currency, bond, and commodity markets. The Swiss Franc is now un-pegged from the Euro, there have been wild swings in the bond markets in Europe due to the aforementioned action, and oil is in an absolute free-fall. There are many geopolitical (and likely criminal) maneuverings behind all of these phenomena, however the chaos in the financial world thus far has been remarkable in that there hasn’t been much given everything going on.

The Most Important Thing You Should Do to Make Money in 2015

Marc Lichtenfeld writes: Last Thursday, the front page headline of the USA Today Money section read “Stock Plunge Digs Deeper.” Above it was a graphic showing that since December 31, 15 days earlier, the Dow Jones Industrials had fallen 2.2%.
Plunge?
The article went on to recount the prior day’s trading when the Dow fell 187 points, or 1.1%. A poor showing for sure, but hardly anything to get excited about.

The U.S. Dollar Has Peaked

Dr. Steve Sjuggerud writes: "Today may be the very top in the U.S. dollar," I told Liz Claman on Fox Business’ "Countdown to the Closing Bell" last Friday.
The U.S. dollar has soared over the last several months. And it has now become a crowded trade. I told Liz that no one expects the dollar to fall today… but that’s what I’m betting on.

Are Plunging Petrodollar Revenues Behind the Fed’s Projected Rate Hikes?

Why is the Fed threatening to raise interest rates when the economy is still in the doldrums? Is it because they want to avoid further asset-price inflation, prevent the economy from overheating, or is it something else altogether? Take a look at the chart below and you’ll see why the Fed might want to raise rates prematurely. It all has to do with the sharp decline in petrodollars that are no longer recycling into US financial assets.

Russia’s Plans for Arctic Supremacy

Although the crisis in Ukraine continues to focus attention on Russia’s western border, Moscow is seeking to exploit a more lucrative prize along its vast northern frontage: the Arctic Circle. Melting ice has opened up new transit routes and revealed previously inaccessible oil and mineral deposits. Facing a year of harsh economic constraints, securing exploitable energy reserves remains a top priority for Moscow. The planned militarization of the Arctic is already underway, and funding is secured through 2015 (the Ministry of Defense was the only Kremlin ministry not to be curtailed in the most recent budget.) With Russia aiming to consolidate its strength by the end of the year, surrounding countries are already reassessing their positions in the face of an overwhelming regional force. 

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