THE SPOT gold price hovered above $1660 per ounce Wednesday morning in London, slightly up on the week so far, before dropping through that level ahead of US trading.
“Monetary policy accommodation continues to paint a supportive backdrop for higher gold prices up ahead,” adds a note from UBS.
“We do not think that there has been any material change in the macro environment to warrant a change in the underlying bullish gold view… the reality is that the Fed’s balance sheet is still expected to continue expanding for some time.“
Silver Bullet Silver Shield Slave Queen Collection at SDBullion.com!!
By
Ben Traynor
“[Gold] continues to consolidate last week’s down move from $1694 to $1627,” says the latest technical analysis from bullion bank Scotiabank.
“Our bias remains lower with $1627 our next line in the sand.”
Gold buying in India meantime slowed Wednesday, dealers report.
“The market has slowed as everyone is waiting for [a price] correction,” says KetanShroff, director at wholesaler Penta Gold in Mumbai.
A day earlier, premiums on gold imported by India hit a two-month high Tuesday, with bullion importing-dealers citing strong demand ahead of a possible import duty hike as well as supply constraints caused by reduced refining capacity over Christmas.
SocieteGenerale meantime became the latest bank to lower its 2013 average gold price forecast Tuesday. SocGen analysts now say they expect gold to average $1700 an ounce this year, down from the previous forecast of $1800.
Silver is forecast to average $31 an ounce, compared to the previous forecast of $34 an ounce.
“The very poor price action of gold recently and lack of bullish triggers leads us to moderate our expectations for gold and silver prices,” says a note from SocGen.
“We remain moderately bullish, and are looking for a similar trajectory to our gold and silver forecasts, albeit at lower levels.”
“Monetary policy accommodation continues to paint a supportive backdrop for higher gold prices up ahead,” adds a note from UBS.
“We do not think that there has been any material change in the macro environment to warrant a change in the underlying bullish gold view… the reality is that the Fed’s balance sheet is still expected to continue expanding for some time.”
Stock markets opened higher this morning before easing back, while US Treasuries ended this morning flat on the day, with most commodities were also little changed.
Silver meantime failed to hold above $30.50 an ounce, despite news of strong coin sales and exchange traded funds demand.
So far this month, the US Mint has sold nearly 4.3 million ounces of silver bullion American Eagle coins, which it produces specifically for investment purposes and sells to primary dealers. This compares to 6.1 million ounces sold in the whole of January 2012.
The world’s largest silver ETF meantime, the iShares Silver Trust (SLV), saw its holdings rise to 10,112 tonnes this week, their highest level since 23 May 2011.
“The low silver prices are clearly being seen as an attractive opportunity to buy,” says this morning’s commodities note from Commerzbank, adding that overall silverETF holdings hit a record 18,990 tonnes yesterday.
The United States will import less oil next year than at any time since 1987, thanks to adomestic supply boost from hydraulic fracturing as well as slower demand growth, according to projections from the US Energy Information Administration published Tuesday.
Elsewhere in the US, economists are debating whether the government should consider minting a $1 trillion platinum coin as a way of continuing to borrow should Congress refuse to raise the $16.4 trillion federal debt ceiling.
“By minting a $1 trillion coin, then depositing it at the Fed, the Treasury could acquire enough cash to sidestep the debt ceiling — while doing no economic harm at all,” wrote Nobel Prize-winning economist Paul Krugman in his New York Times column this week.
“So why not?”
“Wasn’t that the plot of a Simpsons episode?” asked Michael Steel, spokesman for Republican speaker of the House of Representatives John Boehner, when asked about the proposal last week.
“There’s no magic coin to duck the tough choices our nation faces,” Steel added, “and the only way to stop spending money we don’t have is to stop spending money we don’t have.”
The US Treasury said last month the government on December 31, and has introduced extraordinary measures designed to keep debt below the threshold until February.
Over in Europe, the Eurozone remained in recession for the final three months of 2012, according to GDP data published this morning.
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/images/live/s_silv.gif)
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/images/live/s_gold.gif)
A Newsflash, but on a light (heaviy?) no:
An Indian (‘Dot,’ not ‘Feather’) millionaire had a 22-carat Gold shirt made, so that he can impress women. Let me throw the question out to the ladies here on SD:
Does this man impress you?
Linkey: http://tinyurl.com/bzyl3ja
Yeah real impressive…. NOT
GATA P. Huge?
Yes Sir, All is well! Gold and Silver sinking like a rock!!
@Ranger, of course it is! Yesterday I bought some coins – that’s why the price is plunging – happens every #$%& time!
Here is what I bought from a private individual yesterday – for just a beaver-hair below spot:
total of 19 silver coins…
6 silver quarters, 1961, 2001s Vermont State, 2001s Rhode Island, 2001s North Carolina, 2001s Kentucky, 2001s New York.
5 silver half dollars , 2 1982 George Washington 250th anniversary of birth, 1-2001s John Kennedy, 1961 franklin, 1893 columbian Exposition in Chicago
8 silver dimes, 2-1960, 1-1961, 2-1963, 2-1964, 1-2001
ALL were proof, except the 1893 coin all are in proof!
I will set aside the 1982 GW Halves, 2001 dime, quarters & half for sale the next time spot goes up, and keep the others. That 1893 commemorative half is a cool coin and does not show a lot of wear.
Everyone has their stategy Mammoth. As for me, I buy on the move up not down, as nobody knows where the Down bottom is! I am in several thousand ounces at $32. Making any moves to the upside of course will be fine with me. I just don’t really believe that all the facts are on the table to where the price will go to the upside if much at all. There is a lot of Hype about $90,$100, $400 etc. This may be years away. The Central Planners are not only criminals, but smarter than you would think. I remember vividly last year at this very same time that most of the “experts” predicted for sure that Silver would end 2012 at $36.50! Did you see that? I didn’t see that! With all the Silver buying and getting scarce and diesel fuel going up on the miners, it makes no sense, especially with the years long debasement of currencies. My belief right now is that Gold and Silver is in Purgatory and just sitting there between Heaven and Hell. The article writers that put their thoughts here have no idea where Silver is headed, but being expected to say anything without a sworn pledge that they will guarantee anything but “I think”. How would Gold ever be a monetary back up for currency when there is no level playing field of all countries to own the same amount? Hell nobody can tell for a fact what amount any country holds in their hands as to what amount of Gold is actually there. Until Gold is actually accounted for in correct amounts and who can prove that those amounts exist, Silver will go nowhere. Oil is now stand alone in value as it is measured daily. Gold as a ratio to oil was always 20 times a barrel of oil, and Silver always a sixteeth the value of an ounce of Gold. Oil will contiue to rise as it is the most necessary commodity, but now that Gold and Silver are brats in the currency wars, I don’t think you will enjoy a great deal of upside to Gold and Silver until all Fiat currencies fail and that can be a very long time.
@Ranger, good comments there – thanks. Your strategy of avoiding catching the ‘falling knife’ is one way; mine of picking up coins when a local opportunity presents itself, when prices appear low, is another. It is prudent to not be all-in on any one investment, including Silver.
One reason why I stack is that I view this as an alternative to keeping fiat in a savings account, thereby giving the middle finger to the banks and keeping my holdings out from under the watchful eye of the .gov.
And yes – there is no telling when PM’s will break out – and nobody is able to predict this. But I believe it WILL happen, possible overnight.
Mammoth, The Ten Year Trasury yield is now 1.86 Is it going to continue up or down?
@Ranger, I have no idea which direction the 10-year Treasury Yield will go, just like I have no idea which way PM’s will go in the short term. Likewise, my skull is too thick for me to wrap my head around paper trading, shorts, longs – so I do not invest in these. But what I do know is:
- how to bring in additional income when I am not at my day-job
- how to turn dirt, compost and my own labor into food for myself and my family.
- paying down debts and avoiding borrowing is best
- stacking will pay off somewhere down the road.
Cheers,
Mammoth
Ranger Your question about where US bond rates will go was a good one. I just got done Agora Financial’s publication Outstanding Investments. While I don’t paper trade they provide some good data. A chart of the LT treasury rates from 1790 to 2011 is very telling. This is a 230 year chart so the ups and downs take on a solid meaning. In 1798 bond rates hit 10%. 30 years later they were down to 5%. During the wars and panics between 1850 and 1870 they surged up and down 3 times, ranging up to 8, 10 nd 11%. WWI spiked to 7% but wwII dropped to 2%. Go figure. Once we shed the gold standard, the rates raced up to 14% but in the last 30 years, just a small slice of the 230 year chart, the rates have dropped like a rock.
There’s a reason for that drop in the last 30 years; easy money, Greenspan’s put to recussitate the tech wreck and Y2K, stimulus money for housing and huge fundings of the national debt and FIAT to line the bankers pockets. The odd thing is that inflation did not get started in earnest until 2002 or so. Gold and silver ramped from there, up as much as 500-800% All this action is not indicative of a good financial system and stable economy
But the one key factor noted by Agora was the average long term rate for Treasuries was 5%. We are at less that 2%. If I was a betting man, and I am when it comes to silver and gold, my hunch is that the rate won’t just revert to the mean of 5%, it will race past that level to maybe 8-10%. The zig zag rate surges and drops since 1790 looks like teh Sierras, a saw tooth pattern laid over a larger saw tooth pattern. There is no way IMO that rates which dropped from 14% to 2% can stay down. Maybe the rate increase won’t take place tomorrow but rest assured, in a world of 9% inflation and worldwide food shortages coming in 2013, this artificial rate can’t be held down forever And when it snaps, holy crap, the bond prices will crash and our world will change a little more than we would care to see. PM prices will go crazy just like they did in 1980 too boot.
AGXIIK,
Not interested in buying treauries, my GOD NO! The reasson I ask the question is I am thinking about a new
mortgage on my home and I believe the loan rates are tied to the yield. If the yield goes lower interest rates will
be lower I believe on the mortgage rates. If Uncle Ben is buying they should decline I would think?
So that is why I ask the question going up or down and to secure and lock in the best rate.
Roger Ranger. I understand your question. I went off on my tangent for the exact reason that you would not want to be buying treasuries. Me neither. In my business I work with business loans of all sorts soI follow rates like a hawk. We are at the lowest treasury rates in the history of this country. 10 yr T bonds are about 1.85%. While I don’t do home loans, I’ve heard rates at low as 2.75% fixed for 10 yrs. If it was me, and I wanted to refi or get some new money using my home, this time period would be one of the best. Lenders do have fairly large spreads on the final rates they offer so checking around or using a mortgage broker should work well. I think you are in Texas so lenders there should be offering some of the best rates. If you borrow at 2.75%at rates go back up to 5-7%, historical norms, you’ll be loving life and the lender will be boo boo face sad.
While Jim Willie thought treasuries would drop to 1.25% after they hit 1.48%, I would not try to bottom feed for a 1/4 point. In my personal borrowing experience those low ball rates last a couple of days. Hitting the low rate pricing in that narrow time period is like trying to buy phyzz when it’s in on of those downward spikes that comes on about 2 AM.
If you can get a good rate with some decent quotes from a loan professional, locking the rate would be wise. Depending on the rate and your budget you may want a 5, 7, 10 or even 25 yr. fixed rate. I like the long term since we are super low but if you plan to pay off the loan or sell the home in 10 years take the 10 yr loan.
If I can be of any other help let me know on the forum or private message line. I talk to some of the SD regulars outside of normal channels when specific questions come up and I would be happy to talk with you. Best regards
Banks here are not doing home loans unless the owner has 100% equity. Otherwise the market has dried up.
if as everyone predicts the world will fall over and hyper inflation kicks in refinancing on a ten year fixed term close to 3% would be a dream come true …. however in the case of hyperinflation say to 15% per annum have the banks got any way out of the fixed loan