Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Coronavirus Coming Storm Act Now to Protect Yourselves and Family to Survive COVID-19 Pandemic - 19th Feb 20
Future Silver Prices Will Shock People, and They’ll Kick Themselves for Not Buying Under $20… - 19th Feb 20
What Alexis Kennedy Learned from Launching Cultist Simulator - 19th Feb 20
Stock Market Potential Short-term top - 18th Feb 20
Coronavirus Fourth Turning - No One Gets Out Of Here Alive! - 18th Feb 20
The Stocks Hit Worst From the Coronavirus - 18th Feb 20
Tips on Pest Control: How to Prevent Pests and Rodents - 18th Feb 20
Buying a Custom Built Gaming PC From Overclockers.co.uk - 1. Delivery and Unboxing - 17th Feb 20
BAIDU (BIDU) Illustrates Why You Should NOT Invest in Chinese Stocks - 17th Feb 20
Financial Markets News Report: February 17, 2020 - February 21, 2020 - 17th Feb 20
NVIDIA (NVDA) GPU King For AI Mega-trend Tech Stocks Investing 2020 - 17th Feb 20
Stock Market Bubble - No One Gets Out Of Here Alive! - 17th Feb 20
British Pound GBP Trend Forecast 2020 - 16th Feb 20
SAMSUNG AI Mega-trend Tech Stocks Investing 2020 - 16th Feb 20
Ignore the Polls, the Markets Have Already Told You Who Wins in 2020 - 16th Feb 20
UK Coronavirus COVID-19 Pandemic WARNING! Sheffield, Manchester, Birmingham Outbreaks Probable - 16th Feb 20
iShares Nasdaq Biotechnology ETF IBB AI Mega-trend Tech Stocks Investing 2020 - 15th Feb 20
Gold Stocks Still Stalled - 15th Feb 20
Is The Technology Stocks Sector Setting Up For A Crash? - 15th Feb 20
UK Calm Before Corona Virus Storm - Infections Forecast into End March 2020 - 15th Feb 20
The Growing Weaponization of Space - 14th Feb 20
Will the 2020s Be Good or Bad for the Gold Market? - 14th Feb 20
Predictive Modeling Suggests Gold Price Will Break Above $1650 Within 15~30 Days - 14th Feb 20
UK Coronavirus COVID-19 Infections and Deaths Trend Forecast 2020 - 14th Feb 20
Coronavirus, Powell and Gold - 14th Feb 20
How the Corona Virus is Affecting Global Stock Markets - 14th Feb 20
British Pound GBP Trend and Elliott Wave Analysis - 13th Feb 20
Owning and Driving a Land Rover Discovery Sport in 2020 - 2 YEAR Review - 13th Feb 20
Shipping Rates Plunge, Commodities and Stocks May Follow - 13th Feb 20
Powell says Fed will aggressively use QE to fight next recession - 13th Feb 20
PALLADIUM - THIS Is What a Run on the Bank for Precious Metals Looks Like… - 13th Feb 20
Bitcoin: "Is it too late to get in?" Get Answers Now - 13th Feb 20
China Coronavirus Infections Soar by 1/3rd to 60,000, Deaths Jump to 1,367 - 13th Feb 20
Crude Oil Price Action – Like a Coiled Spring Already? - 13th Feb 20
China Under Reporting Coronavirus COVID-19 Infections, Africa and South America Hidden Outbreaks - 12th Feb 20
Will USD X Decline About to Trigger Precious Metals Rally - 12th Feb 20
Copper Market is a Coiled Spring - 12th Feb 20
Dow Theory Stock Market Warning from the Utilities Index - 12th Feb 20
How to Get Virgin Media Engineers to FIX Hub 3.0 Problems and NOT BS Customers - 12th Feb 20
China Under Reporting Coronavirus COVID-19 Infections by 66% Due to Capacity Constraints - 12th Feb 20
Is Coronavirus the Black Swan That Takes Gold To-Da-Moon? - 12th Feb 20
Stock Market 2020 – A Close Look At What To Expect - 12th Feb 20
IBM AI Mega-trend Tech Stocks Investing 2020 - 11th Feb 20
The US Dollar’s Subtle Message for Gold - 11th Feb 20
What All To Do Before Opening A Bank Account For Your Business - 11th Feb 20
How and When to Enter Day Trades & Swing Trade For Maximum Gains - 11th Feb 20
The Great Stock Market Dichotomy - 11th Feb 20
Stock Market Sector Rotation Should Peak Within 60+ Days – Part II - 11th Feb 20
CoronaVirus Pandemic Stocks Bear Market Risk 2020? - Video - 11th Feb 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Gold Summer Trip and a Long-term Overview

Commodities / Gold and Silver 2011 Jul 09, 2011 - 02:20 AM GMT

By: Przemyslaw_Radomski

Commodities

Best Financial Markets Analysis ArticleWe've entered summer, a typically slow season for the metals, which is why they call it the summer doldrums. Gold closed June just 1.8% lower than it first started. Just for your information, the average summer drop over the last ten years was 8.6%, which at current levels would bring us to $1,407.53. It is also interesting to note that the summer lows have usually represented the bottom of the market for the remainder of the year, with one major exception, which was the difficult-to-forget year of 2008, which was when the summer decline was merely a harbinger of nasty things to come.


Summer is a good time to travel, so we invite you for a brief tour around the world to see what is happening with gold. We save the best for last.

Central African Republic: This landlocked and sparsely populated country, ranked among the 10 poorest countries in the world, could well be one of the world's leading exporters of gold in the near future. While international mining companies hope to establish operations there soon, farmers are abandoning their fields and are flocking to the gold areas hoping for a lucky strike. We wish them luck. It would be nice to have the riches go to the hands of people in that area of the world instead of corrupt governments.

Greece:  One of the first things any person facing insolvency does is to sell the family silver and pay back debts. Apparently, that does not hold true for governments. Greece holds an impressive 125 tons of gold in the vaults of the Greek National Bank, worth approximately 4 billion euros. If Athens were to sell that gold, its government would be able to meet at least part of the debt payments without any outside help. Portugal, another country teetering on the brink of crisis, holds an impressive 383 tons of gold with a market worth of about 13.3 billion euros. The Portuguese have just squeezed an 80-billion-euro aid package from the European Union. Of the 400 tons of gold allowed to be sold each year by central banks, according to the Central Bank Agreement, only 53 tons have been sold so far during the present accounting period. About 52 tons came from the reserves of the International Monetary Fund. If central banks want to sell within the framework of the agreement, they are free to do so until September 26, when sales quotas expire. However, central banks around the world are doing just the opposite –they are stockpiling gold rather than selling it.

Iran: Iranians have a long history of buying gold coins for wedding gifts, or as a way to squirrel away savings. But recently, what was a steady demand has become a gold rush.
Instead of taking profits on the rise of gold prices, Iranians continued to buy them in ever larger numbers. The Iranian gold rush has been driven by fears about the domestic economy hit by sanctions against the country, lack of trust in the local paper currency and by fears about the global economy.

China: Silver demand in China is soaring. Silver imports have reached new highs, and analysts maintain that demand for this year will only continue to grow. The growth comes not only from industrial and jewelry demand, but also from the increased investments in silver as a hedge. Reports show that net silver imports to China have risen dramatically and will continue to do so going forward. In 2010, the net import of silver quadrupled, hitting a record of 3,500 tons. The pace of Chinese imports since the start of 2011 is still strong. Analysts see growing demand for silver in China, as well as India, rising by as much as 30% on the year. The increase in demand is also strong for Chinese silver ‘Panda’ coins, prompting the Peoples Bank of China to double the maximum issuance of coins for the year.

Great Britain: Britain's first gold dispensing vending machine made its debut this week in west London. The Gold To Go machine, predictably gold in color, is manufactured by a German company. A computer inside the machine updates the price of gold every 10 minutes to reflect fluctuations in the world market. It sells bars and coins in various sizes, including, a special souvenir 2.5g bar with the London skyline engraved on its reverse. Shoppers pay up to 25 per cent above the spot price for the convenience. We  reported in the past about the world’s first gold vending machine that opened last year in Abu Dhabi' and about another such machine in Las Vegas, so, if you travel to any of those places, take a photo and send it to us.

California: A Northern California gold mine that has been a tourist attraction for years could go back to mining as high gold prices boost the promise of profits. Sutter Gold Mining Inc. has lined up $20 million in financing to restart operations.  If all goes as planned, mining could start next summer. The mine opened in 1989 to host tour groups. The owners say gold prices, topping $1,500 an ounce, make mining economically attractive again.

India: This is not an Indiana Jones summer blockbuster movie, but a true story. Precious stones, jewelry, gold and silver estimated to be worth several billion dollars have been found in the secret underground vaults of an ancient temple in southern India. An 18-foot-long necklace, 536 kilograms (1,179.2 pounds) of 18th century gold coins, diamond-studded plates, rubies and emeralds were found in the vaults of the Sri Padmanabhaswamy temple in Thiruvananthapuram, the capital of Kerala state. The vaults were opened for the first time in 135 years after the Supreme Court ordered the state government to take over the temple’s assets from a trust controlled by the royal family of Travancore. The temple, devoted to the Hindu god Vishnu, was built in the 16th century by the kings of Travancore. The descendants of the royal family had appealed to the Supreme Court against the petition for the takeover. Meanwhile the government has sent two dozen police officers to the previously unguarded shrine for round-the-clock security. India’s Supreme Court will decide what happens to the treasure. We’re waiting to see how this interesting story develops.

Our tour package covers the above-mentioned countries. So it’s time to wind up the trip. Before saying adieu, let’s have a look at the gold charts (charts courtesy by http://stockcharts.com).

The very long-term chart for gold shows continued attempts to move above the rising, long-term trend channel. So far the attempts have been unsuccessful and we consequently expect to see this index move lower in the near weeks. At this time, there is really no other information forthcoming from this week’s long-term chart.

The same can be said about the precious metals stocks.

In the very long-term XAU gold and silver mining stocks index chart this week, once again we see the index level attempting to move above the 2008 intra-day highs. The monthly closing highs have been surpassed but the breakout is not confirmed without XAU taking out the intra-day highs. Consequently, with price below 2008 high, the situation remains medium-term bearish.

Summing up, recent market momentum has been quite positive for gold and mining stocks but not much changed from the long-term perspective and a mid-year correction still appears to be in the cards.

To make sure that you are notified once the new features are implemented, and get immediate access to my free thoughts on the market, including information not available publicly, we urge you to sign up for our free e-mail list. Gold & Silver Investors should definitely join us today and additionally get free, 7-day access to the Premium Sections on our website, including valuable tools and unique charts. It's free and you may unsubscribe at any time.

Thank you for reading. Have a great and profitable week!

P. Radomski
Editor
Sunshine Profits

    Interested in increasing your profits in the PM sector? Want to know which stocks to buy? Would you like to improve your risk/reward ratio?

    Sunshine Profits provides professional support for precious metals Investors and Traders.

    Apart from weekly Premium Updates and quick Market Alerts, members of the Sunshine Profits’ Premium Service gain access to Charts, Tools and Key Principles sections. Click the following link to find out how many benefits this means to you. Naturally, you may browse the sample version and easily sing-up for a free trial to see if the Premium Service meets your expectations.

    All essays, research and information found above represent analyses and opinions of Mr. Radomski and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Mr. Radomski and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above belong to Mr. Radomski or respective associates and are neither an offer nor a recommendation to purchase or sell securities. Mr. Radomski is not a Registered Securities Advisor. Mr. Radomski does not recommend services, products, business or investment in any company mentioned in any of his essays or reports. Materials published above have been prepared for your private use and their sole purpose is to educate readers about various investments.

    By reading Mr. Radomski's essays or reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these essays or reports. Investing, trading and speculation in any financial markets may involve high risk of loss. We strongly advise that you consult a certified investment advisor and we encourage you to do your own research before making any investment decision. Mr. Radomski, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Przemyslaw Radomski Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules