Best of the Week
Most Popular
1. Dollargeddon - Gold Price to Soar Above $6,000 - P_Radomski_CFA
2.Is Gold Price On Verge Of A Bottom, See For Yourself - Chris_Vermeulen
3.Dow Stock Market Trend Forecast 2018 - Nadeem_Walayat
4.Gold Price to Plunge Below $1000 - Key Factors for Gold & Silver Investors - P_Radomski_CFA
5.Why The Uranium Price Must Go Up - Richard_Mills
6.Dow Stock Market Trend Forecast 2018 - Video - Nadeem_Walayat
7.Jim Rogers on Gold, Silver, Bitcoin and Blockchain’s “Spectacular Future” - GoldCore
8.More Signs That the Stock Market Will Rally Until 2019 - Troy_Bombardia
9.It's Time for A New Economic Strategy in Turkey - Steve_H_Hanke
10.Fiat Currency Inflation, And Collapse Insurance - Raymond_Matison
Last 7 days
Gold Exodus to Reverse - 22nd Sep 18
Bitcoin Trader SCAM WARNING - Peter Jones, Dragons Den Fake Facebook Ads - 22nd Sep 18
China Is Building the World’s Largest Innovation Economy - 21st Sep 18
How Can New Companies Succeed in the Overcrowded Online Gambling Market? - 21st Sep 18
Golden Sunsets in the Land of U.S. Dollar Hegemony - 20th Sep 18
5 Things to Keep in Mind When Buying a Luxury Car in Dubai - 20th Sep 18
Gold Price Seasonal Trend Analysis - Video - 20th Sep 18
The Stealth Reason Why the Stock Market Keeps On Rising - 20th Sep 18
Sheffield School Applications Crisis Eased by New Secondary Schools Places - 20th Sep 18
Precious Metals Sector: It’s 2013 All Over Again - 19th Sep 18
US Dollar Head & Shoulders Triggered. What's Next? - 19th Sep 18
Prepare for the Stock Market’s Volatility to Increase - 19th Sep 18
The Beginning of the End of the Dollar - 19th Sep 18
Land Rover Discovery Sport 'Approved Used' Bad Paint Job - Inchcape Chester - 19th Sep 18
Are Technology and FANG Stocks Bottoming? - 18th Sep 18
Predictive Trading Model Suggests Falling Stock Prices During US Elections - 18th Sep 18
Lehman Brothers Financial Collapse - Ten Years Later - 18th Sep 18
Financial Crisis Markets Reality Check Now in Progress - 18th Sep 18
Gold’s Ultimate Confirmation - 18th Sep 18
Omanization: a 20-year Process to Fight Volatile Oil Prices  - 18th Sep 18
Sheffield Best Secondary Schools Rankings and Trend Trajectory for Applications 2018 - 18th Sep 18
Gold / US Dollar Inverse Correlation - 17th Sep 18
The Apple Story - Trump Tariffs Penalize US Multinationals - 17th Sep 18
Wall Street Created Financial Crash Catastrophe Ten Years Later - 17th Sep 18
Trade Wars Are Going To Crash This Stock Market - 17th Sep 18
Why Is Apple Giving This Tiny Stock A $900 Million Opportunity? - 17th Sep 18
Financial Markets Macro/Micro View: Waves and Cycles - 17th Sep 18
Stock Market Bulls Prevail – for Now! - 17th Sep 18
GBPUSD Set to Explode Higher - 17th Sep 18
The China Threat - Global Crisis Hot Spots & Pressure Points - 17th Sep 18 - Jim_Willie_CB
Silver's Relationship with Gold Reaching Historical Extremes - 16th Sep 18
Emerging Markets to Follow and Those to Avoid - 16th Sep 18
Investing - Look at the Facts to Find the Truth - 16th Sep 18
Gold Stocks Forced Capitulation - 15th Sep 18
Hindenburg Omen & Consumer Confidence: More Signs of Stock Market Trouble in 2019 - 15th Sep 18
Trading The Global Future - Bad Consequences - 15th Sep 18
Central Banks Have Gone Rogue, Putting Us All at Risk - 15th Sep 18
Gold Price Seasonal Trend Analysis - 14th Sep 18
Growing Number of Small Businesses Opening – and Closing – In the UK - 14th Sep 18
Gold Price Trend Analysis - Video - 14th Sep 18
Esports Is Exploding—Here’s 3 Best Stocks to Profit From - 13th Sep 18
The Four Steel Men Behind Trump’s Trade War - 13th Sep 18
How Trump Tariffs Could Double America’s Trade Losses - 13th Sep 18
Next Financial Crisis Is Already Here! John Lewis 99% Profits CRASH - Retail Sector Collapse - 13th Sep 18
Trading Cryptocurrencies: To Win, You Must Know Where You're Wrong - 13th Sep 18
Gold, Silver, and USD Index - Three Important “Nothings” - 13th Sep 18
Precious Metals Sector On a Long-term SELL Signal - 13th Sep 18
Does Gambling Regulation Work - A Case Study - 13th Sep 18
The Ritual Burial of the US Constitution - 12th Sep 18
Stock Market Final Probe Higher ... Then the PANIC! - 12th Sep 18
Gold Nuggets And Silver Bullets - 12th Sep 18
Bitcoin Trading - SEC Strikes Again - 12th Sep 18

Market Oracle FREE Newsletter

Trading Any Market

Gold’s Strongest Months Since 1975 Are September And November

Commodities / Gold and Silver 2013 Aug 30, 2013 - 06:53 PM GMT

By: GoldCore

Commodities

Today’s AM fix was USD 1,392.75, EUR 1,051.85 and GBP 899.19 per ounce.  Yesterday’s AM fix was USD 1,406.25, EUR 1,059.96 and GBP 906.79 per ounce.

Gold fell $8.60 or 0.61% yesterday, closing at $1,407.10/oz. Silver fell $0.44 or 1.81%, closing at $23.85. Platinum fell $11.61 or 0.8% to $1,518.99/oz, while palladium was down $8.78 or 1.2% to $734.22/oz.


Gold is set for its second consecutive higher monthly close which is bullish from a momentum and technical perspective. Gold is nearly 5% higher for the month in dollars and euros, 2.5% in pounds and 12% in rupees after the rupee collapsed in August. 

Gold Seasonal - Monthly Performance and Average (10 Years) 

Gold quickly fell from $1,407/oz to $1,395/oz  at 0800 London time despite no data of note and little corresponding movement in oil and stock markets. Profit taking and an increase in risk appetite may have contributed to the falls after the U.K. parliament voted to reject military action against Syria and fears over oil supply disruptions in the Middle East eased.

Oil prices are still heading for the largest monthly gain in a year, with Brent up more than 6% in August after unrest cut output in Libya by around 1 million barrels per day and production fell in Iraq, Nigeria and elsewhere.

The U.S. seems likely to proceed with a strike against Syria even after U.K. lawmakers rejected action which should support prices.  The yellow metal reached $1,433.83/oz on August 28th, its highest since mid May on concerns that the U.S. will go to war with Syria.

Gold’s recent gains are primarily due to very strong physical demand globally and increasing supply issues, particularly in the LBMA gold bullion market. Syria and the increasing geopolitical uncertainty in the Middle East are creating real oil price and inflation risk which has contributed to the increased bullion buying in recent days.

As ever it is important to focus on the medium and long term drivers of the gold market: 

Medium Term Market Drivers

The medium market themes guiding the market currently are as follows:

Seasonal

Late summer, autumn and early New Year are the seasonally strong periods for the gold market due to robust physical demand internationally. 

This is the case especially in Asia for weddings and festivals and into year end and for Chinese New Year when China stocks up on gold. Gold and silver often see periods of weakness in the summer doldrum months of May, June and July.

This week will see the end of August trading and September is, along with November, one of the strongest months to own gold. This is seen in the charts showing gold’s monthly performance over different time frames - 1975 to 2011, 2000 to 2011 and our Bloomberg Gold Seasonality table  from 2003 to 2013 (10 years is the maximum that can be used).

Thackray's 2011 Investor's Guide notes that the optimal period to own gold bullion is from July 12 to October 9. During the past 25 periods, gold bullion has outperformed the S&P 500 Index by 4.7%.

COMEX

Futures market positioning as seen on the COMEX is now very bullish.

Short positions held by hedge funds in the gold and silver markets remain very high and the stage is now set for a significant short squeeze which should propel prices higher in the coming months. Arguably we are in the early stages of this short squeeze.

Hedge funds have consistently been caught wrong footed at market bottoms for gold and silver in recent years and high short positions have been seen near market bottoms, prior to rallies in gold and silver.

Conversely, the smart speculative money, bullion banks such as JP Morgan have reduced their short positions and are now long in quite a significant way and positioned to profit from higher prices in the coming weeks and months.

Federal Reserve “Tapering” The Federal Reserve has been suggesting for months, indeed years, that they would return to more normal monetary policies by reducing bond buying programmes and gradually increasing interest rates. 

‘Talk is cheap’, ‘actions speak louder than words’ and it is always best to watch what central banks do rather than what they say. 

Near zero interest rates and bond buying are set to continue for the foreseeable future. 

Precious metals will only be threatened if there is a sustained period of rising interest rates which lead to positive real interest rates. This is not going to happen anytime soon as it would lead to an economic recession and possibly a severe Depression.

Chinese Demand  Chinese demand for physical bullion continues to be very high and continues to support prices and will likely again contribute to higher prices in the coming months. China gold purchases surged 54% to 706.4 metric tons in the first half of 2013 from the first half of 2012 - a year of record demand in China. 

Demand surged 87% for bars and 44% for jewelry. China's gold demand should hit a record 1,000 tonnes this year and will almost certainly overtake India, the world’s largest saver in gold.

The People’s Bank of China is almost certainly continuing to quietly accumulate gold bullion reserves. As was the case previously, they will not announce their gold bullion purchases to the market in order to ensure they accumulate sizeable reserves at more competitive prices. They also do not wish to create a run on the dollar – thereby devaluing their sizeable foreign exchange reserves. 

Expect an announcement from the PBOC, sometime in 2013 or 2104, that they have doubled or even trebled their reserves to over 2,000 or 3,000 tonnes.

India Indian demand has fallen somewhat due to recent tariffs but will remain robust and should be as high as 1,000 tonnes this year.

Gold Forward Offered Rates (GOFO)  Gold forward offered rates (GOFO) or the cost to borrow gold remains negative. Negative gold borrowing costs is likely due to a lack of supply of large 400 ounce bars as mints, refineries and jewellers internationally and especially in Asia are scrambling to secure supply. 

Gold Backwardation Gold is in backwardation. Meaning that gold for future delivery is trading at a discount to physical market prices – a rare situation that has occurred only after the Lehman Brothers collapse and near the bottom of the gold market in 1999. Spot prices or prices for delivery now are higher than prices for future contracts at later dates. This is very unusual and means that buyers are willing to pay a premium for physical. It also strongly suggests that there is tightness in the physical market.

Eurozone Debt Crisis The Eurozone debt crisis is far from over and will rear its ugly head again - probably as soon as the German elections are over. Politicians and bankers have managed to delay the inevitable day of reckoning by piling even more debt onto the backs of already struggling tax payers thereby compounding the problem and making it much worse in the long term.

Greece, Spain, Portugal, Italy, Ireland, now Cyprus and even France remain vulnerable.

Japan, U.K., U.S. Debt Crisis In Japan, the national debt has topped the ¥1 quadrillion mark. A policy of money printing pursued for a decade has failed abysmally and now politicians look set to pursue currency debasement in an even more aggressive manner – with attendant consequences.

The U.K. is one of the most indebted countries in the industrialised world - the national debt continues to rise rapidly and is now at more than 1.2 trillion pounds ($1.8 trillion) and total (private and public) debt to GDP in the U.K. remains over 500%. 

The U.S. government is once again on the brink of defaulting. At the start of the 'credit crisis' six years ago, U.S. federal debt was just $8.9 trillion. Today, U.S. federal debt stands at $16.738 trillion - 88% higher and increasing rapidly. This does not include the $70 trillion to $100 trillion in unfunded liabilities for social security, medicare and medicaid.

Long Term Fundamentals The long term case for precious metals is based on the four primary drivers - the ‘MGSM’ drivers that we have long focussed on.

Macroeconomic Risk Macroeconomic risk is high as there is a serious risk of recessions in major industrial nations with much negative data emanating from the debt laden Eurozone, U.K., Japan, China and U.S. 

Geopolitical Risk   Geopolitical risk remain elevated - particularly in the Middle East. This is seen in the serious developments in Syria and increasing tensions between Iran and Israel. There is the real risk of conflict and consequent affect on oil prices and global economy. There are also simmering tensions between the U.S. and its western allies and Russia and China. 

Systemic Risk  Systemic risk remains high as few of the problems in the banking and financial system have been addressed and there is a real risk of another 'Lehman Brothers' moment and seizing up of the global financial system. The massive risk from the unregulated “shadow banking system” continues to be underappreciated.

Monetary Risk 

Monetary risk or currency risk remains high as the policy response of the Federal Reserve, the ECB, the Bank of England and the majority of central banks to the risks mentioned above continues to be to be ultra loose monetary policies, zero interest rate policies (ZIRP), negative interest rate policies (NIRP), deposition confiscation or “bail-ins”, the printing and electronic creation of a tsunami of money and the debasement of currencies.

Should the macroeconomic, systemic and geopolitical risks increase even further in the coming months, as seems likely, than the central banks response will likely again be more cheap money policies and further currency debasement which risks currency wars deepening.

Conclusion

Absolutely nothing has changed regarding the fundamentals driving the gold market. We are confident that gold, and indeed silver, are still in long term secular bull markets likely of a 15 to 20 year duration.

Owning physical gold coins and/or bars in your possession and owning physical gold and silver in allocated accounts will continue to protect and grow wealth in the coming years. 

For the latest news and commentary on financial markets and gold please follow us on Twitter.

GOLDNOMICS - CASH OR GOLD BULLION?




'GoldNomics' can be viewed by clicking on the image above or on our YouTube channel:
www.youtube.com/goldcorelimited

This update can be found on the GoldCore blog here.

Yours sincerely,
Mark O'Byrne
Exective Director

IRL
63
FITZWILLIAM SQUARE
DUBLIN 2

E info@goldcore.com

UK
NO. 1 CORNHILL
LONDON 2
EC3V 3ND

IRL +353 (0)1 632 5010
UK +44 (0)203 086 9200
US +1 (302)635 1160

W www.goldcore.com

WINNERS MoneyMate and Investor Magazine Financial Analysts 2006

Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information contained in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: Past experience is not necessarily a guide to future performance. The value of investments may fall or rise against investors' interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. GoldCore Limited, trading as GoldCore is a Multi-Agency Intermediary regulated by the Irish Financial Regulator.

GoldCore is committed to complying with the requirements of the Data Protection Act. This means that in the provision of our services, appropriate personal information is processed and kept securely. It also means that we will never sell your details to a third party. The information you provide will remain confidential and may be used for the provision of related services. Such information may be disclosed in confidence to agents or service providers, regulatory bodies and group companies. You have the right to ask for a copy of certain information held by us in our records in return for payment of a small fee. You also have the right to require us to correct any inaccuracies in your information. The details you are being asked to supply may be used to provide you with information about other products and services either from GoldCore or other group companies or to provide services which any member of the group has arranged for you with a third party. If you do not wish to receive such contact, please write to the Marketing Manager GoldCore, 63 Fitzwilliam Square, Dublin 2 marking the envelope 'data protection'

GoldCore Archive

© 2005-2018 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