Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Dow Stock Market Dow Trend Forecast Current State - 22nd Apr 21
Gold Rebounds Amid Positive Economic Reports - 22nd Apr 21
China's record first quarter fuels strong expansion in 2021 - 22nd Apr 21
Gold Price Next Key Level - 22nd Apr 21
Here's What to Look For When Hiring a Real Estate Agent - 22nd Apr 21
Ethereum EIP 1559 and Raven Coin - 21st Apr 21
Gold, USDX: The Board is Set, the Pieces are Moving - 21st Apr 21
World Economies Need to Find a Lot More COPPER! - 21st Apr 21
DogeCoin CRASH! Time to Start Mining BOODGIE Coin! Crypto Mania 2021 - 21st Apr 21
Pausing Stocks and Gold Fireworks - 21st Apr 21
Precious Metals and Miners Start of New Longer-Term Bullish Trend - P2 - 21st Apr 21
Looking For A Mortgage Broker? Here Is How To Hire One - 21st Apr 21
Amazon AMZN Stock PRIMEDAY SALE! Trend Analysis - 20th Apr 21
Stock Market Sentiment Speaks: You May Not Believe My 2021 Targets - 20th Apr 21
Stock Market Phase Two Projection - 20th Apr 21
Are Precious Metals & Miners Starting A New Longer-Term Bullish Trend? - 20th Apr 21
Inflation: First the Gain, Then the Pain… - 20th Apr 21
8 Stock Market Indicators in 1: Here's the Message of the Panic/Euphoria Model - 19th Apr 21
Gold - You Can Win a Battle, but Still Lose the War - 19th Apr 21
Will Interest Rates Rally Further Push Gold Price Down? - 19th Apr 21
Gold Fireworks Doubt the Official Inflation Story - 19th Apr 21
YuanPay Team Discuss The Process Of Crypto Diversification - 19th Apr 21
Central Banks May Ramp Up Gold Buying - 18th Apr 21
How to Get Rid of Driveway Weeds With Just WATER! 6 Months later NO Weeds, Ultimate Killer! - 18th Apr 21
State of the European Markets - DAX, FTSE, CAC, AEX, SMI, IBEX 35, S&P/MIB, Euro Stoxx 50, RTS - 18th Apr 21
Einvestment Fund: What You Need To Know About Investments - 18th Apr 21
Google Alphabet (GOOG) AI Deep Mind Stock Trend Analysis - 17th Apr 21
Stocks and Bonds Inflationary Slingshot - 17th Apr 21
Best Smartphone Selfie Stick Tripod Review by ATUMTEK Works with Samsung Galaxy and Iphone - 17th Apr 21
How to Give Budgie's First Bath | Easy Budgie Bathing and Water Training with Lettuce - 17th Apr 21
Record-breaking Decrease in New Passenger Vehicle Sale in Europe - 17th Apr 21
US Stocks Climb A “Wall Of Worry” To New Highs - 16th Apr 21
Gold’s Singular Role - 16th Apr 21
See what Anatomy of a Bursting Market Bubble looks like - 16th Apr 21
Many Stock Market Sectors Are Primed For Another Breakout Rally – Are You? - 16th Apr 21
What Skyrocketing US Home Prices Say About Inflation - 16th Apr 21
Still a Bullish Fever in Stocks? - 16th Apr 21
Trying to Buy Coinbase Stock on IPO Day - Institutional Investors Freeze out Retail Investors - 15th Apr 21
Stocks or Gold – Which Is in the Catbird Seat? - 15th Apr 21
Time For A Stock Market Melt-Up - 15th Apr 21
Stocks Bull Market Progression Now Shows Base Metal Strength - 15th Apr 21
AI Tech Stocks Buy Ratings, Levels and Valuations - 14th Apr 21
Easy 10% to 15% Overclock for 5600x, 5900x, 5950x Using AMD Ryzen Master Precision Boost Overdrive - 14th Apr 21
The Current Cannabis Sector Rally Is Pointing To Another Breakout - 14th Apr 21
U.S. Dollar Junk Bond Market The Easiest Money in History - 14th Apr 21
The SPY Is Nearing Resistance @ $410… What Is Next? - 14th Apr 21
The Curious Stock Market Staircase Rally - 14th Apr 21
Stocks are Heating Up - 14th Apr 21
Two Methods in Calculating For R&D Tax Credits - 14th Apr 21
Stock Market Minor Correction Due - 13th Apr 21
How to Feed Budgies Cucumbers - Best Vegetables Feeding for the First Time, Parakeet Care UK - 13th Apr 21
Biggest Inflation Threat in 40 Years Looms over Markets - 13th Apr 21
How to Get Rich with the Pareto Distribution - Tesco Example - 13th Apr 21
Litecoin and Bitcoin-Which Is Better? - 13th Apr 21
The Major Advantages Of Getting Your PhD Online - 12th Apr 21
Covid-19 Pandemic Current State for UK, US, Europe, Brazil Vaccinations vs Lockdown's Third Wave - 12th Apr 21
Why These Stock Market Indicators Should Grab Your Full Attention - 12th Apr 21
Rising Debt Means a Weaker US Dollar - 12th Apr 21
Another Gold Stocks Upleg - 12th Apr 21
AMD The ZEN Tech Stock - 12th Apr 21
Overclockers UK Build Quality - Why Glue Fan to CPU Heat sink Instead of Using Supplied Clips? - 12th Apr 21 -
What are the Key Capabilities You Should Look for in Fleet Management Software? - 12th Apr 21
What Is Bitcoin Gold? - 12th Apr 21
UK Covd-19 FREE Lateral Flow Self Testing Kits How Use for the First Time at Home - 10th Apr 21
NVIDIA Stock ARMED and Dangeorus! - 10th Apr 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Gold Down In February As Weak Hands Sell On Poor Sentiment; Whilst Smart Adds

Commodities / Gold and Silver 2013 Mar 01, 2013 - 03:09 PM GMT

By: GoldCore

Commodities

Today’s AM fix was USD 1,570.00, EUR 1,203.99 and GBP 1,043.74 per ounce.
Yesterday’s AM fix was USD 1,591.00, EUR 1,213.39 and GBP 1,049.20 per ounce.

Gold fell $16.70 or 1.05% yesterday in New York and closed at $1,580.40/oz. Silver slid to a low of $28.40 and finished with a loss of 1.66%.


Gold in USD – 2 Years – 50, 100 and 200 Day Moving Average - Bloomberg

Gold fell 5% in February due to dollar strength, reasonably positive economic data, aggressive selling of paper gold on the COMEX, and poor sentiment.

Despite the very negative sentiment, gold was more resilient in other fiat currencies. In euros and pounds, gold only fell by 1.1% and 0.7% respectively. For the month, gold fell just over £8 from £1,049/oz to £1,041/oz and from €1,225/oz to €1,210/oz.

Gold is oversold on a host of benchmarks, including the relative strength index (RSI), and sentiment is the worst we have seen it in recent years. Therefore, gold is due a bounce. Support is at $1,540/oz and below that at $1,470/oz.

It is worth remembering what the genesis of the sell off was. Once again, more speculative players on the COMEX sold gold futures aggressively during and after the Chinese New Year. Gold was vulnerable at this time due to the complete absence of Chinese demand for physical for those few days.

This initial selling and gold weakness may have contributed to record liquidations in the SPDR gold ETF in February.

As did the misguided belief that the worst of the crisis was over and it was time to jump into riskier assets like stocks again. Gold sentiment deteriorated after the initial falls and continued to worsen after the loud pronunciations of the end of the bull market by Goldman Sachs and some other banks and the much heralded ETF liquidation by Soros in the fourth quarter. Soros’ trumpeted liquidation in the fourth quarter was very small compared to the net inflows of $3.5 billion into GLD during that same quarter.

The significant ETF liquidations in February underscore the weakness in gold sentiment among retail investors that has been prevalent recently.

Our trading desk was the busiest it has ever been on the sell side in February as retail investors sold out of nervousness due to the price falls. High net worth selling was minimal and wealthier clients were more active on the buy side - especially this week.

Panic selling by weak hands and lack of conviction in gold investors and especially speculators tends to happen near market bottoms and suggests we are close to a bottom. Central banks, some hedge funds, institutions and high net worths will have used this latest dip as another opportunity to diversify into gold at cheaper prices.

Concerns about ultra loose monetary policies in the U.S. and around the world have not abated amongst many institutions, pension funds, central banks and more aware investors. The significant risk of currency debasement and inflation remains and will likely deepen in the coming months.

Gold May Be Set to Catch-Up to Higher Inflation Expectations - Bloomberg

Gold prices have closely followed market inflation expectations throughout the past year. A key relationship to monitor during the next few months is investor interpretation of where inflation is headed. While gold has been weaker in recent months, inflation expectations have moved higher.

Were the historical relationship to hold, gold could begin to play catch up soon.

Contrary to many politicians and Keynesian economists’ views, deficits do matter. While they are manageable in the short term, high deficits for a number of years can destroy economies and currencies.

Gold Likes Deficits as They Beget Money Supply Growth - Bloomberg

Deficits matter to economies and to currencies and therefore of course matter to the gold market. High deficits over a period of time lead to a consistent growth in money supply and we are seeing that today in the U.S. and internationally.

Gold prices have tracked global money supply growth very closely in the last ten years.

Global Money Supply Growths Correlation With Gold Prices (2003-2013) - Bloomberg

The Federal Reserve and other central banks claim that their money printing and near zero percent interest policies was a response to the global financial crisis in 2007 and 2008 and was needed to prevent deflation and economic collapse. The above chart shows that this claim is bogus as money supply in the U.S. and globally had been increasing quite rapidly in the period 2003 to 2007, prior to the crisis even beginning.

With central banks such as the Fed, BOE and ECB confirming again this week that ultra loose monetary policies are set to continue, gold’s bull market seems assured.

The worst case monetary scenario remains hyperinflation. It is feared by those with a knowledge of monetary history and by many investors and savers internationally who have experienced the dreadful effects of hyperinflation – especially in Germany. The risk, while still quite small, is real and it is imprudent to completely dismiss it as a possibility, especially given the scale of debts in the world today and the scale of currency debasement today.

At the very least, these policies are set to stoke inflation and stagflation in many economies globally. It is not a question of if, but rather when.

Gold and Inflation - U.S. CPI (1971 to 2013) - Bloomberg

For those already owning gold, now is the time to remain brave and hold on to your position and possibly even add to it. For those with no allocation to gold – you now have an excellent buying opportunity and should consider dollar cost averaging into a position to protect against further short term weakness.

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

© 2005-2019 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