Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. ]]> http://thedailygold.com/gold-stocks-and-the-euro-all-gain-in-risk-asset-recovery-as-positive-manufacturing-data-confirms-chinas-soft-landing/feed/ 0 http://thedailygold.com/thin-holiday-trade-sees-gold-flat-as-euro-stocks-rally-swiss-politicians-reject-negative-rates/ http://thedailygold.com/thin-holiday-trade-sees-gold-flat-as-euro-stocks-rally-swiss-politicians-reject-negative-rates/#comments Thu, 22 Dec 2011 19:31:04 +0000 BullionVault http://thedailygold.com/?p=12405
Thurs 22 Dec., 07:45 EST

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.
]]> http://thedailygold.com/thin-holiday-trade-sees-gold-flat-as-euro-stocks-rally-swiss-politicians-reject-negative-rates/feed/ 0 http://thedailygold.com/gold-holds-support-ready-for-breakout-in-us-and-euro-terms/ http://thedailygold.com/gold-holds-support-ready-for-breakout-in-us-and-euro-terms/#comments Fri, 20 May 2011 21:29:16 +0000 Jordan Roy-Byrne, CMT http://thedailygold.com/?p=6577 While the financial media pronounced the end of the Commodities bull and the end of the Gold trade, the market didn’t listen. The financial media apparently forgot that there is no solution to the coming global sovereign debt crisis. Perhaps they just thought there wasn’t a crisis?

Speculation aside, sovereign debt concerns are growing in a host of European nations. Fitch announced that a restructuring of Greek debt would basically be considered a default. The IMF said that Ireland’s ability to sell its debt is “elusive” and that the country needs a new plan and more financing from the ECB. Finally, a report suggested that Spain would reveal some debts that had previously been hidden by the authorities.

This news is boosting Gold in both US Dollar and Euro terms.

As you can see, Gold in US Dollar terms has held support at $1475. Only $1525 stands between it and a test of the recent high. Gold in Euro terms has been in a bullish consolidation pattern since last summer. The market is close to a technical breakout which would project 17% higher from current levels.

As Gold corrected the financial media and pundits alike boasted about the end of the Gold trade. Sentiment overreacted on the downside and Gold managed to hold support and strengthen in real terms. That setup along with the likely escalating situation in Europe combined to drive the market higher in what could be the start of a new leg higher. If you are looking for more top notch analysis on Gold and would like to make money in the shares, then consider a free 14-day trial to our service.

Good Luck!

Jordan Roy-Byrne, CMT

Jordan@TheDailyGold.com

Source: Gold-Euro… breaking out



The G7, inexplicably, announced that member finance ministers would convene for a conference call this afternoon.  No other details emerged, but this seemed a bit unusual on the heels of the most recent G20 meeting a couple weeks ago.  The Wall Street Journal reports that:  ”News of the conference call comes amid speculation that Spain might tap the EUR750 billion euro rescue fund set up to help euro-zone countries.”  And then Reuters published this report:  “Spain sees credit squeeze but denies EU rescue bid” – here’s the link:  “You as well, Spain?”

The key feature of that news report is adamant denial by Spain’s Treasury Secretary, Carlos Ocana. I believe that is at least the second or third time that Spain has officially denied the need to be financially bailed out.  As per the old political adage:  a rumor is just that until it’s been officially denied three times – then it becomes fact.   This is probably why gold was slammed from its overnight high of $1235.50 (August future) as soon as London trading commenced (usually they don’t hit gold until the a.m. fixing, two hours into trading).  It’s also why gold was hit another $6 as soon as Comex trading commenced.  The key event in this whole sequence is that gold rallied $7 from Friday’s Comex settlement last night in Asian trading, indicating that Asia/India have resumed their physical buying.

In another Weimar-esque development, Obama asked Congress for $50 billion to give to the States in order to help keep public employees employed.  This development of course occurred on Sunday, when very few people actually pay attention to the news.  Please note that this $50 billion would be tossed on top of the more than $37 billion already given to States in order to fund jobless claims.

Can someone please explain to me why Obama is willing to spend $50 billion of printed taxpayer money to keep Government employees well-fed, while the private sector workers continue to face massive job losses? It grows more absurd by the day.  At this point, I’m not sure what the bigger disaster is:  the BP castastrophe or Obama’s Presidency?  Speaking of BP and Obama disasters…

It sounds like BP/Obama are negotiating to put some kind “fence” around BP’s total liability for cleaning up the Gulf.  I have yet to see any estimates of the cost, so I’m not sure why Obama would be willing to cap BP’s exposure.  Rest assurred, the Taxpayer will be paying for the rest, and thus probably the bulk of the clean-up cost.  This is one time that I’m really cheering for the class-action lawyers to bury a big corporation in damage litigation.

Source: http://truthingold.blogspot.com/

Here is the ‘Wrap Up’ segment from the 15 page NFTRH86, which went in depth on a range of relevant issues currently facing financial markets:

Currency

Euro hype to the upside was expressed for years by touts who had presented a picture that it was just the big, bad USA alone that had major problems. All along as a public writer and then in NFTRH I had presented the euro as just another piece of paper with no real value backing it. So recent events are somewhat refreshing from the standpoint of the analysis, which sees major currencies in a race to the bottom [of the barrel].

It appears that the mania toward the opposite pole from over-bullish has gone too far however, and the euro can rally at any time, possibly providing a good relief story for the broad market to pin its ‘hope’ on once again. Similarly, the US dollar has expressed itself in ‘too far, too fast’ fashion amid the euro hype.

The euro just made a weekly close above important support while Uncle Buck remains below the highs last seen during the worst parts of Armageddon ’08. Again, this is a picture of potential short-term relief for many markets, first and foremost obviously, the euro. Longer term, these two debt backed basket cases are featured players in the race to the bottom in the currency world. All major currencies are contestants in this race by the way; at least all major paper currencies. That is how pervasive the ‘debt as economic fuel’ ethic of the current global economic system has become.

While on the subject of currencies, let’s have a look at the progress of gold as measured in a few of them by way of our Gold-Dow, Gold-Currencies ratio chart. The breakout in Gold-Dow from its Hope ’09 consolidation is very early in its progress. While there can be some post-breakout chop and grind, the risk vs. reward in gold vs. Dow is favorable.

In the currency panels we see gold correcting from over bought in British Pounds and euros after having achieved the rough upside targets of the Cup ‘n Handle patterns. Further upside is projected after some corrective consolidation. Gold in Canada dollars breaks out from the handle but hits resistance at the rim of the cup. It looks to go higher after dealing with this resistance. Gold-Aussie dollar was noted previously as not being a cup due to very low right side, yet was bullish above support. This expressed well in a strong rise up toward resistance.

We are in the age of natural economic contraction being fought by policy makers in the only way they seem to know; leveraging confidence in their respective currencies into debt creation in a massive, world-wide funding scheme. How long can this work? Perhaps longer than you or I could hold out if we take a strong, active stance against it.

The last year of euphoric bullish activity tells us something, and that is that the masses are not yet ready to accept that the Fed, Treasury and their counterparts around the world cannot ultimately control financial events. So by definition, a confidence scheme runs as long as its one underpinning – confidence – remains intact.

Biiwii.com
Biiwii.blogspot.com
Notes From the Rabbit Hole

Meanwhile, the European stock markets (using the Dow Jones Europe Index [$E1DOW] as a proxy), have fallen and acted as a terrible currency hedge over the past 6 months:

The Euro Index is down about 14% over this 6 month time period. Of course, the Euro Index defines the value of a paper-debt ticket by pricing it in other paper-debt tickets. Since all paper is sinking relative to Gold, the actual currency decline is likely greater than 14%. Euro Cash-4-Gold anyone? If I was a currency trader (I’m not – I only deal with the US Dollars I am paid in and the Gold I buy with my Dollars), I would be starting to buy the Euro here as a trade. Articles like this show just how long in the tooth the Euro decline has gotten.

As the rolling panicky declines in different currencies progresses, just as it did in the 1930s the last time the international monetary system broke down, look for Gold to become the go to currency. The US Dollar may well be the last to fall, but Gold will continue to rise in US Dollar terms. Gold has risen every year over the past 10 years and this year will be no different.

I suspect a short-term bounce higher in the stock markets is due and I closed my commercial real estate short position today for some quick profits. I plan to re-enter this trade soon as I remain bearish on equities. Let’s see how Gold stocks perform when the bounce comes, as they should outperform general equities on a bounce higher, whether it begins tomorrow or later in the week. GDXJ had a nice strong finish today and ended in the black after a panicky spike lower early in the day. The Gold to commodities ratio has been surging higher, setting up the fundamentals for a price spike higher in the Gold miners. Gold stocks continue to underperform relative to the risk they entail, but they have been known to turn on a dime.

Full year:

Inflationary periods are highly unjust. They undermine the ethics of hard work and thrift. They destroy solidarity, lead to widespread hardship and often to social unrest.

All these points are well documented in history. Many countries have suffered through the destruction brought on by huge surges of inflation. And many people have lost their wealth, their savings, and even their perspectives in the wake of inflationary episodes.

Inflation Is the Result
of Deliberate Policies

Inflationary periods share three major points:

1. They have taken place under fiat money.
2. They are caused by huge public deficits, which are largely financed by money creation.
3. They are manmade, always the result of deliberate political decisions.

So where do we stand now?

Well, the first point above has been fulfilled on a global basis since the end of Bretton Woods. And point two is increasingly becoming the political answer to the burst housing bubble.

On February 12, IMF economists updated their inflation recommendation.

And now the International Monetary Fund (IMF) comes on the scene: In Rethinking Macroeconomic Policy, IMF economists recommend that the world central banks double their official inflation target from 2 percent to 4 percent.

Hence, point number three has arrived.

Plus, we have …

Ben Bernanke …
a Dedicated Inflationist

With Ben Bernanke at the helm of the world’s most important central bank, a designated inflationist is accountable for the world’s most important reserve currency.

In fact, here’s what he had to say during a famous speech on November 21, 2002:

“But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.”

By speaking these characteristic words, the Federal Reserve chairman commended himself for his job as the most important monetary bureaucrat: Promising politicians to always print his way out of any predicament or crisis.

And that’s exactly what he has done during the past years. And that’s exactly what the IMF is now recommending.

So does this mean inflation is no longer a bad thing? No, definitely not.

Inflationary policies are as bad and devastating as they’ve always been! But now they seem presentable. The big problem is, neither Bernanke nor the IMF bureaucrats seem to remember how difficult and painful it is to get the inflation genie back into the bottle once it has been let out.

When inflation threatens, investors flock to gold to protect their wealth.

Gold Has Historically Been
the Best Inflation Hedge

Economic growth is one of the main, long-term drivers of stock and real estate prices. And when inflation hits there is generally little or even negative growth. Consequently, stocks and real estate do not hold up well.

In contrast, gold has been the best hedge as investors seek to protect themselves against the large purchasing power losses of inflated currencies.

While stocks have been in a secular bear market since 2000, gold has been in a secular bull market. And the inflationary times that loom ahead argue that this bull market has a long way to go. So strategically gold still is a strong buy. But what about the shorter-term picture?

Interestingly, gold in euros has already broken out to an all-time high. As you can see on the chart below, it also broke out of a nice consolidation formation. This is a clear buy signal with a minimum target of 900 euros.

Priced in dollars, gold is also looking attractive. After the strong run from $950 to above $1,200 a healthy correction began. Gold nearly fell back to its rising 200-day moving average. In doing so a wedge formation took shape, and a short-term downtrend line became visible.

As you can see on the following chart, gold broke above this trend line. Then a short-term correction ensued, visible as a test of this broken trend line. This principally bullish behavior is being confirmed by medium-term momentum indicators (not shown). Being oversold, they have turned around thus giving buy signals.

All in all, the situation for gold looks very attractive. Fundamentals are bullish and policy makers are recommending and implementing inflationary policies. The short-term correction that started in December 2009 seems to be over. And I believe gold is ready for a resumption of its long-term bull market.

Best wishes,

Claus

About Money and Markets

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