Tuesday, February 9, 2016

Top Gold Stories and Charts Today -- Hot! Hot! Hot!

Yes, I'm bullish gold. And I find these stories interesting ...

UPDATE: Here's my latest ...

Why Gold Will Go From Safe Haven to Highflier in 2016

What if you spotted a rally... and no one believed it?

That’s what’s happening in precious metals right now.

For the first time in four years, investors are piling into gold as a safe haven. Gold has climbed for three straight weeks, the longest rally in 10 months.

And gold miners? Gold miners are on fire!

Look at this chart of year-to-date performance through Friday’s close.

To read the rest, CLICK HERE.

Gold settles near $1,200, at highest level since June.

(Gold as a vengeful beach ball is my favorite mixed metaphor of the week).

“Gold was like a beach ball that had been pushed too low in the water and is now bouncing higher with a vengeance,” Mark O’Byrne, research director at Dublin-based GoldCore, told MarketWatch.

Market participants said this week’s start of the Lunar New Year—a holiday in China and many parts of Asia—was helping drive physical demand for gold.

“While the Chinese Lunar New Year is the high point for Chinese gold demand, it does not drop off significantly afterward as the steady current of growing middle classes continues to attract demand,” said Julian Phillips, a founder and contributor to GoldForecaster.com.

“This is not just a one-off purchase when they become middle class—it signals the start of a continuous purchasing pattern,” he said.

See also The Gold Core Blog, which I like a lot.

(It's in all caps so you know it must be urgent).

The Austrian Mint, one of Europe's largest in terms of coin sales, said it sold 94,000 ounces of gold coins in January, up 40 percent from 67,100 ounces in January last year.

Britain's Royal Mint said sales of its gold 1 ounce Britannia and Sovereign coins also soared by around 80 percent in January from a year earlier, though it did not give precise sales volumes.

Technician says fan pattern in gold price shows big breakout is coming
(It's from CNBC, so you know it must be true, amiright?)

Gold has a very strong resistance band between $1,150 and $1,180 so any new trend breakout requires a sustained move above $1180.

Goldman No Believer in Gold Rally as Fed to Hike Three Times
(Beware, Ebenezer, for ye shall be visited by three ghosts ...)

“Our economics team forecasts that the Fed will raise rates by 25 basis points three times this calendar year, to 1.3 percent,” analysts including Jeffrey Currie and Max Layton wrote in a report received on Tuesday, forecasting that bullion will trade at $1,000 an ounce by the end of 2016.

The faster growth, as well as the expectations for consumer-price gains, are “forecast to result in an increase in U.S. real interest rates, which under our gold framework is set to drive gold prices down to about $1,000 by year-end,” the analysts wrote.

Goldman forecast that bullion will be at $1,100 in three months, $1,050 in six months and $1,000 in 12 months. The bank said a delay to higher U.S. borrowing costs was an upside risk to its forecasts, while China and Russia cutting bullion purchases would be a downside risk.

Investors have scaled back expectations for U.S. rate rises this year as global equity markets have sunk, oil extended losses and China’s economy slowed. There’s now no chance of an increase next month, down from the 51 percent odds seen at the start of the year, according to data tracked by Bloomberg.

Gold Traders Are Betting on a Bigger Comeback

Eight of the 10 most-traded gold options in New York on Monday were bets on further price gains as the metal topped $1,200 an ounce for the first time since June. More than $2.6 billion was poured into exchange-traded funds tracking precious metals this year, and bullion assets held through ETFs are at the highest since July.

There are more signs pointing to a prolonged rally. The put-to-call ratio, or the number of bearish options trading compared with bullish ones, for SPDR Gold Shares is near the lowest since 2008, data compiled by Bloomberg show. The fund is the world’s biggest ETF backed by gold.

The turnaround for investor sentiment comes as China’s slowdown spurs turmoil for global financial markets. Almost $6.8 trillion has been erased from the value of world equity markets this year. Traders are placing the odds of a U.S. rate increase this year at just 30 percent, down from 85 percent a month ago. Bullion holdings in ETPs have climbed for 15 consecutive days, the longest run since September 2012, according to data compiled by Bloomberg.

LAWRIE WILLIAMS: China still building gold reserves, running down forex
(Hey, Sharps Pixley! Format your posts like you want someone to actually read them, you sadistic small typeface f*cks!)

As the Chinese New Year begins, China is continuing to build its gold reserves at a similar rate to the last six months of last year.  In January it added just over 16 more tonnes to its gold reserve total bringing the official figure to 1,778 tonnes as is being reported to the IMF.  Whether this is a true total or not remains open to doubt given the nation’s history of concealing its full gold reserve position.  If the current rate of purchase continues, and we see no reason why it is likely to be cut back given the nation’s view on the importance of gold in the probably inevitable forthcoming global financial reboot, the country will add another 200 tonnes to its gold reserves this year.

 China's foreign currency stockpile fell nearly $100 billion last month
(China's tumbling yuan -- a managed currency that has nonetheless fallen 5% in a year -- is a major driver of gold's rally, IMO). 

Its foreign exchange reserves dropped $99.5 billion in January to $3.23 trillion, the lowest level since 2012, the central bank said Sunday.

As the Chinese central bank "desperately tries to stabilize the yuan, domestic private investors as well as global currency traders and hedge funds continue to see a one-way bet against the yuan," Biswas wrote in a commentary note.

"This has resulted in large-scale private capital outflows out of the yuan since early 2015, as expectations mount that eventually the [People's Bank of China] will be forced to capitulate once its FX reserves are sufficiently depleted," he said

Let's just look at that again: China’s currency reserves declined by another $100 billion in January. Why another $100 billion? Because China's forex reserves fell $108 billion in December!

Gold price hits one-year high on global recovery
(In other countries, with other currencies, gold is doing better than it is here in the U.S. Hey, maybe my Canadian friends should chime in, since your currency turned into Monopoly money.)

Gold prices on Tuesday traded one-and-a-half-year high in Mumbai's spot market following a sharp recovery in global markets. However, buyers were absent in the market and prices were to be quoted at a huge discount to the cost of imports.

(That seemed like a good one to end with because it reminds us that gold won't go straight up. Buyers will go on strike. Prices will fall. The big question is, "has the trend changed?")


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