6 Hot Links and Charts for Monday

Here are some of the things I find interesting this morning.

1. India's gold imports rise in March
The gold import in India surged nearly 50 tones in March, amid the RBI’s import restrictions. Meantime, the RBI Governor, Mr. Raghuram Rajan hinted on the further relaxation of the gold import curbs today despite the increased gold import flow seen recently.

2. Former Treasury Official: The Fed Has No Integrity on Gold
Almost every week it is possible to illustrate the appearance of a large number of contracts shorting gold at times of day when trading is thin. The short-selling triggers stop-loss orders and margin calls and hammers down the gold price. The Fed has resorted to this practice in order to protect the value of the US dollar from Quantitative Easing.

In order for the Fed to effectively support the reserve status of the U.S. dollar by pushing it higher when it starts to drop, the Fed has also to prevent the price of gold from rising. Intervention in the gold market has been occurring for a long time. However, in the last several years the intervention has become blatant and desperate, as rising concerns about the dollar are causing countries such as China and Russia to accumulate fewer dollars and more gold.

Read the rest.

3. How much oil is produced in each tightoil play in the US?

4. Russia Makes New Move into Eastern Ukraine
Pro-Russia activists occupying a regional government building in Donetsk, in eastern Ukraine, on Monday proclaimed the creation of a separatist Donetsk republic, a Reuters witness said.

Sean's note: Read my column from last week explaining why the Russians would move into Eastern Ukraine. Hint: Oil, gas and coal.

5. The First 5 Things You Should Do When You Get a New Computer
Here are a few things you should do whenever you buy a new PC. Most people don't do 'em. Do you?

6. April 7 is National Beer Day!

Treat yourself. And have a great Monday.

Chart of the Day: Commodity Prices in the Bernanke Era

source

They say a picture is worth a thousand words. What does this picture tell you?

Also, Janet Yellin is expected to be a Ben Bernanke clone. What does that tell you?

Have a great Friday.

Yellen About the Yellow Metal

Gold is down a bit this morning. I have a new issue of Gold & Resource Trader going out to subscribers TODAY.

News links of interest...

In remarks released on Wednesday afternoon, Federal Reserve Chair nominee Janet Yellen made four critical points …

•  She believes the benefits of the QE program still outweigh the cost.

• She sees “meaningful progress” in the labor market but wants to see signs that the economy is growing fast enough to sustain them.

• There is no set time for removing the QE program. The Fed is assessing its progress at every meeting.

• The program can’t go on forever.

This was pretty “dovish,” meaning that those hoping for an early end to the QE program were disappointed. And that sent the US dollar lower and gold higher on Thursday.

Yellen's take on gold led to this notable Tweet from Merk Investments head Axel Merk: "Yellen may not understand gold, but gold understands Yellen. Gold up today."

Here is Barron's take on Gold and Yellen

WGC: China Already Tops Record For Full-Year Gold Demand
For the year through September, mainland Chinese gold demand was 797.8 metric tons, reported Marcus Grubb, managing director of investment for the World Gold Council. Demand for full-year 2012 was around 776 tons. India’s official demand was listed at 715.7 tons through September, compared to around 602 for the first nine months of 2012, Grubb said.

In fact, China has become the world's top gold buyer.

Central banks continue to be strong buyers of gold, albeit at a slower rate. Q3 2013 was the 11th consecutive quarter of net purchases of gold. And here is a chart of Russia's gold reserves ...

Source

Gold Seen Flowing East as Refiners Recasting Bars for Asia
Asian bullion demand will keep expanding as elevated inflation spurs purchases, HSBC Holdings Plc economists including Frederic Neumann wrote last month in a report that said the region is “going for gold.” A vault that can hold 2,000 tons was opened in Shanghai by Malca-Amit Global Ltd. this month to target increased demand for storage space.

India Paying an Equivalent $1,565 Per Ounce For Physical Gold Bullion

Gold Is Up and the Dollar Is Down -- Chart

I thought we'd revisit a chart I keep posting of the relationship of between the US dollar and gold -- the "seesaw of pain" as I call it. 

(updated chart)

You can see that this morning, gold gapped higher while the US dollar continues to bleed lower. The day's not over yet -- anything can happen -- but this is a potential set-up for a rally in gold and a pullback in the US dollar. Since the US dollar's larger trend is down, maybe we'll see a resumption of that trend. But be sure to wait and see how the day ends.

Naturally, seeing how the dollar ends the week would be even better.

What seemed to spark this was the prepared testimony of Federal Reserve Chair nominee Janet Yellen, which was released late Wednesday afternoon. Yellen said she would continue current Fed Chairman Ben Bernanke’s monetary policies and said the U.S. economy still needs monetary stimulus because it is performing below its potential. The market place read Yellen’s remarks as dovish monetary policy.

This gave gold a lift yesterday afternoon, but REALLY put a fire under the broad stock market. The action in gold is more short-covering. We need to see follow-through. Gold and silver remain totally at the mercy of tapering expectations.

What could help the dollar (and hurt gold) is if the European Central Bank cranks up its easy money policies. That would probably push the euro lower and boost the dollar. 

However, for now, I'll take the good news where I can find it. This is helpful for the three gold mining positions we entered in Gold & Resource Trader this week.

More Gold News

In other gold news, Bloomberg reports -- quoting The World Gold Council -- that in the third quarter, global gold demand slipped to 868.5 metric tonnes, from 1,101.4 tonnes a year earlier. Investors pulled 118.7 tons out of ETFs and similar products, while buying from central banks was 17% lower than a year ago. So, central banks are still buying, but at a lower rate. 

Also, China’s demand for jewelry, bars and coins rose 30% to 996.3 metric tonnes, while usage in India gained 24% to 977.6 tonnes. So it's a continuation of the big shift from West to East.

Finally, as of November 13, holdings in gold-bullion-backed exchange-traded products stood at 1,873.3 tonnes. That is down 29% from the beginning of the year, but selling seems to have subsided, and holdings in the gold ETPs seems to be hammering out a bottom. We'll see.