by Adam Hamilton
Zeal LLC
The silver miners showed impressive fundamental strength during 2015’s grim fourth quarter. That was the worst silver suffered in many years, a perfect-storm trough with major secular lows fueling extreme bearish sentiment. Traders feared this entire industry faced an existential threat, so they fled in terror from silver stocks. But silver miners’ strong operational performances aced that severe trial with flying colors.
Q4’15 may seem like ancient history now, but it was exceedingly important for the entire precious-metals realm. Gold slumped to a miserable 6.1-year secular low in mid-December, on the day after the Fed hiked rates for the first time in 9.5 years. That was wildly irrational based on market history, which has proven gold thrives during Fed-rate-hike cycles with big average gains. Gold hadn’t seen lower prices since Q4’09.
We continue to see articles by so called “experts” trashing Gold and Silver as investments. Gold is everything from a “Pet Rock” to a “Dumb Investment” or “Barbarous Relic.”
I don’t know if he’s delusional and really believes what he’s saying or if he’s so used to saying the opposite of the truth that the lies just flow naturally out of his mouth. I just don’t know. But this I do know: the truth about anything is the opposite of what Obama claims to be the case. I just have to point to Obamacare to prove that point.
I did not want the day to pass without posting a few words on gold’s significant push to the upside, now trading just shy of the $1300 mark. To be sure, the dual positions with respect to rates on the part of the Bank of Japan (to stand pat) and the Federal Reserve (to remain ultra-dovish) played a role in the dollar’s recent weakness and gold’s strength. Those determinants though, in my view, are only part of the story, and the few percentage point drop in the dollar against the yen over the past week is really not enough to justify a nearly $60 rise in the price of gold over the past five trading sessions. The bigger determinant has been China’s underpinning of the gold price on two different occasions over the past week after it had taken a major turn to the downside in New York trading.
Gold just enjoyed one of its strongest quarters in a generation, and some people are getting very, very excited.
Dear Friend of GATA and Gold:
Six of the world’s central banks (Europe, Denmark, Sweden, Switzerland, Japan, and Hungary) representing 29 countries have taken interest rates negative. They range from -0.05% in Hungary to -1.25% basis points in Sweden.
I have places to go and papers to sign, so I will just post the charts as they look now.
The Dow is now testing key technical support at the 17624 level and breaking this level warns that a correction becomes possible. We have two very important Weekly Bearish Reversals at 17434 and 17120 level. A weekly closing beneath the 17120 level will signal a sharp sell-off of about 1,000 points or down to the 15400 area. Gold has finally exceeded the March high and silver reach 1802. How they respond now to the 2015 high of 1307 and 1850 will be important to determine if we have an extension of this chaos in all markets or are we just pushing everything to the maximum.
The Fed has proven very dovish since their December rate hike. Tumultuous financial markets gave the Fed doves the upper hand, leading the Fed to pause in it’s “normalization” campaign and cut in half the expected pace of rate hikes this year.
Here’s something that should scare the hell out of you, but it doesn’t surprise me at all…
These are shockingly bad times for big banks, especially when you consider that the overall economy is supposed to be fairly healthy. The latest example is Germany’s Deutsche Bank:
Silver continued its spectacular run, and gold had a good week as well.
Flashback to January 26 of this year. The PHLX Gold/Silver Index, or XAU – the longest running index of gold stocks – was recovering from its breakdown earlier in the month to all-time lows. That day, the XAU was testing the breakdown level around $43. Our Chart Of The Day and accompanying post linked above queried “Will this test of the breakdown level lead to a false breakdown, or the start of a new leg down?” Well, 3 months and over 100% later, that answer couldn’t be more clear.
The last time I saw universal basic income discussed on television, it was laughed away by a Conservative MP as an absurd idea. The government giving away wads of cash responsibility-free to the entire population sounds entirely fantastical in this austerity-bound age, where “we just don’t have the money” is repeated endlessly as a mantra. Money, they say, does not grow on trees. (Only as figures on the screen of a computer).
Colin Lokey, also known as “Tyler Durden,” is breaking the first rule of Fight Club: You do not talk about Fight Club. He’s also breaking the second rule of Fight Club. (See the first rule.)
Silver climbed to the highest in more than a year, set for the best month since 2013, amid the dollar’s slump and an improving outlook for industrial demand. Gold surpassed a one-year high.
EASTERN DESERT, Egypt — Off the off-road tracks deep in Egypt’s eastern desert, prospectors are ramping up the hunt for the treasure once revered by the Pharaohs as the “skin of the gods” — gold.
The eurozone “defied pessimism” at the start of the year, as the currency bloc’s economic size finally reached a level it last hit in 2008.