Saturday, October 12, 2019

Demand for Gold ETF's Surge as Quantitative "Not" Easing Returns

The Federal Reserve has cut interest rates twice this year, slashing rates lower in an attempt to spur the economy and keep the good times rolling.

Despite this fact, the markets are not happy and they have demanded more and as it now appears, they are going to get exactly what they wished for.

The odds of an additional rate cut occurring within 2019 has surged higher, with market analyst predicting overwhelmingly that another rate cut is on the way and soon.

The reasoning for this is the Federal Reserve themselves, as they have proven that they will not and are not going to let the free market regulate itself, as seen in their recent intervention in the short-term lending markets throughout the month of September, in which they rushed in to save the day.

The Financial Times reports;

"In recent weeks, the Federal Reserve Bank of New York has injected billions of cash reserves into short-term lending markets to ease the pressures that bubbled up in September and sent the cost of borrowing cash overnight via repurchase, or repo, agreements as high as 10 per cent."

Despite these bail-outs, the short-term lending markets are still seen as on shaky ground and incredibly vulnerable to a repeat collapse.

This has prompted the Federal Reserve to take even further action, announcing that they would once again resume purchases of Treasury Securities from the open market, in an attempt to keep the system chugging alone.

At the National Association for Business Economics conference in Denver on Tuesday, Federal Reserve Chairman Powell explained  how the Fed plans on supporting the markets moving further, however, he strongly stressed that this should not be viewed as Quantitative Easing, stating the following;

“I want to emphasize that growth of our balance sheet for reserve management purposes should in no way be confused with the large-scale asset purchase programs that we deployed after the financial crisis.”

Reiterating this point, Powell would later go on to state;

“In no sense, is this QE,”
Obviously to anyone with half a brain, the above statement by Powell is pure nonsense, as this is obviously QE, whether the Fed wants it to be or not.

This recent softening by the Federal Reserve, in addition to the ongoing geopolitical risks that seem to be plaguing much of the world, has resulted in a massive surge into Gold ETF's as market participants seek the protection that only the king of metals can provide.

ETF gold holdings reached an all time high in the month of September, resulting in the longest run higher in holdings, in the past decade. With the most notable being holdings within the UK.

The last time that such demand for gold ETF's was seen was shortly after the 2008 financial crisis, which does not bold well for what may be coming just over the horizon.

According to the World Gold Council, gold backed ETFs added 75.2 tons of metal to their holdings last month, bringing the total to 2,808 tons.

This surpasses the previous record set in 2012, when gold was at $1,700 per ounce, highlighting just how underpriced gold is at the moment.

Despite these warning signs, signals from the Fed and the deteriorating geopolitical climate around the world, gold stubbornly remains around the $1500 USD per ounce level, struggling to break higher.

2020 is going to be one for the record books and I believe that anything could happen as we head into the US Presidential Elections, with political violence and uncertainty creating a powder keg style situation.

These artificially suppressed prices are not going to last much longer, as the fundamentals for higher gold prices are inevitably going to win the day and precious metals are going to surge higher as we head into an even more tumultuous and unpredictable next year.

Until then, enjoy these prices while you can and as always, keep stacking.

- As first seen on the Sprott Money Blog

Thursday, October 10, 2019

What Is Your Next Strategy After Gold Goes Parabolic?

What Is Your Next Strategy After Gold Goes Parabolic? Wall Street cookie cutter investment plans don’t work. 

When gold rose from $700 to $1900 there were five $100 corrections. China & India buying increase whenever gold corrects down.

Wednesday, October 9, 2019

Rob McEwen: Is the gold price still in good shape and how to stomach volatility

Gold prices may have had a rough start to the week, but the long-term trend remains bullish and investors should not get sidetracked by noise, said Rob McEwen, chairman of McEwen Mining. 

“Despite the last few days, the trend is much higher,” McEwen told Kitco News. “Buy when you have that opportunity, because the momentum is building.”

- Source, Kitco News

Sunday, October 6, 2019

The Case Against Numismatic Gold for Wealth Preservation

Little did I know as I ventured into conversations about owning physical gold, that discussing the option of buying collectable, rare, or “numismatic” coins would draw such heated controversy from multiple corners. 

Many of the topics we’ve addressed to help us all be aware and prepared have encountered polarized positions and world-views (cryptos vs. precious metals, vault storage vs home-storage, and online purchasing vs. cash-in-hand private and local, etc..).

But the extreme views of people I’ve encountered who are earnestly devoted to or repelled by numismatic coins has convinced me that we’ve got to take a closer look, and bring this controversy out of the trenches and into the light of open, civil debate to discern the facts and data, and help us all be better informed. 

So whether each of us may hold deep-seated views, or a casual opinion, or haven’t even heard of or thought about the virtues vs. risks of acquiring “collectible” coins, I hope we will all learn from this discussion, and come away better prepared to protect our family’s financial well being. 

This guest, Franklin Sanders, known as “The Money Changer,” and founder of The-MoneyChanger.com, has been in the gold & silver business for 40 years. 

Sanders visits Reluctant Preppers this first time to explain his experienced view of the factors affecting premiums on collectible gold coins, and why he says the data argues “against” buying numismatic coins as a part of your wealth preservation strategy.

Saturday, October 5, 2019

Fears of a Global Recession Grow, Gold and Silver Rally

With each passing day, the chances of the United States and in all likelihood, the entirety of the global economy entering into a deep recession grows.

The trade wars continue on and as I have written about numerous times in the recent past, I can't see a solution on the horizon, this is bad news in the short term for not only China, who relies heavily on the United States, but also the US economy as well.

Neither party is willing to budge and Central Bankers around the globe are beginning to come to the stark realization that things are going to get a whole lot worse, before they get better.

This is exactly why the FED is cutting rates, this is why the European Central Bank plans on once again entering into a massive stimulus program, as they know that a reckoning is coming.

Confirming this new reality, the World Trade Organization once again cut its forecast for global trade growth on Tuesday.

The Washington Post reports;

"On Tuesday, the WTO said world merchandise trade volume is expected to rise 1.2 percent in 2019 — markedly slower than the 2.6 percent forecast in April. For 2020, the forecast estimates 2.7 percent growth instead of 3 percent.

The revised projections come less than two weeks after President Trump called China a “threat to the world” and said there was little urgency for an interim trade agreement. On Sept. 20, he told reporters he was under no pressure to reach a deal with China before the 2020 election, despite his early insistence that China was eager to return to the negotiation table."

Further confirming this news, it is reported that both US and Chinese manufacturers have entered into recession territory, as the ISM’s U.S. manufacturing Purchasing Managers Index fell to 47.8% last month.

According to CNBC, this is the worst level in a decade, with the index not seeing these numbers since June 2009, when the United States was going through its "great recession" after the 2008 collapse.

Unfortunately, as many of you know, when the United States sneezes, the world gets a cold and already, it appears that the contagion is spreading, with countries such as Singapore reporting that its economy is also "tipping" into recession.

All this negativity and talks of recession, caused gold and silver to plummet lower in price early this week.

(Charts via Goldprice)

Fortunately, it appears that market participants regained some semblance of sanity as the week dragged on, with both gold and silver recovering much of their earlier week losses.

As it stands now, gold bullion has moved once again above $1500 USD per ounce, while silver bullion stands at $17.70 USD per ounce.

These are important levels to maintain and any protracted time spent below these levels could mean much lower prices, however, given the fundamentals it seems unlikely that this will be the case.

Central bankers around the world are now fully aware that we are about to enter into a dragged out global recession as the trade wars continue to go on, with no end in sight.

This means that interest rates around the world are going to be slashed by Central Bankers, stimulus programs are going to once again be all the rage and the money printing is going to be happening at a feverish pace.

In addition to this, the Democratic party in the United States seems hell bent on moving forward with impeachment proceedings against President Trump, a plan that appears to be pivotal in their 2020 election campaign strategy and nothing further, as it is incredibly unlikely that he will be impeached and removed from office.

Even if the House does vote to impeach, the Senate, which is controlled by Republicans are not going to vote to remove him from office, as 2/3rd's must do so.

Unfortunately for the Democrats, I along with many others believe that this is going to backfire on them, as it is only going to embolden Republicans and result in a staggering high turnout for the President come 2020.

Regardless, uncertainty abounds and precious metals are going to take notice as this political theater continues to unfold.

People should not be selling gold and silver bullion as we saw earlier in this week, but in fact be buying it hand over fist in the coming climate.

Expect much higher prices as global risk grows and as QE to infinity goes worldwide.

Keep stacking. Focus on the long term. Ignore the short term noise.

- As first seen on the Sprott Money Blog

Friday, October 4, 2019

The Most Important Technical Indicator For Trading Gold and Silver

Expert technical analyst & professional trader JC Parets says that over the last two years, we've seen the U.S. stock market bear market, and we're closer to the start of a new bull market than we are to a crash, but that doesn't stop JC from turning bullish on gold & silver. 

JC says once gold breaks-out above $1,600, there's no denying this bull market is on, a bull run which likely leads to a $10,000 gold price based on the technical analysis alone.

- Source, Silver Doctors

Thursday, October 3, 2019

The Real Problem With Low Interest Rates...

We review the recent BIS paper which highlights the issues with low interest rates.

- Source, Walk the World