While interest in gold is starting to grow, the yellow metal did not get a warm reception at the 23 annual Sohn Investment Conference.
In his presentation, John Pfeffer, partner at Pfeffer Capital, picked >bitcoin over gold, saying that the cryptocurrency is “the first viable candidate,” to replace gold.
He added that bitcoin is better than gold “on every front.”
While Pfeffer is a fan of bitcoin and the blockchain technology he doesn’t’ think every asset is equal and aside from bitcoin, most are bad bets.
Pfeffer also put his bitcoin where is mouth, donating ten digital tokens to the Sohn Investment Conference Foundation, which raises money for pediatric cancer research.
At current prices, his donation is valued around $90,00. However, he added that the foundation could not sell the coins for five years.
But it is not only gold that didn’t shine for Pfeffer; the fund manager also said that he sees bitcoin thriving in countries that have a failing currency.
He explained that if bitcoin can displace 25% of foreign reserves, the digital currency’s network would be valued at around $6.4 trillion.
Pfeffer’s comments come as bitcoin finds some support trading near a one-month high. However, the digital coin has a long way to go to regain its previous glory. Bitcoin is down 55% from its record highs seen in mid-December.
Meanwhile gold is struggling to find momentum as it trades at the lower end of a well-established trading range. June gold futures settled Monday at $1,234.20 an ounce. Gold is currently up 1.4% since the start of the year.
This year the Sohn conference raised $3 million for its initiatives and has raised a total of $85 million in the last 23 years.
A rise in photovoltaic demand should improve silver’s supply/demand fundamental picture in the coming years, said BMO Capital Markets.
Analysts described silver as a “frustrating commodity” for investors lately, with prospects for outperformance that do not yield results. In a report late Thursday, the bank said it sees the gold/silver ratio eventually falling to 60, which would mean outperformance by silver, from the current level of around 78. The ratio measures how many ounces of silver can be bought with an ounce of gold.
“In our view, one of the ongoing challenges for silver is the longer-term trend of industrial demand decline, which is in marked contrast to other major metals,” BMO said. “However, as the demand void from photography is replaced by a surge in photovoltaics over the coming years, we see a brighter future for silver fundamentals over the coming years.”
The one area in which silver demand was especially hard hit since the turn of the century was photography, BMO noted. With the move toward digital cameras, photographs are now “just a memory,” BMO said. This has taken away 180 million ounces of silver demand since 2000, equivalent to 17% of the current market size, the Canadian bank said.
However, as photography-related demand fell, silver’s use in electrodes for photovoltaic (PV) cells doubled since 2014, BMO said. This occurred despite ongoing thrifting of silver as technology developed. PV demand fell in the first quarter of 2018, but BMO cited energy-industry reports predicting an increase in future solar installations. BMO said it sees PV silver demand doubling to around 200 million ounces annually by 2025.
Meanwhile, BMO said, “mine supply continues to struggle.” The bank projects a third straight decline in silver-mine output in 2018, which will leave this supply 10% below the peak in 2015.
“Silver cannot escape gold’s hold,” BMO said. “Given the macro-driven nature of precious-metals investment demand, we do not think silver can decouple from gold over the coming years. It can, however, outperform as photovoltaics become a significant demand driver.”
(Kitco News) – Gold have dropped to their session lows in morning trading Friday. The down-move in the yellow metal came as the U.S. dollar index pushed to its daily high. Some profit-taking from the shorter-term futures traders is also featured heading into the weekend. Sell stop orders were also triggered in the futures market, when chart support levels were breached on the move lower. June gold was last down $9.30 at $1,339.50.
(Kitco News) – Main Street remains bullish while Wall Street is split on the short-term direction of gold prices, according to the Kitco News weekly gold survey.
Sixteen market professionals took part in the survey. Seven respondents, or 44%, called for gold prices to rise over the next week. Another six voters, or 38%, looked for gold to fall, while three, or 19%, called for a sideways market.
Meanwhile, 677 voters responded in an online Main Street survey. A total of 463 respondents, or 68%, predicted that gold prices would be higher in a week. Another 145 voters, or 21%, said gold will fall, while 69, or 10%, see a sideways market.
For the trading week now winding down, 69% of Wall Street voters and 82% of Main Street voters were bullish. Shortly before 11 a.m. EDT, as Comex June gold was down 0.7% for the week so far to $1,337.90 an ounce.
“At the end of the day, we are probably going to be higher because of geopolitical risks, inflation risks and concerns about possible sanctions on Russia and Iran,” said Phil Flynn, senior market analyst with Price Futures Group.
Charlie Nedoss, senior market strategist with LaSalle Futures Group, sees gold rising on a view that a rally in the dollar index will run out of steam.
“The dollar has been on kind of a run. I see resistance overhead in the dollar [index],” Nedoss said. “North of 90, you will start to see resistance.”
Adrian Day, chairman and chief executive officer of Adrian Day Asset Management,
said “it is only a matter of time” before gold makes a convincing upside breakout.
“There are several fundamental factors supporting the move higher: despite interest rates in the U.S. moving higher, the dollar has failed to follow, a significant divergence indicating dollar weakness ahead; political and geopolitical factors, in Washington and in the Middle East, in particular support gold; and the Fed and other banks are likely to lag inflation moving higher, which is also positive for gold,” Day said.
Sean Lusk, director of commercial hedging with Walsh Trading, also said higher, suggesting that dips will be buying opportunities.
“There are too many questions marks,” Lusk said. “I don’t see the market turning over.”
Meanwhile, Adam Button, managing director of ForexLive, sees gold falling.
“The rise in Treasury yields argues against holding gold in the week ahead,” he said. “With 10-year Treasuries paying nearly 3%, yield is beginning to be a factor.”
Bob Haberkorn, senior commodities broker with RJO Futures, sees gold falling but only slightly, with nervousness about equities helping to keep a floor under the market.
“The geopolitical fears seem to be subsiding,” he said. “We are a week past the Syrian situation [allies firing missiles]. The situation on Korea seems to be getting better and better.”
Ken Morrison, editor of the newsletter Morrison on the Markets, still looks for the metal to test a downside chart level not reached this week.
“It’s been a featureless week, essentially sideways consolidation,” Morrison said. “The market didn’t get to my $1,330 downside target for the week but with the dollar strengthening, I’ll look for that $1,330 trendline support to be tested next week.”
Robin Bhar, metals analyst at Societe Generale, is among those who see a sideways market.
“It’s just trapped in a very tight trading range,” he said. “Bullish factors are offsetting the bearish factors.”
(Kitco News) – Main Street remains bullish while Wall Street is split on the short-term direction of gold prices, according to the Kitco News weekly gold survey.
Sixteen market professionals took part in the survey. Seven respondents, or 44%, called for gold prices to rise over the next week. Another six voters, or 38%, looked for gold to fall, while three, or 19%, called for a sideways market.
Meanwhile, 677 voters responded in an online Main Street survey. A total of 463 respondents, or 68%, predicted that gold prices would be higher in a week. Another 145 voters, or 21%, said gold will fall, while 69, or 10%, see a sideways market.
For the trading week now winding down, 69% of Wall Street voters and 82% of Main Street voters were bullish. Shortly before 11 a.m. EDT, as Comex June gold was down 0.7% for the week so far to $1,337.90 an ounce.
“At the end of the day, we are probably going to be higher because of geopolitical risks, inflation risks and concerns about possible sanctions on Russia and Iran,” said Phil Flynn, senior market analyst with Price Futures Group.
Charlie Nedoss, senior market strategist with LaSalle Futures Group, sees gold rising on a view that a rally in the dollar index will run out of steam.
“The dollar has been on kind of a run. I see resistance overhead in the dollar [index],” Nedoss said. “North of 90, you will start to see resistance.”
Adrian Day, chairman and chief executive officer of Adrian Day Asset Management,
said “it is only a matter of time” before gold makes a convincing upside breakout.
“There are several fundamental factors supporting the move higher: despite interest rates in the U.S. moving higher, the dollar has failed to follow, a significant divergence indicating dollar weakness ahead; political and geopolitical factors, in Washington and in the Middle East, in particular support gold; and the Fed and other banks are likely to lag inflation moving higher, which is also positive for gold,” Day said.
Sean Lusk, director of commercial hedging with Walsh Trading, also said higher, suggesting that dips will be buying opportunities.
“There are too many questions marks,” Lusk said. “I don’t see the market turning over.”
Meanwhile, Adam Button, managing director of ForexLive, sees gold falling.
“The rise in Treasury yields argues against holding gold in the week ahead,” he said. “With 10-year Treasuries paying nearly 3%, yield is beginning to be a factor.”
Bob Haberkorn, senior commodities broker with RJO Futures, sees gold falling but only slightly, with nervousness about equities helping to keep a floor under the market.
“The geopolitical fears seem to be subsiding,” he said. “We are a week past the Syrian situation [allies firing missiles]. The situation on Korea seems to be getting better and better.”
Ken Morrison, editor of the newsletter Morrison on the Markets, still looks for the metal to test a downside chart level not reached this week.
“It’s been a featureless week, essentially sideways consolidation,” Morrison said. “The market didn’t get to my $1,330 downside target for the week but with the dollar strengthening, I’ll look for that $1,330 trendline support to be tested next week.”
Robin Bhar, metals analyst at Societe Generale, is among those who see a sideways market.
“It’s just trapped in a very tight trading range,” he said. “Bullish factors are offsetting the bearish factors.”
Editor’s Note: This story was updated from the original posted on April 20, 2018 at 13:13 EST.
(Kitco News) – Turkey joined the ranks of Germany and Hungary as the latest country which brought back its gold to home base, this according to reports from the country’s media.
Reports from Turkish media outlet Yeni Safak suggest that the country brought back all of its gold stored in the U.S. Federal Reserve. The reports published Thursday indicate that the country repatriated 220 tons of from the U.S. sometime last year. At the time of publication, Kitco News was unable to confirm the news.
The country’s gold reserves currently rank eleventh in the world, behind India, with about 526 metric tons, according to the data compiled by the The Statistics Portal. As of March 2018, the Turkish central bank said its gold reserves amounted to $25.3 billion.
Analysts told Kitco News that the move is likely politically motivated rather than economic. The consensus being that Turkey is sending a message to the U.S., with Turkish President Recep Tayyip Erdogan making currency his priority.
“[Turkey’s decision] has more political intonation than economic,” managing director at RBC Wealth Management George Gero said on Friday. “Turkey is trying to shore up their currency. And I think repatriation has a lot to do with currency pairs trading.”
Earlier this week, Erdogan called for the International Monetary Fund (IMF) loans to be paid in gold and not U.S. dollars.
Turkish media reported Erdogan as saying, “These debts should be in gold. Because at this point the karat of gold is unlike anything else. The world is continually putting us under currency pressure with the dollar. We need to save states and nations from this currency pressure.”
The benefits of holding gold are unique, as the yellow metal market is becoming more international, Gero explained.
“With gold, there is no political allegiance. Gold makes a lot of countries comfortable as a holding, especially if they fear inflation,” he said. “Many countries prefer to hold their own gold.”
And the message Turkey might be sending is — “more independence,” Gero added, explaining that there could be a lot of political backchannel discussions happening between Turkey and the U.S.
Also driving Turkey’s intentions is fear that all gold ETFs are “oversubscribed,” said Todd ‘Bubba’ Horwitz, chief market strategist at BubbaTrading.com.
“There is fear that you won’t have enough gold to cover the amount of all traded ETFs. Governments want to hold physical gold in their own vaults. A lot of these countries don’t really trust the entire system either,” said Horwitz. “But, funnily the price of gold is not reacting to it.”
Gold prices were trading lower on Friday, pressured down by firming U.S. dollar index and options expiration next week. June Comex gold futures were last trading at $1,339.10, down 0.72% on the day.
The gold repatriation trend was kicked off by Germany last summer when the central bank completed the move of 674 metric tons from the vaults of the Federal Reserve Bank of New York and the Banque de France three years ahead of schedule. And prior to that, Germany had repatriated 940 tons of gold from the Bank of England.
Hungary followed in March when the country’s central bank said that it is planning to bring back 100,000 ounces of gold back from London. The reason behind the decision was to strengthen market confidence, according to local media reports.
SEMAFO Inc. (TSX, OMX: SMF) says that construction of the Boungou Mine in Burkina Faso is 91% complete. Officials say commissioning activities are advancing well, with 10% already completed at the end of March, with the crushing circuit equipment and water services tested and commissioned. The reclaim and grinding circuits, reagent and oxygen plants are also undergoing testing. “We are still in line to achieve our first gold pour early in the third quarter of 2018,” SEMAFO says. As of the end of March, development was on budget with $194 million of the $231 million capital expenditures incurred, the company adds.
By Allen Sykora of Kitco News; asykora@kitco.com
Asanko: 1Q Gold Output In Line With Guidance
Thursday April 19, 2018 08:52
Asanko Gold Inc. (TSX, NYSE American: AKG) reports first-quarter production of 48,229 gold ounces and sales of 48,899 ounces leave the company in line with its first-half guidance range of 90,000 to100,000 ounces. Asanko says it posted $64.2 million in gold revenue at an average realized price of $1,314 per ounce. “This is the second consecutive quarter that the mine has performed ahead of the optimized life-of-mine plan, which was introduced in late Q3 2017,” says Peter Breese, president and chief executive officer. “The mine performed exceptionally well and is ahead of plan on the key metrics of gold production, grade and mill throughput.”
(Kitco News) – Gold prices are slightly lower in early U.S. trading Thursday, on some “backing and filling” on the charts amid a quieter world marketplace late this week. Meantime, silver prices are trading near steady but hit another 2.5-month high overnight. The current technical postures for both precious metals are tilted in favor of the bulls. June Comex gold futures were last down $1.80 an ounce at $1,351.80. May Comex silver was last up $0.002 at $17.25 an ounce.
World stock markets were mixed in subdued trading overnight amid a lack of major news developments. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins.
The key “outside markets” on Thursday morning see the U.S. dollar index trading slightly lower. Nymex crude oil prices are higher, hit another 3.5-year high, and are trading above $69.00 a barrel. Oil traders are awaiting an OPEC meeting that takes place on Friday.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey, and leading economic indicators data.
Technically, June gold bulls have the firm overall near-term technical advantage. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the January high of $1,375.50. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at the March low of $1,309.30. First resistance is seen at this week’s high of $1,359.00 and then at $1,362.60. First support is seen at Wednesday’s low of $1,345.00 and then at $1,340.00. Wyckoff’s Market Rating: 6.5
May silver futures bulls have the overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the January high of $17.785 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.50. First resistance is seen at the overnight high of $17.32 and then at $17.50. Next support is seen at $17.00 and then at $16.89. Wyckoff’s Market Rating: 6.5.
Editor’s Note: Welcome to Kitco’s new Bitcoin Daily Technical Alert. Every trading day veteran Kitco technical analyst Jim Wyckoff will provide you with a concise and easy-to-understand near-term technical brief on Bitcoin. Importantly, Jim will glean the short-term charts and technical studies, and then alert you to the signals he sees regarding upcoming potential bigger price moves or price trend reversals. Jim’s unique and exclusive daily technical report is an absolute must for any trader/investor/market watcher who closely follows Bitcoin.
(Kitco News) – Bitcoin-U.S. dollar prices are slightly up in early U.S. trading Thursday. Some chart consolidation, or a pause, is featured this week, which is not bearish. Also, the “collapse in volatility” seen this week suggests a much bigger price move in right on the horizon. Stay tuned! Jim Wyckoff
(Kitco News) – With last year’s equity momentum gone, the best strategy in the marketplace, which is largely ignoring the Federal Reserve’s monetary tightening, is to buy gold, according to one strategist.
“2017 has left the building,” chief investment strategist at 3EDGE Asset Management LP Fritz Folts told Bloomberg earlier this week. “We will definitely have more volatility this year …. And gold can help us there.”
Folts is in charge of overseeing an $800 million portfolio that is embracing a new direction by limiting its exposure to stock-related exchange-traded funds as well as broad emerging-market ETFs, while also shifting its attention to the U.S. and Japanese markets.
The chief investment strategist said that gold is an excellent asset to invest in this year, as it guards against sudden shocks and rising volatility, especially in light of all the trade-war fears rocking the markets. Folts added that his preference is gold-backed ETFs.
Investors have also been picking up on geopolitical risks and buying gold ETFs as security. Bloomberg reported last week that the popularity of gold-backed ETFs was at its highest level since 2013.
One of the shining examples was Frankfurt-listed Xetra-Gold —the third-largest commodity-linked ETF — that saw its outstanding shares approach 177 million as of last week, the most since the fund began to trade in 2007.
Gold prices have also been resilient in light of risk-on sentiment present in the marketplace. June Comex gold futures rose on Wednesday as the U.S. dollar index touched a three-week low, with gold prices last trading at $1,354, up 0.33% on the day.
Kitco senior technical analyst Jim Wyckoff described the price action this week as pro-bull: “The chart postures for both [golf and silver] are tilted in favor of the bulls, which is inspiring technically based buying interest at mid-week.…The ability of gold and silver to post price gains today, amid little risk aversion in the marketplace, is impressive.”
A majority of gold analysts are expecting to see higher gold prices in the second quarter of 2018.
TD Securities’ Bart Melek said in a report published on Monday that investors need to get past a more aggressive Fed tightening outlook before traders will see gold break out of its trading range.
“Any sign from the Fed the U.S. central bank is willing to allow inflation to move above target, that the Fed may be making a policy error or that inflation could disappoint given weaker-than expected inflation data will be needed to give gold a lift above the upper bound of the range and toward $1,400/oz,” Melek said.
Another analyst told investors to be patient when it comes to gold, adding that a gold rally is coming soon.
“ETF buying interest for gold is at its strongest since September 2017.…Once bullish speculative sentiment toward gold resumes, I expect a strong price reaction,” Boris Mikanikrezai, precious-metals analyst at FastMarkets, wrote in a Seeking Alpha post on Monday. “I have a long position in IAU (iShares Gold Trust), expecting a fresh 2018 high in Q2.”
(Kitco News) – One of Canada’s most renowned gold mining companies is wading into the base metals sector, particularly zinc, as prices continue to trade near their highest level in more than ten years.
Osisko Metals is celebrating its first year of operation as it continues to develop two of Canada’s most prominent past producing zinc mining camps.
The Osisko brand is more known for its success in the precious metals sector as it developed its Canadian Malartic project, country’s largest open-pit gold mine now owned by Agnico Eagle and Yamana Gold.
Jeff Hussey, President and CEO of Osisko Metals, said that because of current market conditions it makes sense to capitalize on the momentum in the base metals market.
Hussey highlighted zinc, saying that the metal’s supply and demand fundamentals will continue to support elevated prices for the foreseeable future.
The CEO explained that the metal is a critical component in galvanized steel, which is used extensively in construction material.
He added that because of growing global economy, demand for zinc is on the rise, but supply is limited due to significant mine closures since 2013. Hussey pointed out that there are very few zinc projects in the pipeline that will dramatically shift the market dynamics.
“We are very bullish on zinc. We are currently experiencing a perfect storm for zinc and it will be this way for the next three years at least. We see a similar forecast for copper, but it will take a few more years,” he said. “We see lots of runway for prices in base metals to increase.”
For that reason, the Company continues to move full steam ahead exploring and developing its Pine Point Mining Camp zinc project in Canada’s Northwest Territories and its Bathurst Mining Camp project in New Brunswick. Both of these camps have a long history of zinc production and Hussey said that they are planning to build the resource base first and then move towards development as soon as possible.
Osisko Metals also has a grass-roots zinc exploration project portfolio in Quebec which it hopes to selectively advance throughout 2018.
The Company was able to raise $41 million within its first year, which Hussey said attests to the Osisko brand, but also growing investor interest in the base metal commodity sector. “We are especially pleased to receive such strong support from institutional investors,” he said.
Key shareholders in Osisko Metals include both Osisko Mining and Osisko Gold Royalties, M&G Investment Management, JP Morgan Asset Management and Blackrock Investment Management. The Caisse de depot et placement du Quebec is also a prominent shareholder.
While there is some concern that the U.S. economy is entering the late stage of a business cycle, Hussey said that he is not afraid of a looming U.S. recession due to the growth and strength in the global market.
He noted that India and China will continue to need zinc as they develop and build their infrastructure. “Unlike previous business cycles, the global economy is less reliant on the U.S.,” he said. “We are quite confident in the growth of the global economy.”
(Kitco News) – Gold and silver prices were higher in early-afternoon U.S. trading Wednesday. Silver prices hit a 2.5-month high and are trading well above $17.00. The chart postures for both metals are tilted more in favor of the bulls this week, which is inspiring technically based buying interest. June Comex gold futures were last up $4.40 an ounce at $1,353.90. May Comex silver was last up $0.438 at $17.23 an ounce.
A solid rally in the crude oil market today that saw Nymex futures push to a 3.5-year high above $68.00 a barrel also helped out the precious metals bulls today. Crude oil is the leader of the raw commodity sector, and its “rising tide” is lifting many of raw commodity sector boats.
World stock markets were mostly higher again today. U.S. stock indexes were also higher. Strong first-quarter corporate earnings reports are driving the bulls this week, while geopolitics has taken a back seat, for now. Risk appetite is keen so far this week.
The ability of gold and silver to post price gains today, amid little risk aversion in the marketplace, is impressive.
Technically, the gold bulls have the firm overall near-term technical advantage as prices are not that far below the recent highs. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the January high of $1,375.50. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at the April low of $1,322.60. First resistance is seen at today’s high of $1,359.00 and then at $1,362.60. First support is seen at today’s low of $1,345.00 and then at $1,340.00. Wyckoff’s Market Rating: 6.5
The silver bulls have regained the overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the January high of $17.785 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.50. First resistance is seen at $17.50 and then at $17.785. Next support is seen at $17.00 and then at today’s low of $16.73. Wyckoff’s Market Rating: 6.5.
May N.Y. copper closed up 745 points at 316.45 cents today. Prices closed nearer the session high and hit a four-week high today. The copper bulls have regained the overall near-term technical advantage. A four-week-old uptrend is in place on the daily bar chart. Copper bulls’ next upside price objective is pushing and closing prices above solid technical resistance at 325.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 300.00 cents. First resistance is seen at today’s high of 317.85 cents and then at 320.00 cents. First support is seen at 312.00 cents and then at 310.00 cents. Wyckoff’s Market Rating: 6.0.
Moderating U.S. inflation could end up reducing the amount of monetary tightening from the Federal Reserve, eventually underpinning gold, says TD Securities. “Gold prices remain relatively range-bound as money managers weigh the prospect of future Fed hikes amid a weakish USD [U.S. dollar] and flattening yield curve, in combination with the recent waning of the safe-haven premium and strong producer selling above $1350/oz,” TDS says. “However, we continue to expect that moderating inflation momentum will remove any impetus for the Fed to get restrictive, which could see the yellow metal move higher still.” As of 7:37 a.m. EDT, spot gold was up 25 cents at $1,349.35 an ounce.
By Allen Sykora of Kitco News; asykora@kitco.com
Commerzbank: India’s Holiday Gold Demand Met With Stocks
Thursday April 19, 2018 07:52
Commerzbank says Indian gold demand during the Hindu Akshaya Tritiya festival appears to have been met by stockpiles in the country. “According to Indian newspaper reports, 15-20% higher gold demand was registered during the Hindu Akshaya Tritiya festival,” the bank says. “The lion’s share of this demand is likely to have been met by stocks given that Indian gold imports fell sharply in the first quarter.”
By Allen Sykora of Kitco News; asykora@kitco.com
TDS: Palladium Lifted By Sanction Fears, Could Run Into Profit-Taking
Thursday April 19, 2018 07:52
Palladium has risen on worries about U.S. sanctions on Russia but could quickly run into profit-taking selling if those sanctions end up not affecting the metal, says TD Securities. As of 7:37 a.m. EDT, spot palladium was up $2.75 to $1,037.75 an ounce and peaked at $1,057.60, its strongest level since late February. “Palladium prices continue to surge as speculators wager that Norilsk could be the next target for U.S. sanctions on Russia given that the producer accounts for nearly 37% of global supply,” TDS says. “However, it appears that [U.S. President Donald] Trump has opted against further sanctions for now, which could see some investors start to take profits in the near term.”
By Allen Sykora of Kitco News; asykora@kitco.com
MKS Lists Nearby Support, Resistance For Gold
Thursday April 19, 2018 07:52
So far gold is within Wednesday’s trading band, with spot metal up 25 cents at $1,349.35 an ounce as of 7:37 a.m. EDT. Tim Brown, of MKS (Switzerland) S.A., lists the following nearby technical chart levels: “Gold should find initial support around yesterday’s low of $1,342 and at the 55 DMA [day moving average of] $1,331 below that,” he says. “On the upside, the metal is trading close to the recent resistance level at $1,355; a break through here and we could see another attempt at the 2018 high.”
(Kitco News) – Even with Wednesday’s silver rally, the precious metal is still significantly undervalued, said Goldmoney. But, all of that is about to change, with a more than 30% jump in prices coming our way.
“Silver prices are trading almost 25% below the values predicted by our price model,” Goldmoney’s VP and lead researcher Stefan Wieler said in a report published on Wednesday. “This is the largest downside deviation we have seen in over 25 years.”
The reason for such a gap between where the prices are and where they should be is the massive short selling in the futures market, the report stated, adding that it is unsustainable and that a major reversal is inevitable.
“Over the past 12 months, speculators sold over 600 million ounces of silver in the futures market. This exceeds the previous record three times since the data began in 1990,” Wieler said. “In order to maintain this downward pressure on silver, speculators would have to continue to sell over 500 million ounces of paper silver per year. A reversal of this positioning could lead a >30% rally in silver prices in our view.”
Even a slight decline in net selling would boost silver prices hogher, the report added.
“In a more balanced spec market, meaning buy and sell flows offset each other, silver prices should return to the model-predicted value of USD21/ ozt, which is 30% higher from here,” Wieler explained.
Some of the main drivers for silver include monetary demand as well as industrial supply and demand, the researcher said.
“A large part of the changes in the price of silver can be explained in a regression analysis using just a few drivers: gold prices, TIPS yields, and changes in silver ETF holdings (representing the monetary demand for silver) as well as U.S. industrial production and the ISM manufacturing PMI (the industrial demand for silver),” Wieler wrote. “Indeed, these drivers explain close to 80% of the year-over-year changes in silver prices in a multi-variate regression analysis.”
Silver is having a great week so far, hitting a 2.5-month high and are trading well above $17.00. May Comex silver was last at $17.18 an ounce, up 2.37% on the day.
A jump in crude oil helped the precious metal out on Wednesday, according to Kitco’s senior technical analyst Jim Wyckoff.
“A solid rally in the crude oil market today that saw Nymex futures push to a 3.5-year high above $68.00 a barrel also helped out the precious metals bulls today. Crude oil is the leader of the raw commodity sector, and its ‘rising tide’ is lifting many of raw commodity sector boats,” Wyckoff said in his PM Roundup.
Silver’s performance is especially impressible amid a keener risk appetite in the marketplace, added Wyckoff.
Newcrest Mining’s $8 billion-plus acquisition of Lihir Gold is creating a new top-tier of Australian gold producers, which are already being sized up for takeovers, Reuters reported.
The combined company would have 10 mines and four development projects in eight countries.
The Kinross Gold Corporation is taking a fourth-quarter charge of $216.1 million, mainly to write down the value of two gold mines in line with lower bullion prices and to reflect costs of its acquisition of Amax Gold Inc. The company, North America’s fifth-largest gold producer, is writing down the carrying values of the Refugio mine in northern Chile by $46.9 million and of the Fort Knox mine in Alaska by $40.5 million. Toronto-based Kinross is also taking charges of $104.6 million for excess costs incurred while incorporating Amax’s mines and $9 million for closing the DeLamar mine in southwestern Idaho.
(Minelistings.com – Sept. 6, 2016) – Detour Gold Corporation (TSX:DGC) (“Detour Gold” or the “Company”) today announces a revision to its 2016 production guidance to between 525,000 to 545,000 ounces of gold. The Company will host a conference call on Wednesday, September 7, 2016 at 9:00 AM E.T. to discuss the guidance revisions.
Production at Detour Lake for the second half of the year is being impacted by the unusually heavy rainfalls experienced in mid-August, which flooded the bottom west end of the pit and saturated the surrounding watershed. The west end of the pit hosts the Calcite Zone which is the main source of the higher grade for the plant in the second half of 2016. With the pumping of the water out of the pit expected to be completed by the end of September, access to the Calcite Zone is now delayed. The resulting mine sequencing changes will not impact the mining rates but will result in a lower head grade than previously planned for the third and fourth quarters.
Consequently, gold production for the third quarter is projected at approximately 120,000 ounces. Gold production for the fourth quarter is expected to be between 138,000 and 158,000 ounces and is dependent on timely access to the Calcite Zone and on the success of the larger scale test of processing medium grade fines scheduled to commence later this month. Medium grade fines are obtained by screening the ROM stockpile at minus 2″ to elevate the grade of the ore processed.
Paul Martin, President and CEO of Detour Gold, commented: “We are disappointed that we are not able to access the higher grade Calcite Zone earlier. We have been monitoring our progress in dewatering the pit and have now concluded that the mine plan adjustments we have made for the remainder of 2016 are necessary. On a positive note, the Company remains in a strong financial position and we anticipate significant cash flow in the fourth quarter which will allow us to continue to pursue our debt reduction program.“
In addition, the Company has now completed its last 2016 major scheduled plant shutdown to replace the liners on the SAG and ball mills for both grinding lines. Gold recoveries have been trending back to normalized levels (90%) since August, following operational issues in the recovery circuit in June and July.
All-in sustaining costs are now expected to be between US$970 and US$1,020 per ounce sold as a result of the reduction in gold production and the higher costs associated with the larger scale test of the medium grade fines from the existing ROM stockpile. These tonnes will incur a non-cash book value charge projected at Cdn$10 million, representing approximately US$15 per ounce sold based on the mid-point of the revised guidance.
|
|
|
|
Prior Guidance |
Revised Guidance |
| Gold production (oz) |
540,000-570,000 |
525,000-545,000 |
| Total cash costs (US$/oz sold) |
$640-700 |
$700-750 |
| All-in sustaining costs (US$/oz sold) |
$920-980 |
$970-$1,020 |
|
|
|
Conference Call
The Company will host a short conference call tomorrow (Wednesday, September 7, 2016) at 9:00 AM E.T., which can be accessed as follows:
- By phone toll free in Canada and the United States 1-800-319-4610
- By phone internationally 416-915-3239
A playback will be available until September 30, 2016 by dialing 604-674-8052 or 1-855-669-9658 within Canada and the United States, using pass code 0795.
Technical Information
The scientific and technical content of this news release was reviewed, verified and approved by Drew Anwyll, P.Eng., Senior Vice President, Technical Services, a Qualified Person as defined by Canadian Securities Administrators National Instrument 43-101 “Standards of Disclosure for Mineral Projects.”
About Detour Gold
Detour Gold is an intermediate gold producer in Canada that holds a 100% interest in the Detour Lake mine, a long life large-scale open pit operation. Detour Gold’s shares trade on the Toronto Stock Exchange under the trading symbol DGC.
Non-IFRS Financial Performance Measures
The Company has included certain non-IFRS measures in this news release. The Company believes that these measures, in addition to conventional measures prepared in accordance with IFRS, provide investors an improved ability to evaluate the underlying performance of the Company. The non-IFRS measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. These measures do not have any standardized meaning prescribed under IFRS, and therefore may not be comparable to other issuers.
Total cash costs
Detour Gold reports total cash costs on a sales basis. Total cash costs include production costs such as mining, processing, refining and site administration, agreements with Aboriginal communities, less non-cash share-based compensation and net of silver sales divided by gold ounces sold to arrive at total cash costs per gold ounce sold. The measure also includes other mine related costs incurred such as mine standby costs and current inventory write downs. Production costs are exclusive of depreciation and depletion. Production costs include the costs associated with providing the royalty in kind ounces.
All-in sustaining costs
The Company believes this measure more fully defines the total costs associated with producing gold. The Company calculates all-in sustaining costs as the sum of total cash costs (as described above), share-based compensation, corporate general and administrative expense, exploration and evaluation expenses that are sustaining in nature, reclamation cost accretion (also known as unwinding of the discount on decommissioning and restoration provisions), sustaining capital including deferred stripping, and realized gains and losses on hedges due to operating and capital costs, all divided by the total gold ounces sold to arrive at a per ounce figure.
Other companies may calculate this measure differently as a result of differences in underlying principles and policies applied. Differences may also arise to a different definition of sustaining versus non-sustaining capital.
Forward-Looking Information
This press release contains certain forward-looking information as defined in applicable securities laws (referred to herein as “forward-looking statements”). Specifically, this news release contains forward-looking statements regarding gold production for the third quarter projected at approximately 120,000 ounces; gold production for the fourth quarter expected to range between 138,000 and 158,000 ounces; 2016 gold production of 525,000 to 545,000 ounces of gold; and 2016 total cash costs of US$700 to US$750 per ounce sold and all-in sustaining costs of US$970 to US$1,020 per ounce sold (based on a US dollar to Canadian dollar exchange rate of $1.28).
Forward-looking statements involve known and unknown risks, uncertainties and other factors which are beyond Detour Gold’s ability to predict or control and may cause Detour Gold’s actual results, performance or achievements to be materially different from any of its future results, performance or achievements expressed or implied by forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, gold price volatility, changes in debt and equity markets, the uncertainties involved in interpreting geological data, increases in costs, environmental compliance and changes in environmental legislation and regulation, interest rate and exchange rate fluctuations, general economic conditions and other risks involved in the gold exploration and development industry, as well as those risk factors discussed in the section entitled “Description of Business – Risk Factors” in Detour Gold’s 2015 AIF and in the continuous disclosure documents filed by Detour Gold on and available on SEDAR at www.sedar.com. Such forward-looking statements are also based on a number of assumptions which may prove to be incorrect, including, but not limited to, assumptions about the following: the availability of financing for exploration and development activities; operating and capital costs; the Company’s ability to attract and retain skilled staff; the mine development schedule; sensitivity to metal prices and other sensitivities; the supply and demand for, and the level and volatility of the price of, gold; timing of the receipt of regulatory and governmental approvals for development projects and other operations; the supply and availability of consumables and services; the exchange rates of the Canadian dollar to the U.S. dollar; energy and fuel costs; the accuracy of reserve and resource estimates and the assumptions on which the reserve and resource estimates are based; market competition; ongoing relations with employees and impacted communities and general business and economic conditions. Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements contained herein are made as of the date hereof, or such other date or dates specified in such statements. Detour Gold undertakes no obligation to update publicly or otherwise revise any forward-looking statements contained herein whether as a result of new information or future events or otherwise, except as may be required by law. If the Company does update one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements.
The Kinross Gold Corporation is taking a fourth-quarter charge of $216.1 million, mainly to write down the value of two gold mines in line with lower bullion prices and to reflect costs of its acquisition of Amax Gold Inc. The company, North America’s fifth-largest gold producer, is writing down the carrying values of the Refugio mine in northern Chile by $46.9 million and of the Fort Knox mine in Alaska by $40.5 million. Toronto-based Kinross is also taking charges of $104.6 million for excess costs incurred while incorporating Amax’s mines and $9 million for closing the DeLamar mine in southwestern Idaho.
Toronto, Ontario — August 31, 2016 — Galway Gold Inc. (TSX V: GLW) (“Galway Gold” or the “Company”) announces that it has hired the law firm Arrieta, Mantilla & Associates to explore alternatives to recover its investment in the Vetas gold-silver project and other possible compensation from the Colombian government. The company’s resident lawyer, Ricardo Convers, will continue to be involved in the process. The negotiations with the Colombian government will be related to how the administrative and judicial measures taken by the government have affected Galway’s investment in the Reina de Oro project.
Vancouver, B.C. – Teck Resources Limited (TSX: TCK.A and TCK.B, NYSE: TCK) (“Teck”) announced today that it acquired 8,333,333 common shares, and a $389,117 principal amount convertible debenture of Jet Gold Corp. (“Jet Gold”). Jet Gold issued the securities in satisfaction of $889,117 of indebtedness owing to a Teck subsidiary. Jet Gold had assumed the indebtedness in connection with its indirect acquisition of control over a 30% interest in Haib Minerals (PTY) Ltd., in which Teck indirectly holds a 70% interest. The common shares were issued for an aggregate price of $500,000, and the convertible debenture was issued for a price of $389,117. No cash consideration was paid by Teck and the purchase price was fully satisfied by set-off against the assumed indebtedness.
As a result of the transaction, Teck holds 8,333,333 Jet Gold common shares, approximately 11.6% of Jet Gold’s outstanding common shares, and a $389,117 principal amount convertible debenture. The debenture matures in 48 months and is convertible at Teck’s election, in whole or in part, into Jet Gold common shares at a price of $0.07 per share. If Teck were to convert the entire principal amount of the debenture, Teck would hold approximately 17.9% of Jet Gold’s outstanding common shares, calculated on a partially diluted basis assuming the conversion of the debenture only.
Teck may determine to increase or decrease its holdings in Jet Gold depending on market conditions and any other relevant factors. This release is required to be issued under the early warning requirements of applicable securities laws. A copy of the early warning report may be obtained from the contacts listed below.
About Teck
Teck is a diversified resource company committed to responsible mining and mineral development with major business units focused on copper, steelmaking coal, zinc and energy. Headquartered in Vancouver, Canada, its shares are listed on the Toronto Stock Exchange under the symbols TCK.A and TCK.B and the New York Stock Exchange under the symbol TCK. Learn more about Teck at www.teck.com or follow @TeckResources.
Vancouver, British Columbia, August 31, 2016 – Further to the news release dated August 15, 2016, Lowell Copper Ltd. (“Lowell Copper”) (TSX-V:JDL), Gold Mountain Mining Corporation (“Gold Mountain”) (TSX-V:GUM) and Anthem United Inc. (“Anthem”) (TSX-V:AFY) (collectively, the “Parties”) are pleased to provide an update on the proposed business combination and concurrent financing to create JDL Gold Corp., a new diversified gold and copper production and development company (the “Transaction”).
Name Change and Mailing of the Circular
On closing of the Transaction, the combined company will be named JDL Gold Corp. (“JDL Gold”), a financially strong, emerging gold-copper production and development company. The trading symbol on the TSX Venture Exchange will be “JDL”.
The Parties have commenced mailing a joint circular (the “Joint Circular”) to their respective shareholders in support of the Transaction; copies of the meeting materials are available on SEDAR under each of the Parties respective profiles. Directors of each of the companies have carefully considered and unanimously recommend that their respective shareholders vote in favour of the Transaction.
Included with the Joint Circular are the respective notices of the Annual and Special Meeting of Shareholders of Lowell Copper to be held on September 28, 2016 at 2:00 pm at 2600 – 595 Burrard Street in Vancouver, BC, the Annual and Special Meeting of Shareholders of Gold Mountain to be held on September 28, 2016 at 2:00 pm at 1700 – 700 West Pender Street in Vancouver, BC and the Special Meeting of Shareholders of Anthem to be held on September 28, 2016 at 2:00 pm at 2600 – 595 Burrard Street in Vancouver, BC.
The Transaction is expected to close in early October 2016.
Proposed Directors
As previously announced, the Parties are pleased to advise that J. David Lowell, Greg Smith, Catherine McLeod-Seltzer, Marcel de Groot and James O’Rourke will be directors of JDL Gold. In addition, Matthew Hornor will also be joining the JDL Gold board of directors upon closing of the Transaction.
Matthew Hornor graduated from the University of Virginia School of Law and received two Japanese Ministry of Education (Mombusho) fellowships for graduate and post-graduate studies at Tohoku University in Sendai and at Tokyo University in Law and Economics respectively.
Mr. Hornor has spent more than 16 years in senior executive positions with development and operating mines. From August 2009 until May 31, 2016, Mr. Hornor served as an Executive Vice President at Ivanhoe Mines Ltd. and served as its Executive Vice President of Business Development and Legal since May 2010. Before directly entering the mining business, Mr. Hornor worked as a Senior Associate with the international law firm, Paul, Hastings, Janofsky & Walker, LLP in Tokyo, Japan, representing Japanese clients in various out-bound cross border transactions and top-tier U.S. investment banks.
Updated Technical Report for the Elk Gold Project
In order to support disclosure of the Elk Gold Project for the Joint Circular, Gold Mountain has filed a new technical report dated August 26th, 2016 and entitled “Technical Report on Resources of the Elk Gold Project, Merritt, British Columbia” (the “2016 Technical Report”). The 2016 Technical Report is available on SEDAR and updates the resource estimate from the previously filed technical report on the Elk Gold Project (the “May 2011 PEA”). For a discussion of the sampling, analysis, data verification, quality assurance, quality control and other technical disclosure please refer to the 2016 Technical Report.
The 2016 Technical Report includes updated pit constrained and underground resources (“2016 resources”) from those included in the May 2011 PEA, however, it does not include an updated preliminary economic analysis from that included in the May 2011 PEA.
The 2016 pit constrained resource is reported at a cut-off grade of 1.0 grams per tonne gold (“gpt”) and includes a measured and indicated (“M&I”) resource of 206,800 ounces of gold contained in 1,031,000 tonnes grading 6.24 gpt and an inferred resource of 120,800 ounces of gold contained in 823,000 tonnes grading 4.56 gpt.
The 2016 potential underground resource is reported at a cut-off grade of 5.0 gpt and includes indicated resources of 5,100 ounces of gold contained in 11,600 tonnes grading 13.73 gpt, with no measured resource, and a potential underground inferred resource of 8,800 ounces of gold contained in 273,900 tonnes grading 10.09 gpt.
Resources as of August 22, 2016 have been estimated in accordance with definitions adopted by the Canadian Institute of Mining, Metallurgy and Petroleum. The 2016 Technical Report was prepared by Robert Wilson, P.Geo, of RGW Geosciences, Gary Giroux P.Eng., M.A.Sc., of Giroux Consultants Ltd., and Antonio Loschiavo, P.Eng., of AKF Mining Services Inc. who are all independent Qualified Persons as defined in NI 43-101. The 2016 resource assumes a metal price of US$1232 per gold ounce and takes into account metallurgical recoveries. There is no certainty that all or any part of the mineral resource will be converted into mineral reserve.
The 2016 M&I pit constrained resource reflects an overall increase in grade by 42%, a 44% reduction in tonnes and a 20% reduction in gold ounces compared with the resource presented in the May 2011 PEA. The change in gold ounces is primarily a result of a 100% increase in the cut-off grade to 1.0 gpt from 0.5 gpt used in the May 2011 PEA, results from additional in-fill drilling in areas with statistically inferred values, removal of mineralized material mined in the bulk sample mining program, refinement of mineralized material specific gravity, updated resource pit shell economic parameters and changes in the potential mining methods leading to a refinement of the geologic solids model and interpretation.
About Lowell Copper Inc.
Lowell Copper is a copper exploration and development focused company led by J. David Lowell and is listed on the TSX-V. The company was founded to leverage the current market conditions and build a portfolio of economic copper projects through a combination of exploration, mergers and acquisitions by utilizing the considerable experience and success of management and directors of the company.
About Gold Mountain Mining Corporation
Gold Mountain is a public resource company managed by an experienced team of professionals with a solid track record of exploration, development and operational success. The company owns 100% of the 16,700 hectare Elk Gold property located in Southern British Columbia, which it intends to develop into a precious metal producer, and is also seeking additional near term production assets to further build shareholder value.
About Anthem United Inc.
Anthem is focused on building a precious metals producing company through the acquisition and development of silver and gold mineral assets. The company is currently advancing the operation of the 350 tonne per day Koricancha Mill in Peru, in which it owns a 75% interest as well as an 8% cost of sales royalty payable to Anthem. The company’s joint venture partner, EMC Green Group S.A., owns the remaining 25% and is the operator of the Koricancha Mill. The Koricancha Mill produces gold for its own account by processing gold-bearing material purchased from small scale and artisanal miners in Peru.
Qualified Persons
Robert Wilson, P.Geo, RGW Geosciences is the Qualified Person as defined under National Instrument 43-101 responsible for the technical disclosure in respect of the Elk Gold project in this news release.
(Kitco News) – Gold prices are seeing strong selling pressure Friday and are struggling to hold onto gains for the second consecutive week, and one major U.S. bank sees potential for more weakness in the near term.
In a report published Friday, commodity analysts at Bank of America Merrill Lynch said that significant speculative long positioning in gold futures supports a contrarian view that gold prices, at least in the short term, can move lower. December Comex gold futures last traded at $1,349.10 an ounce, down 0.6% on the day.
“While positioning in futures is no longer as extreme as a few weeks ago, longs still dominate. As such, upside to gold may be limited at present, reinforcing our average 3Q16 forecast at $1,350/oz,” the analysts wrote in the report. “Indeed, the stretched long positions of money managers have raised concerns in recent weeks over where marginal buying that may add another leg to the rally would be coming from.”
However, while speculative positioning and weakening momentum have the biggest impact on prices in the near term, the analysts remain bullish on the yellow metal in the long term. BoAML reaffirmed its view that prices could hit $1,500 an ounce in 2017 because of unprecedented investor demand.
The analysts noted, “Driven by spectacular inflows into physically backed ETFs, annualized investor buying in 1H16 has risen to 2,500t (tonnes), 66% YoY (year-on-year) higher than in FY2015. The importance of these purchases is also apparent in our supply-and-demand model, which suggests that gold could rise to $1,500/oz if full-year investment flows reach around 2,000t.”
The bank noted that the biggest obstacle for the gold market remains the Federal Reserve and potential interest-rate hikes. However, although the bank expects to see a rise in interest rates, it does not expect an aggressive move, which should be supportive for gold.
By Neils Christensen of Kitco News; nchristensen@kitco.com
(Kitco News) – The advanced world economies are stuck between a rock and a hard place.
Nearly 500 million people in the world now live in countries with negative interest rate policies, which represents nearly 25% of global GDP, according to a sweeping research report published this week by S&P Global. Also significantly, over half of the world’s sovereign bonds, as measured by the S&P Global Developed Sovereign Bond Index, now carry negative interest rates, the report said.
Plop, plop, fizz, fizz – money evaporating before your very eyes. That’s the downside of negative interest rates.
Advanced economy global central banks have resorted to unprecedented and experimental attempts to stimulate economic growth. The shift to negative interest rates as an official policy at the European Central Bank, the Danish central bank, the Swedish central bank, the Swiss National bank and the Bank of Japan is a desperate move of last resort.
The U.S. Federal Reserve, for now, has escaped this trap—as the United States scrapes along with a paltry but still positive 1.2% annualized growth rate in the second quarter. Fed Chair Janet Yellen, however, has stated that she won’t rule out negative interest rate policies here in the U.S.
Negative interest rates are in part intended to stimulate sluggish economic growth and to battle against potential deflation. The idea is to encourage banks to lend more, for individuals and companies to borrow more and to get money moving and flowing through economies.
Key report findings: The team of economists at S&P Global note that while European economic data reveals that negative rates may be having the desired stimulative impact there, it’s not working for Japan. The report warns that if negative interest rates remain in place too long, they could damage bank profitability and also that the policy could create excessive investor risk taking, which has the potential to ultimately create more defaults.
3 risks from a negative interest rates environment
- It’s bad for banks. Negative interest rates weighs on profitability for banks. It not only forces commercial banks to pay for their deposits at the central bank, but it also encourages riskier lending practices. Ultimately, weakening our banking system pries at the health of the global financial system.
- It could mean on tax on savings.
How long will it be before banks begin to pass along negative rates to retail depositors? Will you gladly embrace a negative interest rate on your balance on the bank –just for the privilege of holding your money in the bank’s vault?
- It could encourage a move to an all-cash society.
Here’s a quote from David Blitzer, managing director at S&P Dow Jones Indices: “If negative interest rates spread beyond major financial institutions to the overall economy, the economy will shift increasingly towards a cash-only economy. This means increased transaction costs and rising risks of theft. Some industries might benefit: home protection services and safe manufacturers. You would be moving back toward a pure cash society. If nothing else, it’s a cost in productivity. It gets more difficult and expensive to complete transactions. You really turn the clock back.”
What it means for gold: Meanwhile, gold continues to shine in this environment, as concerns about the growing risks of negative rate policies support physical bullion ownership. Gold benefits in a world where nearly half the globe’s sovereign debt have yields below zero. A larger move back to a cash society would also likely be gold-bullish.
Big questions: Monetary policy, Fiscal policy. The more worrisome questions revolve around what will or can global central bankers and global governments do to stimulate economic growth? Fiscal policy has been limited in recent years in advanced economies amid concerns about rising debt levels.
Who has answers? Will Janet Yellen and team have any answers at their famed summer mountain gathering in Jackson Hole, Wyoming on Aug. 26? Stay tuned.
By Kira Brecht, Kitco.com
(Kitco News) – Wall Street analysts are nearly evenly split on gold for next week, while Main Street remains bullish, based on a pair of Kitco News weekly surveys.
Nineteen analysts and traders took part in the Wall Street survey. Seven participants, or 37%, look for gold to be sideways next week. Six each, or 32%, voted higher and the same number voted lower.
Meanwhile, 961 Main Street participants submitted votes in either an online or Twitter survey. A total of 631respondents, or 66%, said they were bullish for the week ahead, while 204, or 21%, were bearish. The neutral votes totaled 126, or 13%.
For the trading week now winding down, 71% of Wall Street respondents and 66% of Main Street participants looked for gold to rise. Both were right. As of 11:06 a.m. EDT, Comex December gold was up by $6.40 for the week so far to $1,349.60 an ounce.
Phil Flynn, senior market analyst with at Price Futures Group, looks for gold to rise despite some of the hawkish comments from Federal Reserve officials that hurt gold this week.
“My sense is the Fed isn’t going to be able to raise rates this year,” Flynn said. “One of the problems they have is the lack of inflation, even though the jobs numbers are getting better….At the end of the day, my sense is the (gold) market is going to rebound next week on increased expectations that the Fed won’t be able to act and the U.S. dollar will continue its downtrend next week.”
Ira Epstein, director of the Ira Epstein division of Linn & Associates, also looks for gold to move higher “as the U.S. dollar seems headed lower.”
However, Charlie Nedoss, senior market strategist with LaSalle Futures Group, looks for gold to pull back after some of the comments from Federal Reserve officials lately suggesting possible higher rates in the wake of a strong U.S. jobs report released earlier this month. “It seems like a lot of the discourse has changed,” he said. He added that he doubts the Fed will hike any time soon, but commented that officials are nevertheless jawboning the market.
“That gold has traded sideways over the past two weeks when the dollar
declined 2% is indicative of the headwinds facing gold,” said an e-mail from Ken Morrison, editor of the newsletter Morrison on the Markets. “Stable financial markets and the ever-present jawboning of the FOMC members reminding us maybe just maybe it’s time to hike rates will keep gold on edge. My scenario has gold breaking trendline support @ $1,340, extending from the July 25 low then declining to $1,320 in the week ahead.”
Kevin Grady, president of Phoenix Futures and Options LLC, looks for sideways trading after some of the recent Fed comments hinting at the chance of a rate hike.
“A lot of the Fed governors this week were trying to talk up the potential for an interest-rate hike in September,” Grady said. “A lot of people are going to be waiting for the (August) nonfarm payrolls numbers. You are going to see some short-term shorting (opening bearish positions) in anticipation of a rate hike. So I think it’s going to be neutral.”
Bob Haberkorn, senior commodities broker with RJO Futures, looks for gold to be largely range-bound ahead of a speech next Friday by Fed Chair Janet Yellen’s at policymakers’ annual Jackson Hole economic symposium.
“The sentiment overall is still bullish,” Haberkorn said. “But I think you’re going to see sideways because Friday you do have a pretty anticipated speech coming from Yellen at Jackson Hole. We’ll be range-bound, waiting to see what she says.”
George Gero, managing director with RBC Wealth Management, looks for “volatility and a continued trading range” ahead of Yellen.
By Allen Sykora of Kitco News; asykora@kitco.com
(Kitco News) – For the second week, gold has been caught in a narrow range and analysts expect more of the, at least until markets hear what Fed Chair Janet Yellen has to say in Jackson Hole.
December Comex gold futures are preparing to end another lackluster week with prices last trading at $1,347.20 an ounce, up 0.28% on the week. In total, gold trade in a less than $24 range this past week.
Yellen will be speaking at the annual central banker conference in Wyoming and markets will be anxious to get some much-needed guidance on future interest rate hikes.
The recently released minutes of the July Federal Open Market Committee meeting showed a strikingly accurate reflection of sentiment in the market, as the committee was split on whether the central bank should raise interest rates later this year.
Despite the growing specter of a rate hike later in the year, Jessica Fung, commodity analyst at BMO Capital Markets, said gold is holding ground because there is still some doubt as to whether or not the U.S. economy can support monetary normalization.
“If you look at the latest economic data, it hasn’t been great. It hasn’t been bad but it’s not great,” she said. “Nobody is going to commit to a bearish position in gold because there is so much uncertainty out there.”
While markets will be on edge ahead of Yellen’s statement, other analysts noted it won’t be enough to clear up the distrust the central bank has already created.
“They have a habit of coming out hawkish but then act dovish by not raising rates,” said Ronald-Peter Stoeferle, fund manager at Incrementum AG and author of the In Gold We Trust Report. “The Fed has lost a lot of credibility in the last few months. I don’t think there is anything Yellen can do to change that.”
Jeffrey Nichols, managing director of American Precious Metals Advisors and senior economic advisor to Rosland Capital, said that disappointing U.S. and global economic data will limit the Fed’s options. He added that gold could do well in an environment where the U.S. central bank will have little room for anything but one “token increase.”
What Do The Markets Say?
Although the latest Fed minutes showed a split in support for interest rate hikes, recently hawkish comments from a range of Fed officials have helped push market expectations modestly higher.
CME 30-Day Fed Fund futures are pricing in only an 18% chance of a rate hike in September, up from 15% seen Thursday. Expectations for November has risen to 25%, up from the previous level of 20%.
Markets are once again pricing in a greater than 50% chance of a move in December. By February, markets see a 54% chance of interest rate being at least 25 basis points higher. Analysts have noted that the U.S. central bank has never hiked rates unless expectations were above 50%.
However, Fung said she remains optimistic on gold as the market has been able to hold support in an environment of rising rate expectations. Still, she expects the market to remain in limbo as there is no other major event in the immediate horizon that will drive prices higher.
“There is no reason why we shouldn’t stay here for a while,” she said. “Just because it is unprecedented doesn’t mean we can’t get caught up in a new paradigm for a while.”
Levels To Watch
Some analysts said they are not ruling out the chance of a bigger correction in the near-term.
In a report Friday, commodity analysts at Bank of America Merrill Lynch warned that elevated speculative long positions raises the risk of a contrarian short trade in the near-term. However, the bank remains optimistic on gold as they still expect investor demand, especially in gold-backed exchange- traded products, will push gold prices to $1,500 an ounce by 2017.
Stoeferle agreed in that prices could fall in the near-term, but still thinks the gold’s party is just getting started.
“I don’t care if prices go down to $1,300,” he said. “There is so much money parked on the sidelines and those investors are just waiting for a dip to jump in.”
According to some analysts, the first support level to watch is around $1,340 an ounce, which has held since late July. Analysts at iiTrader.com noted that a break of this support level should lead to a test of the next support range between $1,319.30 and $1,316.60 an ounce.
Joshua Mahony, market analyst at IG Markets, said that he is bullish on gold as he expects prices to breakout on the upside from its triangle pattern. However, they are watching initial support at $1,346 and then at $1,342 an ounce.
Trade Of The Week
Trade gold through options, where losses can be limited, suggested some analysts.
This week’s play once again comes from Saxo Bank:
In a report published earlier in the week, Ole Hansen, head of commodity strategy, said he sees a growing risk of a correction in gold in the near-term and is recommending a short options spread.
He suggested investors buy one September GLD 125 put, and sell one September GLD 130-123 call spread.
The total cost is 0.76 cents – 1.40 for the put minus a 0.64 credit for the call spread.
The trade has a 44-day time horizon.
Total risk of the trade is $2.76 if price rises above $132 a share.
The target of the trade is a move towards $123.15 a share or lower.
“This is a dynamic trade as the value of the low delta put will rise progressively should the expected price weakness unfold, not least considering the expected pick-up in volatility. On that basis, we do not expect to keep the trade to expiry,” he said in his trade recommendation.
Data, Data, Data
Although the spotlight will be on Jackson Hole and Yellen at the end of the week, the economic calendar will see the release of some important data. The week will kick off with preliminary manufacturing data and housing sales numbers. Investors will also want to watch durable goods numbers for June. Finally, the week ends with the second print of second quarter gross domestic product and Yellen’s speech.
By Neils Christensen of Kitco News; nchristensen@kitco.com
Editor’s Note: If you’d like to sign up for our free weekly newsletter, click here!
(Kitco News) – You know markets were dull when Ryan Lotche – and not the Fed – dominates the chatter on the street.
The U.S. Olympic swimmer apologized Friday for his behavior at a gas station on Sunday in Rio de Janeiro, where he and three other American swimmers were caught on tape allegedly vandalizing the place.
Markets have been relatively quiet this week especially since the release of the July FOMC minutes, which showed us…errr…nothing, except that maybe, the rate hike is coming? Maybe, just maybe…
In gold market news, reporter Neils Christensen says there appears to be a battle of the hedge funds playing out in the market as some funds continue to add to their positions while others look for the exit sign.
According to the latest SEC filings, at the end of Q2 Stanley Druckenmiller, who runs Duquesne Family Office LLC., completely exited his positions in the world’s largest gold-backed ETF SPDR Gold Shares (NYSE: GLD). While this week, George Soros, manager of Soros Fund Management LLC., revealed that his fund sold more than 18 million Barrick shares in the second quarter.
Let’s look at gold and silver prices – they were trading solidly lower in early U.S. trading Friday, as a rebound in the U.S. dollar index is helping to push prices lower. December Comex gold was last down $14.40 an ounce at $1,342.70. September Comex silver was last down $0.48 at $19.26 an ounce.
In other completely different news…remember the good ole’ days when Happy Meals were something to be well, HAPPY about? After McDonalds announced it would be giving kids pedometers in an effort to show they are a healthy choice after all (wink, wink)…the chain said it will no longer distribute the fitness trackers in its Happy Meal after reports surfaced that they might cause skin irritations. Do you want fries with that?
Here’s some other food for thought (no pun intended): with the Olympic closing ceremonies just days away, should medalists be taxed on their winnings? Known as a victory tax, medalists are required to pay Uncle Sam a hefty levy – could be close to $10k for a gold a medal, $6k for a silver and close to $4k for a bronze medal win.
That’s it for this week! Just a heads up, there will be no newsletter next week.
By Daniela Cambone of Kitco News; dcambone@kitco.com
(Kitco News) – Gold remains conflicted by the ongoing dialogue surrounding the next increase in Fed rates. Federal Reserve Vice Chairman Stanley Fischer has indicated that the Fed’s target levels for inflation and growth suggest that the Fed should raise rates sometime this year. Chair Janet Yellen is expected to give an upbeat report on the U.S. economy later this week. It is highly expected that if the jobs report on September 2nd shows a continued strong number, that even September may be on the table. We continue to remain steadfast in our view that the Fed remains on hold in September and trading gold, on the short side on the basis of December being the target date for a move, is much too premature. That said, we are still in a very thin market, but expect the range to be $1,328 – $1,355 to continue ahead of Yellen’s speech on Friday.
By Peter Hug, Kitco Metals Global Trading Director; phug@kitco.com
(Kitco News) – Nymex crude oil futures prices are lower today on profit taking and a corrective pullback after hitting a six-week high on Friday. Meantime, the U.S. dollar index is firmer on a corrective bounce after hitting a seven-week low last Thursday. World stock markets were mixed overnight in quiet, late- summer trading. The “dog days” of summer are here. Many traders in the Western Hemisphere are on vacation. Markets could be quieter until after the U.S. Labor Day holiday in early September.
By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow Jim Wyckoff @jimwyckoff
(Kitco News) – Gold prices are down and hit a two-week low in early U.S. trading Monday. Silver prices are sharply lower and hit a seven-week low overnight. The key “outside markets” are in a bearish daily posture for the precious metals to start the trading week, as the U.S. dollar index is higher and crude oil prices are lower. December Comex gold was last down $6.80 an ounce at $1,339.40. September Comex silver was last down $0.432 at $18.88 an ounce.
Nymex crude oil futures prices are lower today on profit taking and a corrective pullback after hitting a six-week high on Friday. Meantime, the U.S. dollar index is firmer on a corrective bounce after hitting a seven-week low last Thursday.
World stock markets were mixed overnight in quiet, late-summer trading. The “dog days” of summer are here. Many traders in the Western Hemisphere are on vacation. Markets could be quieter until after the U.S. Labor Day holiday in early September.
The highlight of this week will be the Federal Reserve’s annual symposium held in Jackson Hole, Wyoming. Fed Chair Janet Yellen speaks at the event on Friday. Recent comments from Federal Reserve officials have been mixed, but the majority of their recent rhetoric has leaned toward the hawkish side of U.S. monetary policy. Fed Vice Chairman Stanely Fischer on Sunday gave a speech that was deemed hawkish. There are now increasing ideas in the marketplace that the Fed will raise interest rates yet this year. Such has put some upside pressure on the U.S. dollar index just recently.
U.S. economic data due for release Monday is light and includes the Chicago Fed national activity index.
(Note: Follow me on Twitter–@jimwyckoff–for breaking market news.)
Wyckoff’s Daily Risk Rating: 2.5 (Trader and investor market risk aversion is not elevated today.)
(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 5, with 1 being least risk-averse (most risk-on) and 5 being the most risk-averse (risk-off).
Technically, December gold futures bulls still have the overall near-term technical advantage but trading has been choppy and sideways. A six-week-old downtrend line is in place on the daily bar chart. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the August high of $1,374.20. Bears’ next near-term downside price breakout objective is closing prices below solid technical support at the July low of $1,318.50. First resistance is seen at the overnight high of $1,345.70 and then at $1,350.00. First support is seen at the August low of $1,335.30 and then at $1,325.00. Wyckoff’s Market Rating: 6.0
September silver bulls have lost their overall near-term technical advantage as prices hit a seven-week low overnight. Silver bulls’ next upside price breakout objective is closing futures prices above solid technical resistance at $20.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $18.00. First resistance is at $19.00 and then at today’s high of $19.25. Next support is seen at today’s low of $18.71 and then at $18.50. Wyckoff’s Market Rating: 5.0.
By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff
(Kitco News) – Large speculators scaled back their bullish positioning in gold and silver futures during the most recent weekly reporting period for data compiled by the Commodity Futures Trading Commission.
The report covers the week through Aug. 16. During this period, Comex December gold managed a $4.70 gain to $1,351.30 an ounce, while September silver slipped 8 cents to $19.79.
Net long or short positioning in the CFTC data reflect the difference between the total number of bullish and bearish contracts. Traders monitor the data to gauge the general mood of speculators, although excessively high or low numbers are viewed by many as signs of overbought or oversold markets that may be ripe for price corrections.
The commission issues two reports each Friday — a so-called “legacy” report and a “disaggregated” report, started in 2009 and meant to offer more detail.
The disaggregated Commitments of Traders report shows that money managers cut their total longs, or bullish, positions by 4,344 futures contracts to 277,152 lots. This more than offset the short covering, as reflected by a 1,819 decline in total short, or bearish, trades to 34,425. This left money managers net long by 242,727 contracts, down from 245,252 the week before.
“According to the most recent COTR, managed money again decreased their Comex gold positioning in the week up until 16 August, which was consistent with ETF (exchange-traded-fund) outflows, (with) the SPDR (Gold Shares ETF) seeing a further 4.5 tonnes worth of outflows last week,” according to a research note from MKS (Switzerland) S.A. “These trends continue to threaten gold’s upside.”
Still, MKS characterized gold as “resilient,” with the market holding within its recent trading range.
HSBC characterized the reduction in gold speculative net length as “modest” but suggested the decline in silver net length was greater on a relative basis. Money managers trimmed their gross silver longs by 2,574 lots to 98,767, according to the CFTC disaggregated report. They also added 2,451 shorts, bringing the total to 17,311. This left them net long by 81,456 contracts, compared to 86,481 the prior week.
“Silver specs turned a little more bearish last week, cutting back slightly on their heavy level of long contracts and seemingly shifted those positions rather to downside bets,” said TD Securities. “Recent public hawkish rhetoric from Fed members despite global yields falling even more negative seems to have kept precious metals range bound, but ultimately had some specs correctly expecting this would lead prices to trade to the lower end of the range.”
HSBC added that the remaining silver net length means “we could see some further liquidation near term, despite our generally positive view on silver prices longer term.” However, the bank pointed out that while bullish positioning in silver futures fell, holdings by exchange-traded funds rose 4.5 million ounces on the week.
By Allen Sykora of Kitco News; asykora@kitco.com
Financial markets have increased the odds of a Federal Open Market Committee rate hike this year, although the probability at the September and November meetings remains low, says Brown Brothers Harriman. The key event for markets this is Fed Chair Janet Yellen’s speech at the annual Jackson Hole symposium on Friday. Over the weekend, Vice Chair Stanley Fischer said that the Fed is nearing its targets, which implies that tightening isn’t far off. “To the extent that Yellen shares their assessments of the economy, we would expect her to largely echo the broad sentiments expressed by both (New York, Fed President William) Dudley and Fischer,” BBH says. “If she delivers a somewhat hawkish message this week, that should give the dollar more traction. Fed tightening expectations were buffeted last week first by hawkish Dudley comments, then by the more balanced FOMC minutes, and now by the Fischer comments. On net, the markets have adjusted the odds for tightening this year higher, and now stand at the highest odds since the Brexit vote.” The U.S. two-year yield rose above 0.75% to the highest level since June 23, while the while 10-year yield is approaching 1.60%. “Yet despite the strong jobs data in June and July, odds of a move on Sept. 21 or Nov. 2 are still low, with the Dec. 14 meeting seen as the most likely for the next hike,” BBH says.
By Allen Sykora of Kitco News; asykora@kitco.com
MKS: Gold, Silver Pressured Overnight By Fischer, Kuroda Comments
Monday August 22, 2016 09:04
Gold futures fell in overnight screen trading after comments from Federal Reserve Vice Chairman Stanley Fischer and Bank of Japan Governor Haruhiko Kuroda, says Alex Thorndike, senior trader with MKS (Switzerland) S.A. The metal remains softer in early New York trading, with the U.S. dollar stronger. Fischer’s remarks were construed as a sign that policymakers may still hike rates this year, while Kuroda was quoted by news organizations as suggesting Japanese rates could fall further into negative territory. “With the dollar on the up across the board in FX, the metals opened on very weak footing,” Thorndike says, adding that silver was “hardest hit,” with sell stops triggered in light liquidity during Asia-Pacific trading. Around 8:45 a.m. EDT, spot gold was down $3.60 to $1,337.30 an ounce, while silver was 32.6 cents lower to $18.95. The dollar index was up 0.125 point to 94.636. “Technically we are still looking at similar levels with immediate support for gold lying at $1,330-35 and topside resistance edging lower to $1,355-60, with last week’s double tops of $1,356 and $1,358, as well as the downtrend line dating back to the post-Brexit highs which currently cuts in around $1,358-60,” Thorndike says. “Gold remains fairly resilient for the time being, although we are not as bullish as we were previously given that key levels have not been able to be breached to the topside, especially taking into account the general USD weakness over the past week.”
By Allen Sykora of Kitco News; asykora@kitco.com
Walsh’s Lusk: All Eyes In Gold Market On Friday Yellen Speech
Monday August 22, 2016 09:04
The key event for gold this week will come on Friday when Fed Chair Janet Yellen speaks at the annual Federal Reserve symposium in Jackson Hole, says Sean Lusk, director of Walsh Commercial Hedging Services. In the meantime, he says, there could be some profit-taking in gold futures. Much of the market’s focus lately has been trying to gauge when the Fed could hike interest rates again, in particular as early as September. The last nonfarm payrolls report exceeded expectations and a number of Fed officials made hawkish comments last week, although Lusk notes there has been a reluctance of investors to price in another Fed move next month. However, traders may receive some more clarity on the issue at the Fed symposium Friday, he continues. “At that meeting Fed Chair Yellen is likely to clarify her expectations for the pace of any future rate increases,” Lusk says. He adds that “this uncertainty that could have weak longs exiting positions ahead of Yellen’s comments.”
By Allen Sykora of Kitco News; asykora@kitco.com
Detour Gold Corp. (TSX: DGC) has trimmed its debt by using existing cash, reporting that the company repurchased $60 million of convertible notes for an aggregate purchase price (including principal and premium) of $62.1 million, plus accrued and unpaid interest of $0.7 million. For the year to date, Detour has repurchased $142 million in face value of convertible notes, reducing the amount due at maturity in November 2017 to $358 million. The convertible notes were sold in December 2010 to finance development of the Detour Lake gold mine in northeastern Ontario. “As the company’s financial position continues to strengthen, we have taken this opportunity to further reduce debt levels from existing cash balances. With continued confidence in the gold price, we expect to refinance less than $300 million of notes at maturity,” says James Mavor, chief financial officer.
By Allen Sykora of Kitco News; asykora@kitco.com
AuRico Metals Closes Equity Financing, Private Placement With Alamos Gold
Monday August 22, 2016 09:44
AuRico Metals Inc. (TSX: AMI) announces the closing of its previously announced bought deal offering of 11.5 million common shares at C$1 each, which includes 1.5 million shares through the exercise of the over-allotment option. The shares were purchased on a bought deal basis by a syndicate of underwriters. In addition, Alamos Gold Inc. exercised its right to maintain its pro-rata interest through a private placement of 1,272,611 shares, taking combined gross proceeds raised by AuRico Metals to C$12,772,611. “The net proceeds from the offering will be used to fund the potential acquisition of additional royalties, the advancement of permitting activities and detailed engineering at the Kemess underground project, as well as for working capital and general corporate purposes,” AuRico Metals says.
By Allen Sykora of Kitco News; asykora@kitco.com
(Kitco News) – It’s only a matter of time before central banks take the next unprecedented step and issue helicopter money, and this stimulus will be a positive factor for gold, this according to some market players.
The potential for more accommodative policies from central banks was one of the main topics of Incrementum’s tenth annual advisory board discussion, which included bestselling author Jim Rickards; trader and technical analyst Heinz Blasnik; economist Frank Shostak; former investment manager Zac Bharucha; and, and Santiago Capital CEO Brent Jonhnson.
Kicking off the discussion, Rickards said he expects central banks to crank up the printing press by 2017. He added that the main question is: what will this helicopter money look like? Will it be money given directly to consumers or to the government, who will spend it on infrastructure development, he asked.
Johnson said that he is also expecting to see renewed central bank spending and while it will create short-term growth, it is not fixing the underlying global economic problems.
He added that continued money printing will “just lead to more excesses, to more misallocation of capital and sooner or later, you get the big debt knockout.”
Blasnik noted that the problem with an expanded quantitative easing program, either supporting infrastructure growth or money sent directly to consumers, is that governments can’t create wealth or prosperity.
“That is the basic problem – there ain’t no free lunch. And that is what helicopter money implies: It implies that there is a kind of free lunch somewhere, but there isn’t,” he said.
In this environment, the analysts are optimistic on gold, even if the market does face some hurdles in the near term.
Blasnik said that he is expecting to see a correction in gold during the second half of the year; however, he added that it would be a good opportunity to jump back into the market.
“I wouldn’t chase [gold and gold-mining stocks] now, but I think there’s going to be a good opportunity during the second half.”
Johnson agreed that investors shouldn’t chase the gold market at these current levels.
“I think we will get the chance to buy them at a lower price sometime in the next 3-4 months. And even if you don’t get the chance to buy them at a lower rate in the next few months, you might be able to buy them with a lot more certainty,” he said.
Although Shostak said his economic models are still bullish on equity markets, he noted that investors should exercise some caution because stock markets are “really going crazy.”
“I think it’s reasonable holding that core gold position and looking for tactical opportunities. I think there’s probably going to be a kind of crunch again in the markets, I think the sentiment is very fragile,” he said.
Although gold is struggling to hold onto recent gains, stuck in a tight trading range for the last two weeks, Rickards said that he thinks it is only a matter of time before markets move higher.
“I would make the point that we are not near the top, it’s quite close to the beginning – so I’m very bullish on that sector,” he said.
By Neils Christensen of Kitco News; nchristensen@kitco.com
(Kitco News) – Aug. 22 –Sometimes the best trade is no trade at all. The gold market continues to languish within a developing triangle pattern on the daily chart as traders await comments from Federal Reserve Chair Janet Yellen on Friday at the Fed summit in Jackson Hole Wyoming. Not a whole lotta action right now.
Could Janet trigger a triangle breakout? As nearly 500 million people in advanced industrialized nations remain mired under negative interest rates policies –what if any answers do global central bankers have for the current sluggish growth prospects? Will Fed Chief Janet Yellen have any answers this week? Read more here.
In the meantime, as the gold market lumbers quietly in a tight range, it may open the door to several trading mistakes. Do any of these sound familiar?
Trading Mistake #1: Sometimes sheer boredom can trigger you into a trade.
- Looking for some excitement? Don’t look to the markets for that. Don’t take unplanned trades. Write your trades down ahead of time, with your entry points, objectives and stop-loss levels.
Trading Mistake #2: Trading outside your timeframe.
- Are you a short-term intraday trader?
- Are you a multi-day swing traders?
- Are you a long-term investor?
One of the elements of a successful trading and investing plan is to know your timeframe and stick to it.
Trading Mistake #3: Getting stuck and trading your “opinion.”
The markets will tell you where they are going –all you have to do is watch the charts. The markets –gold or otherwise – are not going to change direction just because you doubled down on a losing trade. Good traders listen to the markets – and follow price. Markets don’t care that you “know” gold has to go up right now because of XYZ.
Triangle update: Comex December gold futures remain stuck in a developing daily triangle. As a reminder, triangles are most often “continuation” patterns, which means upon a confirmed upside breakout, gold would resume its previous uptrend. See Figure 1 below.
What you need to know now:
- The triangle has not been confirmed
- The short-term picture within the triangle is weakening as gold dropped below its 20-day moving average.
- Momentum is weak-ish and lackluster.
- Watch the triangle support and resistance trendlines –it would take a sustained rally and close above the top triangle trendline to confirm an upside breakout.
Learn more about Triangles here >> Technical Analysis 101.
What’s you trading plan right now?
By Kira Brecht, Kitco.com
