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Weekly Gold & Silver Market Report – 8/22/2014

UKRAINE TENSION EASES

Several factors were responsible for pushing Gold below $1,300 an ounce Monday, such as a stronger U.S. dollar and European and U.S. shares bouncing due to tensions easing in Ukraine. Gold has jumped nearly eight percent this year as investors have opted for the safe haven asset with concerns growing in Ukraine and the Middle East. For the first time in three weeks, hedge funds and money managers increased their bullish wagers on Gold futures and options, according to data released Friday by the Commodity Futures Trading Commission.

WORLD GOLD COUNCIL RELEASED GOLD DEMAND REPORT

Last week, the World Gold Council released its Gold Demand Trends report for the second quarter of 2014 showing Gold demand has returned to its long term trend, coming off highs achieved in 2013. Marcus Grubb, World Gold Council managing director of investment strategy, commented, “In the context of an exceptional year last year where we saw record consumer buying and investor sell-offs, this quarter’s demand continues to demonstrate a return to long-term trends, illustrating the uniquely balanced nature of the Gold market. Jewelry consumers continued to digest the exceptional purchases of 2013 and investors also rebalanced, pulling back from the extremes we saw last year. Overall the Gold market is stabilizing following the extraordinary conditions we saw in 2013.” Some key report findings include:

· Jewelry continues to represent more than 50 percent of the world’s Gold demand

· Central banks have increased their Gold purchases by 28 percent

· Exchange traded fund outflows are only one tenth of second quarter 2013

· Recycling is at its lowest since 2007

GOLD TRIMMED ON STOCK RALLY AS INVESTORS EYE JACKSON HOLE

Increased risk appetite weighed on Precious Metals and lifted stocks Tuesday as strong U.S. housing data influenced a temporary move away from Gold and Silver. The Gold price continued to hover around $1,300 an ounce as investors and traders alike mull over geopolitical tensions abroad and domestic economic data for signs of future market movement. Many investors awaited the outcome of the annual Federal Reserve meeting in Jackson Hole, WY, when central bankers from around the world gathered Thursday and Friday.  The event has historically ended with important policy announcements regarding the future of U.S. and world monetary policy.

FED MINUTES INDICATE RATE HIKE COULD BE SOONER THAN EXPECTED

The Gold price fell to a two-week low Wednesday as investors speculated whether an interest rate hike may come sooner than expected.  After the release of the minutes from the Federal Reserve’s July policy meeting, Gold came under pressure as non-interest earning assets like Precious Metals reacted negatively to the anticipation of a rate increase.  Continued improvements in the domestic economy are adding fuel to the argument that the Fed should end its stimulus program and begin raising interest rates. “The hawkish voices within the Fed have become louder,” Jerry Webman, chief economist at OppenheimerFunds Inc., said. “While the economic numbers are not very strong, they are definitely showing some strength.”

GOLD, SILVER PRICES CONTINUE TO SLIDE ON FED EXPECTATIONS

Gold and Silver prices fell sharply during trading Thursday, though the pace of decline slowed by the afternoon. The bad news for Gold is good news for stocks. The S&P 500 topped a record level Thursday morning. Expectations that the Fed will raise interest rates sooner than later as a result of good economic data are growing stronger. “The market is really in a sweet spot for U.S. stocks, fundamentals continue to be very good,” Jeff Kravetz, regional investment director at US Bank’s Private Client Reserve, said via phone.

U.S. JOB MARKET PROGRESSING

The labor market may not be where it needs to be, but jobless claims in the U.S. fell more than forecast last week. For the week ending August 16, jobless claims fell by 14,000 to 298,000. Bloomberg’s median forecast, which surveyed 46 economists called for 303,000 jobless claims. “The job market is doing well right now, there’s no doubt about it,” Guy Berger, an economist at RBS Securities Inc. in Stamford, CT, said. “There’s a good chance we’ll get another solid month of payrolls. Lower layoffs, together with faster hiring, mean better prospects for consumer spending.”

RUSSIA BUYS $400 MILLION IN GOLD TO BOOST RESERVES

Russia announced they added 9.4 tons of Gold valued at $400 million to its Gold reserves. This is the fourth consecutive month that Russia has expanded their Gold holdings. Russia now holds 1,104 tons, which moves them ahead of China to fifth in the world (China has not reported their Gold holdings since 2009, but Russia has moved past what was last reported). “Russia has been the largest official buyer for years,” Eugen Weinberg, head of commodities research at Commerzbank in Frankfurt, said Thursday. “It’s a part of its long-term strategy of amassing gold reserves and diversifying its foreign exchange reserves.” According to the World Gold Council, central banks have continued to be purchasers of Gold and have been net purchasers since third quarter 2009. Central banks purchased 409 tons of Gold in 2013 and they are expected to add as much as 500 tons in 2014.

METALS PRICES CLIMB AS THE WEEK COMES TO AN END

Gold and Silver prices climbed steadily Friday, largely on news coming out of Ukraine.  NATO Secretary General Anders Fogh Rasmussen said Friday there has been an alarming buildup of Russian forces near Ukraine, saying, ‘We have also seen transfers of large quantities of advanced weapons, including tanks, armored personnel carriers and artillery to separatist groups in eastern Ukraine.” He also condemned Russia’s move sending “a so-called humanitarian convoy” without acknowledgment from Ukraine or supervision of the International Committee of the Red Cross.

 

Weekly Gold & Silver Market Report – 8/15/2014

GOLD REMAINS FLAT AS INVESTOR SENTIMENT INCREASES FOR JULY

Precious Metals traded near even Monday as lack of news in the headlines kept price movement to a minimum.  Investors continue to eye geopolitical crises in the Middle East and Ukraine as bearish forecasts from major financial institutions in early 2014 continue to prove inaccurate.  Gold has risen 9 percent this year as tension overseas continues to boost the safe-haven appeal of the yellow metal.  Many analysts and economists are still expecting a range-bound price pattern for Gold and Silver in the short-term.  With strong economic factors suppressing a price breakout for Gold and Silver, investors await new factors that could influence significant price movement in the coming weeks and months.

GOLD ON THE MOVE

After a period of varying risk in the markets, Tuesday saw Gold on the upswing as Ukraine denied access to a convoy of 280 Russian trucks, claiming to carry humanitarian aid, across its border. Ukrainian officials would prefer Russia follow international rules, which would require the convoy be led by the Red Cross. However, Ukraine is not the only geopolitical hotspot. “There’s multiple hotspots in the world that could easily spiral out of control to something much greater,” Long Leaf Trading Group chief market strategist Tim Evans said in a telephone interview. “You’ll find that investors will normally flock to safe-haven markets, like Gold, in case something really does develop much greater than what we’re seeing currently.”

OLD THEORY STILL LINGERING

The theory of secular stagnation, or a long period of slow growth, is a term that Federal Reserve watchers should expect to hear more in the coming months. First developed by Alvin Hansen during the Great Depression, there is concern that secular stagnation could cause enough diminishing investment opportunities to stunt economic growth and prevent full employment. Minneapolis Fed President Narayana Kocherlakota plans to hold a symposium on the subject this November. “I think there’s a lot of concern about how long this will last, and I think that’s certainly high on the agenda right now. At least people are entertaining that possibility now that it could drag on for longer,” said Brown University associate professor of economics Gauti Eggertsson, who, along with fellow Brown economist Neil Mehrotra, authored “A Model of Secular Stagnation,” which provides an in-depth explanation of how a long period of low growth could come about.

GOLD FUTURES BOUNCE FOLLOWING WEAK RETAIL SALES NUMBERS

Gold futures received a mild boost Wednesday following disappointing U.S. retail sales data.  The weaker-than-expected retail figures reinforced the belief that the Federal Reserve will maintain low interest rates for the foreseeable future. Naeem Aslam, chief market analyst at Ava Trade, said of the sales figures, “It was an appalling number which has missed the forecast by a large number and this has faded the notion of hike in the interest rate by the Fed, at least today.”  A low interest rate environment bodes well for Precious Metals, which are also receiving support from ongoing crises in the Middle East and Ukraine.

GOLD FLAT BUT OUTPERFORMING OTHER MAJOR ASSETS IN 2014

The Gold price remained relatively unchanged Thursday, even as a rise in unemployment claims pared speculation that the Federal Reserve will lift interest rates in the near future.  “Concerns about the labor market are back,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates, said.  “Also, safe-haven bids continue to come in because of the geopolitical developments.”  Much of this year’s gains for Gold have come due to the escalation of geopolitical tension in Ukraine and the Middle East.

GOLD, SILVER, STOCKS ON A ROLLER COASTER RIDE

Gold began Friday down almost $20, well below $1,300 per ounce, while Silver looked like it might head below $19 per ounce. All the while, U.S. stocks were up nicely. By midafternoon, stocks were down triple digits and Gold and Silver rebounded sharply on news that Ukrainian artillery destroyed a significant portion of a 270 truck Russian convoy. This announcement rattled markets and sent European stocks tumbling. “Appropriate actions were undertaken and a part of it no longer exists,” Ukrainian military spokesman Andriy Lysenko told journalists. Russia has claimed that these trucks were bringing in humanitarian aid, but Ukraine officials never bought into this explanation. Last night’s attack demonstrated their resolve and only adds more uncertainty to this situation.

CONFIDENT U.S ECONOMIC GROWTH OUTLOOK

Economists have raised their growth targets for the third quarter, but trimmed their estimates for the balance of the year. The overall outlook for job growth and lower unemployment remains strong. In the Philadelphia Federal Reserve’s quarterly survey of 43 economists, the third quarter growth forecast went up from 2.9 percent to 3 percent, while the fourth quarter forecast went down from 3.2 percent to 3.1 percent. Overall for 2014, they lowered economic growth from 2.4 percent to 2.1 percent. Inflation is expected to remain muted with only slight increases in the forecasts.

 

Weekly Gold & Silver Market Report – 8/8/2014

GOLD LOWER ON EARLY STOCK RALLY

The Gold price began the week slightly down as global stocks surged following last week’s downturn.  With geopolitical turmoil in place as the central factor keeping metals prices afloat, many investors continue to ponder the U.S. interest rate scenario.  “Unless there is further serious unrest in any of the trouble spots in the world…we remain pretty much rangebound,” David Govett at brokers Marex Spectron, said.

PRICES ON THE RISE DESPITE FED DASHBOARD

Sara Eisen, writing for CNBC, brings an interesting view on inflation. She points out that now that we have heard the earnings report from more than three quarters of the companies, there is an easy to spot trend. Companies across all industries are raising prices on the consumer. Hershey and Mars are passing along rising costs of cocoa, dairy and nuts to the tune of 8 percent and 7 percent respectively. Kraft is raising prices between 5 percent and 12 percent on beef, turkey, cold cuts, and cheese. Restaurants, airline tickets, coffee, cars, shoes, and soft drinks are all going up. Even Netflix is increasing prices for new subscribers. The bottom line is that no matter what is showing up on the Fed dashboard, prices are going up and inflation is here. If there is a Fed misstep, could it be a golden age for Gold?

MARKET HAS YET TO FULLY REACT TO FEDS PLAN FOR EXITING QE3

Strong earnings boosted stock prices Monday despite sharp drops in the high dividend paying utility stocks. August tends to be a quiet month; so many traders are expecting weaker volumes the next several weeks. “The S&P has had a huge run, and it’s earned the right to sit for a bit. The key is to make sure selling remains somewhat contained,” Adam Sarhan, chief executive of Sarhan Capital in New York, said. “We’re in a very strong bull market right now. Markets may retreat over the next few weeks as traders go on vacation and the Fed continues backing out of its bond-buying program. The real question becomes, will the Fed be able to transition and exit from QE3 gracefully?”

GOLD BACK TO EVEN AS STOCK SELLOFF BOOSTS DEMAND

The Gold price rebounded Tuesday from morning lows as a dip in bond yields pushed the dollar lower and a broad selloff of equities increased demand for bullion.  Though the yellow metal has benefited primarily from the presence of geopolitical turmoil in Ukraine and the Middle East during 2014, economic motivators will ultimately need to facilitate the advance of higher Precious Metals prices.  “We suspect that while political outbreaks provide the occasional jolt, it is the economic crises that seem to have more long-lasting impact,” INTL FCStone analyst Edward Meir, said.  Strong U.S. economic data has been jousting with safe-haven demand gained from crises abroad to keep Gold and Silver range-bound for most of the year.

GOLD JUMPS BACK OVER $1,300 WHILE SILVER CLEARS $20

The escalating situation in Ukraine has put quite a scare in the global equity markets recently while at the same time boosting Gold and Silver.  Gold jumped up 1.6 percent Wednesday and was able to maintain trading throughout the day at that level. It is reported that Russia had placed 20,000 troops on Ukraine’s eastern border and it is anyone’s guess as to what happens next. Also supporting Gold are worries about economic activity in the eurozone. “It’s a safe-haven, flight-to-quality day for gold because of fears in the market caused by lower European stock prices and Putin’s aggressive attitude,” Bill O’Neill, partner at LOGIC Advisors, said.

GOLD HIGHER, STOCKS RETREAT AS U.S. THREATENS FURTHER SANCTIONS ON PUTIN

The Gold price traded higher for the second straight session Thursday as ongoing weakness among U.S. equities increased the safe-haven demand for Precious Metals.  The retreat from stocks into Gold and Silver was partly influenced by escalating geopolitical tension surrounding Ukraine.  As Russian forces mobilize near the border of Ukraine, the U.S. has threatened increased sanctions on Russia.  The rise in crises in the Middle East and Ukraine has been the sole motivator of a higher Gold price this year.  The yellow metal has risen 9.2 percent year-to-date while upbeat economic factors have done much to quell any significant upward momentum for Precious Metals.

GOLD WAVERS AS GOOD NEWS IN UKRAINE BALANCES AIRSTRIKES IN IRAQ

Gold and Silver came off strong following early morning rallies Friday; while stocks reacted favorably on news the U.S. would begin military strikes in Iraq. Tensions appeared to be easing in Ukraine and the U.S. involvement in Iraq may be less than first anticipated. “Iraq is a tragedy, but [President Barack Obama] made clear our engagement is going to be limited. While the markets always sell off immediately in the face of uncertainty, it doesn’t take long to realize this airstrike against ISIS (Islamic State in Iraq and Syria) doesn’t change the geopolitical picture in any significant way,” J.P. Morgan Funds chief market strategist David Kelly said.

At 4:40 p.m. (ET), the APMEX Precious Metals spot prices were:

  • Gold, $1,312.00, Down $0.50.
  • Silver, $19.99, Down $0.02.
  • Platinum, $1,478.80, Down $2.70.
  • Palladium, $863.80, Up $6.70.

Weekly Gold & Silver Market Report – 8/1/2014

HEAVY WEEK OF ECONOMIC NEWS

The Gold price began the week on a high note following a slight loss as a stronger U.S. dollar put pressure on the yellow metal. The week was full of extensive economic data and events, which was expected to provide clues to when the Federal Reserve would increase interest rates. The Fed’s policy meeting concluded Wednesday, the same day that second-quarter gross domestic product data was released. Thursday marked the usual weekly jobless claims report, and Friday brought the heavy hitter — non-farm payrolls figures.

RUSSIA AND TURKEY ADD MORE GOLD FOR THE THIRD STRAIGHT MONTH

Russia and Turkey continue to add to their Gold holdings. According to the International Monetary Fund (IMF), this is the third straight month that both countries have added to their bullion reserves. The drop in June of Gold prices prompted many central banks to add to their Gold position as protection from currency and credit risks. Russia is the fifth largest holder of bullion reserves after the United States, Germany, Italy and France. China is sixth, but it should be noted that they have not officially reported their Gold holdings since 2009. Turkey comes in at number twelve.

Mohamed El-Erian published an article in Bloomberg Monday, that lays out the five key issues faced by Fed Chair Janet Yellen and why we should not be fooled by her comforting “steady as she goes” façade. He points out that one of the unwritten rules about central bank policies is that no big policy changes should happen in the summer. There are too many traders across the globe on holidays, so any sudden move could destabilize markets. According to El-Erian, vacations will end and then the Fed will face five complex and inter-related issues:

1) To what extent is the central bank policy approach increasing the risk of financial instability? 2) How much damage did the recession actually cause and does this mitigate the effect of Fed policies? 3) How quickly will the gain in new jobs translate into wage gains and will these wage gains undermine 2 percent inflation goals? 4) How should they respond to the continued parade of geopolitical shocks? 5) By carrying the bulk of the economic stimulus burden is the Fed undermining the political and operational autonomy necessary for its effectiveness?

GOLD LOWER AS INVESTORS AWAIT FED MEETING OUTCOME

The Gold price retreated from a one-week high Tuesday as investors waited for the outcome of Wednesday’s Federal Reserve’s policy meeting. Though geopolitical turmoil in the Middle East and Ukraine continues to assist in buoying Gold and Silver, hawkish comments from Fed Chairwoman Janet Yellen regarding the future of interest rates in the U.S. could weigh on metals. “I’m actually surprised that gold isn’t up more, given the numerous geopolitical risks,” Commerzbank analyst Daniel Briesemann said. If escalating tension overseas continues to persist, safe-haven demand for Gold and Silver could increase in the short-term.

METALS FLAT AFTER DATA, FED ANNOUNCEMENT

Precious Metal prices finished the day trading mostly sideways on Wednesday. After the Federal Reserve hinted toward their plan to continue tapering asset purchases and maintain an easy monetary policy, stocks and Precious Metals wavered slightly. However, with jobs data expected to be released Friday, investors kept a watchful eye. Bruce McCain, chief investment strategist at Key Private Bank, said, “The bulls look at the strength in the second quarter, and the skeptics say you’re getting a lot of bounce back from first-quarter weakness. The question is how do things look in the third and fourth quarters, and the answer is we don’t know. A lot hinges on the employment report on Friday.”

GOLD COULD BE STRONG BET AS STOCKS TUMBLE AND IMPROVEMENT GOES UNREALIZED

The Gold price dipped lower Thursday as the yellow metal is set to post a 3.1 percent loss for the month of July. Strong U.S. employment numbers added to the current downward pressure on Precious Metals. Though reports point to a rebound in the U.S. economy, many individuals are not experiencing the improvement first-hand. Many of the jobs added are part-time positions, which leave countless underemployed. Income has yet to improve as Americans continue to watch the gas prices and other goods rise higher and higher. With looming geopolitical crises escalating, fear of a stock market correction and mounting national debt, many investors still feel the need to protect themselves with safe-haven assets like Gold and Silver.

JOBS REPORT DISAPPOINTS DESPITE MILESTONE

Gold and Silver prices recovered from early losses Friday after the highly anticipated jobs report. Though the U.S. Labor Department’s jobs report released Friday morning showed the first time since 1997 that the economy has seen 200,000-plus gains in six straight months, the 209,000 jobs added in July missed the mark expected by analysts. The unemployment rate increased to 6.2 percent, and the Labor Department believes this is due to more people entering the workforce and looking for work.

At 4:25 p.m. (ET), the APMEX Precious Metals spot prices were:

  • Gold, $1,294.30, Up $12.00
  • Silver, $20.36, Down $0.05.
  • Platinum, $1,466.00, Up $0.80.
  • Palladium, $866.70, Down $8.00.

APMEX’s Account Managers now have extended hours Mondays through Thursdays and are here to serve you until 8 p.m. (EDT)! Or call us Fridays until 6 p.m. (EDT)! If you have any questions about investing in Precious Metals or simply would prefer to

Weekly Gold & Silver Market Recap – 7/25/2014

7/25/2014 3:38:06 PM By: Brandi Brundidge

GOLD RISES DURING UNCERTAINTY; U.K. EXPECTED TO IMPOSE SANCTIONS ON RUSSIA

The Gold price continued to climb Monday as geopolitical tensions grew over the controversial Malaysia Airlines Flight 17 that was supposedly shot down by Ukrainian rebels. U.S. Secretary of State John Kerry confirmed Sunday there is strong evidence suggesting Russia provided the missile that Ukrainian rebels used to shoot down the jet. The safe haven appeal of Gold has been supported by concerns between Ukraine and the Middle East, which has sparked a 9.4 percent gain for the yellow metal this year. “Escalation of sanctions on Russia and more geopolitical problems in Gaza are keeping Gold supported,” George Gero, a vice president and Precious Metals strategist at RBC Capital Markets in New York, said in a telephone interview. “There are enough fundamentals to keep prices over $1,300 [per ounce] for some time.”

EMERGING MARKETS MAY BOLSTER GOLD PRICES

According to a recent research note from Bank of America/Merrill Lynch, the worst may be over for the Gold market. “After the sharp correction in 2013, Gold prices have stabilized this year. Looking at supply and demand dynamics, this was heavily influenced by reduced investor selling at the same time as physical offtake from emerging markets has been steady,” BoA/ML analyst Michael Widmer said in the research paper. The price going forward will greatly be supported by buying in the emerging markets. “We believe that physical demand from emerging markets will gain further clout in the medium term as countries get more affluent, suggesting the worst may be behind the Gold market,” Widmer said.

MIDDLE EAST DEMAND COULD BOOST LONG-TERM GOLD PRICE

The Gold price shifted slightly lower Tuesday as speculation regarding a near-term hike in interest rates weighed on the yellow metal. Though Gold was still trading above $1,300 an ounce, higher interest rate expectations sidelined some Precious Metals investors. However, geopolitical crises are still offering some support and the announcement of trade expansion for bullion in the Middle East could force prices even higher over the long term. A spot Gold contract has been extended into Dubai and is expected to boost the region’s demand for physical bullion delivery. “We believe the Middle East has a lot of potential to catch up with the rest of the world,” Frederic Panizzutti, chief executive officer of Dubai’s MKS Precious Metals DMCC, said.

METAL PRICES FLAT AS UKRAINE, ISRAEL DOMINATE HEADLINES

Precious Metal prices traded flat Wednesday. Although this was the second straight day Gold futures declined, continued turmoil in the Middle East and Ukraine provided support to metals. Blake Robben, a senior market strategist at Archer Financial Services in Chicago said, “There is definitely some temporary support because of geopolitical tensions, but the strength in the equity market continues to be a big headwind.”

DEMAND FOR SAFE-HAVEN AND “RISKY” ASSETS INCREASE

Equity markets around the world edged slightly higher Wednesday after data showed solid corporate earnings, increasing the demand for more “risky” assets. However, strong demand for safe-haven assets has continued as investors monitor geopolitical situations around the world. Rick Meckler, president of hedge fund LibertyView Capital Management in Jersey City, New Jersey said, “The bottom line is investors have moved away, for now, from the big political stories and are refocused on earnings, which in general have been good.”

GOLD DOWN AMID EIGHT-YEAR LOW JOBLESS CLAIMS

Strong data out of China and the eurozone pressured Gold below the $1,300 per ounce level in early-morning trading Thursday. Physical demand for Gold in China increased after the price fell though is still considered weak when compared to earlier this year. Natixis analyst Bernard Dahdah said, “The market is going to follow very closely any comments from the Federal Reserve about interest rates as that is likely to continue having an impact on Gold’s trading pattern.”

U.S. JOB MARKET SHOWS RECOVERY

U.S. jobless claims fell to their lowest level in eight years, according to data released by the Labor Department Thursday. The figure of 284,000 is much lower than the expected 310,000, which pressured Precious Metals. The four-week moving average fell to its lowest level since May 2007. U.S. stock futures increased, pointing toward a higher open for Wall Street. The Dow Jones Industrial Average held above 17,000 and the S&P 500 index closed in on 2,000.

GOLD RECOVERS FROM FIVE-WEEK LOW

The Gold price recovered from a five-week low as it climbed closer to the psychological $1,300 per ounce level Friday. Commerzbank analysts cite the low demand in Asia as a main reason for Gold’s trouble breaking higher. They wrote, “The World Gold Council’s forecasts of Chinese Gold demand, which were issued at the beginning of the year and envisaged demand being on a similar scale in 2014 as it was in 2013, meanwhile appear ambitious. In our opinion, the weak Gold demand figures to come out of Asia – not only China – of late preclude any rise in Gold prices.”

 

Weekly Gold & Silver Market Recap – 7/18/2014

GOLD TUMBLES FOLLOWING WIDESPREAD SELLOFF

The beginning of the week began with the Gold price experiencing it’s largest single-session decline of the year as Portuguese banking worries subsided and a rally among stocks influenced a round of profit-taking for Gold and Silver. “A strong stock market and some stability in the EU [are pressuring gold,]” Peter Thomas, a senior vice president at Zaner Group LLC in Chicago, said. Monday’s drop was not cause for concern among many investors as hedge funds continued to increase their positions and holdings for exchange-traded products. Traders and investors will continue to monitor Federal Reserve monetary policy along with macroeconomic news and geopolitical developments abroad for signs of market movement in the coming weeks and months.

YELLEN’S COMMENTS WEIGH ON GOLD

The Gold price fell back to $1,300 for the first time in roughly one month on Tuesday following testimony by Federal Reserve Chairwoman Janet Yellen in front of the Senate Banking Committee. “Yellen was a little bit more hawkish than expected. That signals higher rates sooner rather than later. And that’s anti-inflationary, and presents competition for Gold,” Gold expert George Gero of RBC Capital Markets, said. Volatility continued Tuesday as the yellow metal hovered near the $1,300 mark. Monday’s significant price drop influenced a strong influx of new positions among Gold ETFs. The inflow of new contracts has raised trading volume to its highest level in nearly three years.

WGC RELEASES 2014 ASSESSMENT OF GOLD

As investors look to the second half of 2014, the Gold price is currently up over 9 percent this year. The World Gold Council (WGC) has released its 2014 review of Gold and has surmised that general interest in Gold is gaining momentum. According to the WGC, following the tremendous price drop in 2013, the current market climate appears bullish for Gold. Citing low prices, high bond issuance, tight credit spreads and record low volatility (prior to recent weeks) the WGC believes Gold is primed for higher prices through the second half of 2014. With ongoing speculation regarding a stock market correction and revamped turmoil in the Middle East, there could be plenty of impetus for a bullish run among Precious Metals before the end of the year.

GOLD TREADING WATER AS INVESTORS AWAIT YELLEN

Gold futures were trading even Wednesday as the yellow metal awaited new upward momentum following three days of losses. Prices dropped over $40 through Monday and Tuesday following a large technical selloff and dovish comments by Federal Reserve Chairwoman Janet Yellen regarding the future of interest rates in the United States. So far this year, Gold has been buoyed by geopolitical tension and low interest speculation. “The new speculative longs in the market may be justified based on (largely unpredictable) political tension in e.g. the Middle East and Eastern Europe,” Walter de Wet, commodities strategist at Standard Bank, said.

METALS RECOVERY CONTINUES; PALLADIUM AT 13 1/2 YEAR HIGH

Precious Metals were on the rise Thursday beginning the day on a positive note, following the recovery that started Wednesday. Fresh sanctions on Russia by the U.S. weighed stocks down, making way for higher Gold and Silver prices. The Palladium price hit a 13 1/2 year high on the sanctions. Mitsubishi analyst Jonathan Butler explained, “I am forecasting a 1.8 million-ounce palladium deficit this year due to the perfect storm of South African supplies falling to a near-20-year low, growing auto catalyst demand and of course the heavy inflows into the two South African ETFs.”

IS ANOTHER U.S. STOCK BUBBLE NEAR?

Andrew Smithers, chairman of Smithers & Co., was one of the only analysts to warn of the late 1990s stock bubble, and he believes we are now seeing the third largest stock bubble in U.S. history. Smithers used a collection of data to come to that conclusion, but also believes that stocks will likely go even higher before the bubble bursts.

MALAYSIA AIRLINES JET CRASH URGES INVESTORS TOWARD SAFE-HAVEN ASSETS

Gold bounced back Friday after news broke that a Malaysia Airlines jet carrying 295 passengers crashed in eastern Ukraine. Investors quickly began to sell stocks and move into safe-haven assets such as U.S. Treasury’s and Gold sparking both to jump immediately. There is still concern that the plane was possibly shot down. At this time, Ukrainian officials have confirmed that neither the government nor pro-Russian separatists fighting in the area were responsible for the incident. “The worst-case scenario from a market perspective would be one in which it was found Russian officials ordered the plane shot down while the most benign scenario would be one in which the crash was the result of mechanical failure, pilot error or some other cause unrelated to the long-running conflict on the ground,” John Canally, investment strategist at LPL Financial in Boston, said.

GOLD, SILVER DROP AS GEOPOLITICAL TENSIONS BECOME OLD NEWS

Speculations that the Federal Reserve plans to raise interest rates sooner than expected trumped Thursday’s geopolitical fears, causing Gold and Silver prices to fall. On Thursday, Gold jumped sharply on news about the Malaysia Airlines plane crash and Israel sending forces into the Gaza strip. Investors appear to not be as worried now. “There’s a little bit of concern that the Fed starts tightening,” Rob Kurzatkowski, a senior commodity analyst at optionsXpress, a Chicago-based brokerage unit of Charles Schwab Corp., said in a telephone interview. “Some of the fears that we’ve seen yesterday have dissipated.”

Top Webinar Q&A

Recently, APMEX held two webinars with Q&A opportunities at the end of the sessions. Below we’ve listed the top 5 Questions and Answers we received. Know that you can always contact APMEX at 800-375-9006 with any questions or issues. Our helpful staff is there ready and waiting for your call.

Question: Is Gold a better investment than Silver?

Answer: Most APMEX customers buy both Gold and Silver. Silver prices tend to move relatively the same as gold. Most people who invest only in Silver do so because of the low cost to invest. Gold has a higher cost to invest. Often we hear the thought that Gold is to “protect my money” and Silver is more “I want make a little bit of money” strategy. This is the reason I think most APMEX customers buy both. If most of your need is to protect your money, then you are probably going to be heavier on Gold and if most of your desire is I want to make money you might gravitate a little bit more toward Silver. Silver also is 57% used for industry where Gold is only 11%. So Silver can actually also benefit a little bit when the time comes in a good economic situation.

Question: What are the advantages and disadvantages of owning bullion vs. minted coins like American Eagles, Krugerrands etc.?

Answer: This is a great question and it’s a common misconception. A coin minted like American Eagles, Krugerrands, Canadian Maple Leafs, are bullion. The value of a Gold American Eagle is only the Gold content.

Now you can buy proof Gold Eagles and you can buy graded Gold Eagles and those have collectible value. But when you are buying just the regular Gold Eagles, Maple Leafs and Krugerrands, the value of those coins is the metal content. It’s purely a matter of preference and the intentions of why you are buying.

Question: Why is the American Eagle weight more than a Canadian Maple?

Answer: If you see the coins side by side, you will notice that the Eagle is actually bigger than the Maple Leaf. The Maple Leaf is actually twenty four carat Gold. The American Eagle and the Krugerrand is twenty two carat gold. Now it is still a full one ounce of Gold. The difference is Gold is a relatively soft metal. If you were to take a Canadian Maple Leaf and drop it ten feet on hard concrete, you might do a little damage; not major but certainly a lot more pliable. Some countries like the United States, South Africa and others mix copper and some other things just to make the coin a little bit more resilient, make it stand up to scratches and things like that. But in the end, it’s not like jewelry, just because it is twenty four carat doesn’t make it any more valuable. Quite frankly the Maple Leafs are often less money than the American Eagle simply because the Royal Canadian Mint charges less than the U.S. Mint. In the end they are all one ounce of Gold. Canadian Maple is twenty four carat, a little bit smaller coin and it has a bright Gold color to it, whereas the American Eagle and especially the Krugerrand have a coppery look to it because of the Copper in it.

Question: What about fractional pieces vs. bulk?

Answer: You will pay a higher premium for a fractional piece. If you are a person with a point of view that it is possible for there to be a currency collapse and you may need real metal to go out and buy real goods and services then you are probably going to gravitate to 1 ounce Silver coins and fractional Gold coins. In those cases it make sense.

If I am just trying to invest in Gold because I want 5% of my money asset in Gold, (or 10% or 20% or whatever it is), I am going to stay away from fractional coins unless I am a collector and like to have a little bit of everything.

Question: Which Gold products would be less likely to be recalled by the U.S. Government?

Answer: This question always comes up in webinars and it is a good question. There are a lot of precious metals dealers that use scare tactics to try and get people worried about what the government might take as far as precious metals. Encouraging customers should buy a more expensive Gold product which the government “couldn’t take”.

Now if you are a person that believes that there is a possibility that the United States or other governments can confiscate Gold, I will not try to talk you out of that. If you are a person that believes that, you do not want to buy bullion coins, you would want to buy things like Pre 33 Gold or graded coins that have been through a grading service anything that would have a collective value because if the rules for confiscation were the exact same thing as in 1933, then collectible coins would not count.

Now those of you who do not have an opinion on whether or not the U.S. would confiscate Gold, I would urge you to consider this: In 1933 Gold coins were at actual currency. You carried them around in your pocket and used them just like you would dollar bills, five dollar bills, ten dollar bills in today’s world. They were a currency.

When the confiscation act came up in the United States, the government knew where to find the coins. They were in the banks. 90% of all the Gold was in the banks. It was very simple for the government to go to the banks and say here is a bunch of paper money give me your Gold. They did not make any attempt really to confiscate Gold from people individually, (they never went door to door,) they just asked the citizens to turn in their stuff and for the most part the citizens did turn it in. Many U.S. citizens sent huge amounts of gold to Europe because many still had friends and family over there. Much of the pre 33 Gold supply that we see in the United States now comes from Europe from those days. There was actually only one case prosecuted by the United Sates government on Gold confiscation and they lost on a technicality.

In today’s world, it can be argued that people aren’t going to give up their Gold. How much would Gold have to be worth for it to be cost effective to get the National Guard to go out door to door?

There are some great reasons to buy Pre 33 Gold. It is historical, it is beautiful, and it has collectability value over and above the bullion content that can go up and down as well. There’s great reason to buy those kinds of coins. I just don’t think the reason to buy them is that the government might come and confiscate it.

Everyone can have an opinion on that. Once again, if you are fearful of that, then certainly buy collectible items because that is something that cannot be confiscated as long as the rules were the exact same as they were in 1933.