Tag Archives: Silver

Just A Minute!

Here’s Thursday’s ‘Just A Minute’ bringing you a 60 second summary what’s happening in the markets today:

Main Trading Events Of The Day: Several today including ECB Press Conference @ 13.30; USD Trade Balance & Unemployment Claims @ 13.30 GMT

Earnings Reports: General Motors Co; Earnings per share forecast: 88 cents. LinkedIn Corp; Earnings per share forecast: 38 cents.

WHAT WE’RE WATCHING TODAY

European Central Banks Set To Meet As Asian Stocks Rebound

A busy day on the markets with monetary policy decisions expected later in the day from the European Central Bank and Bank of England. While analysts don’t expect any action from either bank, focus will be on hints about future policy direction. Asian equities rebounded on the back of upbeat earnings reports and as investors went bargain hunting after recent selling, but caution prevailed ahead of Friday’s U.S. jobs report. U.S. indices ended little changed yesterday as investors reacted to a mixed bag of economic data. Attention now turns to Friday’s important U.S. payrolls report with traders hoping for a rebound after December’s disappointing reading. Another weak report could dent investor sentiment, which has been hurt by the turmoil in emerging markets, slowing Chinese growth and a reduction in U.S. stimulus.

Gold Retreats Again as Silver Extends Advance

Gold retreats once again, falling from the highest in over a week as gains in equities and emerging-market currencies slowed demand for alternative investments. Silver extended an advance to head for the longest rally since December. Bullion for immediate delivery traded at $1,255.67 an ounce from $1,257.92 yesterday, when prices reached $1,274.74, the highest since Jan 27. Silver rose 0.1 percent to $19.9136 an ounce, a fifth day of gains capping the longest winning run since the period to Dec. 27. Gold advanced 3.2 percent in January, the first monthly gain since August 2013 as the MSCI All-Country World Index of equities sank 4.1 percent on concern that a rout in emerging markets would worsen. Silver yesterday jumped 2 percent, the most since Jan. 10 helping send its ratio to gold to the lowest in almost two weeks today.

Twitter Investors Twitchy Over User Growth Figures

Twitter yesterday reported its slowest pace of user growth in recent company history, lowering investors’ hopes that it can sustain its rapid pace of expansion and wiping out nearly a fifth of the company’s value in after-hours trading. Although Twitter posted better-than-expected fourth-quarter revenue of $243 million in its first results as a public company, investors were unnerved by the weak user growth, as well as a severe decline in timeline views. Some analysts warned that its valuation looked increasingly bloated. On a more positive note, the efficacy of its advertising business model which places ads inside users’ timelines every time they refresh appeared to steadily improve. Overall, the actual numbers are strong in terms of fundamentals, just not as strong as some people were hoping for.

That sums up today’s highlights. Remember to watch for those important earnings announcements later today. Keep in touch with us via Facebook, Google+ & Twitter for breaking news, educational information, trader tips and more. Trade only with the experts! We hope you have a profitable day on the markets.

Chinese Consumerism Props Up Gold Prices

Despite fears of commodities losing value this year and investor hesitation in buying into gold, the precious metal climbed to its highest level in three weeks on increased consumption in Asia, despite the lack of investing demand.

Last year, gold dropped 28 percent of its values, the most since 1981, as investors fled to rising equities and dampened inflation for store value. The Fed’s highly publicised talks regarding economic stimulus and last month’s decision to cut funds for bond purchasing from $85 billion to $75 billion played a big role in the market sentiment towards gold.

Despite investors’ hesitation, however, Chinese consumers are certainly taking advantage of the lower prices as shipments of gold to China more that doubled in the first eleven months of the year, as data from the Hong Kong Census and Statistics Department. The title of the world’s biggest bullion consumer has probably shifted from India to China, the World Gold Council said.

SPDR Gold Trust, the biggest gold-backed exchange-traded product, saw its holding deplete to 794.62 tons yesterday, the lowest since January 2009, according to reports published on the fund’s website. A sum of 552.6 tons was taken out in the past year.

Other metals have been showing upward movement as well. Silver for immediate delivery rose 0.2 percent, its fourth consecutive day of advancement. Platinum also climbed 0.2 percent, while Palladium fell 0.1 percent.

EU and US Indices Drop in Anticipation of Fed Meeting

The two-day Federal Reserved meeting scheduled for this month begins tomorrow and its advent has driven European and U.S. equity futures down along with silver. A slower-than-anticipated growth in Chinese manufacturing has sent Asian stocks near a three-month low as the yen strengthened.

Euro Stoxx 50 Index futures dropped 0.2 percent while Standard & Poor’s 500 Index contracts slipped 0.4 percent. The MSCI Asia Pacific Index fell 0.6 percent and Japan’s Topix lost 1.3 percent as the yen gained against all 16 of its major trading peers. Gold and silver declined by at least 0.2 percent and natural gas lost 1.4 percent. Only Brent cruse gained 0.4 percent with rebels refusing to open the ports of Libya.

With the U.S. economy and the job market showing signs of improvement and following the bipartisan budget passed by lawmakers, economists foresee a greater possibility that the Fed will start tapering stimulus soon. Today’s reports may show increased manufacturing in both the U.S. and the euro region.

THe market has been anticipating the tapering for a while down and some consider that the Chinese economy will drop its pace even more, reaching more sustainable levels.

The Future’s Bright…The Future’s Platinum

Platinum hasn’t been in the news much lately, yet global demand has hit record levels amid dwindling supply. With its price now sitting below its cost of production, pointing to further supply shortages, is there a case for buying platinum?

There is currently a record demand for platinum with a record of 8.4 million ounces needed this year. Just over three million ounces of that is needed by the car industry for catalytic converters and a further 2.75 million needed for jewellery. Demand has been steadily growing since 2009. Yet the platinum price has been steadily falling since mid-2011, when it hovered briefly around the $2,000 mark.

You may be excused for thinking that there has been an increase in supply but that isn’t the case. World platinum mine supply was fairly constant from 2007 to 2011, ranging between 5.9 million and 6.6 million ounces. But in 2012, that fell to 5.7 million and it hasn’t rebounded.

Around 75% of global platinum supply comes from South Africa, where production has been falling since 2011. Add in the cost of building the mine and compound deficits over time, platinum mining becomes a very expensive loss-making exercise. A mine can only lose money for so long before it gets shut down. At least four have closed this year already and now only higher-grade, more profitable rock is being mined pointing to further supply falls in the future.

South African platinum production therefore looks fragile as does the other main producer, Russia, where production has also fallen. In addition, the ratio of gold to platinum, low by historic standards is almost 1:1 just now i.e platinum costs about the same as gold. It’s not unusual for platinum to cost twice as much as gold.

Nevertheless, according to reports, the demand-supply deficit will grow as the above-ground stock will run out and the platinum price will rocket. So why has the price been falling in the face of such bullish fundamentals?

Historically, platinum tends to follow the same trend as the CRB index, following the same direction almost all of the time. The CRB is about 75% weighted to energy, grains, meats and softs, things that have nothing to do with platinum. Yet, where it goes, platinum goes and that has been the case for years. Commodities are in a bear market i.e. trending down and nobody knows when this will end but there is quite clearly a set-up for a supply squeeze and higher prices. The question is when? Platinum’s time will almost certainly come again, possibly sooner rather than later. Its future’s looking bright…

Silver and Gold Lose Trading Steam

Precious metals have been pushed down in the markets again on the prospect that the Federal Reserve will reduce economic stimulus as more reports indicate growth in the U.S. economy, with both gold and silver hitting their lowest points since the summer.

The Bloomberg U.S. Dollar Index, which measure the currency’s strength against 10 of its major peers, remained near its 11-week high since yesterday, with U.S. manufacturing picking up most speed in two years. The NFP report is expected to show an increase of 181,000 for last month.

The stronger U.S. economy has lessened investors’ faith in the store value of the precious metal which might see its first annual drop in 13 years. The minutes form the last Fed meeting were released on 20th November revealing that policy makers expected an improvement in the economy “in coming months” which has investors anticipating an early tapering of the stimulus. The next meeting will take place on 17th-18th December.

Gold for immediate delivery dropped 0.7 percent. Prices reached $1,212.47, the lowest since July 5. Bullion for delivery in February dropped 0.5 percent on the Comex in New York.

Canadian Stock Rise on Precious Metals’ Rally

The stocks of Canadian producers of precious metals received a boost after negative U.S. unemployment data were released yesterday and Janet Yellen indicated intentions for continued stimulus in her testimony in the U.S. senate as the nominee for Chairman of the Federal Reserve.

B2Gold Corp. rallied 5.1 percent with the price of gold reversing on five days of losses. Pan American Silver Corp. climbed 7.8 percent as silver gained. CGI Group Inc. (GIB/A), while Agnico Eagle Mines Ltd. gained 4.5 percent.

The raw-materials industry experienced a general lift with stock rising 1 percent in 8 out of 10 industries. Total trading volume exceeded the 30-day average by 11 percent.

The longest-running slump in gold since August broke off yesterday as gold jumped 1.4 percent The S&P/TSX Gold Index increased 2 percent with 22 of its 24 members advancing. Pan American Silver ralled 7.8 percent and Silvercrorp Metals Inc. increased 3.5 percent.

Technical Analysis Predicts 11% Losses for Commodities

Technical analysis by Bank of America Corp. sees commodities falling 11 percent in the upcoming weeks to their lowest levels since May 2010.

The Continuous Commodity Futures Price Index of 17 raw materials has been described as “on the edge of breaking down” by MacNeil Curry, the head of foreign exchange and interest-rate technical strategy at Bank of America in New York, and is reportedly expected to drop to 447.

An index of the six primary industrial metals traded on the London Metal Exchange is set for a second weekly drop, as are gold and silver for immediate delivery. In Chicago, corn and wheat are falling for a third consecutive week. Crude oil is charting a declining course for a fifth week in New York and arabica coffee reached its lowest point since 2006 yesterday.

The commodities measures closed yesterday at 503.99, marking a 9.1-percent drop for the year. Curry warns that a sustained break of 500, which he interprets as two closes below the 500-mark, would open an additional 10 percent slide.

Is The Price Of Silver Set To Double?

The current silver price is US$22 per ounce. This is a truly astonishing number for a few reasons. Back in 1980 an ounce of silver reached a high of $49.95. Despite all the money printing and financial chaos in the world in the past 33 years, silver has gone backwards. Unlike gold, silver has many industrial and medical applications. So investors are in direct competition with big industrial companies. In many cases there are no substitutes – if they don’t have silver they can’t produce. Industry needs it because it’s one of the best conductors of electricity, it’s the second best reflector of light behind rhodium (but at a fraction of the cost) and it’s very effective in killing germs. So demand is exploding in electronics, solar panels and numerous medical applications. Back in 1980 when silver was $49.95 total supply had risen 34% in the previous two years. Supply was growing quickly. By contrast, the global silver supply has actually fallen 2% in the past three years. JP Morgan, infamous among silver investors had virtually no silver in its warehouse in May 2011. But now, the bank has accumulated about 37.7 million ounces of silver which in today’s market is worth about $830m. Across the market as a whole, short positions stood at nearly 260 million ounces of silver in February of this year. Now, short positions have fallen to less than 20 million ounces. This is the smallest short position by commercial traders in more than a decade. For gold bullion prices to rise by 100%, gold would need to rise to $2,620 an ounce, however, it’s a price level we have yet to see. But the investible silver market is truly tiny because of all that industrial demand. In dollar terms, it’s only 4.5% of the size of the gold market. So for silver prices to rise 100%, they would only have to move to $44 an ounce—a price level we already saw in 2011. Isn’t that where we are heading?

Gold Rush Ahead?

Gold traded $1,660 an ounce on Friday, a 13 percent decline from its record high of $1920 set in 2011, when Europe’s debt crisis had its peak. After a substantial decline, some analysts are – quite audaciously – suggesting that gold could very well hit $13k in the next 10 years.

Writing at MSNCB, Javier David shows that regardless of the recent fall in gold price, the yellow substance still has many believers:

“Anthem Blanchard CEO of Blanchard Vault, a retail gold and silver supplier, maintains an eight to 16-year target on gold of $13,000 – an aggressive call even for a gold bug.”

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