Gold recovers on fresh demand; silver remains weak

Gold prices recovered by Rs 85 to Rs 27,310 per ten grams at the bullion market in the national capital on emergence of buying by jewellers and retailers at prevailing levels even as the precious metal weakened overseas.

However, silver remained under pressure on sluggish demand from consuming industries and fell by Rs 460 to Rs 36,140 per kg. Traders said emergence of buying by jewellers and retailers at current levels mainly supported the upside in gold prices but a weak trend in gold in global market limited the gains.

Globally, gold traded a shade lower at US $1,194.20 an ounce in New York on . In Delhi, gold of 99.9 and 99.5 per cent purity prices were up by Rs 85 each to Rs 27,310 and Rs 27,110 per ten grams respectively.
Sovereign, however, continued to be traded at last level of Rs 23,700 per piece of eight gram.

Silver ready declined further by Rs 460 to Rs 36,140 per kg on reduced offtake by consuming industries but silver weekly based delivery rose by Rs 330 to Rs 36,940 per kg on speculative buying. Silver coins also dropped Rs 1,000 to Rs 59,000 for buying and Rs 60,000 for selling of 100 pieces.

Laws to make the manipulation of market benchmarks a criminal offence – sparked by the Libor rigging scandal – will also cover currency, gold, oil and silver markets by 1 April, the government has said.

City of London

The move announced on Monday is the latest by the coalition government to clamp down on malpractice in the City of London, whose reputation has been further tarnished this year by the exposure of traders colluding to manipulate currency rates.

“Ensuring that the key rates that underpin financial markets here and around the world are robust, and that anyone who seeks to manipulate them is subject to the full force of the law, is an important part of our long-term economic plan,” George Osborne said.

Under the law, people found guilty of manipulation can be jailed for up to seven years. It was originally introduced to cover the London interbank offered rate (Libor) market after a global manipulation scandal which resulted in banks being fined billions in 2012.

The Treasury said seven benchmarks including the dominant global benchmark in the $5.3tn-a-day currency market – the WM/Reuters 4pm London fix – would be subject to the law, pending a consultation by Britain’s financial watchdog.

The EU has criminalised the rigging of financial market benchmarks after the Libor scandal, but those laws will not take effect until 2016.

A former City trader was arrested last week in connection with a criminal investigation into allegations that bank traders tried to manipulate currency markets. According to the Financial Times the trader had worked for Royal Bank of Scotland.

Gold prices ended the U.S. day session modestly lower and closed at a three-week low close Tuesday. The precious metal saw selling pressure following a U.S. GDP report that was hotter than expected and which in turn boosted the U.S. dollar index to a four-year high. Some more technically related selling pressure was also featured in gold, following Monday’s losses. Thin trading conditions this week are exacerbating price moves in many markets, including gold and silver. February Comex gold was last down $4.30 at $1,175.50 an ounce. Spot gold was last down $1.60 at $1,175.50. March Comex silver last traded up $0.022 at $15.71 an ounce.

The main U.S. economic report for this week showed the third-quarter gross domestic product report come much stronger than expected, at up 5.0%, year-on-year. The GDP figure was expected to be up 4.3%, versus the previous reading of up 3.9%. The U.S. dollar index rallied to a four-year high in the immediate aftermath of the GDP report, and gold prices sold off.

Trading activity faded as the day wore on Tuesday, ahead of the Christmas holiday Thursday. Look for trading volumes in most markets to remain light until the new year begins.

The Russian ruble has stabilized this week, following last week’s serious erosion against the U.S. dollar and other major currencies. Reports Tuesday said the Russian central bank sold $420 million of its foreign currency reserves last week to support the beleaguered ruble.

The London P.M. gold fixing is $1,175.75 versus the previous A.M. fixing of $1,179.50.

Technically, gold bears possess the overall near-term technical advantage. The gold bulls’ next upside ear-term price breakout objective is to produce a close above solid technical resistance at last week’s high of $1,225.00. Bears’ next near-term downside price breakout objective is closing prices below solid technical support at $1,150.00. First resistance is seen at today’s high of $1,184.90 and then at $1,190.00. First support is seen at Monday’s low of $1,170.70 and then at $1,160.00.

March silver futures bears have the firm overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the December high of $17.355 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $15.00. First resistance is seen at $16.00 and then at Monday’s high of $16.175. Next support is seen at Monday’s low of $15.53 and then at last week’s low of $15.25.

Selling your old unwanted gold is big business. You always want to get a good price. With the up-and-down prices in recent years, finding out the real experts among the flock of gold buyers can be tricky. You don’t know which one could be trusted. But good thing is that it is not like buying gold-If you know the following guide and tips and do your research, you won’t likely to be fooled or ripped off. Remember you are the one who can decide to sell your gold or not.

Two variables in the gold purchasing formula never change: the karat and weight. But the daily spot gold price can fluctuate by the hour. And the price any jeweler or gold traders is willing to pay varies widely, as they balance their profit margin.

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Please check our last article: Know how your gold value is determined before you decided to sell your gold for more information about karat and weight.

Gold buyers are not bound by any restrictions when it comes to buying scrap gold. They can give you 100 percent of that day’s gold value and make nothing, or they can give you 10 percent of the day’s value and hope to make 90 percent when they sell it. An established, reputable jeweler will generally pay at least 50 percent of the daily spot gold price.

A jeweler or gold buyer collects gold and sells it to a refinery, which often pays more than 90 percent of market value. Scrap gold is then melted down and sent on to other, larger, refineries. Stones, however, are not sent to refineries. So, it is good to ask about them when discussing your jewelry with a gold buyer.

If your jewelry has stones, pay close attention. This step separates the experts from the amateurs. Experts have a way of estimating, to a fairly accurate degree, the weight of the stones without removing them.

This means you will get a more true value of both the stones and the gold. If the stones are valuable, the jeweler should inform you of their worth, and discuss your options for keeping them. The amateurs will often guess at the weight and value of the stones, and many won’t even make getting them back an option.

A reputable jeweler will offer to remove any stones from pieces you are selling and return them to you, though there is often a price for having this work done. Some stones will be too small or chipped to be of any value, but a trustworthy jeweler will explain this to you and offer to return any stones of significance.

Even a large diamond will only have a small effect on the overall weight of a piece of gold jewelry. Don’t accept being told, therefore, that stones make up the majority of the weight, thereby reducing the amount of gold value.

When growth slows in capital markets, the bankers’ daisy-chain of credit and debt breaks down; setting in motion defaulting debt which ends in recession, deflation or, in extreme cases, a deflationary depression.

A deflationary depression is a fatal monetary phenomena where the velocity of money—circulating credit and debt—falls so low capital markets are no longer self-sustaining. This happens after the collapse of massive speculative bubbles such as the collapse of the 1929 US stock market bubble which resulted in the world’s first deflationary depression, the Great Depression of the 1930s.

money_in_the_system_1920_1940

money_in_the_system_1920_1940

Throughout history, gold and silver have offered safety in times of economic chaos. Today is no different. What is different is the response of governments and bankers to the collapse of the current economic paradigm—the bankers’ war on gold.

In the midst of the Great Depression, the US passed the 1934 Gold Reserve Act which prohibited the ownership of gold by US citizens, forcing Americans to keep their wealth invested instead in capitalism’s paper assets.

The Gold Reserve Act outlawed most private possession of gold, forcing individuals to sell it to the Treasury, after which it was stored in United States Bullion Depository at Fort Knox and other locations. The act also changed the nominal price of gold from $20.67 per troy ounce to $35. This price change incentivized foreign investors to export their gold to the United States, while simultaneously devaluing the U.S. dollar in an attempt to spark inflation. — http://en.wikipedia.org/wiki/Gold_Reserve_Act#U.S._economic_historical_narrative

The attempt to ‘spark inflation’ in order to overcome a deflationary depression is the 1930s version of today’s similarly futile ‘inflation-targeting’. The resultant rise in the consumer price index from 1934-1937 was only nominal and, by 1938, powerful deflationary pressures had again re-exerted themselves and the US and the world would remain mired in a moribund deflationary depression for the remainder of the decade.

CPI_1922_1940

CPI_1922_1940

Although the devaluation of the US dollar against gold by the Gold Reserve Act didn’t ‘spark’ the inflation bankers hoped would end the 1930s depression, it would cause large amounts of gold to flow into the US Treasury after 1934 as foreign sellers took advantage of the US Treasury’s offer of a 70% higher price for gold.

US_Gold_Reserves_1930_today

US_Gold_Reserves_1930_today

In 1944, this unprecedented flow of gold to the US allowed the US to make the dollar fully convertible to gold, officially making the US dollar the world’s reserve currency at Bretton-Woods. However, due to excessive military spending, the US would overspend its entire hoard of gold by 1970, forcing the US to suspend the gold backing of the US dollar in 1971.

When the US ended the gold convertibility of the US dollar, the US also set in motion capitalism’s end game; as the removal of the bankers’ golden fetters (which previously tied money creation to gold reserves) now allowed governments and banks the fatal freedom to print money and create credit without limits.

US_Money_Supply_1959_2010

US_Money_Supply_1959_2010

http://www.financialsensearchive.com/fsu/editorials/bms/2006/0511.html

The final link between the dollar and gold was broken. The dollar became nothing more than a fiat currency and the Fed was then free to continue monetary expansion at will. The result… was a massive explosion of debt. — John Exter quoted in Gold Wars, Ferdinand Lips, Foundation for the Advancement of Monetary Education, New York, 2001

federal_debt_after_gold_standard_1966_2013

federal_debt_after_gold_standard_1966_2013

It was the explosive growth of money and credit after 1971 that would set in motion Ludwig von Mises’ ‘crack-up boom’. Excessive money printing and credit creation would lead to a series of larger and larger speculative bubbles which inevitably would culminate in monetary chaos.

The credit boom is built on the sands of banknotes and deposits. It must collapse… If the credit expansion is not stopped in time, the boom turns into the crack-up boom; the flight into real values begins, and the whole monetary system founders. — Ludwig von Mises, Human Action, 1949

GOLD AND DEFLATIONARY DEPRESSIONS
Although the ownership of gold by US citizens was outlawed in 1934, the shares of Homestake Mining, the world’s largest gold mining company, acted as a proxy for gold during the Great Depression giving investors the same protection gold has given throughout history in times of monetary distress.

[Shares in] Homestake Mining.. rose from $65 per share in 1929 to more than $300 per share in 1933 and then climbed to a $480 bid and $534 ask in December of 1935…During the next six years after the 1929 stock market crash, Homestake Mining paid out a total of $128 in cash dividends. Its dividend in 1929 was $7 per share which then climbed to a staggering 1935 dividend of $56 per share…Homestake Mining earned a compound rate of return of 35% per year from 1929 thru 1935, excluding dividends.[bold, mine] — http://www.worststockmarketcrashes.com/featured/homestake-mining-after-the-1929-crash/

Today, the world is on the verge of another, even greater deflationary depression than the 1930s Great Depression. But governments and bankers have pooled their considerable resources to hide that truth from the public in order to protect their vast wealth and power achieved through their use of paper money and leveraged debt.

Nonetheless, powerful deflationary forces unleashed by the collapse of today’s even larger speculative bubbles—the 1990 Nikkei bubble, the 2000 dot.com bubble, the 2008 US real estate bubble and the serial global real estate bubbles—are again moving through global economies; and, just as in the 1930s, the velocity of money is now so low capital markets are no longer self-sustaining.

Velocity_M2_1960_2014

Velocity_M2_1960_2014

If today’s investors knew that gold provided not only safety but explosive profits in times of economic chaos, the bankers’ paper markets would have emptied long ago as the majority of investors would have bought gold at the first sign the bankers’ house of cards could go up in flames.

But most investors didn’t know and didn’t buy; and, because of the bankers’ ongoing war on gold, they still haven’t.

This is the time of the vulture, for the vulture feeds neither upon the pastures of the bull nor the stored up wealth of the bear. The vultures feeds instead upon the blind ignorance and denial of the ostrich. The time of the vulture is at hand. — DRSchoon, Time of the Vulture, 3rd ed. 2012

In The Price of Gold and the Art of War, Part I and Part II, I explained how the bankers’ war on gold forced down the price of gold between 1980 and 2000. Next, in The Price of Gold and the Art of War, Part IV, I will explain gold’s price rise after 2000, how the bankers’ responded and how high the price of gold could go in the bankers’ end game.

In my current Dollars & Sense video on youtube, The Economy 2014/2015, I explain the economy in terms that can hopefully be understood by most observers, see https://www.youtube.com/watch?v=YHQNYUdEsGc&feature=youtu.be

As we continue to move deeper into uncharted territory, I believe that good times will succeed the bad times, that love will replace hate and that peace and goodwill towards men and women will prevail.

Buy gold, buy silver, have faith.

Gold Price Forecast 2015: The gold price looks like it will end 2014 down, rounding out three years of weakness for the metal. That makes the outlook for gold in 2015 even more anticipated than previous years…

The biggest questions around gold’s direction in 2015 include: Is gold finally done consolidating? When will it regain its bullish trend? Is gold a good buy today?

Let’s take a look at all the factors to consider…

How the U.S. Dollar Will Affect Gold Prices in 2015

gold price forecast 2015One of the biggest headwinds for gold prices this year has been the U.S. dollar. So far this year, the U.S. Dollar Index is up from 80 at the beginning of July to about 88.5 right now. That’s a 10.6% move in just five months – huge for any currency.

gold-london.fix-Jan-2014-Dec.2014

Now the U.S. dollar is at a level not reached since July 2009, in the immediate aftermath of the financial crisis.

A stronger dollar means fewer of them are needed to buy the same quantity of gold. The gold price can still rise simultaneously with the dollar, but it’s more difficult.

gold price forecast 2015 dxy

gold price forecast 2015 dxy

We could see the U.S. dollar continue to strengthen into 2015. The most influential central banks across the globe are aggressively printing money and either keeping interest rates low or actively lowering them. Japan, Europe, and China are all battling to weaken their currencies.

Overall, though, I don’t expect the dollar to continue to weigh too much on gold’s advance, because central banks will be desperate to get inflation going. And at some point the dollar’s rise will be problematic, so expect the U.S. Federal Reserve and U.S. Treasury to start “talking down” the dollar before too long, which should help the gold price.

Asia’s Surging Demand Will Move Gold Prices in 2015

Another big support for gold is demand, especially from Asia.

Chinese gold demand has been strong and growing rapidly, especially since 2008. According to the China Gold Yearbook, it has nearly doubled from 1,141 tonnes in 2012 to 2,199 tonnes in 2013. What’s more, it’s expected to grow nearly 50% to more than 3,100 tonnes in 2014.

And then there’s the wild card: