– War “inevitable” if U.S. meddles in South China Sea – Global Times
– Senior NATO official warns that “we’ll probably be at war this summer”
– Soros warns of ‘New World Order’ and war with China
– Soros warns could be “on the threshold of a Third World War”
– Many countries in Pacific lay claim to strategically important and mineral rich islands
– Tensions between U.S. and China and Russia escalating
– War would have many facets including cyber-warfare and currency wars

George Soros
George Soros
The ‘war’ word is being increasingly heard internationally as the U.S., EU, Russia and China adopt provocative postures over various disputes including Ukraine and in the Pacific.

War with the U.S. is “inevitable” if the U.S. involves itself in the dispute which has arisen over the Spratley Islands in the South China Sea according to China’s state controlled newspaper the Global Times.

“If the United States’ bottom line is that China is to halt activities, then a US-China war is inevitable in the South China Sea” according to an editorial in the popular government paper.

China has since last year been taking over a greater part of the long-disputed Spratleys and has begun land reclamation projects to make the archipelago a part of its sovereign territory. The move angered many of its neighbours like the Philippines and Vietnam who also claim the islands.

Geographically, the archipelago is close to the Philippines, Malaysia, Brunei and the Philippines. However, China has maintained a presence in the region on and off for centuries which is the basis for its claim.

The islands are believed to be located over large reserves of undersea oil and are also strategically vital as a shipping corridor through which vast amounts of goods are shipped. The islands also provide a platform from which China could project military power into the afore-mentioned countries.

Tensions between the U.S. and China, while low-key in other regards, have been escalating with China responding angrily to U.S. reconnaissance flights in the region.

goldcore_chart2_28-05-15

The Global Times suggests that China is not daunted by a military conflict with the U.S. – “We do not want a military conflict with the United States, but if it were to come, we have to accept it.”

Indeed, The Wall Street Journal has shown that in terms of conventional warfare China is the undisputed heavyweight in the region with a massive airforce and navy – see infographic.

The Chinese are utterly scathing of U.S. “meddling” in the South China Sea, thousands of miles from its own borders and clearly views itself as the new hegemon in the region. This seemingly innocuous dispute has the potential to rapidly spiral out of control.

There are also simmering tensions between China and Japan.

Both have long held claims to the Japanese-administered islands — known as Diaoyu in China and Senkaku in Japan. Tensions have intensified in recent months, and observers fear that a political or military misstep could rapidly escalate.

In late 2013, China announced an air defense zone over the East China Sea, encompassing the disputed islands. The new policy would require airlines to give Chinese authorities their flight plans before entering the airspace designated by China.

Japan’s Prime Minister Shinzo Abe said the new policy “escalates the situation and could lead to an unexpected occurrence of accidents in the airspace.” The United States called China’s announcement “unnecessarily inflammatory.”

Military posturing is quietly reaching new extremes in Europe, the Mediterranean and the South China Sea and the provocative bluster is reaching new heights.

Separately, it is believed that a senior NATO official has warned that “we’ll probably be at war this summer.”

goldcore_chart3_28-05-15

Former NSA intelligence analyst John Schindler has said that a senior NATO official told him that the world would “probably be at war” sometime this summer. Although the tweet was retweeted over 1,000 times, the comment did not get any media coverage.

Finally, the ‘trumpets of war’ became a triumvirate when one of the most powerful men in the world today – George Soros – warned that we “are on the threshold of a Third World War.”

As China’s economy slows down, this could trigger a global military conflict as might other tensions in the region, Soros warned.

“If the transition runs into roadblocks, then there is a chance, or likelihood in fact, the leadership would foster some external conflict to keep the country united and maintain itself in power,” Soros said in remarks at a Bretton Woods conference at the World Bank.

“If there is a military conflict between China and an alley of the U.S., like Japan, it is not an exaggeration to say we could be on the threshold of a Third World War. It could spread to the Middle East, then Europe and Africa.”

Since Soros made his remarks, tensions between China and the U.S. have further escalated. China has released a new white paper which threatens military action unless the U.S. stops its current actions in the South China Sea.

If China’s efforts to transition to a domestic-demand led economy from an export engine falter, there is a “likelihood” that China’s rulers would foster an external conflict to keep the country together and hold on to power.

To avoid this scenario, Soros called on the U.S. to make a “major concession” and allow China’s currency to join the International Monetary Fund’s basket of currencies. This would make the yuan a potential rival to the dollar as a global reserve currency. In return, China would have to make similar major concessions to reform its economy, such as accepting the rule of law, Soros said.

An agreement along these lines will be difficult to achieve, Soros said, but the alternative is a brutal war.

“Without it, there is a real danger that China will align itself with Russia politically and militarily, and then the threat of third world war becomes real, so it is worth trying.”

The warning comes as Europe engages in some of its biggest ever war games — right on Russia’s front door. It’s a deliberate ploy, intended to warn regarding Ukraine but could be seen by Russia as a provocation.

War, if it comes, will be multi faceted and poses risks to markets. Modern warfare would involve many facets including cyber warfare and currency wars.

Geopolitical risk continues to be seriously underestimated by investors and will likely impact markets in the coming months.

Must Read Guide: 7 Key Bullion Storage Must Haves

MARKET UPDATE

Today’s AM LBMA Gold Price was USD 1,189.45, EUR 1,087.08 and GBP 775.94 per ounce.
Yesterday’s AM LBMA Gold Price was USD 1,187.85, EUR 1,088.07 and GBP 770.64 per ounce.

Gold fell $0.20 or 0.2 percent yesterday to $1,187.50 an ounce. Silver slipped $0.05 or 0.3 percent to $16.69 an ounce.

Gold in Singapore for immediate delivery was steady at $1,188.55 an ounce while gold in Zurich also flatlined in lack lustre directionless trading as gold continues to be capped below $1,200 per ounce.

Gold bullion seems to be taking trading direction from the U.S. dollar with no major economic data on the horizon. The dollar has continued its strength since Fed Chair Janet Yellen once again suggested last week that the U.S. Fed is set to raise interest rates later this year.

Although safe haven demand has waned for the yellow metal, the Greek debt crisis is still not solved and may bolster bullion demand once again. June 5th is Greece’s next payment due to the IMF.

European markets are mostly lower this morning although the FTSE is marginally higher, as talks on Greece continue to bear little fruit.

Yesterday, the new government met its international creditors in Brussels to discuss a possible reform deal to unlock its last tranche of bailout money. It desperately needs this money to make repayments to the IMF and ECB over the coming months.

While the Greek government hinted a deal was on the way, saying it was in the process of drafting an agreement, others were less optimistic. Hawkish German Finance Minister Wolfgang Schaeuble said he was “surprised” by Greece’s positive outlook, while European Commission Vice President Valdis Dombrovskis said the two sides still had “some way to go”.

Greece is one of the main topics on the agenda at the G7 meeting of finance ministers and central bank chiefs this week and there could come interesting developments from this.

In late morning European trading gold is up 0.07 percent at $1,188.35 an ounce. Silver is off 0.07 percent at $16.67 an ounce, while platinum is up 0.17 percent at $1,121.78 an ounce.

In Today: War on Cash. Tomorrow: War on Gold? he discusses the scenario that foresees central banks ban or punitively tax cash deposits. A number of commentators believe this would be positive for gold, arguing people will buy the precious metal instead of holding bank deposits, and/or use gold transactionally, which will increase demand for gold and its price.

But Bron is not quite so convinced.

If you’ve ever thought that forecasting the gold price was more luck than judgement, then check out Gold Price Forecasting, the Hard Core Academic Way. Odds are you’ve never seen a prediction that uses the following formula to compute the gold’s next moves!

Perth Mint Blog-Forecasting Gold Prices A Tricky Business-2015-05-26-001

The long and the short of this article is that it’s incredibly difficult to take into account all the “underlying variables” involved. And therein lies a warning about the next talking head you see on TV explaining gold will go up or down because of their view about one single variable they think explains all.

The gold price continued to range-trade on Thursday afternoon, making modest gains on a slightly weaker dollar and mixed messages out of Greece on the state of bailout negotiations.

Spot gold was last at $1,188.90/1,189.70 per ounce, up $1.70 on Wednesday’s close and having traded in an intraday range of $12 so far.

The dollar has pulled back from one-month highs hit earlier this week following weaker-than-expected US jobless claims at 282,000 against consensus at 271,000.

There are also mixed messages over the Greek debt crisis. German finance minister Wolfgang Schäuble and IMF chief Christine Lagarde have both said that more work needs to be done, following comments from Greek Prime Minister Alexis Tsipras who declared publicly that Greece is on the “final stretch” to secure the aid it needs.

Once again on Thursday, Greek officials were optimistic about a prospective deal being completed by the end of the week, while those on the creditor side were more cautious.

With the data calendar quiet on Thursday, the market is looking ahead to the second revision of US GDP growth in the first quarter on Friday, which could be revised into negative territory.

The previous estimate significantly undershot expectations at growth of just 0.2 percent. Friday’s figure might be lowered to contraction of 0.7 percent.

“Although the prospect of a weaker dollar and higher gold prices does not seem to be in vogue now, we think that a worse-than-expected revision to first-quarter US GDP on Friday could start swinging the pendulum on both markets the other way,” INTL FCStone’s Ed Meir said.

In other metals, silver was last three cents higher at $16.68/16.73 per ounce while platinum was up $1 at $1,114/1,119 and palladium was unchanged at $781/786.

– See more at: http://www.bulliondesk.com/gold-news/bullion-latest-gold-price-ekes-out-gains-market-looks-ahead-to-us-gdp-95403/#sthash.lw3z9eY2.dpuf

– See more at: http://www.bulliondesk.com/gold-news/bullion-latest-gold-price-back-under-1-200oz-as-dollar-strength-weighs-95198/#sthash.WCsyzVCG.dpuf

The gold price dropped under $1,200 per ounce during early Tuesday sessions as the yellow metal came under pressure from a stronger dollar following comments from the US Fed chair at the end of last week.

On Friday, US Fed chair Janet Yellen said that despite mixed signs on the US economy, she expected to go through with an interest rate hike this year – with many in the market predicting a September date.

Spot gold was last at $1,197.20/1,198, a $9 loss on the previous day’s close. In currencies, the dollar was firm against the euro at 1,0918.

“Unlike the Fed, other central banks are in full “easing mode” and are even contemplating expanding their stimulus (as is the case for China). All this should be, in theory, bullish for gold, but the precious metal has to contend with the offsetting bearish variable of a stronger dollar,” said INTL FCStone analyst Edward Meir.

“While we attribute the recent weakness to the strengthening of the US dollar, we are somewhat surprised that gold prices have failed to push higher given the sharp decline in US real interest rates of late – which should have, in theory, pushed gold prices higher, added FastMarkets analyst Boris Mikanikrezai.

Still, the gold price did find support from increased concerns that the Greek government might default on its June IMF payment.

“Over the weekend, Greek Prime Minister Alexis Tsipras said that Greece would not increase austerity measures, while the Greek interior minister said that without a deal, Greece could not and would not pay the IMF in June. The uncertainty weighed on Greek equities, which lost 3 percent,” said Credit Suisse in a note.

The data agenda will be US-focused today, with core durable goods, durable goods orders, HPI, flash service PMI, CB consumer confidence, new home sales and Richmond manufacturing data all set for release.

Silver at $16.85/16.89 was back under $17, while platinum at $1,138/1,143 was down $5 and palladium declined $1 to $779/784.

– See more at: http://www.bulliondesk.com/gold-news/bullion-latest-gold-price-back-under-1-200oz-as-dollar-strength-weighs-95198/#sthash.WCsyzVCG.dpuf

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27-May-2015 Everyday Sydney Gold and Silver Prices

Gold Price $1534/oz, $49.31/g
Silver Price $21.61/oz, $0.69/g

Call us 02 9231 2535 or go to Sydney Gold Traders to find out more live gold and silver price

Gold prices ended the U.S. day session solidly lower, fell below the key $1,200.00 level and hit a two-week low Tuesday. A strong rally in U.S. dollar index is a major bearish weight for the precious metals. Market place focus remains on the greenback, despite some developments recently that could be perceived as friendly for the safe-haven gold market. August Comex gold was last down $17.10 at $1,187.80 an ounce. July Comex silver was last down $0.306 at $16.745 an ounce.

The U.S. dollar has surged against its counterparts early this week, continuing a strong rally that started last week. The buck has appreciated in part due to safe-haven demand due to the Greek debt crisis. The dollar hit an eight-year high against the Japanese yen Tuesday and hit a one-month high against the Euro currency. The U.S. dollar index hit a one-month high Tuesday, following a technically very bullish weekly high close last Friday that gave the index a fresh boost of power to suggest the index can continue to trend sideways to higher in the near term. That’s not good news for the raw commodity sector.

Sharply lower crude oil prices Tuesday were the other “outside market” that also worked against the precious metals bulls.

Traders and investors in Europe and the U.S. came back from a long holiday weekend to news that Greece says it will run out of money before its next debt payment is due, unless a new deal is struck with its creditors soon. Greece and its lenders are negotiating new terms to extend Greece’s loan payments, but the lenders are demanding that Greece overhaul its economy. Reports say limited progress has been made in the talks. A European Central Bank official said uncertainty over the outcome of the Greek debt negotiations could destabilize the European Union’s financial markets. The Group of Seven industrial nations will meet in Germany at mid-week, to likely discuss the Greece matter, as well as other world economic and financial issues.

While the gold market is presently seeing little safe-haven demand from the Greece debt matter, that could change in a hurry if the situation with Greece and its debt burden deteriorates.

The U.S. dollar bulls got some more positive fundamental news in recent days when Federal Reserve officials sounded more hawkish on U.S. monetary policy. On Friday Federal Reserve Chair Janet Yellen said a U.S. interest rate hike “would be appropriate at some point this year.” And on Monday Fed Vice Chairman Stanley Fischer said the U.S. central bank will gradually raise interest rates in the next three or four years, to bring borrowing costs back to normal.

A hefty slate of U.S. economic data for released Tuesday was neutral to slightly upbeat, which also did not work in favor of the gold and silver market bulls.

The London P.M. fix is $1,185.40 versus the previous A.M. fixing of $1,194.00.

Technically, August gold futures prices closed nearer the session low and hit a two-week low today. Gold bears have the firm overall near-term technical advantage and have gained downside momentum. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,200.00. Bears’ next near-term downside price breakout objective is closing prices below solid technical support at the May low of $1,170.00. First resistance is seen at $1,200.00 and then at today’s high of $1,208.90. First support is seen at today’s low of $1,185.60 and then at $1,180.00. Wyckoff’s Market Rating: 2.5

July silver futures prices closed nearer the session low today. Silver bears have regained the near-term technical advantage. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at the May high of $17.775 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.00. First resistance is seen at $17.00 and then at today’s high of $17.18. Next support is seen at today’s low of $16.645 and then at $16.50. Wyckoff’s Market Rating: 4.0.

July N.Y. copper closed down 355 points at 277.55 cents today. Prices closed near the session low and hit a four-week low today. The key “outside markets” were fully bearish for copper today as the U.S. dollar index was sharply higher and crude oil prices were sharply lower. Copper bears have regained the near-term technical advantage. Copper bulls’ next upside breakout objective is pushing and closing prices above solid technical resistance at the May high of 295.60 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the April low of 266.00 cents. First resistance is seen at 280.00 cents and then at today’s high of 283.45 cents. First support is seen at today’s low of 277.30 cents and then at 275.00 cents. Wyckoff’s Market Rating: 4.0.