Gold And Silver About To Make A HUGE Breakout?

FOMC members keep on repeating, like a mantra, that the Federal Reserve wants to hike interest rates still in 2015. Although the media is ‘hanging on the lips’ of the FOMC and U.S. Fed, it seems that the market has some other thoughts. Whatever happens in the ivory tower of central planners, rate hike or not, their mantra is going on for 5 full years now. No surprise that the market is transitioning in a state of disbelief.

One of the consequences of the rate hike hype was the crash of precious metals prices in 2013. The market truly overreacted, and sent gold, silver and miners into a truly epic bear market state.

Meantime, it seems that the precious metals complex is stabilizing. Given the growing disbelief in the interest rate hike, even precious metals bears are leaving the arena. As explained earlier this week, the number of bullish gold indicators is growing rapidly, suggesting a trend change is close.

The above observation is also reflected in the longer term precious metals charts. Recent price action is becoming more and more constructive with Gold (NYSE: GLD), Silver (NYSE: SLV) and Junior Gold Miners (NYSE: GDXJ) all pushing against their downtrend lines. Chart courtesy: Short Side Of Long.


The above chart shows that a HUGE breakout is now becoming a real possibility, and that gold traders seem to be anticipating (or speculating) that FOMC won’t rise rates in 2015, as noted by Short Side Of Long. Furthermore, if the stock market and economy weakens, more and more of the commentary could turn towards dovish views of more QE easing. One thing is for sure, hedge funds and other speculators are definitely underinvested towards this sector, as evidenced by the following chart. A strong contrarian signal !



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Gold Price Forecast: Goldbugs Could Have the Last Laugh in 2016

Gold Price Outlook: This Could Send Gold Prices Soaring in 2016
Gold prices had a slight rebound last week, supported by the U.S. Federal Reserve’s decision not to raise interest rates.

The yellow metal has taken quite the beating in market trading this year, as expectations of a Fed rate hike continue to mount. Higher interest rates would mean that income-generating assets will become more attractive to investors than commodities such as gold and silver, which do not generate income but instead appreciate in value over time. This would then lead to uplift for the

The post Gold Price Forecast: Goldbugs Could Have the Last Laugh in 2016 appeared first on Profit Confidential.

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China Now Fifth in World Gold Holdings

In his article for Bloomberg Business Ranjeetha Pakiam takes a look at China’s recent accumulations in gold and how the country now compares in the world league table on gold holdings. He observes that there is a deliberate policy of increased transparency in China “as the country improves data quality, increases its presence in commodities trading and promotes the international role of the yuan”.

  • China has overtaken Russia to become the country with the fifth-largest gold hoard
  • China’s accumulation of physical gold is being tipped to continue by market experts
  • Monthly reporting increases Chinese transparency after years of mystery


Today’s Gold Prices: USD 1122.50, EUR 1000.08 and GBP 739.12 per ounce.
Yesterday’s Gold Prices: USD 1124.60, EUR 1001.16 and GBP 741.36 per ounce.

Gold in GBP – 1 month

Gold closed at $1127.50 yesterday with a $4.40 loss on the day. Silver was up $0.05 at close to $14.64, a gain of 0.34%. Euro gold fell to about €1002, platinum remained at $914.


Gold ends lower for third straight session – MarketWatch
Platinum Extends Slide to Lowest Since 2008 Amid Demand Concerns – Bloomberg
Platinum poised for worst quarter in seven years on Volkswagen scandal – Reuters
Asia shares rally, but on track for worst quarterly loss in four years – Reuters
Traders Flee Emerging Markets at Fastest Pace Since 2008 – Bloomberg


Banks should be afraid, disruption of financial services has only just begun – The Telegraph
World  set for emerging market mass default warns IMF – The Telegraph
Britain’s buy-to-let boom is a growing risk to the economy, could spark a house price crash – MailOnline
Obama Deifies American Hegemony — Paul Craig Roberts
It’s Time to Get Your Gold Out of the U.S. –

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Gold For Cash Through A Pawn Shop

It was only a couple of years ago when ‘gold for cash’ was a raging trend in the Western hemisphere. With gold prices going through the roof, and the financial crisis creating great damage for quite some households, many people found their way to gold shops in order to exchange their jewelry for cash.

That trend started to fade when gold prices came down, and central banks globally intervened in financial markets with a flood of liquidity.

Meantime, the ‘gold for cash’ phenomenon is not very visible anymore in the streets. Online, however, there are still quite some places where individuals can sell their gold and silver bars / jewelry.

A common place to offer an individual’s precious metals is a marketplace, as there are many to be found on eBay, the largest marketplace worldwide. However, with the advance of the internet, products and services can be offered across many stores in search for the most competitive bid.

Another way to offer your metal or jewelry is through a pawn shop. As explained by Wikipedia, a pawn shop offers secured loans to people, with items of personal property used as collateral. The word pawn is derived from the Latin pignus, for pledge, and the items having been pawned to the broker are themselves called pledges or pawns, or simply the collateral.

It becomes even more interesting when looking across pawn shops for the most competitive bid. One of the players offering such a service is who helps find the most convenient pawn shop offering the most money for your metal.

With gold and silver making a long term bottom, we believe prices will start rising from here. Whether they will reach their all-time highs remains to be seen, but as soon as precious metals prices are on the rise again, we expect gold and silver through pawn shops to gain in popularity.


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Negative Interest Rates And Cashless Society Are Theft

Global Gold Switzerland talks to Thomas Bachheimer, expert in financial markets and President of the European chapter at the Gold Standard Institute. This is an excerpt from the Global Gold Outlook Report (subscribe here).

Return to national currencies in the EU

When it comes to currencies, one of the favorite topics that Thomas Bachheimer tends to analyze, he believes a return to national currencies is of great benefit to nations. What exactly are the benefts of ending the Euro?

Diferent nations have diferent economic systems and their economic cycles are not in sync. In order to be competitive, nations need free exchange rates so they can devalue or increase the value of their currency as deemed appropriate. This mechanism is not available in a rigid currency system such as the Euro. The surplus countries, such as Germany, and the ailing economies, such as Greece, both sufer because they cannot adjust the value of their currency. Picture a bicycle race in a mountainous terrain: Some cyclists will still be on level ground, while some others are on a steep incline and the advanced group might have already mastered the mountain. Now, imagine that all cyclists have only one gear and thus cannot adapt to the diferent circumstances. Some cannot accelerate on the plain and others cannot shift down gears to get up the mountain. All sufer and nobody benefts. This destroys the entire cycling team – or much worse, the entire Euro area!

The European states are moving towards a cashless society. If this is the way the ECB wants to go, they could use Greece as a test case for negative interest rates, which, by the way, are nothing but theft. The frst lowering of the interest rate due to an economic reason (Greenspan in July 1996) was theft and redistributed wealth away from labor towards capital (from the hard-working to the rich). All subsequent measures (the spiral of intervention) such as QE I- III, ESM, negative interest rates, etc. are only stealing from the defenseless people by those who have planned and managed this monetary system.

Unfortunately, this is like stealing from the peoples’ bank accounts to repay debts without diluting the Euro as a whole.

Oil should be traded in gold, not U.S. dollars

According to Thomas Bachheimer, we have limited resources of oil and an unlimited measurement through the currency that is used to trade it, i.e. the US Dollar. In other words, the amount of circulated US Dollars is increasing, while the amount of oil is dropping. Given that, oil should be traded in gold.

The rationale behind that idea is that we must not trade the most important commodity of the planet with the illusion of a currency that is increased without limit or rule. There is too much playing fast and loose going around with energy prices and consumers. Producers and the investors (in oil exploration and investments) were exposed to unstable circumstances. The pricing of the oil is unfair for most market participants. This is all done to support the illusion of a fat currency that dominates world trade. Therefore, something that is not increasable, honest and independent is needed. In my opinion, we don’t necessarily need gold. We just need something that enjoys the trust of market participants. Unfortunately, I don’t know any other commodity that fulflls the same characteristics based on emergence, extraction, storage, and stock-fow ratio.

Physical gold has strong global demand

Physical gold is flowing in large quantiaties from West to East, particularly China, India and Russia. Why are those countries accumulating physical gold, and are they heading for gold-based currencies?

It is clear to all interested parties, how much gold is moving from West to East. This development started in China. The country has strong economic growth, enormous domestic demand, great export opportunities, and since 2009 they started making a move towards gold. In the beginning, these developments were noticed by the West. However, it was not considered to be important. China has increased their gold reserves from 0.8% to 1.6%. That was not considered to be very much. Only the statement made by the then governor of the Chinese Central Bank, that gold holdings of other state entities could be taken over by the central bank in a matter of seconds, suddenly made people pay attention. Since China is the biggest producer of gold in some quarters, it means the Chinese are able to buy gold relatively unnoticed in the domestic market. It shows that they are serious. Despite being able to buy gold covertly, they gathered what was possible in the world-market. There are many numbers circulating. As a result, a serious estimate regarding the quantity of the Chinese gold reserves is not possible.

It has to be said at this point that China is making a clear step into the right currency direction. However, they do it with caution. They are gradually moving in that direction. However, it’s still a long way from having a gold standard. Nevertheless, they have begun.

Regarding the heartland theory or the Silk Road, we have to understand that China’s and other countries‘ gold will establish trust for the new development bank and therefore afect the future. With all due respect to this theory, I would like to close with the following old wisdom: “He who has the gold, makes the rules.” And the gold is in Asia. This continent will set the fortunes of the world in the 21st century and I believe the downfall of the USA is therefore sealed. We can just hope that the USA will be civil enough to push the reset-button like the USSR did 25 years ago.

Source: “Global Gold talks to Thomas Bachheimer” 

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Boehner Vows to Ram through More Deficit Spending

It’s campaign season, and that means non-stop media coverage of candidate polls, quips, gaffes, tweets, emails, controversies, lies, and scandals. It all makes for a good soap opera. Unfortunately, it’s almost all irrelevant in the big picture.

The media prefer to focus on the sideshow rather than the 800-pound gorilla in the room: the looming debt crisis. Nothing that comes out of a pundit’s mouth or a Hillary Clinton email will close the $210 trillion long-term fiscal gap the U.S. now faces.

More immediately, Congress faces a likely debt ceiling debacle in the next few weeks.

First up, Members of Congress are considering full funding for Obama’s budget, and the fiscal year begins October 1st. Not surprisingly, the Obama administration’s new budget calls for spending much more than the federal government will take in. So Congress will need to raise the statutory debt limit within a few weeks in order to make that spending possible.

Disgraced Speaker Boehner Vows to Ram through More Deficit Spending before Exiting

To their credit, fiscal conservatives have just forced Speaker John Boehner (R-OH), a proponent of runaway deficit spending, to announce his resignation. But Boehner is defiantly vowing to ram through Obama’s budget and a higher debt limit before his exit in 30 days.

Meanwhile, the chief Republican in the Senate, Majority Leader Mitch McConnell, recently called efforts to rein in Obama’s spending proposals “an exercise in futility.”

If enough members of Congress raise enough of a fuss, they can still prevent a debt limit increase from going through. But the Treasury Department says the “extraordinary measures” it’s taking will only keep the government funded into November. So the threat of a default are already getting played up by the Obama administration, its apologists, and the media.

But the debt ceiling drama isn’t the debt crisis that Americans should be most concerned about. There is a near 100% chance that the government’s borrowing limit will ultimately be raised – just like it has been every other time Congress faced the specter of default. Despite some tough talk, enough politicians can be counted on to capitulate just in time to spare the country from having a government that lives strictly within its means.

Assuming the debt ceiling is eventually raised, the move will make the coming debt reckoning that much bigger. Officially, the national debt now comes in at $18.1 trillion – about equal to the nation’s total economic output for a year. Adding in all projected unfunded liabilities brings the total to about $210 trillion, as calculated by economist Lawrence Kotlikoff.

Meanwhile, demand for U.S. debt obligations appears to be on the wane. China, formerly the largest holder of U.S. government bonds, recently trimmed back its Treasury holdings by more than $140 billion. It also boosted its gold bullion reserves.

This could be the early stages of a longer-term trend that would not bode well for the bond market. “If Beijing dumped hundreds of billions of dollars of Treasuries, U.S. yields would skyrocket,” warns Bloomberg View columnist William Pesek.

The world’s largest holder of Treasuries is now Japan. Japan itself is one of the world’s most indebted nations, making its leveraged Treasury position precarious. How much longer will the Japanese be able to continue issuing debt in yen in order to fund purchases of dollar-denominated Treasuries?

And who will be able or willing to fill in the void left by waning demand from Japan and China? Europe is broke, and most of the rest of the world’s countries are too small, too poor, and/or too indebted to be a major financier of Uncle Sam’s massive spending habits. It’s difficult to see private investors flooding into Treasuries en masse without the incentive of significantly higher real interest rates.

The Fed Is Eager to Buy Government Bonds with Negative Real Yields

The problem is that the government’s financing model depends on issuing debt with a negative real yield – which is to say, an interest rate below the actual rate of inflation. The only institution with an outsized appetite for bonds that sport negative real returns is the Federal Reserve (whose balance sheet has swelled from $1 trillion to $4.5 trillion since the 2008 financial crisis). The Fed is Uncle Sam’s lender of last resort and has been the great enabler of runaway debt spending.

Since 1971, the federal government has failed to run a balanced budget 91% of the time. It’s no mere coincidence.

As financial analyst Mike Patton tells Forbes readers, “In July 1971, President Nixon ended the right to convert U.S. currency to gold and caused what became known as the ‘Nixon Shock.’ Without a gold standard, there was nothing to back the dollar, and the door was opened for increased Congressional spending.”

Absent a return to sound money and a gold standard or some other form of independent, objective restraint on Congress and the central bank, there’s little reason to believe a debt crisis can be averted. The temptation to paper over excess spending with excess currency creation is simply too great.

As the debt grows and the currency supply grows along with it – both at higher rates than the rate of economic growth – the debt crisis will likely morph into an epic inflation crisis. Prepare accordingly.

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Gold and Silver, Good and Bad Choices

A few bad choices come to mind:

  • 1971: President Nixon refused to exchange dollars for gold subsequent to August 15, 1971. He claimed it was “temporary” and blamed speculators. Gold prices and inflation soared.
  • Mid-1990s: The Federal Reserve dramatically increased debt and the money supply and encouraged the NASDAQ “” bubble. The bubble crashed in 2000 and destroyed $Trillions in assets and retirements. Investors preferred stocks and bonds until after they crashed. Gold and silver soared after 9-11.
  • 2001: “Unknown” people created the 9-11 disaster. That event became the excuse for the Patriot Act and wars in Iraq and Afghanistan. History shows that a number of empires collapsed following their attempts to conquer either Bagdad or Afghanistan. American foreign policy chose to ignore history and invade both. The costs have been outrageous with questionable results. Gold doubled and silver prices tripled between 2001 and 2006.
  • 2004 – 2008: Banks and politicians encouraged the real estate bubble with easy money, “liar loans,” various derivative products, and delusions such as “real estate always goes up.” The real estate market crashed and partially caused the 2008 financial collapse. Pension underfunding, welfare expenses, food stamp participants, disability income, and the number of workers no longer in the job market have increased since then. Gold doubled and silver prices tripled between 2004 and 2008.
  • 2009 – 2015: Hope and change, QE, and ZIRP have been disappointing. Those Americans in the bottom 90% are still hoping for better days but expecting little change. ZIRP has destroyed earnings from savings, damaged pension funds, and encouraged mal-investment. More ugly consequences of both QE and ZIRP will manifest in the next five years. Gold and silver will soar in the next 2 – 5 years.

The common elements in those “BAD CHOICES” were:

  • Increased debt;
  • Politicians;
  • Bankers;
  • And good timing for purchases of gold and silver.

Good Choices:

  • 1971: Buy gold at $42 and silver at $1.50
  • 1999: Buy gold at $280 and silver at $5.00
  • 2001: Buy gold at $260 and silver at $4.15
  • 2008: Buy gold at $800 and silver at $9.00
  • 2015: Buy gold at $1,100 and silver at $15.00

Of course we can point to many other bad and good choices over the past 45 years. Buying gold in early January 1980 and for much of the next 19 years was probably a bad choice, so do your own research to make good choices. While trading paper currencies for gold is, in my opinion, currently a good exchange, it is not always a good choice.


  • Physical gold and silver instead of unbacked debt based fiat currency.
  • Physical gold and silver instead of bonds that will eventually default.
  • Less foreign military involvement instead of more wars, expanded military actions, and the resulting increased taxes and inflation.
  • A 3rd party not owned by bankers and the military instead of a Republicrat or a Democan.

Make your own choices. Consider real money, not the digital and paper stuff.



Gary Christenson | The Deviant Investor

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