The Gold Correction Is Not Over

Legendary commodity investor Jim Rogers has never been shy about vocalizing his opinions about the investing world. In particular, Rogers has an affinity for commodities like ags and precious metals. Gold has been one of the most talked about hard assets of the last two years, as the metal soared to all-time highs, only to watch its price take a tumble in the months that followed. All along the way, Rogers had been calling for a correction for gold, and it is a sentiment that he still holds today.

Gold In a Free Fall

Since making highs in September 2011, the price of gold has dropped nearly 30%, as equities have rallied and investor interest in precious metals has waned. This has all happened despite the current $85 billion monthly printing from Ben Bernanke and the Fed, which many thought would spark inflation thereby sending gold higher. Thus far, inflation has stayed low and the appeal of gold has simply faded, as investors have increased their risk appetites and sought higher yielding securities.

  • Dow Jones 30,000 Trigger Leaked by 27-Year-Old Stock Research Firm CLICK HERE
  • The Inevitable: Dow Jones 30,000 CLICK HERE

With the threat of QE ending and markets maintaining a bullish momentum, the outlook for gold looks more bleak as the days go on, fueling Rogers’ comments that gold has yet to finish its current correction.

Rogers on Gold

One of Rogers’ major sticking points was the fact that gold had 12 straight winning years, something that is unheard of for a commodity. In fact, the SPDR Gold Trust ETF (NYSEARCA:GLD) and iShares Gold Trust ETF (NYSEARCA:IAU) have never had a down year for as long as they have been around. 2013 is shaping up to be a poor yield for gold, and Rogers does not see it ending anytime soon.

“Until it scares a lot of people, the correction is not over. I would certainly like the correction to be over this afternoon and see gold go to $2,000 or to $3,000, but that’s not reality,” said Rogers. He did maintain that while he was not currently buying the asset, he also was not selling, as he firmly believes that gold will resume its bull market at some point over the current decade.

Thus far, Rogers has been right on the money with his predictions for gold over the last two years, granting more weight to his recent comments. If gold continues to fall over the coming months, it could be an enticing entry point for investors looking to time the bottom of this precious asset.

Source: http://www.minyanville.com/trading-and-investing/commodities/articles/Jim-Rogers253A-The-Gold-Correction-is/6/18/2013/id/50408

Chart Of The Day: When ETF Paper Beats Gold Rock

Demand for physical gold across the world continues to surge at an unprecedented pace leading India to blame its soaring current account deficit, sliding currency and even deteriorating economy on it (even if failing in its attempts to regulate demand for the yellow metal), and yet gold continues to slide. How come? One word – paper, or rather, ETF paper.

And more vividly, the combined holdings of GLD and IAU.

  • Dow Jones 30,000 Trigger Leaked by 27-Year-Old Stock Research Firm CLICK HERE
  • The Inevitable: Dow Jones 30,000 CLICK HERE

So, for now, paper does indeed beat rock.

Source: http://www.zerohedge.com/news/2013-06-18/chart-day-when-etf-paper-beats-gold-rock

Gold ETFs: Six Straight Months of Outflows

After consecutive years of higher gold prices, traders have finally begun letting go of the precious metal, with gold exchange traded funds experiencing their sixth straight month of outflows.

The SPDR Gold Trust (NYSEArca: GLD), the largest gold-related ETF, lost $2.9 billion in assets over May, according to IndexUniverse. Meanwhile, the ETFS Physical Swiss Gold (NYSEArca: SGOL) shrunk by $89.4 million and the iShares Gold Trust (NYSEArca: IAU) saw $371.5 million in outflows.

Overall, gold exchange traded products saw $5.7 billion in outflows last month, bringing year-to-date redemptions to $23.9 billion, according to BlackRock research note. Total gold ETP assets now sit at $96.2 billion, or 31.9% lower from the $141.2 billion at the end of 2012.

  • Dow Jones 30,000 Trigger Leaked by 27-Year-Old Stock Research Firm CLICK HERE
  • The Inevitable: Dow Jones 30,000 CLICK HERE

BlackRock analysts attribute the rapidly declining interest in gold to the growing speculation that the Federal Reserve’s monetary easing policies could end in the near term as the economy improves, which would force up interest rates. Consequently, a stronger U.S. dollar, greater demand for equities and shift away from traditional “safe haven” assets.

Gold futures were trading around $1,397 per ounce Tuesday.

Gold prices dipped below $1,400 Tuesday on concerns that India, the largest consumer of gold, would restrict imports, reports Lara Denina for Reuters.

“The news that the RBI will curb imports of gold by agencies has weighed prices down today as it is a wider restriction and could imply lower imports of gold into the country,” Societe Generale analyst Robin Bhar said in the article.

Despite recent correction in gold, investors should not shy away from the asset class altogether.

“While gold has historically been seen as a potential cash alternative in periods of economic uncertainty and a hedge against inflation concerns or a weakening dollar, many invest in gold as a long-term holding due to its diversifying properties,” BlackRock said. “Gold has historically shown little to no correlation with other major asset classes, including commodities, and gold is a beneficiary of negative real interest rates which have persisted for some time in many developed economies.”

For more information on gold, visit our gold category.

Max Chen contributed to this article.

Full disclosure: Tom Lydon’s clients own GLD.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

Source: http://www.etftrends.com/2013/06/gold-etfs-six-straight-months-of-outflows/

p5rn7vb