Tag Archives: spot price of gold

Gold Commitments of Traders Report – Update I

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Here is the data in chart format. Note, the general public is the LEAST BULLISH ON GOLD since the very beginning of the decade+ long bull move way back in 2001. You will recall that gold was coming off a twenty year bear market back then.

Even during the depths of the credit crisis in the latter part of 2008, the general public, in spite of a sharp crash in the price of  gold, still remained biased towards the bullish side, even though that sentiment took quite a hit during that downdraft.

Fast forward to this past week and you can see how rapidly sentiment towards gold, on the part of the small speculator, has been damaged. All I can say about this is if the Central Planners wanted to discredit gold as an alternative currency to the Dollar, they have certainly managed to do just that. They have gotten the entire speculative camp, hedge funds, other large reportables and the small speculators selling gold while the bullion banks and swap dealers are in the process of buying it.

Keep in mind that this is using the paper Comex markets as the benchmark against which most of the investment world leans when it wants to know what the price of gold is doing. Most people outside of the gold community do not even know what a gold coin dealer shop looks like or where even to find one. Mention the words, “spot price of gold” and you are liable to get someone asking why the metal is spotted.

Let’s keep a close eye on this to see if we can spot any shift in sentiment. Markets that have suffered such brutal maulings need some time to repair the psyche of those who have been on the wrong side of a move of that nature and been devastated as a result.

This is the reason that I am not in the camp with those who believe that we are now going to see an immediate rocket shot higher in gold. I can assure you as a trader that once you are on the wrong side of a trade of this nature, and watched your trading account or investment capital been blasted into the nether regions, you are in no special hurry to plunge right back into that market. You need time to lick your wounds. There are probably people out there who are swearing out loud right now that they will never even look at another ounce of gold, much less plop down money on a gold investment, especially a mining share!

This market will thus need some sort of healing process in my view to convince the skeptics that it is for real.

Those of us who believe in honest money, need to understand that the majority do not look at these things in the same manner in which we do. Thus, the mass exodus out of the Comex gold markets and the gold ETF. If gold can continue to stabilize here and avoid any further sharp downside plunges, that will go a long way to convincing some of the new skeptics that the worst is over and give some the confidence to wade back into the water.

Traders and other investment types will be looking for another retracement lower in price to see where the support emerges. They will be especially interested in seeing where the strong physical offtake begins to fade at these higher price levels.

Source: http://traderdannorcini.blogspot.ca/2013/04/gold-commitments-of-traders-report.html

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Should One Invest In Gold Given The Current Stock Market News?

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The U.S. Federal Reserve has been keeping its printing presses working overtime for monetary stimulus to the fragile U.S economy. Added to that, is the devaluation of the U.S. dollar. With the rate of underemployment at 15% and an almost stagnant rate of job growth; the housing sector in quite a pathetic state; the banking field not very promising, the stock market news conveys its extreme volatility, giving rise to a new wave of inflation that may be just around the corner. However the prices of gold bullion as well as that of commodities are constantly on the rise; which gives hopes for good investments during these times of extreme uncertainties.

Since a little more than a year, the central bank of South Korea has been increasing its reserves of gold bullion and the figure has presently touched around $3.0 billion; almost five times of the value that was thirteen months ago. Even the central bank of Kazakhstan has announced its intentions of increasing its foreign reserves of gold bullion from 12% to 15%. Thus the stock market news reports of an increasing trend of central banks of the East and those of emerging markets steadily buying gold bullion in the recent years. Continue reading →

Gold & Silver – Why You Wanted Some Yesterday & Need Some Today and Tomorrow

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The price action in gold and silver is much more positive and these precious metals are seemingly now out of their recent price correction. I firmly believe that an investment portfolio should have some exposure to these precious metals, as the commodity price cycle remains one of the only major investment themes this decade. We’re probably halfway through it.

There are so many reasons to own some gold and very few not to. Being commodities, they are inherently volatile and so are gold stocks. But that’s the risk you take to own a store of value that is unique in the world.

The spot price of silver has also been particularly positive lately. A silver trade is perhaps even more attractive than gold due to its stronger correction. A lot of Street analysts have been saying to buy silver over gold, because it has more potential upside. As a commodity, silver is used in a lot of manufacturing (especially automobiles) and we know that the industrial economy is outperforming a lot of other industries.

There are always attractive trades in mining companies, but you don’t have to take on company-specific investment risk to have some exposure to gold or silver. There are all kinds of exchange-traded funds (ETFs) that have physical ownership of gold or silver bars and/or futures. For a speculator, I’d consider some mining companies along with a physical position in gold and silver. Today, there are even ETFs that allow you to have a leveraged position in the spot price action. A number of funds, for example, use derivatives to give you twice the percentage change in the spot price of silver or gold. You can even use these funds to bet against the commodities.

In this kind of market, there’s no need for investors to rush into anything. However, I do think that the fundamentals are strong enough for investors to have some kind of hedge in their portfolios, even with the spot price of gold near its all-time high. The prospects in the world for sovereign debt defaults, inflation, war, and currency instability are too great not to warrant some exposure to gold and silver. And it isn’t just these factors that make these commodities attractive. It’s the demand/supply factor as well. Despite the fact that many mining companies are awash in cash (see Precious Metals Winners—Three Excellent Wealth-creating Stocks), global supplies of gold and silver are relatively stagnant.

Probably, the better actionable trade at this time would be to buy silver. Large-cap gold stocks haven’t done much of anything over the over the last 12 months and I don’t believe they need to be an area of focus for equity investors. I’d rather own higher dividend paying stocks in other industries. At the micro-cap level, the trading opportunities are plentiful, but event-driven.

This year is going to be a wacky one for global financial markets. There’s so much political interference that is helping capital markets over the near term. Longer-term, however, the structural problems facing most of the world’s mature economies remain and that’s why you want some exposure to gold and silver. Whether economies get better or they don’t, spot prices should still move higher.