All posts by: Birch Gold

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Gold suffered a setback last week, closing Friday at $1651.50, with silver faring no better, closing at $29.89. What does this pullback mean for the long term? It’s probably too early to say, as most of the experts are citing domestic troubles in the US as reasons for these latest movements. Remember, events such as the US jobs report and the country’s lurch towards the fiscal cliff are just a small part of what drives the precious metals market, so in the long run, their relative impact on the movements of gold and silver should be minimal. As we report here weekly, the precious metals market is a global system. This week, news from outside the US really underscore how important it is to take a view of gold and silver from an international perspective. Get ready for Shanghai to come on line and watch out for renewed unrest in South African mines and liquidity issues in mining in South America. So despite some knee jerk reactions domestically, the same global supply and demand issues remain. If you understand this bigger picture, you were one of those who called into our office in the last week and snapped up some deals. It’s not too late.

It wasn’t enough that our mysterious traders struck again last Wednesday, throwing speculators of paper gold into a frenzy, thus driving down precious metals prices for the close of the week, gold at $1696.25 and silver at 32.52. Nor was it sufficient that fiscal cliff conversations have now gone completely behind closed doors while the light is finally shining on the Libor scandal which got this entire party started to begin with. No, we still needed more news of the wild as the Tankan survey in Japan marks the country’s 5th straight year of recession, the rupee in India has strengthened a bit to ease anxiety over the price of gold, and China swears it’s not in a bubble, it’s not in a bubble. So with all this wild news and uncertainty still swirling around the domestic and global markets, coupled with sales of gold American Eagles reaching a 14 year high and the precious metals market heading for crisis due to US banks’ huge short positions in gold and silver, Egon von Greyerz proclaims, “A major short squeeze could be imminent.”

November has come and gone with gold not reaching $2000 as some had predicted. Indeed, several large ETF sales and massive automatic sell-offs stymied the progression of the yellow metal during the last week of the month. Gold closed down Friday at $1701.50, with silver closing at $32.85. While some are pulling back on their predictions for gold and silver, Morgan Stanley is remaining bullish and suggests you do, too. China has launched their own gold index, and some mines seem to be indicating that the need to diversify their enterprise is at hand. The European Union is still together, with Draghi twisting some arms to at least get a stay of execution until the US decides that the fiscal cliff is really just its own shadow. Meanwhile on Planet Real World, gold coins are seeing record sales. It’s deja vu all over again.

Gold tacked left this week, then right as it looked for its footing amid a series of pre-ordered trades. What was the trip wire? Failure of US monetary policy makers to step away from the fiscal cliff’s edge, mingled with very jittery bets. While gold closed Friday at $1726.00, making up much of its large slide from Wednesday, it remains to be seen if the bears or bulls have it. Major forecasters are quite bullish as they count the many ways that portfolios must diversify, with gold being a major piece of the program. Silver rose a respectable 2.6%, closing at $34.28. The Euro looks strong next to the weak-kneed dollar, but now Germany is considering bailing on the union while the UK looks like it may be the next domino to fall across the pond. In the midst of all of that, investors are clamoring for physical gold, and India is seeing the highest prices for physical gold ever. So calm those nerves. The bulls appear to have it.

Although it was a short week for the markets here in the US, you wouldn’t know it judging by the news. The cease-fire in Gaza ensured that many would not have indigestion while eating their holiday turkey. However, the devil is in the details and the market responded appropriately with gold closing up at $1734.50 and silver up by 3.5% to close at $33.41, no doubt due to Iran’s and Japan’s sudden infatuation with the white metal. Meanwhile, the greenback shed significant value, indicating that moves from the Eurozone to stabilize Greece could bode ill for the dollar standard. (Are we closer than we know to a gold standard?) If the US slips into a “Japanification” of its economy, gold bulls could well come out on top.

Two weeks ago we saw gold business cards in Hong Kong, and last week brought a lucrative heist in Portland and a mineral museum robbery in California – seems as if the desire for gold is reaching a fevered pitch. Talks of secession from the Euro were joined by screams for secession from the United States, further fueling the currency realists’ call for gold-backed paper. With the yellow metal range bound this week, closing at $1713.50 on Friday, those who thought they should jump in did. Silver continues its saunter towards a predicted breakout, closing at $32.27. With no clear economic policy from any place on the planet, the markets are struggling to find their footing, leaving many to wonder, “How close may we be to a surge from precious metals?”

With the US elections over and maintaining the status quo for the most part, are we back to square one, or can we expect reverse motion away from the fiscal cliff? The markets didn’t think so last week, with gold closing up at $1,738 and silver at $32.16. As indicated last week by astute analysts, the election was a non-event for the markets, though it has made it clear that hedging in gold and silver is a very good idea. Have you talked to one of our precious metals specialists yet? It’s time to ready yourself for the likely paper burn as inflation picks up. You may reach us at (800) 355-2116.

With the presidential election just a few days away, the latest jobs report showed that more jobs than expected entered the economy in October, pushing gold to close at $1685. But even with this drop, the yellow metal continues to average unprecedented highs. Silver, however, is looking like a steal, with global markets bullish on the white metal. Superstorm Sandy’s wake of destruction may have done little compared to the anticipated market frenzy before the US election: with opinion polls showing a dead heat between Obama and Romney, analysts are expecting a surge in trading after the election. Does emotional trading commence on the 7th of November?

Following gold’s slip last week, this week saw a round of bargain hunting. Gold traded near highs of $1,730, ending the week at $1,716. Silver held in a lateral position with platinum taking a beating as South African mining strikes resulted in massive layoffs and mine closures. US job reports leave many unimpressed, and the country’s presidential elections seem to be sliding into confusion rather than home base as the candidates categorically ignore Europe’s meltdown, China’s slowdown and untold mismanaged mineral wealth in Eastern and Central Africa. With the world’s markets indexed to the over-abundant weak-kneed US dollar, those in the know are calling for reinstating the Gold Standard. Central banks are snapping up gold, leading calls for a November fat with $2000 per ounce gold.