Market Update: Moves Away From Gold Appear to be Fleeting

After a surge on Thursday, gold consolidated on Friday to close at $1725.50. The Eurozone is dangerously close to disintegrating, and while we’ve been hearing that for almost two years now, Greece is poised to cut their losses and run while its citizens have already started alternative currencies. Meanwhile, Spaniards continue to take to the streets, igniting desires of freedom among Italians and Portuguese. Mine-rich South Africa is about to be downgraded to junk bonds status and China has decreased their gold consumption. Add to this an ever-expanding base of capital – the printing presses are glowing red hot across the world – and the smart money is on gold and silver. Are you game?

Precious metals on the move

Ask price of each metal at week’s end, and change over previous Friday:

• Gold: $1,725.50, down 1.21%
• Silver: $32.17, down 2.29%
• Platinum: $1,625, down 1.76%
• Palladium: $630, down 2.65%

In the news

US Dollar rises as GE, Google and McDonald’s earnings disappoint
“The question everyone is asking is ‘Was QE3 even necessary?’ given that we are already seeing evidence of a nice third-quarter rebound.” — Tim Vogel, interest rate strategist at FTN Financial (link)

What strikes in South Africa really mean to metals
“Metals traders have been closely watching the strikes at the country’s mining operations – blaming spikes in prices of platinum and palladium, in particular, on the mining disruptions that have spilled over into gold.” (link)

The European Union is now a Nobel Peace Laureate?!
“I suppose could have been even sillier. They could have awarded EU the Nobel for economics.” — Benedict Brogan of the Daily Telegraph (link)

Spotlight on Silver

Is the silver market being controlled? Whatever the case, Jim Rogers thinks it’s the metal to buy
“Whenever you artificially suppress something, once it finally breaks free, boy, does it skyrocket. Look at buying gold in the 70s. They artificially kept it down at $35 for a few decades. Finally the market said enough and it went up over 40 times.” (link)

Long-term outlook

Gold faces hard resistance at $1764 before a significant breakthrough?
“The train has left the station, and another leg up in the bull market is getting started.” (link)

Casey Research predicts $2300-$2500 gold in 2014
Maybe the Fed doesn’t continue QE3 until 2014, but “it’s not just the US central bank that’s printing money…” (link)

The week ahead

• Federal Open Market Committee to meet Monday and Tuesday
• Greece playing chicken with the EU?
• Mario Draghi says he “will do whatever it takes” for ECB to stay together
• Spain to request more bailout funds?
• China to release PMI, a key sign of economy’s strength