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Hedge funds and other big speculators in commodities have started selling gold in a big way, trade data showed on Friday, just a month after they had supported the precious metal amid a record tumble in its price.
Money managers, including hedge funds, pulled USD 1.4 billion from the US gold futures market for the week ended May 14 by trimming their net long positions in the metal, according to Reuters calculations of data released by the Commodity Futures Trading Commission (CFTC).
Just a month ago, CFTC data showed hedge funds had added to their net long positions in US gold futures despite a record loss in bullion prices at that time due to a broad commodities sell-off triggered by global economic worries.
The spot price of gold fell in mid-April, losing over 8 percent or more than USD 125 in a single day. The sell-off was mitigated by buying support later in the week from consumers attracted to the drop in prices for gold bar, coins, nuggets and jewelry. Gold futures then shot back up, to above USD 1,400.
Since then, they’ve fallen again, closing on Friday at below USD 1,365 an ounce.
“I think hedge funds have begun accepting the fact that deflation is a bigger threat to the US economy now than inflation. So, the argument of owning gold as an inflation hedge no longer holds water,” said Adam Sarhan, chief executive at New York-based investment advisory Sarhan Capital.
Open interest, a measure of market liquidity, fell more than 3 percent in the week to May 14 for gold contracts traded by money managers on the COMEX division of the New York Mercantile Exchange, the CFTC data showed.
In terms of actual contracts, the net long position held by money managers fell 10,043 to 39,216. Based on COMEX closing prices for May 14, Reuters calculations showed a net outflow of about USD 1.4 billion from the drop.
In mid-April, after hedge funds had rushed in to buy gold, open interest for the precious metal on COMEX jumped by a staggering 24 percent.
On Friday, gold fell for a seventh straight session, its longest losing streak in four years, as the dollar rose to the highest since 2008 after some Federal Reserve officials said the central bank should end its stimulus for the U.S. economy.
Ultra low interest rates and hundreds of billions of dollars of Fed stimulus money have fueled higher prices for gold and other commodities over the past 3 years.
This year, gold’s safe-haven lure been dulled by improving US economic data, which included a May reading for consumer sentiment that stood at a near six-year high. Money has also been rotating out of gold into equity markets as U.S. stock prices hit record highs.
Some traders expect the current sell-off in gold to not let up until the market loses between USD 200 and USD 300 more. That would push prices to levels last seen in the first quarter of 2010.
“With a few more hard losing sessions, we could be down to between USD 1,050 and USD 1,100. It could happen over two weeks or it could happen in a couple of days if the market plunges USD 100 a dip,” said Frank McGhee, head precious metals trader at Integrated Brokerage Services in Chicago.
Article source: http://www.moneycontrol.com/news/commodities/hedge-funds-sell-gold-after-propping-mktmonth-ago_874486.html
From Kimble Charting Solutions:
The Yen, Australian dollar, and the Euro have created pennant patterns over the past few years and each of these currencies is now breaking support of the pennant patterns.
At the same time, the U.S. dollar has been unable to close on a “monthly basis” above line (1) in the chart [below]…
Read full article (with chart)…
More on the U.S. dollar:
The surprising case for a major bottom in the U.S. dollar
Warning: Don’t forget about the “other” currency war
Porter Stansberry: I made a serious mistake about the “End of America”
Article source: http://www.thedailycrux.com/Post/42761/the-u-s-dollar-could-be-on-the-verge-of-a-major-breakout
From All Star Charts:
I always find it interesting when markets hit new highs and bullish sentiment simultaneously drops. I realize there’s a lot of noise in these weekly AAII Sentiment polls, but it’s fascinating nonetheless.
I think it’s really just the same old story of a hated market. The AAII Investor Sentiment Survey measures the percentage of individual investors who are bullish, bearish, or neutral on the stock market over the next six months.
This week’s numbers came in with a drop in bulls down to just 38.5%, somehow below its long-term average, even with stocks at historic levels. The number of bears picked up a bit as well to 29.3% of those who took the poll.
Here’s the chart of bullish sentiment compared to…
More on sentiment:
This measure set records in 2000 and 2007… And is making new highs today
Top sentiment expert: Individual investors are not buying this rally
A fact about last weekend’s “magazine cover indicator” you may have missed
Article source: http://www.thedailycrux.com/Post/42760/an-unusual-thing-has-been-happening-to-stock-market-sentiment
From Casey Research:
An article was published in Uruguay that has received little notice outside of Latin America.
This article refers to Cuban dissident Yoani Sánchez, also little known in the First World.
Ms. Sánchez has recently been allowed to travel outside of Cuba for the first time, as a result of the elimination of “exit visas.” The requirement for exit visas was imposed in 1961 to stop Cubans who opposed the then-new Castro regime from being able to leave Cuba. (Editor’s note: The regime in Washington imposes an “exit tax” for certain Americans who renounce their citizenship.)
It’s comforting to think that Ms. Sánchez and all Cubans are experiencing the early stages of a more open Cuba, just as the peoples of East Germany, Russia, China, and other countries have experienced in recent decades.
This is another reminder that the concept of totalitarian socialism/communism is not a very workable one and cannot last indefinitely.
It can, however, last for half a century or more, and – even if it pleases those of us who believe in maximizing the liberty of every individual to see yet another oppressive government failing to maintain totalitarianism – we must also recognize that half a century or more of such oppression is enough to destroy individual lives entirely, based on the human lifespan.
Therefore, the real importance that the elimination of exit visas in Cuba might have for the reader of this article (who very likely has never needed to apply for one), is to question whether this requirement might be in his future…
More on liberty:
Today’s entertainment: Jon Stewart’s “brilliant” take on the IRS scandal
Must-read classic: U.S. judge pens one of the smartest arguments on guns you’ll ever read
Must-see: Mainstream media confirms worst fears about last week’s events
Article source: http://www.thedailycrux.com/Post/42759/the-u-s-could-soon-become-more-like-cuba-in-one-important-way
From Peter L. Brandt:
As readers of this blog know, I have been a pretty consistent bear on silver ever since the April 2011 top. In fact, long-time readers know I called the absolute top. I have been a nemesis and the destination of hate of silver bulls ever since.
The chart structure in the metals — gold, silver, and platinum — all remain negative. Major chart tops have been completed, trends are strongly down, and no signs of a bottom have appeared. Additionally, lower chart targets exist.
However, I am tempering my view of silver substantially. I am NOT a bull. But, I can no longer be a bear.
Several technical developments are worthy of note.
First, the decline in silver reached hit the target of $20 to $22 I identified two years ago.
Second, the CFTC Commitment of Traders data cannot be ignored…
More on silver:
Five indicators every gold and silver bull should see now
Why silver could hold the key to a lasting bottom in gold
Precious metals CEO: Physical silver market is “ugly”
Article source: http://www.thedailycrux.com/Post/42758/top-commodities-trader-a-major-low-in-silver-could-be-forming-now
From LewRockwell.com:
Men who are physically strong are more likely to take a right-wing political stance, while weaker men are inclined to support the welfare state, according to a new study.
Researchers discovered political motivations may have evolutionary links to physical strength.
Men’s upper-body strength predicts their political opinions on economic redistribution, according to the research.
The principal investigators – psychological scientists Michael Bang Petersen, of Aarhus University in Denmark, and Daniel Sznycer, of the University of California in the U.S.,
believe that the link may reflect…
More on politics:
Recent poll turns up a shocking belief among many Americans
Why all Americans must now beware of Maryland’s statist government
Must-read post destroys this common liberal belief
Article source: http://www.thedailycrux.com/Post/42757/new-study-reveals-the-surprising-reason-why-some-men-support-the-corrupt-welfare-state
From Bloomberg:
Three Federal Reserve regional bank presidents called for phasing out the Fed’s monthly purchases of $40 billion in mortgage-backed securities as the housing recovery shows signs of gaining momentum.
Dallas Federal Reserve Bank President Richard Fisher said today buying mortgage bonds risks disrupting the market, while Philadelphia Fed President Charles Plosser said, “it’s not good for the bank to be holding lots of mortgage paper.” Jeffrey Lacker of Richmond said to reporters yesterday the Fed should “get out of the credit allocation business.”
The Federal Open Market Committee said May 1 it will keep up its monthly purchases of mortgage bonds and $45 billion in Treasurys, and is ready to increase or reduce the pace in response to changes in the outlook for inflation and the labor market. Plosser, Lacker, and Fisher don’t hold a policy vote this year.
The central bank’s so-called quantitative easing has pushed mortgage rates close to record lows, fueling demand in some housing markets as buyers compete for a tight supply of properties. While values remain well below their peak, 133 of the 150 metropolitan areas tracked by the National Association of Realtors had price increases in the first quarter from a year earlier. Areas such as San Francisco, Atlanta, Phoenix, and Reno, Nevada, saw jumps of at least 30 percent.
“When refinancing activity eventually shifts down, the Fed could soon be buying up to 100 percent of MBS issuance if the current purchase program continues,” Fisher said today in a speech in Houston. “Buying such a high share of gross issuance in any security is not only excessive, but also potentially disruptive to the proper functioning of the MBS market.”
‘Reasonable Step’
Lacker said yesterday the central bank should reinvest the principal from its mortgage bond holdings into Treasurys. “That would be a really reasonable step to contemplate at this point given the strength in the housing market right now,” he said to reporters in Baltimore.
Starts of new U.S. homes fell more than forecast in April to a five-month low, indicating a pause in the industry’s progress as builders slowed work on apartments. Building permits surged to an almost five-year high.
Housing starts slumped 16.5 percent, the most since February 2011, to an 853,000 annualized rate after a revised 1.02 million pace in March, the Commerce Department reported today in Washington. The median estimate of 81 economists surveyed by Bloomberg was for a 970,000 rate.
Plosser said today in a Bloomberg Television interview he “would like to see us get out of mortgage-backed securities.”
Outspoken Opponents
Fisher said in response to audience questions he wants to see the central bank’s balance sheet eventually returned to an all-Treasurys portfolio. While Fisher has been one of the most outspoken opponents to bond buying among Fed officials, he said in February he didn’t want to stop purchases “cold turkey,” which could destabilize the market.
“The housing market is on a self-sustaining path and does not need the same impetus we have been giving it,” Fisher said today to the National Association for Business Economics in Houston. With the success of continued buying “questionable,” he said, “I think we can rightly declare victory on the housing front and reel in – or dial back – our purchases, with the aim of eliminating them entirely as the year wears on.”
Fisher said he was encouraged by recent economic data and believes growth will probably exceed private economists’ forecasts of 2.4 percent this year. The housing market is on the rebound, banks are easing lending standards and state and local government cutbacks are no longer a major drag on growth, he said.
Downward Trend
The jobs report for April as well as a downward trend in initial claims for unemployment insurance may have signaled an improvement in the labor market as well, the Dallas Fed chief said. Employment picked up more than forecast in April, and the jobless rate unexpectedly declined to a four-year low of 7.5 percent, a Labor Department report showed on May 3. Revisions added a total of 114,000 jobs to the employment count in February and March.
More Americans than projected filed applications for unemployment benefits last week. Jobless claims jumped by 32,000 to 360,000 in the week ended May 11, exceeding all forecasts in a Bloomberg survey of economists and the most since the end of March, Labor Department figures showed today in Washington.
The yield on the 10-year Treasury note dropped six basis points, or 0.06 percentage point, to 1.88 percent at 12:12 p.m. in New York, according to Bloomberg Bond Trader prices. The Standard Poor’s 500 Index was little changed at 1,658.20.
Unexpectedly Advanced
Sales at U.S. retailers unexpectedly advanced in April, Commerce Department figures showed this week. Fisher called the figures “a nice upside surprise.”
“This indicates that consumers may have digested delayed tax rebates and the increase in payroll taxes and are reaping the benefits of lower gasoline and food prices,” he said. “So the recovery presently appears to be strong enough to propel hopes that employment growth will continue improving over the near term.”
Inflation reports have been benign, with price measures likely to end the year between 1.5 percent and the Fed’s 2 percent goal, Fisher said.
Labor Department figures today showed the cost of living fell in April for a second month, the first back-to-back declines in inflation since late 2008, as fuel prices retreated. The consumer-price index decreased 0.4 percent, the biggest decrease since December 2008, after falling 0.2 percent in March.
Further Decline
Some Fed officials, including St. Louis Fed President James Bullard, said last month that a further decline in inflation that persisted might warrant additional stimulus. Consumer prices rose 1 percent in March from a year earlier, the lowest level since October 2009, according to the Fed’s preferred gauge of inflation.
Inflation that has “persistently” stayed below the Fed’s goal is a concern and may suggest policy hasn’t done enough to support growth, Boston Fed President Eric Rosengren said today.
“The longer we in the U.S. remain so far below our 2 percent target, the greater the risk that inflation expectations could fall and real interest rates rise,” Rosengren said in a speech in Milan. Low inflation and high unemployment “could lead one to argue that policy has not been sufficiently accommodative.”
To contact the reporter on this story: Steve Matthews in Atlanta at smatthews@bloomberg.net; Dan Murtaugh in Houston at dmurtaugh@bloomberg.net.
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net.
More on quantitative easing:
More and more evidence suggests a brand-new housing bubble could be starting
Nine things you need to know about the “end of QE”
Currency WAR: Japan’s “super-QE” sends currency plummeting to 4-year lows
Article source: http://www.thedailycrux.com/Post/42756/three-top-federal-reserve-officials-are-calling-for-an-end-to-the-latest-qe-insanity
From The Project to Restore America:
Less than two weeks ago, President Obama stood in front of graduates from The Ohio State
University and told them to reject those who warn of government tyranny.
“Unfortunately, you’ve grown up hearing voices that incessantly warn of government as nothing more than some separate, sinister entity that’s at the root of all our problems,” he said.
To young, idealistic people his words likely sounded insightful – until last week. That’s when it became officially impossible to deny that the government abuses its power for political gain.
Practically overnight people labeled conspiracy theorists by the elite were proven prescient interpreters of how big government operates when news broke last Friday that the Internal Revenue Service targeted conservative groups for special scrutiny in their tax-exempt applications.
The media pile on against the administration is so ferocious Fox News could run live feeds from its competitors without losing a beat.
It should be so because the partisan treatment of hundreds of groups is stunning.
Ginny Rapini saw the IRS in action firsthand…
More on the White House:
UNBELIEVABLE: California Congressman exposes ANOTHER huge potential White House scandal
New battle over banks shows Obama and Wall Street are on the same side
Article source: http://www.thedailycrux.com/Post/42755/overwhelming-evidence-now-shows-president-obama-was-dead-wrong
From BullionVault Gold News:
Some things to remember amid the volatility of the gold price…
WHEN VOLATILITY prevails in the gold market, I love seeing so many different opinions because it promotes critical thinking and healthy markets, writes Frank Holmes, CEO and chief investment officer of U.S. Global Investors.
But because gold is unlike any other commodity, many perspectives can be extreme, such as “goldenfreudes” who take pleasure in gold bugs’ pain.
I continue to persuade readers to take a balanced and thoughtful approach to the yellow metal. With this in mind, here are four facts to remember about gold that should help neutralize those extreme bullish and bearish views.
1. You can’t print more gold
The Federal Reserve continues to print fresh, crisp stacks of U.S. dollars amounting to $85 billion every month, driving up the balance sheet to almost $3 trillion dollars. If Ben Bernanke continues churning out dollars at this rate, by 2016, the balance sheet will more than double to $7 trillion dollars.
And research has found that the price of gold moves in near-lockstep to…
More on gold:
Veteran commodities trader: Gold and silver could be headed much lower
Controversial post: Why another attack on gold could be coming soon
Why gold could be the QE “canary in the coalmine”
Article source: http://www.thedailycrux.com/Post/42754/top-resource-ceo-four-fundamental-facts-to-remember-about-gold
Given the recent correction seen in gold prices, Naveen Mathur of Angel Broking and David Lennox of Fat Prophets maintain a bearish stance on the yellow metal.
In an interview to CNBC-TV18, Lennox said, “People who are holding gold, especially in exchange traded funds (ETF), are now looking at other broader markets, especially equity markets.”
Agreeing with Lennox’s outlook, Mathur added that he expects COMEX gold price to consolidate around USD 1350-1375 per ounce. For MCX gold futures, one can sell gold with a stop loss of Rs 26,330 per 10 grams, he added.
Gold has seen its worst decline in a month after investors cut their exposure to bullion . Gold exchange-traded funds (ETFs) fell to their lowest level in four years.
“When one doesn’t have any festivals or marriage season coming out, that, alongwith the international markets cueing down towards the negative side creates pressure on the downward side of the trajectory for the gold prices,” Mathur elaborated.
Below is the edited transcript of the interview.
Q: What does gold look like in terms of valuations at this point, does it look mouthwatering or do you think that it will be a possible sell now?
Lennox: At this stage, we would suggest that gold is probably starting to again look quite fair in terms of valuations. When one has a look at what we are seeing happening in the demand side of the equation, we do think that we are seeing people who are holding gold especially in the exchange traded funds (ETF) funds, they are looking at other broader markets, especially the equity markets. We think it has been a rotation ahead of those ETF funds into the equity markets. The gold that is coming out of those particular ETFs has got nowhere else to go unfortunately but just trade on to the market.
Q: The big question is that will we revisit the April lows and if that happens, will physical demand again come back because especially from countries like China and India because the big talking point was how India’s gold imports increased 130 percent in the month of April. Do you see a scenario like that panning out again?
Lennox: We have certainly been watching the Indian jewellery fabrication market for some time now and those numbers have no doubt been very poor. We have seen first significant improvement in gold imports going into the jewellery fabrication market in April and March quarter. We would be looking for that to hopefully continue through for the rest of this year and provide what we would think is a very strong and stable support for a potential rise in the gold price towards the end of the year.
Q: What have you made in terms of the downside that we have seen in gold and what would you recommend, are these valuations that we will possibly never see again hence accumulate or do you think that it is a possible sell?
Mathur: The market looks to be bearish. There are a number of fundamental factors apart from the ETF and the buying of India which happened in April. We do not see much of the positive buying coming in even if the prices are down to around Rs 26,000 per 10 gm now.
There aren’t many festivals, the marriage season too is off. The festival season does not look to be much too great in coming months. So, these are very timid kind of months coming ahead for any kind of festivities or for marriages.
Article source: http://www.moneycontrol.com/news/commodities/gold%E2%80%99s-fall-not-over-yet-sell-now-recommend-experts_873552.html
Given the recent correction seen in gold prices, Naveen Mathur of Angel Broking and David Lennox of Fat Prophets maintain a bearish stance on the yellow metal.
In an interview to CNBC-TV18, Lennox said, “People who are holding gold, especially in exchange traded funds (ETF), are now looking at other broader markets, especially equity markets.”
Agreeing with Lennox’s outlook, Mathur added that he expects COMEX gold price to consolidate around USD 1350-1375 per ounce. For MCX gold futures, one can sell gold with a stop loss of Rs 26,330 per 10 grams, he added.
Gold has seen its worst decline in a month after investors cut their exposure to bullion . Gold exchange-traded funds (ETFs) fell to their lowest level in four years.
“When one doesn’t have any festivals or marriage season coming out, that, alongwith the international markets cueing down towards the negative side creates pressure on the downward side of the trajectory for the gold prices,” Mathur elaborated.
Below is the edited transcript of the interview.
Q: What does gold look like in terms of valuations at this point, does it look mouthwatering or do you think that it will be a possible sell now?
Lennox: At this stage, we would suggest that gold is probably starting to again look quite fair in terms of valuations. When one has a look at what we are seeing happening in the demand side of the equation, we do think that we are seeing people who are holding gold especially in the exchange traded funds (ETF) funds, they are looking at other broader markets, especially the equity markets. We think it has been a rotation ahead of those ETF funds into the equity markets. The gold that is coming out of those particular ETFs has got nowhere else to go unfortunately but just trade on to the market.
Q: The big question is that will we revisit the April lows and if that happens, will physical demand again come back because especially from countries like China and India because the big talking point was how India’s gold imports increased 130 percent in the month of April. Do you see a scenario like that panning out again?
Lennox: We have certainly been watching the Indian jewellery fabrication market for some time now and those numbers have no doubt been very poor. We have seen first significant improvement in gold imports going into the jewellery fabrication market in April and March quarter. We would be looking for that to hopefully continue through for the rest of this year and provide what we would think is a very strong and stable support for a potential rise in the gold price towards the end of the year.
Q: What have you made in terms of the downside that we have seen in gold and what would you recommend, are these valuations that we will possibly never see again hence accumulate or do you think that it is a possible sell?
Mathur: The market looks to be bearish. There are a number of fundamental factors apart from the ETF and the buying of India which happened in April. We do not see much of the positive buying coming in even if the prices are down to around Rs 26,000 per 10 gm now.
There aren’t many festivals, the marriage season too is off. The festival season does not look to be much too great in coming months. So, these are very timid kind of months coming ahead for any kind of festivities or for marriages.
Article source: http://www.moneycontrol.com/news/commodities/gold%E2%80%99s-fall-not-over-yet-sell-now-recommend-experts_873552.html
Given the recent correction seen in gold prices, Naveen Mathur of Angel Broking and David Lennox of Fat Prophets maintain a bearish stance on the yellow metal.
In an interview to CNBC-TV18, Lennox said, “People who are holding gold, especially in exchange traded funds (ETF), are now looking at other broader markets, especially equity markets.”
Agreeing with Lennox’s outlook, Mathur added that he expects COMEX gold price to consolidate around USD 1350-1375 per ounce. For MCX gold futures, one can sell gold with a stop loss of Rs 26,330 per 10 grams, he added.
Gold has seen its worst decline in a month after investors cut their exposure to bullion . Gold exchange-traded funds (ETFs) fell to their lowest level in four years.
“When one doesn’t have any festivals or marriage season coming out, that, alongwith the international markets cueing down towards the negative side creates pressure on the downward side of the trajectory for the gold prices,” Mathur elaborated.
Below is the edited transcript of the interview.
Q: What does gold look like in terms of valuations at this point, does it look mouthwatering or do you think that it will be a possible sell now?
Lennox: At this stage, we would suggest that gold is probably starting to again look quite fair in terms of valuations. When one has a look at what we are seeing happening in the demand side of the equation, we do think that we are seeing people who are holding gold especially in the exchange traded funds (ETF) funds, they are looking at other broader markets, especially the equity markets. We think it has been a rotation ahead of those ETF funds into the equity markets. The gold that is coming out of those particular ETFs has got nowhere else to go unfortunately but just trade on to the market.
Q: The big question is that will we revisit the April lows and if that happens, will physical demand again come back because especially from countries like China and India because the big talking point was how India’s gold imports increased 130 percent in the month of April. Do you see a scenario like that panning out again?
Lennox: We have certainly been watching the Indian jewellery fabrication market for some time now and those numbers have no doubt been very poor. We have seen first significant improvement in gold imports going into the jewellery fabrication market in April and March quarter. We would be looking for that to hopefully continue through for the rest of this year and provide what we would think is a very strong and stable support for a potential rise in the gold price towards the end of the year.
Q: What have you made in terms of the downside that we have seen in gold and what would you recommend, are these valuations that we will possibly never see again hence accumulate or do you think that it is a possible sell?
Mathur: The market looks to be bearish. There are a number of fundamental factors apart from the ETF and the buying of India which happened in April. We do not see much of the positive buying coming in even if the prices are down to around Rs 26,000 per 10 gm now.
There aren’t many festivals, the marriage season too is off. The festival season does not look to be much too great in coming months. So, these are very timid kind of months coming ahead for any kind of festivities or for marriages.
Article source: http://www.moneycontrol.com/news/commodities/gold%E2%80%99s-fall-not-over-yet-sell-now-recommend-experts_873552.html
Given the recent correction seen in gold prices, Naveen Mathur of Angel Broking and David Lennox of Fat Prophets maintain a bearish stance on the yellow metal.
In an interview to CNBC-TV18, Lennox said, “People who are holding gold, especially in exchange traded funds (ETF), are now looking at other broader markets, especially equity markets.”
Agreeing with Lennox’s outlook, Mathur added that he expects COMEX gold price to consolidate around USD 1350-1375 per ounce. For MCX gold futures, one can sell gold with a stop loss of Rs 26,330 per 10 grams, he added.
Gold has seen its worst decline in a month after investors cut their exposure to bullion . Gold exchange-traded funds (ETFs) fell to their lowest level in four years.
“When one doesn’t have any festivals or marriage season coming out, that, alongwith the international markets cueing down towards the negative side creates pressure on the downward side of the trajectory for the gold prices,” Mathur elaborated.
Below is the edited transcript of the interview.
Q: What does gold look like in terms of valuations at this point, does it look mouthwatering or do you think that it will be a possible sell now?
Lennox: At this stage, we would suggest that gold is probably starting to again look quite fair in terms of valuations. When one has a look at what we are seeing happening in the demand side of the equation, we do think that we are seeing people who are holding gold especially in the exchange traded funds (ETF) funds, they are looking at other broader markets, especially the equity markets. We think it has been a rotation ahead of those ETF funds into the equity markets. The gold that is coming out of those particular ETFs has got nowhere else to go unfortunately but just trade on to the market.
Q: The big question is that will we revisit the April lows and if that happens, will physical demand again come back because especially from countries like China and India because the big talking point was how India’s gold imports increased 130 percent in the month of April. Do you see a scenario like that panning out again?
Lennox: We have certainly been watching the Indian jewellery fabrication market for some time now and those numbers have no doubt been very poor. We have seen first significant improvement in gold imports going into the jewellery fabrication market in April and March quarter. We would be looking for that to hopefully continue through for the rest of this year and provide what we would think is a very strong and stable support for a potential rise in the gold price towards the end of the year.
Q: What have you made in terms of the downside that we have seen in gold and what would you recommend, are these valuations that we will possibly never see again hence accumulate or do you think that it is a possible sell?
Mathur: The market looks to be bearish. There are a number of fundamental factors apart from the ETF and the buying of India which happened in April. We do not see much of the positive buying coming in even if the prices are down to around Rs 26,000 per 10 gm now.
There aren’t many festivals, the marriage season too is off. The festival season does not look to be much too great in coming months. So, these are very timid kind of months coming ahead for any kind of festivities or for marriages.
Article source: http://www.moneycontrol.com/news/commodities/gold%E2%80%99s-fall-not-over-yet-sell-now-recommend-experts_873552.html
Trade idea background
This trade is for June ’13 Gold Futures.
Gold saw a big sell-off yesterday that broke an important Fibonacci level at 1,385. Since then, 1,391 has been the high and it continues to look “heavy”. We are kicking ourselves a bit here at FuturesTechs, as we suggested a short at 1,437.5 for clients on Tuesday, a nice winner. But we moved the stop to 1,390 yesterday and got “ticked out” on a “blip” higher overnight. This is always a risk when running positions in thin overnight trade. Not to be deterred, we will get short once more, with a stop above 1,391, as it does look ripe to retest the 1,321 low from the middle of April.
Trade management and risk description
There is a lot of chatter about demand for the physical right now, especially out of Asia. But I’m a chart bod and my chart tells me this has significant downside risk just now and we want to be short.
Trade idea parameters
Entry: Sell at 1,373-76
Stop: 1,393
Target: 1,325 on half, 1,290 on the balance.
Chart: Daily Candle Chart
Disclaimer:
Non-independent investment research
This investment research has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Further it is not subject to any prohibition on dealing ahead of the dissemination of investment research. Saxo Bank, its affiliates or staff, may perform services for, solicit business from, hold long or short positions in, or otherwise be interested in the investments (including derivatives), of any issuer mentioned herein. » Read more
Article source: http://www.tradingfloor.com/posts/trade-idea-sell-gold-looks-retest-1321-1310367566
From Kimble Charting Solutions:
Lumber has traded within a falling channel for the past 20 years. When lumber has hit the bottom of the channel, stocks have followed to the tune of 100% rallies twice.
The key to this pattern is when lumber is at the top of the channel and turns down, it seems to pull the stock market and economy lower with it.
The upper left chart reflects lumber recently was at the top of the falling channel and the upper right chart reflects a breakdown in…
More on technical analysis:
Major stock markets across the globe are now breaking out
This chart could provide the first warning of a stock market correction
Warning: One of the world’s most important commodities could be breaking down
Article source: http://www.thedailycrux.com/Post/42753/update-one-of-the-world-s-best-leading-indicators-continues-to-fall
From Bloomberg:
An open house for a five-bedroom brownstone in Brooklyn, New York, priced at $949,000 drew 300 visitors and brought in 50 offers. Three thousand miles away in Menlo Park, California, a one-story home listed for $2 million got six offers last month, including four from builders planning to tear it down to construct a bigger house. In south Florida, ground zero for the last building boom and bust, 3,300 new condominium units are under way, the most since 2007.
The U.S. spring homebuying season has been marked by a frenzy of demand fueled by the Federal Reserve’s drive to push down borrowing costs, a scarcity of listings and Wall Street’s new appetite for foreclosed homes. While values remain well below their peak, economists including Stan Humphries of Zillow Inc. (Z) and Mark Vitner of Wells Fargo Co. assert prices in some areas are rising at an unsustainable pace — a dramatic shift from early 2012, when billionaire Warren Buffett said housing “remains in a depression.”
“It’s a big change from a year ago,” said Paul Willen, a senior economist at the Federal Reserve Bank of Boston. “You’ve gone from hearing horror stories about people losing money to hearing stories of frenzy — lots of traffic and multiple offers.”
Price Surge
U.S. home prices jumped almost 11 percent in March from a year earlier, the biggest gain since the height of the real estate boom in 2006, CoreLogic Inc. reported last week. Values are rising faster than incomes, an indication that prices may fall in some cities once higher mortgage rates erode affordability, Humphries said. Investor purchases will inevitably cool, adding another potential hit to the market, according to Vitner.
The gains in some U.S. areas aren’t sustainable for a healthy market, said Dean Baker, co-director of the Center for Economic and Policy Research in Washington.
“If prices keep going up at this rate for another six months, we will have a bubble, and people will get hurt,” he said in a telephone interview.
U.S. buyers spent three times their annual incomes on homes at the end of last year, and those properties were 15 percent pricier relative to incomes than before the housing bubble of the mid-2000s, according to data from Seattle-based Zillow (Z). Markets such as Silicon Valley, Southern California, Boston and New York will look expensive relative to incomes when mortgage rates rise, Humphries said.
‘On Sale’
“The Fed has put every home on sale because of its actions,” Humphries said in a telephone interview. “We’re not saying you should ignore the sale sign and not pay a cheaper price. We want people to be aware of the fact that this is unusual and not bake these expectations of high appreciation into their long-term calculus.”
The average rate for a 30-year fixed mortgage was 3.51 percent this week, and reached a record low of 3.31 percent in November, according to Freddie Mac. That compares with an average rate of 6.24 percent from 2001 to 2006.
It’s too early to say another bubble is emerging. So far, the biggest gains are limited to hard-hit markets such as Phoenix and Las Vegas and thriving job centers such as San Francisco, while prices are falling in cities such as Chicago and Indianapolis, according to CoreLogic. Nationally, existing-home sales are about a third off a 2005 peak and home construction is down by 66 percent. Also, in contrast to the easy lending of the boom years, mortgage standards are strict.
Spotty Recovery
In areas such as Long Island, New York, and Omaha, Nebraska, price gains are within moderate growth levels of 3 percent to 5 percent, according to the National Association of Realtors. In other cities, demand remains stagnant and the market is far from overheated.
Homebuyers in Erie, Pennsylvania, a port on Lake Erie in the northwest part of the state, are still finding plenty to choose from, said Debra Fries, a local agent with Coldwell Banker Select. The median home price in the area fell 5 percent to $105,000 in the first quarter from a year earlier, according the Realtor group.
“We don’t have any bubbles,” Fries said. “We’re steady as a stream.”
U.S. home prices fell 35 percent from their July 2006 peak to the bottom in March 2012, and are still 29 percent off their high, according to the SP/Case-Shiller index measuring 20 U.S. cities. Nationally, prices dropped so much during the crash that they remain about 7 percent undervalued, based on comparisons with historical prices, incomes and rents, Trulia Inc. said this week, introducing a feature on its website called “Bubble Watch.”
Eight Markets
Still, the recent price surge has made eight U.S. markets – – including Orange County, California; Houston; and Portland, Oregon — overvalued, the San Francisco-based real estate data company said.
The housing market has defied predictions of a tepid recovery by many economists. A year ago, Moody’s Analytics Inc. said prices in 2013 would climb 1.6 percent. The company revised its projections upward for each of the last six months and now expects an increase of 7.5 percent this year. Gains probably will moderate in 2014, said Celia Chen, a Moody’s housing economist who predicts a 4 percent rise as homebuilding ramps up and underwater homeowners regain enough equity to sell.
CoreLogic said today that it projects prices will rise at an annualized rate of 3.9 percent through 2017 after climbing 7.3 percent in 2012.
Phoenix, Atlanta
Of the 150 metropolitan areas tracked by the National Association of Realtors, 9 out of 10 showed price increases in the first quarter from a year earlier and areas such as Silicon Valley, California; Phoenix; Atlanta; and Reno, Nevada, saw gains of more than 30 percent, the group said. Prices declined in 17 markets, including Edison, New Jersey; Champaign-Urbana, Illinois; and Allentown, Pennsylvania.
“This is a good spring for sellers in a hurry,” Jed Kolko, chief economist for Trulia, said in a telephone interview. “Buyer demand is stronger than we’ve seen it in years and it’s been strong enough to lift sales despite tighter inventory.”
The buying frenzy was on display at a March open house in Brooklyn, a borough of New York City where the median price rose 14 percent to $515,000 in the first quarter from the prior year as the number of listings plunged 45 percent, according to Douglas Elliman Real Estate and appraiser Miller Samuel Inc. Over two hours, 300 visitors streamed into a three-story brownstone in Crown Heights and it went under contract for more than the asking price less than a week later, said Barbara Brown-Allen, a Douglas Elliman agent who represents the seller.
Brooklyn Boom
The fear of losing out on mortgage rates that are close to the lowest on record is spurring the rush, Brown-Allen said. The up-and-coming Brooklyn neighborhoods of Crown Heights, Bushwick and Bedford-Stuyvesant have surged in popularity during the past year because buyers have been priced out of Manhattan and more exclusive Brooklyn neighborhoods, such as Park Slope and Cobble Hill, she said.
“It was a zoo – sometimes there were over 100 people in the house at a time,” Brown-Allen said. “Once the inventory is this short, you have a lot of people vying for the same properties.”
Above Asking
Even in markets like Boston, where CoreLogic put home-price gains at a moderate 8 percent in March, demand is high. Often, homes spend only one day on the market, said Cliff London, a broker with the RE/MAX Home Team in the suburban town of Needham, Massachusetts.
“By the time the first open house is over the offers are coming in, sometimes above asking price,” London said. “There’s a lack of quality inventory — that’s fueling it.”
In much of the country, inventory has been drained by institutional investors such as Blackstone Group LP and Colony Capital LLC buying single-family homes, often foreclosures, to turn into rentals, said CoreLogic Chief Economist Sam Khater.
Blackstone, the largest buyer in the U.S., spent more than $4 billion on 24,000 rental properties last year. The company recently bought 1,400 residences in Atlanta, the biggest bulk deal for the fledgling homes-for-lease industry. Such purchases helped to drive prices up 12 percent in March from a year earlier in Georgia, where values only rose 1.2 percent six months earlier, Khater said.
Moderating Prices
Appreciation in Arizona (SPCSPHX) is moderating as investors look in other markets for better yields, Khater said. Prices in the state rose 17 percent in March from a year earlier compared with a 20 percent increase in September 2012, he said.
Vitner of Wells Fargo said investors are buying properties as quickly as they can and when they leave, housing will take a hit. Investors accounted for 19 percent of sales in the U.S. in March and even more in some former bubble markets, according to the National Association of Realtors.
“The problem is if they don’t earn a high enough return, they all walk away,” Vitner said. “Investors accounted for a larger proportion of the housing recovery than people realize.”
While the tightness in the existing-home market is driving up sales for new homes, homebuilders can’t increase production fast enough because of labor shortages and rising competition for lots in the best locations. There were 153,000 new homes available for purchase in March, just 10,000 more than a five-decade low in mid-2012.
Not Done
In Menlo Park, builders are selling houses long before they’re completed, said Keri Nicholas, a Realtor with Coldwell Banker in the affluent Silicon Valley town. Land is in such short supply that they’re buying million-dollar homes to knock down and put up mansions, she said.
A three-bedroom house Nicholas listed for $2 million last month received four offers from builders. It sold to an owner-occupant who paid all cash, she said.
In south Florida, 20 condominium towers with more than 3,300 units are under construction, according to Peter Zalewski, owner of Condo Vultures LLC, a brokerage and consulting firm based in Miami. Another 14,600 units are planned, about three-quarters of them for Miami-Dade County, where the crash left dozens of unfinished and failed condo projects, now mostly filled with renters, he said.
“I don’t think there’s any question that we’re in the early stages of the next great south Florida construction boom,” Zalewski said.
The conditions that have propelled prices up for the past year won’t last, said Joel Naroff, president of Naroff Economic Advisors Inc. in Holland, Pennsylvania.
“We’re eventually going to see mortgage rates increase, supply increase, and affordability decline, so you probably cut price gains at least by half,” Naroff said. “It will be a slowdown, not a crash.”
To contact the reporters on this story: Kathleen M. Howley in Boston at kmhowley@bloomberg.net; Prashant Gopal in Boston at pgopal2@bloomberg.net.
To contact the editors responsible for this story: Kara Wetzel at kwetzel@bloomberg.net; Rob Urban at robprag@bloomberg.net.
More on housing:
This hasn’t happened in the housing market in over seven years
This could be a huge red flag for New York real estate
How Ben Bernanke could be creating a brand-new housing bubble
Article source: http://www.thedailycrux.com/Post/42752/more-and-more-evidence-suggests-a-brand-new-housing-bubble-could-be-starting
From DollarCollapse:
One of the lessons gold bugs are learning, in the most painful way possible, is that you can’t trade a manipulated market. When big players with regulatory immunity can move an asset’s price – and can see resistance/support levels and moving averages just as clearly as anyone else – smaller traders don’t stand a chance.
In the gold-is-manipulated script, governments and their bullion bank proxies push the price to levels where they know hedge funds and other traders have stop-loss orders, which kick in and send the price careening lower. Then the manipulators buy back their short positions, thus gaining a two-fer: fleecing the flock for a nice profit, and crushing the spirits of stackers and preppers and regular folks who value honest money.
Which brings us to the following article, published by a major bullion dealer:
Rarely in bull markets do we see opportunities like the one being presented to silver and gold investors right now…
More on gold:
Veteran commodities trader: Gold and silver could be headed much lower
Why gold could be the QE “canary in the coalmine”
Porter Stansberry: A new warning on gold
Article source: http://www.thedailycrux.com/Post/42751/controversial-post-why-another-attack-on-gold-could-be-coming-soon
From Washington’s Blog:
California Congressman Devin Nunes (R-CA) says that the Department Of Justice tapped phones in the rooms where Congress members speak informally and off the record, eat, sleep and socialize when they’re not on the floor of the House of Representatives or in their individual offices.
These rooms are known as “cloak rooms,” which are the spaces in which a lot of informal conversations occur… both between Congress members, and Congress members and reporters.
Congressman Nunes told Hugh Hewitt:
[Congressman Nunes]: I don’t think people are focusing on the right thing when they talk about going after the AP reporters. The big problem that I see is that they actually tapped right where I’m sitting right now, the Cloak Room…
More on the White House:
New battle over banks shows Obama and Wall Street are on the same side
Gov’t OUTRAGE: While America watched Boston, Obama quietly signed a shady new bill into law
The Obama administration has now admitted the unthinkable
Article source: http://www.thedailycrux.com/Post/42750/unbelievable-california-congressman-exposes-another-huge-potential-white-house-scandal
From Casey Research:
The last time Vladimir Putin was president, he laid the foundation to pull Mother Russia from the wreck of economic chaos to a world power once again. This time, he’s ready to extend that influence to counter the West. His tools: Russia’s abundant resources of energy, including uranium.
There’s a new war developing on the continent, and the weapons this time will be oil wells, gas fields, and uranium mines, pipelines and ports, processing facilities, and supply deals.
Led by Russia’s vast resource wealth and China’s massive bank account, the countries of Asia and those along the Eurasian divide are realizing they do not want or need help from the West to achieve their goals. They are settling their differences, negotiating closer relations, and advancing their plans without as much as a phone call to Washington or Brussels.
After years of Western dominance in world affairs, they’ve had enough. And with Vladimir Putin back in as Russia’s president, this emerging bloc has its leader.
Vladimir Vladimirovich is a man of remarkable intelligence, determination, and ruthlessness. In many Russian eyes, that last attribute is far from a fault – they see him as a man’s man who restored their country’s pride, economy, and position of influence after a humiliating period they’d rather forget. If that has required trampling some citizen rights along with much of the country’s new capitalist class… well, nothing comes for free.
From the chaos of financial collapse and political turmoil in 1998, Putin increased GDP by an average 7% annually, cut in half the number of Russians living below the poverty line, grew industry by 75%, and doubled real incomes.
He’s achieved these accomplishments largely though development of energy resources. Under his guidance, Russia became a global energy superpower. Today, with a much-strengthened country under his feet, Putin will use his control over…
More on Russia and uranium:
Jim Rogers: Why I’m targeting Russia now
One country could completely change the market for this popular commodity
The biggest hurdle to U.S. energy independence may have nothing to do with oil
Article source: http://www.thedailycrux.com/Post/42749/casey-research-one-unexpected-country-could-disrupt-the-global-energy-markets
From Forbes:
Just a few weeks have passed since most parents of high school seniors plunked down their tuition deposits locking in their teen’s spot at the college of their choice.
What few realize is that for hundreds of schools, the May 1st deadline isn’t the end, but the beginning of a scramble to fill up freshman classes that could have empty seats come September.
According to the National Association of College Admissions Counselors (NACAC), no fewer than 288 colleges have so far reported that they “have space” for incoming freshman despite the fact that the “official” deadline for most schools has passed. That number is likely to grow as…
More on saving money:
Porter Stansberry: The two big reasons you’ll lose money this year
Doc Eifrig: A “no-brainer” way to save big on your prescriptions
Why saving for your child’s education could be a huge waste of money
Article source: http://www.thedailycrux.com/Post/42748/tuition-discount-alert-fifty-top-colleges-desperate-for-more-students
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