• Gold: 1,290.45 4.86
  • Silver: 17.07 0.07
  • Euro: 1.180 0.004
  • USDX: 93.318 -0.227
  • Oil: 47.64 0

Silver Market Morning: August-11-2017

With the gold price continuing to rise we are torn between New York’s exuberant paper gold trading and Shanghai’s solid gains on the back of physical trading. Today and next week become important days for the gold price. It is also the time when North Korea said they would fire a missile towards Guam!

Silver Market Morning: August-10-2017 -- FOMC and...

Members of the FOMC are talking to the media in very dovish manners. The evidence that inflation is falling has clearly disturbed them. After the 2015, 2016 steady building of inflation, it is falling back again. This implies that we will not see another rate hike in 2017. They still feel that a start to the Fed’s Balance Sheet tightening will be made. After all, it will be slight and the Fed believes it will have barely any impact on markets. While academically that may be true, psychologically it may be a mistake. The recovery remains vulnerable and fragile. Any hint of tightening may well cause a market reaction when they broach that subject with action.

Silver Morning: August-9-2017 -- about to break...

We were around when the Cuba Missile Crisis brought the world to the brink of World War 3. Today this is one country, North Korea, against the U.S. to begin with. But in 1952 when the Korean War raged it became China plus North Korea that took on the Allies. We see a potential restart to the war again [which never officially ended] and a major deterioration of U.S. - China relations if it does. China will not accept the elimination of North Korea! At the moment the markets are not discounting this likelihood. We may see China and Japan do so soon. In South Korea the atmosphere is moving towards fear quickly. Gold will benefit if war does break out as the war hurts financial markets the whole world over.

Silver Morning: August-7-2017

In the euro there was only a small drop in the gold price. So where is the dollar going from now on? We don’t see the gold price falling in other currencies and indeed we are not convinced by the jobs report spurring wage inflation soon. The jobs being created are easily low, but on top of that the impact of technology on quality jobs is heavy. The failure of full employment to spur wages is a structural change that will not reverse.

Silver Market Morning: August-4-2017

The dollar is firmly in its bear market, but the media are calling for a rally as it is ‘oversold’. When it comes to a currency we do not see it moving like a share price. This applies to the dollar in particular. Hence we do not give too much weight to the Technical picture of the dollar, right now as we are seeing structural changes in the currency world.

Silver Morning: August-3-2017 -- still...

New York closed at almost $14 higher than Shanghai’s yesterday’s close. In what we see as a striking testament to the power of Shanghai’s pricing dominance Shanghai moved slightly lower than its previous close with London following it at today’s open with $4.60 discount to Shanghai’s trading level today. With the gold world still looking at New York in the belief that the world will follow that market an understanding of the interrelationship of the three global gold markets is becoming paramount!

Silver Morning: August-1-2017 -- consolidating...

Comments from Alan Greenspan, that the equity market is not yet a ‘bubble’ but the bond market is, comes as a stark warning to financial markets. When it does ‘pop’ everyone will be hurt he says. When that happens, you will see equity and property prices badly damaged too. Gold will become a haven for U.S. investors then too. We reflect on the fact that at one time the euro cost $1.40.

Silver Morning: July-31-2017 -- silver rising in...

A lifetime of experience in global financial markets has taught us to recognize when a market is over extended either way. It has also taught us that it can stay over-extended for a long time The clear signs are when a market has discounted a very rosy future and expected returns are small relative to the price of assets. But in a climate where prices are very high, fund managers have to decide if the reasons are because they are over-bought, or if the money used to buy them is depreciating in value. Right now equity prices relative to fixed interest rate returns are not excessive. But the prospects of higher rates that will change this have been put off, allowing equities and other assets to remain too high for longer. Indeed the temptation this brings is that prices can go, unjustifiably, quite a bit higher. But this brings into view that when markets eventually do turn down they will fall precipitously. In such a climate ‘stop loss’ protections should be replaced with short positions. Once that happens on a large scale interest rates will become irrelevant and permit markets to fall precipitously simply because markets are falling.

Silver Market Morning: July-28-2017

With all the chatter about the timing of rate hikes or trimming the Fed’s Balance Sheet, one very, very important factor is being overlooked in the U.S. If inflation continues at lower or lowering levels and the recovery stalls followed by a downturn, the Fed has almost no more tools with which to combat the falls. As it is rates continue to be so low that any lowering will have little to no impact [unless they go negative] on stimulating the U.S. economy. Likewise, trimming the Fed’s Balance Sheet, we feel, will have little to no impact on the U.S. financial world. If they go that road and there is a downturn in the U.S. further stimulation is likely to crack confidence in the dollar, something that the Fed cannot afford! Certainly little could be more positive for the gold price. Despite their positive demeanor, Fed officials must be very disturbed by the downturn in inflation.

Silver Morning: July-27-2017

The Fed decided not to raise rates, as expected but only said they would start lowering the Fed’s Balance Sheet, relatively soon. This disappointed markets including the global gold markets that are taking the gold price above previous resistance levels into the $1,260 region. But once again the biggest feature of the day was the softening dollar. It has confirmed it is in a ‘bear’ market and will decline over the next few years. More and more analysts including major institutions are now talking the dollar down, over the long term.