Bullish bets in gold at their highest level in 5 months

Sunday, March 4, 2012 12:06:26 PM America/Toronto

Investing in metals

FUNDAMENTALS

  • Spot gold was little changed at $1,712.36 an ounce by 0041 GMT, after posting a weekly decline of 3.9 percent in the previous session.
  • U.S. gold edged up 0.2 percent to $1,713.80.
  • Spain set itself a softer deficit target for 2012 than originally agreed under the euro zone’s austerity drive, putting a question mark over the credibility of the European Union’s new fiscal pact.
  • Money managers, including hedge funds and other large speculators, raised their bullish bets in gold to the highest evel in five month in the week of Feb. 28, as prices surged more than 4 percent to three-month highs before they corrected sharply.
  • Investors will be watching China’s annual meeting of parliament, the National People’s Congress, for hints of policy shifts that will direct the cause of the world’s second largest economy

 

 

Comments | Posted By Jamie Cohen

China paying for oil in gold

Monday, April 23, 2012 11:41:00 AM America/Toronto

The Implications of China Paying in Gold-investing in Metals
by Jim Sinclair

The implications of China paying for Iranian oil in gold is the most important event in the modern history of gold:

1. It is reasonable to assume that China has been threatened with total or at least selective exclusion from the SWIFT system if it pays in any currency for Iranian oil.

2. Gold has been decided by China as the means of making payment for massive international purchases free of the SWIFT system.

3. Other Asian and Middle Eastern nations will now see the gold they hold as money free of Western economic interference.

4. Gold now is not only money free of liability, but also free from interference regarding settlement by the long arm of Western influence.

5. The SWIFT system is becoming ever more a weapon of Western international political will.

6. In case of war anywhere, it is now demonstrated for all to see that only gold will buy the materials required. Paper currencies are under the SWIFT system’s control in settlement.

7. Far from being a barbaric relic, gold is now clearly the money of state survival in every sense.  It is the ultimate in precious metals investing.

8. It is reasonable and possible for the supply of physical gold as investment to fall far behind the size of the massive short positions now common to algorithm and hedge fund paper shorts. That will make an effective cover at a reasonable price as compared to a certain day’s close impossible the following day on an exogenous event.

9. It may not be possible to use TA of any nature to determine a price of overvaluation for gold. Should the USA decide to take on China in full out economic war with the physical market totally illiquid, such as through isolation from the SWIFT system, consider the gold price that might result.

 

Comments | Posted By Jamie Cohen

Toronto, Ontario – May 1, 2012 – This summer marked the annual Mega Networking Event, a networking opportunity for entrepreneurs and other like-minded professionals in the Greater Toronto Area (GTA) to mingle and make new connections.

Canadian Bullion Services (CBS) had the opportunity to secure a booth and connect with other industry professionals. Hosted the by Richmond Hill Country Club, the Mega Networking Event was the perfect opportunity for Canadian Bullion Services to talk about the importance of investing in precious metals.

“The night was a success and we left with the satisfaction that people now had a better appreciation for precious metals and their role in the marketplace”, stated a CBS representative.

“We made fantastic connections and the entrepreneurial spirit of the event made the evening highly worthwhile.”

The Mega Networking Event is held annually in May.

About Canadian Bullion Services:

Canadian Bullion Services was established in order to provide individuals and businesses a vehicle to precious metals investing, while combining the lowest commissions and providing superior service for clients. Contact us to receive a free consultation on purchasing gold, silver, platinum, and palladium and review out weekly Bullion Update.

Comments | Posted By Jamie Cohen

New lows in silver, now is the time to buy

Tuesday, May 29, 2012 11:35:23 AM America/Toronto

This has been an interesting week with a lot of new lows unseen in quite some time. We saw silver today testing new recent lows below the $28 mark. Gold has tested the $1550 mark a couples of times. Oil even took a massive hit, dropping roughly 10% this month down to $90 a barrel. The common theme? USD strength. Yup, believe it or not.

Investors around the world have been fleeing the Euro pushing the Euro/USD pair to 2 year lows. This translates to a lower euro price and a subsequent higher dollar price. The most recent catalyst for further Euro selling pressure is that ratings agency Egan Jones has downgraded Spain’s credit rating. This has been the single largest catalyst for the ‘May Commodity Selloff’ that we have seen in North America. The credit downgrade has renewed fears of a European economic recession, sending the Euro down. Gold and silver have not declined nearly as much in Euro terms as they have in dollar terms. This surge in USD cannot, and will not last. The spotlight is on Europe now, and in due time will be shining brightly on the US once again. Investing in precious metals for the past ten years has been quite the success and education for some and a missed opportunity for others. This pull back in precious metals we are witnessing is an excellent opportunity for those already invested to add to their positions, as well as for new precious metals investors to get involved for their first time at what are relatively low price levels. This discounted price, just like anything on sale, does not last forever. Looking back in 3-5 years anyone who is able to get their hands the physical precious metal at today’s prices will be happy they did so. The Gold/Dow ratio explained below reinforces the opportunity people still have to invest in physical precious metals.

GOLD/DOW RATIO
A lot of people like to determine things in ratio’s; or things relative to something else. A P/E ratio for stocks, or the Gold/Silver ratio for precious metals. A ratio we follow closely, and believe anyone who has ever thought of investing in anything should be aware of the gold/dow ratio, simply, how many ounces of gold it takes to equal the Dow. The ratio currently sits at just under 8 with gold at $1550 and the Dow at 12500 (approximations). We can see clearly two things on the bottom chart with trend lines. One, is that volatility has picked up immensely since the establishment of the Federal Reserve and the ultimate elimination of the Gold Standard (more on that next week). Two, is that after a peak ratio of about 50/1 in 2000 at the height of the dotcom bubble, the ratio has come racing down towards the low of about 1/1. This ratio has been seen at two other points in history before and I believe it is likely we are headed towards this 1/1 ratio once again before we see the ratio begin work in the other direction.

http://www.sharelynx.com/chartstemp/DowGoldRatio.php

The long term trend, measured by any metric, is up for gold and silver. The short term on the other hand has been lower. It is times like these, short term divergences in the long term trend, that allow us at Canadian Bullion Services the opportunity to follow the first part of one of the cardinal rules of investing: buy low, sell high.

I’d like to end of this week’s blog post by encouraging you to watch and listen to a link of famed French President Charles DeGaulle calling for the only lasting standard of money the world has ever seen.

http://www.youtube.com/watch?v=i-g2iGskFPE

BUY THE PHYSICAL!

 

Comments | Posted By Jamie Cohen

USD weakens and Gold jumps $50

Tuesday, June 5, 2012 11:22:00 AM America/Toronto

Precious Metal Investing
This was a quiet week for most asset classes, except for Friday, which saw volatility unseen yet this year. The $50+ move in gold and the declines in the U.S.stock market were the single largest gains and declines in over a year. After steadily gaining through most of this year, the Dow Jones turned red on the year on Friday. This move was extreme, and we believe it was so extreme because it was so overdue. The massive miss of the Non-Farm Payroll number was the specific catalyst but it was long overdue. Along with this miss came a massive reversal in the EUR/USD pair as the Euro benefited from weakness in the USD caused by the NFP miss. This USD weakness was a major part of why gold and silver went as high as they did as quickly as they did.

In order to contextualize this wild move for those we read our last post, the gold/Dow ratio has moved from 8/1 to under 7.5/1 in just one week. This is a significant move, and would have proved to be a great time tell sell equities and get into physical gold bullion. We expect this to be one of many significant catalysts propelling gold and silver to levels not seen in quite some time, and pushing this ratio close to 5/1 faster than people think. Last summer saw a sharp decline inU.S.equities and a significant push higher in gold and silver. Gold was actually closing in on the $2000 mark and silver was holding strong around the $40 dollar mark. The second the spotlight shifts away from Europe and onto theU.S.again we will see USD weakness and extreme strength in gold and silver. Before then please consider buying or adding to your precious metals investing.

All the best!

 

Comments | Posted By Jamie Cohen

Germany-wants to make lawful that debts have to be backed by gold

Tuesday, June 12, 2012 11:16:36 AM America/Toronto

The European crisis-precious metals investing

  • Gold: $1620
  • Silver: $28.9
  • Platinum: $1464
  • Palladium: $624

Hello to all. This has been a very interesting week. Europe, as always it seems, is in the spotlight. Over the weekend Spain announced a 125 billion euro ‘bailout’ of their banks. This sent stock markets soaring on Monday, for only about a few hours, as even the Spanish stock market closed down on the day after being up 6% at one point. This is yet another example of European leaders kicking the can down the road. The problems and bailouts in Europe have piled up like a big pile of stinking smelly $@%!. Markets recognize it, and gold recognizes it as it is comfortable back above the $1600 mark. To all that were able to buy the most recent dip in gold, kudos. As we had predicted the price dropped under $1600 presenting a very good buying opportunity for physical bullion purchases. Gold is back above $1600 and it appears $1600 may act as a new support price. This is a leg-up from the support we saw at $1550 through the month of may. There is some extremely telling news out of china that legendary precious metals investor Eric Sprott covers in a short piece a few days ago titled ‘Gold Alert’. He goes over recent Chinese physical precious metals purchases as well as other very important points about the world of physical gold. The link to that article can be found just below and I urge our readers to read over the report. (he really saved me a lot of research time this week with this) 

The most important thing to come out of Europe this past week was not the Spanish bailout. It was the announcement that Germany wants to make lawful that debts have to be backed by gold, and if unpaid, Germany can redeem the debts of its fellow euro members in physical gold. Italy in particular has $128 billion in Gold reserves which can be used to back new euro-area bonds. There is a fantastic article in the Globe and Mail in which the author explains simply what a rejection or acceptance of the policy really means for the future of gold and of the euro as a trusted currency. He goes on to say that backing the euro with gold would strengthen the euro, and I strongly agree! That article can be found here: http://www.theglobeandmail.com/report-on-business/international-business/european-business/a-golden-idea-to-save-or-doom-the-euro/article4243556/.

That is all for this week. As always feel free to call or email us with any questions, concerns, or if you are looking for more articles about precious metals bullion and precious metals investing.

All the best!

Comments | Posted By Jamie Cohen

Toronto, Ontario – July 10, 2012 – With the prices of gold and silver becoming more and more attractive, ownership these two metals has become lucrative position. Canadian Bullion Services’ recent seminar entitled “Why You Must Own Gold and Silver Today” at the Richmond Hill Country Club addressed just that.

This free seminar addressed concerns about recent economic downturns and how to protect yourself against a looming recession.

Canadian Bullion Services’ Chief Operating Officer, Daniel Kroll, believes that in order “to achieve financial success in today’s economic times, education in the markets is crucial. Precise execution is even more critical to preserve and grow your wealth.”

This powerful seminar touched on why the physical ownership of precious metals is a must for one’s investment portfolio and how to properly utilize leverage to maximize your return. Other topics included an introduction to the basics of precious metals ownership, whether to invest in bullion, coins, ETFs, or futures, how and where to store your bullion and coins, the risks and rewards of owning precious metals, and how to protect yourself with stop losses.

“Although previous metals have historically been used for capital preservation, we believe there is also significant potential for capital gains in these markets in today’s times” announced Kroll.

The seminar drew in over 30 attendees who all left with a better understanding of the precious metals financial market. After the success of this seminar, Canadian Bullion Services hopes to host more in future.

About Canadian Bullion Services: Canadian Bullion Services was established in order to provide individuals and businesses a vehicle to precious metals investing, while combining the lowest commissions and providing superior service for clients. Contact us to receive a free consultation on purchasing gold, silver, platinum, and palladium and review out weekly Bullion Update.

Comments | Posted By Jamie Cohen

Waiting for the next impetus to drive gold and silver higher

Thursday, July 19, 2012 11:10:35 AM America/Toronto

As the summer slowly drags on, the consolidation in the precious metals complex continues as volatility, volume, and ranges become increasingly depressed.   Without any major impetuses to drive it higher, gold has been capped by producer sales and resting speculative offers at the psychological level of $1,600 in three of the last ten trading sessions.   Its broad range in the last two weeks has not even been $50 as many market participants are on the sidelines either for the summer or awaiting news to galvanize the markets.  While it seems like the overall risk for gold remains to the downside, keep an eye out for a potential squeeze on the euro which has accumulated a huge speculative short position over the last few months.  Such a move in the euro could give gold legs in the near term.

Unemployment claims came out slightly worse than anticipated this morning at 386k versus an expectation of 367k.  The markets seem unfazed by the figure and economic data for the rest of the day as well as tomorrow is fairly bland.  It should be a quiet close to the week as July meanders on…

 

Gold

Silver

Platinum

Palladium

High

$1,591.50

$27.58

$1,425.25

$584.50

Low

$1,573.25

$27.17

$1,407.50

$576.00

Last

$1,587.70

$27.40

$1,418.00

$582.50

 

0 Comments | Posted By Jamie Cohen

Bad news for Europe keeps piling on-positive for precious metals

Tuesday, July 24, 2012 11:07:50 AM America/Toronto

The bad news for Europe just keeps on piling up and the trading pattern of the euro accurately reflects that sentiment.  Since the beginning of July, the euro has gone from a high of around 1.27 all the way down to its current lows hovering above 1.21.  In the overnight session, Moody’s revised its outlook on Germany, Luxembourg, and the Netherlands from stable to negative.  Moody’s noted that the outlook had changed due to the “increased likelihood of an exit by Greece from the single currency and the need for greater financial support for struggling eurozone countries from the stronger members of the bloc”.  Greece’s Prime Minister even came out saying that his country is in a “Great Depression” similar to the American one in the 1930s.  Moreover, Spanish 10 year yields have jumped up yet again to trade over 7.56% which reflects the market’s understanding of the risk associated with buying into the Iberian country’s debt.

With the USD gaining steadily against the euro since the beginning of February, the precious metals seem to be getting fully exhausted in their attempts to stem the selling pressure.  All four are nearing major support levels and a euro short squeeze may be the only short term relief before the market returns in force in September.  A three point trendline for gold has initial support at $1,560 while more significant bids will materialize ahead of $1,525.  Silver finds support at $26.50 while palladium has it at $550.  Platinum has now approached the $1,380 area five times in the last three months and this should be a level market participants closely watch in the near term.

 

Comments | Posted By Jamie Cohen

Decidedly bullish headlines out of Europe and the US for gold and silver

Thursday, July 26, 2012 11:05:12 AM America/Toronto

How quickly sentiment can change in this market… in the last three days gold has had two decidedly bullish headlines come out of the US and Europe.  The Wall Street Journal reported late Tuesday that the Fed is more closely approaching action in relation to QE3.  The exact wording was “Amid the recent wave of disappointing economic news, conversation inside the Fed has turned more intensely toward the questions of how and when to move.  Central bank officials could take new steps at their next meeting next week, July 31st and August 1st…”.  This headline caused gold bulls to come out in force and the yellow metal was pushed through psychological resistance at $1,600 yesterday.  Gold stopped in its tracks at a five point trendline at $1,610 but a bullish euro story overnight helped it push through this significant area.

ECB President Mario Draghi stated earlier today “Within our mandate, the ECB is ready to do whatever it takes to preserve the euro – And believe me, it will be enough”.  After succumbing to such steady liquidation over the last few months, this statement caused fear for the many shorts of the currency and an impressive short covering rally has been the result today thus far.  The precious metals have naturally latched on to the move higher and gold’s short term target is a close above a Fibonacci retracement level at $1,628.

 

Comments | Posted By Jamie Cohen