Since its discovery 7,000 years ago gold has been spun, stretched, beaten, eaten or just stashed in bank vaults.
[[wysiwyg_imageupload:2047:]]By Jeb Handwerger
Physical demand for gold and silver is strong as investors seek protection of wealth against uncertainty in the Middle East. It has already been reported that Col. Qaddafi has been a wise gold investor, preparing for this crisis by hoarding a large amount of the precious metal to fund his military and to hedge against economic sanctions. Just like he's been hoarding precious metals, many throughout the Middle East are trying to sell their assets and seek out the shelter of safe havens. It is being reported by the International Monetary Fund that Qaddafi has amassed one of the largest gold positions in the world. Libya's gold reserves are estimated to be worth over $6 billion, and the gold can be used to buy paid fighters. At a time when international sanctions have been increased, gold has been Qaddafi's store of wealth; he appears to have been ready for this day because Libya's holdings are much larger when compared to countries with similar demographics.
Gold continues to run up the Gann angle 45 degree line. Buyers come in on the dips. Question, what will stop or even slow down this power rally. Answer, changes in central bank and government policies. A burst of strong dollar in 2008 didnt slow down gold, nor did the financial crisis, QE1 ending didnt, nothing so far. The bull market has proved itself. This bull market has yet to see the gold 1980s style blow off. The bulls are praying for a happy and wealthy ending.
[[wysiwyg_imageupload:1905:]]By Clif Droke
The single most dominant theme among political commentators is the belief that government should do something - anything - to fix the financial system. Regardless of party affiliation, there is a near universal agreement that government should be charged with the task of regulating the financial realm in order to prevent another catastrophe.
By Jordan Roy-Byrne, CMT
Why is Silver continuing to outperform Gold? The Silver/Gold ratio tends to lead or follow the stock market. Risk assets are outperforming. Silver is outperforming Gold as a risk asset. It is not outperforming for monetary reasons. That occurs when both Gold and Silver advance but Silver outperforms Gold. This is one of several reasons why bugs should be wary of Silver in the near-term.
Typically the stocks will lead the commodity. Relative weakness of stocks against the commodity is always a warning sign. Remember 2007-2008 (to use an example)? In the chart below, we show SLV along with four silver stocks charted against SLV. Prior to the big breakout at the end of the summer three of the four stocks were outperforming Silver. Today, Silver is within a hair of its high yet the stocks are badly lagging.
There was more selling than buying in January of GLD, the gold ETF that ranks in the top 10 holders of the precious metal in the world– right up there with the central banks of the US and several other nations. GLD holds gold worth $53.8 billion according to a spokesman for the fund. Some of its largest owners are hedge fund proprietors George Soros and John Paulson.
By Jordan Roy-Byrne
At the end of December we posted a commentary titled "Three Things that could Halt Gold's Run." We theorized that strength in conventional markets pressures Gold. When stocks perform well, mainstream gurus and stock jocks can ignore Gold. Here is a snippet of our comment:
By Tim Wood
Senior gold stocks are trading at their most discounted values since the depths of the 2008 credit crisis and its wake into Spring 2009. The recent selloff commenced at the start of the year and has driven equities values down to levels that are more suggestive of gold prices at around $1,250 per ounce, or some $100/oz lower than current prices. That raises the question whether gold stocks are a screaming buy or gold bullion is a screaming sell.
Yes, the price of gold keeps rising. But for gold to be a speculative bubble, lots of people would have to buy into it. So far, participation remains thin.
By Jordan Roy-Byrne, CMT
Normally we write about the things and conditions that cause precious metals to rise. While these things may be obvious, the corresponding rise in the bull market will not always be consistent and linear. Small and large corrections will occur along the way. Some will be purely technical while some have real drivers. There are three things which can precede a deep correction or consolidation in the precious metals complex.