How much exposure do you have to gold and silver?

“Commercial traders [in mid March] had built their net short position in gold back up to 195,000 contracts. So I suggested it was time to take profits on the gold trade.

Since then, gold has fallen about $50 an ounce. But according to last week’s COT report – which includes positions as of last Tuesday – commercial traders have increased their net short position to 206,000 contracts.

That means that gold is likely to pull back even more in the short term. So traders should get an even better buying opportunity in the weeks to come.

Don’t miss it.

I own gold for the long term. And I’m looking forward to the chance to buy more of it.

As governments around the world continue to print money and central banks push interest rates into negative territory, the long-term case for owning gold gets stronger.”

“For the last five years, G-O-L-D has been a four-letter world. The suppressors have used every trick they have to abuse it, insult it, and diminish it. If on the entire planet even one study existed, for example, to show gold caused cancer, rest assured they would have found that one by now, and used it too. (Ironically, there are studies that show, in some circumstances, gold can actually treat cancer…but I digress.)

Lately, however, gold has reappeared in the news with a positive bias, and reignited the interest of the longs. April is shaping up to be a very definitive month in the Gold Wars.
This month gold could drop like a stone. Or the bulls could overwhelm the shorts and the metal could soar.

Or, the third (and maybe the most interesting) possibility, gold could simply hold at its current levels. Understand that if gold held this month in spite of the largest commercial short position ever, that would be a major bull signal for the rest of the summer.

My advice? Take a seat and prepare for fireworks.”

“[A]t what point will the Fed lose faith in its models entirely and try to get inflation the old-fashioned way with more ease and a cheaper dollar?

What does my IMPACT system tell us about the next turning point in this never-ending currency war?

The short answer is the turning point is growing near but is not quite here yet. We look for the Fed to raise rates in June (possibly, but unlikely in April) and continue to make hawkish statements about future rate hikes, despite Tuesday’s speech. This will put upward pressure on the dollar, partially offsetting recent developments.

But sooner than later, the weakness in the U.S. economy and stock markets will become obvious even to the Fed. At that point, probably late in 2016, a major turning point in the currency wars will be upon us.

Look for the Fed to reverse course, take easing steps (forward guidance, rate cuts, “helicopter money,” QE4 or even negative interest rates) and trash the dollar. When the dollar goes down, the Fed will finally get the inflation it wants. But it may be too little, too late.”

“As Central Bankers Confront Stagflation, Gold Shines More Brightly

Central bankers have already inflated beyond reason since 2008. Eventually, this excess credit, some $100 trillion of it, will circulate. The West’s larger asset bubbles, including the derivatives bubble, are bound to burst at some point, and some may have already.

Central bankers won’t be able to raise rates for fear of destabilizing what little economic progress has been made. The result will be something that defined the 1970s – a period analogous to this one. We’ve mentioned it in numerous articles: Stagflation.

We’re seeing more articles about stagflation now as reality of its emergence is beginning to be recognized by the mainstream media. CNBC recently posted an article entitled, “Wall Street’s latest dirty word—stagflation.”

The last bout of stagflation in the 1970s pushed gold to around $800 an ounce, a valuation that still hasn’t been reached again when accounting for inflation. This is why some analysts eventually expect gold to travel to $2000 an ounce or more against the dollar.

Conclusion: Much in the world today is unsettled and frightening. Continued purchases of gold and silver are an apt, if modest, remedy. It’s paid off before.”

Source.

Read more: Could Stagflation Happen Again?

There’s been a wealth of data out on precious metals this past week. Two metals consultancy firms GFMS and Metals Focus both published reports on gold demand.

Hardly any of their figures matched up and they were different from those that Koos Jansen produces care of Shanghai Gold Exchange withdrawal data. This data does back up what a refiner known as “Goldfinger” had to say about Chinese demand though. More on that soon.

“Looking at private-investor appetite to buy and own physical gold however, China’s demand rose overall in 2015, say both GFMS and Metals Focus, notably in the second-half of the year…after prices slipped below $1100 per ounce, the stockmarket crashed, and the Yuan was devalued.

Amid China’s financial slump, notes GFMS, Beijing imposed new restrictions on people buying US Dollars. The strict limit of $50,000 per citizen was strengthened by a new rule forcing banks to report any customer buying more than $10,000…and anyone building large holdings below the $50,000 limit would also need to be ‘blacklisted’.

“This increased scrutiny and additional red tape,” says GFMS, “made gold an attractive option”. Call it “widespread safe-haven type gold buying,” says Metals Focus, marking a change from the last decade’s search for capital gains from gold…and a turn to “gold’s wealth preservation properties.”

China’s shift of tone comes despite disappointment with gold’s poor performance after households bought so heavily on the 2013 plunge. It may also map another “plug” for the gap between visible consumer demand and China’s world-beating supplies.

Because as the Q&A session at Metals Focus’ book launch last Thursday noted, data on retail investment demand doesn’t capture large bank-vaulted purchases. And with the gap between visible demand and supply yawning wider in 2015, odds are that large-scale allocations to gold from money managers, high-net worth individuals and investment institutions in China have been growing sharply.

“Really?” asked one attendee. “Isn’t this surely the biggest story in the gold market right now?”

Source: Adrian Ash via email.

“According to ‘Goldfinger’, the supply of physical gold remains scarce. While he says there is increasing amount of scrap gold coming from Southeast Asia (due to the economic slowdown there),

‘On the other hand, good delivery bars were becoming scarcer. Vaults in London — such as the vault holding gold for the GLD exchange traded fund — were being stripped bare. Goldfinger knew this because each LBMA good delivery bar is stamped with the name of the refinery that produced it, and the date it was produced.

‘Bars are generally stored in a vault on a ‘last-in-first-out’ basis. Newer bars are removed first. The older bars — some with dates from the 1980s — are not moved out until the vault is almost empty. Goldfinger was now seeing more of those older bars come in for refining.

‘He told me he had recently returned from the Middle Kingdom where he had visited Chinese refineries and gold mines. His tour was somewhat restricted by Chinese Communist officials but, as a prominent gold executive himself, he was able to see far more than most outsiders.

‘He said Chinese gold demand was insatiable. The Chinese were buying over 450 tonnes of gold produced from their own mines each year, while importing approximately 1,400 tonnes of gold on top of this. Meanwhile, Chinese gold exports were zero.’

–Jim’s message? Buy gold before the buying panic sets in.”

Source.

“ICBC Standard Bank Reclassified as an LBMA Market Maker

ICBC Standard Bank has been reclassified as a spot Market Making Member of the London Bullion Market Association with effect from today.

In order to qualify as a LBMA Market Maker, a company must offer two-way quotations in both gold and silver to the other Market Makers throughout the London business day. Reclassification is the responsibility of the LBMA Management Committee. In deciding on the issue of reclassification, the Committee takes account of the views of the other Market Makers on the performance of the candidate company during an approximately three month probationary period.

Total LBMA membership stands at 146, consisting of 13 Market Making Members, 67 Ordinary Members and 66 Associates Members. The membership list can be found on the LBMA’s website.”

Source.

The WGC is pretty low on hype but they did make a somewhat surprising recommendation. That being that Investors should consider doubling their gold allocations amid negative interest rates.

“We have entered a new and unprecedented phase in monetary policy. Central banks in Europe and Japan have now implemented Negative Interest Rate Policies (NIRP) to counteract deflationary pressures and, in some cases, currency appreciation. Amid higher market uncertainty, the price of gold is up by 16% year-to-date – in part due to NIRP.*

Investors, including central bank managers, should assess the implications of holding bonds with negative return expectations on portfolio composition and risk management.

Our analysis shows that:

— Prepared for Power Cuts? —

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