Oct. 18, 2013
We’re late getting our usual weekly email out as we’ve spent the past 2 days at the Gold Symposium in Sydney (we fly back late this afternoon).
So we haven’t spent too much time watching the newswires although a bit has been going on. The debt ceiling can has been gently kicked down the road for another few months anyway (or rather as Jeff Berwick from The Dollar Vigilante preferred to call it the Debt Target – because they always hit it! ).
The precious metals prices have bounced up quite sharply on this news. Who knows why exactly? Perhaps because buyers believe an increase in the debt ceiling will mean ongoing currency devaluation will continue to be the norm?
The wifi at the hotel seems rather slow so we’re keeping this brief today in the interests of actually getting something out to you this week.
Live from the Gold Symposium in Sydney
There was quite a list of speakers at the Gold Symposium including Rick Rule from Sprott Asset Management who was very entertaining and as mentioned above Jeff Berwick of Dollar Vigilante fame or perhaps rather infamy.
John Butler gave an excellent presentation sharing his view as to how gold will likely return to the centre of the monetary universe. And however grudgingly the various major economies of the world may be to allow that to happen, they will likely be forced to do it as the lesser of 2 evils. The other option being a complete collapse.
John Butler will also be in Auckland on Monday and Wellington on Tuesday (go here for details on how you can still get tickets to see him)
John wasn’t the only speaker to think an agreed revaluation of gold to a much higher rate is the most likely end game. That is, rather than a complete systemic collapse, the powers that be will eventually have their hand forced and an overnight revaluation will occur. Our friend Louis Boulanger also thought this the most likely outcome.
Likewise Chris Powell of GATA also shared this as one of 3 possible end game scenarios. Chris gave some quite cutting remarks aimed at the worlds gold miners saying most didn’t understand the monetary nature of the product they dug up and were doing little to nothing to combat the “blatant” manipulation going on in the gold market.
The manipulation theme was quite strong this year with David Evans of GoldNerds giving his interpretation as to how and why the price plunged back in April and the bullion banks were at the heart of it in his opinion. But there was a strong counter attack from Sean Russo of Noah’s Rule. Sean outlined how he worked for Rothschild’s for 20 years who are meant to be the “worst of them” and he never saw any evidence of any manipulation while there.
Anyhow, we’ll have some fuller reports to come over the next week or 2 on what we’ve heard over the last 2 days so keep an eye on the website for those and of course for our weekly email in the coming weeks.
Gold and Silver in NZ Dollars
As mentioned gold and silver have bounced back strongly over the past couple of days since the debt ceiling fiasco/sideshow/distraction was “resolved”.
However they are both still down from our email last week. Gold last week was $1593; today $1558.66, so down 2.15%.
For gold in NZ dollar terms, the reverse head and shoulders chart pattern that appeared to be playing out seems to have failed, with the price briefly dipping lower than the June lows yesterday. See the chart below.
In US dollars the gold price is still well above the June lows ($1320 versus $1199, so it is once again the strengthening kiwi dollar holding gold down.
So where to from here?
It’s hard to deny that gold in NZ dollar terms seems to remain in a downtrend for now. It will be interesting to see whether the US dollar gold price can continue to hold above the June closing low of $1199 in the coming weeks as this will probably be what determines whether gold in NZ dollars goes any lower.
Last week silver in NZ dollars was $26.94 versus today at $25.87, so is down 3.97%.
However unlike gold silver still remains a bit above its June lows.
Sentiment remains incredibly weak for precious metals, perhaps shown by how far down the attendance was at the Symposium compared to last year. Our guess would be barely 40% of the audience size.
Rick Rule perhaps summed it up the best in that while none of the fundamentals for purchasing gold and silver have changed since 2009/10, it is only the price that is different.
“So you’ve been through the pain. It might be worth hanging around for the gain.”
For anyone believing the fundamentals still exist for removing some wealth from the system, the price for gold is now as low as it was in June. It only stayed there briefly back then and appears to be bouncing higher again now. So a good chance to either average down or get your first tranche if you are yet to purchase.
While silver may not be at the June lows it is also at a pretty good level for grabbing a slab. If you are so inclined then get in touch. We don’t leave Sydney until after 5pm NZ time so we are “open” as normal:
1. Email: firstname.lastname@example.org
2. Phone: 0800 888 GOLD ( 0800 888 465 ) (or +64 9 2813898)
3. or Online order form with indicative pricing
Have a golden week!
Glenn (and David)
Ph: 0800 888 465
From outside NZ: +64 9 281 3898
This Weeks Articles:
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