Radio Show Newsletter
WORLD FINANCIAL REPORT ON RADIO November 8th 2018
CHARTS OF THE WEEK-QUOTES-QUICK HITS
-CHART OF THE WEEK: Record Number of Markets Now in the Red in Worst Year Since 1901. 2018 is going down as the worst year for markets ever, by at least one measure. A whopping 89 percent of assets have handed investors losses in U.S. dollar terms, more than any previous year going back more than a century. The metric comes courtesy of Deutsche Bank AG, whose macro strategists feature it as their chart of the week. Bloomberg
-CHART OF THE WEEK: Morgan Stanley Turns a Bit Less Bearish on Stocks. One of Wall Street’s bears is calling an end to the worst of the market pain. While U.S. stocks could be in for a choppy ride during the rest of 2018 as liquidity is unlikely to improve, most of the price damage is done for now, according to Morgan Stanley strategist Michael Wilson. “We see the need for some healing and the Rolling Bear turning into a Chopping Bear as investors try to figure out what will lead during a time of year when short-term performance pressure may exert more influence than normal,” Wilson wrote in a note Monday. Wilson has deployed “rolling bear” for months to capture the idea that markets would be hit by a series of blows affecting different sectors at different times, as the Federal Reserve’s tightening and a less-synchronized global economic expansion weighed on equities.
Shrinking liquidity from the Fed’s quantitative tightening, and now the European Central Bank and Bank of Japan tapering quantitative-easing purchases, has been a focus all year, Wilson wrote. It reached a “tipping point” early last month and was likely the primary catalyst for stocks’ worst month since the 2011-12 equity bear market, he added. “The good news is that global asset prices now reflect this risk,” Wilson wrote. “The bad news is that the growth in global central bank balance sheets is set to decelerate and go negative by January. We think this will accentuate the choppiness and make it difficult to trade.” Bloomberg
-CHART OF THE WEEK: Three Charts That Show the North American Oil Glut Is Moving. North America’s rapid oil production increase has experienced growing pains, and the aches seem to be moving from one joint to another. The latest oil patch to suffer from too much oil is the Bakken shale formation, a massive play that stretches across portions of North Dakota, Montana and Canada. The difference or spread between the price of West Texas Intermediate crude, the U.S. benchmark, and oil delivered at a Bakken pipeline hub in Clearbrook, Minnesota, reached the widest in six years last week before bouncing back.
The problem in the Bakken is that crude from Alberta is taking up the available pipeline space. The plunge may be short-lived once refineries in the Midwest return to service, soaking up the extra oil trying to find new markets. The Bakken clog follows a similarly nasty dip in Canadian oil prices, which at one point this year were as much as $50 less than WTI. The spread was so substantial it spurred some oil-sands companies to talk about curbing output. Bloomberg
-Just how much money do you need to be among the global 1 percent? According to the 2018 Global Wealth Report from Credit Suisse Research Institute, you need a net worth of $871,320 U.S. Credit Suisse defines net worth, or “wealth,” as “the value of financial assets plus real assets (principally housing) owned by households, minus their debts.” More than 19 million Americans are in the 1 percent worldwide, Credit Suisse reports, far more than from any other country, while “China is now clearly established in second place in the world wealth hierarchy,” with 4.2 million citizens among the world’s top 1 percent.
To be among the top 10 percent worldwide, you don’t even need six figures: A net worthof $93,170 will do it. And even if you have just $4,210 to your name, you’re still richer than half of the world’s residents. These numbers reflect the extreme level of persistent wealth inequality. As Credit Suisse reports: “While the bottom half of adults collectively owns less than 1 percent of total wealth, the richest decile (top 10 percent of adults) owns 85 percent of global wealth, and the top percentile alone accounts for almost half of all household wealth (47 percent).” CNBC
-Despite the “good economy,” only 28% of Americans are financially healthy. Only 45% of people in a new survey said they have enough to cover three months of living expenses. By some measures, the American economy is booming. Corporations are raking in profits. Unemployment is low. But wages are still stagnant, and a new report says that only 28% of Americans can be considered financially healthy.
“We felt like we needed to create a definitive study that helped to demonstrate that while the larger economic headlines around a roaring stock market, and low unemployment, and great consumer spending are out there, that’s not actually telling an accurate story,” says Jennifer Tescher, CEO of the Center for Financial Services Innovation, the organization that created the report, called the U.S. Financial Health Pulse. The organization, which works with startups that are building financial health tools, surveyed more than 5,000 Americans this year. Read more here-http://bit.ly/2Pbydz7
- Nearly half said that their spending had equaled or exceeded their income in the last 12 months.
- 44% of those relied on credit cards to make ends meet.
- Only 45% have enough to cover three months of living expenses (even though the majority of Americans say that they save whenever possible).
- 42% have no retirement savings.
- 30% have more debt than is manageable.
-Renters are struggling more than homeowners: Survey. More than one-quarter of U.S. renters in a survey are not confident they could cover a $400 emergency. Around 18 percent of homeowners report low emergency savings, the survey says. More than 30 percent of renters feel insecurity about food, as do 19 percent of homeowners in the Urban Institute study. CNBC
-David Stockman warns a 40 percent stock market plunge is closing in on Wall Street. Stockman, who served as President Reagan’s Office of Management and Budget director, has long warned of a deep downturn that would shake Wall Street’s most bullish investors. He believes the early rumblings of that epic downturn are finally here. It comes as the S&P 500 Index tries to rebound from its worst month since 2011. “No one has outlawed recessions. We’re within a year or two of one,” he said Thursday on CNBC’s “Futures Now.”
He added that: “fair value of the S&P going into the next recession is well below 2000, 1500 way below where we are today.” This is far from the first time he’s issued a dire warning. But this time, he suggests the latest leg down is an early tremor of the pain that lies ahead. “If you’re a rational investor, you need only two words in your vocabulary: Trump and sell,” said Stockman, in a reference to President Donald Trump. “He’s playing with fire at the very top of an aging expansion.” According to Stockman, Trump’s efforts to get the Federal Reserve to put the brakes on hiking interest rates from historical lows is misdirected. “He’s attacking the Fed for going too quick when it’s been dithering for eight years.
The funds rate at 2.13 percent is still below inflation,” he said. Stockman cited the trade war as another major reason why investors should brace for a prolonged sell-off. “The trade war is not remotely rational,” he said. If the dispute worsens, it “is going to hit the whole goods economy with inflation like you’ve never seen before because China supplies about 30 percent of the goods in the categories we import.” “We’re going to be in a recession, and we’re going to have another market correction which will be pretty brutal,” Stockman said. Read more here-https://cnb.cx/2PMOqu0
-Warren Buffett sends ‘strong signal’ to market with Berkshire Hathaway’s $1 billion buyback. The Omaha, Nebraska, conglomerate bought nearly $1 billion of its own shares in August, the company disclosed in a securities filing on Monday after releasing its third-quarter earnings on Saturday. Berkshire’s Class B shares jumped almost 5 percent on Monday on expectations that the buying may have continued into the final three months of the year. Berkshire was active buying other stocks between July and September as well. Net purchases of stocks through the first nine months of the year were $24.4 billion, more than double what the company bought through June. CNBC
-Concern about when a near-historic U.S. economic expansion might end could actually hasten the arrival of the next recession, according to J.P. Morgan Chase Co-President Gordon Smith. “This late-cycle recession has the potential to become a self-fulfilling prophecy,” Smith said Tuesday during a financial conference held in New York. “There is a great deal of volatility in the equity markets, a great deal of conversation around how late we are in the cycle and worry about the cycle,” Smith said.
“That will ultimately lead to business confidence deteriorating, it will ultimately lead to [corporate] reductions in spending, that will ultimately lead to a shorter work week for hourly-paid people, which will ultimately lead to unemployment beginning to rise, and we would’ve developed our own recession.” To be clear, Smith who runs J.P. Morgan’s mammoth consumer banking division began the discussion by saying that the U.S. economy looks “extremely strong.” Unemployment is at the lowest rate since 1969 and there are few hot spots of worry when it comes to consumer credit, he said. Given those signs, he is “optimistic” about economic growth over the next one to two years, he said. Still, there is the risk that people trigger an earlier recession. CNBC
-The governor of the Bank of Canada says after a decade of low-interest rates around the world the global economy has reached stronger footing where stimulus can be “steadily withdrawn.” Stephen Poloz’s remarks Monday came as the Bank of Canada signals it will gradually raise its benchmark interest rate from its current level of 1.75 per cent to a so-called neutral stance of somewhere between 2.5 per cent and 3.5 per cent. The big question is how quickly the rate will rise. Poloz recently introduced the central bank’s fifth interest rate hike in 15 months and warned Canadians, many of whom are carrying high levels of debt, to get used to the idea of three per cent interest rates as the new normal. In prepared remarks of Poloz’s speech Monday in the United Kingdom, he said the world economy has made considerable progress in shaking off the effects of the 2007-08 financial crisis. Interest rates around the world have remained very low over that period. CBC
–The Toronto Real Estate Board is reporting a six per cent increase in home sales last month compared to the same month a year earlier, with strong demand for condos and low-rise units. The emerging seller’s market for homes was strongest in the city of Toronto, driven by a 10.9 per cent increase in the home price index for condos, which compares an equivalent unit from year to year. The average sale price of a home for October 2018 in the GTA was up 3.5 per cent on a year-over-year basis to $807,340. The average sale price for a condo was $603,153 in Toronto, compared to $461,013 in the 905. That’s a 4.1 per cent change year over year in the average price. A detached house in Toronto came with an average price tag of $1.3 million, compared to $914,000 in the 905, reflecting a more modest increase of one per cent. CBC
-Canada Mortgage and Housing Corp. says the country’s real estate market is expected to moderate over the next two years as the increase in housing prices is expected to slow to more in line with economic fundamentals. In its 2018 housing market outlook released Tuesday, the national housing agency projects housing starts and sales are both expected to decline in 2019 and 2020. It predicts housing starts for single and multi-unit starts will fall to between 193,700 and 204,500 in 2019, while sales are anticipated to be between 478,400 and 497,400 units. Prices are anticipated to range between $501,400 and $521,600. CMHC says it expects economic indicators like income and employment to continue to help support demand for housing starts, but these fundamentals are anticipated to slow down to a more sustainable pace. Rising mortgage rates are also expected to affect housing demand and the resale market. CBC
-About 130,000 more residents left California for other states last year than came here from them, as high costs left many residents without a college degree looking for an exit, according to a Sacramento Bee review of the latest census estimates. They most often went to cheaper, nearby states and Texas. Since 2001, about 410,000 more people have left California for Texas than arrived from there. That’s roughly equivalent to the population of Oakland. California has seen more than 15 consecutive years of net resident losses to other states. The trend was sharpest at the height of the housing boom between 2004 and 2006. It slowed markedly during the housing bust but quickened again during recent years. Santacruzsentinel.com
-156,562,000: Record Employment for 12th Time Under Trump.The economy is the second most important issue for registered voters as the midterm election nears, a new Gallup Poll says. And there was very good economic news on Friday, as the Labor Department’s Bureau of Labor Statistics rolled out the October employment report the final one before next week’s midterm election. The number of employed Americans has never been higher. The 156,562,000 Americans employed in October is the 12th record set under President Donald Trump. cnsnews.com
–New York City‘s five pension funds paid Wall Street investment managers $1 billion last fiscal year as they plowed more money into expensive private equity and real estate funds in pursuit of large returns. Investment expenses rose almost 12 percent for the fiscal year ending June 30, according to the city’s comprehensive annual financial report. The city’s $200 billion pension system returned 8.7 percent for the year after paying 271 money managers.
State and local retirement funds have piled into riskier asset classes such as private equity, distressed debt and real estate over the past decade, seeing the higher-fee investments as a way to achieve the more than 7 percent returns they count on each year. The city’s funds for police officers, firefighters, teachers, school administrators and civilians are $48 billion short of the assets needed to cover promised benefits, and higher-than-targeted returns would help them make up that lost ground. New York City’s private equity program had a market value of $12 billion, or about 6 percent of total assets, and the pensions have committed another $8.2 billion.
The pensions made $2.5 billion in new commitments in fiscal 2018 compared with $1.6 billion the previous year. Real estate commitments rose by $1.2 billion in fiscal 2018 to a total of $12.7 billion, according to the annual report. Since the late 1990s, the city’s private equity investments have returned 10.3 percent after fees, just 0.1 percentage point better than the Russell 3000. Starting in 2016, the city required its private equity managers to provide better disclosure of expenses, including incentive fees, portfolio company charges and fund expenses. Bloomberg
-Jobs smash estimates with gain of 250,000, wage gains pass 3% for first time since recession. Nonfarm payrolls increased by 250,000 for October, well ahead of Refinitiv estimates of 190,000. Average hourly earnings increased by 5 cents an hour for the month and 83 cents year-over-year, representing a 3.1 percent gain, the best pace since 2009. The unemployment rate stayed at 3.7 percent, the lowest since December 1969. CNBC
-The economy added 11,200 jobs last month despite fewer people looking for work, Statistics Canada said Friday. The data agency’s monthly Labour Force Survey showed that more than 18,705,000 Canadians 15 or older said they had a job last month, an increase from 18,693,000 the month previous. October’s numbers mean the economy has added almost 206,000 new jobs in the past year. Economists had been expecting the monthly figure to be slightly higher, with the median forecast at 15,000 new jobs, among those polled by Bloomberg. CBC
-The U.S. midterm election results are in line with market expectations: Democrats will control the House from January, while Republicans maintain their majority in the Senate. There will be a record number of women in the House, with the first female Muslim and Native American representatives elected. Looking forward to 2020, one trend that might worry GOP strategists is the party’s under-performance in the Midwestern and Rust Belt states that handed President Donald Trump his victory in 2016. Bloomberg
-Investing in Coloured Diamonds. Diamonds have been revered for their beauty for millennia. Nowadays, coloured diamonds offer a strong return on investment even in the current global market. Debatably less complex than the cryptocurrency market and, decidedly, more beautiful than stocks, fancy coloured diamonds (FCDs) are increasingly turning the heads of wealthy investors. Thanks to a surge in demand for FCDs over the last decade and their reputation for being a safe long-term investment it’s no wonder connoisseurs are adding them to their financial portfolios. What makes these tangible assets so appealing? They have the ability to appreciate in value whilst simply being admired. Read more here-http://bit.ly/2CBxekS
-Slight Increase in Prices of Blue Diamonds in Q3 2018, Says FCRF. During the third quarter of 2018 prices of fancy color blue and pink diamonds rose by 0.7% and 0.4% respectively in all sizes and saturation levels, according to the Fancy Color Diamond Index published by the Fancy Color Research Foundation (FCRF). At the same time, overall fancy color diamond prices showed no significant change and increased by only 0.1%, the FCRF said. Yellow fancy color diamonds showed a decrease of 1.0% in prices during the same period. Fancy vivid blue diamonds continued to outperform, rising 8.5% in the past 12 months and 1.1% in Q3 2018.
A distinctive difference in price trends was seen in the 1 carat category; pink diamonds remained stable, blue diamonds increased by 4.7%, yellow diamonds decreased by 2.2%, while intense yellow 1 carat diamond prices increased by 1.1%, the FCRF reported. On a year-to-year basis, when compared to Q3 2017, the Fancy Color Diamond Index increased by 0.4%, with blue prices up 5.9% and yellow and pink prices down by 1.6% and 0.5%, respectively. FCRF Advisory Board member Eden Rachminov said, “In my opinion, the price of fancy yellow is influenced by the general mood of many diamond traders that carry a mixed inventory of colorless and yellows. Due to the slowdown in the colorless business and to compensate in their general turnover, these traders slightly lower the prices of yellows.” Read more here-http://bit.ly/2QsyKtc
-Fancy Pink Diamond Shatters Auction Record At Bonhams. A fancy pink diamond weighing 5.03 carats raked in in $583,551 per carat. A fancy pink diamond weighing 5.03 carats sold for £2,228,750 ($2,935,263) at Bonhams London Fine Jewellery sale last week raking in $583,551 per carat. According to Bonhams, this is a new auction world record for a Fancy Pink diamond per carat. According to Emily Barber, Director of Jewellery at Bonhams UK, the diamond achieved the price due to a number of factors: “its size it’s exceptionally rare to see a pink over five carats on the market today; its even colour saturation and its extraordinarily elegant cut”.
Other notable items included a fancy colored diamond three-stone ring from 1910, which sold for £168,750 (about $220,000); an emerald and diamond necklace, bracelet, earring and ring suit by Chatila, sold for £656,750 (about $855,000); and a ruby and diamond ring by Bulgari, weighing 3.28 carats, sold for £242,750 ($319,701). Overall, Bonhams raked in £6,936,250 (about $9 million) with 89% of the lots sold by value. Read more here-http://bit.ly/2zPU7Pg
-This 19-carat Pink Legacy diamond could fetch $50 million. A large pink diamond a could become one of the most expensive gems ever sold at auction, estimated to fetch up to $50 million next month in Geneva. The 18.95 carat, fancy vivid pink stone is a rectangular cut and is called The Pink Legacy. Christie’s will put it up for auction Nov. 13 at its Magnificent Jewels Sale in Geneva, with an estimate sale price of $30 million to $50 million, according to Christie’s. Fancy vivid pink diamonds are extremely rare, especially those more than a carat or two.
Only four over 10 carats in size have ever come up for auction in 250 years, Christie’s said. The Pink Legacy also has a type IIA classification, meaning it is among the most chemically pure diamonds. The gem traces its history to the Oppenheimer family, which adds to its worth. The famed South African diamond dynasty controlled much of the world’s trade over three generations. Nicky Oppenheimer sold the family’s 40 percent stake in diamond mining company De Beers Group for $5.1 billion to Anglo American in 2011, after taking De Beers private in 2001. “The discovery of this previously unrecorded and remarkable diamond will cause immense excitement with collectors and connoisseurs of diamonds around the world,” said Rahul Kadakia, international head of jewelry for Christie’s.
The Pink Legacy won’t be the most expensive stone ever sold. That honor is still held by The Pink Star, a 59.60 carat fancy vivid pink diamond that sold in Hong Kong by Sotheby’s last year for $71.2 million. It first sold at auction in 2013, when Sotheby’s sold it for $83 million to a New York-based diamond cutter. But the buyer defaulted on the deal, so it came back up for auction. The second most expensive diamond ever sold is the Oppenheimer Blue diamond, which had also been in the Oppenheimer family, sold for $57.2 million in 2016. If the Pink Legacy fetches $50 million, it would become the third most expensive ever auctioned. Read more here-https://cnb.cx/2Q6AebT and http://bit.ly/2DsCxEQ
-Blue Diamonds to Lead Sotheby’s Auction. A blue diamond ring estimated at $9 million to $12 million will go under the hammer at Sotheby’s Geneva auction on November 15 alongside a roster of rare colored diamonds. The rectangular-cut, 5.04-carat, fancy-vivid-blue piece is one of three blue diamonds set to feature at the Magnificent Jewels and Noble Jewels sale. The auction will also include earrings containing a 2.61-carat and a 3.06-carat diamond with a presale estimate of $8 million to $10 million.
A brilliant-cut, 2.02-carat, fancy-intense-blue, internally flawless diamond valued at $2 million to $3 million rounds out the set. Sotheby’s will also offer a cushion-cut, 21.19-carat, fancy-light-pink, type IIa diamond estimated at $4.5 million to $6.5 million, and a collection of white diamonds. Those include a pear-shaped, 40.18-carat, D-color stone with a presale estimate of $2.5 million to $3.5 million, and a Harry Winston necklace with nine D-color, internally flawless diamonds valued at $4.8 million to $5.8 million. Colored gemstones and signed jewels by Cartier, Bulgari and Van Cleef & Arpels will also be up for sale. Sotheby’s will preview the jewels from November 10 to 14 at the Mandarin Oriental hotel in Geneva ahead of the auction. Read more here-http://bit.ly/2Qalut0
-What colour is the most expensive for diamonds in the world? In the world of fancy colour diamonds, red, blue, pink and yellow are preferred choices for investment, while green, purple, violet and orange are colours for collectors. Cut is the attribute that most affects a diamond’s beauty, but colour is the second. The most intensely coloured diamonds are in a class of their own. Known as fancy colour diamonds, they are appreciated for the presence of colour rather than its absence, as is the case for white or colourless diamonds.
Green is increasingly popular among fancy colour diamonds, while colourlessness is the most desirable white diamond. The Gemological Institute of America identifies 27 hues, and awards stones with the grade of fancy light, fancy, fancy intense, fancy deep, fancy vivid or fancy dark. These denote the tone and saturation of a colour diamond. Fancy vivid tends to be the most desirable, and is an ideal investment stone. The other three Cs remain important. Clarity, cut and carat weight all affect value, but to a lesser extent than colour in fancy colour diamonds. The Argyle mines, the main producers of quality fancy pinks, face exhaustion and are set to close by 2020.
Demand and prices are expected to surge once the supply is cut off. Rio Tinto, which runs the Argyle mine, saw prices of its annual diamond tender triple from 2000 to 2015, increasing by an average of 15 per cent per year and reaching more than US$1 million per carat. Last April, the record for the most expensive diamond sold at auction was set by the Pink Star, a 59.6ct internally flawless vivid pink. It was bought by Hong Kong jewellery retailer Chow Tai Fook for US$71.2 million and renamed the CTF Pink. Rio Tinto’s tender this year is open for bidding, and includes a 3.14ct emerald-cut fancy vivid purplish pink christened the Argyle Alpha. It is the largest pink diamond in the tender’s 34-year history. Read more here-http://bit.ly/2RGcBby
-Will green diamonds become a China investor’s best friend? ‘If you look at it purely from an investment point of view, they’re very much undervalued,’ said Paul Redmayne, head of jewellery sales at auctioneer Bonhams Hong Kong. Since 2014, only 13 lots of green diamonds have made their way into Bonhams auctions eight of which sold in Hong Kong. Diamonds in the “fancy colour” family are priced according to the vividness and purity of their colour. A pure green diamond can sell for upwards of US$1 million per carat at auction.
Or even more. Chow Tai Fook Jewellery paid the most ever for a green diamond US$16.8 million. That was the 5.03 carat, fancy vivid Aurora Green, which the Hong Kong jeweller bought at $3.3 million a carat at a Christie’s auction in May of 2016. The largest such diamond is the Dresden Green, a pear-shaped, 40.70 carat gemstone that is on display at the Albertinium Museum in Dresden, Germany. “Green is one of the rarest diamonds,” said Paul Redmayne, head of jewellery sales at auctioneer Bonhams Hong Kong. “And if you look at it purely from an investment point of view, they’re very much undervalued.” Read more here-http://bit.ly/2QJqJzL
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Gold to silver ratio at 80 to 1 with gold at $2,000 the silver price would be $25.00
Gold to silver ratio at 70 to 1 with gold at $2,000 the silver price would be $28.57
Gold to silver ratio at 60 to 1 with gold at $2,000 the silver price would be $33.33
Gold to silver ratio at 50 to 1 with gold at $2,000 the silver price would be $40.00
Gold to silver ratio at 40 to 1 with gold at $2,000 the silver price would be $50.00
Gold to silver ratio at 30 to 1 with gold at $2,000 the silver price would be $66.67
Gold to silver ratio at 20 to 1 with gold at $2,000 the silver price would be $100.00
Gold to silver ratio at 15 to 1 with gold at $2,000 the silver price would be $133.33
-Silver poised to outpace gold in 2019. Global demand for silver is expected to grow, according to a Canadian investment bank and financial services provider TD Securities. It has projected silver outperforming the sister metal gold next year. There have been several factors conspiring against the entire precious metals sector, such as rising interest rates, a strong US dollar, and a weaker yuan, according to the head of commodity strategy at TD Securities Bart Melek. He told Kitco News silver was further weighed down by concerns that the global economy will be hurt because of a worldwide trade war. Right now we think the market is underpricing silver’s potential,” Melek said.
Despite the fact that the trade war between China and the US “can still get ugly,” TD Securities sees positive economic growth next year, which should support silver prices, boosting the metal’s industrial demand. “We don’t see global economy collapsing next year. We see the global economy growing 3.5 percent and that should lead to higher demand for silver,” said Melek. “You can’t get too negative on silver when you see higher demand and flat primary supplies. We are certainly not seeing new silver production or infrastructure coming online any time soon.” According to him, TD Securities sees silver prices pushing to $17 an ounce by the end of next year. December silver futures were trading at $14.75 an ounce on Friday compared to gold at $1,232.90 an ounce.
Meanwhile, the Canadian bank sees gold prices ending next year at $1,325 an ounce, with a gain of 7.5 percent from current prices. Melek said that a rally in gold prices should also support silver, which has double the volatility compared to the yellow metal. He added that TD Securities is optimistic about gold as equity markets fell into correction territory last month, losing almost seven percent. “The balance of risks is that equities will continue to go lower as they have gone higher for such a long time,” he said. “That is helpful for the precious metals complex. Weaker equities should galvanize some portfolio managers to reweigh their exposure to gold and silver.” Read more here-http://bit.ly/2D8FBUM
-Clive Maund: Silver Market Update, Silver continues to be a singularly neglected and unloved investment, and has been for years now, but as we will proceed to see, this is not a situation that is likely to continue for much longer. On its 10-year chart we can see that silver has basically been moving sideways marking out a low base pattern since late 2014 late 2015, following a severe bearmarket from its 2011 highs. For a while this year it was thought to be marking out a downsloping Head-and-Shoulders bottom, but with the renewed decline from June through late August, it was clear that the pattern had morphed into something else, and on the basis of what we are seeing in other metals, principally copper, gold and platinum, it now looks like it may instead be completing a large Double Bottom pattern, and if this is what it is, then it is very close to the 2nd low of the Double Bottom here, and thus at an excellent point to buy. Read more here-http://bit.ly/2ukL5rH
-Clive Maund: Gold Market Update, The Precious Metals sector continues to be viewed with disdain and skepticism by the vast majority of investors, which is exactly what you want and expect to see at the earliest stages of a major bullmarket. However, the charts continue to shape up well, as we will now see. Starting with the long-term 10-year chart for gold, we see that it is now approaching completion of a more or less symmetrical complex Head-and-Shoulders bottom, with multiple shoulders. It is now believed to be rising up to complete the final Right Shoulder, which should be followed by a breakout above the resistance at the top of the pattern, which will be a positive technical development of huge significance. Read more here-http://bit.ly/2PNwKhK
-Gold ETFs See Strong Demand In Volatile October After Robust Global Gold Demand In Q3. Read more here-http://bit.ly/2PLmLd3
-Chris Powell at New Orleans conference: Gold market manipulation update, Nov 2018. Read more here-http://bit.ly/2OvQZMr
-Forget bars & coins: Digital gold will revolutionize marketplace. As one of the top traded assets in the world, gold, is hugely inefficient. But that is going to change, according to CEO of asset management company Sprott, Peter Grosskopf. He told Kitco News that like more than a decade ago when exchange-traded products revolutionized the gold market, the yellow metal is now on the cusp of a new digital revolution. “Going to a bank or a broker to buy gold is not a great option. Because of the fees, it’s a losing trade,” he said, adding that “buying ETFs (exchange-traded funds) are better, but the storage costs are still prohibitive for long-term investors.”
According to the manager, the gold market relevant to today’s modern investors is a digital market, which is why his company has taken a stake in a physically-backed digital marketplace. The transactions and ownership of the gold are recorded there through blockchain technology. Grosskopf explained that a digital marketplace is the next evolution of the gold market, which hasn’t seen any significant changes since the first gold-backed ETFs were launched. “The gold market is ready for a whole new investor. We just have to bring the physical market into a digital world,” he said. While falling to a 1.5 year low in August, gold prices have held critical long-term support levels, Grosskopf said.
This happened despite facing significant pressures from strong momentum in the US dollar and higher bond yields, he added. The CEO expects the precious metal to regain its luster through the rest of the year as investors start to see cracks growing in the US economy. He said that increased economic risk and higher volatility will prompt some investors to move out of equities and invest in more defensive assets. “It just takes a small percentage of investors to take their money off the table and put it into gold to spark a major rally,” he said. “I think people are starting to recognize that gold is a resilient asset.” Read more here-http://bit.ly/2zwyy4K
-Fund Managers Say Don’t Count on the Midterms to Revive Gold. It’ll take more than election upheaval to restart gold’s rally. That’s the view of money managers including Stephen Land of Franklin Templeton Investments, who say concerns that the Federal Reserve will continue raising rates will overshadow any short-term boost to haven demand from Tuesday’s midterm vote. The dollar and U.S.-China relations are also likely to reassert themselves as catalysts, they say. The rally in gold, which in October posted its first monthly gain since March, fizzled last week as a resilient dollar and a rebound in global equities undercut demand.
U.S. data last Friday showed hedge funds added to their net-bearish position, and the metal was little changed early on Tuesday before the vote. The election “won’t be the key driver around gold,” Land, the San Mateo, California-based portfolio manager at the Franklin Gold and Precious Metals Fund, said in a telephone interview Nov. 2. “It’s the outcome of the potential trade war with China, the overall health of the Chinese economy and the Fed actions and how that relates to the U.S. and the strength of the dollar.” Higher rates diminish the appeal of gold, which doesn’t pay interest, while a stronger dollar curbs demand for the metal as an alternative asset. Both forces have helped push gold futures down almost 6 percent this year.
The buoyant greenback has also eaten into demand for the metal as a haven from market volatility, even as the U.S.-China trade war heated up and geopolitical turmoil such as Brexit simmered. On Tuesday, Vice President Wang Qishan said Beijing remained ready to discuss a trade solution with the U.S., but cautioned the country wouldn’t be “bullied and oppressed.” Goldman Sachs Group Inc. said it sees a divided Congress as the most likely outcome of the midterms, with Democrats taking the House of Representatives and Republicans keeping a slim majority in the Senate. Luc Luyet, currency strategist at Pictet Wealth Management, says the likely “gridlock” scenario may mean the status quo continues and gold remains in a lull.
“Overall, in our base scenario, U.S. growth should remain firm and rates should continue to move up, albeit gradually, weighing on gold,” Luyet said in an email. Federal Reserve Chairman Jerome Powell and his colleagues are expected to hold policy steady at a two-day meeting that starts Wednesday, right after the U.S. vote, while leaving the door ajar to a rate increase at their final gathering of 2018. So far this year, the Fed has raised rates three times. After the election, the U.S. economy will still have a strong jobs market, according to Axel Merk, manager of the $135 million VanEck Merk Gold Trust. “This means the Fed will continue to hike, more so than is currently priced into the markets,” he said in an email Nov. 2. “The price of gold will do what it has been doing of late: gyrate.” Bloomberg