The Price of Gold Jumps!
Daily Pfennig

Blog Subscription Form

  • Email Notifications
    Go

Archives

.........But First, A Word From Our Sponsor..........

WHY RUSH INTO METALS WHEN YOU CAN WALTZ?

The rarity of precious metals helps drive their value and potential significance to your portfolio. But for those not interested in making a mad rush to metals, EverBank has unearthed an exciting and equally rare investment alternative.

With our automatic purchase plan, you can start mining metals at your pace.

?Fund for as little as $100 a month

?Choose from gold, silver and platinum

?Pay no ongoing fees

Available only with the NON-FDIC INSURED Metals Select Unallocated Account1, this is a rare opportunity to strategically utilize dollar cost averaging to grow your metals ownership from one month to the next.

Start mining at your pace today. Learn more and view IMPORTANT DISCLOSURES at https://www.everbank.com/investing/metals/unallocated?referid=11808. Or call 800.926.4922.

EverBank is an Equal Housing Lender

© 2013 EverBank. All rights reserved. 13AGM0003.

......................................................

In This Issue.

* Currencies remain in tight range .

* Gold can't stand prosperity!.

* Central Bank meetings all around .

* Jim Rogers drops in .

And, Now, Today's Pfennig For Your Thoughts!

The Price of Gold Jumps!

Good Day! And a Tub Thumpin Thursday to you! Still trying to overcome the sadness, but ready to tackle the day. Thanks to those that sent along good thoughts yesterday. Well the winter storm that was originally supposed to be upon us right now, has taken its sweet time getting here, and now it's scheduled for an arrival time of this afternoon, you know, just in time to make a mess of rush hour traffic! But it's December, and from now till April, we have to get used to snow and ice.

I turned on the currency screens this morning to see the currencies trading about in the same spot they were yesterday morning! The euro is still close enough to 1.36 that it could spit in 1.36's back yard, and all the rest of the levels for the currencies are looking very familiar this morning. I guess, while I was gone yesterday, the currencies decided to take a break! But not Gold! The shiny metal finally got some wind in its sails and pushed higher on the day. When I left yesterday morning Gold was $1,213. And looking as if it was heading further south. When I turned on the screens this morning, Gold was trading at $1, 236. And it's down $8 this morning, so using my new math skills acquired some 50 years ago, that means Gold gained $31 yesterday after I left!

But showing that it can't stand prosperity, the shiny metal has already given back $8 of that gain yesterday. But then stocks were down yesterday, so maybe we're beginning to see a Gold VS stocks trading pattern. I don't like Gold's odds short term in that pattern given the Bernanke Asset Bubble still has hot air being blown into it, and will continue for at least 3 more months. But when they stop the blowing of hot air into the Bubble, this could get really ugly, especially if you go back to the performance of stocks in September when Bernanke first muttered the words "Taper". But then in October, he surprised the markets by deciding to blow more air in the bubble rather than brandishing a pin to pop the bubble, and stocks haven't looked back.

But I do like Gold's odds in the long run. For, eventually, even if the bubble never finds the pin in the room, there will be too much air blown into it, and it will pop on its own. Yes, eventually, the markets will grow tired of trading on one theme, the Bernanke Asset Bubble, and move on to something else.

Earlier this week I mentioned Grant Williams' latest piece on Gold price suppression. I don't know if you've had an opportunity to read it yet, but I'm highly recommending it to you, for it touches on a lot of very important points, but most importantly how he expects this current Gold price suppression to end as badly as the Long Gold Pool did. OK. I'm going to lead the dear reader to water here. I'm going to give you the link to the great piece. http://www.gotgoldreport.com/2013/12/grant-williams-things-that-make-you-go-hmmmmm-twisted-by-the-pool.html

OK. The Fed's Beige Book printed yesterday afternoon, and in it, the Fed Heads all agree that U.S. factories are seeing modest to moderate expansion. OK. let me say that while 5 years ago, when the dust had settled on the financial meltdown and the skies looked a little brighter, this would be good news, eh? Yes, 5 years ago, modest to moderate expansion would have been good news. But 5 years, almost 6 years later? I don't think so! Sure you could be one of those people that believes everything is seashells and balloons with the economy, and say, "Hey, we starting now!" Or you could be a logical thinking person like me, and realize that we're going nowhere fast. Nearly 6 years later and we're still getting excited about "modest to moderate expansion"? You would have to figure that with years of ZIRP now (zero interest rate policy) and $85 Billion of bond buying happening each and every month, that we would be seeing something stronger than "modest to moderate" expansion, don't you?

But hey! Don't forget that the cavalry is coming. Yes, GDP accounting is going to get a huge lift in the 3rd QTR and going forward by the "new math" of accounting for GDP in the U.S. Recall, I went through all this when it was announced, but for those of you new to class, The U.S. decided this year, that since they couldn't get GDP to show the types of gains they wanted it to, that they would just move the goal posts, and add stuff to the calculation. Hey! If at first you don't succeed, try and try again until GDP looks right, even though it might not have a hill of beans to do with actual economic growth!

And that Calvary is supposed to add up to 3% in GDP. So, when the 3rd QTR GDP prints today and the media is going gaga over a number around 3%, remember, that the books have now been cooked on GDP.

Today is the day that the European Central Bank (ECB) and the Bank of England (BOE) both hold meetings to discuss rates and monetary policy. So, I expect no change in either the ECB or BOE today. The ECB will probably see President Draghi reiterate his position that he still has arrows in his quiver to address any material downside in the economy from here. That might cause some rumblings in the euro this morning, but should be taken with a grain of salt because we've heard it all before. You know, been there, done that, bought the T-Shirt!

The BOE meeting is likely to be a non-event. If anything we could hear the noise being optimistic and upbeat. The data from the U.K. has been a little better lately, and the pound sterling has benefitted from this better data. Sterling has been quite resilient in recent months, much to my surprise, as I still don't see any reason for buying sterling, with all the debt, zero interest rates and no real oomph from the economy. But, the traders out there, like it, so all I can say is be careful here..

In Norway yesterday, the Norges Bank left rates unchanged, and then threw a bone to the krone, by not making any mention of any near-term rate cut. The krone rallied a bit on the announcement, but has since drifted lower again. The exporters in Norway have to be happy, happy, happy, that the krone is drifting lower and lower. The reason I say that is I haven't seen one story from Norway addressing the exporters whining about the strength of the krone, which is good, because it has been awhile since we could say the krone had some strength! This currency is as big a mystery to me as to why it's not the king of the hill VS the dollar, as it is a mystery to me why the dollar continues to have favor with anyone!

Another currency that can't stand prosperity, the Aussie dollar (A$) was moving along on the positive side of the ledger, when the Aussie Trade Balance printed, and from there it was not smooth sailing for the A$. The Aussie Trade Deficit widened in October from AS$ 270 Million to A$ 529 Million.. OK. we need to all settle down here . I did just say Million, and not Billion. And keeping that in mind, the ability of Australia to get that whittled down to a surplus is very strong, given the Chinese economic rebound. I find this reaction by traders to sell A$'s on this data, to be just another excuse to take the A$ down. For this data has no legs to stand on.

Ty Keough sent me a short piece on Canada that I thought hit on most of the things I've told you about Canada over the years, but also that demand for both Canadian equities and bonds has remained strong since July, thus the demand for The Canadian dollar / loonie remains strong. The piece also reminds us that Canada has the highest interest rates among G-7 nations. I have say that the Canadian economy while teetering remains stable and is underpinned by commodities, of which Canada has quite a few! But, I remind you that the new Bank of Canada (BOC) Gov. Poloz, is not a fan of a strong currency, and so, the black clouds over the loonie will remain for now.

OK. the U.S. data cupboard printed some stuff for us to look at yesterday. the ADP Employment Change report for November was good, as they showed an increase in jobs in November of 215,000. The October Trade Deficit came in as expected $40.6 Billion, but the previous month's $41.8 Billion deficit was revised to $43 Billion. So nothing good here. And then New Home Sales in September were down, by quite a bit, and the previous month's number was revised downward.

Today, as I mentioned above, 3rd QTR GDP will get its first print. And the Personal Consumption data for the 3rd QTR will print alongside the usual Tub Thumpin Thursday fare of the Weekly Initial Jobless Claims. I sure hope the Fed Heads aren't thrown a curve today by that GDP number.

Before I head to the Big Finish today, I have a quote from Jim Rogers for you. Jim continues to believe that the Commodity Bull Market is far from over, and that all the debt in the U.S. is "going to end badly" for us. Here's Jim thinking out loud. "we are all floating around on a sea of artificial liquidity right now. This is not going to last." - Jim Rogers.

For What It's Worth. So, have you been on the edge of your seat waiting for news from the U.S. V.P's meeting with China over the escalating tension between China and Japan? I knew you were, so I have an update for you that I took from Ed Steer's letter today. This originally appeared in Russia Today, and of course they have their own slant when writing. Here you go!

"A meeting between Biden and China's President Xi Jinping scheduled for only 45 minutes this week turned into a two hour ordeal and ended with the US senator-turned-second-in-command offering brief remarks but answering no questions before a press scrum in Beijing.

When Biden finally emerged from his marathon meeting with President Xi on Wednesday, he appeared "solemn" and "weary-sounding," according to the New York Times' Mark Lander, and the Associated Press equated the meeting between men as an "awkward kickoff" for the vice president's tour of China.

Instead of directly acknowledging the disagreement between China and Japan during the press conference that followed his meeting, Biden said both nations need to make use of "crisis management mechanisms and effective channels of communication" and spoke of a "new model of major country cooperation" that rests on trust."

Chuck again. Sounds like things didn't go as planned in the meeting, eh? You have to wonder if China's President Xi, sat down the Biden and got out the charts with the amount of debt that China has financed, and then said, "And you want to talk to us about what?" just saying.

To recap. The currencies appear to be trading in the same clothes as yesterday, with the euro still close enough to 1.36 that it could spit in 1.36's back yard. Gold had a heck of a day on the upside for once in a blue moon, but has already given back $8 of its $31 gain yesterday. The Norges Bank left rates unchanged and delayed their rate hike, leaving the krone to slide on the news. The ECB and BOE both meet today, and Chuck doesn't expect any changes, but more of the same old tired "more options" talk from Draghi and the ECB could be tough on the euro today.

Currencies today 12/5/13. American Style: A$ .9030, kiwi .8200, C$ .9380, euro 1.3597, sterling 1.6350, Swiss $1.1085, . European Style: rand 10.4895, krone 6.1940, SEK 6.5205, forint 222.05, zloty 3.0840, koruna 20.1820, RUB 33.01, yen 102.05, sing 1.2540, HKD 7.7540, INR 61.76, China 6.1310, pesos 13.05, BRL 2.3810, Dollar Index 80.58, Oil $97.52, 10-year 2.82%, Silver $19.48, Platinum $1,367.50, Palladium $727.25, and Gold. $1,234.25

That's it for today. Getting older. If you're lucky, you get to grow older. But then it's time to go, it's a fact of life, although never accepted by everyone. I hope to grow old in age, but not in heart, soul and mind. And I hope to remain in the batter's box fouling off pitches for a long time.. Sorry to get like this, I guess when someone close to you dies, your own mortality comes into question. Time to move along. Hey! Tomorrow is St. Nick's Day! That means you need to leave your shoes outside your door tonight, to be filled with goodies by St. Nick! Time to get back to dressing up the house and getting ready for Christmas! That's been on hold for awhile. I missed an interview that a young man wanted to do with me for school project yesterday, and I missed a lunch with one of my fave people, Ellie Williams, hopefully she will give me a rain check! And with that I hope you have a Tub Thumpin' Thursday!

Chuck Butler
President
EverBank World Markets
1-800-926-4922
1-314-647-3837





Posted 12-05-2013 11:40 AM by Chuck Butler