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’Gold’s non-record level
What with all its recent records, you’d be forgiven for thinking that gold prices were dangerously extended.
However, Lombard Street Research makes a good point on Thursday. Despite all the recent records,
Terry Smith says the world is living in a fantasy
Terry Smith, CEO of Tullett Prebon, has given a remarkably bleak interview to the BBC’s Today programme on Friday.
Though it’s scarily logical.
Here are the key points:
1) He is very pessimistic about the Greek deal — “it doesn’t cut Greece’s debt enough”
Gold’s not as stretched as you might think, Citi says
One for the gold bugs, this.
The possibility of a surge in the price of gold is growing, according to the commodities team at Citigroup.
In fact, they say, the probability of a short-lived spike in gold is now above 25 per cent (up from 5 per cent just a few weeks ago) and that’s even without a worst-case economic scenario actually happening.
Dick Bove says – the search for a new safe haven is on
Gold? Pffft.
The euro? Too euro-trash.
The dollar? Puh-lease.
Rochdale banking analyst Richard Bove reckons the search is on to find a new global safe haven. Because even if this US debt debacle gets sorted by lifting the ceiling,
The Swiss franc’s safe-haven status, a visual interpretation
The Swiss franc is on the rise against the euro and the dollar again on Wednesday thanks, as multiple market reports state, to its safe-haven status.
In fact, the currency was last quoted at about 1.158 versus the euro and 0.7996 against the dollar.
What’s as good as gold, but potentially much more volatile?
The Swiss franc.
It has indeed often been cited as being as good as gold.
But while, on the surface, its similarities with the yellow metal might seem obvious, there is one very important difference to bear in mind.
What are gold fund outflows really saying?
The FT reported last week that because investor inflows into gold exchange-traded funds have recently stagnated, many analysts have begun questioning if the decade-long rally for the gold market might be nearing exhaustion.
Raid Fort Knox!… and other debt ceiling solutions
By Izabella Kaminska and Cardiff Garcia
How does one buy time when trying to avoid a US debt ceiling-related default?
Why not by repo-ing the Treasury’s $300bn worth of gold stocks?
It’s one solution that’s currently being touted by former Federal Reserve official and current Peterson Institute economist Joseph Gagnon,
The eurozone central banks that ♥ gold…
Bullionvault’s head of research Adrian Ash has spotted an interesting trend among eurozone central banks this year.
Rather than selling gold, they’ve been buying it instead.
Not a lot.
But buying — mostly for gold coin trading purposes– nevertheless.
Virtual money, from real central bank mistrust
What happens when you cross computer geeks with populist outrage at central banks?
Bitcoins happen.
New Scientist reports in its latest edition that a new virtual currency is harnessing peer-to-peer networking and high-tech computer-run algorithims to rival central-bank issued money.
Euro solidarity/desperation, gold edition
At this point, extra EU loans to Greece would be dead money, susceptible to debt haircuts pari passu with private creditors.
But if you’ve got to do a one-off fiscal transfer, and an entire currency union is at stake…
What drove the commodities rout?
The quick answer is… nobody knows.
Although JBC Energy has come up with a helpful summary of points that they feel could be behind the Thursday rout.
Here’s the list:
-”disappointing global economic headlines”
Portugal, sell your gold!
The terms of Portugal’s draft bailout agreement have been revealed. But no mention within the documents about what happens to the country’s ample stash of gold bullion.
Some 12.3m troy ounces in fact,
Cash is king
Here’s something you don’t hear very often in the City of London: cash doesn’t get the attention it deserves as an asset class.
But SocGen’s strategist Dylan Grice wants to change that. He reckons there are times when it’s simply the best thing to own.
Snap news
Breaking pre-market news on Thursday,
- Dollar index hits three-year low – Reuters
- Gold at all-time high of $1,508 an ounce for fifth straight session – Reuters.
- SVG Capital posts 11 per cent growth in NAV in first quarter – statement.
Who’s afraid of Comex gold delivery?
The answer is the University of Texas Investment Management company.
Via bullion brokers Goldcore’s daily note on Monday:
$1 Billion of Gold Bars Taken Delivery of by Pension Fund Due to Risk of COMEX Default and Shortages
Although the dispatch is actually based on the following story from Bloomberg:
A rouble re-run
It’s also central bank run, of sorts.
Belarus news specialist The Telegraf reports that the nation’s central bank has stopped exchanging gold for Belarusian rubles. That’s after the National Bank of Belarus said the volume of gold and foreign exchange reserves dropped by $68m to $5,512m last month ahead of a widely-expected devaluation.
Further further reading
For the commute home, where the carry trade means helping your better half unload the car in exchange for first dibs on the remote,
- The FT visits Bernie Madoff.
- Where Galleon allegedly made its money.
QEased commodities charts, part deux
The QEased commodity debate continues…
Our latest contribution to the “Yes, quantitative easing is making commodity prices go bananas” comes from Vivin Oberoi, head of global macro research and Trading at Telluride Asset Management — a hedge fund based in Wayzata,
Oh, my precious
Gold and sliver spot prices were on a tear on Thursday.
Spot gold rose 0.71 per cent to hit a record high of $1,446.40 per troy ounce:
But it was spot silver which lead advances, rising 1.87 per cent to $38.06 per ounce,
Goldman Sachs says Tips mean (gold) prizes!
Take a close look at this chart from Goldman Sachs:
See the (until recent) correlation between an inverted US 10-year Tip (Treasury Inflation Protected bond) rate and the Comex gold price?
It’s a point Goldman Sachs has made before,
The shape of things to come, Centamin Egypt datapoint [updated]
Ructions in Centamin Egypt shares at pixel time (via Reuters):
That’s following newswire reports that employees at Centamin’s Sukari gold mine have used their newfound political freedoms to stage a sit-in demanding that it’s handed over to Egyptian ownership.
Gold is good to go at JPMorgan repos
JPMorgan, one of two tri-party clearing banks in the US, will now accept your bullion.
From a February press release:
Gold can now be used as collateral to satisfy securities lending, repo, pledge and other obligations with counterparties.
John Paulson’s real 2010 success: Gold
Paulson & Co may well have made more than $1bn from its long position in Citigroup, but the firm’s really big bet — the one that has seen the firm’s assets swell by around $8.4bn over the past 12 months (before,
More on silver backwardation
We promised some comment on the silver backwardation story we did earlier, and now we have some.
The story continues with Friday’s LBMA silver forward rates (SIFO) settling in at negative as far out as 12 months for the second day in a row.
Chinese inflation through surging online searches
Inflation in (simplified) Chinese is 通 货膨胀.
Standard Chartered are back with another ‘wisdom of China’s online crowds’ piece, or a look at Chinese consumer trends through internet searches. There’s a difference this year though.
Eurogeld déjà vu
Euro shorts burned on Thursday — still being roasted on Friday:
It’s a European Financial Stability Facility-inspired short-covering/risk rally — Spanish and Italian sovereign bond spreads against Bunds are at their tightest since early December.
Echoes of a ‘Notgeld’ Germany
On Thursday, Germany’s Sueddeutsche Zeitung carried a story suggesting Germany was working on the creation of a European Stability and Growth Investment Fund, which according to Reuters would run as a largely independent institution next to the European Central Bank.