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GLD vs. SLV: Investors Favor Less Successful Gold

Aibek Burabayev - INO.com Contributor - Metals


Today I would like to share with you an analysis of precious metals ETFs. The goal of the study is to identify the correlation of price moves in both gold and silver with the demand for their ETF shares, represented by an appropriate precious metals holdings change. Below the chart you will read some interesting findings.

Chart 1. Gold, Silver and ETFs (Q/Q percent change): Silver Rises Without ETF Support

Gold, Silver and ETFs (Q/Q percent change): Silver Rises Without ETF Support
Chart by Aibek Burabayev, data source: spdrgoldshares.com; ishares.com

In the first quarter of the last year, we can see that investors were betting on a bottoming gold price with a 4% rise in SPDR Gold Trust (PACF:GLD) holdings despite the 1% fall in price. It’s interesting that at the same period, investors, on the contrary, cut their silver ETF holdings despite the rising silver price; it looks like they used the ‘sell silver on spike’ approach to gain on metals correlation. It’s amazing! But they were right shorting silver as it fell in three consecutive periods exceeding gold’s losing streak. [Read more...]

It's Official, They Exit! Risk Aversion Chronicles: Gold Leads The Safety Demand!

Aibek Burabayev - INO.com Contributor - Metals


Today is a historic day in World financial history, which will be recorded in our memory forever! And it was a long and sleepless night all over the world as financial markets were frozen in agonizing suspense.

We should admit that Britons are firm and consecutive in pursuing their goal of independence. Almost a quarter century ago, they decided to withdraw their currency from the European Exchange Rate Mechanism (ERM) and they didn’t turn off their road yesterday on the final referendum.

Bookies and analysts got it all wrong as they forecasted the win of the "STAY” option, but more and more we have witnessed that all efforts to calculate human emotions and perceptions fail. The economic consequences for Brexit are harmful to the UK in a short term, but they still voted to leave. People are irrational in their behavior and the realization of this fact would bring the dramatic changes in the economic science in the future. [Read more...]

The Fed Giveth and the Bullion Banks Taketh Away…

Precious metal expert Michael Ballanger breaks down the gold price roller coaster surrounding the Fed's decision not to raise interest rates.

Ballanger chart cover

Janet Yellen just blew all remaining semblances of credibility believed to be still present at the U.S. Federal Reserve Board.

We have all heard for the past month or so that the Fed was going to hike the Fed Funds rate at today's meeting, the anticipation of which caused a rally in the U.S. Dollar (USD) and a surge in stocks - all while the bond market was rallying in response to weakness in the macroeconomic environment.

Well, they didn't raise as predicted back in March because of "China weakness," so today they didn't hike because of "soft exports" and "vulnerabilities in the global economy" and "Brexit worries" and a host of other totally clueless hypothecations. But the bottom line is that they didn't hike because the ensuing dollar rally would impair the collateral that underpins the massive debts owed by governments and homeowners to the banks that hold that debt. Stocks reversed lower when it became clear that the Fed has absolutely zero control over the U.S. economy, and is now truly caught in the headlights because banks are getting killed with the yield curve this "flat," and since the Fed's shareholders ARE "the banks," it takes on an aura of the surreal. [Read more...]

Article source: http://feedproxy.google.com/~r/theaureport/Ajgh/~3/3pvSUQUw-P8/17009

George Soros Making Big Bets on Gold

George Soros has joined fellow billionaire investors Stan Druckenmiller and Ray Dalios on investing big in gold. Precious metals expert Michael Ballanger explains what is behind these moves.

This week George Soros once again came out with his very large directional "bets" for the SP 500 and for gold and, needless to say, Mr. Soros is once again shorting the SP and buying gold and gold miners, joining Ray Dalio, Stanley Druckenmiller and Michael Ballanger (just kidding) in a decidedly unpopular stance. Carl Icahn came out in agreement during a CNBC interview this week that left the interviewer near-speechless and groveling in the mud of anti-Wall Street rhetoric.

In the meantime, some of the smartest investors I know are SOOOO bullish on gold that they are buying huge baskets of penny explorers under a nickel because of the leverage contained when the public finally decides to re-allocate to include gold (and mining stocks). A fund manager I know said to me, "Must be the top!" in reference to this, but it really can't be the top after a five-month rally representing the largest recorded quarterly advance in mining shares since recordkeeping began.

Look at the chart above and think what would happen if we were to get a shift from bonds to gold; 49% of global asset allocations reside in bonds while 1% reside in gold. Now, consider these two facts: [Read more...]

Article source: http://feedproxy.google.com/~r/theaureport/Ajgh/~3/kBRgCx6mCRc/17006

The Numbers Add Up to Vindication for a Cautious Gold Bull...

Precious metals expert Michael Ballanger discusses the importance of caution and timing in gold investment.

Back in early March, with the HUI screaming along north of 150, I published "Patiently Climbing Aboard the New Golden Bull," in which I opined that we had entered a brand-spanking-new bull market in precious metals and related equities. But I also noted that, with the Relative Strength Index (RSI) above 85 on the daily SPDR Gold Trust ETF (GLD) and approaching 80 on the daily NYSE.Arca Gold BUGS Index (HUI), the short-term outlook was less than appealing, while the intermediate and long-term outlook was unequivocally bullish for the first time in five long years. [Read more...]

Article source: http://feedproxy.google.com/~r/theaureport/Ajgh/~3/C-DBP3wN_ss/16992

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