Category: General

Gold falls on uncertainty over U.S. budget talks

Posted on by The INO.com Team

Investors are selling gold as the end of the year draws closer without a compromise in hand for the U.S. budget.

Gold for February delivery dropped $21.10 to finish Thursday at $1,696.80 per ounce.

Investors are uncertain about what's ahead for the economy if Republicans and President Barack Obama fail to agree on a new budget. Without an agreement in place, tax increases and spending cuts will occur Jan. 1 that many economists believe could send the U.S. into a recession.

The Federal Reserve has announced measures to support the economy, which typically benefit gold and other commodities. But the Fed also predicted growth will be no more than 3 percent in 2013. It also expects the unemployment rate to remain at higher levels until late 2015. The unemployment rate was 7.7 percent in November. Continue reading "Gold falls on uncertainty over U.S. budget talks" →

A Critical Year in Review: What's Next?

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China's export quotas triggered the investment rush for rare earth elements (REEs). John Kaiser of Kaiser Research Online summarized the first chapter of the REE story in his no-nonsense April 24 interview, "Rare Earth Juniors Have a Five-Year Window."

John Kaiser: Historically, REE prices have been very low due to China's abundant resources and its ability to produce them very cheaply. China is aware that it could become the world's biggest polluter when its economy eclipses that of the U.S. China is very concerned about making sure it has the raw materials on hand to assure its clean-energy future. The supply restrictions China introduced a couple of years ago were part of a campaign to clean up and consolidate its high-pollution industries. Those restrictions resulted in spectacularly high REE prices for export and substantially higher prices within China. Since July 2011, the drop in demand and China's inability to control smuggling resulted in a pullback in REE prices. To some degree, I think China wants its monopoly to end. China's ambitions go far beyond squeezing a few profits out of a market it controls. Continue reading "A Critical Year in Review: What's Next?" →

Stocks gain on budget talk optimism, Fed stimulus

Posted on by The INO.com Team

The stock market showed signs of life Tuesday following hopeful signs of progress in budget talks being held in Washington. The Standard & Poor's 500 had its biggest gain this month.

The Dow gained 78.56 points to 13,248.44, after climbing as much as 137 points earlier. The Standard & Poor's 500 index finished up 9.29 points at 1,427.84. Both the Dow and the S&P have risen for five straight days.

The Nasdaq composite ended up 35.34 points at 3,022.30.

Delta Air Lines rose 52 cents, or 5.1 percent, to $10.66 after the company said it will buy almost half of Richard Branson's Virgin Atlantic for $360 million as it seeks a bigger share of the lucrative New York-to-London travel market.

AIG gained $1.90 to $35.26 after the U.S. Treasury Department said it has sold the rest of its stake in the insurer. AIG was bailed out by the government after nearly collapsing during the 2008 financial crisis. Continue reading "Stocks gain on budget talk optimism, Fed stimulus" →

Peter Grandich: What a Turnaround in Junior Gold Mining Stocks Will Look Like

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The Gold Report: Peter, when we talked in the spring, you were essentially all in on a number of junior resource equities that were trading at what you believed were at or near their lows. Have you changed your course of action or are you still all in?

Peter Grandich: I am still on course. While 2012 may not have been the worst junior resource market by percentage losses, given the prices of metals now versus other markets and other market conditions compared to last year, it was the worst bear market since I entered Wall Street in 1984.

I've been in this market since the late 1980s, when it felt that if gold could just get over $400/ounce (oz), all would be well in the junior market. Now gold is at an average price of $1,600-something for the year, yet most companies did not do well. It is befuddling.

TGR: We are not far from exiting 2012. What is your perspective on the junior precious metals sector heading into 2013? Continue reading "Peter Grandich: What a Turnaround in Junior Gold Mining Stocks Will Look Like" →

Gold Chart of the Week

Posted on by The INO.com Team

Each week Longleaftrading.com will be providing us a chart of the week as analyzed by a member of their team. We hope that you enjoy and learn from this new feature.

Weekly Gold Report (December 10 through December 14th)

I am not sure if I have ever been so happy to close the books on a week of trading, as I was last week on Friday. You wouldn’t think that it was that bad if you look at the daily chart today, but it was not easy to sit through either a short or a long position in the Metals last week. I will explain why.

The week began with Gold and Silver dropping below the support trendlines that were held from early November. They also were dropping alongside a weakening Dollar. I understood the selling from a technical perspective, but fundamentally I was a bit puzzled in the short term. Once support was found, Monday’s decoupling from the usual relationship to the US Dollar made holding new long positions a bit difficult. Furthermore, the rangy trade over the next four days had a “Groundhog’s Day” feel to it. It seemed as though Metals prices opened around the same price each day, closed the European Markets at the same price each day, closed the pit traded session at the same price each day, and closed the electronic session at the same price each day. Short option traders long for weeks like those, but futures traders had to be a bit uneasy. I know I was. Continue reading "Gold Chart of the Week" →