We began this Gold Commentary in January 1996.
Due to many requests, we began to archive them in May 2000.
December 31 - 2010 Year End Report - Ten Years - And Counting?
"On December 31, the last (shortened) trading day of the year, the spot future price of Gold gained $US 15.50 to close at $US 1421.40. This was the high for the year, it was also a brand new all time high for Gold in $US terms. And last but not least, it was the highest point yet reached in a bull market which has now continued unbroken for a full decade."
December 10 - Big Heads - Suddenly - Longer-Term Treasury Yields Surge!
"Preposterously, many mainstream US economic commentators welcomed this sudden surge in Treasury yields as a signal that the markets were factoring in a new burst of "economic growth" and were therefore finding it less necessary to buy the "risk free" end of the market - Treasuries and Gold."
December 3 - Big Heads - Lots Of Sand - Buried Deep
"On Sunday, December 5, the venerable CBS "current affairs" program 60 Minuts will be airing an interview with Fed Chairman Ben Bernanke. We suggest a suitable intro would be the helicopter scene in "Apocalypse Now" - complete wit the full sound track."
November 26 - Gold Is Not Paper - And - A Chinese Suggestion
"China's demand for the physical metal was up 60 percent in 2009 and has risen an as yet indeterminable amount so far this year. China is now the world's largest Gold producer (Australia being number two) but physical output is expected to be flat next year. Demand, meanwhile, just keeps on growing, encouraged by the Chinese government and by gradual but steady relaxation of the rules covering Gold buying and selling in China."
November 19 - Europe To The Fore - Again
"This week, Gold has given up the gains it made in the immediate aftermath of the Fed's decision to implement QE2, falling as low as $US 1337 on November 17 before rebounding to close the week in the low $US 1350s. The catalyst has been a ramping up of the European "sovereign debt crisis". This time, the focal point has been Ireland instead of Greece, with Portugal, Spain and even France being pointed to as potential contributors to the crisis."
November 12 - The Elephant In The Room?
"Gold and Silver prices did indeed drop precipitously, a strange reaction to what was universally seen as a move by China to try to slow down what is indeed rapidly accelerating price inflation. But the more fearful paper investors get, the more "erratic" all markets will become. Paper money continues to be created at a rate never before approached. Gold is the only viable alternative."
November 5 - The Beginning Of The End
"By now, you will know the details about what Mr Bernanke and the Fed intend to do and how much Treasury and other $US denominated debt they intent to "buy" between now and the end of June next year. You may have noticed (as several more astute commentators have pointed out) that the total announced by the Fed very closely matches the borrowing requirements of the US Treasury over the period in question."
October 29 - An Abrupt Gold Turnaround
"But over the last two days of the week, Gold bounced $US 35.00, regaining about two-thirds of its correction losses. Even more interesting, unlike the big run up from mid June to mid October, this bounce in Gold was in terms of ALL major currencies, not just the US Dollar."
October 22 - The Countdown To A Lot Of Stuff
"With all that "stuff" piling up, something had to be done about Gold (and the US Dollar). And it was. Gold swan dived $US 36.00 on October 19 - along with the $US price of almost everything else, including US stock markets. The catalyst was the surprise announcement of a rate rise by the Chinese central bank, its first over the course of the GFC."
October 15 - It's A Debt Crisis - Period
"On October 14, as the spot future Gold price was setting yet another all time high closing price of $US 1377.60, the trade-weighted US Dollar index (USDX) fell to close at an equal 2010 low of 76.88. Since the USDX set its high for the year of 88.47 on June 8, the index had fallen by 13.1 percent by October 14. Over the same period, $US Gold had risen by 10.6 percent. As you can see, the recent BOOM in Gold in US Dollar terms remains confined to the US Dollar and currencies tied or "fixed" to the US Dollar."
October 8 - They'll Talk About "Currency" - But Not About MONEY
"This situation is far worse than ANY of the mainsream analysts admit it is. A system that relies totally on money which comes into existence as the "flip side" of new debt is doomed. It is doomed at the point where both creditors and debtors begin to flee from it because they fear that it has already been debased beyond the point where any return will compensate for the risk of default. We are getting very close to that point."
October 1 - Waiting For Higher US Interest Rates
"Meanwhile, yields on US Treasury debt, especially at the longer end of the curve, are at or near their historic late 2008 lows. The mainstream financial media in the US seem utterly oblivious to the correlation between these fantastically low yields and the increasing weakness in the US Dollar. The situation is potentially very volatile indeed.
September 24 - Gold Goes Up - US Dollar Goes Down
"On these numbers, it is clear that Gold is one of several currencies competing against the US Dollar. It is also clear that the US Dollar is losing against all of them. In fact, on its present trajectory, the US Dollar is losing against almost everything in sight.
September 17 - $US Gold Breakout
"$US Gold traded as low as $US 1243 intraday on Monday, September 13 but it never closed at the $US 1240 or lower it would have taken to form that triple top. Instead, as you know, $US Gold broke through its old highs and went on to a new all time high close of $US 1277.50."
September 10 - A New High - But Only Just
"And not for long. Yep, Gold did did hit a new spot future closing high this week. On September 7, the contract closed at $US 1259.30. But the high was not sustained with Gold falling back to close for the week at $US 1246.50."
September 3 - Whoops - The Gold Stocks Are Stirring
"Whatever the reason, the Aussie Gold sector has all of a sudden awakened from a long slumber. Whether this sudden surge has come from a re-found popularity for Aussie Gold stocks from foreign investors or if Aussies have all of a sudden realised that Gold is near old highs we don't know."
August 27 - "We'll Do Whatever We Can"
"It is clear to everyone by now that short of throwing in the towel and climbing into his famous "helicopter", there is nothing further Mr Bernanke can do. US government debt has been unsustainable for the best part of the past two decades. It has been dragging down the US economy with ever increasing speed for at least the past decade."
August 20 - Puzzling - Gold Is Going Up Again
"There is not the slightest chance that there will emerge any GENUINE way out of the GFC until such time as the gartantuan malinvestments propelled by the credit money boom which has now collapsed are liquidated on a market. Every day that this is delayed makes the situation worse. Every new "Dollar" created by governments and their banking system makes the situation worse."
August 13 - We Can't Fix It - But We Can Fix You Properly
"So, with the "proceeds" guaranteed by the ability of the government to tax its citizens, the Fed is going to buy the debt paper issued by that same government and relying on that same ability to tax. Once again, it is embarking on the path of straight monetisation of government deficit spending. Why? Because they can, and because they see NO other means of perpetuating a "system" wich is collapsing all around them"
August 6 - Slowly Slowly Catchee Monkey
"This is the best kind of a Gold "revival". It is slow, gradual, innocuous and all but unnoticed in the great investment maelstrom. On August 6, Gold regained the $US 1200 level for the first time since mid-July. It has risen for the past eight straight days on a spot future close basis with only one of those days seeing a daily advance of more than $US 10.00."
July 30 - Double Tops Do "Work"
"The warning came almost exactly a month ago on June 28 when the spot future Comex Gold price fell $US 17.60 on the day from $US 1256.20 to $US 1238.60. That fall gave the third double top in the entire post 2001 bull market on our $US 5 x 3 Gold chart. More to the point, it gave the first double top since Gold broke above its January 1980 all time high back in January 2008."
July 23 - Physical Gold In The Spotlight
"Clearly, the other aspect of this new role for the IRS' Form 1099 is to make it all but impossible to keep the buying of Gold private. If the provision does go ahead (and there is quite a bit of protest about it which will likely increase as the date approaches) it will be illegal to keep Gold purchases of any size whatsoever away from the prying eyes of the US Government."
July 16 - A Sudden Transition From Hope To Fear
"Now, as official figures out of the US government are pointing to a RAPIDLY weakening economy, the US central bank is mulling what "further" stimulus it might employ. Of course, any further stimulus it DOES employ is going to mean even more $US financial "assets" - including US government debt instruments, are going to be looking for a buyer."
July 9 - Officially - China Doesn't Like Gold
"SAFE also answered another question, this one about Gold, supposedly posted by a "concerned" Chinese citizen. It said that Gold is unlikely to become a "major" holding in its foreign exchange reserves because its price is too "volatile" and it doesn't earn interest."
July 2 - Double Top - Correction
"As has happened on June 28, the vast majority of the "action" on July 1 took place in the US after the closing of Asian and European markets. In one of the most startling one - two punches seen on US markets for a long time, the spot future Gold price plunged by $US 39.20 - at the same time that the trade-weighted US Dollar index (USDX) was having by far its biggest one day fall thus far in 2010. It is very rare for the USDX to fall more than 1.00 points in a single day."
June 25 - "The Immutable And Fiduciary Value Par Excellence"
"Actually, it is difficult to envision in this regard any other criterion, any other standard than gold. Yes gold, which does not change in nature, which can be made into either bars, ingots or coins, which has no nationality, which is considered, in all places and all times, the immutable and fiduciary value par excellence."
June 18 - Yet Another - New High
"The other assertion in the NYT article is that "Gold buyers have always been motivated by fear". On conventional (paper) markets, it has long been an adage that a bull run is fed by greed and a bear run by fear. Is the Gold market the exception which proves this rule?"
June 11 - Bernanke - And Others - On Gold
"Mr Bernanke has not got the hang of being head Fed. He has never learned to speak in tongues - something that his predecesser Mr Greenspan brought to a fine art. As a result, he doesn't get "interpreted" in the financial press anything like as much as Mr Greenspan did."
June 4 - Narrowing Down To The Core
"The resilience of Gold is simply an illustration of two things. First, there are increasing numbers of people who are in the process of literally losing faith in paper altogether. Second, there is a lesser but also increasing number of people who understand that governments cannot print real wealth any more than the Obama administration can cap the oil leak in the Gulf of Mexico by waving a magic legislative wand over it."
May 28 - Market Fundamentals
"There is no government "bailout plan" for Gold. There are no government regulations or market guidance mechanisms designed to support the "price" of Gold. No government has passed a law banning the shorting of (paper) Gold on the markets."
May 21 - The Latest Flight To "Safety"
"Interestingly, Gold saved its biggest falls in $US terms for later in the week, when the US Dollar was actually falling, quite hard, on a trade-weighted basis. The USDX hit a new 2010 high on Tuesday (May 18) as the $US Gold price began its fall. It then fell away sharply for the rest of the week with Gold descending right along with it."
May 14 - The Only Port In The Storm?
"$US Gold's first great bull market at the beginning of the global feat money era lasted eight and a half years, from August 1971 to January 1980. $US Gold's current bull market has already lasted a year longer than that, and has just revalidated itself with the all time highs set this week."
May 7 - A Watershed Week For Gold - CONFIRMED
"It is true that Gold has not yet equalled the $US 1218.30 all time high spot future close it set on December 3, 2009. The close on May 7 of $US 1210.40 is only Gold's third highest spot future close and the third time that the metal has closed above the $US 1200 level. But in ALL other respects, what was signalled last week by Gold refusing to go down as the world debt markets siezed up again was confirmed this week."
April 30 - A Watershed Week For Gold?
"One week does not a trend make, but if you take a look at the long term $US Gold chart below you can see that the nearly decade long bull market is still completely intact. The resistance level, and the one which Gold is going to have a hard time getting above if the global financial powers that be have anything to say about it, is the December 2009 all time high just below $US 1220."
April 23 - A "Missed Week" Doesn't Make Much Difference
"Which brings us full circle to the explanation of Gold's increasing strength as being an alternative to holding currencies. In the first place, this is a euphemism. Investors don't hold "currencies", they hold paper investments which bear an interest rate denominated in currencies."
April 9 - The Alternative Currency Analysis
"Two weeks ago on April 9, spot future Gold closed in New York at $US 1161.90, up $US 9.00 on the day. On April 23, spot future Gold in New York closed at $US 1153.70, up $US 10.80 on the day."
April 1 - A Telling Contrast
"It is obvious that if everyone wanted their Gold "contracts" settled in physical metal then one of two things would happen. Either only a tiny fraction of such contracts would be honoured or a tiny fraction of the Gold stipulated in the contracts would be delivered to "honour" them."
March 26 - The "Canary In The Mine"?
"In a financial equivalent of "killing two birds with one whiff of gas", while Treasury yields were storming upward on March 24-25, so was the US Dollar. Over those same two days, the trade-weighted USDX jumped from 81.11 to 82.40, the close on March 25 being its highest so far this year and indeed the highest close on the USDX since mid May 2009."
March 19 - Go Figure
"Of course, all this attention on the sovereign debt of OTHER nations takes the pressure off the Fed and the Treasury in the US. They can blithely, with non existent official interest rates, accuse other nations of "manipulating" their currencies. They can keep happily asserting that their own economy and financial system is beyond reproach while pointing all around the compass at the "riskiness" of investing anywhere else."
March 12 - A Most Interesting Development
"Late last year, we had a situation in which Gold was rising as the US Dollar fell. Then came the big correction as European troubles monopolised the headlines. Between the second week in February and the beginning of March, Gold and the US Dollar were rising together as Gold recovered from the correction. And finally, especially over the last three days of the week just ended, the US Dollar and Gold were going DOWN in tandem."
March 5 - Old Man River
"If you are beginning to think that this is a methodical exercise in downgrading Europe and its "alternative" currency and investment markets by the US ratings agencies in order to keep the dire state of the US banking, financial, fiscal and monetary situation out of the spotlight, we would not disagree with you. It is working so far, but it is VERY risky."
February 26 - The Genie Is Out Of The Bottle
"But for the global financial system, the fundamental problem remains the same. In early December last year, facing a rapidly rising Gold price and the absolute necessity to increase the US Treasury's debt limit, drastic measures were called for. The "sovereign debt" genie was let out of the bottle with the decision to downgrade the sovereign debt of Greece by the US based ratings agencies."
February 19 - Not Afraid Of The Debt - Yet
"On Friday, February 12, Mr Obama officially increased his Treasury's borrowing limit by $US 1.9 TRILLION to $US 14.294 TRILLION. Monday, February 15 was a holiday on US markets. On the next day, $US Gold had its biggest one-day rise since November last year (when it was on its way to $US 1200 plus). On February 16, Gold jumped $US 29.80 while the trade-weighted US Dollar index - the USDX - fell back below the vital 80.00 level"
February 12 - The Power Of The US Pen
"In the face of the EXACT same problem for which Greece and its fellow "PIGS" nations are now being pilloried, what does the US government do? It passes a "law" giving itself "permission" to borrow more. In this case, $US 1.9 TRILLION more. "
February 5 - This Time It's "Sovereign"
"So why the big US Dollar jump against the Euro? Quite simply because the Global Financial Crisis has come back, but this time, it is not the risk of banks going under - it is the risk of "sovereign nations" going under. Which sovereign nations? European ones, or more precisely peripheral European ones along the shore of the Mediterranean sea."
January 29 - Business As Usual
"Mr Obama has given his State of the Union address. Mr Geithner has been grilled by the US Senate. Mr Bernanke has been confirmed for a second term as Fed Chairman, albeit by the weakest vote (70-30) in the history of the Fed. The Senate has approved a watered-down bill to "curb spending" and attached a $US 1.9 TRILLION increase in the Treasury's debt 'limit'."
January 22 - Something Happened
"In fact, what happened after January 19 this week looks eerily like what happened after the GFC hit crisis maximum in September/October 2008. Back then, the US Dollar rallied hugely and commodities and precious metals swooned in a huge global deleveraging."
January 15 - The Calm Before Something Happens
"Over the first week of January, the $US Gold price was up 4.0 percent. That surge continued at the start of this week as Gold poked above $US 1150 on Monday - January 11. But then on January 12 came the announcement from China that they were increasing the reserve requirements in their banking system."
January 8 - Has Any Market Gone Up Every Year For A Decade?
"In particular, any MAJOR market? We must admit we do not know but if one has, it would be a rare occurrence."