BoJ Lifts Stocks, Sinks Gold: Morning Market Update Oct 31

The Bank of Japan shocked markets today with sudden large increase in its stimulus program. Already running the world’s largest QE program, the B0J announced that it was boosting its goal to raise the monetary base in two years from 60-70 trillion yen to 80 trillion yen.

Stock markets exploded, with the Japanese Nikkei index shooting up 755 points, 4.83%. Euro markets followed suit, and Wall St. opened sharply higher, with expectations of the S&P 500 hitting a new all-time high this morning.

The yen plummeted to a 7-year low, and the euro fell on deflationary fears. The dollar is sharply higher, flirting with the 87 mark on the DXY index. Crude oil dropped over $1 a barrel.

Gold swooned over $35 an ounce to touch a low of $1,160 this morning, breaking through support at the triple bottom of $1,183 before recovering. Investors are selling off other assets to pile into the stock market.

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Shortage of Gold for Dubai’s “Your Weight In Gold” Campaign

Dubai's "Your Child's Weight In Gold" program was a wild success this year.

Dubai’s “Your Child’s Weight In Gold” program was a wild success this year.

According to various sources, the “Your Weight In Gold” program offered by the municipal government of Dubai (United Arab Emirates) has hit a temporary snag: there were so many successful participants this year, the distribution of prizes–in the form of gold coins–will be delayed until December.

The government incentive, known in its second year as “Your Child’s Weight In Gold,” pays out 1 gram of gold for each kilogram of weight lost by participants in excess of 2 kilos. Like last year, the municipal government the added caveat that families who participated together received two grams of gold in exchange for each kilo of weight loss over 2 kg. The time span for the contest lasted from July 15th through September 15th.

The municipality was overwhelmed this year, however, by the number of winning participants in the program, which aims to reduce childhood obesity. Contest winners will have to wait until December to receive their gold prizes due to a shortage of gold coins. It is estimated that some 40 kilograms of gold will be paid out in total to 7,350 participants, many of them children under the age of 13. This represents a 100% increase over the number of participants in the event’s inaugural year. With the dramatic spike in the contest’s weight-loss activity, Dubai simply did not allocate enough gold to the production of the prize coins, which will be of a remarkable .9999 fineness, or 99.99% pure gold. This year’s “biggest loser” shed close to 30 kg after last year’s best mark was just over 26 kilos.

Image courtesy of ArabBusiness.com

Image courtesy of ArabBusiness.com

With the continued success of this clever “gain gold by losing weight” contest, Dubai may soon have the fittest population in the world–and one of the most financially secure! Be sure to plan for the future of your own wealth with the variety of highly pure gold products available at Gainesville Coins!

 

by Everett Millman

GDP, Dollar Pressure Gold: Morning Market Update Oct 30

The Commerce Department released its preliminary estimates for third quarter GDP for the US this morning showing a 3.5% increase in the economy. This is more than the 3.0% analysts expected, and follows are big 4.6% increase for the second quarter. A 10% increase in spending by the Federal government offset softer consumer spending.

The news lent support to the dollar, which jumped from negative territory yesterday afternoon after the FOMC meeting. The stronger dollar and healthy economic outlook is putting pressure on gold. Precious metals are down across the board, with gold down three quarters of a percent, silver down 3.5%, and the PGMs down over 1.3%.

Stocks opened mixed on Wall St this morning, with the Dow opened up, and the Nasdaq and S&P 500 opening in the red.

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Is This The End Of QE? : Morning Market Update Oct 29

Federal Reserve Open Market Committee

This afternoon, we will get the policy statement from the most anticipated FOMC meeting since the taper to the Fed’s $85 billion a month bond-buying scheme was announced.  If everything goes to schedule, the Federal Reserve Open Market Committee will announce the end of QE3, which had been throttled down to $15 billion a month.

However, there are many traders and speculators banking on a continuation of what some call “money printing,” due to the dire economic conditions Western Europe finds itself in. Even if the purchases of mortgage-backed securities (the toxic loans the banks made, and the Fed is buying at book value) and bonds ends, there is disagreement among Fed officials whether the resulting $4 trillion balance sheet should be allowed to naturally shrink as the bonds mature, or should the Fed take the money and buy more.

Stocks are up globally on sentiment that the Fed will “do the right thing.” Wall St. opened slightly in the green, but the Nasdaq was pulled down by a falling Facebook share price. The S&P saw a little help this morning, as a reversal in falling crude oil prices lifted energy sector stocks.

Spot gold eased slightly overnight, suffering a drop in early New York trading that was mostly erased in an hour. Silver was steady overnight, resuming an extremely tight range in Asia and Europe. The only real market movement is happening in US trading.  Platinum is steady, and palladium is trading just a shade higher than Monday’s New York close.

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Gold Up on Durable Goods Miss: Morning Market Update Oct 28

Durable goods orders in the US unexpectedly fell for a second month in September, after a jarring 18.3% drop in August. Orders for durable goods fell 1.3% last month, as companies continue to stuff inventories.

The report smashed a recovering dollar into negative territory, while spot gold jumped over $8 an ounce. The fall in the dollar is helping crude oil prices stabilize from recent falls.

Despite the news, stocks in New York opened higher and rose at the bell.

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EU Bank Stress = Not So Bad: Market Update Oct 27

10945992_xxlGold and silver both dropped at the start of this week’s trading on some profit-taking, but recovered to near-unchanged in Asia.

The platinum group metals gained in Asia, but platinum had eased to just above unchanged in early New York trading. Palladium is modestly higher, riding a late European bounce into New York trading.

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Weekly Wrap-Up: Market Volatility Up as Fed’s Asset Purchases Set to End

This week was characterized by renewed volatility in the markets. This can partly be attributed to the diverging policies of the Federal Reserve and European Central Bank: the latter is just now instituting its form of monetary easing, while the former is set to conclude its stimulus program. After undulating, stocks ended the week up as gold retreated from its recent rally.

iStock_000013551810MediumAfter a considerable period of record-low volatility, the markets oscillated throughout the week before the stock markets in the U.S. and Europe rallied on Thursday. Gold and silver were also volatile as strong seasonal demand is setting in. Just three months ago, market volatility was quietly stable, as the VIX volatility rating registered its lowest ever reading; after this week, the VIX has hit a 13-month high.

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Diwali Festival Continues Today Following Dhanteras

The The Diwali Festival is considered the largest annual gold-buying event in the world.

The The Diwali Festival is considered the largest annual gold-buying event in the world.

Today, October 23, marks the third day of the five-day Diwali Festival of Lights in many Hindu and Jain cultures. The festival began on Tuesday with the day known as Dhanteras. This holiday is considered the most auspicious time to make investments, spend money on gifts, and especially buy gold. In general, it is a day of levity, joy, and gratitude, specifically focused on celebrating prosperity and well being. Naturally, the purchase of precious metals as a tangible investment is a popular way of observing Dhanteras. (Dhan means “wealth” in Hindi.)

Today, the third day of the festival, is the observation of Diwali itself (although the entire festival is often referred to as “Diwali.”) Each year, the festival of lights–with the attendant candles and fireworks–marks the high point of consumer spending in india-goldIndia. For this reason, it can be seen as somewhat analogous to Christmas for Christians. Gold and silver, however, are inextricably tied to the holiday. This year alone, it is estimated that India’s gold demand has spiked 450% during the festival. This effect was compounded by the recent dip in gold and silver prices, which makes these purchases even more affordable for families taking part in the festivities.

Diwali is recognized as an official holiday in a wide variety of countries around the world, including India, Nepal, Sri Lanka, Myanmar, Mauritius, Guyana, Trinidad and Tobago, Suriname, Malaysia, Singapore, and Fiji. There are also widespread celebrations of Diwali by Hindi communities in the Caribbean, Australia, New Zealand, the United Kingdom, and the United States.

Whether your bullion purchases are for holiday gifts or private investment, you can always track your precious metal investments with Gainesville Coins’ helpful Portfolio Tracker and Financial News page!

 

by Everett Millman