Metals Retrench as Profit-taking, Risk-on Outlook Take Hold: Morning Market Update

July 14th, 2014 by

Gold is seeing a large correction Monday morning, as fears subside over banking concerns in Portugal, and speculators pour money back into the stock market.

As the “fear trade” faded and profit-taking set in, tight sell stops were triggered, sustaining the correction. Gold and silver were both down over 2.5% in early trading in New York,

Investors have decided that nothing is really going to happen with the latest Hamas rocket attacks from the Gaza Strip that could affect the markets, nor is anything likely to happen in Ukraine, as the government there squeezes the rebels in their last strongholds. The Nikkei finally broke its losing streak in Tokyo as the yen weakened, and merger & acquisition talk is providing support for the European and U.S. markets.

In a disturbing article this morning, Bloomberg says that “mom and pop” retail investors are piling into the stock market, buying shares that professional investors are selling as they head to the exit.  The article notes: “Individual investors are plowing money back into the U.S. stock market just as professional strategists say gains for this year are over. About $100 billion has been added to equity mutual funds and exchange-traded funds in the past year, 10 times more than the previous 12 months, according to data compiled by Bloomberg and the Investment Company Institute.”

Individuals buying into the market as the professionals leave it is a classic sign of the climax of an asset bubble.

moneymanCitigroup has agreed to a total of $7 billion in fines to halt a federal investigation into the bank’s misrepresentation of toxic mortgages, which were bundled into mortgage-backed securities that it peddled to investors. The fines include a $4 billion civil penalty paid to the Justice Department, a half-billion dollars to various states’ attorney generals, and $2.5 billion in loan modifications to borrowers.

Citi is the second big bank to finally settle for their role in hiding subprime mortgages in bundles that it then told investors were safe. JP Morgan agreed last November to pay $13 billion for the same behavior, and the Justice Department is presently arguing with Bank of America over a civil settlement.

Gainesville Coins is having a sale on Sunshine Mint 1oz silver bars and rounds, 10oz Sunshine Mint silver bars, and 100oz Royal Canadian Mint silver bars, all at special prices. These extra savings mean an even better deal if you’re buying on the dip today!




by Steven Cochran

Gainesville Coins Portfolio Tracker and Financial News