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GOLD IN AN UNCERTAIN WORLD

(Excerpts from my speech to the 7th annual CHINA GOLD & PRECIOUS METALS SUMMIT, Shanghai, China, December 5th through December 7th, 2012) Gold in recent months has been stuck in a trading range between $1675 and $1750 an ounce - disappointing many bullish investors and quite a few gold-market analysts (like myself) who had expected the yellow metal to be ending the year approaching - or even exceeding - its all-time high-water mark near $1924 recorded back in September of 2011. Recent attempts to rally higher have been thwarted by stepped-up speculative selling and softer physical ...

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U.S. Monetary Policy: Good News for Gold Investors

We have long expected further monetary easing by the U.S. central bank . . . but this past Thursday's news from the Fed was more than most gold investors could have imagined or hoped for.  In reaction to persistent recession-like conditions and continued high unemployment in the U.S. economy, the Fed is now embarking on even more reflationary - and ultimately inflationary - monetary policies. In a statement following Thursday's Federal Open Market Committee (FOMC) meeting, the Fed said "If the outlook for the labor market does not improve substantially, the committee will continue its ...

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I’m No Gold Bug — Just Super Bullish

I've been unwaveringly bullish on gold for nearly a decade . . . and suspect I'll remain bullish for at least a few more years.  Indeed, I strongly believe that the price of gold will more than double - and possibly triple - before the end of this decade. But, please don't label me a gold bug.  I see nothing magical about the yellow metal . . . and those who attribute to it miraculous powers or foresee it resuming its sometimes historical role as the central anchor of the world monetary system are sure to be disappointed. I consider myself a dispassionate economist, analyst, and observer ...

The Fed Speaks . . . and Gold Listens

Gold rallied this past week, showing some of its old spunk, first breaking through overhead resistance around $1,625 an ounce . . . and then piercing through the $1,650 level on Wednesday's news from the Fed that more monetary stimulus could be in the cards. As in recent months, gold's price action has very much reflected buying and selling by institutional traders and speculators, driven by high-frequency program trading that rely heavily on momentum indicators and technical signals, as well as expectations of prospective U.S. monetary policy, Eurozone sentiment, and the latest move in the ...

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GOLD – Dark Clouds, Bright Skies

Disappointing news for the U.S. economy is good news for gold investors. Recent economic data show an economy that is "stuck in the mud," to quote Fed Chairman Ben Bernanke.  And, in response to signs of a slowing economy, the U.S. central bank is, sooner or later, likely to embark on another round of monetary easing. In fact, the recent gold-price rally that took the yellow metal back over the psychologically important $1,600 an ounce level reflects rising market expectations that the Fed will announce further economic stimulus following the July 31-August 1 Federal Open Market Committee ...

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GOLD: Still Waiting for the Fed

Gold shed more than $50 an ounce in a blink following last Wednesday’s news from the Federal Reserve that America’s central bank would not, at least not now, initiate another round of quantitative easing, opting instead for more muted monetary stimulus by extending its “Operation Twist” through year-end. Operation Twist, in which the Fed sells short-term U.S. Treasury securities from its portfolio and simultaneously purchases longer-dated Treasury notes and bonds, is intended to stimulate the economy by lowering medium- and long-term interest rates without actually speeding up growth in the ...

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GOLD: Waiting for the Fed

Bad news for the American and other major world economies is usually good news for gold and silver – especially when it triggers expectations of more accommodative, more reflationary, monetary policies.After all, easy money is what these precious metals thrive upon. Indeed, the near-term outlook for gold and silver is now very much dependent on U.S. monetary policies and, to a lesser extent, the unfolding European debt and currency crisis. With the U.S. Federal Reserve’s next policy-setting meeting set for June 19th/20th, the next week or so may be the last chance for investors to buy gold ...

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A Quick Note on China’s Economy and Gold Market

Having just returned from another visit to China, where I had the opportunity to talk with a number of "insiders" in the Chinese gold community, I am more convinced than ever that the country will continue to have a profound influence on the world market and future price for years to come. Growth in aggregate demand from jewelry buyers, private investors, and the People's Bank of China will continue to outpace growth in total supply from mine production and secondary sources.  With both domestic supply and demand relatively price inelastic, the market will require a growing stream of ...

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OPPORTUNITY KNOCKS — A Quick Note on Recent Gold-Price Action

This past week's dramatic gold-price action - with the metal falling some 5.8 percent from a Wednesday high of $1,790 an ounce (in European trading) to a low of $1,687 (in after-hours New York trading) - does nothing to dissuade us from our super-bullish long-term view of gold-price prospects. Indeed, we have often warned clients and readers of NicholsOnGold to expect occasional episodes of great price volatility with sizable corrections that would lead many investors and pundits to prematurely eulogize the end of gold's bull run.  Wednesday's decline was just such a correction - and it ...

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GOLDEN JUNCTURE

With the Greek drama taking an intermission and the euro strengthening at the U.S. dollar’s expense, it looks like gold wants to move higher – and, quite possibly, it has enough oomph to break through strong technical overhead resistance as we approach and possibly exceed $1,800 an ounce. As I have pointed out in past NicholsOnGold commentaries, it is important to distinguish the forces and players that drive gold prices in the short term – measured in days, weeks, and sometimes months – from those that determine the longer-term trend and average price over many years. Short-Term ...