The worst for gold may be over: Bank of America Merrill Lynch

July 22, 2014 Posted by admin

On the heels of a 2.1% loss for gold last week and news that hedge funds have gone way short, gold bugs could perhaps use some cheer. Enter analysts at Bank of America Merrill Lynch who say the worst days for the precious metal may be over.

In a note to clients Monday, metals strategist Michael Widmer notes how gold prices



have stabilized this year thanks to steady physical demand from emerging markets — China and India absorbing mine and scrap supply — which has helped compensate for investor selling. In the future, he says, that balance will sway in gold’s favor:

“We believe that physical demand from emerging markets will gain further clout in the medium term as countries get more affluent, suggesting the worst may be behind the gold market.”

Of course, he says, don’t expect all smooth sailing from here. For now, investors in developed markets remain marginal buyers and gold tends to be bought and sold around macroeconomic “themes.”  In 2013 rising nominal rates and falling inflation expectations — the ultimate bear pit for gold — led to major portfolio adjustments running against gold. Unfolding normalization of the global macro economy and implications for rates/inflation should keep a few headwinds going, Widmer says.

But while those headwinds remain, he doesn’t see a repeat of 2013 happening. That’s because natural interest rates are falling for several reasons and because inflation expectations should gradually pick up along with global growth.  And as B. of A. Merrill Lynch recently pointed out, gold and oil prices are correlated, and longer-dated oil prices look cheap on several measures, which Widmer says backs up their view that gold prices should be bottoming. Therefore the return of volatility seen in 2013 is not likely.

Echoing some of B. of A.’s thoughts, Julian Phillips, in his Gold and Silver Market Morning note, explained just why those Asian buyers are so important to gold, and less fickle than their western counterparts. Asian buyers are not all about short-term and short-term profits, trusting gold and silver as long-term investments, and only buy when they feel the price has dropped too much, he says. They are fully confident in the long-term and rarely sell for profit reasons alone, so buying is “persistent and on-going.” Phillips argues the technical picture remains positive for both gold and silver.

Hedge funds cut bullish gold bets for the first time in six weeks in the week to July 15. Commodity Futures Trading Commission data show short holdings jumped over 30%, which was the biggest rise in 7 weeks. Just you wait. GotGoldBlog sees gold and silver as resilient and thinks “mercenary swap dealers with the most and largest gross short positioning for gold” are vulnerable to a short squeeze, if the position is right.

“…at some point, gold and silver are going to catch a tail wind strong enough that those attempting to prevent runaway breakouts could be overwhelmed. It is in such cases that the trader community on the COMEX becomes its most cutthroat and merciless,” says GotGoldBlog.

– Barbara Kollmeyer

More must-reads from MarketWatch:

Gold perks back up with all eyes overseas

Here’s your second-half playbook for stocks

A junk-bond warning: Investors exit as yields rise

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Scrap Gold, Silver and Platinum recover on Index

July 21, 2014 Posted by admin

SEATTLE (Scrap Monster): The daily scrap gold prices – both hallmarked  and non- hallmarked witnessed sharp recovery on Thursday, 17th July, 2014  on the ScrapMonster Price Index. The prices of scrap silver and Platinum too climbed higher on Index.

In the Hallmarked category, the 14 carat gold scrap prices were up by $ 2.98 per Oz. The prices of 18 carat and 22 carat gold scrap went higher by $ 3.82 and $ 4.66 per Oz respectively.9 carat gold scrap also edged higher by $ 1.91 per Oz. The price of Platinum scrap witnessed a jump of $ 13.13 per Oz to reach $ 1,091.50 per Oz. Silver scrap prices were marginally higher by $ 0.07 per Oz.

In the Non-Hallmarked category, the 14 carat gold scrap prices went higher by $ 2.82 per Oz. The prices of 18 carat and 22 carat gold scrap too went up by $ 3.61 and $ 4.42 per Oz respectively.9 carat gold scrap also increased by $ 1.80 per Oz. The price of Platinum scrap increased by $ 13.13 per Oz. Silver scrap prices were up by $ 0.06 per Oz to touch $ 15.18 per Oz.


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Thanks, Captain

July 20, 2014 Posted by admin

This was All-Star week for Major League Baseball. Normally, it’s a time when the Old Coach takes a couple of days off from watching first pitch to extra inning walk-off Orioles games to catch up on my reading, gardening and napping. I have made it a point over the years to avoid watching sports all-star games because they are invariably dull and meaningless, much like the Country Music Awards, the Academy Awards and the Miss Universe Pageants.

Come on, Coach. Don’t you at least watch the swimsuit competition?

Only if it happens between innings.

But this year was different. The Old Coach couldn’t resist tuning in to the 2014 Derek Jeter Farewell Tour, complete with grooved pitches, base hits and slips of the tongue by National League starter Adam Wainwright. Let me start by saying that I have great respect for Jeter, one of the few Yankees about whom I can say that. I admire the shortstop for his consistent play over almost 20 big league seasons, all with the same club — which is a remarkable accomplishment in the modern sports era. No doubt, he will be a first-ballot Hall-of-Famer.

“The Captain” has had a distinguished 18-year career with more than 3,400 hits, a lifetime batting average of .311, 14 All-Star Game appearances, five Gold Glove Awards, five Silver Slugger Awards and a Rookie of the Year Award in 1996. But Jeter, also known to fans as “Captain Clutch” and “Mr. November,” at 40 years old, recognized his diminishing productivity the past five years and wisely decided to retire after the 2014 season. After his ankle injury at the end of the 2012 season limited his games to just 17 last year, it was obvious Jeter is a step slower and a tad late with his bat.

When the Old Coach was down at spring training in March and attended an Orioles/Yankees game, it was fairly obvious the New York star was fading fast. His signature effort was still there, but he wasn’t able to make the same plays that earned him all of those Gold Gloves. And once feared as a hitter you didn’t want to face with the game on the line, now he is just an average batter.

That brings us to Tuesday night’s All-Star Game. Coach’s Corner totally understands why the fans overwhelmingly voted Jeter to start for the American League. A player of his caliber and consistency has earned the honor. But with the significance of the winner of the game achieving home-field advantage for his league champion in the World Series, there is a lot at stake in besting the other league. When one league uses a designated hitter and the other doesn’t, there has to be an advantage for the team that gets four home games in a possible seven-game series. Perhaps MLB should scrap the fan vote deciding the starters and just come up with selections made by team managers or a committee of Hall of Fame players.

As far as the Wainwright revelation about giving Jeter “a couple of pipe shots” in his first at-bat, the Old Coach is disappointed in the St. Louis hurler. His statement could be taken as an insult by Jeter. In an all-star game, you should give your best effort, regardless of who is at the plate. Giving any player for any reason an easy pitch to hit is not in the true spirit of the game. I’m sure Jeter was expecting Wainwright to do his darnedest to induce an out. That’s how the game is played.

And who knows, maybe Jeter, ever the epitome of competitive drive and sense for the dramatic, might well have hit Wainwright’s best fastball into the stands.

Thanks, Derek Jeter, for 18 years of playing the game the way it’s supposed to be played and doing it with a smile.

Hal Grau coached various sports for 36 years at Frederick, Thomas Johnson, Catoctin, Walkersville and Linganore High Schools. Email him at

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