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Get REAL with Jan Skoyles: Gold is heading West to East

Stacy Summary: The show that was the first ever crowdfunded financial news programme is back. Jan Skoyles talks to Ned Naylor-Leyland about gold heading from West to East. Lots of interesting discussion and data.

Episode sponsored by Metal Tiger (LON:MTR):

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Happy Christmas from all the team in GoldCore

Happy Christmas from all the team in GoldCore

Happy Christmas and Wishing You a Healthy and Prosperous 2015

Happy Christmas to you and yours,

We hope you had a fulfilling 2014 and thank you for your feedback, your sharing, your support and your business during the year and in recent years. Please take note of our office hours over the Christmas and New Year’s Season.

GoldCore Office Hours

GoldCore will be closed over the holidays.
If you have an emergency matter please call +353 87 2297883

22/12/2014 – Office Closed
23/12/2014 – Office Closed
24/12/2014 – Office Closed – Christmas Eve
25/12/2014 – Office Closed – Christmas Day
26/12/2014 – Office Closed
29/12/2014 – Office Open
30/12/2014 – Office Open
31/12/2014 – Office Open – New Year’s Eve
01/01/2015 – Office Closed
02/01/2014 – Office Open

Bloomberg and CNBC Interviewed GoldCore Today about Gold in 2015

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Click here to view Bloomberg Interview


Why You Should Be Constructive On Gold In 2015
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Click here to view CNBC Interview

 

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Is Russia Being Driven Into the Arms of China?

Is Russia Being Driven Into the Arms of China?

The “isolation of Russia” idea is one which has been receiving a lot of traction of late. Russia’s recent economic woes have sometimes been covered with barely contained glee despite the hardships that average Russians may have to endure if the rouble continues to collapse … not to mention the inevitable geo-political backlash.



Reuters image of the over 50% drop in the Rouble against the U.S. dollar

Russia has become isolated from its western neighbours on account of the putsch in Ukraine which led to the predominantly ethnically Russian Crimea seceding from Kiev through a democratic process.

European governments slavishly adhere to U.S. imposed sanctions. So from a western elite point of view, Russia is indeed isolated.

Whether antagonising Russia is damaging to Russia is a moot point. Certainly in Russia’s current straits the bankrupt west is in no position to help. European farmers are suffering from loss of export markets while Europe is still dependent on Russian natural gas.

So how “isolated” is Russia in reality?

 

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Russian Currency Crisis and Defaults Could Create Contagion in West

Russian Currency Crisis and Defaults Could Create Contagion in West

Russia’s currency market witnessed further huge volatility again today.  The finance ministry said it would start selling foreign exchange which are primarily in dollars. This appeared to reduce selling pressure on the battered rouble.

The fall of the rouble this year has been severe, with a 50 percent fall against the dollar and of course gold this year. The slide has been precipitous as in the past two days alone, it fell about 20 percent against the dollar and gold.

On Monday, the ruble fell 10% against the dollar and gold followed by another crash of 11% on Tuesday, despite a massive rate hike.

The heavy selling pressure this week, made the central bank sharply increase its key interest rate by an unexpected 6.5 percent or 650 basis points. The move did little to buttress the currency in the short term as speculators and traders continued to sell the rouble.

Momentum is clearly down and computer driven markets and increasing dominance of algorithmic or black box trading is exacerbating the rouble’s short term weakness. However, the sharp increase in interest rates and the fact that the fundamentals of the Russian economy remain reasonably sound and not much worse than many western economies, will support the rouble. It is likely to stabilise at these levels and recover in the coming months.

It is also important to note that political and economic relations between Russia and China are very good at the moment and China would likely provide financial assistance – if indeed that is needed…

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Gold Imports ‘Phenomenal’ In India – 571 Percent Surge To 150 Tonnes in November

Gold Imports ‘Phenomenal’ In India – 571 Percent Surge To 150 Tonnes in November

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India’s gold imports were over a staggering 150 tonnes in November and have seen a “phenomenal” rise in India according to India’s Trade Secretary, Rajeev Kher.

A few weeks ago we said that the death of the Indian gold market was greatly exaggerated. The latest gold import data out of India confirms this.

The import restrictions on gold that were imposed on Indians in August of 2013 were lifted at the end of last month. Despite the fact that the restrictions were still in place gold importation in November surged an incredible 571% relative to the same month last year at over 151.58 tonnes.

This was an increase of 38 percent from 109.55 tonnes a month earlier, trade ministry data showed on Tuesday.

The Indian government had recognised the socially destructive impact of the 80:20 scheme – which obliged importers to export 20% of it’s gold imports before bringing in another shipment – by pushing business into the hands of smugglers and thereby empowering criminality while losing out on the 10% duty currently charged on all gold imports.
It had been assumed that, because demand was being met by these “informal” supplies, the relaxing of the 80:20 policy would not have a dramatic impact on gold imports into India. That remains to be seen. Smuggling networks are now well established and arguably could provide cheaper gold than government-sanctioned channels.

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Silver Eagle Coin Sales Very Robust – Record High For Second Consecutive Year

Silver Eagle Coin Sales Very Robust – Record High For Second Consecutive Year

Silver bullion demand remains very robust as silver stackers continue to stack. 2014 has been another record-breaking year at the U.S. Mint which has sold 43.3 million silver eagle coins – up from 42.7 million coins last year.

Record demand in 2014 was seen despite the U.S. Mint running out of Silver Eagles early last month due to very high demand throughout October. As a consequence of this lack of supply, November sales of the coins were down 40.8% according to Reuters.

Silver prices fell 36% last year and, despite obvious shortages in the supply of physical silver, they have declined a further 12.5% this year. This demonstrates the degree to which naked shorting of the market – the selling of paper contracts for gold which the seller is not actually in possession of – is determining price of the physical metal.

 

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New York Times on Benefits of Gold in Currency Wars

New York Times on Benefits of Gold in Currency Wars

The New York Times published an important article this week in which the benefits of gold to nation states during a period of currency wars was highlighted. The article was noteworthy as the New York Times has rarely covered gold in a positive manner.

The article, entitled ‘The Golden Age’ is about the growing use of gold in geopolitical affairs. They drew attention to the gold repatriation movements in Europe and to the accumulation of the precious metals in vast quantities by the central banks of the East – particularly Russia and China.

The Times attempts to get into the mind-set of the central banks who are buying gold or attempting to repatriate their current stocks of the metal. It presents two major rationales for the current trend.

“Some that’ve interpreted the metal’s mini-comeback as an indication that financial Armageddon, in the guise of runaway inflation, is approaching. Others have read the recent move as a symbolic way for central banks and governments to make a show of strength in nervously uncertain economic times.”

The first point is one which we have covered here consistently. The article quotes Jim Rickards who interprets the policies of China and Russia as “they understand who fragile things are and they are getting ready for the demise of the dollar.”

 

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Faber Favours Commodity Stocks In India, Asia … and Gold

Faber Favours Commodity Stocks In India, Asia … and Gold

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Respected economic historian and author of the “Gloom, Boom and Doom Report,” Dr Marc Faber has warned about the continuing and coming decline of western economic power.

He believes that the generation of young people starting to work today will be the first in two hundred years to have a lower standard of living than their parents had. He believes dividend paying Asian stocks will grow wealth in the coming years and remains an advocate of owning physical gold.

In a video interview with Barron’s, Dr Faber states,

“I meant that with respect to western societies and Japan where essentially the younger people – today’s generation – will earn less than their parents and they will have less wealth than their parents, inflation adjusted.”

“[This is] because we will have wealth taxes, we will have more estate taxes and we have essentially declining real median incomes in the western world and Japan.”

Faber has consistently warned since the late 1990’s that this dynamic would come to pass as the West and the U.S. in particular exported its industrial infrastructure and binged on consumer junk fuelled by easy credit while the emerging economies of east Asia used the proceeds to focus on production rather than consumption to become industrial powerhouses.

 

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Gold Surges As Greece Crashes – Eurozone Debt Crisis Part II Cometh

Gold Surges As Greece Crashes – Eurozone Debt Crisis Part II Cometh

Gold jumped 2.3 percent to a six-week high yesterday as sharp falls on stock markets globally led to renewed demand for gold as a haven.


Monday night and Tuesday saw renewed market turmoil across the world. Leading shares suffered their biggest daily fall since the middle of October, hit by renewed fears about the global economy and uncertainty in Greece following the announcement of snap presidential elections.

The FTSE 100 finished 142.68 points or 2.14% lower at 6529.47 yesterday as a combination of worries unsettled investors. Greece’s stock exchange crashed as the banking sector dragged the rest of the stock market down a staggering 13 percent, it’s most dramatic single-day decline ever. Greece is failing to exit its bailout amid uncertainty over its political future after the election news.

Meanwhile Chinese shares fell sharply in the wake of Monday’s disappointing trade data, showing a drop in imports, and a clampdown on its corporate bond market, while Japan was revealed to be deeper in recession than expected and the Nikkei was down 2.25 percent this morning.

The Shanghai Composite and Abu Dhabi’s ADX saw their sharpest falls since 2009. Wall Street joined in the global declines and stock markets lost $100 billion on Monday.

The already jittery market apparently balked at the shock announcement of Greek Prime Minister, Antonis Samaris, to hold a snap presidential election. If the government candidate loses it would pave the way for a general election in which the socialist Syriza party would be strong contenders.

Syriza say that they will renegotiate with the Troika and increase public spending which may put bondholders at risk. Britain’s Independent quotes Charles Robertson from Renaissance Capital warning that “a possible Syrizas election victory may force the Eurozone to choose between a fiscal union or the first euro exit.”


Greek Gold Stater Coin (323-281 B.C.)

Greece still has very high unemployment of around 25 percent and GDP has been wallowing since 2009 with a 1 percent rise in the cards for this year off a base that is 30 percent below 2009 levels.

 

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Gold Prices Kept Low But Only For Americans

Gold Prices Kept Low But Only For Americans

The SGT Report interviewed GoldCore’s Head of Research Mark O’Byrne over the weekend. The video was released yesterday evening and has already had over 5,300 views.


Click on image or here to watch

Topics covered in the interview included:

  • Gold performing well in all currencies in 2014
  • A yes vote to Swiss gold referendum would have been “icing on cake” for gold market
  • Existing fundamentals sound due to India and China demand and Russian, Chinese and other central bank demand
  • Germans can’t get their gold reserves. Do how did the Dutch get their 122 tonnes of gold?
  • Is Germany being prevented from holding gold to prevent independent foreign policy action?
  • The mind boggling scale of the U.S. $18 trillion national debt  and over $100 trillion to $200 trillion in unfunded liabilities
  • How humongous is a billion, a trillion and a quadrillion?
  • The illusion of digital “wealth” and the coming wealth transfer when system implodes
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ECB Draghi’s QE Battle With Germany; Rules Out ECB Gold Buying

ECB Draghi’s QE Battle With Germany; Rules Out ECB Gold Buying

The European Central Bank will decide early next year whether to follow the Federal Reserve, Bank of England and the Bank of Japan with quantitative easing or money creation to buy government bonds and other assets but will not buy gold, its president Mario Draghi said yesterday.

Speaking in the ECB’s new 1.3 billion euro headquarters, an imposing Frankfurt skyscraper designed to show the strength of the ‘single’ currency, Draghi threw down the gauntlet to Germany and signaled that he would not allow opposition from Germany or anyone else to stop the ECB’s QE.

Despite the fact that it has failed in Japan and is meeting with mixed success in the UK and U.S.

In his clearest language yet, Mario Draghi underlined his desire and commitment to debt monetisation, and argued the case for creating new money to buy assets such as government bonds. He made the comments during the question and answer period of his monthly press conference following the ECB’s monetary policy meeting.

Interestingly, Draghi ruled out the printing of money to buy gold bullion. He was asked what types of assets the ECB would buy as part of its quantitative easing program. He responded, “we discussed all assets but gold.”…

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Gold +14.3%, 12.3%, 5.8% and 0.4% in JPY, EUR, GBP and USD 2014 YTD

Gold +14.3%, 12.3%, 5.8% and 0.4% in JPY, EUR, GBP and USD 2014 YTD
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Despite the worst sentiment towards gold we have seen since the brief 30% price fall in 2008, gold continues to eke out gains in all major currencies. So far in 2014, gold is 14.3%, 12.3%, 5.8% and 0.4% higher in japanese yen, euros, sterling and dollars respectively (see chart).

Gold is again acting as a hedge against currency weakness and the ongoing devaluation of currencies as stealth currency wars continue. Overnight, gold rose to over EUR 986/oz and looks set to challenge the significant and important level of resistance that is EUR 1,000/oz due to euro weakness and concerns that Draghi may launch the ECB money printing ‘Bazooka’ in 2015.

There is a perception that gold has performed badly recently and in 2014 due to the recent dip in gold prices in dollar terms and despite the fact that gold is actually higher even in dollar terms in 2014.

This focus on gold solely in dollar terms is misleading. It shows a peculiarly dollar centric way of looking at the world. It is important for investors in the UK, EU, Japan and elsewhere to always consider performance in local currency terms.

Gold is not “priced in dollars” solely as is frequently, simplistically asserted.

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