Gold Knowledge - Thursday's dramatic drop in gold came as no surprise, And Chaturmas, the Fed & Gold's Summer Lull
Gold Knowledge & Tips by Pierre A PienaarThursdays dramatic drop in goldcame as no surpriseGOLD Near Term: Downside favoredTime: 21-06-2013 02:52:00Pivot: 1338Our View: Short position below 1338. Target 1265. Conversely, break above 1338, to open 1354.Comments: The pair breaks below support.Key levels1365135413381288.76 Last Price
126512501234Source: Windsor brokersDear Valuable Friend,The huge drop was no surprise. I believe that the next major move in gold would be tothe downside. The video runs just under 4 minutes and contains a lifetime of tradingeducation.No matter what you think of gold, bull or bear, you will find this video interesting andinformative and some might even say, disruptive. I will be analyzing both the macro andmicro picture for gold and explain where I see it headed in the next three to six months.In my opinion gold is sure to rally. Today there is a steady, positive move, but will ithold?. As I see it, the noise around gold is based on – when a bull or bear in the market,people tend to believe it will go on like that forever. So when gold was around $1,700there were speculations that gold would cross $2,000 an ounce. But now that gold isdown to $1,380-something people anticipate it to go further down to $1,000!! Marketsare driven by fundamentals which support a surge in the gold prices.Gold rose from the mid-$200s/ounce (mid-$200/oz) in 2002 to as high as $1,900/oz.That clearly suggests that things are not all right in the global economy. Politicians liketo create the illusion that they can create something out of nothing and give it to peoplein exchange for votes. Gold gets in the way of that falsehood politicians wish to use todeceive voters for their own gain and the gain of those who fund their electioncampaigns.You shouldnt buy gold and silver to get rich. The reason why you purchase gold andsilver is to preserve your wealth.I would like to present this article as well to get a full view of the situation of Gold on theGlobal Markets, and you should take note and act wisely. What is wisely? You shouldensure that you have a least 10% of your Portfolio in Physical Gold, Like Gold Bullion,Coins, Spot Gold, Gold Futures, or Gold Options. However, be cautious in your buying,and short selling. Don’t use money you cannot afford to lose.-----Chaturmas, the Fed & Golds Summer Lull
Thursday, 6/20/2013 20:52Gold prices typically slip in summer. So how might summer 2013 play out following thecrashes this spring...?FIRST the import curbs, then the Fed. Next it will be Chaturmas, writes Adrian Ashat BullionVault.Will the closed season for Indian weddings finally stall the subcontinents gold buyingthis summer?It usually does. All Asian gold demand tends to ease off mid-year, but India goes deadquiet, thanks to the lack of auspicious days on the Hindu calendar. 2013s Chaturmas –literal meaning, "four months" – starts in mid-July. Although it starts later and is shorterthan in 2012, the shutdown for Indian weddings will still run until early November as theHindu gods and goddesses enjoy their Yogi Sleep.Lord Vishnu deserves a rest after the frantic gift-giving and wedding demand for goldseen so far this year. Chaturmas should also enforce a truce between Indian households– the worlds No.1 gold consumers – and their government, now one of the worlds mostanti-gold administrations.Hiking gold import duty to 8% last month, and imposing strict new rules on how goldimports can be financed (no credit, in short), the government has still met record levelsof gold demand. To their mind, that has only worsened a problem hitting emergingmarkets everywhere: a sudden outflow of foreign cash, spooked by chatter about the USFederal Reserve daring to slow its rate of money creation. Or maybe even raisinginterest rates from zero. At some point. Perhaps.The effect on what were the worlds hottest investment hotspots has been dramatic.Mass protests in former darlings Turkey and Brazil come as Western fund managers holdtheir lowest allocations to developing economies since the Lehmans crash of 2008.China looks to have all but stopped buying US Treasury bonds, thanks to slowing inflowsof cash needing a home, plus the sudden need to keep money at hand as Chinese creditdries up. Indias latest curbs on gold imports were supposed to buoy the Rupee(everyone said so), but it has sunk to new all-time lows on the currency marketsregardless.Well, not quite regardless. The worlds biggest gold buyers, Indian citizens boast zeromine output. So pretty much every ounce bought for weddings, festivals and the 10% ofhousehold savings which go into gold each year must come from abroad. Thegovernment warned time and again it wanted to curb those gold imports, becausethey dent Indias current account deficit so badly that they hurt the Rupee. So mid-Aprils gold crash was already preceded by a sharp upturn in buying. Because peoplewho love buying gold love buying it now if they know supply will be capped tomorrow.The Rupees slump has only made gold more expensive. But wholesalers, if not finalconsumers, kept buying gold anyway. Even the end of credit-paid imports failed to dentMays surge in demand. So far, all the new 8% duty has done is spark warnings (andreports) of increased smuggling, with Dubai only a short trip away by dhow overnight.Still, the Hindu wedding season – for which tradition demands heavy gift-giving in gold –is set to end mid-July. Thanks to Chaturmas, it wont resume until after the festivalcalendar starts again in September. A bit like Lent for vegans, it bans the eating ofcertain leaves, fruit and tubers as the gods take their rest. And all else being equal,Indias summer vacation from bullion also helps to cap gold prices worldwide.On a monthly basis, over the last 45 years, the Dollar gold price rose 2.2% annualizedbetween June and September on average. The annualized rise between September and
May was 14.8%. Sure, Western fund managers following the "Sell in May" motto alsohelps flatten the action. But internal to golds supply and demand balance, Chaturmasremoves the No.1 consumers.From the Gregorian calendar, however, Chaturmas is a moveable marriage ban. And alltold in 2013, Hindu observance allows nearly 25% more wedding days than it did in2012 according to this chart from Kotak Mahindra Banks Shekhar Bhandari, speakinglast year at the LBMA conference in Hong Kong. The summer lull in Asian demand isdelayed, in short, and wedding gift-giving will start again sooner. And failing to curbdemand so far in 2013, Indias government hasnt even managed to beat a rise in supply,thanks both to peoples continued love (and need) for hard asset savings (Indianhouseholds have seen gold rise vs. Rupees in 30 of the last 39 years), and more recentlyto spring 2013s global gold discounts.All this is cold comfort, of course, to Western investors and savers watching gold pricesplunge once more this week. Yes, Asian savers have hoovered up much of the gold soldfrom ETF trust funds, but the acceleration of golds eastwards drift hasnt done enoughto prevent a slump in prices. And its that slump itself which really sparked the surge inIndian and Far Eastern demand. Still, thanks to these bargains, Asia is on track forrecord quarterly buying according to Marcus Grubb of the World Gold Council. Perhapssome 400 tonnes of gold will be sucked into India alone between April and June –"almost half of the total imports in the whole of 2012." And with Swiss refineries onlynow catching up with demand, that has led to record highs in the local premiums for 1-kilogram gold bars, over and above the international spot price for wholesale 400-ouncebars (12.5kg), in the Asian centers of Hong Kong, Singapore and Mumbai.Again, its important to note that – for now – this surge has come from price-wiseconsumers. First Indian dealers and households stocked up ahead of New Delhis clearlyflagged action against the drain on foreign currency holdings which imports require.Second, the price slump of mid-April (and now mid-June) has unleashed pent up demandwhich did not exist north of $1500 per ounce. Any bargain hunting this month might wellprove to be consumption brought forward as well. Only once Chaturmas ends can wegauge the strength of Indias peak demand for 2013, as Diwali draws near. Two monthslater, Chinese wholesalers will start getting ready for the Lunar New Year gold shoppingspree. Between them, Indian and Chinese consumers now buy one gold ounce in everytwo sold worldwide. But the first faces 8% import duty, plus 4% sales tax, andsmugglers will struggle to match the record levels of legal flows. China meantime faces abanking crisis all of its own. And no one can yet say how gold-loving households will actwhen the credit and economic growth of the last 20 years takes a pause, nevermind adive.Still, looking ahead, and with Western investors continuing to sell, "Gold [has been]passing from the clearly shaky hands of [ETF trust fund] investors into strong hands,"reckons Commerzbank – "a trend that should lend support to the gold price in themedium to long term." And beyond there, dont miss where long-term economic power –and gold – is heading worldwide. If you fear a decline of the West, relative to fast-risingAsia, it makes sense to buy at least a little of their first choice for household savings. Notleast at todays knock-down prices.Buy gold at the lowest prices in the safest vaults today...
Adrian Ash runs the research desk at BullionVault, the physical gold and silver marketfor private investors online. Formerly head of editorial at Londons top publisher ofprivate-investment advice, he was City correspondent for The Daily Reckoning from2003 to 2008, and is now a regular contributor to many leading analysis sitesincluding Forbes and a regular guest on BBC national and international radio andtelevision news. Adrians views on the gold market have been sought by the FinancialTimes and Economist magazine in London; CNBC, Bloomberg and TheStreet.com in NewYork; Germanys Der Stern and FT Deutschland; Italys Il Sole 24 Ore, and many otherrespected finance publications.Nations around the world embraced gold and silver as a store of wealth and amedium of international exchange. Individuals have sought to possess preciousmetals as insurance against the day-to-day uncertainties of paper money. Gold,silver, platinum and palladium constitute the majority of trading in preciousmetals. Trading in precious metal futures market or spot market in a speculativemanner provides an important alternative to traditional means of investing inprecious metals such as gold bullion, coins, and mining stocks, and wheresubstantial profits, as well as losses can be made. Trading contracts in preciousmetals also provide valuable trading tools for commercial producers and theusers of these metals. Precious metals are traded on the futures and spotmarkets in contracts (a contract of gold is 100oz while a contract of silver is5000oz). On the spot market, precious metals are usually bought or sold basedon a value date of 48 hours which can be rolled over on a daily basis thereafter.Trading on the futures market is done by buying or selling precious metal for aspecific settlement date in the future. For example July Gold, can be bought inMarch for July settlement. Trade Gold Futures hereBid Buy South African Gold CoinsOptions Insights Membership - Continuing Study of the Secrets of Making Money inOptions TradingIndex Options System Index Time Trading MachineSpot Gold
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