4.5% Interest on Gold and Silver?

In Odd Twist, Canadian Bullion Dealer Offers To Pay Interest On Gold And Silver

4.5% interest appears too good to be true in a world immersed in 0.4% gold lease rate, ZIRP, 0.25% USD interest rate and NIRP. It's a good deal anyhow if there is nothing sinister behind it. This shows that for CBS to be willing to pay an interest of up to 4.5%, it found a way to profitably utilize such gold holdings with higher yield. However, knowing the history of gold, India's recent failed attempt to lure its people to hand their gold into govt safekeeping and the current state of Canadian economy, I am suspicious that this could be a precursor to a subtle form of confiscation, a Canadian version of FDR's EO 6102.

Gold Market Related Stories

Mainstream news outlets are now echoing three interconnected stories regarding the gold market, which months ago could only be found among contrarian sites. This made me suspicious. . .

The first story is the "safe haven story". . .

"That's part of a widespread flight to safety that has seen investors dump anything perceived as risky — stocks, oil and currencies like the Canadian dollar — and put their money into investments that are perceived to be safer."

The writer compared the recent volatility prior to the 2008 housing bubble . . .

"'Investors are suddenly waking up to the risks in the market, pretty much like what happened in 2008,' said Robert Cohen, a portfolio manager at Scotiabank's Dynamic Funds."

It seems that they're cooking this story for something big . . . Will there be a big crash before there will be a spike? I can't avoid thinking this way after reading too much content about gold rigging. . .

I suspect that gold will really drop below 1000 USD that will make gold bugs capitulate and lead the financial analysts malign the PM sector once again. . . There is too much good news that make me suspicious. . 

" 'Many gold watchers think the stage is set for bullion to take aim at all-time highs. Citing investor fear that's currently pervading the market, "gold could not only reclaim $1,800 to $2,000 an ounce but actually move substantially higher," said ABC Bullion's chief economist Jordan Eliseo in an interview with the Australian Broadcasting Corp.' "

Source: Gold price over $1,200 has bullion buyers sure rally will continue

And then we also have been hearing a lot about this claimed trend change leading to the "gold-bull story". . .

"The monthly chart of Gold continues to give the most clarity on its prognosis. We have written about the importance of Gold holding support at $1180-$1200/oz, which it did this week. A monthly close above that support adds greater confirmation to a change in the primary trend. Gold has near-term upside potential to $1285/oz which marks monthly resistance and contains the 40-month moving average. Note that weekly resistance is at $1294. In addition, there should be very strong monthly resistance at $1330." 

"The odds favor Gold and gold stocks continuing to move higher before a correction begins. . . . Gold has upside potential to $1285-$1294/oz. The counter-trend moves within very strong trends occur quickly. Gold declined from $1264/oz to $1192/oz in less than three days while the miners (GDX and GDXJ) have corrected 9-10% twice in the past ten days. Unless Gold and gold stocks fall below Thursday’s lows then we should anticipate higher prices in the short-term. A bigger correction will come but not yet."

Source: When Will Gold and Gold Stocks Correct?  

"Now gold looks headed for $1314. A daily close over $1210 today will be bullish for next week." 

"Bullish over $1214.00 with $1234.70-$1249.70 and $1263.60 as price target 

Bearish below $1207 with $1199.90-$1194.80 and $1189.60 as price target 

Neutral Zone between $1207.00 and $1214.00"

Source: Asian Metals Market Update

"The upside action we’ve seen in precious metals since mid last month has been impressive. But what’s even more impressive is the fact that, generally speaking, we’re seeing mostly sideways trading and consolidation after each big upward move. That is traditional bull market behavior, and new buyers of both paper and physical are coming to this market at a rate that is exceeding the ability of the cartel to keep prices down. It appears that last month, the cartel was forced into a 'managed retreat' posture, to use GATA Chairman Bill Murphy’s term."

Source: 

Expert Analyst Warns Collapse of Paper Silver and Gold Manipulation May Be At Hand!

And as a result, we are told that investors are flocking into the PM sector. . .

Source: “Own Some Solid Currency, In Other Words … Gold” Warns Faber

But despite of these three stories, we have here a cautious gold bug. . . 

"However, I would surmise from our conversation that I am at least somewhat more open to the possibility that gold will blast off from $1280 without looking back, leaving in the dust all who were hoping to accumulate bullion and mining shares on weakness."
"Doug describes himself as agnostic on gold but nonetheless maintained a large short position for several years as a hedge against his Treasury portfolio while bullion was falling from 2011’s bull-market top near $1920. Last July, however, he began to accumulate gold near $1060, about $14 higher than the eventual bottom that was to occur in December. He did so partly for technical reasons, calculating that a 50% retracement of the 2008-2011 bull would bring gold down to around $962. His initial bids were nearly $100 above that level because he wasn’t looking to get in at the exact low, but to start accumulating gold when it looked like a good bargain." 

"My trading bias turned aggressively bullish in January with gold trading near 1090. More recently, for a short-term trade, I told subscribers on Wednesday night to jump on the April Comex contract at 1212. . ."  

". . . it has been my practice over the course of gold’s long correction to give rallies the benefit of the doubt to the extent possible. While we kept the $815 target in the back of our minds as gold fell, we were ready to put our skepticism aside if the hourly chart turned bullish. This time, however, I am being especially cautious – not out of fear that I will overestimate the rally’s power and longevity, but that I will underestimate it. We’ve become so used to bullion rallies that spike and then detumesce rapidly that this may have inured us to the real McCoy if and when it comes. If the current rally is indeed the real deal, we should see this confirmed by thrusts that turn minor “Hidden Pivot” rally targets into chop suey. The most immediate of them lies at 1280.00, whence, as noted above, a tradable pullback would become very likely. If the April contract makes short work of it, however, that would further shorten the odds that the rally is more than the bull-trap tease to which we’ve become accustomed. Moreover, and as I detailed here a week ago, an uncorrected push above the 1308.00 ‘Matterhorn’ peak recorded in January 2016 would turn the weekly chart impulsively bullish for the first time in years. That would provide the strongest evidence we’ve seen to date that the bear market begun in 2011 is over." 

"Whatever happens, it was predictable all along than any bull market in gold would develop in such a way as to leave even bullion’s most devoted supporters skeptical. Assuming the rally continues to make its way higher by fits and starts, on low volume and without a sustained push, you should start asking yourself now whether you might be in the group of war-weary gold bugs that the bull is trying hardest to fool." 

Source: Is a Bull Market Quietly Gathering Strength in Gold?

And this story appears to be a confirmation of my suspicion . . . 

"Gold will plunge to US$725 approximately by the end of March 2016 then go parabolic to US$3,500 approximately sometime between November 2016 & February 2017!"

It sounds like a combination of Phoenix Capital and Sol Padha. . . . continued rally of the USD and DJIA. . .

Source: 

Gold & Silver To Plummet By End of March – Then Go Parabolic!

And finally, listen to an expert in Chinese gold market . . . but his story is not about China. . . . It's Venezuela. . .

"Venezuela’s economy is in dire straits. Adding to failing economic policy by the government the country gets nearly all of its export revenue from oil, of which the price has declined roughly 70 % since 2014. Venezuela’s foreign exchange reserves are dwindling fast, from $24.2 billion dollars in February 2015 to $14.8 billion dollars in November 2015, while Inflation is said to be triple-digit and Credit Default Swap (CDS) data shows that traders see a 78 % chance on default, according Reuters. In an effort to avoid catastrophes the BCV has a very strong motive to employ its official gold reserves."

Will this decision of Venezuela to sell its gold holdings avert the current rise in gold price? This reminds me of UK announcement sometime either in 2000 or 2001 that floored the price of gold . . .

Or will it have a positive impact on gold price in view of fact that Venezuela's gold has been taken from LBMA's vault?

"Reuters wrote Venezuela’s gold involved in swaps does not enter the market. I beg to differ. Normally, in a swap the gold is sold spot from the client to the dealer in exchange for dollars, while both parties agree to reverse the purchase at a future date at a fixed price. If the gold is physically moved during the swap depends on several factors. Because Venezuela had repatriated 160 tonnes of gold in 2011/2012 this metal left the London Bullion Market Association’s chain of integrity."

It will have a positive on gold price if the crisis in Venezuela's economy will aggravate all the more the deteriorating economy of the world. . . 

"Obviously Venezuela is in a tight spot. The country is trying desperately to survive on its last reserves and the bullion banks seem to offer shark deals. How long this can go on is anyone’s guess." 

Source: 

Venezuela Exported 36t Of Its Official Gold Reserves To Switzerland In January

Gold News Today

1. Iranian International PM Exhibition

". . . the Eighth International Gold, Silver, Jewelry, Watch and Related Industries Exhibition will be held from February 16-19."

". . . companies from Italy, China, Turkey and Britain will take part in the upcoming exhibition."

Source: http://www.irna.ir/en/News/81953697/?

2. Gold marching to $1200 per ounce!

". . . the suggested technical setup for Gold to make the run from 1076 (back on Christmas Eve) up across 1200 is happening, . . ."

". . . that upswing for Gold is clearly welcome, (obviously well overdue), and gives some foundation to our year's target being the upper 1200s, ideally above 1280 which is the upper band of the 1240-1280 resistance zone. . . marking this past week as the strongest percentage five-day up move since that ending 28 October 2011 -- over four years ago -- on which date Gold settled at 1743, (a level that we'll inevitably again see):"

". . . we place a 'value' on Gold in two ways, the FIRST being borne of common sense as portrayed by currency debasement . . . The SECOND is the reality that Gold, being one of our five primary BEGOS markets, behaves relative to how the other four components (Bond, Euro, Oil, S&P) are flexing. Indeed all five of the markets are constantly reacting to how each of the others are doing, for example the S&P moves subject to the cost of debt, the cost of currency, the cost of hard asset protection and the cost of energy, (all of which redound to companies' bottom lines, and ultimately your managed dough). . . . price right now is at an extreme high, . . . . The last time Gold was this high (113 points) above the smooth line was on 27 January of 2015, from which price dropped by over 100 points in the ensuing five weeks. But this time 'round, the momentum of Gold already closing in on 1200 is such that we sense a near-term pullback ought be more muted:"

"Further, 'tis helpful for Gold when Big Players are on the Buy Side. In the last few weeks we've read of Russia and China respectively adding better than 20 tonnes to both of their stacks. . . . we learned just a week ago of die Deutsche Bundesbank continuing its repatriation promise, last year transferring to Frankfurt 110 tonnes of Gold from Paris, plus better than 90 tonnes from beneath New York's Federal Reserve building."

". . . Fed Vice Chair Stanley Fischer stated 'The world is an uncertain place, and all monetary policymakers can really be sure of is that what will happen is often different from what we currently expect.' "

". . . Haruhiko Kuroda says they stand ready to move rates still further sub-zero, whilst over at the European Central Bank, President Mario Draghi says they shan't 'surrender' in combating low levels of inflation, the case for more accommodation coming in March. . . ."

"The level of Federal StateSide debt has just topped $19,000,000,000,000, . . . We carefully calculated the effect on the price of Gold were all that debt to come due at once, but after going through an entire box of pencils, . . . we gave up."

Source: http://www.gold-eagle.com/article/golds-swift-price-ascent-already-closing-1200?

3. Jason Burack of Wall St for Main St

Topics he discussed: 

a. NIRP coming to US

"Some members at the Federal Reserve talking about copying Japan and experimenting with negative interest rates."

b. Source of NIRP idea

"Where do negative interest rates come from? (Hint: They come from Marx’s labor theory of value and Marx’s and Keynes’ views of a '.savings glut' in an economy)."

c. The banking sector

"Bank Stocks Look to Be Collapsing and predicting an imminent stock market crash and large global financial crisis."

d. Liquidation of sovereign wealth funds

"Many sovereign wealth funds are selling their stock positions to go to cash to pay off debt in their home countries."

Sources: 

http://thenewsdoctors.com/fear-the-bust-bank-carnage-precious-metals-bull-returns-welcome-to-dystopia-15/

https://www.youtube.com/watch?v=s0CGSPIMVFg



4. From Peak Prosperity as of 5 February 2016

"It appeared that nobody wanted to be short gold going into the weekend.  Since the dollar rallied strongly too, gold's big move higher on Friday was especially impressive."


"This week after two days of hesitation at the 200 MA, gold broke sharply above the 200 and rocketed higher for the next three days, with the heavy volume in tandem with last week's COT report indicating that the shorts are being steadily squeezed out of the market."


"Gold is approaching its previous high at 1191.70 - at the current $20/day rate of climb, gold will be testing this level Monday.  Now I don't really believe we'll have another $20 day come Monday; its hard to know just how many shorts remain after the last three days of price action, but this is why I have been saying that 'the COT report shows a bullish stance for gold.'"

"All that said: gold is now extremely overbought: RSI-7 is 88, which is a very high reading, and usually suggests a top is coming soon.  Now is a high risk time to buy gold.  Price at COMEX could keep rising, but corrections off these sorts of near-vertical moves can be vicious."

"After consolidating above the 50 MA, the miners screamed hgher this week - GDX rose an incredible 18% in three days, blasting through the 200 MA and causing the shorts to flee in terror.  GDX showed strong buying towards the end of day on Friday, just like with gold.  The GDX:$GOLD ratio is back - way back in bullish territory.  Volume in the last three days was immense. . . . I really can't say if there are shorts left or not.  But they certainly have had a terrible last three days."

"On the weekly chart, GDX has clearly snapped its downtrend line, and has managed to close (just barely) above the middle spike in the 'double bottom' reversal pattern - thus confirming the bullish double bottom by a slim margin.  Its an amazing move for one week; I do not think we should expect a repeat performance next week, but the miners have definitely broken their medium term downtrend by this week's price action.  A double-bottom is a strong reversal signal.  Long term, the miners remain quite cheap - although buying this high is probably not the wisest move as a short-term retracement off this near-vertical move could be substantial."

"Miners leading the metal is what we like to see in a bull move for gold, and that's what we are seeing now.  Much of PM is now over the 200 MA.  Next step is a 'golden cross' - but that is likely months in the future."

"In spite of - and also because of - the large moves in the miners and gold, I believe a reversal is probably in the cards for the near term. . . . It is more likely that this is about a normal "gold cycle" of the sort encouraged and shaped by the commercials.  We can't know this for sure until we get the COT report next week, . . . When RSI values get into the high 80s, its time to be careful, not reckless."

"The market could surprise me and break above that previous high at 1191.70.  You just never know."

Source: http://www.peakprosperity.com/comment/191371#comment-191371


5. Gold Exchange in India?

"In line with the Shanghai bourse, the proposal envisages gold-importing agencies to sell gold only on the exchange's platform, bringing transparency in pricing and premiums, and leading to a formal mechanism to measure the flow of imports into the country."

Source: http://www.business-standard.com/article/markets/clarity-likely-soon-in-bullion-market-116020800026_1.html

PSEi Bear Market

PSEi topped at 8,136.97 last April 7, 2015.

After 2 months, on June 9, 2015, the first down leg was 7,272.36, an 864.61 decline.

And then after 2 months again, on August 25, 2015, the 2nd down leg was 6,603.19, a 669.15 decline.

The 3rd down leg happened 5 months after on January 21, 2016 with 518.91 decline at 6,084.28.

In the coming months and a year or two from now, I am projecting that the three remaining down legs will be completed. I just don't know exactly when will this happen. I am anticipating the following drop:

4th down leg - 5,400

5th down leg - 4,800

6th down leg - 4,200