Aden Sisters: Gold May “Take Off”

Release Date: 
Friday, September 12, 2014

Gold and Silver Prices

Gold prices declined this week on a strengthening U.S. dollar. “This week, gold has been undercut by a dollar that’s finding support in expectations the Federal Reserve will take a more hawkish tone on interest rates…‘Gold remains at the mercy of the U.S. dollar sentiment, but we could still see a bit of small-scale physical buying at these levels, followed by some consolidation,’ said Andrey Kryuchenkov of VTB Capital in a note.” (“Gold slips for 5th straight day, eyes weekly loss of 2.5%,” MarketWatch, 9/12/14.)

Gold finished the week at $1,228.90, down $40.50. Silver prices closed the week down $0.66, finishing at $18.63.

Aden Sisters: Gold May “Take Off”

Noted analysts and publishers of the Aden Forecast, Mary Anne and Pamela Aden, described the current global situation and how it may affect gold.

“Global conflicts, wars and tensions are happening around the world. Any one of these could come flying at us and turn things upside down…Is World War III around the corner? Is the Middle East going to blow up? Will China collapse? We don’t know and neither does anyone else.”

“Geopolitical tensions, low interest rates and a weak economy in the first quarter all helped push gold up during the first half of 2014. In fact, you’ll remember that the first two quarters provided the first back to back gold advances since 2011. September is normally a seasonally strong time for gold. This means if gold can rise back above $1326.60 by month’s end, it’ll be another positive quarter for the year…[Federal Reserve Chair Janet] Yellen continues to reiterate that lower rates are here to stay until we see better jobs figures. She insists there is still slack in the labor market. And the latest jobless claims reinforced this. Gold likes these comments from Yellen…we could see gold take off like we showed you last month.” (“Aden Forecast—September 2014,” The Aden Forecast, 9/10/14.)

New Threats of Cyber Jihad

As the threat of cyber attacks grows, many are pointing to so called cyber-jihadists as the next potential threat.

“Jihadists in the Middle East are ramping up efforts to mount a massive cyber attack on the U.S., with leaders from both Islamic State and Al Qaeda - including a hacker who once broke into former British Prime Minister Tony Blair's Gmail account - recruiting web savvy radicals, has learned. Islamic militants brag online that it is only a matter of time before they manage to pull off a highly disruptive attack on America’s infrastructure or financial system. In addition, Islamic State, the terror group that claims to have established a caliphate across Syria and Iraq, boast openly of plans to establish a ‘cyber caliphate,’ protected by jihadist developed encryption software from behind which they hope to mount catastrophic hacking and virus attacks on America and the West.”

“‘We’re in a pre-9/11 moment with cyber,’ John Carlin, assistant attorney in charge of the Justice Department's National Security Division, warned at a July conference in Aspen. ‘It’s clear that the terrorists want to use cyber-enabled means to cause the maximum amount of destruction as they can to our infrastructure.’” (“Digital jihad: ISIS, Al Qaeda seek a cyber caliphate to launch attacks on US,” Fox News, 9/11/14.)

Cyber Attack on Financial Exchanges Could be “Catastrophic”

Experts are warning that cyber attacks may devastate our financial system.

“Breaches are affecting institutions across every facet of people’s lives. Where we bank. Where we shop (Home Depot, on Monday confirmed a breach of payments systems at U.S. and Canadian stores that may date back to April). Where we eat (P.F. Chang’s reported a recent breach). The hospitals where our illnesses are treated It’s hard to feel that our data are safe anywhere.”

“The real nightmare scenario: an attack that disrupts exchanges or the markets as a whole. ‘Anything that would affect the trust and confidence of the markets is really the top priority,’ says Karl Schimmeck, vice president of financial services operations at the Securities Industry and Financial Markets Association. Sifma holds cybersecurity exercises for individual firms to coordinate and prepare for a systematic attack.”

“An attack on an exchange could be catastrophic to the economy. An equally unsettling scenario would be if hackers found a way to play with specific stocks’ prices to wreak havoc on individual companies. ‘Somebody could already be doing it and it would be easy for someone to manipulate the stock market and it would blend in the background noise,’ says Todd Morris, founder and CEO of New York-based BrickHouse Security, whose clients include about half of the Fortune 500 companies.” (“The financial industry’s biggest cyber fears,” MarketWatch, 9/11/14.)

Russia Begins Nuclear Tests

Russia began nuclear testing this week, in a possible show of strength to Western efforts to diffuse the tensions between Russia and Ukraine.

“President Vladimir Putin said on Wednesday Russia must maintain its nuclear deterrence to counter what he called growing security threats, after Moscow test-launched an intercontinental nuclear missile. With ties between Moscow and the West frayed by the crisis in Ukraine, Putin also took greater control of a commission that oversees the defense industry and made a new call for Russia to become less reliant on imported Western equipment. He said NATO was using rhetoric over the Ukraine crisis to ‘resuscitate itself’ and noted that Russia had warned repeatedly that it would have to respond to such moves. (“Russia tests ICBM as Putin says nuclear deterrent must be maintained,” Reuters, 9/11/14.)

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Goldline provides a wrap-up of the week's precious metals news along with important commentary on the American Advisor Week in Review audio program. Listen to the show below:

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†This material has been prepared for private use. Although the information in this commentary has been obtained from sources believed to be reliable, Goldline does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.

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