CNBC: “No Time Like the Present” to Own Gold

Release Date: 
Friday, August 1, 2014

Gold and Silver Prices

Gold rallied on Friday to recover some of its earlier losses, but still ended the week down. “Gold prices rallied on Friday after a weaker-than-expected U.S. jobs report stoked investor appetite for haven assets and soothed worries over a potential tightening in U.S. monetary policy…Gold prices traded as high as $1,298.40 an ounce after data showed the U.S. economy added 209,000 nonfarm payrolls in July, missing economists' forecasts of a 230,000 gain…‘The prospect of a stronger employment report had also weighed on gold...(so) the goldilocks jobs number we've had this morning allayed some of the fears that the Fed would move sooner rather than later on interest rates,’ said Dave Meger, director of metals trading with Vision Financial Markets in Chicago.” (“Gold Jumps After U.S. Jobs Data Miss Forecast,” Wall Street Journal, 8/1/14.)

Gold finished the week down $14.10, closing at $1,295.20. Silver prices closed the week at $20.40, down $0.45.

CNBC: “No Time Like the Present” to Own Gold

CNBC told viewers that geopolitical tensions, rising inflation and easy monetary policy from the Federal Reserve all favored an investment in gold.

“If ever there was a time to own gold as a safe haven alternative to other financial assets during tumultuous times, there's no time like the present…Israel is embroiled in a now three-week long and counting uncertain military operation in the Gaza Strip…the EU and U.S. are considering added sanctions on Russia and could impose level-three trade and financial sanctions, crippling the Russian economy, business and relations with the West. Iran is still building a nuclear weapon…China continues to engage in angry confrontations with neighbors over territorial claims in the South China Sea, including Vietnam and Japan. North Korea ramps up its provocations…Argentina is on track to default for the second time in the last 12 years. And West African countries are now imposing travel restrictions to stop the worst outbreak ever of Ebola in Liberia, Sierra Leone and Guinea.”

“If that's not scary enough, inflation is rising and the Federal Reserve risks falling behind the curve on tightening policy to keep up with rising employment and prices. ‘Gold is a great hedge against inflation, escalating geopolitical tensions, trade skirmishes and repeated rounds of currency depreciation,’ said David Rosenberg, economist and market strategist at Gluskin Sheff.”

“'I'm tired of the cliché 'falling behind the curve' but the gold market is beginning to call [Fed Chair Janet Yellen] out and believing that her credibility is at risk. I believe that it's a very good bet that the Fed won't get ahead of this curve and therefore this gold bear market is over,’ said [Lindsey Group’s Peter] Boockvar.” (“Gold may soon break out of its bear market,” CNBC, 7/29/14.)

Jim Grant: Gold is “Legacy Monetary Asset”

Financial author and CNBC contributor Jim Grant explained why physical gold is an important asset to own in today’s economic climate. “Gold is a very sound inoculation against the wild haired doctrines of modern central banking…I love to hold the stuff (gold) in my hands…Gold to me is the legacy monetary asset.” (“Jim Grant: Fed has little self—awareness,” CNBC Video, 7/28/14.)

U.S. Jobs Report Disappoints

The July non-farm payroll report came in below what most economists were predicting.

“U.S. job growth slowed in July and the unemployment rate unexpectedly rose, pointing to slack in the labor market that could give the Federal Reserve room to keep interest rates low for a while. Nonfarm payrolls increased 209,000 last month after surging by 298,000 in June, the Labor Department said on Friday. Economists had expected a 233,000 job gain…‘It's a goldilocks report for an economy that is steadily expanding but not lifting off. It will reinforce for now the Federal Reserve's commitment to a gradualist policy approach,’ said Mohamed El-Erian, chief economic advisor at Allianz in Newport Beach, California.” (“U.S. job growth cools, unemployment rate rises,” Reuters, 8/1/14.)

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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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