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Gold and Silver Prices
Gold prices recovered much of their losses from earlier this week to end relatively flat. Prices were fueled by a weaker than expected U.S. job report, confirming the fragility of the U.S. economy.
“Gold prices jumped Friday after U.S. jobs data came in far lower than expected, signaling continued sluggish economic growth and easing expectations of an interest-rate increase this year—adding up to a bullish backdrop for safe-haven assets such as precious metals. Gold prices were down nearly 1% earlier in Friday’s trading session but reversed losses after the release of the data…
“The Commerce Department said U.S. nonfarm payrolls rose by 142,000 in September, far below the 200,000 gain expected... Equally troubling was a sharp downward revision to prior data on August jobs numbers to 136,000, 21% lower than the initial estimate last month… ‘“That was a pretty big miss,’ said Bob Haberkorn, a senior commodities broker at R.J. O’Brien in Chicago. ‘It’s pretty bullish for gold for the remainder of the year. With data like that, I don’t see how the Fed is going to be in a position to raise rates.’” (“Gold Prices Jump After Weak U.S. Jobs Data,” WSJ, 10/2/15.)
Gold finished the week down $8.90, closing at $1,137.80. Silver prices closed the week at $15.30, up $0.14.
Financial Collapse Inevitable; Gold is Currency – Holter
Former stockbroker and financial commentator Bill Holter warned investors that a collapse of the Western financial systems is inevitable.
“Outright financial collapse, chaos and most probably war is not only in sight, it is imminent and unavoidable now…What we are looking at now it ‘the FINAL FLUSH’ of the Western financial system. The Federal Reserve has lost all credibility. This has followed both the Bank of Japan and European Central Bank being seen as hopelessly neutered of the ability to support the system. Confidence was THE very last ‘hope’ and the Fed gave even that away last week…
“Money Velocity has crashed and so has global trade. Leveraged commodity trades have blown up and left many sectors dysfunctional… Geopolitically we have watched as West has lined up against East militarily in many spots all over the world. The short list includes the South China Sea, Ukraine, Yemen and of course Syria.
“Is it any wonder there are now shortages and tightness in the gold and silver markets? The East believes gold ‘IS’ money, they also know the dollar is untenable and will not be a store of value. In fact, I believe China and Russia may step in to ‘help’ the dollar fail… To wrap this up, do not let anything that may happen from here surprise you. The conditions are ripe for global currency crises and a shutdown of credit. The conditions are also ripe for hot war to explode in multiple venues. A meltdown or shutdown of markets will serve as a FINAL FLUSH of what remains left of the U.S. middle class.” (“The Final Flush Is At hand!” Gold-Eagle, 9.28/15.)
Critical Gold Ratios Point To Record Gold Prices – Lombardi
Financial commentator Michael Lombardi reviewed two important ratios which confirms his forecast of new record gold prices.
“There are two indicators I closely follow to gauge where gold prices are headed. And right now, they are saying the bottom is in for gold and that higher prices are in the cards. The first such indicator is the ratio of the price of gold to the price of crude oil, often referred to as the gold-to-oil multiple… Each time the gold-to-oil multiple got to a level over 24, gold prices subsequently went much higher... Using history as a gauge, this indicator tells us sharply higher gold prices lie ahead…
There’s another indicator that suggests gold prices could be bottoming, or already have bottomed. I’m taking about the gold-to-silver multiple. This multiple tells us how many ounces of silver it takes to purchase an ounce of gold at current market prices… Historically, whenever it takes more than 74 ounces of silver to buy one ounce of gold, gold prices subsequently move sharply higher. It happened in 2003, it happened in 2009, and we are there again today…
“[Y]ou know I have gone on record predicting gold will hit $2,000 to $2,500 an ounce, maybe even higher. Two historically proven indicators of future gold prices, the gold-to-oil and gold-to-silver multiples, are giving credence to my forecast for sharply higher gold prices ahead.” (“Gold Prices: Two Key Ratios Say Bottom Is In,” Profit Confidential, 9/25/15.)
Mints Face Silver Shortage As Demand Goes “Through the Roof”
Reuters reported that mints throughout the world are rationing silver coin sales due to a dramatic increase in demand.
“The global silver-coin market is in the grips of an unprecedented supply squeeze, forcing some mints to ration sales and step up overtime while sending U.S. buyers racing abroad to fulfill a sudden surge in demand.
“The U.S. Mint began setting weekly sales quotas for its flagship American Eagle silver coins in July because it can't meet demand, and the Canadian mint followed suit after record monthly sales in July. In Australia, the Perth Mint sold a record of more than 2.5 million ounces of silver this month, nearly four times more than in August, and has begun rationing supply of a new line of coins this month, a mint official said.
“’Silver [coin] demand is absolutely through the roof,’ said Neil Vance, wholesale manager at the Perth Mint. ‘There seems to be a bit of frenzy as people think there is a shortage of silver. But in fact it is a (crunch in) manufacturing capacity.’” (“Silver-coin shortage shows bright side of precious metal collapse,” 10/1/15.)
IMF Warns of Potential Global Economic Slowdown
The International Monetary Fund’s Managing Director, Christine Lagarde, told CNBC there are worrisome signs of a global economic slowdown.
“The head of the International Monetary Fund says there is reason to be concerned about the global economy. In prepared remarks for a Wednesday speech, IMF Managing Director Christine Lagarde said that her organization sees troubling signs in the world's finances, and that it is unclear if the current situation is cyclical or if it represents a fundamental downturn…
“’Certainly, we are at a difficult and complex juncture,’ Lagarde said, explaining she is worried about recent global affairs — and international economics are similarly distressing. ‘On the economic front, there is also reason to be concerned. The prospect of rising interest rates in the United States and China's slowdown are contributing to uncertainty and higher market volatility… There has been a sharp deceleration in the growth of global trade. And the rapid drop in commodity prices is posing problems for resource-based economies…’
“’If we put all this together, we see global growth that is disappointing and uneven. In addition, medium-term growth prospects have become weaker," she said. "The 'new mediocre' of which I warned exactly a year ago — the risk of low growth for a long time — looms closer.’” (“IMF's Lagarde: More volatility likely for emerging markets,” CNBC, 9/30/15.)