What did Obama Say? Rumors are circulating that President Obama called the strong dollar a "problem," while speaking to a G7 summit on Sunday. The White House has come out hard against the rumors, but the idea of a strong-dollar problem was strong enough in investors' minds to move the currency market Monday morning. Strong Dollar? While the dollar has strengthened considerably over the last twelve months, the move is not yet large enough to cause concern. You can see on the chart below that the dollar has gained on other currencies, but hasn't reached two standard deviations above mean … [Read more...]
Gold, Silver, and Currencies
Young Research & Publishing has been providing research and insights on precious metals and currency markets to institutional investors, corporate financial officers, business owners, and individual investors for over four decades. Richard C. Young started Young Research & Publishing in the 70s to publish the authoritative Young's World Money Forecast, a 50-page monthly investment report on the precious metals and currency markets. Today, our research on gold, silver, and currencies is geared toward investors in or nearing retirement who are looking to preserve and protect wealth.
Gold Tested Again, Passes
Over the last week gold retested prices near $1150/ounce and continued to find support at that level. Since then prices have risen to $1192.88/ounce. Emerging markets Kazakhstan and Tajikistan both increased their purchases of gold in February. Putting downward pressure on the price has been India’s failure to cut the import duty on gold. A cut on the duty was expected and its failure to materialize hurts Indian demand for gold. Meanwhile in China, the government is fostering greater interest in gold by allowing a major expansion of gold mining and trading in the Middle Kingdom. But most vital … [Read more...]
Is Euro-Dollar Parity Imminent?
For the first time since 2002 the euro is headed for parity with the U.S. dollar. Contributing to the steep drop in the euro's value vis a vis the dollar is the monetary stimulus recently undertaken by the ECB, and the expectation by many analysts that the U.S. Federal Reserve will begin raising rates by year-end. … [Read more...]
Gold for all in India
Big changes could be coming to the gold market in the coming Indian budget. Sources have signaled that the government is likely to cut the 10% tariff on gold imports to 8% or 6%. The Reserve Bank of India has already eliminated some curbs on gold import, including a prohibition on banks selling gold on consignment. Now banks will be able to sell gold as long as they aren’t fronting the money for the inventory. Reuters quoted Prithviraj Kothari, executive director of the India Bullion & Jewellers’ Association as saying he expected as much as a 125% increase in gold imports per month. The … [Read more...]
Swiss Franc Soars
The Swiss National Bank announced today that it was dropping its three year-long peg to the euro. The franc soared on the news gaining as much as 30% against the euro and as much as 25% against the dollar before settling in with about a 15% gain against the USD. The revaluation was a punishing blow to Swiss exporters. The Swiss stock market is down about 8.5% on the news, but in USD terms it is up better than 5%. … [Read more...]
Gold vs. Oil
Oil is a steal in terms of gold. The ratio of gold to oil is trading at more than two standard deviations above an almost five decade mean. A long-short would be your play here. … [Read more...]
The Monday Melee: “Grexit” Unavoidable?
Could Europe Cope with a Greek Exit? Is it Unavoidable? What We’re Reading: The Comeback of the Running Back (The Wall Street Journal) The Depression That Was Fixed by Doing Nothing (The Wall Street Journal) Top 5 stock market hoaxes of 2014 (Fortune) A 2015 ‘Rebalancing’ Act for Investors (The Wall Street Journal) Ten warning signs of a market crash in 2015 (The Telegraph) Statisti-Quote: “Since 2010, more than two dozen enclosed shopping malls have been closed, and an additional 60 are on the brink, according to Green Street Advisors, which tracks the mall industry.” — … [Read more...]
The Monday Melee: The Value of a Dollar
Strongest Dollar in Years The dollar is the strongest it’s been since July 2010, but still isn't at its strongest historically. Returning to a Stable Dollar Quotable: "The appreciation of the dollar against the backdrop of divergent monetary policies may, if persistent, have a profound impact on the global economy, in particular on EMEs. For example, it may expose financial vulnerabilities as many firms in emerging markets have large US dollar-denominated liabilities continued depreciation of the domestic currency against the dollar could reduce the creditworthiness of many firms, … [Read more...]
The Monday Melee: Risk Off
Risk Off: Russia Even though Canada, Norway and Russia are all major petroleum exporters, Russia's ruble is getting hammered compared to the Norwegian krone and the Canadian dollar. The ruble isn't just reacting to oil, it’s reacting to Russia's perceived risk in general. Canada and Norway have low risk, stable governments and strong rule of law. Look at the resilience of their currencies in the face of a strengthening dollar and falling oil prices. Swiss to Buy Gold? Quotable: “A ship is always safe at the shore - but that is not what it is built for.” ― Albert … [Read more...]
Yes. Gold is a Currency
Is gold a currency? “Yes. Remember what we’re looking at. Gold is a currency. It is still, by all evidence, a premier currency. No fiat currency, including the dollar, can match it,” responds former Federal Reserve Chairman, Alan Greenspan. … [Read more...]
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