Gold Losing Appeal for Investors Retreating From Rally … ‘People don’t believe in the gold rally,’ Holmes says. Investors are growing more skeptical of gold’s lasting luster. Hedge funds and other speculators cut their wagers on a bullion rally for the fourth time in five weeks. As traders tire, the metal’s 30-day historical volatility has dropped to the lowest since November. Open interest is also on the decline. – Bloomberg
Here comes Bloomberg telling us gold (and silver) are moving down.
That’s the implication anyway. Bloomberg rarely has something good to say about precious metals. The news service represents and endorses a technocratic version of the world.
Bloomberg’s vision is one of a world run by vast corporate interests and controlled by an elite group of bankers. These individuals manipulate money and commerce as they wish. Gold and silver only interfere with their control.
After stunning gains to start the year, bullion has started to lose its momentum. Prices are down about 1 percent in August as the U.S. economy picks up steam, damping demand for a haven.
American payrolls surged in July and wages climbed, pointing to renewed optimism that the jobs market will sustain consumer spending in the second half of 2016.
“People don’t believe in the gold rally,” said Frank Holmes, who oversees about $700 million as chief executive officer of U.S. Global Investors in San Antonio, Texas. “You can see this last dip in gold, the employment numbers are so good. When there is good economic data out, rates rise and the price of gold goes down.”
This argument is based on a “recovery” in the US economy. But there is a good deal of dissension about this so-called recovery.
Libertarian politician and commentator Ron Paul recently posted an article entitled, “The Phony Job Recovery.”
A bombshell jobs report [has just been released], with headlines exclaiming that the US economy added over 250,000 jobs in July, far in excess of any forecasts.
The reality was far more grim. Those “jobs” weren’t actually created by businesses – they were created by the statisticians who compiled the numbers, through the process of “seasonal adjustment.”
That’s a bit of statistical magic that the government likes to pull out of its hat when the real data isn’t very flattering.
It’s done with GDP, it’s done with job numbers, and similar manipulation is done with government inflation figures to keep them lower than actual price increases.
Ron Paul goes on to say that “In reality there are a million fewer people with jobs this month than last month, but the magic of seasonal adjustment turns that into a gain of 255,000.“
It is disconcerting that Bloomberg doesn’t mention this in the article. It’s an important point and the reader should be informed that the numbers Bloomberg is quoting are government extrapolations.
Paul also has questions about the kinds of jobs that were created, as many seem to have been created in government and health care.
Also, large parts of the supposed growth were in areas of “temp jobs and leisure & hospitality (i.e. waiters and bartenders).”
Paul would like to see significant growth in private sector, non-service jobs. That’s now what the jobs report shows.
So Bloomberg’s analysis is necessarily flawed. It looks more like Bloomberg took numbers that were massaged by the administration to put the best face possible on a non-existent recovery and used them to bash gold.
That’s the way the news media operates these days. Articles are more likely to express an opinion than to provide an honest assessment of facts. We commented on that just yesterday, HERE.
Obviously, we have a different opinion than Bloomberg regarding gold and silver. We’ve written that monetary policy remains loose around the world and that includes the US. Janet Yellen was going to raise rates several times in the US in 2016. She hasn’t raised them once.
We would tend to doubt that gold and silver will crash throughout the rest of 2016 as Bloomberg seems to imply. There may be volatility, even considerable volatility, but unless there is a substantial monetary shift around the world the fundamentals will remain in place to drive metals prices higher against the dollar.
The current stock market rally is a monetary one, not drive by an industrial resurgence. Bloomberg wants to use the current jobs report as evidence that industry is expanding again in the US but that is evidently not the case.
Our optimism regarding gold and silver encouraged us to take on our first-ever sponsor earlier this year. Investing in gold and silver projects can be risky and one needs to do appropriate due diligence.
However since we began to promote the opportunities available at Golden Arrow, silver has had an upwards move along with gold. Golden Arrow partner Silver Standard has announced it is working toward a new mine by the end of the year with Chinchillas, a Golden Arrow subsidiary.
Golden Arrow Contact: Shawn: 1-800-901-0058 or 778-686-0135.
GOLDEN ARROW RESOURCES is a sponsor of The Daily Bell under a new marketing program. The company welcomes your interest and support. Please consult DB’s disclaimer before making investment decisions.