Market Sentiment shifting

Gold up to almost $1340 today, up again, interesting presentation by McEwn of Goldcorp fame

Nice move up in gold last 2 days. Maybe this is the start of the move we have been waiting on

The financial industry has been hit with billions of euros in fines worldwide in the last decade for manipulating key benchmarks. This morning saw the latest penalties from EU antitrust regulators, which fined Barclays (NYSE:BCS), Citigroup (NYSE:C), JPMorgan (NYSE:JPM), Mitsubishi UFJ Financial (NYSE:MUFG) and Royal Bank of Scotland (NYSE:RBS) a total of €1.07B for rigging the spot foreign exchange market for 11 currencies. Swiss peer UBS (NYSE:UBS) was not penalized as it alerted the two cartels to the European Commission.

What about Gold manipulation?

Indians could buy at least 10 percent more gold during the annual Hindu and Jain holy festival of Akshaya Tritiya than a year ago, industry officials said, as a dip in prices prompted consumers to increase purchases.

A rise in consumption by the world's second-biggest gold consumer could help global prices which are currently hovering near a 4-month low, but could widen India's trade deficit and put pressure on the rupee.

"Demand is picking up across the country. We will end up with at least a 10 percent rise over last year," Anantha Padmanabhan, chairman of the All India Gem and Jewellery Domestic Council (GJC) told Reuters.

www.mining.com/web/gold-glitters-india-k...&utm_campaign=digest

This is a must read, massive injection in the world banking systems as gold valued 50% higher. I will do an in depth explanation in the newsletter

www.zerohedge.com/news/2019-04-09/gold-b...again-no-one-noticed

Hoss, your bottom pick on GLD two weeks ago is looking good, nice call. As Gambler noted - monetary policy another positive for gold

Historically, monetary policy has been a key catalyst for changes in gold price. "When the Fed has shifted from a tightening to a neutral stance, gold prices have increased, even if this effect has not always been immediate," WGC analysts note. Interest rates have become more influential relative to the value of US dollar, which is another deciding factor in gold performance.

This is especially true when the FOMC changes its policy stance because the market expectations will also adjust, and more uncertainties will emerge.

www.mining.com/fed-holding-steady-rates-...&utm_campaign=digest

Most important and bullish factor in the gold market in the last 50 years. This is a translation from an Italian news article



Banks and the Return of the Gold Standard: Gold in Financial Statements Becomes Money

By Alessandro Plateroti
Il Sole / 24 Ore, Milan, Italy
Monday, February 25, 2019

www.ilsole24ore.com/art/finanza-e-mercat...19-02-24/banche-rito ...

What is happening with world gold reserves?

In the gold market there is a cold war climate: For the first time in 50 years, central banks bought over 640 tons of gold bars last year, almost twice as much as in 2017 and the highest level raised since 1971, when U.S. President Richard Nixon closed the era of the gold standard.

The interesting fact is that the European central banks, together with the Asian ones, have been the most aggressive in their purchases. Is this fear of the euro crisis and currency wars?

In reality, and this is especially true in Europe, behind the great maneuvers with gold reserves there is not only the traditional protective shield against major risks; there is also the call of opportunity. A reminder of which few still seem to know, though the appointment is now a matter of a few weeks: March 29, 2019. The day of judgment for the Brexit will also be the advent for the gold market.

It is not clear whether by choice or by chance, the Bank of International Settlements in Basel, Switzerland, called the "central bank of central banks," for its key role in the world financial system, has set an appointment with the story for March 29: Resurrection of the gold standard in the banking world.

For almost 60 years, the gold standard has regulated the convertibility between gold and dollar, engaging the market value. In 1971 it was the American president Richard Nixon, frightened by the bearish pressures that were likely to sink the dollar in the cold war, to cut the cord with gold, decreeing the end of the gold standard.

Now something starts moving in the opposite direction.

... Gold as cash

The Sun / 24 Hours has discovered that among the complex but well-known reforms of the standards for credit and finance from the "Basel 3" plan, there is an accounting alchemy that can turn gold into money on the balance sheets of the large banking groups. From March 29, by decision of the BIS, the gold in the portfolio of commercial and business banks becomes "cash equivalent," an asset equivalent to cash and therefore "risk-free." In fact, it is the first "reassuring of gold" since the time of the Bretton Woods agreement. Technicians call it "gold remonetization," a process that is the reverse of the "demonetization" of gold decided by Nixon.

... Same status as sovereign bonds

The operation of the BIS, as reconstructed by The Sun / 24 Hours, carries the signature of the Federal Reserve, the European Central Bank, the Bundesbank, the Bank of England, and the Bank of France, the G-5 of the great global monetary powers. In 2016, when the new rules of the banking system included in the "Basel 3" package were defined, the central bankers committee inserted an epoch-making norm that no one, however, has ever openly discussed in public.

In practice, gold in "physical" bullion -- hence not under the "synthetic" form of certificates -- will return to be considered by regulators as the equivalent of the dollar and the euro in asset security, thus eliminating the obligation to weigh the risk for the purpose of capital absorption, as with any other financial asset, excluding (for now) eurozone government bonds.

The turning point is not insignificant for the gold market and for the very role of national gold reserves. The result is significant: With the new rules of Basel 3, gold is given the same status that is now recognized for sovereign bonds on bank balance sheets.

A question therefore arises: Is the promotion of gold the premise for applying a weighting of risk to the government securities held by banks? From the debt crisis, the regulators' objective was in fact two-fold: to require the banking system to hold an adequate equity to cover the risks. In the crosshairs there are mainly the government securities that according to current rules can be held by banks without any impact on their assets. The issue mainly concerns low-rated countries such as Italy, Spain, Portugal, and Greece, which were seen to be special after the debt crisis in 2011.

The banks of these countries, both to increase profitability (carry trade) and to facilitate the issue of public debt in auctions, have the highest amount of government securities in the euro area. And this phenomenon is particularly felt in Italy, where the banking system has 400 billion BTp on the 2.4 trillion of public debt. What would happen then, if it were applied to risk weighting on Italian government bonds as the Basel committee wants?

The consequences depend on the level of risk weighting applied to the Italian government bonds. If it were high, some banks could be forced to replace the securities with other financial assets, including gold, or to proceed with capital increases. At a time when the market is reluctant to buy bank shares, the risk of repercussions on the stability of the banking system could be high. Just look at the credit default swaps (default risk insurance) on Italian banks. According to Bloomberg data, the five-year credit-default swaps of some of the major Italian banks have surged since the spring of 2018, even tripling the value in some cases. It is in this context that the date of March 29 is approaching rapidly.

Countries that have repatriated gold from abroad, regaining control and management, are already protected from the risk of being short of physical gold after March 29 to make available to their banks in case they want to replace sovereign bonds with it. In the arsenal of the system, there is a golden mountain of 33,000 metric tons of gold worth $1,400 billion at the current exchange rate. And that represents 20 percent of all the gold extracted in the world in almost 3,000 years.

As usual, the most forward-looking and prudent countries -- or perhaps the best-informed about the turnaround coming at the end of March -- were Germany, Holland, Austria, France, Switzerland, and Belgium. But Poland, Romania, and Hungary also regained control of gold reserves, increasing their consistency.

China, Russia, India and Turkey have been the nations that have bought gold in the last two years more than anyone else, with Moscow having even liquidated its entire portfolio in U.S. government bonds to replace them with precious metal. But the problem is not this; it is the price of gold.

In 2018 as many as 641 tons of gold bars were bought by the monetary authorities of every continent, but above all in Europe, it is the highest level since 1971. The maneuver is unprecedented and should be seen in the phenomenon of repatriation of ingots of state custody. Seven thousand tons of gold reserves were withdrawn by central banks from the coffers of the Federal Reserve Bank of New York, while 400 tons were secretly released by the Bank of England.

In recent years, but especially in 2018, a jump in the price of gold would have been the normal order of things. On the contrary, gold closed last year with a 7-percent downturn and a negative financial return. How do you explain this?

While the central banks raided "real" gold bars behind the scenes, they pushed and coordinated the offer of hundreds of tons of "synthetic gold" on the London and New York exchanges, where 90 percent of the trading of metals takes place. The excess supply of gold derivatives obviously served to knock down the price of gold, forcing investors to liquidate positions to limit large losses accumulated on futures.

Thus, the more gold futures prices fell, the more investors sold "synthetic gold," triggering bearish spirals exploited by central banks to buy physical gold at ever-lower prices.

With this system, those looking at gold as a safe haven, like China, India, Russia, and Turkey, have practically doubled their gold reserves in the last five years.

Moscow, to buy gold, has even sold the last 20 percent of the U.S. government bonds it held in currency reserves.

How compatible is such a situation with the duties of correctness and transparency of a central bank? Certainly, the system created by the Anglo-American "Goldfinger" seems to be made for abuses. Who knows what will happen after March 29?

Daily clouds on GLD look interesting. A lot of indicators looking very weak so a good buy here. We are in the cloud and as long as in or above, the uptrend is in place.

A drop below the cloud would be negative, so set stop loss close around 120

Interesting comment from Alamos. New discoveries will be going up in price

Thursday March 7 2019 - In the News

Also Alamos Gold Inc (C:AGI) In the News

The Financial Post reports in its Thursday edition that Barrick Gold's sudden expansionist desires are driven by the same concerns as the rest of the industry -- it is getting harder to find gold and more expensive to mine it. The Post's Gabriel Friedman writes that is the view of John McCluskey, chief executive officer of Alamos Gold. Barrick is pursuing a $17.8-billion (U.S.) hostile bid for Newmont Mining in a deal that would combine the two largest gold companies into a firm of unparalleled size. Mr. McCluskey said he thinks that Barrick, and its new chief executive officer Mark Bristow, are concerned about the company's gold reserves and wants to increase its size so that it can comfortably sell off less-impressive mines without cutting its profitability. "They're trying to essentially get enough critical mass so they can afford to divest what they know in their portfolio are non-core assets," said Mr. McCluskey. "It doesn't help Mark Bristow's case when he describes those non-core assets as second-tier or garbage because then the companies he's hoping will buy those, they have to turn around to their investors and explain why they want to buy garbage," he said, adding that he admires the Barrick CEO.

Central Banks continue to scramble for physical gold, investors should pay attention
If legislators enact the bill, Manly writes, "Romania looks set to join the ranks of Hungary, Austria, Germany, and the Netherlands in bringing gold bars back into domestic storage. Which European nation will be next after Romania? Poland is a likely candidate, with 102.9 tonnes of gold stored at the Bank of England."

Manly's analysis is headlined "The Domino Effect: Romania Joins Gold Repatriation Exodus" and it's posted at Bullion Star here:

www.bullionstar.com/blogs/ronan-manly/th...repatriation-exodus/

inflation rising - Gold the perfect storm. Fed has made a big turn around