Warnings from the IMF

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In a recent Reuters article, The International Monetary Fund’s managing director, Christine Lagarde, cautioned that the global economy’s growth will likely remain dormant for a considerable time as countries struggle to get out of debt. Her concerns, which she refers to as the “clouds on the horizon”, are:

  • Divergence between the central banks in their plans to raise interest rates
  • The consequences of continuing loose monetary policies
  • Geopolitical risks, such as the conflicts in Ukraine and the Middle East, and the Ebola outbreak in West Africa

Due to the IMF’s conclusion that the global economy is “weak and uneven”, it has downgraded its global growth forecast for this year and next.

Read more about the troubling signs pointing to a sluggish recovery in these headlines:

UPDATE 1-IMF’s Lagarde says global recovery ‘not good enough’, Reuters

No Happy Ending for Investors in Central Bank Fairy Tale, Bloomberg

The IMF’s $3.8 trillion warning to the Fed, MarketWatch

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U.S. Stock Markets Wobble Violently as Traders Look to the Federal Reserve for Directional Clues

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On the global front, most of the geopolitical events that have been taking center stage have simmered down over the last two weeks, but the markets have been extremely volatile. The most important event last week was the release of the Federal Reserve meeting minutes, otherwise referred to as the FOMC minutes. In the immediate aftermath of the release, the equity market shot up and the US dollar had its biggest drop in at least a month. All this because the FED signaled worries about a slowdown in the global economy and hinted at lingering concerns on US dollar strength. As the week came to an end, the equity markets had completely reversed that initial movement higher and closed the week on a negative tone, and the currencies that trade against the dollar had also retraced most of their upward movements and were looking quite somber.

Gold Finds Strong Buying Support after Sell Off

Now let’s take a look at the technical developments in the gold market. As I had mentioned in my last report, I expected the gold market to come lower and test its strong support band in the $1,185 region and then garner significant buying interest at that level. This is exactly what transpired in the early hours of October 5th — the gold market tested the $1,185 band and then a strong wave of buying ensued while most of North America was sound asleep. The price of gold snapped back about $50 dollars in a couple days and encountered some tough resistance at the $1,232–35 bands. The market looks like it wants to digest some of these gains and possibly test the next level at $1,250–$1,275. In my opinion, with the seasonal demand for gold coming up, we could see this market try to test higher. It will find strong resistance at the $1,275 level and how it behaves at that pivotal level will be telling on what prices want to do in the near term. Continue reading our market analysis

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Edmund Moy On Gold’s Timeless Value and Soaring Demand

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In a recent interview with Fox Business, former U.S. Mint Director Edmund Moy discusses gold’s timeless value. Not only has the U.S. Mint’s gold bullion sales doubled in September, but Moy makes a strong argument for gold supported by these 3 valid points:

  1. Stocks can fall to zero; gold will never go to zero because it has maintained its value since the beginning of history.
  2. Gold miners cannot afford to produce more gold under the $1,200 per ounce mark and therefore supply can become very limited.
  3. Demand for gold in the East continues to be very high.

Watch the full Fox Business interview here:

Skip Bitcoin, Buy Gold?

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Demand for Gold is Still Strong…

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While the mass media has us believing that gold demand is soft, the U.S. Mint reported this week that gold coin sales have doubled in September!

Additionally, there is solid evidence of the world’s wealthiest investors stockpiling the yellow metal. Do they know something the rest of us don’t?

Read these latest headlines to learn the truth about current demand for gold.

Chinese gold buying picks up after holiday; Indian premiums rise, Reuters

U.S. Mint Gold-Coin Sales Double in Month as Futures Drop, Bloomberg

Gold price: The world’s wealthy are snapping up bullion, The Sydney Morning Herald

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A “Golden” Buying Opportunity Not to Be Missed

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gold coinsGold prices dropped lower on Friday due to a better-than-expected jobs data report and on the anticipation that interest rates will be lifted in the first half of 2015. Gold prices may be at their lowest, but with Middle East tensions not likely to cease during our lifetime, a volatile stock market, and other countries setting out to abandon the petrodollar, physical gold is and will always be a crucial component of a bulletproof portfolio.

For long-term gold investors, we recommend a steady process where you look at a monthly or quarterly basis of buying gold during your specified time-frame. Dips such as this provide a great buying opportunity to add to your long-term position by buying at a discounted price. Adding to your long-term position during dips maximizes your long-term profits by getting in at a lower level.

When looking for a buying opportunity, a pullback such as this where we’re getting down below the $1,200 an ounce level makes a buy very interesting. It’s much more reasonable to buy at these prices. So for long-term investors, this pullback provides a great opportunity to add to your position.

Tune in to this week’s edition of The Gold Show to learn about the long-term benefits of owning physical gold and the market indicators to be closely aware of in planning your financial future.

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Four Reasons to Hold Onto Your Gold

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In a recent interview held at the Clinton Global Initiative, renowned resource investor, Frank Giustra, emphasized that All the reasons why gold went to $2,000 in the first place are still there, and in spades.

Frank Giustra supports his argument with these four valid reasons:

  • Currencies worldwide are being devalued due to excessive money printing
  • Governments are still running deficits
  • U.S. debt is unsustainable
  • The ramifications that will follow the end of the Federal Reserve’s bond buying program in October are likely to be hazardous to the economy.

Read the full interview here:

Reasons Gold Neared $2,000 Still In Place – Frank Giustra, Kitco News

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World Gold Council: Gold’s Value as a ‘Practical Hedge’

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The World Gold Council released new research in their seventh edition of Gold Investor that explores gold’s positive correlation with economic growth and its value as a practical hedge during times of economic pressure.

Download the full report here:

Volume 7 – Gold Investor: risk management and capital preservation

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Euphoria Persists in the Equity Markets as the World Digests the Federal Reserve Meeting

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Last week was laden with major fundamental events, both in the U.S. and in the world. First, this Wednesday was the conclusion of the two-day Federal Reserve meeting. On Wednesday afternoon, as expected, the U.S. Federal Reserve announced another round of tapering by eliminating another $10 billion of bonds from their balance sheet. They are on course to complete the tapering process at their next meeting in October. More importantly, Chairwoman Janet Yellen made some interesting comments on the outlook for interest rates. She continued with the verbiage of low interest rates for a continued period of time, but played around with the timing and intensity of the rate hikes. This obviously spooked the raw commodity markets and gave way to more selling pressure in some of the major commodity sectors. We have seen this before after numerous Fed meetings this year. I, for one, think that some traders are pricing in an interest hike too early, and it will be entertaining to watch volatility develop in many markets when these predictions get altered. Continue reading our market analysis

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Tips for Retirement Planning In An Uncertain Economy

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Until the crash in 2008, simple investments like your 401k seemed like a safe bet for retirement. But in a slow economic recovery showing ongoing volatility, your retirement plans may be changing. The fees alone on most current retirement plans are enough to get you thinking about other options. Investing in gold is a safe and secure choice for those seeking stability. Continue reading our market analysis

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Will Gold Reach $1,500/oz By Christmas?

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Sprott Asset Management’s Charles Oliver argues that gold and silver prices will make a big turn-around before the end of this year. In a recent interview with The Gold Report, Oliver discusses how gold and silver prices are manipulated by central banks and that prices for both metals are bound to burst due to supply and demand.

Read the interview here to understand the factors supporting Oliver’s argument and learn why he sees gold prices reaching $1,500/oz by Christmas.

Sprott’s Charles Oliver: Gold at $1,500 by Christmas? Kitco.com, Kevin Michael Grace of The Gold Report

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