Posts Tagged Gold
346 Tons Of Gold On BIS Balance Sheet
Posted by Belisarius in Commodities, Markets on July 7, 2010
The big news point of the day is a newly discovered 346 tons of gold on Bank for International Settlements (BIS) balance sheet. The information can be found in a footnote in the BIS’s annual report. Page 163.
Included in “Gold bars held at central banks” is SDR8,160.1 million (346 tonnes) (2009: nil) of gold, which theBank held in connection with gold swap operations, underwhich the Bank exchanges currencies for physical gold.The Bank has an obligation to return the gold at the end ofthe contract.
Monthly Strategy – July 2010
Posted by Belisarius in Monthly Strategy on July 3, 2010
Almost unchanged from June.
Equities
Only extremely favorable economic data could change the negative trend established. This is highly unlikely. So I would say we will soon see S&P 500 at 875.
On a macro level, the stimulus is wearing off, politicians and central bankers are not ready to continue with loose fiscal an monetary policies, just the opposite, austerity is the game. For now.
Private demand is weak. Private investments also show no strength. Real-estate is burdened with unsustainable debt levels, still to high prices and weak demand. Without real-estate investment recovery, we cannot talk on sustainable and historically high economic growth rates.
Monthly Strategy – June 2010
Posted by Belisarius in Monthly Strategy on June 9, 2010
Little late…but better late then never…
Equities
Only extremely favorable economic data could change the negative trend established. This is highly unlikely. So I would say we will soon see S&P 500 at 900.
On a macro level, the stimulus is wearing off, politicians and central bankers are not ready to continue with loose fiscal an monetary policies, just the opposite, austerity is the game. For now.
Private demand is weak. Private investments also show no strength. Real-estate is burdened with unsustainable debt levels, still to high prices and weak demand. Without real-estate investment recovery, we cannot talk on sustainable and historically high economic growth rates.
Monthly Strategy – May 2010
Posted by Belisarius in Monthly Strategy on May 5, 2010
Equities
With my 1,200 S&P 500 target reached I’ve moved to a kind of a ambiguous stance to the markets. Now I believe the equity markets are bound for a 10%+ down move at least.
My mid-term view remains unchanged – this is just a bear market rally; U.S. and E.U. economies will experience same patterns in both economy and markets as Japan in ‘90ies.
Recent pickup in consumer spending was due to decreased savings rate, not income growth, so I believe it is unsustainable mid term. The inventory cycle has ran its course, government stimulus is wearing off. A slower GDP growth is almost certain for the second half of the year.
China Will Not Deversify It’s Foreign Reserves Into Gold
Posted by Belisarius in Commodities, Markets on March 9, 2010
The dream of every gold bull got shattered today by Yi Gang, head of the China State Administration of Foreign Exchange (SAFE):
It is, in fact, impossible for gold to become a major investment channel for China’s foreign exchange reserves. I have 1,000 tonnes now, and even if I doubled that holding, according to current prices, that would be about $30 billion.
It is obvious that the China currency rate and foreign rate policy is only aimed at retaining China trade advantage. The U.S. treasuries are the the primary investment vehicle because of U.S. -China symbiotic production-monetary and deficit-surplus relationship.
Targets
Posted by Belisarius in Markets on February 9, 2010
One of the most important piece of data being reported this week is Chinese money supply. When giving a little thought to the meter, it gives a negative impulse to the markets turned both ways. If the growth continues we have asset bubbles forming and inflation threat; If growth slows down we have a threat that China investment driven economic model collapses globally subdued demand for everything China imports. I will be interesting to see how the markets will react, in my view it could only be negative.
Interesting exercise David Rosenberg made yesterday in Gluskin Sheff economic commentary:
Monthly Strategy – January 2010
Posted by Belisarius in Monthly Strategy on January 2, 2010
Equities
Equity performance was impressive in recent month, down to the last trading day of the year. Thursday trading showed that the investors are not so confident that the upside will continue, revealing, maybe a moment of truth. Everybody is long because of fear not to miss further gains, but scared of a potential slip.
The new regulation for real-estate developer land purchases in China; slowing credit growth and Rusal IPO which could capture excess cash which is fueling the rally and serve as a sort of a global wide correction catalyst.
Correlation Divergence
Posted by Belisarius in Markets on December 4, 2009
Well I must admit that I don’t have a clue what’s happening in the markets now. The markets opened positive on large positive surprise in non-farm payrolls and in mid of trading everything reversed. Three reasons come to my mind: first is a deeper look in unemployment numbers; the second one would be the new low in Nakheel bond indicating a stall/collapse in Dubai World debt restructuring efforts and the third would be distorted correlations at opening today that disoriented algorithm driven trading.
Nonfarm Payrolls Edge Lower
Posted by Belisarius in Markets on December 4, 2009
Nonfarm Payrolls for November came out at -11.000 vs. -100.000 consensus and – 190.000 in September. A clear improvement and a positive surprise for the markets.
Chart 1. Non-farm Payrolls Monthly and Yearly Change
Source: Econoday
The unemployment edged lower to 10.0% from 10.2% in December. Consensus was at 10.2%.
Chart 2. Civilian Unemployment Rate
Source: Econoday
The equity and U.S. dollar moved higher on the news; gold and treasuries lower.
Portfolio update: sold off gold position yesterday; 100% in cash now.
GM CEO Resigns
Posted by Belisarius in Markets on December 2, 2009
ADP unemployment for November just came out at -169.000 vs. -209.000 last month. Similar as with jobless claims, the job loses are coming down, but U.S. economy is still losing jobs.
The story of the day in the U.S. yesterdays was GM CEO Fritz Henderson resignation. The resignation followed the Motor Vehicle Sales but apparently the reason was the GM board being not happy with Mr. Henderson handling Opel and Saab asset sales. Bloomberg link: Henderson Said to Flunk Board’s 100-Day Review on Fixing GM.