Gold’s rally won’t outlast tectonic rate shift

December 11, 2014

The yellow metal is up as tumbling oil prices and a rising dollar destabilise many financial markets. Euro zone fears and Russian gold buying have also helped. But U.S. rate rises will create major shifts in the financial world. Gold is set for a bad 2015.

Gold bulls have precious little to cling to

November 6, 2014

The asset was first to swoon when investors awoke to the end of U.S. money-printing. Coin sales, a recovering Indian rupee and declining supply offer some hope. But even after a near-40 pct fall, the price hasn’t adjusted to the end of speculative fervour. Sub-$1,000/oz looms.

Gold’s geopolitical ledge won’t hold up

September 1, 2014

International tension has helped stabilise the gold price after a 2013 plunge. But the fundamentals are bad. ETF redemptions persist while bar and coin investment has dropped heavily. Jewellery demand remains soft. Consumers want cheaper gold. They are likely to get it next year.

Market adjustment is not over yet

March 17, 2014

Gold’s rise to a six-month high indicates rising fear and coincides with a retreat to assets seen as safe, including the yen and bonds. Emerging market woes may now hit developed markets more keenly. But the Fed seems intent on tapering, which will eventually be bad for gold too.

Commodities set to distinguish themselves

January 3, 2014

From gold to grain, raw materials will in 2014 trade less in line not just with equities, but each other. That’ll continue a trend started in the summer. Thank a calm euro zone and the prospect of a Fed taper. Commodity costs set by fundamentals, not fear, would be good for many.

Gold hasn’t melted down to its base yet

November 21, 2013

Investor demand for gold is likely to continue falling as Fed tapering pushes up market interest rates. That may in turn affect demand from central banks in emerging markets. Asian jewellery demand offers gold an eventual salvation – but probably below $1,000 per ounce.

Gold warns markets of an anxious September

August 7, 2013

As in April, the yellow metal’s slide to a three-week low suggests broader troubles for markets. Better U.S. data means Fed asset purchases could be reduced in September. Less central bank cash is good for the dollar - and bad for most other global assets.

Safe havens face three-pronged assault

July 3, 2013

Markets have corrected but safe havens are still vulnerable. U.S. dollar strength is bad for gold, bonds, and the Aussie dollar. A euro zone out of acute crisis is bad for the Swiss franc. And even a tepid economic recovery will attract funds out of safe havens into stocks.

Gold miners still look expensive

April 16, 2013

It’s hard to see value in the sector despite shares being savaged. Miners’ earnings will be crushed as high costs meet falling prices. Management has few levers to pull. Gold’s peculiar dynamics mean that closing unprofitable mines may have only a muted effect on the market.

Gold is the canary in the financial mine

April 15, 2013

The safe-haven metal has suffered a dramatic reversal. It is an extreme case because for a decade it benefited from the U.S. housing bubble and then QE. Gold at a tipping point offers a lesson investors should know. Markets are distorted by excess liquidity, corrections will come - and hurt.