Monday, May 11, 2015

CBC: Galati Takes on Bank of Canada

Take special note of his comments on CMHC mortgage insurance and consider why the Canadian housing market is the hottest in the world. Homes are not going up in "value" they are going up from an expansion of the mortgages on bank balance sheets. Galati could be "the card" that brings down this "house of cards" economy? BK

Monday, April 27, 2015

Heraeus Gold Market Commentary

Weaker US economic data fuelled lingering doubts about the timing of an increase in US interest rates. Following the recent pattern, this offered encouragement for the gold price: The metal rose on Thursday up to nearly 1.200 $/oz before profit taking on Friday pressed it back under the level of 1.175 $. This latter move coincided with a weaker dollar also, which is rather unusual. The combined effect pushed the euro gold price to 1.081 €/oz, the lowest level since the end of March. Market participants in the Euro-zone reacted accordingly: While investors remained largely on the sidelines, there was a noticeable increase in buying from industrial users.
For the coming week, once again US interest rate policy will be the key focus of attention for market participants. This week’s FOMC meeting should bring the market some transparency about the Fed’s policy concerning interest rates. Hints about rising interest rates would again put the gold price under pressure and lead to a test of support at 1.160 $/oz quickly. The next significant mark is at 1140 $/oz, where physical buying interest should provide support. Significant chart resistance for gold is at 1200 $/oz and then 1211 $/oz. 

Friday, March 27, 2015

Gold Market Comments

Heraeus Metals NY

The Yemen news yesterday gave a short lived pop to gold. But yet there is something else going. In Asia gold traded as high as 1206. In London and NY it has traded above 1200 only to retreat. Today’s  fourth  quarter GDP report was  a little higher but the annualized was lower than expected which should have been bullish for gold. Reuter’s Michigan Consumer sentiment was slightly higher than expected causing a net zero effect on market direction. The precious metals complex remains under the gun from the expectations of higher interest rates, futures shorts and ETF liquidations. But in the battle of direction it does not seem that shorts hold all the cards as every good dip has been met by buying. The question is who will tire first, the bulls or the bears before a new direction is made clear when the dust finally settles.