Dollar Strength

Gold, Silver, Copper, Nickel and the Slow Death of Money

Gold, Silver, Copper, Nickel and the Slow Death of Money

A huge opportunity to hedge against both inflation and deflation is lying out there in the open. There are no transaction costs and right now there’s even a built-in discount. But most people will never realize any of this. In 1933 President Franklin Delano Roosevelt signed Executive Order 6102, which made it illegal for U.S. citizens to hold gold bullion. Prior to that, the $20 bill was essentially a warehouse receipt for a one-ounce gold coin. Prior to the Federal Reserve Act of 1914, the $20 bill actually told you this. After Executive Order 6102, $20 notes weren’t allowed to be exchanged for gold anymore. Americans couldn’t legally own or trade gold as money and savings, only as jewelry or collectible coins. A year after making monetary gold ownership illegal, FDR revalued gold from $20.67 per ounce to $35 an ounce with the Gold Reserve Act. The Act also required all gold and gold certificates to be turned over to the Treasury. The dollar was debased. A chunk of the gold it used to be good for was legally removed. Instead of  “containing” 1/20 an ounce of gold, each dollar now only contained (or represented) 1/35 an ounce. And of course you couldn’t actually own the gold itself. In 1971 Nixon severed the last official ties between gold and the dollar. The dollar quickly sunk to its real value, which had been debased by years of money supply inflation. By 1975 Americans were allowed to own bullion gold again, but during the roughly 40 years bullion gold ownership had been illegal, the dollar had been drastically debased. At its former lowest point in the summer of 1980, the dollar …

Continue Reading »

Gold Prices Today Plummet on Stronger US Dollar

Gold prices today have plunged as the US dollar strengthened on mixed economic news. The stronger dollar has also pushed the price of other metals and commodities down, pressuring natural resources companies in general. Uncertainty surrounding the inevitable resumption of quantitative easing may be pushing gold prices temporarily down as well, as the idea it may done more incrementally than in

Continue Reading »

Oracle’s Estimates Lowered at UBS on Currency Concerns (ORCL)

Oracle’s Estimates Lowered at UBS on Currency Concerns (ORCL)

Enterprise software giant Oracle Corporation ( ORCL ) saw its earnings estimates cut on Thursday by analysts at UBS. The firm said it lowered ORCL’s estimates through 2011, citing possible currency headwinds as the euro continues to decline and dollar strengthens. Still, the analyst maintained its “Buy” rating and $31 price target on the stock, which had closed at $22.64 on Wednesday. Oracle shares fell 14 cents, or -0.6%, in premarket trading Thursday. The Bottom Line We recently removed shares of ORCL from our recommended list on May 4, when the stock was trading at $26.01. The company has a .88% dividend yield, based on last night’s closing stock price of $22.64. The stock has technical support in the $20-$21 price area. If the shares can firm up, we see overhead resistance around the $25-$26 price levels. We would remain on the sidelines for now. Oracle Corporation ( ORCL ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars. Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

Continue Reading »

Citigroup (NYSE:C): $1,500 Gold May Come by End of Year

Citigroup (NYSE:C) said if continual concerns over the sovereign debt crisis with Greece and much of the European Union continues to weigh on investors, gold could reach as high as $1,500 an ounce by year’s end.Analyst Alan Heap said, “Certainly $1,500 an ounce is possible. Gold’s rallying despite dollar strength and it’s rallying because investors are once again concerned about sovereign risk.”

Continue Reading »

Daily Forecast : May 19

Filed in Dollar Strength, Gold, Gold Bullion prices, lead by on May 18, 2010 0 Comments
Daily Forecast : May 19

EURUSD Forecast: The EURUSD attempted to push higher yesterday, topped at 1.2443 but whipsawed to the downside, bottomed at 1.2164 and closed at 1.2201. Technically this fact opens the door for further bearish scenario testing my weekly target around 1.2000 area as I see no more significant technical support or upside correction pattern so far except price already in oversold area. In a bearish market, oversold area should only be seen as a potential correction before continue to push lower. Immediate resistance at 1.2280 area. Unless we have high impact news or data that could pause Dollar strength, I don’t expect any movement higher than that area today. However, break above that area could trigger further upside correction testing 1.2320 area but I still prefer bearish scenario at this phase with short on rallies strategy. GBPUSD Forecast: The GBPUSD continued its bearish scenario yesterday, bottomed at 1.4305, slipped below 1.4251 earlier today in Asian session, but still unable to stay consistently below 1.4251 so far. The bias is bearish in nearest term targeting 1.4110 region but we need a consistent move below 1.4251 area to continue the bearish scenario. Immediate resistance at 1.4400 area which could be tested today as price already in oversold area. Unless we have high impact news or data that could pause Dollar strength, I don’t expect any movement higher than that area today. However, break above that area could trigger further upside correction testing 1.4450 area but I still prefer bearish scenario at this phase with short on rallies strategy. USDJPY Forecast: The USDJPY slipped below 91.71 key level support earlier today in Asian session but still unable to move below that area so far. Although this fact opens the door for further bearish pressure testing the major trendline support, we need a consistent move below 91.71 to continue the bearish scenario. Immediate resistance at 92.50 area. Break above that area could lead

Continue Reading »

The U.S. Dollar Index: A Deceptive Indicator of USD Strength

Filed in currencies, Dollar Strength, euro, Gold Investing, silver by on May 18, 2010 0 Comments

Most of the major financial news outlets and many investors have come to rely on the movements of the U.S. Dollar Index as a daily barometer of the U.S. dollar’s relative strength and weakness taking it on faith that the Dollar Index is the dollar – pure and simple. In reality, the Index offers a very distortive view of the movement of the dollar against the currencies that matter most. If anything, recent movements of the Index are a reflection of euro weakness rather than dollar strength. Words: 1019

Continue Reading »

Oil Prices Drop Further in Week as Euro’s Travails Continue

Crude oil prices plunged nearly 4% on Friday and were off almost 20% from their 18-month high less than two weeks ago, as the euro continued to lose ground against the dollar and U.S. oil inventories continued to build. The benchmark West Texas Intermediate contract settled at $71.61 a barrel on Friday, down $2.79 on the day, compared with $75.11 a week earlier, and the lowest price in three months. Oil prices hit an 18-month high of $87.15 on May 3. The euro on Friday reached its lowest point against the dollar since October 2008, falling below $1.24 from just above $1.25 on the previous day. As the dollar strengthens, it puts downward pressure on oil prices. Oil futures fell below $71 a barrel in intraday trading, and analysts now feel that prices may test the $70 threshold. OPEC has repeatedly said it would like oil prices to stay in a range of $70 to $80 a barrel, and the oil cartel might be prompted to cut production if prices fell below $70. The buildup of inventories continued to weigh on the Nymex contract. The European benchmark, ICE’s Brent crude, which normally trades at a discount to WTI, settled at $77.18 on Friday. The weekly inventory report from the U.S. Energy Information Administration on Wednesday showed an increase of 1.95 million barrels in oil stocks. In Cushing, Okla., the delivery point for Nymex crude, inventories rose by 784,000 barrels to a record 37 million barrels. The oil price decline on Friday came in spite of an increase in the Reuters/University of Michigan consumer sentiment index for May. The index rose to 73.3 from 72.2 in April, indicating a possible pickup in demand. Also on Friday, it was announced that U.S. retail sales rose 0.4% in April, to $366.4 billion – the seventh straight month sales have risen. Pressure on the euro continued even though European leaders last weekend agreed on a nearly $1 trillion package to back euro zone members and the European Central Bank reversed its earlier position and agreed to buy member’s government bonds to counter selling pressure in international bond markets. While the oil spill in the Gulf of Mexico has seemed to have little direct effect on prices, President Barack Obama pledged on Friday that the U.S. government would review its regulatory procedures for oil companies in the wake of the accident. Earlier in the week, the administration said it would split up the government agency responsible for offshore drilling so that supervisory and enforcement responsibilities would be separate from leasing and revenue collection. Source: http://oilprice.com/Energy/Oil-Prices/Oil-Prices-Drop-Further-in-Week-as-Euros-Travails-Continue.html

Continue Reading »

Short Euro, Sterling

Filed in Dollar Strength, euro, Gold Investing by on May 7, 2010 0 Comments

Michael McCarthy, head of dealing, Asia Pacific at City Index, says he is short the euro and sterling and looking for further dollar strength. He talks to CNBC’s Bernand Lo and Oriel Morrison. Short Euro, Sterling

Continue Reading »

Precious Metals Continue To Hang Tough

This week in the precious metals continues to provide evidence that savvy investors are choosing hard assets as an alternative to fiat currencies. As Greece’s debt crisis negotiations continues to keep the Euro Dollar under siege it has become apparent that the true fiscal crisis is much worse than originally thought. The Greek bonds rallied to a yield of 8.24% which definitely explains why they are having difficulties finding buyers for their debt. The Greece debt situation has put a huge strain on the Euro states as well as the global economy and considering there are several other Euro states in need of debt relief this scenario could be a daily market indicator for quite some time. The problem is the constant contradictions being released from the European union. This has chased investors out of the Euro drama and into “safer havens primarily precious metals. Goldman Sachs will get their chance to defend themselves In front of a Senate hearing next week. Last Friday the Securities and Exchange Commission filed charges against banker Fabrice Tourre and Goldman Sachs accusing them of fraudulent mortgage procedures. The following Monday we learned the SEC voted 3 to 2 to file charges against the industry giant….(it was not unanimous). Many investors saw the split vote as vote of confidence for the already embroiled Wall Street constitutes. This has been a rough patch for Wall Street as of late. The Central Bank of India

Continue Reading »

The Peak Oil Side of Volcanoes

This Icelandic volcano is not just a quaint story about some faraway place. We need to keep an eye on Iceland and its grumpy volcanoes. The historic record is filled with Icelandic volcano blasts that wrecked European civilization. It goes back at least to the days of the Roman Empire. There’s evidence that an Icelandic eruption in A.D. 405 led to a harsh winter the next year, in which the Rhine River froze. This allowed the barbarians cross in numbers sufficient to defeat the Roman Legions. In A.D. 934, there was a massive lava flow from Iceland’s Eldgja fissure system. It unleashed the largest basalt flood in recorded history. An ash cloud blanketed Northern Europe and weakened many political structures. This eruption helped keep the Dark Ages dark, and in particular harmed the English political system. It’s no coincidence that William, Duke of Normandy, conquered England a century or so later, in 1066. Then there was the Laki eruption in 1783, with another immense outpouring of lava in Iceland. This eruption emitted large volumes of poisonous gas, including fluoride and sulfur dioxide chemicals that poisoned half of Iceland’s livestock. The gas cloud blew over Scandinavia as well, causing many deaths and hardships that included a long famine. There were many deaths further south in Western Europe, as well, in 1783. Then came several years of extreme weather. Among other problems was a shortfall in farm output. This led to a drop in tax receipts for governments across the continent. In France, King Louis XVI eventually had to summon the Estates General to ask for new taxes. Instead, he wound up with the French Revolution. Do not discount the immediate or long-term human, economic and social effects of natural phenomena. I hope that the Icelandic volcano goes back to being dormant. But it’s nothing that anyone can control. One way or the other, the Icelandic volcano is important to you as an investor. …

Continue Reading »

Is the Dollar Done?

I am not implying for good but quietly the dollar has lost ground for the last 6 sessions trading to its lowest level in one month today. The losing streak in Crude was broke today with conviction as a draw of 2.2 Million in today’s inventory report has prices in the futures $2 higher trading back near $86/barrel. After the recent shakeout prices may be on their way to $90/barrel. We will be out of the country next week so we chose not to be in Crude until we return but those wanting exposure we would advise longs. We would remain long as long as $84 holds on a closing basis in May. Natural gas was higher for the second day running but we would like to see a more convincing confirmation like a settlement above $4.35 in May. We suggest longs in June futures and purchasing July 50 cent call spreads. Assuming we’ve found a low a 38.2% Fibonacci retracement would lift prices in May to $4.65. Positive earnings and comments from Bernanke helped lift indices to fresh highs. With the Dow above 11000, S&P above 1200 and the NASDAQ above 2000 what was resistance now becomes support. Regardless we are not buying with clients and would rather miss more upside than be long at these levels. Sugar gained 3% today and had its first close above the 20 day MA since mid-February. We are advising longs and expect a trade above 19 cents in the not too distant future. We feel you still have time to layer in longs in OJ as prices have only moved a nickel off their lows last week. We’re expecting an appreciation of 12-15% in prices in the coming weeks. Treasuries failed to make new highs today and look destined to make new lows. The inverse relationship to equities should play out but we would prefer to be a seller from higher levels with clients. Corn gained 1.50% today trading to its highest level in 3 weeks. We continue

Continue Reading »

NovaGold Resources (NG): Lundin’s Look at Gold

NovaGold Resources (NG): Lundin’s Look at Gold

Filed under: International Markets , Newsletters , Commodities , Stocks to Buy “Western speculators are quick to dump gold on dollar strength, while long-term investors and savers continue to quietly accumulate in anticipation of oncoming inflation,” says metals and mining specialist Brien Lundin . In his The Gold Newsletter , he explains, “Over the long tern, the price of of gold will be set not by governments or speculators, but by those who look to gold as a bulwark against the ravages of inflation. Despite the vast tides of money flowing into and out of the “paper gold” markets as hedgers and speculators fight their daily games of tug-of-war, investors and savers across the globe continue to buy gold.” Continue reading NovaGold Resources (NG): Lundin’s Look at Gold NovaGold Resources (NG): Lundin’s Look at Gold originally appeared on BloggingStocks on Thu, 08 Apr 2010 10:00:00 EST. Please see our terms for use of feeds . Permalink | Email this | Comments

Continue Reading »