Gold to tank in 2014: Goldman Sachs...

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Bad news for "gold-bugs"—bullion's current beginning-of-the-year rally will not only lose steam, but prices could drop sharply by the end of 2014, according to Goldman Sachs' Jeffrey Currie.

Currie, Goldman's head of commodities research, told CNBC on Monday he had an end-of-year price target of $1,050 per ounce for gold, a 16 percent drop based from current prices of $1,251. The main culprit? Economic recovery.

"Our view there really is driven by the expectation of the U.S. economy reaching escape velocity," Curie said on "Essentially when you think about a short on gold ... it's essentially just a bet on a substantial recovery in the U.S. economy."

  Gold prices ballooned in the years since the 2008 financial crisis, driving prices to record highs thanks to ultra-low interest rates from the Federal Reserve's economic stimulus programs. Prices dropped last year amid fears the Fed would scale down those programs earlier than expected, but a weaker-than-expected December employment report re-ignited interest in gold last week.


Currie said gold still worked as a hedge against inflation; he just doesn't see any strong inflationary pressures in the next few years. He said once the economic recovery picks up more momentum, inflation would follow and gold may become attractive again. Gold's early 2014 rally won't last, he said.

"I get it all the time—'Why are you bearish on gold when you expect the U.S. economy to recover?'" Currie said. "You have to think about it in different phases of the business cycle."

Other commodities Currie expects to underperform include beans and copper. Currie remains unwilling to make a big bet against oil because of disruptions in Libya and Iran. Investors continued to move away from commodity-intensive emerging markets and into developed economies, a trend that affects most commodities outside gold, he said.

"They're all driven by the same theme, rotation away from emerging markets and toward developed markets," Currie told CNBC.

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News Source: www.cnbc.com

Gold outlook: Fed Tapering Fear...

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Gold prices are seeing follow-through selling pressure from Thursday’s strong losses and have hit a four-week low in early U.S. trading Friday. Much of the selling in gold and silver is tied to their weakening near-term technical postures and to less risk aversion in the market place this week. December Comex gold was last down $12.60 at $1,318.10 an ounce. Spot gold was last quoted down $2.70 at $1318.75. December Comex silver last traded down $0.244 at $21.895 an ounce.

It was generally quiet in Asian and European markets overnight, except the gold and silver markets. The perceived decreasing odds of U.S. military action against the Syrian regime continue to pressure safe-haven gold. Traders that had made bets the U.S. military would strike Syria and went long gold are at least temporarily licking their wounds and unwinding those positions.

Many traders and investors this week have been looking ahead to next week’s meeting of the U.S. Federal Reserve’s Open Market Committee (FOMC). A majority of the market place believes the U.S. central bank at next week’s meeting will announce it will begin to scale back, or “taper” its monthly bond-buying program. Some reckon the Fed will announce a $10 billion or $15 billion reduction in its $85 billion-a-month bond-buying program. The surprise to the markets could be if the Fed either does nothing at this meeting, or is more aggressive in its initial reduction in bond purchases. For the past several weeks the market place has been fixated on what the U.S. central bank will announce at the conclusion of next week’s FOMC meeting.

The Japanese Nikkei news service reported overnight that President Obama late next week will name Larry Summers as the next chairman of the Federal Reserve. The U.S. dollar index rallied modestly on this report, while gold saw some added selling pressure—on notions Summers as a Fed chairman would be more hawkish on U.S. monetary policy than would present Fed vice chair Janet Yellen. However, the White House has denied the Japanese report. CNBC continues to report the Fed chairman’s job “is Summers’ to lose.”

U.S. economic data due for release Friday includes the producer price index, retail sales, manufacturing and trade inventories, and the University of Michigan consumer sentiment survey.
The London A.M. gold fix is $1,308.25 versus the previous P.M. fixing of $1,328.00.

Technically, December gold futures prices closed nearer the session low Thursday. The gold market bears now have the slight overall near-term technical advantage. A two-month-old uptrend line on the daily bar chart has been negated. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,350.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at $1,300.00. First resistance is seen at $1,340.00 and then at $1,350.00. First support is seen at the overnight low of $1,304.60 and then at $1,300.00.  


December silver futures prices closed nearer the session low and hit a fresh four-week low Thursday. Silver bears now have the slight near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at this week’s high of $24.25 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $20.65. First resistance is seen at the overnight high of $22.185 and then at $22.50. Next support is seen at the overnight low of $21.42 and then at $21.00. .

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Email:info@cfb.ae

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Here is another blog that provides regular news and information and is very useful for Forex Signals.

News Source: www.reuters.com

Bank of Japan to adopt 2% inflation target

The Bank of Japan on Tuesday formally adopted a 2% inflation target in a major shift in its policy stance, and said it will continue its asset purchases on an "open-ended" basis to further expand its monetary stimulus. At the conclusion of its two-day policy meeting, the central bank said its "price stability target" of 2% year-on-year increase in consumer prices will replace its previous "goal" of a 1% increase in inflation. Under its open-ended asset purchases, the Bank of Japan said it will pursue "aggressive monetary easing" aimed at achieving its 2% price stability target, "through a virtually zero interest rate policy and purchases of financial assets," for as long as the bank judges it appropriate. The decision sent the yen and Japanese stocks on a wild ride: The yen initially fell sharply after the announcement, sending stocks rallying, but the currency soon bounced back sharply as the market digested the details, with shares likewise moving back to losses

Will Obama Ruin the Economy to Ruin the Republicans?

With both the 14th Amendment and platinum coin options to defuse a debt-limit crisis (apparently) off the table, only two possible outcomes are left: a debt- ceiling increase or the government's missing required payments and economic chaos ensuing. This is exactly the choice President Barack Obama laid out in his news conference this morning.
Politico reported today that top Republican staff members believe “more than half” their conference is prepared to push the government into default on some payments rather than cave on their demands for further spending cuts.
This isn’t because Republicans are reckless, as such. Many conservatives are sincerely convinced that excessive government spending poses a dire risk to the U.S. economy, and that even if missed payments have severe negative short-term economic consequences, they will be worth it if the long-term outcome is a smaller government.
The conviction that everything is about to come apart in the U.S. if the government maintains its current economic-policy course -- through tremendous inflation, a debt crisis, and/or all of the productive members of society Going Galt -- animates the huge Republican resistance to anything Obama proposes, even if that’s just the government paying the bills it has already run up. They’re trying their very hardest to save the country from a madman.
This sincere outlook is also insane, as you can see from how the stock and bond markets have behaved in recent years in response to various policy actions. The markets like fiscal expansion, monetary expansion and deals that keep the government operating as usual without drastic policy change. They do not cry out for massive disruption in pursuit of smaller government.
But the conservative worldview is robust because of its imperviousness to evidence. Economic data, like polling data or climate data, cannot get in the way of the narrative. Conservatives are sure that the Obama presidency will lead to an economic calamity, and they will prove it, if necessary.
Mike Konczal of the Roosevelt Institute has a good rundown of the game theoretical implications of the White House’s choices to take the coin and the 14th Amendment off the table. By removing the options to hit the debt ceiling without economic disaster, maybe the White House will force Republicans to give the White House the policy it most wants: a clean debt-ceiling increase. Or maybe we’ll hit the debt ceiling anyway.
But there is another explanation for the White House’s choice that is missing from Konczal’s analysis. If Obama had minted the coin, he would have taken the blame for whatever problems ensued, real or imagined. He might have saved the economy while bearing the political cost of ruining it. Foreclosing that option has an indeterminate impact on the economy, but it will ensure that Republicans get all the blame for whatever bad economic events happen in the next few months.
By creating an object lesson of how unfit the Republican Party has become to govern, Obama can ensure himself a political “win.” But with a new recession sparked by a government payments crisis, the country would lose -- and Obama, whose second-term plans would be hampered by the need to manage yet another recovery, would lose, too.
(Josh Barro is lead writer for the Ticker. E-mail him and follow him on Twitter.)
Read more breaking commentary from Bloomberg View at the Ticker.

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• CFB provides state-of-the-art online trading software, providing electronic order entry in the most liquid and dynamic market movers world-wide
• Through one window, traders access FX, futures, stocks, CFDs, metals, energies etc.
• As a client you will have access to real-time prices, two-way quotes, charts, news, market commentaries & analysis of all major currencies, metals, commodities, futures, energies etc. and  receive statements of your account on regular basis

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Benefits & Services facilitated by CFB

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• An enormous liquid market making it easy to trade most markets.
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• Wide range of trading markets and financial instruments.
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• Recognized instruments for controlling risk exposure.
• The ability to profit from rising or falling markets.
• Leveraged trading with low margin requirements.
• Proper training for trading in FX Markets.

• CFB provides state-of-the-art online trading software, providing electronic order entry in the most liquid and dynamic market movers world-wide
• Through one window, traders access FX, futures, stocks, CFDs, metals, energies etc.
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FISCAL CLIFF (What’s in Boehner’s “Plan B” – and what’s not)

What’s in Boehner’s “Plan B” – and what’s not

December 19, 2012, 11:30 AM

House Speaker John Boehner’s “Plan B” is Topic A in Washington as Republicans and the White House try to avert the fiscal cliff. And while it has almost no chance of clearing the Democratic-controlled Senate, passage in the House would allow the GOP to say Republicans acted to stop some tax increases. A vote — which the White House says President Obama would veto — is expected on Thursday.

Here’s a look at what’s in the bill, and what’s not.

The marquee element of the bill, which Boehner first unveiled on Tuesday, is its extension of Bush-era tax cuts for Americans making less than $1 million. That threshold was a concession by Boehner, who’d originally wanted tax increases on no one. But it’s much higher than President Obama’s $400,000 threshold (which was itself a concession for Obama).

Plan B also sets at 20% the tax rates for capital gains and dividends on income higher than $1 million — but keeps the current 15% rate for those making less than $1 million. Without a fiscal cliff agreement, rates on capital gains go up to a maximum of 23.8%. For dividends, rates go even higher, from 15% now to 43.4%. Click here for a Tax Foundation primer on the fiscal cliff.

Boehner’s bill would keep current rules on the estate tax, setting the exemption just north of $5 million with a top rate of 35%. That’s compared to 55% without a fiscal-cliff deal. Obama would set the estate tax at 45% with a $3.5 million exemption.

Plan B would also prevent the expansion of the alternative minimum tax, and extend some expensing for small businesses.

What it would NOT do is address the across-the-board spending cuts set to kick in next year for the Pentagon and domestic spending. Nor would it deal with the debt limit.

So while passage of Plan B would put Republicans on the record as opposing most tax increases (as if that were in doubt) it would only address half of the fiscal cliff. But Republicans could blame someone else for that.

FISCAL CLIFF (What’s in Boehner’s “Plan B” – and what’s not)

What’s in Boehner’s “Plan B” – and what’s not

December 19, 2012, 11:30 AM

House Speaker John Boehner’s “Plan B”is Topic A in Washington as Republicans and the White House try to avert the fiscal cliff. And while it has almost no chance of clearing the Democratic-controlled Senate, passage in the House would allow the GOP to say Republicans acted to stop some tax increases. A vote — which the White House says President Obama would veto — is expected on Thursday.

Here’s a look at what’s in the bill, and what’s not.

The marquee element of the bill, which Boehner first unveiled on Tuesday, is its extension of Bush-era tax cuts for Americans making less than $1 million. That threshold was a concession by Boehner, who’d originally wanted tax increases on no one. But it’s much higher than President Obama’s $400,000 threshold (which was itself a concession for Obama).

Plan B also sets at 20% the tax rates for capital gains and dividends on income higher than $1 million — but keeps the current 15% rate for those making less than $1 million. Without a fiscal cliff agreement, rates on capital gains go up to a maximum of 23.8%. For dividends, rates go even higher, from 15% now to 43.4%. Click herefor a Tax Foundation primer on the fiscal cliff.

Boehner’s bill would keep current rules on the estate tax, setting the exemption just north of $5 million with a top rate of 35%. That’s compared to 55% without a fiscal-cliff deal. Obama would set the estate tax at 45% with a $3.5 million exemption.

Plan B would also prevent the expansion of the alternative minimum tax, and extend some expensing for small businesses.

What it would NOT do is address the across-the-board spending cuts set to kick in next year for the Pentagon and domestic spending. Nor would it deal with the debt limit.

So while passage of Plan B would put Republicans on the record as opposing most tax increases (as if that were in doubt) it would only address half of the fiscal cliff. But Republicans could blame someone else for that.

Gold and Silver Miners Show Strength as Futures Decline

On Tuesday, gold (NYSEARCA:GLD) futures for February delivery, the most active contract, dropped $25.30 to settle at $1,695.80 per ounce, while silver (NYSEARCA:SLV) fell 95 cents to close at $32.78.

Both precious metals declined as political rhetoric over the fiscal continues to dominate headlines. In an interview on Bloomberg Television, President Barack Obama said, “We have the potential of getting a deal done.”

 However, he also added, “We’re going to have to see the rates on the top 2 percent go up, and we’re not going to be able to get a deal without it.” The statement shows that both sides of the aisle still have some work to do before reaching an agreement.

Some analysts believe that a failure to prevent the fiscal cliff will send gold prices lower, as everything in the market will selloff in the short-term. However, long-term bullish trends like ultra-low interest rates still remain in place for precious metals. Australia’s central bank cut interest rates by 0.25 percent to 3.0 percent on Tuesday, matching the lowest level on record since 2009.

In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) fell about 1.0 percent, while the iShares Silver Trust (NYSEARCA:SLV) declined 2.0 percent. Gold miners (NYSEARCA:GDX) performed better, with Barrick Gold (NYSE:ABX) and Goldcorp(NYSE:GG) both jumping more than 1.0 percent. First Majestic Silver (NYSE:AG) and Silver Wheaton (NYSE:SLW) also climbed higher.

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