Commodity Trade Mantra

Posts Tagged ‘US Dollars’

Will the US Dollar Die as "New World Money" Goes Live Today? Should I Buy Gold?

Today, Sept. 30, is when the IMF officially adds the Chinese yuan to its basket of currencies comprising its special drawing right (SDR). It has enormous long-term implications for the dollar. Does that mean the dollar becomes worthless overnight? Of course not. This is a development with long-term implications, and that’s the point — the dollar will die — but with a whimper, not a bang.

China On A Gold Buying Binge Despite Massive Debt For Obvious Reasons

Similar to that of other developed nations, China’s debt has also reached “bubbly” proportions. But they know that during the next crisis those nations with a large gold backing will not only survive, but will be prosperous as well! China will most certainly increase its gold reserves even further. Imagine if only a portion of their $1.22 trillion US treasury holdings are shifted to gold. BOOM…

Case for Owning Real Money - Gold and Silver Outside the Banking System

We’re in a situation on a global basis we’ve never been in before, which is that the reserve currency of the world is failing, which means you need something outside of the system. You need something that’s not electronic-based, has no counterparty risk, that’s universally recognized & of high value that could be used anytime, anywhere by anyone. That of course is gold and silver.

Deutsche Bank Refuses Delivery Of Physical Gold Upon Demand

What was supposedly an ETC which promised physical delivery upon demand, is nothing more than yet another “paper only” play. Is the inability to deliver physical gold an incipient issue with Xetra-Gold, or Deutsche Bank, and if the latter is suddenly unable to satisfy even the smallest of delivery requests by retail clients, just how unprecedented is the global physical gold shortage?

Here Is Why The US Dollar Collapse Is Imminent

The list of reasons why the US dollar could collapse is getting bigger daily. Here are some factors – Reckless monetary policies by the Federal Reserve. U.S. national debt continues to increase. Other currencies like the Chinese yuan are gaining a significant amount of attention on a global level. Central banks are starting to lose trust in the US dollar as well. Read more…

Believe it or Not - It’s Way Too Early to Take Profits in Gold and Silver

If another asset appears better positioned to deliver capital preservation or if the risks to capital fade, it will be time to sell some of your physical gold and silver. For now, the risks are extreme, and most other options look awful. Here are a few signs which would signal it is time to lighten up on gold and silver. Simply hold on tightly to your precious metals till then.

While America Debates the $20 Bill, China Moves Closer to Gold

By trading physical gold in renminbi, China is slowly chipping away at the dominance of US dollars….The gold reserve on the China balance sheet has almost doubled since 2009. By holding gold, and moving away from a US-dollar centric system, we actually require less US dollars. Of course the true measure of China’s gold holdings is still a closely guarded secret.

A Scramble for Gold has Begun - Jim Rickards

What drives gold’s new allure? In some cases, central banks are constructing a hedge against US dollar inflation. Countries are also acquiring gold in advance of a collapse of the international monetary system that has a shelf life of about 30 years. The system has collapsed three times in the past century. Each time, major financial powers came together to write new rules.

China Yuan Gold Fix Is Part Of A Planned Shift From The US Dollar

By trading physical gold in renminbi, China is slowly chipping away at the dominance of US dollars. Gold, silver, and petroleum are the three US dollar based commodities that China wants most control of, according to Bocom strategist Hao Hong but “gold in particular is one of the commodities that China is hoarding very hard.”

Silver Futures Near $16.30 Resistance - Will Silver Prices Break Through?

Silver futures for May delivery climbed to $16.13 a troy ounce, putting it on pace for the highest close of the year on the Comex. Silver futures are likely to face stiff resistance near $16.30, a price level that has been difficult to penetrate since September 2015. A clear break above that level could expose a further upside rally in silver futures in the coming months.

China needs a lot of Gold to make-up for the Loss Expected on Treasuries

Right now, China’s reserves are about $3.2 trillion, of which about $2 trillion is denominated in US dollars, and most of that are U.S. Treasury Securities. They can’t dump them. So what the Chinese are doing instead is they’re acquiring gold as a hedge. China is going to be in this position where they lose on the paper, but they make it up on the gold.

Gold and the US Monetary Base Signal the Greatest Depression

When the US monetary base gets too big relative to the gold price (& US gold reserves), then market forces seek to correct the situation. The lack of confidence in banks will be a critical part of the coming gold rally. Remember that if we were to get a 100% gold backing of the US monetary base, based on current US official gold reserves, gold would have to be trading in excess of $15 000.

This is not 2008 – At least not for Gold Prices

Both, low energy prices & higher real interest rates are already reflected in the current gold prices. As longer-dated oil prices cannot remain below industry costs indefinitely, nor real interest rates rise much higher given a data dependent FED, this creates an asymmetry to gold prices, regardless of broader market normalization – or capitulation.

Why "Supply & Demand" Doesn't Work For Oil Prices

The costs of producing oil continue to rise, as a result of diminishing returns, so this fall in oil prices is clearly a problem. Low oil prices make future production unprofitable; it also leads to an increasing number of debt defaults. It is also inevitable that the price of oil must stop rising at some point because of the adverse impact on spendable income of consumers.

The Aussie Dollar Gold Just Broke Out to Multi-Month Highs

After putting in a panic low in Nov last year, Aussie dollar gold soared, peaking in late January of this year. A strong rally in Aug followed by more gains in Sept, gave the upward trend a push. US dollar gold price strength, combined with a weaker Aussie dollar, sent the Aussie dollar gold price to an eight month high overnight. It closed the US trading session at $1,641 an ounce.

Will the Fed Have to Save Emerging Markets with QE4?

As emerging markets and nations attempting to defend their currency pegs to the USD sell U.S. Treasury bonds (which have been held as foreign exchange reserves), the yields on the Treasuries rise as a matter of supply and demand. As supply increases, sellers must offer higher yields to entice buyers. This dynamic undermines both the emerging markets and the U.S.

What China's Devaluation Means For The Future Of The Dollar

Nearly every government, commercial bank & central bank in the world holds US dollars in reserve as they are used as the primary currency in global trade. But this status is by no means written in stone. The US dollar is not the first global reserve currency, and it won’t be the last. It’s foolish to expect a reserve currency with such pitiful fundamentals as the US dollar to last forever.

Everyone Is Probably Wrong About The US Dollar

Could the current US dollar rally last a bit longer? Absolutely. However, it is unlikely to move substantially higher without a reasonable correction first. From a contrarian standpoint, with everybody on the long side of the trade, it may be time to take the opposing view. The good news is that a weaker dollar will play favorably for the beaten down commodity driven sectors.

Currency Devaluation: The Crushing Vice of Price

When stagnation grabs exporting nations by the throat, the universal solution offered is devalue your currency to boost exports. Currency Devaluation is a bonanza for exporters’ bottom lines, but has a negative consequence: The cost of imports skyrockets. When imports are essential, the benefits of devaluation may be considerably less than the pain caused by rising import costs.

Currencies Need to Depend on Faith, Gold Doesn’t

Gold should not be compared to stocks or real estate, but to other forms of money, such as any one of a number of fiat currencies now in circulation. Ironically, in a world awash in fiat currencies that are created at an ever increasing pace, and whose value is solely derived from faith in the issuing state, gold is the only form of money whose value does not require a leap of faith.

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