Gold Could Jump on Inflation, Dollar, India Jewelry Demand

Gold prices may be poised to rebound as several elements are combining to give the yellow metal a probable boost.

Federal Reserve Chairman Ben Bernanke made a statement that rising oil prices could spark inflation, the U.S. dollar has been under pressure, and jewelers in India are ending a 5-day shutdown protesting proposed tax increases from the Indian government; all of which could push gold prices up quickly over the short term.

Another major factor is the ongoing sovereign debt crisis in Europe, which continues to weigh down the Zone. The media has neglected it recently, so it hasn't been part of the conversation, even though it's a significant factor in the movement of gold prices.

Bernanke was extremely bearish on European banks, which points to the fact there will be more quantitative easing coming, which is also very bullish for gold.

So far in 2012 gas prices in the U.S. have soared 18 percent, reaching a ten-month high of $3.864 a gallon Wednesday. Not only is inflation a trigger for gold prices to rise, but in the case of higher gas prices, it takes away from consumer spending, which weakens the economy, which also can push gold prices higher.

Gold for April delivery on New York Mercantile Exchange the Comex division of the New York Mercantile Exchange settled at $1,650.30 an ounce, up $3.30, or 0.2 percent.

Wells (WFC) Downgraded by Bove on Inflation Concerns

Wells Fargo (NYSE:WFC) was downgraded by Rochdale analyst Richard Bove, citing concerns over inflation and whether or not investors will dump the stock because of it.

Bove said, “The expectation is that inflation will grow slowly at first but then accelerate by the end of 2012 into 2013 and the United States may find itself with a 1970s problem. The initial rise in prices is likely to push interest rates and consequently bank earnings higher. Ultimately, if rates keep rising then the values on bank balance sheets will be questioned and it will be assumed that real book values are falling. Thus, banks will not be able to raise their asset values in the expected inflation they will see their asset values fall.”

Including the uncertainty surrounding the seemingly endless number of regulations that are strangling and threaten to destroy the banking industry, the low demand for loans and the rising costs of servicing mortgages, and you have a case for Wells Fargo remaining in limbo for some time concerning its share price.

Of course that's not much different than its peers, which it wouldn't be surprising to hear they're being downgraded as well.

Wells Fargo closed Thursday at $28.54, falling $0.29, or 1.01 percent. Bove lowered his price target on the giant bank from $39.50 to $32.50.

Ivanhoe (IVN) (NCMGY) (JAG) (EGO) Close Down Even as Gold Prices Soar to Record High Again

Even though gold prices reached new all-time highs on Monday, that wasn't the direction for most gold companies, such as Newcrest Mining (OTC:NCMGY.PK), Ivanhoe Mines Ltd. (NYSE:IVN), Eldorado Gold Corporation (NYSE:EGO) and Jaguar Mining (NYSE:JAG), which all closed down on the day.

Spot gold jumped as high as $1,497.20 an ounce Monday after Standard & Poor’s downgraded its credit outlook for the United States, revealing the risks associated with its own sovereign debt crisis.

U.S. gold futures for June delivery settled up $6.90 an ounce at $1,492.90.

The sovereign debt crisis in Europe continues to boost gold as well, as the euro and U.S. dollar continue to face pressures on out-of-control government spending and refusal to make meaningful spending cuts.

Global inflation and unrest in the Middle East also continue to be major factors in the gold price equation.

As to why most gold miners have been pulling back, a lot of that is based on the fact the majority of the miners are based in Canada, and so the weaker U.S. dollar as it relates to the Canadian dollar is a major factor a lot of investors in gold companies don't take into account.

Ivanhoe Mines Ltd. closed Monday at $25.65, dropping $0.95, or 3.57 percent. Jaguar Mining closed at $4.98, falling $0.14, or 2.73 percent. Newcrest Mining ended the day at $43.15, down $0.73, or 1.66 percent. Eldorado Gold Corporation closed at $17.76, losing $0.30, or 1.66 percent.

Yamana (AUY) (RGLD) (KGC) (GFI) Trade Mixed as Gold Rushes Toward $1,500

On Friday gold prices soared toward the $1,500 an ounce mark, trading as high as $1,488 an ounce in afternoon action until closing at $1,486.50 an ounce. Royal Gold (Nasdaq:RGLD), Kinross Gold (NYSE:KGC), Yamana Gold (NYSE:AUY) and Gold Fields (NYSE:GFI) traded mixed as many gold miners pulled back after pushing up last week.

Inflation continues to be a major factor in gold price movement, as food and fuel prices in the U.S. continue to soar and consumer prices in China jump.

The ongoing weakness in the U.S. dollar, sovereign debt crisis in Europe and the unrest in the Middle East makes gold an attractive safe haven alternative for capital.

Gold Fields closed Friday at $17.88, falling $0.09, or 0.50 percent. Kinross Gold closed at $15.67, dropping $0.21, or 0.13 percent. Yamana Gold closed at $12.80, gaining $0.05, or 0.39 percent. Royal Gold ended the session at $53.77, up $0.33, or 0.62 percent.

Hecla (HL) (SSRI) (GPL) (MGN) Trade Mixed as Gold, Silver Rise Again

Shares of most silver miners were up as silver jumped again Thursday, although Silver Standard Resources (NASDAQ:SSRI), Hecla Mining (NYSE:HL), Mines Management (AMEX:MGN) and Great Panther (AMEX:GPL) were trading mixed.

Silver climbed $1.427, or 3.6 percent, to $41.664 an ounce.

Gold for June delivery rose $16.80 to settle at $1,472.40 an ounce on the Comex division of the New York Mercantile Exchange.

Spot gold was up 1.4 percent to $1,474.30 an ounce, closing in on its record $1,476.21 set on Monday.

The collapsing U.S. dollar, tightening in China, sovereign debt crisis in Europe, unrest in the Middle East, increasing inflation and consequences of the Japanese earthquake are just some of the negative catalysts affecting the price movements.

The U.S. dollar was close to session lows, resulting in a further impetus to gold. The U.S. currency traded as low as 74.617, its lowest level since December 2009.

In base metals trading, May copper dropped 1.05 cents to settle at $4.284 a pound, July platinum increased $18.40 to $1,795.60 an ounce and June palladium was up $8.95 to $774.25 an ounce. May copper fell 1.05 cents to settle at $4.284 a pound

Great Panther closed Thursday at $4.16, gaining $0.16, or 4.00 percent. Mines Management closed at $2.88, up $0.02, or 0.70 percent. Hecla Mining ended the day at $9.53, up $0.34, or 3.70 percent. Silver Standard Resources closed at $33.98, rising $0.26, or 0.77 percent.

NovaGold (NG) (GFI) (GRS) Fall as Gold Prices Drop Monday

Gold prices took a breather Monday after soaring for several days, ending up with gold miners like NovaGold Resources Inc. (AMEX:NG), Gold Fields (NYSE:GFI) and Gammon Gold (NYSE:GRS) dropping in price.

On Monday gold prices closed lower, falling $6 to $1,468 an ounce on the Comex division of the New York Mercantile Exchange. The contract had set a new all-time in the last session, reaching $1,478 a troy ounce.

June gold settlements were $1,468.10, down $7.90; Range was $1,465.40-$1,472.80.

Much of the recent jump in gold prices is based upon the collapsing U.S. dollar, pullback in China, sovereign debt crisis in Europe, unrest in the Middle East, deepening inflation and consequences of the Japanese earthquake are just some of the negative factors hitting the markets.

A stronger dollar on Monday pressured gold prices down. The U.S. dollar battled back to gain lost ground from the euro, with the European currency trading at $1.4426, down from $1.4480 on Friday.

Gammon Gold closed Monday at $10.37, falling $0.13, or 1.24 percent. NovaGold Resources closed at $13.13, down $0.63, or 4.58 percent. Gold Fields closed at $18.14, dropping $0.41, or 2.21 percent.

Barrick (ABX), (GFI) (HMY) Jump as Gold, Silver Skyrocket

Gold and silver prices are roaring again after languishing for some time on unwarranted optimism which has resulted in gold miners like
Barrick Gold (NYSE:ABX), Gold Fields (NYSE:GFI) and Harmony Gold Mining (NYSE:HMY) soaring with the precious metals.

On Friday gold prices hit another new record, reaching a high of $1,476 an ounce. Silver prices rose to a 31-year high, closing at 40.60 an ounce, after reaching a high of $40.63 an ounce during the session.

Most of this is based upon the collapsing U.S. dollar, pullback in China, sovereign debt crisis in Europe, unrest in the Middle East, deepening inflation and consequences of the Japanese earthquake are just some of the negative factors hitting the markets.

Amazingly, many investors are acting as if these are some parenthetical events that have little bearing on the markets and commodity prices.

Gold Fields closed Friday at $18.55, gaining $0.40, or 0.40 percent. Barrick Gold closed at $54.37, rising $0.60, or 1.12 percent. Harmony Gold Mining closed at $15.56, jumping $0.23, or 1.50 percent.

Retailers (WMT) (JCP) (M) (HD) (TGT) (LOW) (ODP) All Down on Inflation Expectations

The CEO of Wal-Mart (NYSE:WMT), Bill Simon, said in an interview with USA Today that he sees inflation having an impact on price in the latter part of 2011, causing retailers like JC Penney (NYSE:JCP), Home Depot (NYSE:HD), Target (NYSE:TGT), Lowe's (NYSE:LOW), Macy's (NYSE:M) and Office Depot (NYSE:ODP) to all fall.

Food companies have already had to begin to endure the higher prices, as input costs rise as food demand surges around the world. In that case the companies have responded more by lowering the amount of product in some packaging, rather than raising prices or suffering the loss of margins and earnings.

Of course general retailers, for the most part, don't have that luxury, and so will be force to raise prices or allow earnings to underperform, something most will most likely not be willing to allow to happen.

Bottom line is it appears in an environment of higher fuel costs retailers will have to boost prices, making it a difficult time for the overall sector going forward, in an a price sensitive situation.

Southern Copper (SCCO), Newmont (NEM) Rise on Copper, Gold Exposure

Based on their exposure to copper and gold, Southern Copper (NYSE:SCCO) and Newmont Mining (NYSE:NEM) could be in good position to benefit from the price of both going up, as well as demand.

Copper and gold prices jumped on anticipated demand, and in the case of gold, safe haven status, as investors continue to be jittery on global events and economic uncertainty.

For copper, the demand from China and India, along with the emerging demand from Japan as it looks to rebuild after the earthquake, gives a strong impetus for prices to remain strong going forward.

Gold is also expected to continue to rise, and will get a boost from growing inflation as investors move to protect their wealth.

Southern Copper closed Wednesday $41.55, gaining $1.37, or 3.41 percent. Newmont Mining closed at $54.83, $1.66, or 3.12 percent.

JPMorgan (JPM) Poll Confirms Inflation Fears Growing

Economists are warning that rising inflation is a growing threat to the economy and poses new challenges to Federal Reserve policymakers. A survey conducted by JPMorgan (NYSE:JPM) found that concerns are growing that core inflation rates, or inflation stripped of volatile food and energy prices, are on the rise despite the Fed's claims to the contrary.

The JPMorgan poll of financial professionals finds that in the U.S., core inflation will be running 1.8 percent a year from now, up from 1.4 percent from a previous survey conducted in November and up from February’s 1.1 percent forecast, according to The Wall Street Journal. Respondents pegged overall inflation at 2.9 percent.

"The report notes the recent jump in oil prices and the longer-running increase in commodity prices may be skewing responses. But the report notes core inflation rates have already been rising in the U.S. and the U.K.," the newspaper reports.

"Sixty-one percent of those surveyed think inflation will be running above the Fed’s target, generally thought to be around 2 percent. Of those respondents, 12 percent thought inflation would be 'significantly' above target."




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Jim Rogers Says "End the Fed"

Jim Rogers said in an interview on "Breakout," the new financial show offered by Yahoo! Finance (NASDAQ:YHOO), that the Ben Bernanke and the Federal Reserve continue to be a disaster, and if he was instated as Chairman of the Federal Reserve, he would shut it down quickly in order to start working on the problems it has created.

He says Bernanke continues to make things worse by throwing "fuel on the fire," rather than dealing with the underlying issues.

Rogers ultimately sees higher interest rates and inflation going forward, and a major pullback in equities, especially in the tech sector.

Jim Rogers on Corn, Inflation, Supply an Demand

Billionaire investor and commodity expert Jim Rogers has been touting the inevitable rise in commodities in general, and agricultural commodities in particular, for some time, especially concerning the price of corn.

While monetary policies of the Federal Reserve are a disaster and have played a large part in the rise in commodity prices, it's not the entire story, says Rogers.

He points to the simple fact of supply and demand for corn and other commodities as a major factor in the price increase, and it isn't solely a dollar/inflation scenario moving corn prices.

Growing middle classes in China and India are the major impetus behind soaring corn and commodity prices, and having a growing amount of disposable income, along with the desire for better food, is a big part of the rise in food prices, even though a large part of that is from the misguided policies of the Federal Reserve and other central banks, who continue to debase currencies.

Lowe's (LOW), Home Depot (HD), Toll Brothers (TOL) Down Even After Good Reports

Many investors consider results from the last quarter as largely looking in the rearview mirror, including those for Lowe's (LOW), Home Depot (HD) and Toll Brothers (TOL), which all exceeded expectations.

The crisis in the Middle East, ongoing concerns over the European sovereign debt crisis which never goes away, and rising inflation are among the factors weighing on markets.

This will be good for energy stocks for sure, as it appears the unrest in the Middle East has a long way to play out, which will especially be a boost to companies with strong crude exposure.

For those companies like Lowe's (LOW), Home Depot (HD) and Toll Brothers (TOL), it appears to underscore the fragility of the so-called recovery, and the economic jitters still being entertained by the majority of investors.

Goldman (GS) Getting Frisky on Economic Growth

Goldman Sachs (NYSE:GS) is getting even more bullish than they have on the U.S. economy, increasing its economic growth projections for 2011 and 2012 from 3.4 percent to 3.5 to 4 percent. This year they peg it at 5 percent GDP growth.

Jan Hatzius, Goldman Sachs' Chief U.S. Economist said, "It's a reasonably upbeat view. It’s certainly a reminder that there are still some significant risks in the global economy (food inflation), and of course especially to the extent that it affects oil prices and commodity prices more generally. Having said that, our outlook for global growth and the U.S. economy is pretty positive. We think close to 5% GDP growth this year and next year in the global economy and sort of 3.5-4% over the next two years in the U.S."

One good thing Hatzius admits which others are slow to, is that food price inflation isn't included in economic data at this time, and is still several months out.

He said once that happens there will be upward pressure on the headline CPI numbers.

Even so, Goldman sees consumer spending improving as the year goes on. "I think the first quarter looks a lot softer than a fourth. The number now on record for the fourth quarter is 4.4% ... I think it will come down a bit in the wake of the downwards revisions to the retail sales report. I think the first quarter will be softer. Over the next year or so, I would expect something like 3.5% consumer spending growth, definitely better than what you have seen for the last few years, though not as strong as the recent spurt," added Hatzius.

Somewhat surprisingly, Hatzius also said he sees unemployment dropping to 8 percent by the end of 2012, much lower than his previous estimate of 8.75 percent.

Marc Faber Says Bernanke, Bureau of Labor Statistics Lying about Inflation Levels

In an interview with CNBC, investor Marc Faber said inflation in the U.S. is much worse than the official government line, and Federal Reserve Chairman Ben Bernanke and the Bureau of Labor Statistics are both lying about the actual level of inflation.

Faber said, “The annual cost of living increases are more than 5% today and the Bureau of Labor Statistics is continuously lying about the inflation rate, including Mr. Bernanke. He’s a liar. Inflation is much higher than what they publish.”

Faber said he sees the actual rate of inflation in the U.S. at about 5 to 8 percent, although allowing for people at different stages of their lives, e.g., those with or without children. Western European inflation he sees at levels a little under the U.S. rate.

Concerning the so-called recovery, Faber stated, “We have to realize that it’s an artificial recovery driven by ultra-expansionary monetary policies and also ultra-expansionary fiscal policies.”

Even so, for approximately the next six months Faber thinks the global economy will probably do okay, but longer out enormous problems will emerge, citing growing deficits.

Actual Marc Faber interview below.

Gold Prices Today Roar Back, Pushing Past $1,400

It's been a while since gold has made a move, but with the drop of the U.S. dollar today reminding investors of the precarious situation the economy is in and misguided policies of the Federal Reserve being the major culprit, gold prices today have soared past the $1,400 an ounce mark.

Strong Christmas sales also could be part of the story, as it appears there may have been less need to discount, which would have helped prices, but also reminding investors of the inflation beast waiting out there.

As of 12:00 PM EST, spot gold was up $20.90, reaching $14.05 an ounce. We'll see if there is the typical sell-off after noon as traders take some quick profits.

Gold for February delivery soared $18.30 to $1,400.70 an ounce at the Comex division of the New York Mercantile Exchange.

Gold Prices Today Rise on Bernanke's QE Increase Talk

Early in the trading session gold prices surged on the comments made by Federal Reserve chairman Ben Bernanke that he was open to increasing the $600 billion the central bank has already committed to injecting into the economy.

The already-applied $1.7 trillion has done nothing to create jobs, so it's hard to know why Bernanke would institute an even larger amount of money to waste and throw away, while ultimately created a huge increase in inflation.

Gold prices have pulled back right after noon, as usual, when prices skyrocket quickly, as traders and speculators take advantage of the quick jump.

Long term though, every time Bernanke asserts he's going to increase the money supply, it's good news for gold investors, as it's a prelude, over the long term, for gold prices to continue to soar, which they will for some time.

Gold prices went slightly negative after traders sold, with spot gold down to $1,414.40 an ounce, dropping $0.10 as of 1:30 PM EDT.

Gold Prices Bursting or Correcting?

The usual speculation when any asset class makes a wide swing is part of gold now, as gold prices are in the midst of a huge downward move, and has generated questions on whether or not gold is correcting or it's in the middle of a bubble bursting.

Anyone familiar with gold for a long period of time knows this is nothing more than a correction, as the elements surrounding a bubble haven't yet emerged, and gold prices have a long way to go before they run their course, although it is a good lesson in what factors will eventually bring gold prices back to earth.

One of the major things ultimately stopping the rise of gold prices will be measures put in place to combat inflation: increasing interest rates.

That alone won't completely stop it if other major factors are driving gold prices up, but it would definitely slow it down, and if implemented in most, if not all, major economies, could have a dramatic effect.

That isn't going to happen any time soon though, as the U.S. isn't even close to thinking of raising interest rates in the current economic climate.

Even if China is to increase interest rates like South Korea did on Monday, that won't be enough to pull down gold in the long term, even though it would push gold prices down immediately and give the appearance of a bubble bursting.

Another thing driving gold prices down down, in conjunction with interest rate concerns, is the temporary strengthening of the U.S. dollar. That's all related to the weakened euro because of the renewed focus on the European sovereign debt crisis, which continues to stubbornly hang on.

After the EU bluffs its way through that or throws a bailout bone to Ireland, that will be considered taken care of, even though as Greece had shown yesterday, as it appears there is still corruption in the process, as Greece said they had underestimated the size of their deficit.

Greece isn't exactly so big that working out how big of a deficit they have should be that difficult. They're obviously understating things in hopes of stealing more money from the region to support their socialist practices via unsustainable entitlement programs.

In the end, there hasn't been much that has changed to justify the typical ignorant conclusions, and wishful thinking by some, that gold has ended its historical run. It isn't even close to being the case.

The U.S. dollar will continue its collapse in light of the inflationary policies of the Federal Reserve, the euro isn't considered that important any longer by the international community, physical demand for gold continues to rise, and of course, it's still the best place for safety in the turbulent economic times we live in, which are far from turning around at all.

What may happen in the near term with gold is it'll be much more volatile than usual until the decisions - by Asian countries in particular - as to raising their interest rates to combat inflation come about.

That appears to be priced already into the fall in gold prices, although I think the China factor will be the most devastating impact in the near term.

Once that's over with, gold will resume its assent with little in the way to stop it.

Sarah Palin Tells Bernanke "Cease and Desist" from QE2

Citing the hyperinflation experienced by Germany in the early part of the 20th century, Sarah Palin took aim at Ben Bernanke and the Federal Reserve, saying "maybe it's time for Chairman Bernanke to cease and desist," from printing more money and inflating the money supply through acquiring more government debt, "When Germany, a country that knows a thing or two about the dangers of inflation, warns us to think again," she said.

Palin rightly noted there's no certainty the printing of money will work, and I would add more strongly: it won't work. What about the abysmal failure of the first round of quantitative easing doesn't Bernanke or the Federal Reserve understand?

"We don't want temporary, artificial economic growth bought at the expense of permanently higher inflation which will erode the value of our incomes and our savings," concluded Palin speaking to the Specialty Tools and Fasteners Distributors Association.

Again, last time the so-called stimulus failed to do anything, but the debt is still owed, and no jobs created.

That is proven by the fact when the gimmicks and money that actually went into the economy ended, the economy reverted back to what it really was: a disaster.

Or, it simply revealed itself for being as weak and anemic as it had always been. And even with the hundreds of billions spent, no jobs were created whatsoever, other than the, for the most part, temporary government jobs.

The Federal Reserve is under increasing pressure as Americans slowly but surely understand the devastating and unchecked institution this is, and how they control the quality of their financial lives.

The genie is out of the bottle, and there's no putting it back. Slowly we'll see this out-of-control institution weakened, and hopefully, ended.

Until then, chiseling away at the edges by people like Sarah Palin is a good way to keep in front of the American people the carnage the Fed creates through its actions.

Gold prices will continue to benefit from the horrid policies of the Fed, which seem to be committed to printing money until by what they consider the power of their actions can push the economy into growth.

When the economy recovers, we all need to know it's not from the Federal Reserve, but in spite of it.

Gold Prices Today Blow Past $1,400

For the first time spot gold prices today have soared past the $1,400 an ounce mark as economic conditions and economic decisions by the government and Federal Reserve continue to feed the gold price beast, which isn't going to change for some time.

The latest is of course the decision by the Federal Reserve to print another $600 billion to acquire government bonds over the next 6 months.

That will push up inflation, which Fed chairman Ben Bernanke has said is part of his goal. Interest rates will also be held where they are, helping to support goal, along with other elements.

Also a factor is the falling price of the U.S. dollar, which is largely the consequence of U.S. monetary policy as well, which will continue top plummet as more and more money is printed.

Even though called "quantitative easing," that's just a new description of the old phrase of printing money, or inflating. It's just being used by the Federal Reserve in an attempt to cover over the consequences of what happens when they implement these policies and actions.

There will continue to be corrections on the way for gold prices, but there is little, if anything, to stand in the way of it continuing its upward run, even if a correction ends up being a major one at some time.

Gold prices had reached over $1,402 so far today.