Segment 1: Tax Tales SEGMENT BEGINS AT 00:37 Economist Jerry Robinson welcomes author, financial writer, and stand-up comedian Dominic Frisby for an enjoyable, stimulating discussion of his book, Daylight Robbery, as well as the role of taxes in history and the...
In this 23rd episode of the Mid-Week Precious Metals Market Update, Tom Cloud discusses some of the technicals and fundamentals that are impacting gold and silver prices with exclusive early access for FTM Insiders.
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Audio Transcript Below
This is Tom Cloud with the Midweek Precious Metals Market Update.
Today, on Wednesday, the Federal Reserve finally made their much anticipated announcement that they were going to taper approximately $10 billion a month off of the $85 billion they were buying mortgage backed securities with. But, if you read the rest of the story, they also announced that they were also going to increase the purchasing of treasury bills. Now, anyone out there that’s listening to me or has followed our subject matter for any time realizes this is really an increase in purchases because they’re purchasing a lot more treasuries than they’re putting into mortgage backed securities. No one in the world, as I talk to my contacts in China and Europe in particular, is buying US treasuries.
We’re on the verge of seeing interest rates getting ready to head significantly higher in 2014, and all kinds of charts being broken on bonds. You’re going to see money moving from bonds, and money that has been invested in real estate is now going to move to precious metals. I feel very sure about that when I know what kind of volume and what kind of talk is going on right now among major money. So, this was really anticipated and absolutely a fact so gold and silver did drop a little bit late in the afternoon after the announcement. but it’s something we feel is very healthy.
Don’t look for a lot of volume the rest of the year. We’ll see low volume days and gold and silver should stay fairly neutral. Once again, we’re looking for a very good 2014. The forecasts are starting to come in from the people that forecast it, and the only bank last year that forecast that gold was going to go down in 2013 is now talking about it being a 20% up year for gold next year.
The one thing I want to just keep reiterating is that palladium is really sizing up. The figures coming out on palladium are incredible. In fact, Kitco ran an article on all the forecasts on palladium by seven different major banks, and in forecasting terms, they had palladium going up a minimum of 10% to over 30% for the next year 2014.
We’ve seen a substantial increase in our palladium volume, and I think we will continue to see the hedge fund managers and institutional investors move in as they see palladium continue to be the number one metal for two consecutive years. I would be very surprised if it didn’t end up number one in 2014. So, it’s a great time to buy palladium. It was affected a little bit by the Fed announcement, but not much. It stands as probably the best value in the precious metals market right now, and platinum also looks like it’s going to have a good year in 2014.
So, we do look for a rebound in the metals, gold and silver, that actually went down in 2013. But, it could be late in the first quarter before we start seeing all the interest rate increases. The money put in to buy treasuries is going to drive yields up, and the money will be exiting the treasury market. It’s going to be an interesting first quarter. Over all, we’re looking for a tremendous 2014.
Just two things I’ve mentioned several times. If you have rare coins, I really, really urge you to get out of those as soon as you possibly can, and get into the bullion coins and bars.
Also, it looks like there could be some problems with your IRA. If you want to get into precious metals, and you don’t already have a precious metals IRA, then I would be happy to discuss that with you, also. You can reach me at 800-247-2812.
We look for a very interesting 2014, and we’ll spend a lot more time the first part of the year talking about what’s going on in China with the industrial and commercial business.
Lastly, before closing, we did get some good news today besides the news on the tapering from the Federal Reserve. In the Indian government, after raising taxes on gold from 4% to 10% in 2013, they saw their tax revenues actually go down because people were buying gold that was being smuggled in. So, the government got smart and dropped those taxes to 6%, and may even go lower before 2014 starts. So, for those that didn’t have sources to buy gold that was coming in, this will put a lot of people back in the gold market. We did have a big drop in gold purchases in India during 2013. So, this is another very good thing going forward into 2014.
With this week’s midweek precious metals market update, this is Tom Cloud signing out.
Want to speak with Tom Cloud? Call him direct at (800) 247-2812