Advertise | Bookmark | Contact Us | E-Mail List |  | Update Page | 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page >> News >> Story  Disclaimer 
Latest Headlines

SSR Mining begins drilling at Eagle Plains (TSX-V: EPL) Fisher Gold Property
By: Nicholas LePan,

Worried About Rising Rates? I Believe this Strategy Could Be the Answer
By: Frank Holmes

Is It The Trade War Threats Or Extreme Overvaluation?
By: Dave Kranzler

GoldSeek Radio Nugget: Peter Schiff and Chris Waltzek

When Is Three Better for Gold Than Four?
By: Arkadiusz Sieron

Mining Gold and Silver From Bombs
By: Rory Hall

Golden Arrow Starts Drilling at Antofalla Silver-Gold-Base Metal Project, Argentina
By: Golden Arrow Resources Corporation

Gold +1.8%, Silver +2.5% As Fed Increases Rates And Trade War Looms
By: GoldCore

Gold Seeker Closing Report: Gold and Silver Gain Roughly 2% After Fed
By: Chris Mullen, Gold Seeker Report

Ira Epstein's Metals Video 3 21 2018
By: Ira Epstein


GoldSeek Web

Gold: Sound & Fury… But What’s It All Mean?

 -- Published: Tuesday, 3 February 2015 | Print  | Disqus 

By Jeffrey Nichols, Senior Economic Advisor to Rosland Capital

Gold-price volatility so far this year has been a reflection of short-term speculative activity by a relatively small group of hedge-funds and other institutional traders taking relatively large positions in “paper” markets.  


In paper markets, no physical gold actually changes hands.  Instead, trading of futures and forward contracts, as well as IOUs between large dealers and traders, governs much of the short-term day-to-day (and even more so much of the intraday) price fluctuations.  


Meanwhile, “physical" demand continues to grow over time — with buying from the gold-friendly Asian markets and from a number of central banks continuing apace.  While total global physical demand may be up in one quarter and down in the next, its long-term trend continues inexorably higher thanks to rising personal incomes and growing middle classes in China, India, and elsewhere in the region.  


However, it is important to remember, much of the recent "sound and fury” signifies little with respect to the long-term multi-year outlook for the yellow metal. 


So far this year, despite its recent losses, gold could continue to outshine returns on U.S. and global stock markets.  If gold’s relative strength vis-a-vis equities continues in the weeks and months ahead, fund managers will begin shedding equity holdings for both “paper” gold and some (i.e. central banks as well as retail investors) will go for the real thing, “physical” bullion.  


Indeed, in recent weeks, we have seen sizable growth in gold ETF holdings presumably by a few hedge funds restoring positions taken up prior to the September 2011 all-time gold-price high. This could be a sign of things to come.  


This year’s gold-price volatility — both up and down — has largely been a reflection of speculative activity triggered by a series of market developments: 

  • First, the uncoupling of the Swiss franc from its peg with the euro and its subsequent sharp appreciation against virtually all currencies — including even the U.S. dollar and Chinese yuan, produced a sharp rally in gold.  
  • Next, fueling more bullishness for gold, came the announcement of Quantitative Easing (QE) by the European Central Bank, following in the Fed’s footsteps, raising anxiety among traders over how this would “pan out” for the European experiment with a single currency — and its ultimate inflationary consequences.  
  • This was followed by rather hawkish news from the Federal Reserve, raising expectations of an early rise in interest rates — and sending gold prices sharply lower.  
  • Finally, this past Friday’s news that economic growth in the last quarter of 2014 (as indicated by the downward revision in U.S. Gross Domestic Product for the fourth quarter) was lower than financial markets heretofore believed sent gold prices quickly higher, while Wall Street took a bath.  

Most gold analysts at the major banks and brokerage firms, along with much of the financial press, expect the metal’s price will likely average somewhere in the $1100 to $1200 range with a possible low near $1180.


I’m considerably much more bullish than the consensus: Stock market volatility, especially on the downside, attracts bullish long-term gold investors and short-term speculators . . . and this could very well be the fuel that sends gold much higher this year and beyond.  


About Rosland Capital

Rosland Capital LLC is a leading precious metal asset firm based in Santa Monica, California that buys, sells, and trades all the popular forms of gold, silver, platinum, palladium and other precious metals. Founded in 2008, Rosland Capital strives to educate the public on the benefits of buying gold, numismatic gold coins, silver, platinum, palladium, and other precious metals. For more information please visit www.roslandcapital.comFollow Rosland Capital on Twitter for company updates and industry news


About Jeffrey Nichols

Jeffrey Nichols, Managing Director of American Precious Metals Advisors and Senior Economic Advisor to Rosland Capital, has been a leading precious metals economist for over 25 years. His clients have included central banks, mining companies, national mints, investment funds, trading firms, jewelry manufacturers and others with an interest in precious metals markets. 

| Digg This Article
 -- Published: Tuesday, 3 February 2015 | E-Mail  | Print  | Source:

comments powered by Disqus


Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to >> Story

E-mail Page  | Print  | Disclaimer 

© 1995 - 2017 Supports

©, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer

The views contained here may not represent the views of, its affiliates or advertisers. makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of, is strictly prohibited. In no event shall or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.