The Diwali holiday traditions in India are often marked by healthy gold purchases and increased use of the precious metal. The demand that India typically holds this time of year often offers a boost for gold prices, as citizens and jewelers across the country scoop up the commodity left and right. This year’s Diwali season, however, painted a much different picture as purchases and interest in the metal were quite muted [for more gold news and analysis subscribe to our free newsletter].
Gold has been one of the most polarizing assets of the past decade as it enjoyed a rare 12-year bull run. Barring a borderline miracle, it looks like gold will snap its winning streak in 2013 as the precious metal has hit a wall and has failed to find any kind of positive momentum. While the yellow commodity has been sputtering for months, a number of investors have been holding onto their positions, growing more frustrated by the day as the metal has shown little signs of turning around [for more gold news and analysis subscribe to our free newsletter].
While many commodity producers have reported better-than-expected third quarter results, particularly oil and gas companies, several firms have been missing the mark, citing lower demand and lower commodity prices as significant detriments to growth. Last week, Peabody Energy Corp (BTU), Halliburton (HAL), ConocoPhillips (COP), and Exxon Mobil (XOM) managed to beat analyst estimates. Meanwhile, El Paso Pipeline Partners (EPB), Dow Chemical (DOW), and Chevron Corporation (CVX) missed expectations [for more commodity news and analysis subscribe to our free newsletter].
On Wednesday, Caterpillar (CAT)–one of the biggest manufacturers of construction and mining equipment–posted lower-than-expected quarterly results and cut its full year forecast. The bellwether cited weak demand from its mining customers, its most profitable product category, as the primary source of Caterpillar’s sour quarter. In 2014, Caterpillar estimates revenue will be essentially flat to +/-5% compared to 2013. For the year, the company now expects revenues to come in around $55 billion versus the previously forecasted $58 billion figure [for more commodity news and analysis subscribe to our free newsletter].
Peter Schiff, CEO and Chief Global Strategist of Euro Pacific Capital, has long been a major presence in the precious metals industry. We had the chance to sit down with Peter to discuss silver, gold and his new fund that debuted earlier this year.
Gold has been steadily declining for the past year, as the precious metal looks like it will finally end its 12-year bull run. Part of its demise stemmed from equities rallying, causing a major increase in risk appetite and an asset class shift for many. Others stipulate that it is simply a natural correction preceding a run higher. Lately, however, gold has been feeling pressure from India as the emerging economy has been frustrating traders around the world [for more gold news and analysis subscribe to our free newsletter].
An event several years in the making could be just days away. For some time now, the Fed has been debating whether or not it should limit big banks and their participation in the commodities markets. The debate stemmed from a number of accusations of market manipulation for profit, though most of the institutions on the chopping block have maintained their innocence. The decision is expected to fall sometime in the next month and could be a welcomed change for traders [for more commodity news and analysis subscribe to our free newsletter].
Gold has been at the center of investor attention since soaring to historical highs in the latter half of 2011. Since then, however, the metal has taken a tumble, leading many to speculate when it would hit its bottom and when it was time to buy back in. Everyone from Jim Rogers to Peter Schiff had their predictions of where gold was headed and just how low it would go, but the fundamentals for the metal seem to be suggesting it is on the cusp of a healthy breakout [for more gold news and analysis subscribe to our free newsletter].
Stock market bulls have eased off the throttle a bit in recent days as last week’s lackluster employment report reminded investors that while the housing market may have turned the corner, the labor market recovery remains anemic. To top it off, Fed Dallas official Fisher reminded investors in a speech on Monday that policymakers will need to scale back on bond repurchases because it is unhealthy for markets to keep rising on the notion that stimulus will always be readily available [for more commodity futures news and analysis subscribe to our free newsletter]. On the commodity front, with the exception of crude oil, metals and agriculture prices remain largely suppressed across the board thanks to a strong U.S. dollar and lackluster growth in China. The recent rate cut by the Reserve Bank of Australia plays a major role in the world of precious metals for two reasons.
2013′s second quarter earnings season was perhaps not what many analysts had expected, as companies across all sectors reported both hits and misses. In the commodity space, Alcoa had set the tone for the start of the season, beating estimates despite falling aluminum prices. And while other commodity stocks also managed to post better-than-expected results, some showed signs of weakness from this year’s commodity slump [for more commodity news and analysis subscribe to our free newsletter].