Stock market is not "financial nirvana," just another bubble about to burst, argues Bill Fleckenstein
"We've got worldwide interest rates at zero for like five years and we're cheering a quarter of GDP growth that was a rounding error and we're only excited because all this free money has boosted stocks to the moon, which has only increased the risk, so this is one giant false premise," Fleckenstein Capital chief Bill Fleckenstein tells Fox Business in a May 23 interview.
"I personally would rather buy gold at these prices, especially if I had a portfolio full of stocks and bonds and I was afraid of lightening up, which many people are. ... Gold will protect you over time from the folks at the central bank that think that monetizing government debt and debasing the currency will lead to a happy ending. It will not, OK? The same people that brought you bubbles and the crashes that came after them are going to bring you another one. It's already starting in Japan. ... Gold ought to protect you from that, especially since it's been hit so hard in part because people think that we've got a financial nirvana outcome that has been orchestrated by the central banks, which is bull."
"All-time most bearish sentiment" will send prices "to the upside," he says
"I don't think there's enough evidence that the secular bull market in gold is over," Heritage Capital exec Paul Schatz tells Yahoo! Finance's "Breakout" show.
"It began in '01, and the bear market lasted from essentially 1980 all the way to 2001, yet this is probably half to three-quarters of the way done. Do you remember '08? Gold collapsed, from roughly $900 down to $680. Everybody came out of the woodwork: 'The bull market is over -- it's over, it's over, it's over.' And then just like that a year later gold's up 70%. I think it's way too early. Real rates are still negative. That's a tailwind for gold. Yes, I heard what Bernanke said. That's fine. I do not think yet we can conclude the bull market's over. There's a lot of constructive things going on with gold. You still have an incredible situation in Japan, which hasn't played out in gold yet. I think in the euro, they haven't even started to print money yet. And so there is still a pretty good tailwind for gold. And I would subscribe that at some point before the secular bull market in gold ends, gold's going to go back to being a fear trade rather than a risk-on trade. ... The sentiment right now in gold is worse, more negative from 'mom and pop,' from the average person, than it was when gold was $235 an ounce. This is all-time most bearish sentiment ever in gold. You can't find any time where people were more negative on gold. So if you believe like I do that the masses are always wrong at extremes, you're in that extreme zone. ... If you give it a little room, I think the next big move in gold is to the upside."
With gold prices dropping under $1,400 and silver hovering around $22, bullion coins have lost some luster. Not so for collector coins.
"Collector coins are shining because the demand has remained constant for many years and they are no longer being overshadowed by bullion-related material," said Harry Miller of Miller's Mint.
"Also, many people have come to the realization that negative metals do not necessarily affect scarce coins while positive metals do because they provide more liquidity in the market."
The lower prices for precious metals have a good impact on numismatic coins, said Steven Musil, a dealer in Kearney, Neb.
"While gold and silver prices were going gangbusters, numismatic material suffered some," Musil said. "Now I think it's just the opposite. It's time for collector coins to shine." ...
"Premium quality raw or CAC-stickered coins bring substantial premiums," Miller said.
Bank of America researcher argues that Fed can't cut QE without hurting equities
"In the short run you can argue if interest rates go up from here, there's no doubt gold is going to go down. But I think this market is very fickle, it's very QE dependent," Francisco Blanch of Bank of America Merrill Lynch Global Research says in a May 23 CNBC interview.
"Obviously if the Fed goes and removes quantitative easing, gold's going to have a bad time ahead. But can they really do that? And I think the Japanese market has sent a big warning. If you start to doubt QE, if the data comes back, you're going to have to keep printing or even put more money into a system, right? And that's kind of the support point for gold. ... The short- run risks are probably to the downside. But I think in the medium term, we might realize that we need QE more than we realize. ... The bounce in gold overnight shows that if we have a bad equity market movement, whether it's Japan or somewhere else, investors are going to get back to gold. And I think that's the main point we've learned over the last 24 hours."
Bullion "will start climbing again from the fourth quarter," says exchange chief
Trading in gold using the Chinese currency has tripled in Hong Kong this year as the yuan's rally to a 19-year high helps limit risks for jewelers. ...
"Yuan appreciation helps as jewelers who receive yuan from clients become more willing to buy gold bars in the currency to minimize exchange-rate risks," Haywood Cheung, president of the society, said in a May 15 interview in Hong Kong. ...
"Although yuan gold trading volume has exceeded targets, I'm not satisfied," said Cheung. "I wish the government could put more efforts in promoting commodity products denominated in yuan, instead of focusing so much on bonds and stocks." ...
"At around $1,300, there's still some room for correction," Cheung said. "But I see very strong support between $1,280 and $1,300. The sentiment is still not one of recovery, but I believe gold prices will start climbing again from the fourth quarter."
