Jeffrey Nichols, Senior Economic Advisor to Rosland Capital had the following comments on the current gold-market situation and outlook:

The past few weeks have been trying times for gold investors. Just when it looked like gold was set to break out into higher territory, the market shifted into reverse, leaving many investors and analysts wondering what was going on. To put some numbers on it, gold has now dropped some eight percent from its March 17^th six-month high and is now hovering just above the technically significant $1280 support level.

We’ve never put much faith in short-term forecasts, preferring instead to focus our attention on the long term where gold’s own supply/demand fundamentals and global macroeconomic trends rule the market’s price-setting function. Indeed, this explains our multi-year bullishness despite gold’s failure to satisfy our immediate desires.

However, we can look at the market retrospectively for insight into gold’s recently disappointing performance.

A few weeks ago – as gold prices were beginning to soften – I wrote in these Rosland Gold Commentaries that two recent developments had “shifted trader expectations and triggered the recent round of selling . . . First, Russia’s annexation of Crimea failed to provoke any serious response from the West . . . Second, expectations of future U.S. Federal Reserve policy also shifted . . . [with] the suggestion from Fed Chair Janet Yellen that the central bank might be raising short-term interest rates as early as mid-2015.”

To be sure, these developments played a key role. But, now, looking back, it appears there was more to gold’s mid-course correction than previously thought.

Ukraine Gold Reserves

What has not even been mentioned, amid all the sturm und drang over the Ukraine, is the possibility that the country’s central bank, the National Bank of Ukraine, has sold or, more likely, collateralized its official gold reserves, which last we looked were some 42 tons (about 1.4 million ounces).

On the brink of financial insolvency, it seems unlikely that Ukraine’s official gold reserves would not have been mobilized. Even if collateralized rather than sold, the lender would have probably sold the gold with the intention of repurchasing the metal at the time of repayment by the borrower, if that were ever to occur. However, for the term of the loan, the collateralized gold might continue to be reported by the central bank as official reserves.

Regardless, the sale of Ukraine’s gold might have been enough to stall the yellow metal’s ascent and trigger still more technical selling as key chart points were breached. In any event, this would be a one-off event without any continuing bearish influence on the market price.

Interest Rates – A Reversal of Expectations

Over the past few weeks, the financial market’s assessment of prospective U.S. monetary policy has continued to weigh heavily on the price of gold. It all began in mid-March when Fed Chair Janet Yellen suggested U.S. short-term interest rates might begin their next ascent in mid-2015. Contributing to expectations of higher interest rates next year has been the recent improvement in a number of U.S. economic indicators, suggesting the recovery is gathering sufficient momentum so that the Fed can continue its policy of tapering, in other words weaning the bond markets from a continuing infusion of liquidity.

As a rule, rising interest rates are a negative for gold, representing the “opportunity cost” for holding the metal . . . and although higher rates are still at least a year away, expectations alone have been enough to weigh on today’s price.

In my view, the economy remains anemic – and will continue to underperform for a very long time to come, suffering from what some economists have labeled “secular stagnation.” The household sector cannot fund a recovery in consumer spending because it remains overly indebted and underemployed while much needed government spending is politically impossible.

It will soon become apparent that the recent statistical improvement is nothing more than a bounce back from the past winter’s weather-induced economic chill. As this pessimistic view of economic prospects takes hold, the markets will re-assess expectations of Fed policy – and this should be a big plus for gold.

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 investing in gold bullion, numismatic gold coins, silver, platinum, palladium, and other precious metals. Rosland also helps people who wish to protect their wealth by including a gold or precious metal-backed IRA in their asset portfolio.

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.

NEW YORK (May 8, 2014) – Jeffrey Nichols, Senior Economic Advisor to Rosland Capital, had the following comments:

Despite improved economic indicators and optimism among Fed policymakers, in all truth, the economy remains anemic – and will continue to underperform for a very long time to come, suffering from what some economists have labeled “secular stagnation.” The latest economic data show a bounce back from the harsh winter interruption in activity – not an improvement in the underlying fundamentals as wishful thinkers believe.

The household sector simply cannot fund a recovery in consumer spending nor in home sales and new construction – prerequisites for a robust economy – because it remains overly indebted, underemployed and rightfully cautious. Meanwhile, much needed public spending is politically impossible.

Factor in a likely correction – or, worse yet, a crash – on Wall Street and we still have more juice for a resumption in gold’s long-term bull market.

Equity prices have been inflated by central bank monetary creation, not by a fundamentally healthy economy. The broad market indexes (like the S&P 500) are at or near record highs, not because most companies have moved higher but because a small few that dominate the indexes are up sharply.

Long-lasting bull markets in equities have historically been a reflection of long economic expansions, bringing economic benefits to a large swath of the population – and they have typically undergone occasional mild corrections. Now, we have stock markets rising – not because the underlying economy is healthy, but because it’s not – and the Fed, in response, has been printing money that finds its way to Wall Street.

Moreover, this bull market in equities has not been tempered by periodic corrections as we’ve seen historically, leaving many investors today with overvalued portfolios. Not having benefitted from occasional corrections, the odds now favor a severe correction, or even an outright bear market in equities.

As noted above, the recent statistical improvement in the U.S. economy is just a bounce back from the past winter’s weather-induced economic chill. As a more realistic view of economic prospects takes hold, the financial markets will re-assess expectations of Fed policy – and this could be the catalyst triggering a resumption of gold’s long-term bull market.

Sooner or later, equities are due for a setback – perhaps mild, more likely not so gentle. Either way, the competition for investment funds between equities and gold – a competition that equities have won in recent years – will shift increasingly toward bullion.

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 investing in gold bullion, numismatic gold coins, silver, platinum, palladium and other precious metals. Rosland also helps people who wish to protect their wealth by including a gold or precious metal-backed IRA in their asset portfolio.

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.

Rosland Capital participated in the New Directions for Veterans’ 4th Annual “Walk for Warriors” 5K this past Memorial Day with a team made up of more than 20 employees. Team Rosland Capital was the top fundraising group at the event, raising more than $10,000 in an effort to improve the quality of life of our nation’s veterans.

Held Monday, May 26 on the Veterans’ Affairs Campus in West Los Angeles, the 5K event raised money for New Directions for Veterans, a nonprofit organization dedicated to ending veteran homelessness by offering services, such as transitional and permanent housing, individual and group therapy and job hunt assistance for service members post-deployment.

5K participant and Rosland Capital CEO Marin Aleksov was a proud supporter of the event. “Rosland Capital has always been a supporter of our veterans and is proud to assist in the efforts of New Directions,” Aleksov said. The Memorial Day walk and run was well received by participants and veterans alike,as attention focused on the true meaning of the day – honoring the sacrifice of our servicemen and women.

Today, there are more than 6,000 homeless veterans in the Los Angeles area alone. All donations from Rosland Capital and other event participants will directly benefit the efforts of New Directions to drastically decrease that number and allow our veterans to achieve the quality of life they deserve.

Media Coverage
Rosland Capital: Top Donor for “Walk for Warriors”
Team Rosland Capital Walks for Warriors

Rosland Capital’s CEO, Marin Aleksov, recently appeared on TheStreet with Joe Deaux to discuss gold prices as they relate to the situation in the Ukraine. Marin told Mr. Deaux that the easing of tensions in that region reduces the fear trade for gold, which traders often buy during times of geopolitical uncertainties. Marin notes that the situation is not over, and that further fluctuations in gold prices could result as more events between Ukraine and Russia unfold.

For more, connect with Marin Aleksov on LinkedIn or follow Rosland Capital on Twitter.

NEW YORK (June 4, 2014) – Jeffrey Nichols, Senior Economic Advisor to Rosland Capital, had the following comments:

I’m just back from a two-week vacation from the gold market. In the interim much has changed – especially the metal’s price, which has fallen some $65 to $75 an ounce. That’s more than five percent – but no reason to despair!

While the price has weakened, the metal’s fundamentals, fundamentals we have discussed in past reports, have continued to improve, so much so that some bounce-back now seems likely – with bigger gains due later this year.

Golden Drivers

Our optimism about gold’s long-term prospects is, in part, a reflection of our pessimism on long-term U.S. and global economic prospects. But even if we are wrong on the economy, and we hope we are, gold will still move much higher in the years ahead on the strength of long-term demand from the twin Asian tigers – China and India.

These gold-market drivers are likely to support a significant rebound in the metal’s price later this year. One timely factor especially worth highlighting is Indian gold demand, as it is pregnant with possibility. With a new government in New Delhi, the country’s restrictive gold import policies will almost certainly be relaxed in the weeks or months ahead, leading to a surge in demand ahead of this autumn’s festival season, traditionally a time of great gold interest across the sub-continent. Remember, until last year, India was the world’s largest gold-consuming market when a surge in Chinese demand and India’s own restrictive gold-import policies reduced it to second place in the gold world.

Russia in the Wings

Another possible short-term boost for gold could come from a further aggressive gambit by Russia on the East European chessboard. Right now, the Ukraine situation is neutral toward gold. Whatever price gains were registered at the time of Russia’s annexation of Crimea have largely dissipated and no longer result in any gold-price premium.

For now, Russia seems less threatening to Ukraine’s territorial integrity, even in the areas culturally and linguistically aligned with the Russian bear. But this could change quickly – and, if it does, expect gold prices to move higher. In other words, any further relaxation in tensions in the region is unlikely to weigh on gold’s price – but a worsening of tensions would, at least temporarily, raise safe-haven demand and benefit the price.

The Macro Economy – Bullish for Gold

We believe the macro-economy in the more advanced industrial nations will continue to be constrained by insufficient demand for goods and services – especially in the household and public sectors. Moreover, the latter – which could do much to bolster growth – continues to pursue inappropriate and misguided fiscal policies in the mistaken belief among some that cutting government spending will encourage private spending.

Instead, without any help from fiscal therapy (which would be more appropriate and more successful in ameliorating the pain of persistently high unemployment, especially when accounting for discouraged workers, who are dropping out of the labor force) the burden of stimulating the economy has fallen on the Federal Reserve and other major central banks.

Monetary policymakers – in expectation of a speedier recovery and a return to pre-2008 rates of economic growth – are already adopting less accommodative policies and have signaled a rise in short-term interest rates could begin by mid-2015. This situation, these expectations, have indeed weighed heavily on the gold market in past weeks.

We believe financial market expectations built on these assumptions are overly optimistic . . . and this will be reflected in a variety of disappointing economic indicators over the next few months. As financial markets and central bankers at the Fed adjust to the reality we expect – that is the reality of persistently disappointing economic growth, gold investors will be major beneficiaries.

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 bullion, numismatic gold coins, silver, platinum, palladium, and other precious metals. Rosland also helps people who wish to protect their wealth by including a gold or precious metal-backed IRA in their asset portfolio. Click here to request more information.

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.

Rosland Capital’s Senior Economic Advisor, Jeffrey Nichols, was interviewed on TheStreet with Joe Deaux on Thursday, discussing the European Central Bank cutting its benchmark interest rate. Click here to see the video.

For more, follow Jeffrey Nichols on Twitter or like Rosland Capital on Facebook.

Rosland Capital, a leading precious metals asset firm, today announced the opening of their first overseas office in the United Kingdom. Opening July 7, Rosland’s London office will include a staff of 12 UK-based professionals.

The move to open an office in the United Kingdom coincides with an uptick in interest in precious metals ownership in the European market. The office will serve as a beachhead for wider expansion later in the European Union, said Marin Aleksov, chief executive officer of Rosland Capital and a 20-year veteran of the precious metals industry.

”We’re in the business of helping people get their hands on gold and silver, and we see great opportunity in the UK, where precious metals and coins have had much lower visibility in the past,’’ Aleksov said. “We plan to follow the same successful approach pioneered in the U.S., providing people with experience-backed knowledge that inspires confidence in their purchases, broadening their options and providing exemplary customer service.’’

Rosland Capital Group’s U.S. office, located in Santa Monica, Calif., has experienced strong growth since the company was founded in 2008. Rosland’s UK operations will leverage television advertising, backed by a strong online presence, to encourage inquiries from the public. Television advertising will start July 7 on multiple satellite channels.

“We’re quite excited about this important milestone in our growth,’’ Aleksov said. “In the process, we’re creating jobs in the UK, just as we continue to do as we expand in the US.”

Rosland very much appreciates the assistance and support it has received from both UK Trade & Investment, Los Angeles, and London & Partners, the Mayor of London’s business and promotional organization.

Rosland Capital’s expansion into the United Kingdom has been covered in a new article this week by the Los Angeles Business Journal. Written by James Rufus Koren, the piece explores the differences between the US and UK gold markets and how Rosland plans to be successful overseas. The article also includes quotes from Rosland Capital CEO Marin Aleksov. He told Koren that Rosland will sell all types of coins in the UK, with consumers likely being interested in modern and historic as well as commemorative coins.

Metal Broker Aims to Take Shine in British Market

NEW YORK (August 5, 2014) – Jeffrey Nichols, senior economic advisor to Rosland Capital, had the following comments:

We are soon entering a propitious period for gold in the annual calendar. Historically, prices have moved higher as gold traders and buyers returned from their summer holidays.

In reality, it has been the approaching Indian holiday, wedding, and agricultural harvest seasons that have boosted gold demand and supported higher prices in world markets as summer draws to a close.

Until last year, India was the largest consumer of gold in the world market, but thanks to the imposition of gold-import barriers by the Indian authorities and the surge in Chinese demand, China rose to the top spot and India trailed behind. Nevertheless, India remains a major player holding much sway over the world price.

With discouraging import duties and other anti-gold trade barriers still in place, it remains to be seen this year whether or not India will provide its usual seasonal boost to gold demand and prices in the world marketplace.

I expected India’s new government would move quickly to roll back the ten percent tax on gold imports and abolish other barriers to the gold trade, but so far, it has failed to provide any relief to bullion importers and the related jewelry and gemstone industries.

Relief will come sooner or later, perhaps even by September or October. Indian authorities now wish to discourage smugglers (who last year may have smuggled as much as 200 tons into the country) and to relieve the bullion, jewelry, and gem industries, an important political constituency that has been harmed by the restrictions on gold importation.

A rollback in import restrictions and a surge in Indian gold consumption, whenever it comes, could be sufficient to jog the world gold market into high gear, triggering resumption in the long-term gold-price upswing. In any event, with or without a rollback in India’s barriers to free trade in gold, demand for gold in that populous nation will be rising in the months ahead, offering support to the metal’s world price

About Rosland Capital

Rosland Capital LLC is a leading precious metal asset firm based in Santa Monica, Calif. 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 bullion, numismatic gold coins, silver, platinum, palladium, and other precious metals. Rosland also helps people who wish to protect their wealth by including a gold or precious metal-backed IRA in their asset portfolio. Subscribe to Rosland Capital on YouTube for more commercials and more information.

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.