This chart says it’s time to start selling gold – CNBC.com – CNBC

<!– –>



Traders who have ridden gold higher over the past few months might want to think about cashing out.

So far this year, gold has climbed 9 percent, nearly doubling the performance of the S&P 500. Still, the move comes after the metal gave back about 12 percent from the start of September through the end of 2016,

“We have another relief rally in gold,” Piper Jaffray technical analyst Craig Johnson said Monday on CNBC’s “Power Lunch.” “At best, I would say this rally runs out of steam 3 percent higher.”

Recently, gold has gotten a boost from a weakening U.S. dollar. Uncertainty over the future path of U.S. policy, spurred by President Donald Trump’s and congressional Republicans’ high-profile failure to repeal the Affordable Care Act, has also given the safe haven asset a boost.

But the optimism about gold may run short as it struggles to surpass a key level.

“We’re running into big overhead resistance here at $1,260,” Johnson said. “I would be selling into the strength on gold.”

Nick Colas, chief market strategist at Convergex, is of a similar mind.

“In a market with this little volatility, you’ve got to pick entry points very carefully, and at a one-month high, gold is overextended,” Colas said Monday on CNBC’s “Closing Bell.”

However, one strategist think that future political uncertainty could make the metal a better pick than equities.

The gold market is now being driven by “a tug of war between folks that are worried about reflation and inflation that drove the market higher, versus the ones that are pretty darn scared about the way things are shaping up around the world,” Max Wolff of 55 Capital said on “Closing Bell.” “I think the people who are scared probably have the upper informational hand. “

After all, beyond gold’s safe haven status, the potential for politics to drag on the economy could also reduce number of future Federal Reserve rate hikes. Since these rate increases tend to help the dollar, that would be good news for bullion.

“I like the product here,” Wolff added. “I think it probably grinds higher.”


On-Air Video




  • Trading Nation: Apple hits record high

    Gene Munster, managing partner at VC firm Loop Venture, and Ari Wald, Oppenheimer technician, discuss Apple’s stock with Brian Sullivan.




  • Trading Nation: Buy the bullion bounce?

    Max Wolff, 55 Capital Partners, and Craig Johnson, Piper Jaffray, take a look at where gold is headed with Brian Sullivan.




  • Trading Nation: Big bounce for the banks

    Ari Wald, Oppenheimer, and Chad Morganlander, Washington Crossing Advisors, discuss the moves in bank stocks with Brian Sullivan.



Host






“Power Lunch” Co-Anchor





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Diamond Industry’s Famous Hungry Crocodile Doesn’t Cut It – Bloomberg

The diamond industry’s most famous chart is the hungry crocodile, the ancient reptile’s jaws wide open, reflecting both a predicted shortage of gems and the inevitable price rises that will come with it.

The diamond industry’s famous ‘Hungry Crocodile’ chart presented by De Beers in 2014

Not only has this chart, which has been an industry staple for more than a decade and promoted by big miners like BHP Billiton Ltd., Rio Tinto Group and De Beers, never materialized, it oversimplifies the fact that the industry’s 15,000 different categories of diamonds are performing in very different ways.

That divergent trend has accelerated in the past year. Last month, a mine producing lower quality stones was shut due to a dip in prices, while top producer De Beers has been forced to offer unprecedented concessions to its customers. Both events show the chart is less relevant today than ever before.

“Miners have all used the open crocodile graph to justify their business case,” said Anish Aggarwal, a partner at Gemdax in Antwerp. “A greater degree of granularity is needed now to look at what the demand and supply looks like for each particular project.”

Over the past year, rough diamond prices have risen 8 percent. But that’s a very misleading guide if you’re producing a higher percentage of lower quality stones which have underperformed the wider market, with some categories of cheap diamonds falling as much as 20 percent.

Lower quality diamonds have been hit for various reasons — too much supply, lower profit margins in major cutting centers such as Surat in India, and Indian Prime Minister Narendra Modi’s fight against so-called black money which cut liquidity to the lower end of the market. The cheaper stones are also more at risk from the emergence of man-made gems.

In response, De Beers has had to offer concessions to buyers of lower quality stones in recent sales to support the market. At the same time, the company raised prices as much as 4 percent in its January sale for some higher quality goods, according to people familiar with the situation, exacerbating the spread.

Firestone Diamonds Ltd. said Tuesday that while the overall market remains difficult, prices for larger and better quality diamonds remain strong.

Ghagoo Shut

Gem Diamonds Ltd. last month said it was shutting its newly built Ghaghoo mine in Botswana, a producer of lower quality stones, saying prices had fallen a third to $142 a carat since 2015. In contrast, its Letseng mine sells diamonds at an average price of almost $2,000 a carat, the highest in the industry.

“In most commodities there’s a homogeneity; that doesn’t exist in diamonds,” said Clifford Elphick, chief executive office of Gem. “When you talk to investors about the thousands of different categories of diamonds you see their eyes glaze over. It’s just too complicated.”

Both Aggarwal and Elphick say the lower end of the diamond market is now rebounding and that category of stones won’t always underperform.

The diamond industry is heavily dependent on seven giant mines, all aging. While most mines produce a broad spectrum of diamonds they are anything but equal.

Rio Tinto’s Argyle mine in Australia is one of the world’s biggest and produced about 14 million carats last year, but the gems are among the world’s cheapest at about $20 a carat. Jwaneng, owned by De Beers and the world’s biggest mine, sits somewhere in the middle with production of about 12 million carats at an average price of about $250 a carat.

That means that too much of a miner’s valuation is driven by how cost effectively they produce the stones, rather than the demand for their production and how they can add value by marketing and selling their stones, Gemdax’s Aggarwal said.

“When you’re looking at a project you’re tempted to use a generic pricing model,” he said. “The one thing that’s missing is that the different segments of the diamond market are not being modeled.”

    State of the Art: Estate Jewelry – Forbes

    Deneuve Cartier Necklace

    Courtesy of Shreve & Co.

    Lab-grown diamonds are the new trend – azfamily.com 3TV | Phoenix Breaking News, Weather, Sport – AZFamily

    (MEREDITH/AP) —  This brilliant gem might be a little too heavy to balance on your fiancee’s ring finger, but who is going to turn down a diamond the size of a gull’s egg? This 118. 28 karat oval white diamond went on sale at Sotheby’s auction house in Hong Kong. It is the largest D color, flawless diamond ever to be sold at auction and it fetched well over 30 million US dollars.

    Another top gem being auctioned is this “pink star” diamond. The flawless, fancy pink stone is expected to fetch 60 million US dollars.

    Manufacturers of luxury goods are keen to be associated with other luxury items, and at the Geneva Motor Show this year Rolls-Royce unveiled its new crushed diamond paintwork for car owners who feel driving has lost its sparkle.

    In its most recent global report on the diamond industry, Bain and Company put the retail value of diamond jewelry at 60 billion US dollars. It said most of the demand is from the US, Western Europe and Japan, but demand is expected to be boosted by consumers in China and India. The allure of diamonds is showing no sign of fading.

    But until now, most of those diamonds have been mined from the earth, not grown in a laboratory. Lab-grown diamonds have tended to be used for industrial processes rather than jewelry. But a growing number of potential diamond buyers are demanding that their stones are ethically sourced and have not been used to finance conflict – so-called blood diamonds.

    These consumers are often younger and have the cash but not the desire to prop up industries where human rights have not been paramount.

    Andre Huaman and Priscilla Engeldinger are typical of the new demographic showing an interest in laboratory grown diamonds. Huaman works at a wealth management firm, Priscilla is a teacher. They live San Francisco and were not too fazed by the idea of traveling down to a Silicon Valley jeweler which used new tech advances to make their own diamonds.

    Endeldinger was already impressed with her fiancee’s previous gift of diamond earrings, so she says she was willing to keep an open mind about the provenance of her engagement ring.

    She says: “I was skeptical at first just kind of wondering what it was and once he explained it to me I was really comfortable with the idea and I think it’s actually better than a blood diamond, as Andre would say.”

    Ada Diamonds is the company that manufacturers these lab diamonds.

    The owners are a husband and wife team Jason Payne and Lindsay Reinsmith, and they stress their diamonds are anatomically identical to diamonds taken out of the earth.

    Huaman says ethical issues were paramount for him.

    “I think my concern about traditional mined diamonds was the fact that I had no idea, or ownership, or control about where those diamonds came from. We had no idea who in the world went through what to get this beautiful diamond, this beautiful rock on her finger and understanding the process of how lab grown diamonds and how the supply chain works made me feel much more comfortable about the ring that my fiancee is going to wear for the rest of our lives.”

    Ada Diamonds isn’t the only company producing diamonds in the lab, although not all labs use the same processes.

    The diamonds they produce have to be sent for independent verification to the same bodies that sanction the provenance and size of mined diamonds.

    Payne explains the process of ‘growing’ a diamond.

    “So you take carbon, you heat it up to you heat it up to fifteen hundred degrees Celcius and turn it into liquid carbon and you pressurize it to over a million PSI, or seventy thousand atmospheres of pressure. At that height of temperature liquid carbon slowly cools back down to a solid and at that height of pressure the solid form of carbon is a diamond. These diamonds are stronger, more pure and a higher quality crystal than the diamonds that are grown in the chaos beneath the earth below us.”

    Both Payne and Reinsmith believe their diamonds will become more marketable as the process becomes more widely understood.

    According to Reinsmith: “Right now laboratory grown diamonds make up about two percent of the overall fine jewelry market, however, Morgan Stanley predicts that this number can reach as much as 15 percent in just the next five years. So while it is currently a small part of the market as consumers learn about this product, and learn about its efficacy and learn about its benefits and its origins, they’re turning to it more and more.”

    A host of new uses is also being discovered for the diamonds, especially those that can be made to order more cost effectively according to Payne.

    He says: “Today they are used for surgical knives they are used for water purification, they’re used for the high powered lasers that are used to make electronic devices and to me, most importantly, these are the most thermally conductive material on earth.”

    In the past, the diamond trade in Western Africa was captured by insurgent warlords who would use the gems to finance conflicts and inflict many atrocities on the civilian population.

    As political instability and an escalation of violence in countries including Angola, Sierra Leone, Liberia and the Democratic Republic of Congo grew in the 1990s, the diamond industry’s reputation took a battering.

    The Kimberley Process was set up within the auspices of the United Nations to try to end the trade in conflict diamonds, but doubts still persist.

    Reinsmith says: “We often talk about the provenance of our diamonds being something that’s important to our clients. For a mined diamond a provenance might be unknown or might have a questionable origin. Does it come from a part of the world that contributes to conflict, or does it have unsustainable mining practices, because laboratory grown diamonds are guaranteed to not contribute to conflict and be sustainably grown.”

    It is currently cheaper to create a man-made diamond, but Reinsmith says consumer demand is pushing up prices:

    “For the very large and the very small diamonds the price differential tends to be around thirty percent less expensive for laboratory grown. However, for smaller stones in what we call the sweet spot of demand, that’s where the bulk of demand for engagement rings exists, between half to one and a half karats, the price differential is a little bit less because demand is outstripping the supply.”

    But despite the growing interest, it’s likely to be a long time before demand for lab-grown diamonds can rival the desire for stones born in the heat and pressure of the earth.

    Copyright 2017 Meredith Corporation / Associated Press. All rights reserved.

    This chart says it’s time to start selling gold – CNBC

    <!– –>



    Traders who have ridden gold higher over the past few months might want to think about cashing out.

    So far this year, gold has climbed 9 percent, nearly doubling the performance of the S&P 500. Still, the move comes after the metal gave back about 12 percent from the start of September through the end of 2016,

    “We have another relief rally in gold,” Piper Jaffray technical analyst Craig Johnson said Monday on CNBC’s “Power Lunch.” “At best, I would say this rally runs out of steam 3 percent higher.”

    Recently, gold has gotten a boost from a weakening U.S. dollar. Uncertainty over the future path of U.S. policy, spurred by President Donald Trump’s and congressional Republicans’ high-profile failure to repeal the Affordable Care Act, has also given the safe haven asset a boost.

    But the optimism about gold may run short as it struggles to surpass a key level.

    “We’re running into big overhead resistance here at $1,260,” Johnson said. “I would be selling into the strength on gold.”

    Nick Colas, chief market strategist at Convergex, is of a similar mind.

    “In a market with this little volatility, you’ve got to pick entry points very carefully, and at a one-month high, gold is overextended,” Colas said Monday on CNBC’s “Closing Bell.”

    However, one strategist think that future political uncertainty could make the metal a better pick than equities.

    The gold market is now being driven by “a tug of war between folks that are worried about reflation and inflation that drove the market higher, versus the ones that are pretty darn scared about the way things are shaping up around the world,” Max Wolff of 55 Capital said on “Closing Bell.” “I think the people who are scared probably have the upper informational hand. “

    After all, beyond gold’s safe haven status, the potential for politics to drag on the economy could also reduce number of future Federal Reserve rate hikes. Since these rate increases tend to help the dollar, that would be good news for bullion.

    “I like the product here,” Wolff added. “I think it probably grinds higher.”


    On-Air Video




    • Trading Nation: Apple hits record high

      Gene Munster, managing partner at VC firm Loop Venture, and Ari Wald, Oppenheimer technician, discuss Apple’s stock with Brian Sullivan.




    • Trading Nation: Buy the bullion bounce?

      Max Wolff, 55 Capital Partners, and Craig Johnson, Piper Jaffray, take a look at where gold is headed with Brian Sullivan.




    • Trading Nation: Big bounce for the banks

      Ari Wald, Oppenheimer, and Chad Morganlander, Washington Crossing Advisors, discuss the moves in bank stocks with Brian Sullivan.



    Host






    “Power Lunch” Co-Anchor





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    Gold Weaker On Profit Taking And On Rebounds In Equities, US Dollar – Forbes

    (Kitco News) – Gold prices ended a choppy, two-sided trading session slightly lower Tuesday. A solid rebound in the U.S. stock market from its recent slide helped to pressure the safe-haven metal today. A higher U.S. dollar index on this day was also a negative for the precious metals. Gold prices also saw a bit of profit taking from recent gains that pushed prices to a four-week high Monday. Silver saw decent gains Tuesday and hit a four-week high. Gold and silver bulls are holding the slight near-term technical advantage at present. April Comex gold was last down $1.50 an ounce at $1,254.10. May Comex silver was last up $0.122 at $18.23 an ounce.

    Global stock markets were mostly firmer Tuesday, on corrective bounces from recent selling pressure. U.S. stock indexes were holding solid gains in afternoon trading Tuesday. Traders and investors are debating whether the recent downside pressure in stock markets is the end of the “Trump rally” that had been in place since the U.S. president was elected in November. Or, are the recent slides in stock indexes just normal corrective pullbacks in bull markets that still have more room to run? A better conclusion on this matter can be made come the close of trading on Friday. Beneficiaries of the stock markets’ recent declines have been the precious metals markets.

    The key outside markets on Tuesday saw the U.S. dollar index higher on a technical bounce after scoring a 4.5-month low on Monday. The greenback bears still have the technical advantage as prices are in a downtrend on the daily bar chart. Meantime, Nymex crude oil prices were also firmer Tuesday, on some short covering from recent losses. However, the oil market bears remain in near-term technical control. Precious metals prices have been supported by the weaker greenback, but the declines in oil prices have tempered their rallies.

    (Note: Follow me on Twitter–@jimwyckoff–for breaking market news.)

    Live 24 hours gold chart [Kitco Inc.]

    Technically, April gold futures prices closed near mid-range today. The gold bulls have the slight overall near-term technical advantage. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,275.00. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at $1,225.00. First resistance is seen at this week’s high of $1,261.00 and then at the February high of $1,264.90. First support is seen at this week’s low of $1,245.50 and then at $1,240.00. Wyckoff’s Market Rating: 5.5

    Live 24 hours silver chart [ Kitco Inc. ]

    May silver futures prices closed nearer the session high and hit four-week high today. The silver market bulls have gained the slight overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the February high of $18.54 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $17.50. First resistance is seen at today’s high of $18.255 and then at $18.54. Next support is seen at $18.00 and then at this week’s low of $17.78. Wyckoff’s Market Rating: 5.5.

    May N.Y. copper closed up 425 points at 267.45 cents today. Prices closed near the session high today. The copper bulls have regained the slight overall near-term technical advantage. Copper bulls’ next upside price objective is pushing and closing prices above solid technical resistance at 275.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the March low of 255.85 cents. First resistance is seen at 270.00 cents and then at 272.50 cents. First support is seen at 265.00 and then at today’s low of 261.50 cents. Wyckoff’s Market Rating: 5.5.

    PRECIOUS-Gold falls below 1-month high as dollar, Treasury yields rise – Reuters

    PRECIOUS-Gold hits 1-mth top after Trump doubts knock dollar and shares

    * Trump healthcare defeat raises reflation doubts
    * Dollar index slides to four-month low, equities fall
    * GRAPHIC-Gold hits 200-day moving average http://reut.rs/2nmwp50
    * GRAPHIC-2017 asset returns http://tmsnrt.rs/2jvdmXl

    (Updates prices; adds comment, second byline, NEW YORK
    dateline)
    By Marcy Nicholson and Jan Harvey
    NEW YORK/LONDON, March 27 Gold rallied more than
    1 percent on Monday after U.S. President Donald Trump’s failure
    to push through a health

    Jewellery’s comeback among men – The Economist (blog)

    Diamond Industry’s Famous Hungry Crocodile Doesn’t Cut It – Bloomberg

    The diamond industry’s most famous chart is the hungry crocodile, the ancient reptile’s jaws wide open, reflecting both a predicted shortage of gems and the inevitable price rises that will come with it.

    The diamond industry’s famous ‘Hungry Crocodile’ chart presented by De Beers in 2014

    Not only has this chart, which has been an industry staple for more than a decade and promoted by big miners like BHP Billiton Ltd., Rio Tinto Group and De Beers, never materialized, it oversimplifies the fact that the industry’s 15,000 different categories of diamonds are performing in very different ways.

    That divergent trend has accelerated in the past year. Last month, a mine producing lower quality stones was shut due to a dip in prices, while top producer De Beers has been forced to offer unprecedented concessions to its customers. Both events show the chart is less relevant today than ever before.

    “Miners have all used the open crocodile graph to justify their business case,” said Anish Aggarwal, a partner at Gemdax in Antwerp. “A greater degree of granularity is needed now to look at what the demand and supply looks like for each particular project.”

    Over the past year, rough diamond prices have risen 8 percent. But that’s a very misleading guide if you’re producing a higher percentage of lower quality stones which have underperformed the wider market, with some categories of cheap diamonds falling as much as 20 percent.

    Lower quality diamonds have been hit for various reasons — too much supply, lower profit margins in major cutting centers such as Surat in India, and Indian Prime Minister Narendra Modi’s fight against so-called black money which cut liquidity to the lower end of the market. The cheaper stones are also more at risk from the emergence of man-made gems.

    In response, De Beers has had to offer concessions to buyers of lower quality stones in recent sales to support the market. At the same time, the company raised prices as much as 4 percent in its January sale for some higher quality goods, according to people familiar with the situation, exacerbating the spread.

    Firestone Diamonds Ltd. said Tuesday that while the overall market remains difficult, prices for larger and better quality diamonds remain strong.

    Ghagoo Shut

    Gem Diamonds Ltd. last month said it was shutting its newly built Ghaghoo mine in Botswana, a producer of lower quality stones, saying prices had fallen a third to $142 a carat since 2015. In contrast, its Letseng mine sells diamonds at an average price of almost $2,000 a carat, the highest in the industry.

    “In most commodities there’s a homogeneity; that doesn’t exist in diamonds,” said Clifford Elphick, chief executive office of Gem. “When you talk to investors about the thousands of different categories of diamonds you see their eyes glaze over. It’s just too complicated.”

    Both Aggarwal and Elphick say the lower end of the diamond market is now rebounding and that category of stones won’t always underperform.

    The diamond industry is heavily dependent on seven giant mines, all aging. While most mines produce a broad spectrum of diamonds they are anything but equal.

    Rio Tinto’s Argyle mine in Australia is one of the world’s biggest and produced about 14 million carats last year, but the gems are among the world’s cheapest at about $20 a carat. Jwaneng, owned by De Beers and the world’s biggest mine, sits somewhere in the middle with production of about 12 million carats at an average price of about $250 a carat.

    That means that too much of a miner’s valuation is driven by how cost effectively they produce the stones, rather than the demand for their production and how they can add value by marketing and selling their stones, Gemdax’s Aggarwal said.

    “When you’re looking at a project you’re tempted to use a generic pricing model,” he said. “The one thing that’s missing is that the different segments of the diamond market are not being modeled.”

      Suspect busted in Las Vegas jewelry heist – New York Post

      Authorities have charged a man in connection with the weekend Hollywood-style heist at a high-end jewelry store at the Bellagio Resort & Casino in Las Vegas.

      Sebastian Gonzalez was one of a group of four wearing suits or tuxedos and animal masks to carry out the early Saturday break-in at Tesorini, a Rolex retailer.

      Gonzalez was arrested hours later on charges of robbery with use of a deadly weapon, burglary, conspiracy to commit robbery and attempted robbery, according to the Las-Vegas Review-Journal.

      The group — wearing masks including the faces of a pig, cat and panda — used sledgehammers to smash open the jewelry cases and loot the store on the Las Vegas Strip, cops said.

      The Metropolitan Police Department said the thieves attempted two carjackings during their getaway.

      The other suspects are still at large.