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Stocks’ ‘Wash and Rinse’ Drenching Dampens Metals

Posted by on August 1st 2014 in Federal Reserve, General Economy, Gold, Middle East, Quants, Russia, Short Sellers, Silver, Ukraine, Wall Street | Be the first to comment!

LaundryDay

Spot gold and silver fell 1% on Thursday, which was only half as bad as stocks, with the three major indexes falling between 1.9% and 2.1%, including a 317 point plunge for the Dow. “So what happened today?,” asks the Café Américain‘s Jesse:  “Today was ‘laundry day’ at the U.S. markets, as the foamy stock peak of the past month took a hard turn in the old ‘wash and rinse’ cycle, that blew off the froth. That’s what it was.  Pure and simple… The ‘tell’ was the selling of gold and silver along with stocks today.  This was no flight to safety of cash on geopolitical jitters.”

See also:

USA Gold/Forex.com:  Gold drops as dollar jumps to 10-month high; Gold battered by buck’s surge, but short-term support sits at 1272

Zero Hedge: Elliott’s Paul Singer on gold, inflation & the global monetary delusion

Bloomberg/Mineweb:  Gold ETPs halt outflows as buyers return amid price slump; Lawrence Williams – Hold some gold. Better safe than sorry

Peak Prosperity:  The West’s reckless rush towards war with Russia

USA Today/CNN:  West Bank grows restive as war in Gaza continues; Analyst – Most Arab states are actively supporting Israel against the Palestinians

Haaretz:  The common denominator of Gaza and Ukraine: Outsiders who make things worse

Metals Shrug Off GDP Beat, Fed Taper

Posted by on July 31st 2014 in Federal Reserve, General Economy, Gold, Janet Yellen, Monetary Policy, Short Sellers, Silver, Wall Street | Be the first to comment!

MetalsShrugOff

Repeating Tuesday’s pattern, silver and gold were little changed on Wednesday, edging up and down respectively, despite 2nd quarter U.S. GDP growth of 4% that beat expectations and the Fed continuing its tapering plans. As for GDP, CNBC notes that “there were detractors the minute the report came out. A lot of inventory building, some complained. But most felt the numbers didn’t change their outlook for the second half dramatically. Barclays is a good example: ‘We do not view the outperformance in this report as a signal that the outlook for growth has improved,’ they said.”

And before Wednesday afternoon’s FOMC statement, in which the Fed signaled that it was in no hurry to raise interest rates, Bloomberg quoted one analyst’s take on gold:  “Investors would want to see whether or not the central bank is starting to think about some sort of a timetable as to when it will conceivably raise rates. However, the unsettled geopolitical backdrop makes us reluctant to short the metal at this stage.”

See also:

CNBC/Of Two Minds:  Markets could begin to ignore Fed; The Fed’s failure complicates its endgame

Coin News:  Gold dips, Silver Eagle bullion coins top 26 million

USA Gold/GoldCore:  Richard Russell says stick with gold and silver; Ron Paul- Gold could go to infinity

FastMarkets:  Mitsubishi Corp. – India may hold key to higher gold prices

ZeroHedge/ValueWalk:  Social media is making people dumber, fears Elliott’s Paul Singer; Warns of social unrest if inequality unaddressed

Wall Street On Parade:  WSJ reporter:  “The entire United States market has become one vast dark pool

Metals Prepare to Run News ‘Gauntlet’

Posted by on July 30th 2014 in CFTC, ECB, Federal Reserve, General Economy, Gold, IMF, Janet Yellen, Monetary Policy, Short Sellers, Silver, Wall Street | Be the first to comment!

NewsGauntlet

Gold and silver futures inched down and up repectively on Tuesday in advance of Wednesday’s “gauntlet” of GDP and Fed news. Gold was also said to have been pressured by a rise in U.S. consumer confidence — debt collectors be damned! and a stronger U.S. dollar, which hit a 2014 high against the euro on Tuesday. Wondering “if gold would be able to hold $1280 should the euro fall accelerate,” Dan Norcini opines that “the only thing currently holding gold higher is geopolitical tension. Were it not for those events ( and who knows how all this is going to end) gold would be lower, especially with the dollar strength we are witnessing. Those events should continue to bring some safe haven buying into the yellow metal for the time being which will work to mitigate any sharp drops in price that could occur.”

See also:

BullionVault/Mineweb:  Gold prices move “sideways” ahead of “auto-pilot Fed” and US jobs data; Watch U.S. GDP, jobs reports, not Yellen for gold impact

Telegraph:  Sharp interest rate hikes could trigger global growth shock

David Levenstein/MarketWatch:  While other currencies emerge as an alternative to U.S. dollar, gold will also benefit; Foreigners complain about the dollar but keep buying it

SafeHaven/SilverSeekSilver set to star; Silver prices – megaphone patterns

Zero Hedge:  Jim Grant- Gold is the ultimate inoculation against harebrained central bankers”

CNBC Calls Out Faber, Culls Out His Comeback

Posted by on July 29th 2014 in CFTC, CME Group, Federal Reserve, General Economy, Gold, Media, Russia, Short Sellers, Silver, Ukraine, Wall Street | Be the first to comment!

FaberPunchLine

As portfolio manager John Hussman warns of “an equity bubble, and a highly advanced one,” another veteran investor and frequent crash-predictor says the current stock market environment is ‘like being in the Twilight Zone,” and argues that “When there is a correction, it will be very severe.” Enter Marc Faber, who, after predicting that a 20 to 30% correction will begin within a few months, CNBCportfoliowas taken to task by a CNBC host for continually predicting corrections that have yet to happen. “I started to work in 1970,” said Faber, “and over that career, somehow, somewhere, I must have made some right calls; otherwise I wouldn’t be in business.” At that point, reports Zero Hedge, “What CNBC then edited out of the transcript was Faber pointing out his 22% annualized return in his publicly-viewable funds since then and asking, “I wonder what the CNBC portfolio would look like since 1999?”

See also:

Bloomberg/NY Times:  Gold futures climb as violence in Ukraine boosts demand

Aden Forecast/Got Gold ReportStill looking good; COMEX swap dealers hedging a massive long play on silver?

Reuters/GoldCore:  Silver bullion banks accused of manipulation in U.S. lawsuit

GATAAnother class-action suit charges gold market manipulation; Possible discrepancy in GLD‘s gold bar accounting

Jesse’s Café Américain/Resource Investor:  What is the effective limitation on the Fed’s ability to ‘print money’?; Why we should fear the REPO

Traders Stock Up on Metals, Not Stocks

Posted by on July 26th 2014 in China, General Economy, Gold, Goldman Sachs, Iraq, Middle East, Russia, Short Sellers, Silver, Ukraine, Wall Street | Be the first to comment!

StockingUpOnMetals

Although gold and silver ended slightly lower on the week, they were back to being safe havens on Friday, with futures gaining about 1% each on what Bloomberg describes as “escalating havoc in Eastern Europe and the Middle East” that “boosted demand for haven assets.” Or, as a brokerage VP put it, “When you see schools shelled in Gaza and heavy artillery fire from Russia and Ukraine, people are very nervous, and you can’t blame them. As we go into the weekend, with the amount of turmoil that we have, people are going to buy gold.”  An opinion seconded by a strategist who added yet another hot spot to the mix, telling Reuters that “With the news flow coming out Russia and Ukraine and you don’t know what’s going to happen in Iraq, traders are buying gold as they don’t want to get too exposed to geopolitical risks going into the weekend.”

See also:

Zero HedgeStocks slide, gold soars on weak earnings, geopolitical fears; Goldman goes schizo on gold – Boosts price target to $1200 even as it’s “Selling It with conviction”

Jesse’s Café Américain:  Metals bounce, huge week for events & news coming

CNBC/Seeking Alpha:  BlackRock strategist – Stock market could get ‘nasty’; The blow-off top is here

New York Times/Bloomberg:  Op-ed – A Chinese gold standard?; Ecuador weighs escape from dollar ‘straitjacket’

BusinessWeek/Euro Pacific Capital:  Gold diggers revive French exploration as prices drive hunt; The strange case of German gold (scroll down)

Time/Daily Reckoning:  Meet America’s most beloved CEO—Too bad he just got fired; Where you can make $56,000 a year delivering pizzas

Metals Retreat; West Bank Palestinians Advance

Posted by on July 25th 2014 in CFTC, China, CME Group, General Economy, Gold, IMF, Middle East, Quants, Short Sellers, Silver, Ted Butler, Wall Street | Be the first to comment!

MetalsRetreatPalestiniansAdvance

Gold and silver ended down about 1% and 2.5% respectively on Thursday, representing a buying opportunity for one scribe, as global strife took a back seat to what was seen as positive economic news from the eurozone and China, and on U.S. jobless claims hitting an eight-year low.  But citing earlier “negative surprises” from the U.S. and Chinese economies, and ongoing geopolitical risks, the IMF lowered its global growth forecast for 2014.

With gold dropping below $1,300 and stalling at its 200-day moving average, Reuters quotes one observer as saying, “To be fair, I think some people have a right to be disappointed that the stresses around the world haven’t led to a continued rise in the price of gold. We’re probably in oversold territory right now where gold is concerned, but we also seem to be pulling into an area between $1,290 and $1,280 that should offer some support to the market.”

See also:

Dan Norcini/Reuters:  China gold demand slumps 19.4 pct on yr, but output rises

Ted Butler:  Silver tightness

Hard Assets Investor:  Gold’s fair value – bear says $800, bull says $5,000

Investing.com/SafeHavenHappy markets in an unhappy world; Clear and present danger zone

Bloomberg/Business Insider:  Don’t tell anybody about this story on HFT power Jump Trading, one of 10 being eyed by the SEC

Wall Street On Parade:  Lawsuit stunner – Half of futures trades in Chicago are illegal wash trades

Through the Revolving Door to Lobby

Posted by on July 24th 2014 in CFTC, General Economy, Gold, India, Short Sellers, Silver, Wall Street | Be the first to comment!

SwapsThis!

An epic farce” is how Zero Hedge characterizes Scott O’Malia’s spin through the revolving door just two days after resigning as an CFTC commissioner, to become the new head of the International Swaps and Derivatives Association (ISDA), “the biggest banking group that has constantly opposed every intervention and attempt to regulate the swaps market by the CFTC since the Lehman crisis.”

It describes ISDA as “a global OTC derivative lobby group, counting the world’s largest investment banks among its members, [that] has RegulateThis!frequently fought regulatory efforts to reform the market after the financial crisis.”  And, goes on to note that “Even an otherwise impartial Reuters appears outraged by this blatant and painfully clear example of government capture of ‘public servants’ by those who have dangled carrots of money in exchange for lobby (and future employment promise) favors, and thus set the rules, courtesy of people like O’Malia.”

See also:

Coin News:  Gold, silver prices change narrowly

Alhambra Partners/Gold Report:  Speculating on the gold supply; Money managers – Three reasons why gold and gold stocks will rise

Got Gold Report:  COMEX Producer/Merchants in gold, view from 30,000 feet an eye opener

David Morgan/Mineweb: Smoking out Indian gold, central bank relaxes loan rules; Gold & silver bears – Was last week your best shot?

Pragmatic Capitalism:  Chart of the day – Inflation fears are rising

Conflicts Seen Supporting Gold for ‘Next Several Years’

Posted by on July 23rd 2014 in CFTC, China, Federal Reserve, General Economy, Gold, Iraq, Middle East, Monetary Policy, Russia, Short Sellers, Silver, Ukraine, Wall Street | Be the first to comment!

WorldOfProblems

Silver futures were flat on Tuesday and gold ended modestly lower, at just over $1,300 an ounce, on what was seen as a number of technical factors, such as profit-taking and chart consolidation, as well as “less risk aversion in the market place.” But according to the CPM Group’s Jeffrey Christian, the latter could be short-lived. He’s quoted by Reuters as saying that without the current crop of international conflicts, “gold probably would be down around $1,240 – $1,280 at present.”  But he also points out that these conflicts “all fester without a joint international effort to help resolve them. This means more problems being more difficult to resolve, which probably means that more investors will seek gold as a portfolio diversifier and safe haven over the next several years than otherwise.”

See also:

USA Gold/Dan Norcini:  Gold supported by geopolitical risk, even as stocks, dollar gain; Euro currency breakdown

Sharps Pixley/Mineweb:  Gold & silver – Geopolitical tensionsLawrence Williams – Escalating Ukraine crisis could blow gold sky high

Casey Research/Bloomberg:  The truth about China’s massive gold hoard; Middle East seen gaining gold share as trading expands

Telegraph:  How a golden shield can work for investors; Have central banks been breaking the law?

Zero Hedge:  Portugal president admits Espirito Santo failure could be systemic; NY Fed slams Deutsche Bank (and its €55 trillion in derivatives): Accuses it of “significant operational risk”

SRSrocco Report:  How derivatives will trigger a bond market melt-down

 

Squeezing the Shorts — ‘Watch For It’

Posted by on July 22nd 2014 in CFTC, China, CME Group, Federal Reserve, General Economy, Gold, India, Janet Yellen, Monetary Policy, Russia, Short Sellers, Silver, Ukraine, Wall Street | Be the first to comment!

WatchForShortSqueeze

“You know, if someone with quite a lot of firepower were to take a good look at the Swap Dealer combined positioning in gold and silver, and exploit that by pressing the metals a bit, they sure might have a squeezing good time of it,” writes Got Gold Report‘s Gene Arensberg, in a comprehensive analysis of the current COT set-up. He goes on to predict that “Most anything can happen short term, but at some point gold and silver are going to catch a tail wind strong enough that those attempting to prevent runaway breakouts could be overwhelmed.  It is in such cases that the trader community on the COMEX becomes its most cutthroat and merciless.  If the other traders sense a trapped large trader or group of traders, you know, maybe one with a way-too-huge-short position in a rising price environment as an example … well, let’s just say that all traders consider it a duty to pile on and make them pay.  Watch for it.”

See also:

Reuters/Coin NewsGold rises above $1,300 on heightened tensions, S&P drop;  Gold rises 0.3%, silver advances 0.6%; US Mint bullion coins gain

CNBC/Zero Hedge:  David Stockman – Market’s teetering on edge, beware of Black Swan; Saxobank – “Be warned” of delayed market reaction to “escalation of global turmoil”

MarketWatch:  Bank of America Merrill Lynch – The worst for gold may be over;  Yellen encourages ‘fully-fledged equity bubble,’ says Jeremy Grantham

Bloomberg:  Fed’s junk loan bubble-busting faces trouble as sales jump; Yellen wage gauges blurred by Boomer-Millennial shift

The BRICS Post/The Telegraph:  BRICS bank capital might not be held in U.S. dollars; The dollar’s 70-year dominance is coming to an end

Financial Times:  U.S. dollar clearing rules make gold the new green

Metals Off as Rate-Rise Talk Trumps Turmoil

Posted by on July 19th 2014 in Federal Reserve, General Economy, Gold, Monetary Policy, Russia, Short Sellers, Silver, Ukraine, Uncategorized, Wall Street | Be the first to comment!

GazaTurmoil

Spot gold and silver were off about 1% Friday with the drop attributed to profit-taking and the prospect of an accelerated interest-rate increase, reversing Thursday’s gains and trumping events in Ukraine and Gaza.  Investigators were reportedly denied access to the Ukrainian crash site by “heavily-armed” rebels, and the U.S. is now claiming that Russia may have helped launch the missile that brought down the plane. This as Prime Minister Netanyahu said that Israel is prepared to “significantly widen” its Gaza ground offensive, as it authorized the call up of an additional 18,000 reservists, and both sides are thought to be “in this for the long haul.”

MortgageApps

As for ongoing speculation over the timing of an interest-rate increase, it was further stoked on Thursday by St. Louis Fed President James Bullard, when he predicted that the Fed might have to raise short-term interest rates “sooner rather than later.” But with mortgage applications at 13-year lows, as illustrated in the above chart, Zero Hedge asks:  “Just what happens if interest rates ever rise?

Tragedy Puts Focus on Safe Havens

Posted by on July 18th 2014 in Gold, Russia, Silver, Ukraine | Be the first to comment!

TragegyPutsFocus on SafeHAvens

Gold and silver were already up Thursday on escalating Ukraine tension, and then extended their gains following the news that a Malaysian airliner was shot down in eastern Ukraine, killing all 298 on board. AFP reports that “Social media posts by pro-Russian insurgents — most of them hastily removed — suggest the rebels thought they had shot down a Ukrainian army plane before realizing in horror that it was in fact a packed Malaysian airliner.” It came just days after a Ukrainian transport plane was downed by a surface-to-air missile, which was seen as foreshadowing Thursday’s crash.

While lamenting the tragedy, Dan Norcini writes of also being “a bit disappointed in the gold price as the metal could not even stay above the $1320 level. With the backdrop of an Israeli ground operation against Hamas, and with this commercial airliner incident, one would think it would have garnered some more upside. Tomorrow is going to be an important day for the metal therefore.”

Metals Up After 2-Day Drop; Indian Gold Surge

Posted by on July 17th 2014 in China, Federal Reserve, General Economy, Gold, India, Janet Yellen, Monetary Policy, Quants, Short Sellers, Silver, Wall Street | Be the first to comment!

IndianGoldSurge

Both spot gold and silver were up a fraction on what Reuters describes as “bottom-picking” following two down days, but gold’s rally was said to have “faded after data showed U.S. manufacturing output rose at its fastest pace in more than two years in the second quarter,” and following a talk by Dallas Fed President Richer Fisher in which he said that the Fed was “likely” to start raising interest rates early next year. Over at Bloomberg things were shinier for gold as it highlighted a report that Indian imports surged 65% year-over-year in June.

See also:

The Gold Report:  Editor- Upward trend a silver investor’s friend

Mineweb/GATA:  Bulls might take heart from latest gold smashdown failure; The more obvious they are, the closer the day of deliverance

Bullion Bulls CanadaThe end of the paper-gold market?

Zero Hedge/CSM:  Shocking first – Mainstream media rushes to defend dollar reserve status; Can BRICS development bank become a rival to the World Bank?

Jesse’s Café Américain/Nanex:  The stock market is rigged, with details

Wall Street on Parade:  Sen. Warren lets Yellen know she’s had it with Fed’s charade about too big to fail