Archive for the ‘China’ Category

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 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

Metals Hit by BRICS or ‘Bubbles’?

Posted by on July 16th 2014 in CFTC, China, Federal Reserve, General Economy, Gold, IMF, India, Janet Yellen, Monetary Policy, Russia, Short Sellers, Silver, Wall Street | Be the first to comment!

BRICSbank

As Jim Sinclair weighs in on Monday’s market shenanigans, spot gold and silver ended off 0.6% and 0.3% respectively on Tuesday.  Gold “was weakened, opined analysts, by strength in the U.S. dollar,” reports Coin News. “The greenback saw gains after Fed chairwoman Janet Yellen testified before Congress and said the U.S. economy is improving but still needed support.” This as other analysts, and some traders, also saw her testimony as “largely neutral for the gold market,” and “tended to blame the price decline on factors such as another large sell order that reportedly hit the market, sell stops, long liquidation by funds and a reaction to outside markets.”BubblesTestimony

Echoing that notion, while also downplaying the role of Yellen’s testimony, the proprietor of Jesse’s Café Américain opines that “Most would think that the slam on the metals, and that is clearly what it was, is coincident with Bubbles Yellen and her appearance before the Congress. I was thinking it was more related to the BRIC meeting in Brazil,” where, reports Newsweek, the countries “announced the long-awaited bank and contingency fund, a clear move away from the dominance of the West in global economics and the dire consequences of an unstable dollar.”

Metals Pop on Problemo Banco

Posted by on July 11th 2014 in CFTC, China, CME Group, ECB, Federal Reserve, General Economy, Gold, Janet Yellen, Monetary Policy, Quants, Short Sellers, Silver, Wall Street | Be the first to comment!

'Espirito' Moves Gold & Silver

Gold futures added 1.1% to approach four-month highs on Thursday and silver surged 2.1% after a parent company of Portugal’s Banco Espirito Santo “delayed debt payments on short-term notes, fueling concern that the euro region remains vulnerable to financial shocks,” reports Bloomberg, quoting one trader’s observation that “Equities are getting hammered, and we are seeing a flight to safety.”

“We did have a strong gold rally during the last period of sovereign risk in Europe, so it’s not surprising to see the market reacting like this,” said HSBC metals analyst James Steel, adding, “But to be fair, gold has been trending higher for a while now and there aren’t too many sellers to stand in the way with the geopolitical crises of the Middle East and Europe and the Fed’s insistence that higher U.S. rates are still way off.”

See also:

Barron’sFed policy to boost gold, silver (click thru for article)

Silver News Blog/SilverSeek:  Silver keeps chugging along; Steve St. Angelo:  Silver will be the king precious metal performer

Got Gold Report:  Swap dealers ‘goal line stand’ for Comex silver futures in jeopardy, short squeeze very possible now

Trader MC:  Metals and miners bull market point of recognition

Acting Man/Economic Collapse Blog:  Janet Yellen chimes in on the bubble question

Zero Hedge:  Did China just crush the U.S. housing market?; “Unrigged?” The bulk of odd lot trades on U.S. exchanges are one-share-lots!

Bloomberg:  Chicago Fed calls for curbs on high-frequency trading

Wait a Minute(s): ‘Dovish’ Fed Seen in No Hurry to Raise Rates

Posted by on July 10th 2014 in CFTC, China, CME Group, Federal Reserve, GATA, General Economy, Gold, Janet Yellen, Monetary Policy, Short Sellers, Silver, Wall Street | Be the first to comment!

FedSaysWaitAminutes

Gold and silver gained before and after Wednesday’s release of the minutes from June’s FOMC meeting, which warned that “market participants were not factoring in sufficient uncertainty about the path of the economy and monetary policy.” The Fed also delivered what was described as a “dovish message” on interest rates, with FOMC members said to be “clearly in a position where at least right now, they’re inclined to let this thing run a little further, to take out some insurance. Given how long we have under performed, if you’re the Fed and you view things the way they do, what’s the harm in going a little further?”

But according to a contributor at The Street, who describes Wednesday’s stock market gains as a “dead cat bounce,” the Fed is also “between a rock and a hard place. It has said that it will end the bond purchasing by October. If it withdraws the easing by stopping the money printing, the Fed will puncture the asset bubbles. If it keeps printing, inflation will gather strength. As weak data over the rest of the year come in, the Fed will realize it has tapered into weakness. This will cause it to launch new money printing, or QE4, in 2015.  The big winner in terms of asset class will be the precious metals [and] energy.”

See also:

Short Side of Long/Got Gold Report:  Precious metals bulls are back!; COT turning point?

King One Eye/Yahoo Finance:  Gold is still in a big uptrend (chart); Technical analyst – Charts hinting at a big move for gold

GATATF Metals Report – Understanding the latest bank participation report; London Silver Fix – Meet the new boss…

CNBC:  Schiff makes case for gold, but Gartman not buying it; Marc Faber says stock market will crash, just don’t know catalyst

Zero Hedge:  Gold and China’s challenge to the “narrative of central bank omnipotence”

Metals Rangebound: Any Breakout In Sight?

Posted by on July 9th 2014 in CFTC, China, CME Group, ECB, Federal Reserve, General Economy, Gold, JPMorgan, Monetary Policy, Short Sellers, Silver, Ted Butler, Wall Street | Be the first to comment!

GoldBreakout?

Spot gold and silver saw the slightest of gains on Tuesday while futures were slightly off in what Gold Forecaster‘s Julian Phillips brands a “strange” market, where gold demand is “steady and solid in a relatively thin market, but not swayed by speculators,” who, along with and dealers, “are trying to move gold around with the euro, which keeps going stronger as the dollar weakens.”  But, he added that gold “keeps drifting higher as U.S. investors are now net buyers of the SPDR gold ETF in the last three weeks.”

As for the prospect of gold drifting even higher, CNBC, under the headline “These 3 charts tell you to buy gold,” highlights a note from Sterne Agee.  The author contends that the investment advisory “remain new buyers and would be new buyers right here, in anticipation of the current ‘bearish-to-bullish’ reversal continuing and gaining urgency as new participants are drawn in.”  It goes on to predict that gold will rise to $1,500/oz, but with no timeline, before running into resistance….Read More >>>

See also:

Barron’s/Bloomberg:  Gold, silver – The speculators are back; Gold shines again as hedge funds boost wagers on advance

Expected ReturnsI’m back!; Do you remember? Why gold?

Eric Sprott:  The physical buyers will overwhelm the paper sellers

Mining.com/SilverSeek:  Reports- CME/Thomson Reuters to run the silver fix; Ted Butler – CME’s Comex- Why it’s corrupt

Zero Hedge:  Stock buyback shocker; Debt – Eight reasons why this time is different; Is the Fed going to attempt a controlled collapse?

Reuters/New York Sun:  Fed’s Yellen to deliver monetary policy report to Congress next week; Congress eyes rules for the Fed

Gold Market Analyst: ‘U.S. is Out Of the Game Right Now’

Posted by on July 8th 2014 in CFTC, China, ECB, Federal Reserve, General Economy, Gold, India, Janet Yellen, Monetary Policy, Short Sellers, Silver, U.S. Congress, Wall Street | Be the first to comment!

USOutOfGoldGame

With gold and silver futures ending down a fraction of a percent on Monday, a Bloomberg report attributes gold’s drop to predictions by some banks that the Fed will raise interests earlier than previously assumed, from the first quarter of 2015 to the fourth quarter of this year. But dismissing the notion that an early rate increase would hurt gold, Bloomberg Industries’ Kenneth Hoffman said that “I think the U.S. is out of the game right now,” pointing to Asia as the epicenter of the market. Citing the Singapore Exchange’s introduction of gold trading in September, he says that he recently returned from Asia and with so many “traders moving into Singapore and Hong Kong and Shanghai, there’s a lot of excitement about gold in Asia.”  In late May, Mineweb wrote about a presentation by Hoffman, who offered up statistics showing that China and India are consuming more gold than the world is mining.

See also:

Los Angeles Times/GoldSeek:  Why interest rates may stay very low for a lot longer

GoldCore/Peak Prosperity:  Europe seeks alternative to dollar dominance – 70-year shift; Mike Maloney – The dollar as we know it will be gone within 6 years

Confounded Interest/Reuters:  Has the Federal Reserve destroyed market discipline for housing and the stock market?; House Republicans propose Fed reforms, set hearing

Zero Hedge:  Life on planet Yellen; The stunner from today’s round table debate to “fix” the London Gold Fix

Arabian Money: Traders see gold & silver as best bets for H2 like coffee in H1; Gold and silver entering a win-win scenario for the hedge funds?

Got Gold Report:  COMEX heavy commercial gold shorts not always a sign of a top; John Hathaway – Financial leverage now $100 trillion, nine ‘compelling’ gold charts

Metals Only Bend on Big Jobs Number

Posted by on July 4th 2014 in CFTC, China, ECB, Federal Reserve, General Economy, Gold, Iraq, Russia, Short Sellers, Silver, Ukraine, Wall Street | Be the first to comment!

MetalsOnlyBend

With gold and silver futures off, but by less than one percent following an estimate-topping jobs print of 288,000, the head of investment advisory H.C. Wainright said that “In a more normal, less tense environment, the employment data should have sent gold much lower by $25-$30 an ounce quickly, but these are not normal conditions.  Good U.S. economic news is tempered in part by foreign events which the U.S. has no influence or control over at present.”

Metals’ spot prices took even less of a hit, with spot silver ending flat on the day.  As for gold, Dan Norcini echoes the above sentiment in observing that it “looks as if geopolitical events in Iraq are continuing to provide some support. The stronger dollar coming on the heels of the payrolls number, provided pressure. The lack of wage inflation did likewise. However, while the market bent, it did not break. The geopolitical premium remains.”

See also:

Mining.com/Silver Investing News:  Silver above 15-week high on world tensions, investor confusion; Still going strong, silver beats last week’s high

Zero Hedge:  People not in labor force rise to new record; June full-time jobs plunge by over half-a-million, part-time jobs surge by 800K

Washington Post/Of Two Minds:  More Americans are stuck in part-time work; Is this a self-sustaining recovery or as good as it gets?

Reuters/Bloomberg:  China gold imports may drop 400 tonnes hit by financing curbs-consultant; Chinese trader said to pledge metal 3 times for loans

Salient Partners:  China in the golden age of central bankers

Businessweek/In Gold We Trust:  How bad would a housing market crash be for China?; Are the Chinese ghost cities really empty?

‘Boring’ Gold ‘Quite Resilient’ as ETF Holdings Surge

Posted by on July 3rd 2014 in CFTC, China, Clinton Inc., Federal Reserve, General Economy, Gold, Goldman Sachs, IMF, Janet Yellen, Monetary Policy, Short Sellers, Silver, Wall Street | Be the first to comment!

GoldETFSurge

With gold and silver futures gaining 0.3% and 0.9% respectively ahead of Thursday morning’s release of the jobs report for June, BullionVault‘s Adrian Ash tells MarketWatch that “Mid-June’s big jump aside, gold has become so boring not even U.S. payrolls are giving traders much fun right now,” but he adds that unless the jobs number exceeds 300,000, “it’s hard to see U.S. futures getting sold before the long weekend.”

This as Bloomberg reports that assets in GLD rose 1.4% on Monday and Tuesday of this week, the biggest two-day gain since November 2011. The article quotes one commodity broker as saying that “the dovish outlook from the Fed is increasing interest in gold, and we are seeing some investors return,” and cites a report from UBS AG analysts, who wrote that “Although the overall macroeconomic backdrop remains unfriendly towards gold, with ongoing QE tapering, looming rate hikes and stocks at record highs, prices have generally been quite resilient.  That the aggressive ETF selling of 2013 has not made a comeback has provided ongoing support.”

See also:

BullionVault/SRSrocco Report:  Silver prices- Is 14% enough for one month?; The coming two-stage rally in silver;

Alhambra Investment Partners/CNBCThe golden tail?; Trader- Gold will be the second half’s big winner

USA Today/The Hill:  Stock market’s correction-free run tops 1,000 days; Another financial meltdown on the horizon?

Arabian Money:  Is gold going to be an effective hedge in the next global financial crisis?

NY Times/Reuters:  Janet Yellen signals she won’t raise interest rates to fight bubbles; Yellen drives wedge between monetary policy, financial bubbles

Zero Hedge:  The Fed’s inflation survey that the Fed would rather not hear; “Clinton Inc.” raises almost $3 billion, and the biggest ‘donor’ is…

Wall Street on Parade:  Hillary and Bill- Their rugged journey from paupers to one-percenters in 365 days

Silver Takes Quarter; Gold Wins Half

Posted by on July 1st 2014 in CFTC, China, Federal Reserve, General Economy, Gold, India, Iraq, Janet Yellen, JPMorgan, Monetary Policy, Russia, Short Sellers, Silver, Ted Butler, Timothy Massad, Wall Street | Be the first to comment!

SilverQuarterAfter spot gold and silver added a fraction of a percent on Monday, silver ended up 7% for the quarter, its highest gain in three quarters, reports Reuters, and gold gained about 3.5 percent on the quarter after a nearly 7 percent gain in the first quarter, making gold the best-performing asset in the first half of 2014.

Reuters attributes gold’s gains to tensions over Ukraine and Iraq, and going forward, geopolitical tensions are alsoGoldHalf seen as the “wild card” for gold and silver, according to one analyst quoted by MarketWatch.  He adds North Korea as a potential third hot spot, and says that “Any flare up in these areas could quickly lead to another round of ‘safe haven’ buying in the precious metals.”

See also:

BullionVault/Mining.com:  Gold & silver beat stocks, best first-half since 2011 after “surge in bullish hedge fund bets”

Mineweb:  Silver the star performer in recent precious metals rally; Silver – The irresistible force

Jesse’s Café Américain/Ted Butler:  Comex silver stockpiles at the end of 2Q 2014;  Comex – Why it’s corrupt

Financial Times/GATA:  Singapore seizes on soaring Asia gold demand; Koos Jansen – Chinese gold demand remains robust and in an uptrend

Telegraph/Peak Prosperity:  BIS – Ultra low interest rates could make global economy permanently unstable; Axel Merk – The Fed’s next move

MarketWatch:  Taper Time? Janet Yellen’s Georgetown neighbors complain about ‘doughnut bellies’ of security detail

Chinese ‘Unwind’: A Great Leap Forward for Gold and Silver?

Posted by on June 27th 2014 in China, Federal Reserve, General Economy, Monetary Policy, Quants, Short Sellers, Silver, Wall Street | Be the first to comment!

GreatLeapForward?

Spot gold and silver ended mixed on Thursday, with silver up and gold down, each by about a quarter of a percent. St. Louis Fed President James Bullard talking up higher interest rates was seen weighing on gold, but the big news was a report that Chinese gold processing companies used falsified gold transactions to borrow about $15 billion from banks, which was said to be either good or bad for gold, and by extension silver, depending on the source and the timeframe.   “If China continues to clamp down on these financing deals, it would likely be negative for the gold price in the short run,” according to one analyst, reasoning that “More gold will be available on the market and less demand for gold from these financing deals.” But another tells MarketWatch that “The Chinese story is a likely bullish force for gold and may partially explain the massive buying behind the June 19 rally.”

CCFDsGoodForMetals?

And that $15 billion may be just the tip of the iceberg.  Citing a Bloomberg article on the “fake gold trades,” Zero Hedge notes that “As much as 1,000 tons of gold may have been used in lending and leasing deals in China, and Goldman reports that up to $80 billion false-loans may involve gold. As one analyst noted, this was unlikely to have a significant impact on the underlying demand for gold in China, and as we have pointed out before, any unwind of the gold CFDs would lead to buying back of ‘paper’ gold hedges and implicitly a rise in prices….So unlike in the industrial commodities – where the CCFD unwind drives prices down as the image above shows, thanks to synthetic manipulation and domination of the paper gold (and silver) market, the opposite occurs in precious metals.”

But apparently taking aim at Zero Hedge, without naming it, Dan Norcini comes down on the other side:  “The usual ‘we have never seen a story concerning gold that we could not spin to make it bullish’ website somehow manages to contort this story as friendly! Just use common sense and do not get lost in the weeds with their ‘logic’ and you will see what it is that has been lurking out there in the minds of metals traders. They are understandably nervous about this.”

And while it certainly won’t be the last word on the subject, today’s comes from that “oasis of civility,” Jesse’s Café Américain, which offers “Some thoughts on leverage in the great gold and silver frauds.”