Pedal to the Metals

Introducing an article on how ETFs may be “the next accident waiting to happen,” Jesse’s Café Américain speculates that “the next trigger event for a major financial crisis” will be ETFs and derivatives.  (Update:  A part 2 has been added)

About ETFs, he cites a “lack of transparent audits from legitimate physical trusts,” and contends that “some of the ETFs, especially in commodities and on the short equity side, appear to be almost fraudulent both in construction and representation, and are often more instruments of manipulation and raw speculation for extracting wealth from the less sophisticated than investment vehicles.” He goes on to describe why, “when the ETFs fail it will be an echo of the market failure of 1929…”

And the author of a Seeking Alpha article on reasons why the price of silver is down for now, writes that “I don’t own the SLV ETF anymore, but I’ve been buying some actual silver – a little at a time – for few years now and will probably continue to do so,” adding that “in many ways, real silver can be a better investment vehicle than an ETF.”

Related Links:

MarketWatch:  Gold off 1.1% after U.S. jobs, services data; silver down 1.7%

Trader Dan:  ECB’s Draghi derails metals, but where did the money flow?

CNN Money/Bloomberg:  ECB leaves rates steady but hints at future cut; Draghi leaves door open for further ECB action as elections loom

Mineweb:  Gold’s quietest 40 days since the financial crisis began

KWN:  Egon von Greyerz – Swiss refiners say “demand for gold is massive“

JSMineSet/Reuters:  Dear Jim, Is this capitulation in the gold markets today?; Gold’s 3-month drop could be basis for fresh uptrend

Road to Roota:  Silver: Big money lays in wait…for the sub-$30 end game

Bullion Street:  Silver rally to hit $50 later this year

Casey Research:  Rick Rule on contrarian speculation

Firstpost:  Why Indians will keep buying gold even at higher prices

Amity Shlaes/Gary North:  Gold standard for all, from nuts to Paul Krugman; Bernanke’s pet peeve: The gold standard

CNBC:  Peter Schiff:  US Treasurys are ‘junk,’ dollar headed for collapse

Alt-Market:  States to use gold and silver as legal tender

Financial Times/GATA:  Norwegians take big broker’s trading algos for an expensive ride

Gallup/NYT:  Poll:  Retirement, slipping farther and farther away

MarketWatch:  Have Americans lost trust in banks? Interest in home safes grows

As Mineweb‘s Lawrence Williams looks at the “puzzling” but “understandable” price patterns in gold, which he sees as increasingly resilient in the face of poor current fundamentals, Marc Faber, in a lengthy interview with Hard Assets Investor, says that he’s “telling every investor, in the long run, that central banks all over the world are going to print money because they know nothing else. The  purchasing power of currencies will continue to go down. In other words, the price of gold and silver will move up in the long run.”

And asked what kind of portfolio allocation he would recommend for investors, Faber’s formula is “25 percent in equities, 25 percent in physical precious metals, 25 percent in Asian properties and 25 percent in corporate bonds, mostly emerging economies.”

Related Links:

Forexpros:  Gold slumps 0.4% on strong greenback; silver off 0.9%

Trader Dan:  Dodd-Frank strikes the commodity markets; traders are literally on the edge

Kitco:  Friday’s U.S. jobs data may influence gold, financial markets, but longer-term trend more important

SafeHaven:  Gold breaks 3-month rule for 1st time in 11 years

The Daily Gold:  A weak economy remains gold’s best friend

GoldSeek:  Central bank demand to change gold, silver markets and prices

Beacon Equity:  Smart money banking on gold & silver prices to soar

Bloomberg:  Martin Feldstein:  Stock market is in a Fed-fueled bubble

Reuters/CNBC:  Positioning for more ECB easing, but not in May; In battle against crisis, ECB running out of weapons

Zero Hedge:  Hugh Hendry on Europe “You can’t make up how bad it is”

Financial Sense:  Ron Paul vs. Paul Krugman:  The invisible red line

Seeking Alpha/Mineweb:   A rare opportunity for SLV investors; India’s silver jewelry exports grow in the U.S.

Wall St. Cheat Sheet:  What do Americans think about gold?

Financial Chronicle:  Ten reasons for putting your money in gold

Santiago Capital:  Why did gold become money?

In calculating “The costs of war,” Rep. Ron Paul asks readers to imagine what the $7 trillion estimated tab for Iraq and Afghanistan might have done in the private economy.  And on Monday, Paul battled Paul Krugman in a “fun” debate on Bloomberg TV.  Here’s a transcript, which includes Paul pointing out that “the Constitution still says the dollar should be pegged to gold and/or silver,” and post-debate analysis from Zero Hedge, and Mike Shedlock, who also explains why he’s “swapping some gold for silver.”

Related Links:

Reuters/MarketWatch:  Gold falls on strong U.S. data, ends five-day rise; gold and silver both off 0.1%

Bloomberg:  Gold seen advancing on central banks stimulus speculation

Tim Iacono:  On an ocean of credit with central bankers at the tiller

KWN:  Gold fund manager:  This Fed manipulation is incredibly dangerous

Gold Scents:  The inflation trade is on:  Bernanke has broken the dollar rally

Jim Rickards:  The real reason Ben Bernanke resists the gold standard

Mineweb:  Sprott & Baker: Global physical gold market undergoing staggering change; Analyst:  Scientific rationality aside, metals prices are about to turn for the better

SilverSeek:  Canada’s Dr. Doom likes silver

Silver Investing News:  Silver scrap supply sees further growth

Zero Hedge:  Treasuries and gold outperform as financials drag stocks down in April; Monday’s $1.24 billion targeted gold slam down makes the mainstream press

GATA:  ‘Fat finger,’ Wall Street Journal? No, government’s heavy hand on gold

CNBC:  Fed officials:  US economy faces risk of ‘fiscal cliff’; Economist: Spain default could hit US stock market 10%-20%

GoldSeek:  Austerity fires voter vengeance against euro

Seeking Alpha:  The ECB’s LTRO isn’t working out: Protect yourself with gold and silver

MarketWatch:  Capital preservation is more important than capital growth

In an extensive look at the “Critical Factors that will Impact Silver,” Steve St. Angelo argues that “the fundamentals for silver today are even better than they were last year when its price and sentiment were higher.  Nevertheless, consumer affinity for precious metals has turned rather pessimistic presently.”

The five critical factors St. Angelo sees are 1) controlling silver market sentiment; 2) energy supply and diesel consumption; 3) declining average ore grades; 4) future silver mine supply, and 5) nationalization and monetization of precious metals.  And he closes by advising that “the best tactic for those who put their faith in the oldest forms of money in the world is to purchase and take delivery of the physical metal.”

Related Links:

MarketWatch:  Gold edges slightly lower for session, month; Silver suffers more than 4% monthly percentage drop

Dow Jones:  Gold shakes off $1.24 billion ‘fat finger’

Seeking Alpha:  Silver one year after the peak:  On the brink of the next big move; Is silver finally on its way to $40-$50?

SafeHaven:  Analysis of the latest COT reports for silver and gold

Commodity Online:  Huge upside potential in Gold as COMEX speculative net longs hit record lows

GoldSeek:  Investors dumped equities in April fastest in 17 years, will they now turn to gold and silver?

Tim Iacono:  Economy, central banks, and technical factors to drive gold price higher

Mineweb:  Indian gold prices testing new highs

Jesse’s Café Américain:  Gold bull’s long-term trendline – The indispensable chart

GATA:  The Moneychanger interviews GATA secretary about gold and silver suppression

Bullion Bulls Canada:  Paper money:  The barbarous relic

The Daily Bell:  Canada introduces plastic cash – say, how about trying a little gold and silver?

FT Alphaville:  The unwitting move towards a global gold standard

Arabian Money:  How JM Keynes was the Warren Buffett of his time

Zero Hedge:  iTax avoidance; U.S. elections:  Deflecting attention from the real question

Mike Shedlock/KWN:  GDP miss far bigger than announced; Shadowstats‘ John Williams – The “recovery” faked by phony government numbers

With a growth-sensitive commodity like copper moving higher despite the lower-than-expected Q1 GDP numbers released Friday, Dan Norcini sees “an environment in which the more bad news we get, the more optimistic traders are becoming that the next round of QE is coming right up.

That is what gold began sniffing out in yesterday’s session and appears to be continuing today. We have been accustomed to seeing these rotten numbers generate the risk aversion trades, trades in which commodities in general are dumped and the Dollar is bid higher. We are now seeing a change in trader perceptions, which after all is what runs markets, in which the steady trickle of news showing a deteriorating growth pattern in the US is being met with increased expectations for QE sooner rather than later.

In other words, it is QE ON instead of RISK OFF.  As long as this perception continues, gold is going to move higher. The trick is just how bad do traders think the news has to get before it forces the hands of the Fed.”

Related Links:

Reuters:  Gold posts biggest weekly rise since late Feb

MarketWatch:  Gold gains 0.3% on weaker dollar, euro-zone fears; silver adds 0.5%

Zero Hedge:  Golden day as stocks slip and silver still leads YTD

Jesse’s Café Américain:  Unless there is a major liquidity event, most likely triggered by Europe, the metals bias seems to the upside

Jim Sinclair:  The most important development since The MSM/MOPE assault on Euroland began

Market Oracle:  Impending gold & silver price launch

SilverSeek:  The silver megathrust

Silver Investing News:  Silver acts industrial in an uncertain market

Bloomberg:  Gold traders get more bullish as central banks hoard more

P. Radomski:  Gold’s long-term picture remains bullish

Mineweb:  Goldman Sachs and CITI both very positive on gold price; Gold-starved Indians lap up gold ETFs

Seeking Alpha:  Precious metals:  Their place in a portfolio

Reuters/Daily Reckoning:  Jim Rogers:  Why the Fed is wrong; Ben Bernanke’s paper dollar embodies systemic risk

Got Gold Report:  Jim Grant – the people have had enough, the Fed’s “Atlas Complex”

CNN Money:  Battle of the beards: Bernanke vs. Krugman

Zero Hedge:  Chart of the day: Change in Q1 American debt and GDP; U.S. companies are furiously creating jobs… abroad

As a Casey Research strategist explains how the global power realignment will lead to “the demise of the U.S. dollar as the world’s reserve currency,” something that “the U.S. mainstream media has left largely untouched,” technical analyst Przemyslaw Radomski, in a shorter-term view, reasons that “Since the trend remains down for the USD Index, it seems that the precious metals could very well rally once this index begins to move lower.”  And within that rally, the above “silver-to-gold ratio chart suggests that silver is likely to outperform gold in the months to come, yet it should be kept in mind that this may require some time to happen.”

Related Links:

MarketWatch:  Gold rallies 1.1% on weakened dollar, Fed; silver gains 2.8%

Dow Jones:  Gold leaps to 2-week high as traders weigh Fed

Trader Dan:  Gold seeing some strength

Scott Pluschau:  Bull hammer in silver

SilverSeek:  May silver’s precise bounce is encouraging

Victory Report:  Visualize:  The big silver picture

Arabian Money:  Will gold spike to $3,000 on a short squeeze as China uses gold to buy oil from Iran?

Reuters:  Chinese yuan to become key commodity currency

Commodity Online:  Goldman India gold ETF trading volume surges 20 times on Akshaya Tritiya

Telegraph:  Europe faces Japan syndrome as credit demand implodes

Zero Hedge: Project ‘end-up-like-Japan‘ continues

SafeHaven:  Global macroeconomic analysis through the Austrian lens

Bloomberg/Tim Iacono:  Cooling U.S. labor market takes toll on confidence; Jobless claims remain worrisomely elevated

KWN:  Bloomberg Brief economist:  U.S. is seeing a collapse in real disposable incomes

Econbrowser:  Infographic:  U.S. unemployment rates by county

“It seems to me that you opened up a very large can of worms last week when you sought to combat price manipulation in the energy markets,” begins an open letter to President Obama from Motley Fool contributor Christopher Barker.  “Within that now-opened can, I believe you will find one worm made of gold and another cast in silver.”

Barker, who writes regularly on gold and silver, goes on to remind Obama that  “you have repeatedly lamented the absence of a ‘silver bullet’ to address the elevated gas prices that threaten to choke off any green shoots of economic recovery that may be trying to sprout. I find your choice of phrasing a bit ironic, since last week you ignored the clearly manipulated markets for gold and silver while decrying manipulation in the energy markets.

I think I understand precisely why you might be inclined to fight for free and fair energy markets while turning a blind eye to gold and silver, but nonetheless I wanted to express to you my disappointment in the resulting double standard. In the meantime, if you really want to find something resembling a silver bullet for gas prices, you might wish to begin by looking inward at the out-of-control trends in U.S. fiscal and monetary policy.”

Related Links:

MarketWatch:  Gold ends 0.1% lower, recovers from sharp post-Fed drop; silver down 1.3%

Tim Iacono: FOMC statement:  Fed nothingburger leaves markets wanting

Reuters/Business Insider:  Press Conference:  Bernanke says Fed prepared to do more for economy

KWN:  Caesar Bryan – Asia to deploy stunning & massive QE

The Gold Report:  Is this the end of the consolidation in gold, silver and the miners?

MoneyWeek:  Good news for gold bulls – it could be time to start buying again

Mineweb:  Fact, opinion and fiction in the rising gold price scenario

Metallwoche:  James Turk:  Gold and silver are still undervalued

Global Times:  Shanghai Futures Exchange paves the way for silver futures

SafeHaven:  Gold and silver manipulation – Small silver speculators trounced

GATA:  ‘Real’ trading in U.S. markets is down to 16 percent; the rest is machines

GoldSeek:  Exchange trading out-sleazes carnival midway

St. Louis Post-Dispatch:  Missouri’s sound-money bill is really a protest

Telegraph:  Nightmare week for Angela Merkel as austerity bloc crumbles; Merkel defends austerity

Mineweb:  Investors buying sovereign debt rather than gold; Possible Eurozone collapse a game-changer for gold

Jesse’s Café Américain:  Janet Tavakoli: Another financial crisis looming, and you’re on your own

Following recent explanations by Jim Rickards on “The hidden role of gold at the IMF,” and central banks’ obsession with gold, Mineweb reports that according to the latest IMF statistics, “at least 12 countries are known to have increased their gold reserves in March, indicating the continuation of a trend now going back more than two years, and one which has been on its own a substantial supporter of the higher gold prices seen over the period.”

That trend “will continue in the medium and long term,” according to a Swiss analyst quoted by Bloomberg, who adds that “Gold will continue to be a preferred central bank reserve asset. It is currency protection and stabilization.”  And a recent Prudent Bear commentary described the huge pent-up demand for central bank gold buying in emerging market countries.

Related Links:

Reuters:  Gold rises 0.3% on Wall St gains; options, Fed in focus; silver off 0.3%

MarketWatch:  Gold at one-week high; weak housing data stoke hopes for more QE

Trader Dan:  Gold chart and central bank buying

Jesse’s Café Américain:  Gold and silver charts – winding, winding…

SilverSeek:  The silver reverse bubble of 2012

Silver Investing News:  Fate of silver lies in investors’ hands

Bullion Vault:  There are still reasons to be excited by gold

Jim Sinclair:  ESM will supply whatever money is needed In Euroland; The implications of China paying in gold

Hard Assets Investor:  Jim Rogers on when to buy gold, Chinese bubbles and fake good news

The American Conservative:  China’s rise, America’s fall

PBS’ Frontline:  Money, power and Wall Street (premieres Tuesday)

GATA:  Are markets arranging a de-facto return to the gold standard?

Got Gold Report:  Ron Paul on CNBC:  Fed counterfeiters

GoldSilver.com:  Sound money takes hold in Utah, Missouri and South Carolina

Fox News:  Gold rush: California’s weekend warriors discover prospecting

“So just go buy your physical and be thankful that you are getting it at a cheaper price today,” says precious metals analyst Harvey Organ in an interview with Chris Martenson.  How much cheaper?  Gold and silver were both down on Monday, with gold off $10 an ounce, and silver falling about $1.00 as it formed a “descending triangle” on the daily chart, before rebounding in after-hours trading.

Related Links:

Forexpros:  Gold, silver plunge on global growth fears

Jesse’s Café Américain:  Two day Fed meeting weighs on metals

Tim Iacono:  This week’s Fed meeting is key for gold and silver

SafeHaven:  Silver market update

SilverSeek:  How long until silver breaks out of its consolidation phase and heads higher?

GoldSeek:  Gold and silver enter period of low volatility and disinterest

Seeking Alpha:  Do you think that gold & silver are broken?

Mineweb:  Indians charging up for Tuesday’s gold buying festival frenzy

Prudent Bear:  Precious in all but recent perception

Future Money Trends:  Jim Rickards on central banks obsession with gold and why more QE is imminent

KWN:  John Hathaway – 8 key charts, gold, Fed & the big picture

Bloomberg:  Europe’s austerity backlash gathers steam in Merkel test; Hathaway called it

Wall St. Cheat Sheet:  What are the key themes in gold?

Forbes:  The best reason in the world to buy gold

Mineweb:  Two views on gold – both positive but….

iStockAnalyst:  Gold price will continue higher as rate of new discoveries decreases

As India prepares for Tuesday’s celebration of Akshaya Tritiya, a holy day that turns on going shopping for gold, Avery Goodman looks at how India’s recent interest rate cut of .5 percent may impact precious metals prices.

He predicts that the larger-than-expected cut — which gave precious metals a brief boost — won’t be the last, and that India is just the beginning:

“It would be rare and unusual for a central bank to do a ‘shock and awe’ rate cut like this one without intending to do more of them,” writes Goodman, who also sees it as “a pattern many other emerging market central banks will follow. All of them are very worried about bolstering local economies against the turmoil in Europe, which is the biggest export market in the world. Other central banks are likely to lower rates in spite of high inflation. The natural response of Indians and others all over the world will be the traditional one. They will probably trade in their rupees, yuan, pesos and so on for hard currency like gold and silver as they have always done.”

A charting exercise that contrasts the purchasing value of silver with that of the U.S. dollar, and puts the CPI-adjusted silver price at north of $100 an ounce, leads to the conclusion that silver currently trading around $32 per ounce offers what could be an historic buying opportunity.

And a Coin Week article asking “What’s the Best Way to Invest in Silver?,” points out that “90% silver is very popular because it sells for the lowest premium over melt of any form of physical silver…. If you hold those coins until silver rises by say $10 a ounce, you can sell them for a profit and not lose a chunk of your initial outlay to premiums which disappear at the time of sale.”

Related Links:

MarketWatch:  Gold inches higher, loses 1% on week; silver up 0.8% for week

Kitco:  Watch U.S. dollar, FOMC meetings for metals markets’ direction

Jesse’s Café Américain:  Comex silver inventory watch heading into May-July delivery period

Silver Doctors/Seeking Alpha:  HSBC transfers 329,000 ounces of silver into JPMorgan’s vaults; CME silver stocks at an all-time high, or are they?

Bullion Bulls Canada:  Two scenarios for next precious metals rally

KWN/SafeHaven:  John Hathaway – Fed to print more money & gold to hit new highs; Many signs point to gold’s higher prices

Jim Sinclair’s MineSet:  QE to infinity certain with European Stabilization Mechanism treaty

Wall St. Cheat Sheet:  Gold and silver miners put real money where their mouth is

Global Times:  Shanghai Futures Exchange paves the way for silver futures

Zero Hedge/Got Gold Report:  Eric Sprott & Charles Biderman discuss paper vs. physical gold; Biderman knocks government ‘statistics’

WSJ:  Gold is an ‘anti-government trade‘

Bloomberg:  BofAML’s Blanch says U.S. fiscal woes will push up gold

Tim Iacono/NYT:  Non-Fed leading economic indicators negative again; Fears rise that recovery may falter in the spring

Reuters:  Growth vs. inflation debate sharpens

Russia Today/Business Insider:  Ron Paul fights the Fed in new video game

That’s what Patrick Heller argues in an article headlined “Major gold and silver price suppression now a weekly occurrence. So what?“  He writes of having “previously warned my readers that markets will be more volatile as we get closer to the time when I expect gold and silver prices to soar.  When the US government needs to work with its trading partners and allies to engineer a major price suppression once a week, we are getting a lot closer to the day when such tactics will no longer work.”

Scroll down here to see an example from earlier this week of “what a bear raid looks like,” and read a recent interview with Ted Butler, in which he spoke of manipulation’s silver lining.

Related Links:

Forexpros/GoldSeek:  Gold eases higher on weak U.S. data, euro zone worries; Gold and silver end slightly higher

Jesse’s Café Américain:  Gold & silver winding up for a move

MilesFranklin.com:  David Schectman:  I’m a buyer at these prices

Got Gold Report:  Bob Moriarity:  Sprott will signal silver bottom

Silver Institute/Mineweb:  World Silver Survey 2012 released; Thomson Reuters GFMS forecasts ‘just above’ $40/oz high for silver

Kitco:  Silver Survey: Investment key to silver-price action in 2011

Bloomberg:  Top analysts see record gold in Q4 as hedge funds retreat

KWN:  Stephen Leeb: QE3 is now 80% – 90% & I’m going all-in gold if it dips

Tim Iacono: Economic data should spur more Fed money printing talk

SafeHaven:  Inflation and hidden gold taxation: 3 historical case studies

Gregor Macdonald:  Get ready for ‘hot’ inflation

Bullion Vault/Zero Hedge:  Derivatives: A disaster lurking just below the surface?; The mother of all infographics: Visualizing America’s derivatives universe

Reuters:  Sources:  Syria selling gold reserves as sanctions bite; Mongolia’s “ninja” miners help sate China lust for gold

BBC:  Silver: The harsh realities behind diminishing supplies