Archive for the ‘Gold’ Category

A Wild Week

Posted by on May 15th 2017 in General Economy, Gold, JPMorgan, Monetary Policy, Short Sellers, Ted Butler | Be the first to comment!


By Theodore Butler

Despite what you may have read, the big banks did not sell gold and silver to depress the price on the big drop recently. The data will show, just as they have always shown that the managed-money traders (computer-driven hedge funds) were the big sellers and the commercials (big banks) were the big buyers. In that fashion, JPMorgan and the big banks successfully closed out a large portion of their profitable short positions. The commercials rig prices lower through the magic of spoofing and other computer scams, but they do so only to generate managed-money selling, so that the commercials can then buy. And this week, the managed-money traders sold COMEX gold and silver in droves, while the commercials bought every contract sold. That’s the game. With record trading volume, this past week was among the best financially for the commercials and worst ever for the managed-money traders in gold and silver. Including the extraordinary price turnaround on Tuesday evening into Wednesday, I’d estimate that JPMorgan and the other commercials made more than $3 billion in gold and silver this week and the managed-money traders lost the same amount.


That’s a far cry from the near $4 billion the commercials were in the hole for during the summer price highs. This is the money game that drives gold and silver prices. The good news is that the market structure is nowhere near as bearish. We have taken a large step towards getting most of the downside price damage behind us. The commercials whacked huge chunks off the price and there seemed to be an urgency in getting the job done.


When the selloff is done, it is likely to be the final selloff in silver. JPMorgan is in the best position for a silver blastoff than it has ever been, particularly after this week, with its largest physical position ever and a sharply reduced paper short position (the whole point of the selloff). It is impossible that the commercials aren’t tuned into the managed-money traders’ behavior, especially considering how few in number are the large commercials. Earlier this year, the commercials were in the hole $4 billion in gold and silver, only to have made that back and $3 billion more over the decline. These are stakes guaranteed to get attention.


The reason for the $4 billion loss was that the commercials miscalculated in allowing themselves to sell short to the managed-money longs at too low gold and silver prices earlier in the year. The reason the commercials miscalculated is that they misjudged the extent to which managed-money traders have attracted investor money. It was large investor inflows that created the much larger positions the managed-money traders put on this year.


Better than anyone else, the commercials and in particular JPMorgan now fully appreciate the tremendous buying and selling power that the managed-money traders possess. Armed with this knowledge, the commercials will never sell as aggressively at low prices when the prospects are for much more managed-money buying to come. It will be to the commercials’ advantage to lay back and hold off when the managed-money traders begin to buy, rather than rush to sell too soon as was the case earlier this year. This would result in much sharper price moves for silver than we’ve witnessed to date.


The right time to buy silver is after it has fallen sharply in price. That’s true with many investments, but buying silver at the right price can make you more money than just about anything else. The good news is that silver has fallen sharply from its summer price highs; making it a better buy now than it has been in many months.


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Taking Stock: Metals Gain on Equities’ Pain

Posted by on December 12th 2014 in CFTC, China, CME Group, Federal Reserve, General Economy, Gold, Goldman Sachs, Interest Rates, JPMorgan, Middle East, Monetary Policy, Short Sellers, Silver, U.S. Congress, USD, Wall Street | Be the first to comment!


Despite falling a fraction of a percent on Friday, spot silver and gold added 4.4% and 2.6% respectively on the week, as the Dow ended its worst week since 2011, reports Bloomberg, finishing Friday’s session “with a 100-point lurch in the final half-hour of trading, as equities tumbled around the world after crude extended declines below $58 a barrel.”

Summing up the week, a Commerzbank analyst tells Reuters that “When the equity markets dropped quite sharply, precious metals soared, so there is definitely still the link between equities and gold in particular (due to) risk appetite among market players. Some of the equity markets had a decent run this year. We don’t expect this to be continued to the same extent next year, so this might give some tailwind to gold prices.”

See also:

GoldMoney/Jesse’s Café Américain: Market report – Gold was the safe-haven this week; Gold and silver charts & commentary

CNBC/USA Gold: Oil has world markets over a barrel as Fed meet looms

Zero Hedge/Bullion Star: Austria considers repatriating its gold; WGC notes 2014 Chinese gold demand could reach 1,700 tonnes

GoldCore: New York Times on benefits of gold in currency wars

Politico/Confounded Interest: How Wall St. got its way in spending bill

David Stockman/New Yorker: Memo to Citigroup CEO Michael Corbat: Does your crony capitalist plunder know no shame?; The winner of the spending-bill vote: JPMorgan Chase CEO Jamie Dimon

Investors ‘Returning to Gold to Take Cover’

Posted by on December 11th 2014 in CFTC, CME Group, Federal Reserve, General Economy, Gold, India, Interest Rates, Middle East, Short Sellers, Silver, U.S. Congress, USD, Wall Street | Be the first to comment!

TakingCoverWithGold“As a rout in energy prices spreads to global equities, investors are returning to gold to take cover,” begins a Bloomberg article about how assets in GLD, the world’s largest gold-backed ETF, rose on Wednesday “at the fastest pace since July. The holdings are up almost 1 percent in December, snapping four straight months of losses.” Spot gold and silver did however end marginally lower on Thursday, falling about one-fifth of a percent following what was described as an “upbeat” retail-sales report But following that release, notes Reuters, “data showed the net worth of U.S. households fell in the third quarter for the first time in three years, hit by a fall in the value of their stock holdings and rising debts, giving mixed signals on the outlook for consumer spending.”

See also:

Zero Hedge/TF Metals Report:  CME implements gold, precious metals circuit breakers up to $400 wide; a.k.a. trading collars

The Gold Report/GoldCore: Elliott Wave charts point to shocking countertrend for gold; Marc Faber favors commodity stocks in Asia … and gold, in interview with Barron’s

Sprott Money/SRSrocco Report: China’s role in the global (paper) silver market; Current price of silver $50 based on the historic oil-silver ratio

Confounded Interest/Moneynews: Fed bubble bursts in $550 billion of energy debt

Matt Taibbi: The 10 craziest things in the Senate report on torture

Does Flight to Safety Have Legs?

Posted by on December 10th 2014 in CFTC, China, Federal Reserve, General Economy, Gold, India, Interest Rates, Short Sellers, Silver, USD, Wall Street | Be the first to comment!


The metals moved a mere 0.2% on Wednesday, with spot silver ending up and gold down. “The weak oil prices sapped some of the strength out of the gold market,” according to HSBC analyst James Steel, but “weak equities and the stronger euro were positive, and that kept the losses to a minimum.” And while both metals consolidated recent gains, Arabian Money‘s Peter Cooper suggests that “The recent sell-off in precious metals seems to be over with a massive increase in long positions in the Comex powering prices to the upside.” And asking, “What could sustain a precious metals rally this time?,” he predicts “a flight to safety as other asset markets break down. Whether you look at bonds or equities they have a definite sense of vertigo at these levels.”

See also:

Peter Brandt/ValueWalk:  Six chart reasons why silver has bottomed; The bullish case for gold [charts]

BullionVault/Frank Holmes: Gold & silver price ‘surge’ turns bears ‘neutral’ as China trading hits record; What is China’s ulterior motive for gold?

Mineweb: Chinese and Indian gold demand boost fundamentals further; Gold forecasts for 2015 – Scotiabank mining panel

Economic Times: Indian households spend 8% of daily consumption on gold jewelry and coins

Mike Shedlock/Silver Institute:  I traded some gold for silver

Bullion StarGuilty gold

Financial Times/Telegraph: Investors tapped to fund gold fraud film; Chinese general gives out Mercedes filled with gold

Metals Pop as Dollar, Equities Drop

Posted by on December 9th 2014 in CFTC, China, CME Group, Federal Reserve, Gold, India, Interest Rates, Short Sellers, Silver, USD, Wall Street | Be the first to comment!


Spot silver and gold gained slightly more than 4% and 2% on Tuesday, while futures surged 5.3% and 3.1%, “as the dollar headed for the biggest drop in a month against a basket of 10 currencies,” reports Bloomberg, adding that “More than $100 billion was wiped from the value of world equity markets yesterday, and global shares are falling again today.”

The Bloomberg article also quotes an options trader as pointing out that “Stimulus from every corner of the global economy is now entrenched, and that’s bullish for precious metals. This is a change of sentiment in a huge way, because investors stopped looking at U.S. interest rates possibly rising next year, to see the fact that every other major economy is easing at a breakneck pace to try and quell the slowdown.”

See also:

Jesse’s Café Américain/Stockcharts:  Gold and silver charts: On the cusp – With all respect to Willem Buiter; Gold breaks out

Zero Hedge/InvestorPlace: Markets turmoiled as 5th Hindenburg looms

Bill Bonner: The next phase of QE will shock you; What do central banking & “twerking” have in common?

Bloomberg/Seeking Alpha: U.S. silver coin sales climb to annual record as prices rebound; Silver – Always a wild ride

Reuters: India should allow banks to hold gold as reserves – World Gold Council report

Eagles Score Annual Sales Record

Posted by on December 8th 2014 in CFTC, CME Group, Federal Reserve, General Economy, Gold, Monetary Policy, Short Sellers, Silver, USD, Wall Street | Be the first to comment!


On Monday, American Silver Eagles hit an annual sales record, as the latest tally by the U.S. Mint put the sale of 2014-dated bullion Eagles at 42,864,000, besting 2013’s previous record by almost 200,000. But, reports Coin News, “This year’s annual record cannot climb too much higher. The supply of Silver Eagles will be shut off for about three weeks. On Friday, the U.S. Mint told its authorized purchasers that it was transitioning production from 2014-dated coins to 2015, and that it expects to have ‘enough coins to offer allocations through the week of December 15th.'” More from Silver Coins Today, which reports that the launch of 2015-dated Eagles will be January 12.

See also:

SilverSeek/Reuters: Gold and silver gain about 1%; Gold jumps above $1,200 on chart-based buying surge

KWN: James Turk – Here’s the reason gold and silver spiked after Comex close

Bloomberg: Gold bulls return as wagers on stimulus accumulate

Casey Research: Seven questions gold bears must answer

Zero Hedge/SafeHaven: On precious metals, patience, & paperbugs; Why Wall Street and governments hate gold

Bullion Star/SRSrocco Report: China’s Jan – Nov net gold imports  – 1,212 tonnes; Top primary silver miners Q3 2014 — Losses at $19

Morningstar/Alhambra Partners: Something’s not working in November jobs report; A matter, it seems, of faith

Metals Said to Have ‘Run Out of Big Sellers’

Posted by on December 6th 2014 in CFTC, China, Federal Reserve, General Economy, Gold, India, Interest Rates, Monetary Policy, Short Sellers, Silver, USD, Wall Street | Be the first to comment!


After the November non-farm payrolls report showed a gain of 321,000 jobs, spot silver and gold came off lows on Friday to end the day down 0.9% and 1.2% respectively, reports Reuters, quoting one analyst as saying, “It will be interesting to see how (gold) develops as we move towards the FOMC meeting on Dec. 17.” He predicts that “If we have a more hawkish Fed, more of an adjustment in interest rate expectations, and a still higher dollar,” it will be negative for gold. Given those prospects, a report concludes that “the damage may have been greater” for gold and silver on Friday, but argues that both were spared larger losses because they have “run out of big sellers.” And despite Friday’s downturn, silver and gold still ended up 5.5% and 2.1% on the week.

See also:

GoldSeek/SafeHaven: Gold shorting exhaustion; What’s next for the dollar and gold?

GoldMoney: Alasdair Macleod – Commodities & the dollar; The case for silver

Mineweb: Lawrence Williams – Is Indian gold turnaround a game changer for prices?

GoldSeek/Zero Hedge: New signs gold and silver are returning as monetary assets; Voices grow louder to end the U.S. dollar’s reserve status

Bullion Star: Belgium investigating repatriation of gold reserves; World Gold Council rectifies 2013 Chinese gold demand

Bloomberg: China said to consider scaling back restrictions on gold imports; Shanghai gold trade passes record as China seeks more sway

MarketWatch/GoldSeek It’s official – America is now No. 2; But, with an * The world’s most corrupt countries ranked

ECB’s Draghi Bugs Out On Gold

Posted by on December 4th 2014 in ECB, Euro, Federal Reserve, General Economy, Gold, Interest Rates, Monetary Policy, Short Sellers, Syria, USD, Wall Street | Be the first to comment!


In not committing to additional stimulus measures on Thursday, ECB head Mario Draghi specifically ruled out the possibility that future asset purchases would include gold, which temporarily put pressure on gold before it pared losses on a Euro rebound, ending the day off 0.2% as silver advanced 0.7%.

USA Gold calls out Draghi for having “said the ECB had discussed all assets except one. Really? Sovereign bonds? Student debt? Auto loans? Junk bonds? Everything except gold? I think that was thrown in to counter ECB board member Yves Mersch’s comment from several weeks ago that gold purchases were indeed possible. Draghi just doesn’t want the gold market to run on him.”

Zero Hedge, and others, pile on: “So to summarize, the ECB will willingly take on Greek bank CDOs, Italian 3rd lien espresso shop loans, Spanish condo HELOCs, and Portuguese Used-Car ABS… but not – never – gold.”


Oil Pumping Gold Up and Down

Posted by on December 4th 2014 in CFTC, China, Federal Reserve, General Economy, Gold, Interest Rates, Monetary Policy, Russia, Short Sellers, Silver, USD, Wall Street | Be the first to comment!


Spot silver and gold ended mixed on Wednesday, with the former off a fraction of a percent while gold was up about one percent. In what Reuters describes as “volatile trading,” gold was said to have been “boosted by firmer oil prices that prompted investors to shuffle positions while largely shrugging off the firm U.S. dollar.”

“A whipsaw in oil is spurring the biggest price swings for gold in almost nine months,” reports Bloomberg, pointing out that the correlation between the two “rose close to 0.4 today, the strongest link since July 2013. A reading of 1 means the prices move in lockstep.” It quotes one trader predicting “higher volatility in gold with oil and interest rate-hike uncertainty,” but another tells MarketWatch that despite volatility between now and year’s end, “I don’t see a sustained move one way or the other. I think we range trade for a while and attempt to consolidate gold around the $1,200 level and silver above $16.”

See also:

Fiscal Times/Mike Shedlock: Fed’s Beige Book finds ‘optimistic‘ view of the economy; Yield curve casts doubt on “robust recovery” theory

BullionVault/Zero Hedge: U.S. rates won’t rise in 2015; “We’re all in a Ponzi-world … hoping to get bailed-out by the next person”

BullionStar/ Eurosystem expressing an increasing interest in gold; Swiss vote the low point for gold?

MarketWatch/Pragmatic Capitalism: China plays big role in oil’s slide; Oil price won’t stay low forever

Bonner & Partners: Don’t bet on $70 oil lasting long; Has Russia reached “maximum pessimism”?

GoldMoney: Alasdair Macleod – Russia’s monetary solution

Debt Marches On; Can Gold Regain Ground?

Posted by on December 3rd 2014 in General Economy, Gold, India, Middle East, Monetary Policy, Short Sellers, Silver, U.S. Congress, USD, Wall Street | Be the first to comment!


Spot silver held Monday’s gains on Tuesday, ending unchanged, while spot gold fell about 1% as oil took another spill and the U.S. dollar rebounded. Gold and silver futures didn’t fare as well, falling some 1.5%, but with the U.S. Mint posting sales of 139,000 Silver Eagles on Tuesday, the bullion coins are now less than 500,000 away from hitting a new annual sales record.

With the dollar’s strength, gold is losing ground on U.S. debt, as shown in the above chart dating back to 2001.  This as USA Gold notes “that U.S. national debt very quietly surpassed $18 trillion yesterday,” and “the mainstream financial press seems to have ignored the milestone entirely. Has massive debt become so commonplace that nobody even takes note of big-round-numbers ending in twelve-zeros anymore? If that’s true, then there’s nothing to stop governments from running up even bigger burdens. Bigger burdens that will require more currency debasement to carry. All the more reason to get some gold now.”

See also:

Sovereign Man/Reason: Five complete lies about America’s new $18 trillion debt level

Seeking Alpha/MarketWatch: Accumulate gold amid bearish sentiments

SafeHaven/Mike Shedlock: What’s driving gold now?; Huge commodity reversals – Is the bottom in?

Short Side of Long: Currencies & metals overview

KWN/GATA: Tocqueville’s John Hathaway – Banks scrambling to find metal to cover shorts; Monetary metals markets likely reversing, Hinde Capital CEO Davies tell KWN;

Sprott Money/SRSrocco Report: India submits to the free market, fails to suppress gold; Massive Indian silver imports – setting up for another big record year

After Swiss Say Non!, Metals Say Oui!!!

Posted by on December 2nd 2014 in China, General Economy, Gold, India, Monetary Policy, Short Sellers, Silver, USD, Wall Street | 1 comment


After falling off in early trading, spot gold and silver soared to end up 4.2% and 6.9% respectively on Monday, reports Reuters, attributing the gains to “the surging oil market, technical buy signals and potential for increased Indian imports… The rally followed a thinly traded move lower, viewed by traders as overdone, after Switzerland voted on Sunday against a proposal to boost its gold reserves.” MarketWatch adds a dollar retreat and a downgrade in Japan’s sovereign debt rating to the list.

See also:

Jesse’s Café Américain:  Metals bears shocked by unusual intra-day reversal

Zero Hedge/Coin News:  Silver soars 17% from intraday lows; Gold rebounds to 5-week high, bullion Silver Eagles top 42 million

SilverSeek:  2014 Silver Eagle & Silver Maple Leaf sales – Five times larger than 2007

Bloomberg/Smaulgld: Surprise end to India gold controls boosts wedding demand; Is India about to set off another gold bull market?

Avery Goodman:  Swiss gold referendum? No… the big news is that India is back!

GoldSeek/Mineweb: Dramatic increase in gold flows into China; China holds the gold price key

Metals Drop On OPEC Production Punt

Posted by on November 28th 2014 in CFTC, Federal Reserve, General Economy, Gold, Interest Rates, Middle East, Monetary Policy, Short Sellers, Silver, USD, Wall Street | 1 comment


Spot gold and silver ended off 1.9% and 4.3% respectively Friday, falling with oil as the U.S. dollar gained after OPEC left its production target unchanged at a meeting on Thursday. “It is a brave new world,” declared one analyst quoted by Reuters, “OPEC is clearly drawing a line in the sand at 30 million barrels per day. Time will tell who will be left standing.”

In response to a CNBC article asking, “Could oil collapse cause next credit crisis?,” USA Gold’s Mike Kosares looks at the potential impact on gold and silver prices if that happens:

“If the latest oil shock – this time in a southerly direction – creates knock on effects, we will hear a great deal about systemic risks in the days and weeks ahead, Recall that gold at first went south in the crisis of 2007-2008 and then headed sharply higher as investors moved to shore up their portfolio’s against the possibility of a showdown on Wall Street and within the banking system.

We are in a much different situation today than we were back then and the system as a whole still suffers from the damage done by the last crisis. If a crisis were to hit today, it would start with a much weaker line-up on the playing field than the last time around. Keep in mind too that all of this has occurred because quantitative easing on a global basis simply has not worked.

We suspect that gold and silver demand will grow stronger even if the price weakens, or perhaps because the price weakens. Those who understand the virtues of gold ownership are not going to suddenly go to their national currencies, or the banking system, or the New York Stock Exchange as a defense. They will go to gold and silver.”