News and Views

A Gold Silver Worlds‘ article highlights Ted Butler’s analysis that JPMorgan has built the longest position in physical silver in recorded history, having “accumulated between 100 and 200 million ounces of physical silver (if not more).” And in his latest weekly review, Butler writes that “Quite literally, what JPMorgan does or doesn’t do determines the price of gold and silver. It’s easy to lose track of the big picture when one focuses on all the details. But when you step back a bit, JPMorgan is dominant in just about every detail.” Citing the above quote, a post at Jesse’s Café Américain applauds Butler for doing “an exceptionally good job of analyzing the Comex market, and I appreciate his efforts…. Sources like this are a blessing.”  But, adds that “I am rather reluctant to lay any wagers on JPM’s motives based on this information however.  It is not clear to meContinue Reading
Comex gold and silver futures gained some 1.5% on what was seen as “rising haven demand” following a “disappointing” report on manufacturing data from the Institute for Supply Management (ISM) and a “steep drop” in U.S. stocks, The ISM index was off more than 5% in January, at 51.3% compared to December’s 56.5% level, and the Dow fell 326 points, it’s biggest drop in seven months. And under the headline “U.S. Mint bullion coins soar to highs in January sales,” Coin News reports that “Gold coin sales by the United States Mint jumped the most since April and the bureau’s silver coins moved the quickest in a year.”  Despite a delayed debut, American Eagle silver coin sales were just above 4.7 million — the fourth-largest January on record, but well below last year’s blow-out January of almost 7.5 million. See also: Reuters:  Analysis – Gold finds major support from bullishContinue Reading
February 1, 2014

Two-Minute Warning

Zero Hedge describes how, in the above “must watch” segment, Jim Grant, “In a mere 140 seconds… explains to an almost stunned into silence Rick Santelli, how we all ‘live in a valuation hall of mirrors’ as the Fed manipulates everything. Thanks to it’s ‘fingers and thumbs on the scales of finance,’ Grant continues, the Fed ‘insists on saving us from ‘everyday low prices’ – what they call deflation – and by doing so it manufactures ‘redundant credit’ which ‘does mischief’ in and out of markets. Grant, ominously concludes, ‘there is no suspense as to how [this will] end…[it will] end badly.”  Earlier:  Grant denounces the Fed at 100, calls gold “an investment in the almost certain failure of the PhD-standard in central banking.” See also: Dan Norcini:  Gold slips; Silver steady MarketWatch:  Emerging-markets turmoil’s set to buoy gold, sink oil Mineweb:  Christian sees $1320 gold before end of Q1,Continue Reading
“I am really fascinated with the gold and silver markets for a simple reason,” says metals’ bull John Embry. “I believe that the fundamentals that should be driving the price couldn’t be better. At the same time, because the price of both gold and silver have been driven down relentlessly – going on two and a half years now for gold – the degree of undervaluation against any method that I look at is approaching historic records.  As a result of this counter-intuitive price action that we’ve seen in both metals, the sentiment in the market is horrible. I don’t think I have actually ever seen people so negative and disinterested in the subject, which I think represents one of the greatest buying opportunities in history.”….Read More >>> See also: MarketWatch:  Gold & silver futures drop 1.6% & 2.2% as U.S. dollar, equities gain Zero Hedge:  Stocks dead-cat bounce asContinue Reading
With spot gold and silver gaining 0.7% & 0.9% respectively on Wednesday, as the Fed announced an additional taper of $10 billion per month, Reuters reports the view of some analysts that the taper “had already been fully discounted in the bullion market” before the announcement, as well as the observation of one money manager that “As the currency crisis continues to heat up in the emerging markets, people are looking for gold to be a safe haven.” But Dan Norcini sees gold “caught in a tug of war” between tapering and the currency crisis, with “downward pressure originating from those selling the metal as the Fed begins to scale back,” and “upward pressure from safe haven flows tied to the emerging markets crisis. In the former, gold acts more as a commodity; in the latter as a currency. Depending on which input the market is focusing on any givenContinue Reading
Although gold and silver fell on Tuesday as U.S. stocks rebounded and emerging markets stabilized, noted silver analyst David Morgan tells The Gold Report that “I think that the worst is over. I think silver has bottomed. Gold probably has as well.… Now is the time, for those not in the sector, to get in. For those  already in, either hold what they have, add to their position or ride it out.” He sees 2014 as “a rebuilding year. Depending on what happens in the global economic system, it’s possible that we could even see a very good year for the metals, but I don’t anticipate that. I’m anticipating a rebuild year where silver climbs back over $30/oz and gold travels up well over $1,600/oz, probably to the $1,700/oz level or higher depending on how the economy unfolds.” See also: WSJ/Barron’s:  Turkey’s central bank declares a shock-and-awe rate hike; Turkey’sContinue Reading
Comex gold and silver futures ended mixed on Monday with silver up 0.1% and  gold off 0.1%, reports MarketWatch, quoting one analyst as observing that “gold futures did catch a bid off the lows of the day in an inverse reaction to the stock market … as the primary driver of markets remains emerging market concerns,” and quoting another as saying that recent gold moves offer “encouraging early signs that the lows of $1,180 in June 2013 and $1,182 earlier this month are a double bottom.” And according to a Bloomberg report, gold shipments from Hong Kong to China totaled a record 1,109 tonnes in 2013, a 33% increase over 2012.  Addressing the minor discrepancy between that figure and Reuters‘ tally of 1,158 tonnes, despite the stats being received from the same source, Mineweb‘s Lawrence Williams also points out that China “imports gold through other land, sea and air borderContinue Reading
“The Emerging Market (EM) crisis took a turn for the worse,” begins Doug Noland’s latest Credit Bubble Bulletin. “The apt Bloomberg currency market headline read: ‘Contagion spreads in emerging markets as crises grow.’ Note plural ‘crises’ as opposed to a singular EM crisis. This is a pertinent issue. A popular CNBC contributor posited Friday that EM-related market stress was not as troubling because it was related to individual country issues as opposed to what would be more challenging ‘macro’ forces. I would counter that the unfolding global crisis will be particularly problematic because of what has been a dangerous interplay between global ‘macro’ and individual country ‘micro’ Bubble dynamics.”…Read More >>>Continue Reading
As the Dow fell more than 300 points on Friday to complete a two-day drop of almost 500 points, Comex gold and silver futures ended mixed, with silver falling 1.2% and gold rising 0.2%, on what was described as “emerging market jitters.”  Gold finished up 1% on the week, it’s fifth weekly gain in a row, reports Bloomberg, “the longest run of weekly gains in 16 months as declines in global equities spurred demand for the metal as an alternative investment.” And the case for holding physical gold got an endorsement from a column headlined “Learn from Buba and Demand Delivery for True Price of Gold.” Pointing out that “Buba is the nickname for Deutsche Bundesbank, the central bank of Germany,” the proprietor of Jesse’s Café Américain writes that “I nearly fell out of my chair when I read a description of the divergence between the paper and physical gold marketsContinue Reading
Comex gold and silver futures gained 1.9% and 0.9% respectively on Thursday, with gold reaching $1,262, its highest close since mid-November, reports MarketWatch, on “the prospect of India easing curbs on gold imports, a drop in U.S. equities and a weaker dollar.”  A USA Gold article adds “heightened risk aversion” to the equation, and Dan Norcini points out that “there was a strong combination of data releases that really lit a fuse under the gold market in today’s session. Unemployment numbers, the Chicago Fed’s index, China, etc. Each of these data releases showed slowdowns in growth.” See also: Zero Hedge:  Bank Of America – “Gold squeeze gets explosive above 1270″ Reuters/CNBC:  Reports – Ruling party head Sonia Gandhi seeks easing of India’s gold curbs; Indian Finance Minister – No rollback of gold restrictions Mineweb:  GFMS- Professional gold market ‘obsessed’ with tapering issues Hard Assets Investor/CNBC:  Next week’s second Fed taperContinue Reading
In a pair of big picture analyses, Jesse’s Café Américain takes stock of “Where We are At In the Global Precious Metals Markets,” and Grant Williams, in his latest Things That Make You Go Hmmm… newsletter, deems 2013 to have been “an absolutely seismic year for gold, but the way in which the tectonic plates shifted has yet to be fully understood. I firmly believe that in the years to come, when we look back at the great game being played in gold, we will pinpoint January 16, 2013, as the day when it all began to unravel. That day, the day the Bundesbank blinked and demanded its bullion, will be shown to be the beginning of the end of the gold price suppression scheme by the world’s central banks; and then gold will go on to trade much, much higher.”  He goes on to predict that 2014 “could beContinue Reading
Koos Jansen, whose Web site In Gold We Trust is an invaluable resource for information on China’s gold dealings, interviews Willem Middelkoop, described as “the Dutch equivalent of Jim Rickards,” and who is also a co-founder and principal of the Commodity Discovery Fund. Q:  Your new book is named “The Big Reset,” isn’t our current monetary system sustainable?  A:  No, we now have arrived at the point where it is not the banks, but the countries themselves that are getting in serious financial trouble. The idea that we can ‘grow our way back’ out of debt is naive. The current solution to ‘park’ debts on to the balance sheets of central banks is just an interim solution. A global debt restructuring will be needed, as economists Rogoff en Reinhart recently explained in their working paper for the IMF. This will include a new global reserve system to replace the currentContinue Reading