Posted by Investment Rarities on November 8th 2014 in CFTC, CME Group, Gold, JPMorgan, Quants, Short Sellers, Silver, Ted Butler, Wall Street | Be the first to comment!
This memorandum was written by Ted Butler
for the Investment Rarities’ broker staff on October 28, 2014
There is a flip side to everything and mainly as a result of the terrible beating it has taken over the past few years, the upside cycle for silver appears to be at hand. Not only is silver at a stupid cheap price, it has everything necessary to rally sharply and soon. This week, for the first time in my memory, the CEO of a leading silver miner, First Majestic, called on fellow silver miners to withhold production to break the back of the manipulation. If there’s one clear signal that a commodity’s price is too cheap, it is just that.
To an investor, a cheap price means low risk and a good time to buy. But what about the reasons for silver to rally and rally soon? Start with the largest speculative short position in history. You’ve heard me complain about a massive silver short position by JPMorgan and other banks for years, but I’m talking about something different now. While there is still a very sizable commercial paper short position on the COMEX, that is separate from the new historical short position in COMEX silver held by technical funds or traders who rely on chart signals alone to buy or sell….Read More »
Posted by Investment Rarities on November 8th 2014 in Federal Reserve, Gold, Monetary Policy, USD | Be the first to comment!
Gillian Tett: Do you think that gold is currently a good investment?
Alan Greenspan: Yes… Remember what we’re looking at. Gold is a currency. It is still, by all evidence, a premier currency. No fiat currency, including the dollar, can match it.
Posted by Investment Rarities on November 7th 2014 in CFTC, Federal Reserve, General Economy, Gold, Interest Rates, JPMorgan, Short Sellers, Silver, U.S. Congress, USD, Wall Street | Be the first to comment!
Spot silver and gold recovered slightly on Thursday, adding a few-tenths of a percent, after Wednesday’s rout “tempted some buyers back to the market and as the dollar dipped on profit-taking,” reports Reuters. It quotes one gold trader as observing: “We’re holding steady today but nobody wants to make a big move ahead of the employment numbers tomorrow morning. If there’s a positive number, they (the bears) may take a run at it.” This as Bloomberg reports that the gold/silver ratio hit a five-year high earlier this week, topping 76 before ending at 74.1 on Thursday (see above chart). And in a separate article, on American Silver Eagles selling out, Bloomberg notes that assets in ETFs and other exchange-traded products “backed by silver rose to a record last month, defying a slump in gold ETP holdings to the smallest since 2009.”
GoldPrice.org/Mineweb: Silver and gold are severely oversold; Will they get worse before they get better?
Zero Hedge: Physical gold shortage worst in over a decade – Gold forward rate most negative since 2001
Barron’s/GoldSeek: Will the Swiss referendum turn around gold?
Pragmatic Capitalism/Sprott Money: What if the Fed isn’t the wizard behind the economic curtain?; Federal Reserve counterfeiting approaches 100%
NY Post/Of Two Minds: GOP should start fixing the Fed; If you think it matters which party controls the Senate, answer these questions
NY Times/Rolling Stone: Matt Taibbi spotlights a JPMorgan whistleblower; The $9 billion witness – Meet JPMorgan Chase’s worst nightmare
Posted by Investment Rarities on November 6th 2014 in CFTC, Federal Reserve, General Economy, Gold, India, Interest Rates, Russia, Short Sellers, Silver, U.S. Congress, USD, Wall Street | Be the first to comment!
Spot gold and silver ended off 1.8% and 3.6% respectively on Wednesday, reports Reuters, as the U.S. dollar rose, “extending multi-year highs after Republicans in mid-term elections won control over both chambers of the U.S. Congress for the first time since 2006, lifting investor expectations for more pro-business policies.”
While one analyst suggested that “Conservatives by nature are more hawkish and that is pushing the dollar higher. People do not see the need for gold,” another said that “Republicans might be harder on the Fed and loose policy. There’s little reason to hold gold when forward interest rates are going in one direction.”
And in response to a Wall Street Journal article, headlined “Good Morning, Ms. Yellen, Rand Paul on Line One,” USA Gold points out that “Yellen will advocate aggressively for continued Fed ‘independence,’ but I remind you of the recent statement made by former Fed chair Alan Greenspan: “I never said the central bank is independent!“
Reuters/Coin News: U.S. Mint temporarily sold out of Silver Eagles amid huge demand
GoldCore: “Global scramble” for silver – coins “hard to get”, “premiums likely to jump”
Zero Hedge: Paul Singer – Gold, bonds and “maybe history has stopped”; Russian ruble plunges to new record low as central bank hints at gold sales
Forex Live/Bloomberg View: BOJ Minutes: Will keep easing until 2% inflation stable; William Pesek – Is Bank of Japan’s governor a genius or a madman?
Resource Investor/Market Realist: Indian gold bullion imports hit 17-month high; Why India’s gold imports are increasing
Mineweb/Reuters/Politico: U.S. miners may profit from GOP election blow-out; Energy seen getting biggest boost from Republican Senate; Elections give Keystone a filibuster-proof majority
Posted by Investment Rarities on November 5th 2014 in CFTC, China, CME Group, Federal Reserve, General Economy, Gold, Interest Rates, JPMorgan, Quants, Short Sellers, Silver, Ted Butler, USD, Wall Street | Be the first to comment!
“All of the things I look at in silver seem to be aligned for a sharp move up,” says Ted Butler, in an interview with Investment Rarities’ President Jim Cook. Butler explains that “The big commercial traders, led by JPMorgan, have managed to get all the technical hedge funds to plow into the short side of COMEX silver. The technical funds must buy back their thousands of short silver contracts since they can’t possibly deliver real silver.”
And in a more extended conversation, with Peak Prosperity‘s Chris Martenson, Butler reiterates that the technical funds “have no ability whatsoever to deliver physical metal and at the same time they’re shorting like crazy into a physical environment where there’s nothing but indications that the market on a wholesale, physical basis is very tight. And that’s a combination that you can just blow sky high in price.”
Reuters/SafeHaven: Gold rises as dollar drops, breaks 4-day fall; Yen massacre and gold muscle
Mining.com/Bullion Star: Chart – Silver price weakness won’t last; Insatiable Chinese gold demand continues unabated
Jim Rickards: The difference between currency wars & financial wars
Zero Hedge: Interest rates cannot rise – here’s why; Goldman shows “equity bust” risk highest since 2008
Bloomberg: Singer’s Paul Elliott Says U.S. growth optimism unwarranted as data ‘cooked’
Sharelynx/Money Metals: Gold manipulation at the LMBA fixes; Why your stockbroker hates gold – The ugly truth
Posted by Investment Rarities on November 4th 2014 in CFTC, China, Federal Reserve, General Economy, Gold, Interest Rates, JPMorgan, Monetary Policy, Short Sellers, Silver, USD, Wall Street | Be the first to comment!
With silver and gold futures inching up and down respectively on Monday, paper and physical continue to diverge as explosive demand for bullion coins is being seen in both the U.S. and Europe. According to a German coin dealer quoted by that country’s Gold Reporter: “On Thursday and Friday people had to draw numbers in order for us to control the run. On both days we sold each around 40,000 silver ounces – incredible. Demand is back – and hysteria as well.”
And Coin News reports that U.S. Mint “bullion coins rallied to start November with gold coin sales jumping 14,500 ounces and silver coin sales advancing 736,000 ounces. Gains extended from an exceptional October when gold coin sales were the highest since January 2014 and silver coin sales were the highest since January 2013.” This as Sprott’s John Embry contends that “silver remains as undervalued an asset as I have ever seen.”
InvestorIntel/Reuters: World demand for gold is strong, despite a price drop to the lowest level in four years
Seeking Alpha: Markets misreading of Fed statement is opportunity in gold; Gold and QE – Setting the record straight
USA Gold/Zero Hedge: The reinvention of Alan Greenspan; Greenspan to Marc Faber: “I never said the Fed was independent“
Silver Seek/SafeHaven: A silver primer – Where are we now?; A sunny silver forecast: Low price today means high price tomorrow
Mining.com/GATA: China’s gold strategy; ETF outflows – Is that where all that gold going into China is coming from?
Bloomberg/Wall Street on Parade: JPMorgan faces U.S. criminal probe into currency trading; Despite criminal history, JPMorgan holds $1.7 trillion in QE bonds
Posted by Investment Rarities on November 1st 2014 in China, Federal Reserve, GATA, General Economy, Gold, Interest Rates, Monetary Policy, Short Sellers, Silver, USD, Wall Street | Be the first to comment!
Gold futures were off 2.3% on Friday and silver doubled that decline, with both hitting four-year lows on the day and having their worst week since April 2013. “Japan basically pushed gold over the edge as it triggered a major risk-on move,” according to a Saxo Bank commodity strategist, citing Japanese stimulus, the Fed ending QE and dollar strength as being “more than the market could cope with this week.”
“The main reason for gold’s fall is the strength in the dollar after the BOJ’s desperate efforts to weaken the yen,” said the head of one asset management firm, and while predicting that “Gold could fall further in the short term as the dollar could rise,” he also thinks “gold should eventually benefit as a hedge against the uncertainties and economic turmoil brought by central-bank actions.”
While in the realm of the coins, Silver Eagles had their best month of the year in October, and with sales of some 38 million this year, they’re only about one million behind the pace of 2013’s record-setting year.
Jesse’s Café Américain: Good morning, Fiat Nam!
Dan Norcini: Hedge funds feasting on small specs in silver; Gold bears nail hedge fund sell stops
Seeking Alpha: Putting the gold selloff into perspective
Mineweb/Bullion Star: Gold and silver dive yet Chinese demand keeps rising; The great Chinese silver market debate
The Gold Report: 321 Gold‘s Bob Moriarity – Flock of black swans points to imminent stock market crash
KWN/Sprott Global: Eric Sprott says the stock market will crash, not gold; What Greenspan’s latest talk means for gold
GATA: Here’s what the World Gold Council is doing today amid the war against gold
Posted by Investment Rarities on October 31st 2014 in CFTC, China, Euro, Federal Reserve, General Economy, Gold, Interest Rates, Monetary Policy, Russia, Short Sellers, Silver, USD, Wall Street | Be the first to comment!
Following better-than-expected U.S. GDP growth of 3.5% for the third quarter, spot gold and silver fell 1% and 3.4% respectively on Thursday, and futures were hit even harder, tumbling 2.1% and 4.9%, on what was “a rough day for the precious metals, with the financial powers-that-be trying to prove that the end of QE III need have no negative effects on their financial engineering of The Recovery™.”
With silver hitting a 56-month low, the gold/silver ratio is now pushing 73, a 66-month high, but if an in-depth chart analysis published by SilverSeek — “Time Running Out on Silver Bear” — proves correct, that could change in weeks, not months. It predicts that November is “the time for the present silver bear market to end, and for silver to begin its next leg higher within its primary bull market.”
Zero Hedge/Businessweek: Broken stocks, battered bullion, and bruised crude; Did the U.S. just ‘steal’ GDP growth from the fourth quarter?
James Grant/Eric Parnell: Complexity – The hidden cost of central bank actions; A once-in-a-generation change for stocks
Bullion Star/Mineweb: China stocks up on oil & gold while prices are low; China’s ‘new normal’ still global metals demand driver
Bloomberg/Mining.com: Russia buys most gold for reserves since 1998 financial crisis; Pushes forward plans to mine the moon
CNBC/Grant Williams: Currency traders eye Swiss vote on gold holdings
GoldCore: U.S. Mint gold coin sales near 60,000 ounces in October – Swiss gold initiative leading to increase in demand?
Posted by Investment Rarities on October 30th 2014 in Federal Reserve, Gold, Interest Rates, Monetary Policy, Short Sellers, Silver, USD, Wall Street | Be the first to comment!
Spot gold and silver fell some 1.4% and 0.8% on Wednesday, with most of the drop following the FOMC announcement that it was ending it’s QE program, but that it would also keep interest rates low for a “considerable time.” The U.S. dollar rose on the announcement, which was said to have also “put downside price pressure on gold.”
But according to former Fed Chair Alan Greenspan, during an appearance Wednesday, QE “didn’t do much for the real economy.” And as Zero Hedge points out, Greenspan “has suddenly had an epiphany and now has a very different message from the one he preached during his decades as the head of the Fed: ‘Mr. Greenspan said gold is a good place to put money these days given its value as a currency outside of the policies conducted by governments.'” And USA Gold’s buying it: “With the price of gold down in reaction to today’s policy statement, now might be the perfect time to heed the former chairman’s investment advice.”
Posted by Investment Rarities on October 29th 2014 in Federal Reserve, General Economy, Gold, Interest Rates, Short Sellers, Silver, USD, Wall Street | Be the first to comment!
October sales of the U.S. Mint’s 2014 Gold and Silver American Eagles surpassed September’s sales this week, reports Coin News. Gold Eagles saw their best month since January, and the 4.36 million Silver Eagles sold in October was more than in any month since March. And given the outsized gold/silver ratio, which stood at 71.46 on Tuesday, Patrick Heller writes that “it should surprise no one that demand for physical silver by American investors is so strong in the U.S. that the dollar volume of retail sales by coin dealers of silver exceeds that for gold. Over the past month, demand has been especially skewed in favor of silver.”
MarketWatch/InvestorPlace: Gold and silver futures creep higher ahead of Fed decision
Confounded Interest: The Night of the Living Fed!
Hard Assets Investor: Fed’s halting of QE may mark gold’s bottom; Don’t get bullish on gold until it breaks $1,350
SilverSeek: Why silver and gold are the good news metals
Gold Report/Mineweb: Analyst says peak gold is here to stay; Hong Kong gold exports to China pick up strongly but…
Deviant Investor: Gold vs. paper – A Tale of Two Cities
Posted by Investment Rarities on October 28th 2014 in Bart Chilton, CFTC, China, Federal Reserve, General Economy, Gold, Goldman Sachs, India, Interest Rates, Janet Yellen, Monetary Policy, Short Sellers, Silver, USD, Wall Street | Be the first to comment!
Silver and gold futures inched up and down respectively on Monday, with the market said to be in “a wait-and-watch mode” ahead of this week’s FOMC meeting. One reason that gold “came under pressure” on Monday, reports Reuters, was “a sharp pullback in crude oil after Goldman Sachs slashed its price forecasts, citing lackluster global demand.” But it was also “underpinned” by China’s net gold imports from Hong Kong hitting a five-month high in September. This as the Times of India reports that annual Swiss gold exports to India have hit a record high level in advance of Switzerland’s gold referendum on November 30.
Mining.com/Mining Feeds: Will the Fed turn off the QE tap?; What will the end of QE mean for the precious metals?”
Motley Fool CA/Market Sanity: 3 reasons why I remain bullish on silver; Rick Rule – Why to love the silver bear market
SafeHaven: Gold and silver – Respect the trend but prepare for a reversal
Telegraph/BullionVault: BIS warns on ‘violent’ reversal of global markets; Gold as investment insurance
SRSrocco Report: China- 10,000 tons of gold reserve? Could have been done with ease
Zero Hedge: How China & gold will shape the future; Caption contest – Bart Chilton salutes you
Posted by Investment Rarities on October 25th 2014 in China, Federal Reserve, General Economy, Gold, Interest Rates, Monetary Policy, Short Sellers, Silver, USD, Wall Street | Be the first to comment!
While spot gold and silver ended nearly unchanged Friday, futures inched up slightly as the dollar dropped for the first time in four days. “Today’s upward move is all about the dollar reacting to Ebola fears in New York,” according to a market strategist quoted by Bloomberg, who added that the metals’ “long-term price direction will be all about what the Fed does next,” with the next FOMC meeting set for October 28-29.
Despite being “stopped in their tracks” on Friday, “as the price dominant Comex continues to exert its inordinate influence over the real world economies,” Jesse’s Café Américain counsels that “the most fruitful perspective for the precious metals is that of a long-term investor. Short term traders may find little to interest them here. And when they do, it may be too late to climb on board. So we must take the markets as they are. There is no sense to criticize a lifeboat for not being a motorcycle. Do we need lifeboats? Do you trust the central banks and the politicians to safeguard your wealth and the integrity of the money and the financial system?”
Alasdair Macleod: Weekly market report – Precious metals subdued as panic over; Financial markets and reality disconnected
Numismaster/SafeHaven: Patrick Heller – Silver demand tops gold; Bullish silver stealth buying
SilverSeek: Bank for International Settlements paves the way for silver & gold
Mineweb/Fast Markets: Swiss gold referendum – Early opinion poll strikes fear; Swiss National Bank could be forced to buy $60 billion of gold
SF Chronicle/Channel NewsAsia: Huge, honkin’ gold nugget hits the market; Singapore-based Bullion Star gives employees the option of being paid in gold
Burning Platform: What could you buy with $100 worth of silver or gold if you invested 40 years ago?