Metals Rise as Dollar Drops Most In a Year

Posted by on October 7th 2014 in CFTC, China, Federal Reserve, General Economy, Gold, Janet Yellen, Monetary Policy, Short Sellers, Silver, Wall Street | Be the first to comment!

MetalsRiseOnDollarDrop

After falling below $1,200 last Friday with the release of September’s jobs report, Monday saw investors having second thoughts about the data. Gold rebounded 1.3% and silver more than doubled gold’s gains, soaring almost 3%. A Reuters‘ article attributes the turnaround to a “sharp retreat” in the U.S. dollar [see above chart] that “sparked fresh physical demand and short covering.” It quotes one metals’ strategist as saying, “The spate of economic news has put downward pressure on gold, but the payrolls report might have painted a much better picture for the job market than what it really is,” specifically stagnant wages. “The dollar fell as much as 0.9 percent against a basket of 10 currencies,” reports Bloomberg, “as uneven U.S. labor-market data fuels speculation on when the Federal Reserve will raise interest rates.”

See also:

Dan Norcini/Coin News:  Macro trade reverses from Friday; Gold bounces above $1,200; Silver Eagles hurdle 34 million

Seeking Alpha/Sovereign ManRecord shorting in silver; This one chart shows exactly how undervalued gold is right now…

Trading Floor:  Are you aware of the potential Swiss gold shock?

Zero Hedge:  Will gold crash with the Dow… or soar?; 10 reasons why reserve currency status is an “exorbitant burden

Bloomberg:  The world’s most powerful central banker: Janet who?

Jobs Report: 230,000 Shades of Grey

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

230,000ShadesOfGrey

Gold and silver were said to have been “hit hard today in honor of the non-farm payrolls report. It sent gold negative for the year, with the spot price falling as low as $1,189 on Friday before ending off 1.8%, on a report that was described as both “beating expectations,” and “ugly,” notwithstanding the “joyous headlines” on Fox Business and CNBC.  The 248,000 new jobs went inordinately to workers in the youngest and oldest age groups, wage gains continued to be stagnant, and the number of those that have checked out of the labor force hit a record high.

“Strengthening payrolls are going to add the perception that the Fed is going to raise rates sooner,” said one research analyst quoted by Bloomberg, a perception he sees as “negative for gold.” But with the latest round of QE winding down, it’s also argued, in a cogent analysis at TF Metals Report, that “Without the constant dump of fresh greenback into the global banking system, we are right back to where we were in 2008. Namely, deflation.” And while this will initially drive metals lower, the Fed, with its stated mission to prompt unemployment and inflation, “will be forced to act … Deflation is their number one enemy and they will do anything (and this includes QE4) to avoid it!”

See also:

TradePlacer/Eric Sprott:  Why there is still hope for gold bulls; Metals vastly oversold from naked shorting

KWN:  Worried about today’s gold & silver smash – Just read this; Man who executed QE1 for Fed says own gold, fiat will burn

Coin News:  U.S. Mint sells 1.65 million Silver Eagles in three days, 2.74 million this week

Bullion Star:  New York Fed gold holdings tumble 15 tonnes in August:  Could it be sie Germans?

GoldCore/BloombergNew gold rush cometh with global bond market on edge of ‘cliff’; Humans lose to machines in $500 billion-a-day U.S. bond market

Wolf Street:  This chart shows how you get screwed in the stock market

Metals Take Small Steps in Right Direction

Posted by on October 3rd 2014 in CFTC, China, CME Group, ECB, Federal Reserve, General Economy, Gold, Goldman Sachs, JPMorgan, Quants, Short Sellers, Silver, Wall Street | Be the first to comment!

SmallStepAs gold futures inched down on Thursday, and silver added about a half a percent, Comerzbank analysts noted that “Gold and silver have recovered somewhat from their respective multi-month and multiyear lows.” This as the U.S. dollar and the euro are said to “have turned modestly corrective this week, with the euro being boosted amid disappointment that the ECB didn’t make that final leap into QE.”

And, Reuters reports that “pro-democracy rallies in Hong Kong underpinned gold prices,” quoting one metals analyst as saying: “With the likelihood of further weakness in equity markets, coupled with the still-volatile situation in Hong Kong, we would rather not want to be short gold here, as we think the precious metal may benefit from some short-covering heading into the weekend.”

See also:

Nikeei Asian Review/NY Times:  China trying to avert another Tiananmen in Hong Kong; Mainland Chinese tourists get a glimpse of rebellion

Examiner.com:  China will use gold and gold pricing to force global currency reset

Coin News/Bloomberg:  U.S. Mint coins gain again; Gold sales at Perth Mint reach 11-month high as prices retreat

USA Gold:  U.S. Eagle gold and silver coin sales surged in September

SilverSeek/Daily Reckoning:  Gold to silver ratio – sentiment; 4 ways to make a fortune with one precious metal

Bloomberg: High-speed trader accused of commodity market ‘spoofing’; Is the New York Fed a pushover for big banks? Dudley fires back

Public Integrity:  Megabanks lock up prison financial services – Government gives no-bid contracts

Metals Rise as Airlines Sink Stocks

Posted by on October 2nd 2014 in CFTC, China, Federal Reserve, General Economy, Gold, Media, Monetary Policy, Short Sellers, Silver, Wall Street | 1 comment

FlightToQuality

Spot gold and silver ended up 0.5% and 1.4% respectively on Wednesday, with the gains attributed to a September slow down in U.S. manufacturing growth, a flat U.S. dollar and a stock sell-off that was led by shares in airlines and travel booking companies, based on fears about ebola.

“One catalyst for gold could be a flight to quality bid if equities continue to deteriorate,” said a trader quoted by MarketWatch, who added that “From a timing perspective, the best opportunity would likely come when the dollar finally pauses to consolidate its current gains. Even the temporary dissipation of such a headwind would likely lead to a sharp rally.”

See also:

Hard Assets Investor/SilverSeek:  Gold bulls hanging on in battle vs. surging U.S. dollar; Dollar is the last stop before gold & silver spike

Seeking Alpha:  Investors fleeing euro & yen, could U.S. dollar be next currency to crumble?

Coin News/SRSrocco Report:  Gold rises in October start; U.S. Mint coin sales explode; The U.S. Mint sells over 750,000 Silver Eagles in one day

Mining.com:  Demand for physical gold remains strong as bullion banks suppress prices

Zero Hedge/Bill Bonner:  Bridgewater’s Ray Dalio – “There is always a downturn”; What CNBC isn’t telling you about the end of QE

CBC/Reuters:  China warns Hong Kong protesters of ‘unimaginable consequences‘; Security firm – Advanced iOS virus targeting protestors

Gold/Silver Ratio Tops 70

Posted by on October 1st 2014 in CFTC, China, CME Group, Federal Reserve, General Economy, Gold, Goldman Sachs, JPMorgan, Monetary Policy, Short Sellers, Silver, U.S. Congress, Wall Street | 1 comment

Gold:SilverRatioTops70

With spot silver slumping 2.5% on Tuesday, and silver futures diving 19% for the quarter, the biggest drop since mid-2013, the falling price is bringing out the coin buyers.  The 4.1 million 2014 American Silver Eagles sold in September more than doubled August’s total, and was the “highest since sales of 5,354,000 in March,” reports Coin News.  “Silver Eagle sales for the year are at 32,251,000, the second quickest pace in the coin’s 29-year history.”

An Economic Times article deems silver to be a “better investment bet than gold,” given silver’s sharper fall in price, compared to gold’s, along with silver’s rising industrial demand.  It also points out that the gold/silver ratio, which hit 71.2 on Tuesday, is “much above the 10-year average of 57.75 times. So the risk-reward ratio is more in favor of silver.”

See also:

Numismatic News:  Patrick Heller – Silver gets cheaper relative to gold

Reuters/Dan Norcini:  Gold posts first quarterly loss this year as dollar soars; EuroZone inflation data hammers the euro

SafeHaven: Does surging demand for gold and silver coins signal a bottom?

Bullion Star/USA Gold:  China aims to surpass U.S. in official gold reserves; Why China thinks gold is the buy of the century

Zero Hedge:  Why is China hoarding gold? Alan Greenspan explains

BBC/Reuters:  Hong Kong democracy protesters defiant on National Day; Protests approach potential National Day flashpoint

Wall Street on Parade/Washington Times:  Carmen Segarra – Wall Street’s Spy vs. Spy; Sen. Elizabeth Warren calls for corruption investigation of Federal Reserve

Could HK Protests Boost Gold?

Posted by on September 30th 2014 in China, Federal Reserve, General Economy, Gold, JPMorgan, Short Sellers, Silver, Uncategorized, Wall Street | Be the first to comment!

Gold and silver prices ended slightly higher on Monday, with gold seen supported by unrest in Hong Kong, where an estimated 80,000 protestors, in what has been dubbed the “Umbrella Revolution,” are “demanding that China withdraws rules that allow it to vet candidates for the next leadership election,” reports the BBC. “The protesters, who are made up of students and supporters of the Occupy Central pro-democracy movement, want a free choice of candidates for the vote in 2017 but Beijing has ruled that option out.”

Acknowledging the short-term bump for gold, an RBC strategist has a wait-and-see attitude about the ultimate impact: “You’re always going to have, in any geopolitical uncertainty, a small flight to quality. To break out of a two-year range, you really need a catalyst. Hong Kong could break it out of that range, but 24-48 hours of protests is not enough.”

See also:

USA Gold:  Gold underpinned by geopolitical tensions, dovish FedSpeak

ABC (Australia)/Ciovacco Capital:  Hong Kong protests add new geopolitical threat to markets; U.S. stocks – Key week for bull/bear battle

Gold Silver Worlds:  COT Report shows JP Morgan holds lowest silver short position since 2008

Bullion Star/Gold Reporter:  Chinese gold demand becomes explosive; German bullion dealers report major increase in sales

Bloomberg:  Singapore bourse to start kilobar gold trading to lure investors

GATA/TF Metals Report:  William Cohan discusses hangup in publication of report on silver market rigging

Silver Price Seen Struggling—To Go Any Lower

Posted by on September 27th 2014 in CFTC, China, Federal Reserve, General Economy, Gold, Goldman Sachs, JPMorgan, Quants, Russia, Short Sellers, Silver, Wall Street | 1 comment

SilverTDI

Referencing the above chart of The Disparity Index (TDI), for silver, which measures the relative position of its current price to the 40-week moving average, Gary Christenson calls attention to “the recent smash-down in silver prices and its deeply over-sold daily status,” which has led to a current daily silver TDI reading that’s “the most over-sold since the post-1980 crash.

And in his weekly market wrap-up, Alasdair Macleod cites an exceptionally high volume of futures contracts being swapped for physical silver. “Could it be that this silver was required to be delivered to other markets,” asks Macleod, “such as Shanghai, where stocks are depleted and silver is trading at a price premium? Could it be that the acceleration of demand for silver eagles is indicative of the demand for physical silver at these low prices? If so, it is an indication that Comex is pricing silver futures too low to reflect genuine demand, and the price will struggle to go lower.”

See also:

Bloomberg/LA Times:  Gold drops 0.5% as U.S. economy expands most since end of 2011; silver gains 0.6%

Zero Hedge:  High-yield credit’s worst week in 15 months sends stocks sliding; It’s the dollar, stupid!

WSJ:  Watch that rising dollar, it might eventually give the Fed pause; U.S. dollar strength not likely to dampen inflation much

GoldCore:  Currency wars deepen – Russia, Kazakhstan buy very large 30 tons of gold in August

Jesse’s Café Américain:  William Cohan responds on his silver rigging exposé - Two U.S. national publications refused the story

Michael Lewis – The secret Goldman Sachs tapes:  ProPublica article; This American Life episode

Salon:  Wall Street’s new jackpot at taxpayers’ expense

Indian Gold Demand Smokes Comex

Posted by on September 26th 2014 in CFTC, China, CME Group, Federal Reserve, General Economy, Gold, India, Monetary Policy, Short Sellers, Silver, Wall Street | Be the first to comment!

IndianGoldSmokesComex

“After a gap of nearly five months, there is some cheer emerging from India for the bullion market,” begins a Mineweb report, “as buyers appear to be taking advantage of the relatively low gold prices. Gold demand has picked up across the country, according to traders, despite it being an ‘inauspicious’ period as per the Hindu calender.”  The period’s end, which occurred on Wednesday, “also marks the beginning of festive buying that peaks around Diwali,” the start of the Hindu New Year.

Given the Indian government’s restriction on gold imports, the buying season’s surge in demand is being met by another surge, one that has reportedly seen 50 tonnes of gold smuggled in over 10 days.

Jesse’s Café Américain puts the contextual icing on that cake:  “So much for the mainstream media reports of a waning interest in gold in India and elsewhere. To put this into perspective, there are just under 32 tonnes of total registered gold on the Comex.”

See also:

Bloomberg: Gold rebounds from eight-month low as U.S. equities slide

Dan Norcini: Stock market weakness brings safe-haven buying into gold, bonds:

Business Insider/The Trading Report:  NYSE margin debt drifting higher again; 5 U.S. banks each have $40 trillion in exposure to derivatives

John Hussman:  The Ponzi economy

Zero Hedge/Joseph Stiglitz:  China set to fire its central bank head, unleash the liquidity floodgates; “The U.S. will always pay its debt. Because it just prints the dollars.”

Pragmatic CapitalismThe great gold debate

Gold and Silver: ‘Sellers Remain In Control’

Posted by on September 25th 2014 in CFTC, ECB, Federal Reserve, General Economy, Gold, India, Monetary Policy, Short Sellers, Silver, Wall Street | Be the first to comment!

StrongDollar

Spot gold and silver were off half a percent on Wednesday as the dollar gained on the back of single-family home sales hitting a six-year high in August, even though the overall housing numbers are seen as “still fairly depressed.” As for the dollar, “the rally in the U.S. dollar index to a four-year high has been a major bearish ‘outside market’ factor working against gold and silver,” according to an analyst’s report cited by Coin News, and “the continued bearish technical postures for both gold and silver are allowing the sellers to remain in control.”

See also:

MarketWatch/Gold-Prizes.biz:  Gold may rebound as extreme bearishness sets in

Mineweb/KWN:   Lawrence Williams – What’s behind the current silver disconnect?; Despite pressure, is silver ready to turn mega-bullish?

Numismastic News/Reuters:  Patrick Heller – Soft metals weaken U.S. coin prices; American Eagle gold coin sales set to jump in September

JS Kim:  Don’t be misled by weakness in gold & silver paper markets

Yahoo! Finance/Seeking Alpha:  Analyst – Dollar power is a problem for stocks

Arabian Money:  Can gold and silver really fail when stocks and bonds fall?

Gold Flares Up, Tails Off On Syria Strikes

Posted by on September 24th 2014 in CFTC, China, Federal Reserve, General Economy, Gold, Middle East, Short Sellers, Silver, Syria, Wall Street | Be the first to comment!

GoldFlaresUp

Spot gold and silver ended up 0.6% and 0.3% respectively on Tuesday, after gold pulled back from a more than 1% overnight gain following airstrikes in Syria. “Gold is getting some temporary support from the bombs,” according to one trader quoted by Bloomberg, who added that “Physical demand is expected to rise after the big drop in the past few weeks.”

That’s the case with American Silver Eagles, which “crossed the 30 million mark” on Tuesday, reports Coin News, “landing at 30,531,000 with sales moving up to the second quickest pace in the coin’s 29-year history. Sales of this year’s Silver Eagles had been on a record annual pace until severe slowdowns in June, July and a good part of August. Early last week, demand for the coins started to rise sharply.”

See also:

GoldCore/Telegraph:  Gold, silver bullion coin sales robust despite sell off; Royal Mint’s tip for investors: go for gold

Hard Assets Investor/Seeking Alpha:  U.S. dollar will decide gold’s fate; China’s central bank is still underweight gold

KWN/The Daily Coin:  Sovereign buy orders in gold, but watch silver for price gains; Gold silver mining supply ratio

Market Oracle:  Silver, gold, debt and taxes; Gold, the Fed and the looming stock market correction Q&A

Alhambra Partners/Paul Craig Roberts:  QQE pandering goes global; Rigged gold price distorts perception of economic reality.

Silver: Bad News ‘Now Built Into the Market’

Posted by on September 23rd 2014 in CFTC, China, CME Group, Federal Reserve, General Economy, Gold, Quants, Russia, Short Sellers, Silver, Wall Street | Be the first to comment!

SilverOpportunity

Although spot gold and silver inched up on Monday, silver is hovering near a four-year low.  But according to options trader Todd Horwitz, in the above interview with Bloomberg, silver’s “got real solid support around this $16, $17 level.”  And reminding that “this is where we actually broke out when we went up to $50 an ounce,” he declares that “I’d be a buyer here at about the $17.50 level.” Concerning silver’s drop on a stronger U.S. dollar, and what many see as a stepped-up timetable for an interest rate increase, Horwitz argues that “all of the news is now built into the market, so I think this is a great spot to take a step in and take a shot at buying it.”

See also:

Wall Street Journal/Reuters:  Alan Blinder – Behind the Fed’s dovish turn on rates; Shane Ferro – Interest rates aren’t going up anytime soon

Bron Suchecki/TradePlacer:  Gold bottoming?; Has the gold price drop run its course?

Seeking Alpha:  Lower lows in gold still highly likely; Is the bottom in? It doesn’t matter to me

Daily Pfennig/Mineweb:  Russia and China add to their gold reserves. Russian central bank buys more gold and builds bilateral trade with China

GoldSeek/SCMP:  Chinese checkmate; Established rivals may keep Shanghai trade zone’s gold exchange in check

CNN:  Six ways Shanghai is different than the rest of China

A Yuanderful New Era for Gold?

Posted by on September 20th 2014 in CFTC, China, CME Group, Federal Reserve, General Economy, Gold, India, Short Sellers, Silver, U.S. Congress, Wall Street | Be the first to comment!

YaGottaYuander

Following Thursday’s launch of the Shanghai Gold Exchange‘s trading of contracts in the city’s free-trade zone, China’s first exchange completely open to foreign investors, Reuters reports that “A successful take-up of the exchange could see gold priced and paid for in yuan rather than the U.S. dollar, challenging the traditional dominance of London and New York in trading.  While physical demand provides underlying support for gold, prices are largely driven by speculative trade. China’s push for an international physical exchange means physical demand could have a stronger influence.” But BullionVault‘s Adrian Ash makes the case that “China’s inability to export gold bullion puts a big block on it affecting world prices.”

See also:

Bloomberg:  Gold falls on equity rally, silver drops to four-year low; Dollar has longest win streak since 1967 on divergence

GoldSeek/Mineweb:  Gold and silver fall more than 1% and 4% on the week; Julian Phillips – Silver at ‘bargain levels

Gold Silver Worlds:  Gold and silver prices drop to critical Fibonacci levels

Zero Hedge:  Fed’s Fisher admits “Fed has levitated markets“, warns of “signs of excess”; Quantitative proof the Fed is destroying the middle class

Fiscal Times:  Instead of QE, the Fed could have given $56,000 to every household in America

Reuters:  U.S. House passes Fed audit bill, but measure seen doomed in Senate; Angry with Washington, 1 in 4 Americans open to secession

The Wire:  Congress heads home after some eight days in session between late-July and mid-November