Metals Only Bend on Big Jobs Number

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

MetalsOnlyBend

With gold and silver futures off, but by less than one percent following an estimate-topping jobs print of 288,000, the head of investment advisory H.C. Wainright said that “In a more normal, less tense environment, the employment data should have sent gold much lower by $25-$30 an ounce quickly, but these are not normal conditions.  Good U.S. economic news is tempered in part by foreign events which the U.S. has no influence or control over at present.”

Metals’ spot prices took even less of a hit, with spot silver ending flat on the day.  As for gold, Dan Norcini echoes the above sentiment in observing that it “looks as if geopolitical events in Iraq are continuing to provide some support. The stronger dollar coming on the heels of the payrolls number, provided pressure. The lack of wage inflation did likewise. However, while the market bent, it did not break. The geopolitical premium remains.”

See also:

Mining.com/Silver Investing News:  Silver above 15-week high on world tensions, investor confusion; Still going strong, silver beats last week’s high

Zero Hedge:  People not in labor force rise to new record; June full-time jobs plunge by over half-a-million, part-time jobs surge by 800K

Washington Post/Of Two Minds:  More Americans are stuck in part-time work; Is this a self-sustaining recovery or as good as it gets?

Reuters/Bloomberg:  China gold imports may drop 400 tonnes hit by financing curbs-consultant; Chinese trader said to pledge metal 3 times for loans

Salient Partners:  China in the golden age of central bankers

Businessweek/In Gold We Trust:  How bad would a housing market crash be for China?; Are the Chinese ghost cities really empty?

‘Boring’ Gold ‘Quite Resilient’ as ETF Holdings Surge

Posted by on July 3rd 2014 in CFTC, China, Clinton Inc., Federal Reserve, General Economy, Gold, Goldman Sachs, IMF, Janet Yellen, Monetary Policy, Short Sellers, Silver, Wall Street | Be the first to comment!

GoldETFSurge

With gold and silver futures gaining 0.3% and 0.9% respectively ahead of Thursday morning’s release of the jobs report for June, BullionVault‘s Adrian Ash tells MarketWatch that “Mid-June’s big jump aside, gold has become so boring not even U.S. payrolls are giving traders much fun right now,” but he adds that unless the jobs number exceeds 300,000, “it’s hard to see U.S. futures getting sold before the long weekend.”

This as Bloomberg reports that assets in GLD rose 1.4% on Monday and Tuesday of this week, the biggest two-day gain since November 2011. The article quotes one commodity broker as saying that “the dovish outlook from the Fed is increasing interest in gold, and we are seeing some investors return,” and cites a report from UBS AG analysts, who wrote that “Although the overall macroeconomic backdrop remains unfriendly towards gold, with ongoing QE tapering, looming rate hikes and stocks at record highs, prices have generally been quite resilient.  That the aggressive ETF selling of 2013 has not made a comeback has provided ongoing support.”

See also:

BullionVault/SRSrocco Report:  Silver prices- Is 14% enough for one month?; The coming two-stage rally in silver;

Alhambra Investment Partners/CNBCThe golden tail?; Trader- Gold will be the second half’s big winner

USA Today/The Hill:  Stock market’s correction-free run tops 1,000 days; Another financial meltdown on the horizon?

Arabian Money:  Is gold going to be an effective hedge in the next global financial crisis?

NY Times/Reuters:  Janet Yellen signals she won’t raise interest rates to fight bubbles; Yellen drives wedge between monetary policy, financial bubbles

Zero Hedge:  The Fed’s inflation survey that the Fed would rather not hear; “Clinton Inc.” raises almost $3 billion, and the biggest ‘donor’ is…

Wall Street on Parade:  Hillary and Bill- Their rugged journey from paupers to one-percenters in 365 days

Metals Hold Gains; Weak Dollar, Geopolitical Strife Support Gold

Posted by on July 2nd 2014 in CFTC, Federal Reserve, GATA, General Economy, Gold, Iraq, Russia, Silver, Ukraine, Wall Street | Be the first to comment!

GoldVsDollar

Despite big gains in stocks, gold and silver “held their rally” on Tuesday, as futures again inched up with gold’s support seen coming from a declining dollar — “The dollar weakness is helping gold stay supported at the current levels” — and geopolitical tension — “Gold is being supported by Iraq and now Ukraine.” Concerning Monday’s rally, Dan Norcini cites the latest number from the GLD holdings showing “a nice influx of some 5.05 tons of gold since the last updated number,” which he describes as “a nice ‘positive’ strike three. I mean by that, you had the gold price moving higher yesterday, the mining shares moving higher and the GLD showing an increase of 5 tons. That is exactly what one wants to see if they are a gold bull. That, plus the fact that the U.S. dollar index fell below 80 on its chart.”

See also:

Hard Assets Investor:  Rick Mills – Rising demand and falling supply equals higher metals prices

Scott Pluschau/SilverSeek:  Silver is at a key reference area to trade from; Trading the ratios and swapping gold for silver

Market Oracle/BullionVault:  Gold prices benefit from economic sins; Gold price vs. pundits – can’t both be wrong

Telegraph/Bloomberg:  Fund manager – ‘Why I am backing cash and gold until stock markets fall’; How Memphis firm decoded bond secrets mystifying Wall Street

GATA:  Gold market manipulation injected uncomfortably into BNN interview; Bank of England gets pretty intimate with the London Bullion Market Association

Silver Takes Quarter; Gold Wins Half

Posted by on July 1st 2014 in CFTC, China, Federal Reserve, General Economy, Gold, India, Iraq, Janet Yellen, JPMorgan, Monetary Policy, Russia, Short Sellers, Silver, Ted Butler, Timothy Massad, Wall Street | Be the first to comment!

SilverQuarterAfter spot gold and silver added a fraction of a percent on Monday, silver ended up 7% for the quarter, its highest gain in three quarters, reports Reuters, and gold gained about 3.5 percent on the quarter after a nearly 7 percent gain in the first quarter, making gold the best-performing asset in the first half of 2014.

Reuters attributes gold’s gains to tensions over Ukraine and Iraq, and going forward, geopolitical tensions are alsoGoldHalf seen as the “wild card” for gold and silver, according to one analyst quoted by MarketWatch.  He adds North Korea as a potential third hot spot, and says that “Any flare up in these areas could quickly lead to another round of ‘safe haven’ buying in the precious metals.”

See also:

BullionVault/Mining.com:  Gold & silver beat stocks, best first-half since 2011 after “surge in bullish hedge fund bets”

Mineweb:  Silver the star performer in recent precious metals rally; Silver – The irresistible force

Jesse’s Café Américain/Ted Butler:  Comex silver stockpiles at the end of 2Q 2014;  Comex – Why it’s corrupt

Financial Times/GATA:  Singapore seizes on soaring Asia gold demand; Koos Jansen – Chinese gold demand remains robust and in an uptrend

Telegraph/Peak Prosperity:  BIS – Ultra low interest rates could make global economy permanently unstable; Axel Merk – The Fed’s next move

MarketWatch:  Taper Time? Janet Yellen’s Georgetown neighbors complain about ‘doughnut bellies’ of security detail

Ted Butler: Current Silver Setup the ‘Best in History’

Posted by on June 28th 2014 in CFTC, Gold, JPMorgan, Quants, Short Sellers, Silver, Ted Butler, Timothy Massad, Wall Street | Be the first to comment!

SilverSetup

With gold and silver futures posting their longest run of weekly gains since January, MarketWatch‘s “Commodities Corner” column looks at “Why silver’s outperforming gold and isn’t done yet,” and Ted Butler declares that “there has rarely been a better time to buy and hold silver because the sharp price decline has created an undervaluation that I never expected.”

Describing the two categories of traders known as “raptors” and “technical funds,” Butler explains that “The raptors who are long have the technical funds who are short over a barrel. It’s only a matter of time until the raptors decide to ring the cash register by orchestrating higher silver prices. This will cause the technical funds to buy back their silver short position. Because the technical funds hold a record silver short position, this makes the current setup the best in history. Make no mistake, the technical funds must buy back, rather than deliver metal to close out their short position. As a result, there is now the largest amount of potential buying power in history. Silver should surprise to the upside at some point soon.”… Read More >>>

Chinese ‘Unwind’: A Great Leap Forward for Gold and Silver?

Posted by on June 27th 2014 in China, Federal Reserve, General Economy, Monetary Policy, Quants, Short Sellers, Silver, Wall Street | Be the first to comment!

GreatLeapForward?

Spot gold and silver ended mixed on Thursday, with silver up and gold down, each by about a quarter of a percent. St. Louis Fed President James Bullard talking up higher interest rates was seen weighing on gold, but the big news was a report that Chinese gold processing companies used falsified gold transactions to borrow about $15 billion from banks, which was said to be either good or bad for gold, and by extension silver, depending on the source and the timeframe.   “If China continues to clamp down on these financing deals, it would likely be negative for the gold price in the short run,” according to one analyst, reasoning that “More gold will be available on the market and less demand for gold from these financing deals.” But another tells MarketWatch that “The Chinese story is a likely bullish force for gold and may partially explain the massive buying behind the June 19 rally.”

CCFDsGoodForMetals?

And that $15 billion may be just the tip of the iceberg.  Citing a Bloomberg article on the “fake gold trades,” Zero Hedge notes that “As much as 1,000 tons of gold may have been used in lending and leasing deals in China, and Goldman reports that up to $80 billion false-loans may involve gold. As one analyst noted, this was unlikely to have a significant impact on the underlying demand for gold in China, and as we have pointed out before, any unwind of the gold CFDs would lead to buying back of ‘paper’ gold hedges and implicitly a rise in prices….So unlike in the industrial commodities – where the CCFD unwind drives prices down as the image above shows, thanks to synthetic manipulation and domination of the paper gold (and silver) market, the opposite occurs in precious metals.”

But apparently taking aim at Zero Hedge, without naming it, Dan Norcini comes down on the other side:  “The usual ‘we have never seen a story concerning gold that we could not spin to make it bullish’ website somehow manages to contort this story as friendly! Just use common sense and do not get lost in the weeds with their ‘logic’ and you will see what it is that has been lurking out there in the minds of metals traders. They are understandably nervous about this.”

And while it certainly won’t be the last word on the subject, today’s comes from that “oasis of civility,” Jesse’s Café Américain, which offers “Some thoughts on leverage in the great gold and silver frauds.”

Metals Rebound on GDP Tank

Posted by on June 26th 2014 in CFTC, China, Federal Reserve, General Economy, Gold, Janet Yellen, JPMorgan, Quants, Short Sellers, Wall Street | Be the first to comment!

GDPtank

Gold and silver pared losses on Wednesday to end slightly up after data showed that U.S. GDP for the first quarter fell 2.9%, and the dollar dropped with it.  USA Gold, describing what it calls “this stunning collapse in economic activity,” cites Jim Rickards’ “prescient assertion early in the new year that the Fed was tapering into weakness, and in doing so before achieving their own growth and inflation criteria. ‘The danger now is that they cause a recession,’ Rickards stated in a February interview. I wrote last week that gold’s gains back above the $1300 level significantly improved the technical picture and went a long way toward confirming the cycle lows at 1182.10/1179.83. The latest “In Gold We Trust” report from Incrementum AG of Lichtenstein [see below] seems to agree: “We are therefore convinced that the technical picture has been repaired and that a stable bottom has formed.”

See also:

Bloomberg/Zentrader:  Gold euphoria won’t last with Yellen’s rally fading; Few believe gold can shine

Jim Sinclair: 30 reasons the bear phase in gold ends this summer

SilverSeek/Mining.com:  Has key to silver ‘bet’ finally changed?; Is silver the cure for silver prices?

CDN/Reuters:  Germany’s missing gold; Singapore vie for Asia gold pricing alternative to London

Zero Hedge:  Chairman of China’s largest copper producer commits suicide by jumping from hotel

New York Times:  Barclays faces New York lawsuit over dark pool and high-frequency trading

In Gold We Trust — 2014 Edition

Posted by on June 25th 2014 in CFTC, China, Federal Reserve, General Economy, Gold, Iraq, Janet Yellen, Monetary Policy, Short Sellers, Silver, Wall Street | Be the first to comment!

InGoldWeTrust

Introducing the latest edition of the highly-regarded annual report, “In Gold We Trust,” authors Ronald Stoeferle and Mark Valek, write that “The tug-of-war between a deflationary debt liquidation and politically- induced price inflation is well and alive. Last year we coined the term “monetary tectonics” which describes the battle between these powerful forces. Recent developments may be the beginning of a reassessment by market participants regarding the risk of price inflation. Should the price inflation trend reverse, there would be excellent opportunities in inflation-sensitive assets like gold, silver and mining equities.”

Offering a shorthand version of the comprehensive analysis, Mineweb’s Lawrence Williams points out that while “In Gold We Trust” may be “positive in its outlook, it’s not one of those documents put out by the gold mega bulls predicting a $10,000 gold price, but an extremely considered and balanced analysis of gold’s fundamentals and the global factors which contribute to its demand as a monetary metal and tends to disregard most aspects of gold as a commodity….Anyone interested in the precious metals sector should view the latest “In Gold We Trust” report for the wealth of detailed analysis on virtually all aspects of the gold market.”

See also:

Reuters/MarketWatch:  Gold and silver hit multi-month highs as S&P falls; Gold futures score 5th straight session gain

Nuveen Asset Management:  Is the Fed underestimating inflation?

Confounded Interest/Dan Norcini:  Credit Suisse fear barometer hits all-time high as income remains stagnant

SRSrocco Report/SilverSeek; Should I invest in gold or silver, coins vs. rounds?; Gold versus Silver

USA GoldReflections in a golden eye

Metals Pause, but Technicals Still Seen as Positive

Posted by on June 24th 2014 in CFTC, Federal Reserve, General Economy, Gold, Iraq, Janet Yellen, Russia, Short Sellers, Silver, Wall Street | Be the first to comment!

SlumpingDollarA 0.1% gain in gold futures on Monday was attributed to a slumping dollar, while silver fell for the first time in ten sessions, ending the day off 0.1%. Weaker U.S. stocks and increasing violence in Iraq also supported gold, according to a Reuters report, which points out that “Rising safe-haven bids were reflected in a recent drop in the open interest of gold call options, suggesting short covering in the bullion options market continued. This as Coin News cites one analyst who notes that while gold saw “Some profit taking and technical chart consolidation” on Monday, “gold and silver bulls still have some upside technical momentum on their side.”

See also:

Tim Iacono:  Yellen’s latest misstep lights a fire under precious metals

Investing.com/SafeHaven:  The real price of gold; Silver headfake report

Dan Norcini/Gold Silver Worlds: Crude oil – Speculative frenzy kicking off; What crude oil says about silver

Peter Schiff/GoldSeek:  The bond trap; Will silver and gold short squeeze collapse the bond market?

Zero Hedge/Jesse’s Café Américain:  Germany gives up on trying to repatriate its gold, will leave it in the Fed’s “safe hands”; Germany’s gold – Auf wiedersehen

Gold Holds Gains; Silver Keeps Surging

Posted by on June 21st 2014 in CFTC, China, Federal Reserve, General Economy, Gold, Goldman Sachs, IMF, Iraq, Monetary Policy, Russia, Short Sellers, Silver, Wall Street | Be the first to comment!

 BestWeekForMetalsInFourMonths

Gold futures inched up 0.2% on Friday, but silver gained 1.5% on what was seen as a “perfect storm” of buying.  Both metals had their best week in four months, and according to a Bloomberg report, “Trading in bullion options show the biggest rally in nine months has more to run after some contracts betting on higher prices surged by the most since 2012 yesterday.”  It points to Fed Chair Yellen’s outlook for low U.S. interest rates as “bringing investors back to gold.”

But another theory for the metals’ rise that took root in the financial alternative media — see post below — gets some mainstream exposure.  MarketWatch quotes an FX strategist who says that “In the background, the unwind of China’s commodity financing deals may be helping to boost the price of gold as Chinese speculators sell their physical gold and at the same time buy back their hedges in the futures market.  This mechanism assumes that the paper market dominates the pricing of gold rather than the physical market, which seems possible given the difference in volumes.” That it does. How about 55 to 1?; Maybe 100 to 1?; Or even 400 to 1?

See also:

Dan Norcini:  Silver takes the lead over gold; Inflation expectations rise this week

Arabian Money:  Geopolitics more important than Fed hints on inflation in shifting gold & silver prices higher from here

KWN:  Andrew Maguire – 90-ton delivery triggered short squeeze in gold; Grant Williams: “Given [gold's] scarcity, the prices that we could see are astronomical”

In Gold We Trust:  Investment gold demand higher in Switzerland than China?

Wall Street Journal:  IMF girds for market storms ahead; The Fed’s never-ending downward growth revisions

CBS News:  Former Goldman Sachs trader sues over skimpy $8.25 million bonus

Metals Get Wound UP; Hypotheses Include Rehypothecation Unwind

Posted by on June 20th 2014 in CFTC, China, Federal Reserve, General Economy, Gold, Monetary Policy, Quants, Short Sellers, Silver, Wall Street | Be the first to comment!

MetalsGetWoundup

After silver and gold soared 4% and 3% on Thursday, Reuters quoted one commodities broker as saying “The Fed statement and geopolitical tensions sparked a frantic reversal in market sentiment.” But Jesse at his Café Américain isn’t so sure those were the flashpoints. While acknowledging that “Today was nice. It would have been nicer to have known why the metals moved so violently higher today, in what certainly turned into short covering….I don’t think the Fed’s statement yesterday is what caused this, but it is the go to plug for those who have to say something. Anyone who thought the Fed would do anything else must be a tourist. I am leaning toward the unwind of commodity rehypothecation in China, as is Zero Hedge, but it bothers me that so far it is all base metals being discussed. We know there is a lot of leverage in the precious metals.”

But what were seen as gold-friendly comments by Fed Chair Yellen,”caught a lot of traders leaning the wrong way,” observes Dan Norcini:  “Most everyone expected the Fed to announce further tapering, which they did, to the tune of another $10 billion/month reduction. But most expected the Fed to sound a more upbeat tone about the economy and begin to start preparing the markets for an eventual rate hike. Quite the opposite happened. Disappointed traders, or better yet, shocked traders, ran for cover.”

See also:

Barron’s/GATA: GLD, established in 2004, has its 14th biggest move, ever; China gold association chief talks gold down on its biggest day of the year – They haven’t gotten all they want yet

EconMatters:  Gold becomes inflation hedge as bond markets manipulated by central banks

SilverSeek/Got Gold Report:  June lows often mark the beginning of a long rally in gold and silver; COMEX Managed Money record silver shorts more like insurance than a one-way bet

Short Side of LongConsider purchasing metals

Reuters/Wall Street on Parade:  Sources – FX chatrooms show traders shared order, price details; Virtual corporate media blackout of Senate hearing on high-frequency trading

Metals Gain on Fed; Faber ‘Bugged’ by Media’s Gold Jargon

Posted by on June 19th 2014 in Federal Reserve, General Economy, Gold, Janet Yellen, Media, Monetary Policy, Short Sellers, Silver, Wall Street | Be the first to comment!

FOMCprojections

Gold and silver ended up a fraction of a percent on Wednesday, and added to gains after the Fed announced that while it will continue tapering, and hinted at a slightly accelerated pace for raising interest rates, it also dialed back economic expectations, which was seen as a positive for buillion.  Its forecast for GDP growth this year dropped from 2.8% to 3% in March, to 2.1% to 2.3% now.  The above chart from Alhambra Investment Partners, shows how things have fallen off since the FOMC predicted an annual growth rate pushing 4% last September.

FaberBugged

With the Fed cooling on the economy, things heated up on CNBC, where Marc Faber called out the financial mainstream for its negative attitude towards gold.  He tells the anchor that investors are shunning gold “because the media doesn’t like gold, nobody at CNBC owns gold. Nobody at Bloomberg owns gold. Gold is being constantly talked down by the media, and Fed officials, and economists, who also don’t own any gold. They’re all stocked up in equities ….When people talk about people who are optimistic about gold, they call them ‘gold bugs.’ A bug is an insect. I don’t call equity bulls ‘cockroaches.’ Do you understand? There is already a negative connotation with the expression of ‘gold bug.’”