saveyourassetsfirst3 |
- Gold Rebounds and Gains Momentum
- Markets “Comfortable Again with Gold”, Euro Falls After “Soft” Italian Debt Auction
- Key For The Bulls Is A Dow Close Above 12,500 Today
- Healthcare Investment Conference Roudup
- Dollar to Launch Gold
- About Leaving your gold fillings to your heirs
- A Bet On Keegan Resources Is A Bet On Gold's Price
- Morning Outlook from the Trade Desk - 01/13/12
- An Even Better Deal than Gold
- How low are we going on this correction?
- A startling Chinese development we haven't seen in over a decade
- Bill Gross warns: Central banks are printing money "like gangbusters"
- Controversial post: Why oil prices are about to collapse
- The Great Silver Heist
- Dollar Cost Averaging - A Strategy For Making The Most Out Of Fluctuating Gold Prices
- US debt ceiling: here we go again
- War With Iran has Begun, Gold to Break $2,000: Jim Rickards
- Bloomberg Suffers, Too, in Collapse of MF Global
- From Gold Bras to Gold Bars
- Gold Bar Premiums In Asia Rising Again On Physical Demand
- Jim Sinclair: Gold downside risk gone
- Silver Coin Sales May Signal Bear-Market End: Chart of the Day
- Economic and Gold Stock 2012 Outlook
- Gold & Silver Market Morning, January 13, 2012
- Silver Update: “Overwhelming Demand”
- Emotions, Premiums and Backwardation
- End of Tax Loss Selling in Graphs
- People Don’t Buy Gold to Make Money; They Buy It Because They Have Money
- Chinas Rising Gold Panic
- China Gold Hoarding Turns More Traders Into Bulls
| Gold Rebounds and Gains Momentum Posted: 13 Jan 2012 06:14 AM PST
Based on the January 13rd, 2012 Premium Update. Visit our archives for more gold & silver analysis. Gold rallied this week hitting its highest in a month and breaking above its 200-day moving average. There were a myriad of reasons suggested in the financial press. Some writers said it was a stronger euro that helped boost the price above the key technical level. One headline said it was due to a buying binge from China ahead of the Lunar New Year which begins January 23. (The country imported a record 103 tons of gold from Hong Kong in November, up 19% month-on-month and a 483% increase year-on-year.) Another headline attributed the rise in the price of gold to active demand from India where consumers took advantage of a drop in local prices to stock up ahead of the wedding season beginning later this month. Whatever the reason, we gave you a heads up as long ago as on January 3rd, when we wrote in our essay on a bottom in the precious metals sector:
The fact is that "breakdowns" similar to the one we're seeing just now have been (in all cases seen on the chart) followed by the final bottom of the consolidation (not too far below the line that is has broken), which was in turn was followed by a strong rally. In these cases, lower prices were never seen thereafter. Consequently, from both fundamental and technical perspectives, gold remains in a bull market, and what we're seeing right now may be the best buying opportunity that we'll see in the coming years.
Seasoned gold investors know that gold prices can be quite volatile – with big upswings often followed by big downswings, albeit wrapped around a rising long-term trend. At every downturn the gold bears have come out of the woodwork. And just as they have been repeatedly wrong in the past decade, they are still wrong (in our opinion) in 2012. Before this week's rise, the Wall Street Journal wrote an obituary for gold as a safe haven. The article by Stephen L. Bernard said that "it turns out gold is just another metal after all." It noted that after trading for much of 2011 as a safe haven, gold is acting more like other commodities and riskier assets these days.
For much of the past two years, when the economic slowdown and European debt crisis sent investors looking for low-risk assets, gold traded in the opposite direction of the euro. Gold could return to its safe-haven status again if the Federal Reserve embarks on another round of bond buying, which would likely hurt the dollar, analysts said. Gold is priced in dollars so it becomes cheaper to buy using other currencies when the dollar weakens. It can also serve as an alternative safe haven when U.S. currency loses its appeal.
At Sunshine Profits we are far away from writing the obituary for gold. At this point there are no indications that gold would not be up again in 2012 – so the trend should remain in place.
Even if you're extremely bullish on gold in the long-term, you may want to know what the short-term outlook for gold is. Let's begin the technical part with the analysis of gold to bonds ratio (charts courtesy by http://stockcharts.com.)
In the gold to bonds ratio chart, we also see bullish signs. The recent bottom formed close to the long-term support level and the index is now right at it after a period of zigzag correction. When comparing current patterns with the trend seen in 2006, it seems likely that a move to the upside will be seen from here.
In the long-term chart of gold from a non-USD perspective, we can see that prices are clearly back within the rising trend channel. The pattern here is very similar to what was seen in the middle of 2011 and suggests that a powerful rally without a significant pause is quite possible. After such a rally, a prolonged consolidation would be probable once new highs have been reached. The implications here are different than from the comparison between today and 2006 – consolidation at previous highs vs. no consolidation. However, in any of these scenarios, the weeks ahead should see higher gold prices – also from a non-USD perspective.
In the short-term GLD ETF chart, we see that gold is about to reach the upper border of the declining trend channel and its 50-day moving average. We could see a pause and possible consolidation around this $163 price level. The outlook will remain bullish here unless a top forms and a decline is seen on significant volume. On the other hand, if the decline takes place above the $163 level and takes gold no lower than to this particular level, it would be a very bullish development and we would likely consider adding to long positions.
Summing up, the outlook for the medium and long term for gold is bullish. The short term could very well see an insignificant pause at some point in the next 5 to 10 trading days with the rally resuming thereafter. More serious correction will likely be seen once gold moves higher, however we will leave details to our Subscribers.
Thank you for reading. Have a great and profitable week! P. Radomski * * * * *
Sunshine Profits provides professional support for Gold & Silver Investors and Traders.
All essays, research and information found above represent analyses and opinions of Mr. Radomski and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Mr. Radomski and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above belong to Mr. Radomski or respective associates and are neither an offer nor a recommendation to purchase or sell securities. Mr. Radomski is not a Registered Securities Advisor. Mr. Radomski does not recommend services, products, business or investment in any company mentioned in any of his essays or reports. Materials published above have been prepared for your private use and their sole purpose is to educate readers about various investments. By reading Mr. Radomski's essays or reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these essays or reports. Investing, trading and speculation in any financial markets may involve high risk of loss. We strongly advise that you consult a certified investment advisor and we encourage you to do your own research before making any investment decision. Mr. Radomski, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
|
| Markets “Comfortable Again with Gold”, Euro Falls After “Soft” Italian Debt Auction Posted: 13 Jan 2012 06:02 AM PST BullionVault Friday 13 January 2012, 08:45 EST Markets "Comfortable Again with Gold", Euro Falls After "Soft" Italian Debt Auction SPOT MARKET Dollar gold prices dipped to $1637 an ounce Friday morning London time – a 1.4% fall from Thursday's high – as the Euro fell against the Dollar following a successful-yet-disappointing Italian bond auction. In contrast to Dollar gold prices, the gold price in Euros gained throughout Friday morning, hitting €41,326 per kilo (€1285 per ounce) around lunchtime. Silver prices dipped to $29.69 – 3.3% below yesterday's peak – while stocks and commodities were mostly flat and government bond prices gained. "We feel the market is once again comfortable with gold," says Scotia Mocatta's latest technical analysis report, "but will liquidate on a break of $1605." Heading into the weekend, gold prices are up 1.5% in Dollar terms, while on a fortnightly basis gold is looking at a gain of 4.7%. Based on PM London Fix prices, this would be gold's biggest two-week gain since the fortnight ended 4 November. Italy successfully auctioned €4.75 billion of 3-Year government bonds this morning, paying an average yield of 4.83% – down from 5.62% paid at a similar auction two weeks ago. "On the whole [however] the auction results are mixed to soft," cautions Rabobank strategist Richard McGuire, adding they were "certainly far from the humdinger we saw in Spain yesterday." "It doesn't defeat the notion that the [European Central Bank] extraordinary liquidity provisioning will support peripheral debt but it perhaps tempers expectations as to what degree these operations will support." ECB president Mario Draghi argued yesterday that last month's 3-Year longer term refinancing operation – at which European banks borrowed close to €500 billion – had averted a potentially disastrous funding crisis. "The ECB can be rightly justified in saying that the Armageddon we were facing toward the end of last year does seem to have been addressed," reckons James Nixon, chief European economist at Societe Generale. Speaking at a press conference following the announcement that the ECB would leave interest rates on hold, Draghi said that "the [ECB's] monetary stance is and will remain accommodative". "Further rate cuts," says SocGen's Nixon, "will only be forthcoming if, for example, we see signs of an outright credit crunch." The decline in the Euro in the second half of last appears to have boosted the Eurozone's trade balance. The 17-nation Eurozone saw its external trade surplus grow strongly in November – rising to €6.9 billion from €1.0 billion a month earlier – data published Friday by Eurostat show. However, the full 27-member European Union still ran an external trade deficit of €7.2 billion, though this was less than half that run in October. The Euro ended December around 12% below its 2011 peak against the Dollar, and currently trades around $1.28. "With a rate of $1.29 or $1.30 … [the Euro] is still too high," said French president Nicolas Sarkozy back in January 2011. Hungary – whose government debt is now rated as junk by all three major ratings agencies – must show "strong commitment" to economic reform before the International Monetary Fund will consider opening negotiations on a bailout, IMF managing director Christine Lagarde said Thursday, following a meeting with Hungarian officials. "We fully understand and agree with the experts from the IMF," said Tamas Fellegi, the Hungarian minister appointed to negotiate with the IMF. Hungary's prime minister Viktor Orban said this morning however that "there are areas where views differ significantly" between his government and the IMF. China meantime saw its foreign exchange reserves fall to $3.18 trillion in the fourth quarter of last year, a period that included the first consecutive monthly fall (in December) since early 2009. "The decline in foreign exchange reserves in Q4 is consistent with the sharp reversal in capital flows out of emerging markets in general and the region in particular," reckons Andy Ji, economist at Commonwealth Bank of Australia. The news "might also be contributing to gold's downward movement," reckons Standard Bank commodity strategist Marc Ground. "This can be explained in terms of the negative effect that a slowing down in Chinese foreign-exchange reserve accumulation would have on global liquidity and the ability of governments, especially those of developed nations, to borrow." Copper and gold provide "the best value opportunities" for investment this year, according to a report published by Goldman Sachs on Friday. The Goldman report also argues that there was a "wedge" between gold prices and real interest rates towards the end of last year. Short-term gold lease rates – the difference between the return on lending cash and the return on lending gold – were negative for much of 2011, falling towards the end of the year. "Demand for US Dollars drove the gold lease rates to unprecedented negative levels as US Dollars became increasingly more valuable than gold," the report says. "This new demand for Dollars was mostly from European banks using the gold market to source US Dollar liquidity when their funding from the US money markets dried up, which created a significant amount of gold selling." Ben Traynor Gold value calculator | Buy gold online at live prices Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK's longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics. (c) BullionVault 2011 Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.
|
| Key For The Bulls Is A Dow Close Above 12,500 Today Posted: 13 Jan 2012 05:46 AM PST By Richard Suttmeier: Stocks may be undervalued fundamentally, but mainly because the 30-Year bond rate is below 3.00%. If the Dow Industrial Average closes above 12,500 today technical momentum takes over. All daily charts are overbought and the weekly charts are either overbought, or will be soon. To review; The Dow Industrial Average has been influenced by my annual and quarterly pivots at 12,312 and 12,478 and has tested the down trend connecting the highs of May and July 2011 at the 12,500 area. The other major averages have stayed below their quarterly risky levels at; 1305.4 SPX, 2777 NASDAQ, 2422 NDX, 5448 Dow Transports, 829.03 Russell 2000, and 390.17 SOX. Monthly value levels lag at; 11,210 Dow Industrials, 1152.8 SPX, 2432 NASDAQ, 2185 NDX, 4443 Dow Transports, 646.71 Russell 2000, and 310.48 SOX. The yield on the 10-Year has tested my semiannual pivot at 1.903. Gold tested both of my semiannual pivots Complete Story » |
| Healthcare Investment Conference Roudup Posted: 13 Jan 2012 05:41 AM PST By M.E. Garza: If the news flow has been a bit slow for biotechs outside of the HCV space this week, some of it may have to do with the fact that a great number of companies and executives converged in the center of San Francisco for three of the busiest health care conferences we've seen in some time. If the Sundance Film Festival is where the films industry gathers to see new films, make deals and shake hands, then San Francisco's event is certainly where biotech/health care CEOs, industry executives and investors all gather to swap information, handshakes and pitch their companies. Certainly, there appeared to be much more activity and attendees at this year's Biotech Showcase, J.P. Morgan Healthcare Conference and The OneMedForum—all of which took place simultaneously at three hotels downtown. While the buzz from the recent multibillion dollar acquisition deal for Inhibitex (INHX) was on people's lips, some of Complete Story » |
| Posted: 13 Jan 2012 04:55 AM PST |
| About Leaving your gold fillings to your heirs Posted: 13 Jan 2012 04:34 AM PST |
| A Bet On Keegan Resources Is A Bet On Gold's Price Posted: 13 Jan 2012 04:26 AM PST By Michael Polodna: The financial news has been buzzing in recent weeks about the carnage that investments in junior gold miners wrought on the portfolios of many big name investors and hedge funds last year. With the Junior Gold Miners ETF (GDXJ) down almost 40% in 2011, and long-term fundamentals pointing towards elevated gold prices in the intermediate future, there may be some bargains to scoop up in the sector. I decided to take a look at one particular junior gold miner, Keegan Resources (KGN), and attempt to determine if the stock is a gold mine or a money pit. The financial news has been buzzing in recent weeks about the carnage that investments in junior gold miners wrought on the portfolios of Complete Story » |
| Morning Outlook from the Trade Desk - 01/13/12 Posted: 13 Jan 2012 01:57 AM PST The markets had a chance to show their conviction and tried for the next resistance level, BUT failed. S&P looking to downgrade everything in sight in Europe and markets (equity markets) reacted as expected. Gold needs to regain $1,635 on the close. As I write , this may prove a difficult objective. Euro down almost 2 Euros against the dollar. As I may have suggested: Euphoria, everything has turned in Europe. NOT |
| Posted: 13 Jan 2012 01:31 AM PST It has all the great fundamentals and it's cheap! |
| How low are we going on this correction? Posted: 13 Jan 2012 12:31 AM PST I cashed in a portion of my IRA and want to buy a load of physical - probably ASEs. How low are we going on this correction. Any technical analysis guys? Are we going back to test the lows of 26ish? I am thinking about buying silver at about $27.50. Will we get there in the next few days? |
| A startling Chinese development we haven't seen in over a decade Posted: 13 Jan 2012 12:21 AM PST From Bloomberg Businessweek: China's foreign-exchange reserves posted the first quarterly decline in more than a decade, as foreign investment moderated, the trade surplus narrowed, and investors withdrew capital amid the global financial crisis. The holdings, the world's biggest, fell to $3.18 trillion at the end of December from $3.2 trillion at the end of September, according to People's Bank of China data released in Beijing today. That was the first quarterly contraction since the second quarter of 1998, according to data compiled by Bloomberg. Slower growth in foreign-exchange reserves may provide Premier Wen Jiabao with ammunition to defuse overseas criticism of the nation's currency policy and may add pressure on the central bank to lower lenders' reserve requirement ratio to boost liquidity. The global downturn may lead to capital withdrawal "of a large magnitude" this year, central bank governor Zhou Xiaochuan said in an interview with the Xinhua News Agency, published Jan. 8. "This is a good argument against U.S. calls to... Read full article... More on China: Chinese stocks are about to fall off a cliff New reports suggest the collapse in China has begun The U.S. is at war with this nation... But most Americans have no idea |
| Bill Gross warns: Central banks are printing money "like gangbusters" Posted: 13 Jan 2012 12:19 AM PST From Newsmax: Pimco co-CIO Bill Gross says the fact that central banks are printing money "like gangbusters" could reignite inflation. By adding "hundreds of billions" of currency into circulation, central banks "can produce reflation -- that's why we're seeing the pop in oil, gold," and other commodities, Gross told CNBC. However, there's also "the potential for deflation if the private credit markets can't produce some sort of confidence and solvency going forward," says Gross. "So we’re at great risk here, not only in the U.S. but on a global basis." Gross says he expects the Federal Reserve will... Read full article... More from Bill Gross: Bond king Bill Gross just made a shocking move Bond king Bill Gross: More "QE" could send interest rates soaring Bill Gross: Four ways the gov't is planning to steal from you now... |
| Controversial post: Why oil prices are about to collapse Posted: 13 Jan 2012 12:16 AM PST From OilPrice.com: All is not as it appears in the global oil markets, which have become entirely dysfunctional and no longer fit for its purpose, in my view. I believe that the market price is about to collapse as it did in 2008, and that this will mark the end of an era in which the market has been run by -- and on behalf of -- trading and financial intermediaries. In this post, I forecast the imminent death of the crude oil market and I identify the killers... the re-birth of the global market in crude oil in new form will be the subject of another post. Global Oil Pricing The "Brent Complex" is aptly named, being an increasingly baroque collection of contracts relating to North Sea crude oil, originally based upon the Shell "Brent" quality crude oil contract that originated in the 1980s. It now consists of... Read full article... More on oil: The five big myths about "peak oil" A huge potential energy story the mainstream media has missed Top liberal energy expert: Obama is wrong on U.S. energy policy |
| Posted: 12 Jan 2012 10:25 PM PST The Great Silver Heist Johnny Silver Bear (Editors Note: One of the perks of editing "the Bear" allows me to post my own rants. I originally published The Great Silver Heist in November, 2004. We recently published an incredibly well researched exposé entitled "The Silver Stealers" by our good friend, Charles Savoie. Through his research, we gain a much greater understanding of the methods and motives of "the Darkside" in their megalomanical attempts to rule the world. We thought it would be a good time to repost "The Great Silver Heist" as it dovetails with Mr. Savoie's research. In our opinion, you must understand the causes of a problem before you stand a chance of solving it. - JSB)) I founded the Silver Bear Cafe in the spring of 2002 for the purpose of raising the awareness of everyone I could, concerning the importance and value of precious metals to our liberties, our freedoms and our American way of life. As the editor of the Silver Bear Cafe, I find myself continually "telling Noah about the flood", as our membership is made up, generally, of "community members." By community, I mean the relatively small group of contrarians that frequents web sites such as "the Bear" and sites of a like nature such as Silver Investor, Financial Sense Online, 321 Gold, Gold-Eagle, and many others of the same ilk. These "community members" are generally already in tune with the causes and effects of the downward economic spiral we find ourselves in. Still, I find myself driven to "spread the word" and extend my reach to include "Joe Six Pack" on Main Street, USA. The subjects I personally editorialize are concerned with the wholesale attack on our freedom and liberty, the theft of our assets through inflation, and the socialistic mind set of the puppet masters, who are bound and determined to destroy the Republic. Unfortunately, "Joe Six Pack" hasn't got a clue. I constantly attempt to refrain from the discussion of politics in my examinations, as I view the left-right debate as a contrived distraction. The more important issue is the battle being waged by collectivists against individualists, which can be more easily understood by grasping the "Y axis" rather than the "X axis". On the "Y axis", totalitarianism occupies the top extreme and libertarianism occupies the bottom. For a graphic explanation of this concept, please follow this link and take the test. If you have been paying the least bit of attention to the underlying theme of my rants you would also realize that I consider the "Dark Side" to be made up of institutional wealth in the hands of multinational corporations, the various banking cartels, and "Old Money" elitists that were not responsible for creating the wealth but rather are simply endowed with the ability to wield the power that comes with such wealth. These factions are, IMO, grossly abusing their powers and, as a result, selling out America. They are disrupting the course of natural evolution. For instance, the natural process of food production has been altered through the genetic manipulation of seeds. This process renders the seeds with unnatural characteristics. This is primarily done, not to improve the various strains, but rather to enable the manipulators to patent the strains and control them in the market place for profit. The same thing is occurring in the pharmaceutical industries where known herbal remedies, which are free to all, are genetically altered, in order to sell them. The consequences of these alterations on the human body are dismissed as superfluous and unimportant. The profit motive pervades every action of the "Dark Side." Don't get me wrong. I am as much of a capitalist as any good, patriotic American should be. I do not believe, however, that my profit should come from the detriment and suffering of others. Altruism plays no part in the "Dark Side's" agenda. World domination through economic control is their goal. The technology of the "Dark Side" owned media has reached the point where it has achieved the power of creating realities for the people that are distorted and unnatural. As corporations merge, so that they control more and more of the technology and want to use more advertising to create false needs, the costs of basic human survival will continue to escalate. Most imperative is the "Dark Side's" obsession with increasing government power and surveillance. Citing a need to combat drug dealers and terrorists, the government has infringed more and more on the liberties of the citizen. Through Patriot Acts I & II, the Bill of Rights has been effectively dismantled. Get ready for Patriot Act III. Cash transactions are being restricted and the Internet fully monitored. The next step will be forcing the move to a cashless society, controlled by a central authority. All we need is electronic credit money, devoid of all checks and balances, and a system by which we can all be tracked on a 24/7 basis, cradle to grave, and the central banker conspiracy will be complete. This growth toward a central, spiritless governmental authority in a high tech, virtual world, divorced from natural processes, where food, water, and the routines of living have been commoditized and distorted, marks the beginning of the end, of the world as we know it, for everyone. Which brings me to the topic of precious metals. Who among us believes that, along with all the other economic malfeasance, the price of precious metals has not been manipulated? The evidence is staggering, but the motives of the manipulators have not been exposed cohesively enough for "Joe Six Pack" to understand. "Joe" still rolls his eyes back and wonders why anyone would consider the possibility that there are forces, behind the scenes, controlling high levels of government in our country that are not working in "We the People's" best interest. Drawing on some of the research of Charles Savoie (Editor's note: Mr. Savoie's archives are housed on David Morgan's Silver-Investor site. Click on the link and scroll down to Mr. Savoie's archive) I would like to attempt to bring these motives into the light of day. I want to concentrate on silver. In an attempt to continue to purvey the "big picture" in the silver market, here are some interesting facts for your consideration. Silver is as important a strategic commodity as oil. The need for a supply of silver in times of war is so essential, that a shortage of the metal could pose dire and direct consequences to the continued well being of our country. With the evolution of technology, silver has become so intrinsically important, that a lack of it will adversely affect America's national security. Meanwhile, as a result of the collusion between industrial users, central bankers, the Commodity Futures Trade Commission, (CFTC), the Chicago Board of Trade, (CBOT), and government regulators, spanning the past fifty years, inventories have all but disappeared. How and why have our silver reserves been so radically depleted? The major causal factor for the growing scarcity of silver in the United States is an organization called the Silver Users Association, (SUA). This group was founded in 1947 for the sole purpose of controlling the price of silver, and has since manned a small army of lobbyists. These lobbyists represent some of the biggest corporations in the country. As the industrial uses for silver are quite diverse, so are the types of companies that engage the services of the SUA. It is their job to lobby politicians and persuade them to suppress, depress, repress, oppress, or do what ever it takes to maintain a grip on the price of silver. The SUA co-ordinates campaign contributions between association members and complicit politicians in return for quasi-legal legislation designed to keep the price down. It does not matter to them whether the means of suppression are legal or illegal, so long as the price does not rise. The chief purpose of the Silver Users Association, when it was formed 54 years ago, was to lobby and convince the US Government to dispose of its immense stockpile of silver, as much as 4 billion ounces of silver, at as favorable a price as possible. Of course, when I say "favorable", I'm talking about as low a price as possible to the members of the SUA. The prices were decidedly "unfavorable" to the owners of that silver, the citizens of the United States. But, in any event, the SUA was successful beyond imagination. In my opinion they conspired to hold down prices and that's an anti-trust violation. The SUA achieved an almost impossible feat. They made off with the world's largest known stockpile of silver. Let's see - the US Government had billions of ounces of silver the year the SUA was formed, and 54 years later, the US announced it would have no silver left this year. That is truly remarkable. And the best part (or worst part, if you are a regular citizen) is that the SUA got a real "steal" of a price on that silver, roughly one dollar an ounce. Slick and successful would be mild words when judging the accomplishments of the Silver Users Association. So would price fixing. - Taken from Ted Butler's 2001 essay entitled"Silver Users, Silver Abusers" SUA members include corporations like Eastman Kodak and Polaroid who use great quantities of silver for the production of film. Obviously, the price of silver plays an important role in their bottom lines and it is of great advantage to keep the price of silver as low as possible. Other clients include Lockheed Martin, Raytheon, General Dynamics, American Superconductor, and Intermagnetics General who use even greater quantities of silver for the production of super conducting cables, missiles and torpedoes. All companies that produce electrical components for use in weapons, high tech aircraft, fighting vehicles, ships, communication devices, almost everything that has to do with the war machine, depend heavily on silver. An interesting thing to point out is that when a missile or torpedo explodes, as much as 1400 ounces of silver is vaporized. This is one of the industrial reasons why the above ground stockpiles of silver have already been depleted to the point of scarcity. The artificial capping of the price of any commodity is not unlike the insertion of a huge cork in a volcano. This can result in nothing less than the massive explosion of its price in the immediate future. Members of the SUA also include Union Carbide, Dow Chemical, Du Pont, Goldman Sachs, and JP Morgan Chase. Why would Goldman Sachs and J.P. Morgan Chase be members of an organization whose sole purpose is to suppress the price of silver? Well, from a central banker's standpoint, a worldwide recognition of the superiority of silver, as money, over their "funny money" would be a disastrous occurrence. Am I singing to the choir here? The Federal government, apparently to make the paper dollar appear worth more than it is, allows artificial price depressive tactics aimed at silver and gold---Constitutional money. When Federal regulators default on their duties, it is up to state officials including you to take action. If anyone attempted to sell short 22 times the number of Ford Motor shares in existence, the SEC would lock that person up for 200 years. Yet, in silver, the CFTC allows such insanity. Such insanely huge and totally un backed short positions cannot help but have the effect of smashing the price to the ground, a situation on the COMEX complained about by high-ranking Mexican and Peruvian government officials as far back as 1971 (see New York Times, June 10, 1971, page 67, and June 21, 1971, page 42). Producers are cheated of fair prices for this commodity, and thousands are out of work because of this and central bank silver "leasing." Taken from a letter written by Charles Savoie to Drew Edmondson, the Oklahoma State Attorney General, on September 29th, 2003. Again let me state, the radical depletion of our country's strategic silver reserve and the incessant, illegal action of the naked COMEX shorts who routinely sell 22 times more silver than is available for delivery is illegal, abhorrent, and reprehensible. Common gambling, so-called, was a crime. The gambling of the exchanges was legitimate and legalized, and the men who thus gambled with the resources of the nation were esteemed as highly respectable and responsible leaders of the community. For a penniless man to sell anything he did not own, or which was not in existence, was held as a heinous crime and was severely punished by a long prison term. Gustavus Myers in History of the Great American Fortunes (1907) page 303 This demented and evil activity has served two purposes: First, it has unjustly enriched large, soulless corporations, renegade COMEX traders, and central bankers. This unjust enrichment has contributed greatly to their wealth and power. Second, to greatly diminish America's ability to continue to defend itself because of its growing reliance on imported silver. The regulators, politicians, corporations, traders, administrators, bankers, financiers, soleless opportunists and scallywags that have been complicit in the activities of the SUA are guilty of no less than treason, and should be dealt with accordingly. Borrowing again from the research of Charles Savoie the following excerpt was taken from his recent essay, War and Silver "Today not a missile goes aloft from Cape Canaveral, not a jet plane from Idlewild that does not contain some silver. A good 25,000,000 or more ounces of silver are used each year in the U.S. in the form of solders and brazing alloys in refrigerators and air conditioners, electric appliances, aircraft and rockets. About 19,000,000 ounces are estimated to go into electric contacts in appliances and electronic equipment. More than 1,000,000 ounces are consumed in ceramic colors and pigments. About 1,500,000 ounces are used in making silver-zinc batteries for jet aircraft, missiles and portable TVs and silver-cadmium batteries for portable equipment. Silver goes into such miscellaneous products as mirrors, pharmaceuticals, dental alloys, plating of fine copper wires, medical and scientific instruments. In certain high temperature applications, as in space vehicles, silver is ideal. Research is finding new uses every year. During World War II new brazing alloys of silver were developed by Handy & Harman. The automobile, the airplane and the telephone all call for the use of silver in their structure. The demand for silver in high temperature applications in guided missiles, jet and rocket aircraft has soared." "Silver is a noble and versatile metal. It resists corrosion and so is ideal for chemical vessels and the lining of metal cans. Silver nitrate is used in hair dyeing and making indelible inks. Extremely ductile, a gram of silver may be drawn out into a wire 180 meters long. Malleable, silver may be beaten into a leaf 0.00025 millimeters thin. In making phonograph records, a thin deposit of silver is employed in making the matrix." - Economist Herbert Bratter, writing in The Commercial & Financial Chronicle, December 10, 1959, page 2422. Remember, it's not just the U.S. that needs silver, it's also everyone that we are fighting, or will be fighting soon, that needs it just as badly as we do. The collusion, between the bankers, industrial users represented by the SUA, and the government, has left us in an extremely uncomfortable situation. This collusion was motivated solely for the profit of everyone involved, politicians included, much to the detriment of every other American citizen. There are, and have been anti-trust laws in place that should have precluded this collusion, but the laws were systematically ignored. Placing themselves above the law, in this manner, goes against every tenet of justice and fair play in the book. When the stinky stuff finally hits the mix master, it's not going to be pretty. There were some folks who realized the nature of the SUA conspiracy as long ago as the early 1950s, but it wasn't until the 1970s that anyone stepped up to the plate and tried to do anything about it. In 1970 the price of silver was at $1.50/oz. The Hunt brothers, Bunker and Herbert, of Texas oil fame, were both acutely aware of the wholesale theft of the Nation's silver stockpile that had been taking place through the actions of the SUA. (For an in-depth examination of the Hunt brother's attempt to corner the world silver market, see H.L. Hunt's Boys and the Circle K Cowboys by Larry LaBorde.) When Nixon removed the dollar from the last vestiges of the gold standard in 1971, the brothers also realized that the New York Eastern banking establishment, led by the Rockefellers, was now free to work its diabolical monetary magic. Through the insidious contrivance called inflation, they could effectively transfer a portion of the Hunt's oil fortune into their coffers. The brothers started buying silver. Over the next nine years, as the Hunt's predicted inflation accelerated and racked the economy, Bunker and Herbert continued to use silver to hedge their assets with a vengeance. By the accumulation of more and more silver, they effectively protected their family's property and, single-handedly remonetized the white metal. Throughout the world people began to remember that real wealth consists of real assets, not paper money, and that real assets include gold and silver. In the summer of 1979 the SUA and their cronies in the COMEX and the CBOT, along with their co-conspirators at the CFTC, (a governmental regulatory bureau), started to panic. Obviously, the world's recognition of the monetary realities of precious metals was an untenable threat to the central bankers, and their "funny money". The elevated price of silver would also seriously impair the ability of the SUA to continue to swindle "We the People" out of our Nation's strategic silver reserve. But the main reason for their panic was that many members of the COMEX and CBOT had illegal financial interests in the silver market through their substantial silver short positions and were facing financial ruin. It should be apparent to everyone that these financial interests would obviously constitute insider trading and should have brought on a slew of indictments from the Justice Department. Rather than to allow the Hunts to legally wipe out their short positions, they illegally changed the rules. The CFTC promptly backed up the rule change. Even after illegally changing the margin requirements on futures contracts, the market, fueled by the Hunts momentum, continued to go against them so the COMEX illegally suspending trading in silver. They would only accept liquidation orders. Then, through their continued selling of massive quantities of silver that they did not have, (naked short selling), they finally managed to, once again, artificially bring the price under control. The "Dark Side" owned media was quick to let "Joe Six Pack" know that the whole debacle was simply a one sided manipulation attempted by a couple of greedy Texas oilmen. In reality, the shorts and the Eastern establishment had just as much, if not more, at stake than the Hunts. The final result was that the Hunt's would be fleeced for about $3.5 billion, and the world would once again be safe for the SUA, the central bankers, and the corrupt politicians to ply their trade. And ply their trade is just what they have done. The central bankers, through their control of the Fed, in collusion with the Treasury Department, have diluted the value of Federal Reserve notes, (FRNs), to the point that the Russians, Chinese, Japanese, and Indians have begun dumping U.S. dollars and U.S. Treasury paper with abandon. These countries make up the single largest bloc of U.S. bond speculators in the world. As I have mentioned many times before, the FED may set short-term interest rates, but bond speculators set long-term rates. The liquidation of the U.S. currency holdings could cause the collapse of our economy. Please do not take what I just stated lightly. The FED, in collusion with the U.S. Treasury Department, has inflated the worldwide credit bubble to such an obscene extent that they have left our economy defenseless against the forced repatriation of our own dollars. We can't possibly absorb that much liquidity without first suffering the throes of hyperinflation. As a result, all four countries have us over a barrel. They will demand some major concessions, in the near future, if they are to refrain from cashing in their chips too fast. How did we get in this predicament? Where did our system of checks and balances break down? What constitutional subjugation's took place that could of allowed us to arrive at this juncture? When I began researching this essay my initial idea was to pose a solution. We have since gone through a national election, the results of which have come under extreme scrutiny. Discrepancies in electronic vote tabulation have surfaced, throwing the whole process in doubt. I am now convinced that, at most, a survival strategy, rather that a solution, may exist. I would implore you to consider how we got to where we are today. Those of you that are familiar with my rants are already aware of my frustration with the present state of our democracy. In fact I have received numerous emails admonishing my depiction of a society that has been conditioned to vote for a free lunch. So, in an attempt to clarify my feelings concerning our democratic system I will elucidate. There are two fatal flaws in our current system. Curiously, they would seem to be offsetting on the surface, but upon closer examination they emanate from the same collective mind set. If these two flaws could be remedied, our Constitutional way of life could be preserved. Unfortunately, the underlying causes have been so ingrained in the system, that their effects are probably irreversible. The first flaw was initiated by FDR, (see one of my previous essays, The Patriotic and Moral Imperative for Owning Gold and Silver), when he started handing out taxpayer money and thereby created "the dole". Since then politicians have refined their ability to use taxpayer money to buy votes until it has evolved into a catastrophically successful ploy to redistribute the wealth of, and as a result decimate, America's middle class. If "We the People" demanded that a law was enacted that would prohibit anyone from voting, in a national election, so long as they remained "on the dole", (OTD), half of the problems with our "bastardized democracy" would immediately go away. If the people couldn't vote for a hand out, politicians couldn't simply pander a handout in return for a vote, which is essentially all they do now. I'm not simply talking about welfare recipients, although they make up a significant portion of those who should not be eligible. I'm talking anyone who is OTD. Any receiver of any Federal support should not be eligible to vote. The Constitution provided no Federal support for anyone, period. This would include grant recipients, those who receive Federal entitlements, farmers receiving subsidies, employees of any Federally subsidized business, even employees of companies benefiting from trade sanctions. Taken to the extreme, we should un-entitle Federal employees including members of the Armed Forces, Congress, Federal Law Enforcement, Treasury Department, Justice department, and the Judicial Branch. You see, each one of these persons harbors a personal agenda and is apt to vote for whoever promises him/her more. When you're OTD, staying OTD is job one. Have you noticed the most important thing for a politician to accomplish while in office these days, is to get re-elected. That's the problem with the "Free Lunch" mind set. There is no such thing. The second flaw concerns the passing down of institutional wealth. The "Dar |
| Dollar Cost Averaging - A Strategy For Making The Most Out Of Fluctuating Gold Prices Posted: 12 Jan 2012 10:18 PM PST |
| US debt ceiling: here we go again Posted: 12 Jan 2012 10:00 PM PST The gold price has encountered selling resistance at $1,650, while the silver price is still being pegged below $30. Though fears about the US going to war with Iran are growing, crude oil prices ... |
| War With Iran has Begun, Gold to Break $2,000: Jim Rickards Posted: 12 Jan 2012 09:23 PM PST ¤ Yesterday in Gold and SilverThe gold price did very little during Far East trading yesterday...and by 9:00 a.m. in London was up about five bucks from its Thursday close in New York. Then a rally developed that lasted until the London p.m. fix at 3:00 p.m. local time, which was 10:00 a.m. in New York. That p.m. fix was the high of the day...and from there it got sold off until the Comex closed at 1:30 p.m. Eastern. From there, the price traded sideways into the close of the New York Access Market. Gold closed at $1,648.60 spot...up $5.60 on the day. Volume was reasonably light 112,000 contracts.
The silver price pattern was pretty much the same, except for the fact that the high tick of the day came at the London silver fix, which was a few minutes after 12 o'clock noon GMT. There was a secondary high three hours later at the London p.m. gold fix...and from there the price slid back to unchanged by 2:30 p.m. Eastern time in New York. From that 2:30 p.m. low, silver rallied a bit into the close. The silver price finished the Thursday trading session at $30.25 spot...up 28 cents on the day. Volume was pretty decent at 33,000 contracts.
The dollar index didn't do much until precisely 3:00 a.m. Eastern time, which was 8:00 a.m. in London. Then the dollar headed down, hitting its absolute low at half past lunchtime in New York. From that low, the index recovered about 10 basis points. The dollar index closed down about 45 basis points on the day. Yesterday's rally in the gold began shortly after 9:00 a.m. in London...and came to an end about 10:05 a.m. in New York...which is hardly an exact match for the dollar's decline. I would guess that the dollar index decline had more to do with the rally in the Euro, as the Italian and Spanish bond auctions went off 'better than expected'...and I have a story about that further down.
Gold's Thursday high at London p.m. gold fix is the most prominent feature on this graph. From there the gold stocks got sold off in fits and starts...and touched the unchanged mark at 2:15 p.m. Eastern time, before rallying a bit into the close, with the HUI finishing up 0.90% on the day.
The silver stocks did just OK yesterday...and all of the stocks that make up Nick Laird's Silver Sentiment Index finished in the green. The rest of them were a mixed bag. The SSI finished up 0.95%.
(Click on image to enlarge) The CME's Daily Delivery Report showed that 13 gold and 92 silver contracts were posted for delivery on Monday. Once again in silver it was Jefferies as the only short/issuer...and the Bank of Nova Scotia and JPMorgan as the only long/stoppers. The link to the action is here. For the second day in a row there were no reported changes in either GLD or SLV. Ted Butler mentioned that despite the hopes that the short position in SLV might have declined substantially with the big engineered price decline in silver over the holidays, that did not turn out to be the case. The good folks over at shortsqueeze.com showed that the number of SLV shares shorted jumped from 22.0 million to 24.9 million...an increase of 13.15%. It was much the same with GLD shares, as their short position rose by 5.43%...as the number of shorted shares rose from 14.77 million to 15.58 million. The U.S. Mint had a sales report yesterday. They sold 3,000 ounces of gold eagles...500 one-ounce 24K gold buffaloes...and 340,000 silver eagles. Month-to-date the mint has sold 85,500 ounces of gold eagles...8,000 one-ounce 24K gold buffaloes...and 4,597,000 silver eagles. Silver continues to pour into the five Comex-approved depositories. On Wednesday they added another 846,864 troy ounces...and shipped a tiny 3,862 ounces out the door. The link to that action is here. Here's a very interesting chart that should come as no surprise to anyone...but it's still amazing to see on paper. It's self-explanatory...and I thank Washington state reader S.A. for sharing it with us.
I have the usual number of stories today...and I hope you have time for most of them. All the overseas gains in both gold and silver disappeared under the watchful eye of the New York bullion banks during the Comex trading session yesterday. Jim Sinclair: Gold downside risk gone. Gold Bar Premiums In Asia Rising Again On Physical Demand. From gold bras...to gold bars. ¤ Critical ReadsSubscribeTheft, RICO lawsuit targets MF Global, CME Group, MorganChaseHere's a GATA release from yesterday... Our friends at the Philadelphia law firm of Berger and Montague this week brought a class-action lawsuit in federal court in New York, charging theft and misappropriation, against people connected with the failed commodity brokerage firm MF Global, including its former CEO, former New Jersey U.S. Sen. and Gov. Jon Corzine; MF Global's enabler and supposed regulator, CME Group; and the investment bank JPMorganChase. The lawsuit is brought under both the Commodity Exchange Act and the Racketeer-Influenced Corrupt Organizations Act -- the famous RICO. How to participate in this lawsuit...and a pdf copy of the complaint itself...is contained in this GATA release...and the link is here.  Bloomberg Suffers, Too, in Collapse of MF GlobalThe collapse of MF Global has wreaked havoc on farmers, ranchers and other investors who were clients of the brokerage firm, prompting a loud outcry over the disappearance of $1.2 billion in customer cash. But they are not the only ones to suffer. The financial information giant Bloomberg L.P. lost about 600 subscriptions to its computer terminals — which translates to nearly $1 million in monthly revenue — after MF Global filed for bankruptcy on Oct. 31. The sudden loss of business caused Bloomberg employees to miss their target sales by 12 percent in 2011, people briefed on the matter said, a shortfall that could take a toll on the firm's bonuses. While $1 million sounds like a rounding error for Bloomberg, which generates nearly $7 billion in revenue a year, the hit underscores the symbiotic relationship between Wall Street and Bloomberg. I understand their pain, but somehow I just can't bring myself to feel sorry for them. Reader Phil Barlett sent me this Bloomberg story at 4:01 a.m. Eastern time this morning...and the link is here.  Foreigners Sell Record $85 Billion In Treasuries In 6 Consecutive Weeks - Time To Get Concerned?As the chart below vividly demonstrates, the traditional diagonal rise in foreign holdings of US paper has not only plateau, but it is in fact declining: a first in the history of the post-globalization world. Well as of today's H.4.1 update, the outflow has increased by yet another $8 billion to a new all time record of $85 billion, in 6 consecutive weeks, which is also tied for the longest consecutive period of outflows from the Fed's Custody account ever. This week's sale brings the total notional of Treasuries in the Custody account to just $2.66 trillion (down from a record $2.75 trillion) and the same as April of last year. This zerohedge.com piece from yesterday was sent to me by West Virginia reader Elliot Simon. The graph is worth a quick look...and the link is here.  Fed blew the housing bubble, then sought to pop it, transcripts showThe US Federal Reserve fretted about a slowdown in housing in 2006, but never considered the possibility that it could cause a financial crisis, according to complete transcripts of that year's meetings. The transcripts, released on Thursday, highlight the failure of the Fed -- one matched by most other central banks, commentators, and economists around the world -- to spot dangers to the financial system from subprime mortgage lending. That complacency set the stage for the devastating crisis that began in the summer of 2007. Indeed, a number of Fed officials saw the housing slowdown as welcome news that would help resolve a potential threat to the economy. "As to housing, we are in fact, as all have noted, squeezing out of that sector the speculative excesses that developed with the low interest rates of recent years -- and doing so is unavoidable if we want to correct the sector," said Thomas Hoenig, then president of the Kansas City Fed, at the September 2006 meeting of the FOMC. This story was filed in the Financial Times yesterday...and is well worth the read. It's posted in the clear in this GATA release...and the link is here.  Bulk Foreclosure Sales Could Cause Bigger Bank Write-DownsAs government, federal regulators and big-money private investors try to figure out a plan for bulk sales of foreclosed properties, big banks are already making deals, but they are few and far between. The trouble is, they are looking at even bigger write-downs than forecast if they sell these distressed properties in bulk. "One of the things that might be holding these bulk sales back is that the assets might not have been fully written down by the banks," says Rick Sharga of Carrington Mortgage Holdings, a private equity firm. "The problem for the banks is that in that scenario, when they sell off these assets in bulk, they have to recognize pretty significant losses all at once, rather than spread those losses out over a longer period of time." This cnbc.com story from yesterday is another Elliot Simon offering...and the link is here.  The Financial System is a Farce: Part Three - Eric Sprott & David Baker2011 was a merry-go-round of more bailouts, more deferrals and more denial. Everyone is tired of the Eurozone. It's not fixable. There's too much debt. The politicians don't know what's going on. Nothing has structurally changed. We're still on the wrong path. There's more global debt than there was a year ago, and it's the same old song: extend and pretend, extend and pretend,… around and around we go,… and it isn't fun anymore. Just as we wrote back in October 2007, and again in September 2008, we feel compelled to state the obvious: that the financial system is a farce. It's a complete, cyclical farce that defies all efforts to right itself. This past year continued the farcical tradition with some notable scandals, deferrals and interventions that underscored the system's continuing addiction to government interference. With the glaring exception of US Treasuries and the US dollar (which are admittedly two of our least favourite asset classes), it was not a year that rewarded stock picking or safe-haven assets. Many developments during the year bordered on the ridiculous, and despite some positive news out of the US, we saw little to test our bearish view. If anything, our view was continually re-affirmed. January's Market's at a Glance commentary is posted over at the sprott.com website...and the link to this must read 4-page pdf file is here.  Spain and Italy succeed in selling €22bn of debtSpain sold nearly €10bn of three and four-year debt - nearly twice the targeted amount - at the cheapest rate for months in a move that was seen as a vote of confidence in new prime minister Mariano Rajoy& |
| Bloomberg Suffers, Too, in Collapse of MF Global Posted: 12 Jan 2012 09:23 PM PST  The collapse of MF Global has wreaked havoc on farmers, ranchers and other investors who were clients of the brokerage firm, prompting a loud outcry over the disappearance of $1.2 billion in customer cash. But they are not the only ones to suffer. The financial information giant Bloomberg L.P. lost about 600 subscriptions to its computer terminals — which translates to nearly $1 million in monthly revenue — after MF Global filed for bankruptcy on Oct. 31. The sudden loss of business caused Bloomberg employees to miss their target sales by 12 percent in 2011, people briefed on the matter said, a shortfall that could take a toll on the firm's bonuses. |
| Posted: 12 Jan 2012 09:23 PM PST  Like haute couture, gold's worth is very much in the eye of the beholder. Mix the two and, in valuation terms, you're into CDS-squared territory. But Jean-Paul Gaultier, the French fashion designer famous for putting Madonna in a bra that could take your eye out, has done exactly that. Fashionistas with a taste for the flamboyant but more than a little concerned about the side effects of quantitative easing can now buy a one-ounce 24 karat gold bar engraved with a heart, rays and Gaultier's name on a banner. |
| Gold Bar Premiums In Asia Rising Again On Physical Demand Posted: 12 Jan 2012 09:23 PM PST  Premiums for gold bullion bars in Asia are rising again and are at their highest since October in Hong Kong and Singapore. Premiums are at $2.15/oz in Hong Kong and $1.65/oz in Singapore. Bullion's strength was also attributed to the euro's 16 month low, with Fitch warning the ECB to purchase assets to try to stabilize the euro. This story showed up posted over at the goldcore.com website yesterday. I thank Roy Stephens for his final offering of the day...and the link is here. |
| Jim Sinclair: Gold downside risk gone Posted: 12 Jan 2012 09:23 PM PST  Gold mining entrepreneur and gold advocate Jim Sinclair told King World News yesterday that gold's downside risk is gone and that five big U.S. banks have big derivatives problems. I borrowed the title and the introduction from a GATA dispatch...and the link to this must read KWN blog, is here. |
| Silver Coin Sales May Signal Bear-Market End: Chart of the Day Posted: 12 Jan 2012 09:23 PM PST  The surge in the U.S. Mint's sales of American Eagle silver coins in January may signal an end to the bear market in the metal. The Mint sold 4.60 million ounces of the coins to authorized purchasers Jan. 3 through Jan. 12. At this pace, full-month deliveries may reach 14.2 million ounces, more than twice the record 6.422 million ounces sold in January 2011. |
| Economic and Gold Stock 2012 Outlook Posted: 12 Jan 2012 09:00 PM PST |
| Gold & Silver Market Morning, January 13, 2012 Posted: 12 Jan 2012 09:00 PM PST |
| Silver Update: “Overwhelming Demand” Posted: 12 Jan 2012 08:49 PM PST from BrotherJohnF: Got Physical ? ~TVR |
| Emotions, Premiums and Backwardation Posted: 12 Jan 2012 05:17 PM PST Good interview between Jeff Lewis (silver-coin-investor.com) and Grant Williams (vulpesinvest.com). Grant makes a very good point on emotions influencing how events are interpreted (my emphasis): " It's important to try and keep a sense of balance because the way things trade, particularly in silver, it's easy to get fixated upon an idea and to blame every move on that particular idea. In the case of silver, the big theory about silver is the manipulation of the COMEX futures. ... It's a dangerous game to sort of ascribe every single move in an instrument to a construct that has yet to be proven beyond any doubt. While I suspect there is definitely something untoward going on the silver futures as Bart Chilton has intimated in his comments this past year. I think it's a very dangerous game to not have a balance, to just simply look at the way markets behave, look at the extraneous events that may have an effect and cause the de-leveraging or liquidation and to try and get a more rounded picture of why something moves now." Later he says what the extraneous event was: "I think a lot of that downdraft we saw in both gold and silver going into year end, was just people who are having to raise cash and selling the thing that they had a little bit of profit built into. Now, once they start going down, the shorts are going to press that; and so these falls get a lot more vicious than perhaps they would be in just an orderly market where people were looking to sell a bit of precious metals to raise some cash for year end. But as I say, you have to try and take your emotions out of this thing." Interesting here that Grant says that the initiator of the price drop was year end selling, which was further "pressed" by speculators. I made a similar point in this corporate post when talking about bullion banks being aware of falling Indian consumer demand. My point, and Grant's, is that not everything is a manipulation (as in being initiated by speculators) and sometimes speculators are just riding a physical market trend. Don't drink the Kool-Aid (or should that be "Silver-Aid") of the pumpers which blame every price drop on manipulation but who never question any price rise. As Ted Butler says (my emphasis) "... when silver experienced two separate 35% price declines in a matter of days. Such a decline in a world commodity for no observable supply/demand reason is unprecedented and I would say impossible in a free market." Same applies when you have the London AM Silver Fix increasing 20.1% over 24 hours from $10.77 to $12.93 on 18 Sep 08 (note: I can't find two 35% price declines in London Fix data, Ted must be talking intra-day). Some who has been drinking the Silver-Aid is Tyler Durden with the silly headline Physical Silver Surges To Record 30% Premium Over Spot, In Backwardation. Regrettably, it was picked up by Money Morning Australia (from whom I'd expect better), to which I left this comment: "What that chart tells us is that PSLV is a closed end fund with some possible tax advantages with good marketing, hence the premium. In the real physical wholesale silver market which is not constrained by a limited number of shares, Perth Mint is not having any problem acquiring, or selling, silver at spot." Tyler must be drinking a lot of Silver-Aid or desperate to alleviate the cognitive dissonance of a circa 25% increase in COMEX silver warehouse stocks since mid-2011 to claim that a stock exchange listed trust is as good as and representative of cold hard physical in your hand. Further proof that Tyler is suffering is his conclusion that the backwardation discussed in Keith Weiner's appended article "means, although for those who like the punchline here it is, as above: shortage" when, if you read Keith's good article, he says at the bottom that (my emphasis) "In a normal commodity, backwardation means shortage. ... But in gold and silver it means something else entirely. People have the metal. But for whatever reason(s), they choose not to take this free money. In the silver market right now, trust is in short supply." Why everyone thinks that Zero Hedge is a credible source when in this example (and I have others) he can't even understand that Keith is saying there isn't a shortage of metal, there is a shortage of trust. I covered this idea in the Gold Standard Institute's 2009 Canberra seminar (I'll post up the points from the presentation shortly for those interested). I've left this comment on ZH, let's see what comes of it: "Perth Mint does not incur any premium when it pulls physical out of London. Whoever is feeding you that is making a fool out of you. If you really are independent and after the truth, more than happy to chat with you anytime - you have access to my email in my profile." There are plenty of good reasons to hold precious metals I don't know why people resort to this shortage and premiums meme - maybe it is just a simple idea easily understood and communicated compared to some more intellectually dense analysis of the market's supply/demand/stocks. Anyway, to finish on a more upbeat tone, here is Grant again: "... we are left with an awful lot of strong hands holding silver now. I'm here in Asia, the futures price is really more of an irrelevancy. Over here it's all about physical metal both in gold and silver and so we see a lot of buying of physical metals here in Asia when the price comes down on the COMEX and we see premiums expand because it's very tough to get delivery." I focus on the base trend for precious metals and see it driven by increasing numbers of strong hands. The day-to-day volatility (down AND up) is driven by leveraged money of speculators and hedge funds and bullion bank prop desks. I'd suggest ignoring that volatility, otherwise you waste too much emotional energy stressing about it. Just buy your PMs (or dollar cost average in) and forget about it and relax. That's what insurance is for.  |
| End of Tax Loss Selling in Graphs Posted: 12 Jan 2012 05:12 PM PST Just below are a few examples that we think illustrate the effects of tax loss selling and more importantly, the end of it. These are 3-month Volume Candle charts which weight the trading periods (in this case 1-hour increments) by volume. The more volume the larger and wider the trading bar and volume indicator. The graphs are self explanatory. See if you agree they show the peak of tax loss selling, with most occurring around the middle of December. (Evolving Gold, above. Click on any of the graphs to see a larger version.)
(Kaminak Resources)
(Golden Predator Resources)
(Mega Precious Metals) |
| People Don’t Buy Gold to Make Money; They Buy It Because They Have Money Posted: 12 Jan 2012 05:07 PM PST Gold Forecaster |
| Posted: 12 Jan 2012 05:00 PM PST |
| China Gold Hoarding Turns More Traders Into Bulls Posted: 12 Jan 2012 04:40 PM PST |
| You are subscribed to email updates from Gold World News Flash 2 To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 20 West Kinzie, Chicago IL USA 60610 | |
No comments:
Post a Comment