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- Barrick: Valuing The Golden Giant
- Why Not To Expect SMP Or LTRO From ECB Next Week
- “Negative Forecast” Remains for Gold, India Needs “Good Monsoon” to Boost Bullion Demand
- EM: Silver Update 6.26.12
- Newmont: What Is It Worth?
- Can Oil Turn Around In July? Which Companies Will Perform The Best?
- Silver buying support below $27
- Gold, silver retreat in electronic trading
- À propos those BIS gold swaps
- China and Russia buying gold as protection against currency reset
- DTS: The Silver Stacker
- Silver Update: Losing Position 6.25.12
- Turkey, Russia, Ukraine and Kazakhstan Further Diversify Into Gold
- Ackerman & Keiser: Gold vs. Paper
- BIS says gold is a currency, not a commodity
- Turk – Capital Controls, Panic, The Great Depression & Gold
- Future Silver Legal Tender
- Richard Russell – This Terrifying Financial Collapse & Gold
- Casey Daily Dispatch: Top Seven Reasons Gold Producers Will Soar
- Turkey, Russia, Ukraine & Kazakhstan Diversify in Gold
- 'Negative Forecast' Remains for Bullion
- Intervention for Market Plunge
- Gold Always Glitters in India: Will Curbing its Import Save the Economy?
- Four King World News Blogs/Interviews
- Argentine nervous savers withdrew 522 million dollars in the last week
- Imagining the Unthinkable The Disastrous Consequences of a Euro Crash
| Barrick: Valuing The Golden Giant Posted: 26 Jun 2012 03:19 AM PDT By Bulls and Bears: Barrick Gold Corporation Ticker: ABX Share Price 6/22/2012: $37.92 Shares Outstanding 12/31/11: 1,000,000,000 Market Cap: $37.9B Website: barrick.com Company Overview: Barrick (ABX) operates as a worldwide gold and copper mining company, with 26 operating projects located primarily in North America, South America, and the Australia Pacific. Headquartered in Canada, Barrick is the largest gold mining company with 139.9mm ounces of proven and probable gold reserves. Barrick also has the gold industries only "A" rated balance sheet. In May the company increased its annual dividend by 33% to $0.80 per share. 2011 Key Points
Analyst Estimates: Source: Yahoo finance Analysis of Reserves: Since 2008 Barrick has not been able to grow P&P reserves. Competitors like Newmont Complete Story » |
| Why Not To Expect SMP Or LTRO From ECB Next Week Posted: 26 Jun 2012 03:08 AM PDT By Marc Chandler: The ECB meets next Thursday, July 5. Although a few members wanted to cut rates earlier this month, they did not represent a majority. Expectations are running high for some action next week. The ECB did announce last week a relaxation of collateral standards and a liberalization of criteria. We have suggested this should be understood as just as important, if not more so, than a rate cut itself. Given financial crisis, access to credit is critical and, within reason, is important than the price (or interest rate). Maltese central banker Bonnici warned earlier today that an interest rate cut would have only limited economic impact. Some read his comments as playing down the likelihood of a rate cut next week. We demur. Instead, the comments should be understood as warning against expectations of a quick fix. In addition, by suggesting that impact of monetary policy was limited, Bonnici keeps Complete Story » |
| Posted: 26 Jun 2012 03:03 AM PDT
from news.goldseek.com: SPOT MARKET prices to buy gold traded just above $1580 an ounce throughout Tuesday morning's London session, up around 0.6% on last week's close following gains the previous day. Prices to buy silver traded in a tight range around $27.50 an ounce – 2.1% up on the week so far. "In our opinion," adds Commerzbank senior technical analyst Axel Rudolph, "gold has resumed its downtrend…we will retain this negative forecast while the gold price trades below the current June high at $1641." European stock markets meantime edged slightly higher by lunchtime in London – following losses the previous day – while commodities were broadly flat and US Treasury bonds fell, as markets continued to focus on upcoming policy discussions in Europe. On the currency markets, the Euro struggled to stay above $1.25 this morning, having fallen from one-month highs last week. "If the US Dollar remains strong, then gold may easily move down a little bit," says one bullion dealer in Hong Kong. Keep on reading @ news.goldseek.com |
| Posted: 26 Jun 2012 02:52 AM PDT endlessmountain: Silver Update 2012.06.26 ~TVR |
| Posted: 26 Jun 2012 02:39 AM PDT By Bulls and Bears: Newmont Mining Corporation Ticker: NEM Share Price 6/22/2012: $47.96 Shares Outstanding 12/31/11: 494,000,000 Market Cap: $23.7B Website: newmont.com Company Overview: Newmont (NEM) operates as a worldwide gold and copper mining company, with operating projects located in the United States, Australia, Peru, Indonesia, Ghana, New Zealand, and Mexico. Headquartered in Colorado, Newmont is one the largest gold mining companies, with 98.8mm ounces of proven and probable gold reserves, land holdings approximately the size of Austria, and 43,000 employees. In 2011 they became the first company to offer a gold price-linked dividend, which is currently $1.40 per share annually. Additionally, they are the only gold company in the S&P 500 index. 2011 Key Points
Analyst Estimates: Source: Yahoo Fnance. Analysis of Reserves: Complete Story » |
| Can Oil Turn Around In July? Which Companies Will Perform The Best? Posted: 26 Jun 2012 02:36 AM PDT |
| Silver buying support below $27 Posted: 26 Jun 2012 01:42 AM PDT
from goldmoney.com: We saw divergence yesterday between stocks and precious metals – with the former struggling as a result of more euro fears, while the latter rallied higher; the gold and silver selling at the end of last week once again tempting bargain hunters into precious metals. The US dollar also gained as a result of "safe haven" bids – with the EURUSD dropping to a low of $1.247 before recovering. The Dollar Index gained 0.29% to settle at 82.50. PIIGS debt again sold off following Spain's formal request for a bank bailout, with strong bids for German Bunds, US Treasuries, and to a lesser extent UK gilts. Today is expiration day for Comex silver options, which might have had something to do with the weakness seen in silver at the end of last week. However, there were strong bids for the "poor man's gold" yesterday afternoon which took the price up by around 75 cents in a matter of minutes. This has lifted silver away from its dangerzone around $26, and confirms the decent buying support that exists for silver below $27. Keep on reading @ goldmoney.com |
| Gold, silver retreat in electronic trading Posted: 26 Jun 2012 01:37 AM PDT
from marketwatch.com: SYDNEY (MarketWatch) — Gold futures retreated in electronic trading Tuesday, paring sharp previous session gains, as investors mulled more negative developments from Europe ahead of a leaders' summit later this week. Gold for August delivery GCQ2 -0.98% lost $3.80, or 0.2%, to $1,584.60 an ounce during Asian trading hours. The metal jumped 1.4% in Monday's session as pessimism about this week's European Union summit helped drive investment demand.Ahead of the meeting, more signs of distress in the region's financial system emerged. yprus joined the ranks of European countries seeking financial aid, and Spain formally asked for help for its banking system. Late Monday, Moody's Investor Service downgraded 28 Spanish banks by one to four notches. Keep on reading @ marketwatch.com |
| Posted: 26 Jun 2012 01:28 AM PDT
from ftalphaville.ft.com: In 2010, when the BIS first revealed that it held gold swap agreements worth SDR8.16bn (representing 346 tonnes of gold) the revelation knocked the gold market. That's because rather than making money (or yield) from lending out its gold — as the BIS usually did — it had become cost effective for the BIS to lend out currency against gold collateral instead. It was possibly the most famous example of a "cash for gold" loan in the world — with the BIS acting as the ultimate bullion pawnbroker. So has anything changed this year? Looking at the BIS results in 2012, seemingly no. From the annual report: Included in "Gold" is SDR 12,262.8m (355 tonnes) of gold (2011: SDR 11,940.5m; 409 tonnes) tha the Bank holds in connection with its gold swap contracts. Under such contracts the Bank exchanges currencies for physical gold, and has an obligation to return the gold at the end of the contract. Keep on reading @ ftalphaville.ft.com |
| China and Russia buying gold as protection against currency reset Posted: 26 Jun 2012 01:23 AM PDT
from arabianmoney.net: Consumers made the most of the dip in the price of bullion and mainland China's gold purchases via Hong Kong hit a record 101.7 tonnes in April, up 62 per cent, reported Bloomberg. Meantime, the Russian central bank has again increased its gold reserves by 500,000 ounces. Former Russian finance minister Alexei Kudrin said that a full-blown economic and financial crisis in the euro zone is inevitable and will develop within a year. Real money Russia is clearly buying gold to protect the ruble from devaluations and Russia from an international monetary crisis. China is doing the same both by official gold purchases and by encouraging individuals to buy precious metals. Keep on reading @ arabianmoney.net |
| Posted: 26 Jun 2012 01:20 AM PDT daytradeshow: Silver: The Myth, The Truth, and What You Can Learn from daytradeshow: ~TVR |
| Silver Update: Losing Position 6.25.12 Posted: 26 Jun 2012 01:16 AM PDT |
| Turkey, Russia, Ukraine and Kazakhstan Further Diversify Into Gold Posted: 26 Jun 2012 01:12 AM PDT gold.ie |
| Ackerman & Keiser: Gold vs. Paper Posted: 26 Jun 2012 01:10 AM PDT In this episode, Max Keiser and co-host, Stacy Herbert, discuss the world looking for people looking for economic salvation in gold, the Eurozone and emerging markets and ask "what kind of stupid people put precious money into messy banks?" In the second half of the show Max talks to former market maker and newsletter writer, Rick Ackerman, about inflation, deflation, the euro and the student loan market. RT (Russia Today) is a global news network broadcasting from Moscow and Washington studios. RT is the first news channel to break the 500 million YouTube views benchmark. from russiatoday: ~TVR |
| BIS says gold is a currency, not a commodity Posted: 26 Jun 2012 12:54 AM PDT From the Bank for International Settlements International Convergence of Capital Measurement and Capital Standards: Page 179 "Gold is to be dealt with as a foreign exchange position rather than a commodity because its volatility is more in line with foreign currencies and banks manage it in a similar manner to foreign currencies." Page 182 "718(xLiii). This section establishes a minimum capital standard to cover the risk of holding or taking positions in commodities, including precious metals, but excluding gold (which is treated as a foreign currency according to the methodology set out in paragraphs 718(xxx) to 718(xLii) above). ... The price risk in commodities is often more complex and volatile than that associated with currencies [ie gold] and interest rates. Commodity markets may also be less liquid than those for interest rates and currencies and, as a result, changes in supply and demand can have a more dramatic effect on price and volatility." Who's to argue with the eggheads at the BIS? Well, a lot of financial market people who hate gold always call it a commodity, which hides its special nature. Any commodity with around 60 years of above ground inventory would have a price close to zero. The fact that gold has a price tells you it is not a commodity.  |
| Turk – Capital Controls, Panic, The Great Depression & Gold Posted: 26 Jun 2012 12:53 AM PDT
from kingworldnews.com: With tremendous volatility in global markets, today King World News interviewed James Turk out of Europe. Turk told KWN that we are headed into an extraordinarily dangerous time for both the markets and the financial system, that will end in a massive panic. Here is what Turk had to say about what is taking place: "Today was a very important day, Eric, because gold was strong while the stock markets were weak. This is a trend I expect to continue, and one that will baffle many financial analysts, going forward, that don't understand this type of cycle." James Turk continues: "I was hoping to see more strength in the precious metals at the end of last week, Eric, given the pummeling gold and silver were given. But I guess that was too much to ask for with July option expiry this week. Keep on reading @ kingworldnews.com |
| Posted: 26 Jun 2012 12:52 AM PDT The latest from Chris duane of truthnevertold. SBSS 44. Future Silver Legal Tender ~TVR |
| Richard Russell – This Terrifying Financial Collapse & Gold Posted: 26 Jun 2012 12:49 AM PDT
from kingworldnews.com: With global markets trading in a sea of red, the Godfather of newsletter writers, Richard Russell, issued the following warning: "… it is dawning on Bernanke that the Fed cannot defeat the powers of deflation and the primary bear trend … and Bernanke knows it, but cannot talk about it – it's too frightening." Russell also discussed gold at length, but first, this was Russell's disturbing conclusion regarding the precarious situation we face: "The Russell view — The Fed and all central banks are fighting the implacable forces of global deflation. This is really the primary bear trend that I've been writing about. It's the result of a fundamental change in the world markets. Suddenly, within the space of a few years, Asia has entered the global economy." Richard Russell continues: "The world is now producing far more goods (and more competitively) than ever before. I think deep in his heart, Bernanke knows and understands this. As a result, he does not want to use all the possible anti-deflation ammunition that the Fed can muster. The reason — it is dawning on Bernanke that the Fed cannot defeat the powers of deflation and the primary bear trend. Keep on reading @ kingworldnews.com |
| Casey Daily Dispatch: Top Seven Reasons Gold Producers Will Soar Posted: 26 Jun 2012 12:17 AM PDT By Jeff Clark, Senior Precious Metals Analyst For the past eighteen months, gold stocks have been pummeled. They showed some life from mid-May to mid-June - GDX, the gold miner's index, was up 21%, while gold rose 5.5%. That bounce was exciting, but they've still got a lot of lost ground to make up. Since January 1, 2011, GDX is down 28%, while gold is up 10%. So what's going to move these darn stocks? Will their day ever come? Could our research - gulp - be wrong? Jokes have even started circulating...
Laugh or cry, underneath this heap of stock-certificate debris is the contrarian opportunity of a lifetime. That's a strong statement, I know, but there are numerous well-researched reasons why I'm convinced gold stocks are one spark away from igniting the portfolios of those with the cash to buy, courage to act, and patience to hold. And it's not just because they're undervalued, something that's been the case for at least eight months. Let's review the core reasons why gold stocks are the place to invest right now, and why I'm convinced much higher prices will be had before this bull market is over... Reason #1: Gold stocks have leverage to gold bullion prices. In spite of what's occurred recently, history is on our side here, as the track record of precious metals equities demonstrates they can reward patient investors tremendously. They rose:
It's normal for gold stocks to demonstrate this kind of leverage to gold. It would completely contradict the historical pattern - and common sense - for gold stocks remain where they are until this bull market ends. (And sometimes, even when the price of gold bullion falls, gold stocks can still offer big upside. Case in point: in the 24 months from January 1, 1981 to January 1, 1983, while the price of gold bullion fell by 25% - from $597 to $446 - gold stocks rose 72%. A series of giant gold discoveries in Canada set off a mini-mania in the equities.) Check out the historical record, which includes some mind-boggling performances by juniors. Reason #2: Gold stocks are grossly undervalued. Gold stocks aren't just inexpensive, they're stupid cheap. Their current undervaluation is more than just compelling... it's fire-sale attractive. It should have your full attention. Just look at the data and you'll see what I mean:
This undervaluation cannot and will not last. Even the trader who knows nothing about Newmont or Barrick or Goldcorp will sooner or later want to jump on this - and if he doesn't, his boss will want to know why. Read what one Sprott fund manager thinks about gold stocks. Reason #3: Gold stocks are universally under-owned. There are plenty of reports about how little gold and silver the average mainstream investor owns - which likely means they own even less of gold equities. But the disconnect is bigger than you realize... In the institutional world, pension funds sit at the head of the table. However, the typical fund devotes only 3% to commodities, and of that 3%, only 5% is committed to gold and gold stocks. In other words, only 0.15% of assets are in gold and another 0.15% in gold mining stocks, a pathetic total of less than one-third of one percent. Ditto other institutional investors. Given the gamut of sovereign risks in virtually the entire world, even the developed world, the lack of gold and gold stock ownership is appalling. That will change as the growing fiat currency risks around the world impact investors more deeply. Reason #4: All that cash has gotta go somewhere. It's one thing to say gold stocks are under-owned, but is the money available to buy them? One could make an argument that any rush into gold equities would be muted if no one has any savings or if demographics dictate that a fifth of the developed world will soon be retired. At the end of Q1, S&P 500 corporations had $1.7 trillion in cash and another $4 trillion in short-term investments. The M1 money supply is currently $2.2 trillion. Pension assets exceed $31 trillion, more than twice the size of last year's GDP in the US. Contrast those figures with the market cap of all primary gold producers trading in North America: about $800 billion. Or the market cap of all primary silver producers: a measly $32 billion.
Check out the chart of these data. And by the way, don't forget other corporations in the US and around the world, insurance companies, hedge funds, sovereign wealth funds, mutual funds, private equity funds, privat e wealth funds, ETFs, and millions of global retail investors. There are, quite literally, tons of cash available for investment in whatever sector the mainstream targets. What if they all enter the gold market at or near the same time? Reason #5: Physical gold may become hard to get. The gap between supply and demand isn't letting up. Since 2001, worldwide production is flat, despite a sixfold increase in the gold price - and demand has grown from $3 billion to $80 billion. I'm in touch with bullion dealers on a regular basis, and they're all saying the same things. Andy Schectman of Miles Franklin insisted that the bullion market "will ultimately be defined by complete lack of available supply." Border Gold's Michael Levy cautioned, "If an overwhelming loss of confidence in the US unfolds, the demand for physical gold and silver will far outweigh all known inventories." And Mike Maloney of GoldSilver.com warned that if shortages develop, "physical bullion coins and bars might become unobtainable regardless of price." As increasing numbers of people view gold as a must-own asset, and as supply is not keeping up with demand, where is the next logical place for investors to turn to get exposure? Gold stocks. Imagine the plight of the mainstream investor who calls a bullion dealer and is told they have no inventory and don't know when they'll get any. Picture those with wealth finally becoming convinced they must own precious metals and being informed they'll have to put their name on a waiting list. Imagine a pension fund or other institutional investor scrambling to get more metal for its fund and being advised the amount it wants is "currently unavailable." Mining equities would be the fastest way to meet that demand. It'll be the next logical step to take - maybe the only sensible step available if the supply of physical metal remains constrained. It will feel like the most natural thing in the world for them to do. It is indeed the overlooked reason gold stocks will soar. Reason #6: Gold has a lot further to climb. This is why I'm convinced gold stocks will soar again: a rising gold price. Many investors have focused on gold's lackluster movement for the past eight months, forgetting that it rose a total of 2,333% in the 1970s - with much less currency dilution than we have today. For gold to match the same percentage rise from its 2001 low, the price would hit $6,227 per ounce. Nothing says it has to match that price - but neither does it have to stop there. Given the ongoing caustic actions of politicians, we see much more upside risk in gold than downside. And here's the key for gold stocks: once the gold price resumes its uptrend and begins making new records again, all sorts of investors - from large market-moving institutions to small retail buyers - will return to gold equities. I suggest beating them to it. Reason #7: "The boat" has a leak. The dilution of our currency is on a nonstop - and scary - trajectory. Just since January 1, 2000, US dollars have lost a whopping 26% in purchasing power. The Canadian dollar has lost 23%. This is a serious and gross devaluation of what we use for money. Meanwhile, gold has gained 325% in purchasing power (after accounting for inflation as measured by the CPI, which understates the amount of inflation by a considerable amount). And this is while the gold price has gone nowhere since last September. The problem is, the leak in our economy is only going to get bigger. The monetary base now exceeds $2.6 trillion, up 215% since January 2008; the national debt is over $15.7 trillion and will conservatively reach $20 trillion in just three years; the $1.3-trillion US budget deficit, which is more than the entire US budget was just 20 years ago; the approximate $4 trillion in US Treasuries held in foreign central banks, many of which continue making arrangements to bypass the dollar; the vulnerable and propped-up economies around the globe; the still-unresolved European debt crisis; the many negative real interest rates that show no sign of reversing course anytime soon. These are massive megatrends that won't be reconciled without further, serious dilution of the currency - it's the only politically acceptable way to decrease the debt burden. This is why we're convinced more money-printing in the US and around the world is highly likely - whether they call it "quantitative easing" or try to hide it under some other guise - especially if we get another deflationary scare. With the only logical choice being to print, gold will be forced higher by an order of magnitude. I say all this about gold because I think that is the key to gold stocks. If gold and silver are destined for higher levels, gold stocks will follow. I know they haven't demonstrated that for a while now, but slumps don't last forever. The bottom line is this: Gold stocks do respond when gold goes higher - and gold is going higher because of completely unsustainable fiscal and monetary actions of governments all around the world. So, will gold stocks really soar again someday? The historical record of gold stock manias... the extreme undervaluation of gold equities... the lack of mainstream participation in our market... the abundance of available cash... dwindling supply and rising demand... the massive disconnect between gold and gold stocks... the likely trajectory of the gold price... and last but not least, the political compulsion to dilute the currency further... all these factors point to an incredible opportunity to buy gold stocks at extremely low levels and someday realize potentially life-changing rewards. Hang in there, my friends. Our time will come. In fact, I predict that someday we'll wonder why anyone doubted it in the first place. Just how convinced am I that the risk/reward ratio for these stocks offers a rare upside opportunity, with limited downside risk? I just bought four precious metals stocks for my risk-averse mother.
Chilean Lower House Votes Unanimously to End "Copper Law" that Finances the Military (MercoPress) The Chilean Chamber of Deputies voted for changes in the country's military funding. Should the initiative gain approval in the Senate, it would end ties between the Armed Forces and Chile's state-owned mining company, Codelco, which funds the military through an annual 10% allocation of its sales. This so-called "copper law" has been in force since 1958. While the impact on Codelco cannot yet be known, it seems likely that the repeal would not be made simply to benefit the company's bottom line. There would likely be some other tax or royalty put in place to redirect the money from the military to social spending. This could lead to a power struggle between the military and civilian authorities in Chile, which would be a very bad thing for the country. Even if it doesn't, the fact that the military directly benefited from mining in Chile has been a pro-mining force in the country for decades. If that changes, it seems unlikely to be a good thing for mining. This bears close watching. Italian Stopped at Swiss Border with 50 kg of Gold (Reuters) An Italian businessman was trying to transport 50 kg (1,607.5 ounces) of gold in a hidden compartment in his car. Italian tax police seized the gold, worth about $2.5 million, and charged the man and his daughter, who was also in the car, with smuggling. As Reuters reports, Italians have billions of undeclared assets stashed in Switzerland, and many have bought gold to protect their wealth from being destroyed by the European debt turmoil. This title caught our attention as reminder to transport gold legally. Other than an ounce or three carried on your person, use a reputable service for transport. Gold Hedging Update (Mineweb) Societe Generale and Thomson Reuters GFMS expect that mining companies' hedging and de-hedging in 2012 won't have a significant impact on gold prices. During the first quarter, the global producer hedge book declined by 0.08 million ounces (3 tonnes), leaving the outstanding producer hedge book at 5.07 million ounces (158 tonnes). There are 1.38 million ounces (43 tonnes) of de-hedging due during the remainder of this year, and Societe and GFMS anticipate "a continuation of small discrete amounts of project hedging as part of risk management connected to the securing of project finance agreements and credit facilities." GFMS confirms what we would expect from gold producers at this time: the majority of them remain bullish on gold because they're not hedging.
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| Turkey, Russia, Ukraine & Kazakhstan Diversify in Gold Posted: 25 Jun 2012 11:36 PM PDT Gold's safe haven credentials were burnished again yesterday when despite falls in stock indices globally, gold rose $15.10 or 0.99% and closed at $1,586.30/oz. Gold traded sideways in Asia and continues in a narrow range in European trading. |
| 'Negative Forecast' Remains for Bullion Posted: 25 Jun 2012 11:12 PM PDT Spot market prices to buy gold traded just above $1,580 an ounce throughout Tuesday morning's London session, up around 0.6% on last week's close following gains the previous day. Prices to buy silver traded in a tight range around $27.50 an ounce. |
| Intervention for Market Plunge Posted: 25 Jun 2012 09:27 PM PDT We believe there will be intervention into the markets if they fall to hard. Below is a look at the charts as of June 21 day end. Dow Jones Industrial Average: Closed at 12,573.57 -250.82 on 112% of normal volume with momentum rising with the selling. Two key supports were broken and the close was under both the 20 and 50 day moving averages. However, the price was supported above the very important 200-day moving average at 12,481.35. The lower and very key support is that 200-day moving average. Below that number, 12,000 is the next key support. We forecast that the Dow could easily sell more down to 12,500 on Friday. Should the 200-day moving average, just under that number be threatened with harder selling, we would expect the PPT Plunge Protection Team to step in and buy S&P futures by the thousands to protect this market and prevent a larger selling accident. Look for a close on Friday near 12,500 and intervention at 12,250 to prevent a selling overshoot to 12,000 if necessary. S&P 500 Index: Closed at 1325.51 -30.19 on 115% of normal volume and rising momentum on this stronger selling. Like the Dow, this index price sold down and through the 20 and 50 day moving averages to be supported above the 200-day moving average at 1315.34. If tomorrow, Friday is another selling day and these stock markets capitulate, we would expect a Friday close near 1315.34 on the 200-day average. There is nearby lower support at 1300, which is possible but not likely. A close at 1300, would however, produce an inverted head and shoulders bullish chart pattern signaling a recovery rally could follow. While this current market selling appears rough, keep in mind the 200 day averages are holding and this is an election year. We expect a big market bust-up in 2012 but not until just before or, just after the national elections in November, 2012. S&P 100 Index: Closed at 607.42 -12.82 as the larger company index did not sell or, move as much as the others. Volume was a touch above 100% and the momentum was rising with the selling; however, the momentum peaked before the close telling us Friday could be flat to mild selling toward 600 support. The 200-day average is just below 600 at 595.61. The close was right on the 20-day average at 607.65 and just three points under the 50-day average at 610.56. These prices and patterns tell us this selling cycle should be normal and not abnormally large wrecking markets at this time. This should be considered a standard move after the stock markets were overbought. We all know the PPT, Federal Reserve, IMF and others, along with the US Treasury, will ensure there are no major market breakdowns prior to the November voting if it can be helped. Recent worries over Europe's messes have given rise for concern, but the IMF and Federal Reserve along with others have more tools to prevent a global disaster, at least for now. Nasdaq 100 Index: Closed at 2556.96 -66.37 that produced normal volume on rising momentum that peaked when the selling stopped near the end of the session. The price remained above the 200-day average at 2496.27, which is major support for the Nasdaq. The other stock indexes are all well supported by their corresponding 200-day averages as well. However, keep in mind this index major support is 2500 and we are not far from that number. Yet, the close remains on and inside the former up-trending channel support line. As we have mentioned many times before, watch this index as the leading indictor for all stocks and stock indexes. It is faster and moves ahead of the others signaling the potential for where the balance of the other stock sectors could go next. Worst case on Friday might be breakdown to 2500 major support but we do not expect this. Rather, look for a Friday close near 2562 on the 20-day moving average. 30-Year Bonds: Closed at 149.72 +1.12 rising on falling stocks. Momentum has peaked and tipped over into selling during the month of June. Yet, the price is propped and levitating on falling stocks and multiplying worries on credit failures in Europe, which for all intents and purposes seem uncontainable for now. With the Greece election thinly supporting the Euro-land bailout, we think the Greek mess is contained for at least another 90 days. Yes, the streets will be hot this summer, but the overall authority remains in place for a credit extension for, we think, at least three months. The larger problem now is Spain and the potential for Italy to begin slipping enough to frighten markets. The Moody's downgrades on banks today especially on Credit Suisse, can have some impact but is not strong enough to make a larger problem in the shorter term. Expect bonds to trade in chop between 148.50 and 149.50, until we are closer toward the end of June next week when there is potential for a selling drop to 146.45 down to the 50-day moving average. XAU: Closed at 157.04 -9.15 after double topping in a bear move earlier this month. The important metal to shares ratio is flat and pointing downward but is supported on the 20-day average. Momentum has peaked and is turning lower. The price drop today was a hard one breaking down and through 160 price support and closing under the 20 and 50 day averages. The close was on a down bar forecasting more weakness and selling. Yet, if the dollar will stop buying and pull back as mainline stocks support and recover, the XAU could hold-up near 155 and certainly we think no lower than 150. Should the 150 number be touched as lower support, that would produce a stronger base for the next rally. Look for June to be choppy to frail and selling, but with a new rebound and recovery late in the last week of June. Gold: Closed at 1565.50 -42.10 on rising but flattening momentum. The price is now below all moving averages and resting on a selling channel line. This forecasts that the selling trend continues all the way to the oversold price of 1550, which is major support. We think gold stays in the selling mode and doldrums until the end of June. At that time, we can expect a new gold rally to a 50% retracement resistance number of 1736.50 also near a larger months' long down sloping trend channel line. This would be a six week's long cycle. With today's close near $1550, we might meander near $1550-1555-1565 for the rest of June. Silver: Closed at 426.88 -1.25 down -4.4% in major sell-off taking price to a nearby previous major low of $26.62. The chart has produced a very wide triple bottom and less wide double bottom, covering May and June. Silver is very volatile and since the daily limits of $1.50 have been removed, we have some wild trading days for the prices. Momentum has peaked and is turning lower. However, in after hours' futures trading on the September contract, we see a price of $26.93 in very light volume. The posted trading range on that month today was $2.00, which is significant and wide. While the selling could continue on an overshoot to under $26.62, we think that former support and resistance should hold-up. If this is true and a new basing format is produced, we would be looking to go long with spreads and shares as well as options on the better, higher volume senior silver share companies. Look for a September peak. US Dollar: Closed at 82.32 +0.91 on falling but supporting volume, the dollar had a hard spike bull move today taking the price above and out of the down-trending trading range. The inverse Euro trade did not move down much but rather stood still in choppy trading with an after hours' close on the September futures of 125.69. New support is 82.00 and resistance is 82.50. If 82.50 is broken on the upside with more buying, the next higher resistance is 83.00-83.50. We do predict that higher price range for the dollar in June with a chance of even higher prices in early July. Watch for significant rising breakouts that hit sporadically throughout the summer and even longer until the Euro can find some hard support. Next lower Euro currency support is 124.50-125.50. Higher dollar prices ahead. Crude Oil: Closed at 78.03 -3.05 on basing momentum after a larger selling event today. Oil acted like the 80.00 price would hold for most of June with three triple bottoms near 82.50 but it could not hang on. The price drop today was hard and fast falling over $3.00. The price is now under all three, major moving averages. Reserves are above normal and even some of the Iran sanctions have been relaxed to enable Iran to sell something getting unleaded gasoline imports in return. Resistance is now 78.50 with support back at 74.50-75.00. With the entire commodities sector selling-off on weaker demand, we forecast the oil price sinks to $75.00 support this month with a chance for an over-shoot to 72.50. CRB: Closed at 267.16 -5.75 as the momentum signal based and crossed over to the bull side. The chart has produced a bull double bottom, which is clean and clear. This technical move shows the CRB, while being drastically oversold and pronounced to be in a larger bear market, is in fact ready to begin a new rebound, and perhaps as early as Monday morning next week. Almost every sector has been oversold with especially the crude oil and energy group; the largest part of this market. The forthcoming USDA report will probably say there is too much in reserves and planting is going well to smother the prices. However, we see weather and insect problems, lower reserves, and higher demands for food. Look for grain, precious metals, and energy rallies to begin next week. Do not forget the specter of inflation later this year. –Traderrog         This posting includes an audio/video/photo media file: Download Now |
| Gold Always Glitters in India: Will Curbing its Import Save the Economy? Posted: 25 Jun 2012 09:17 PM PDT ¤ Yesterday in Gold and SilverGold traded very quietly in the Far East and early London trading. The low, such as it was, came just after 12 o'clock noon in London...and by 11:00 a.m. in New York four hours later, gold was back to unchanged from Friday's close. Then the gold price popped about fifteen bucks or so...hitting its high of the day, $1,589.50 spot, just minutes before the Comex close. From there it got sold down a few dollars going into the electronic trading session. Gold closed at $1,585.30 spot...up an even $13 on the day. Volume, which had been exceedingly light up until that price jump, soared all the way up to around 114,000 contracts net.
The silver price made another attempt to break through the $27 spot price mark the moment that the market opened on Sunday night in New York, but that got sold down 40 cents in pretty short order. Silver the rose back to unchanged about 2:00 p.m. Hong Kong time...and it slid to its London low at the 12:00 o'clock noon silver fix. The subsequent rally lasted until 11:15 a.m. in New York, making it all the way back to Friday's closing price. Then the silver price rose rapidly from there...and most of the significant gains were in by shortly after 12 o'clock noon in New York. Silver moved a bit higher from there, with the high of the day [27.77 spot] coming about five minutes before the Comex closed. From that high, silver got sold off about two bits...and closed at $27.54 spot...up 64 cents on the day. Gross volume was huge...but net volume was pretty light at around 24,000 contracts. Silver had an intraday price move of about $1.17...or 4.35% to the upside.
The dollar index rallied a bit yesterday, hitting its high tick of the day...about half-past lunchtime in London, which was 7:30 a.m. Eastern. After that, it gave up about half its gains...and finished the Monday session in New York up about 20 basis points.
The gold stocks started off slowly...and finally broke into positive territory to stay on the gold price run-up in the last hour of trading yesterday morning. The high of the day for the HUI was around 1:30 p.m. Eastern...and it faded a hair into the close...but finished up 1.12% on the day.
The silver stocks were a mixed bag yesterday, but there were more green arrows than red ones...and Nick Laird's Silver Sentiment Index closed up a tiny 0.16%.
(Click on image to enlarge) Considering that the equity markets in general did so poorly, I'm grateful for the gains that we got in the shares, as the yesterday's gains in the metal itself were rather modest, even though the chart patterns looked impressive. The CME's Daily Delivery Report showed that 2 gold and 29 silver contracts were posted for delivery tomorrow. The data isn't even worth a cursory glance. There were no reported changes in either GLD or SLV. However, the U.S. Mint had a sales report yesterday. They sold 3,500 ounces of gold eagles...1,000 one-ounce 24K gold buffaloes...and 493,000 silver eagles. Month-to-date the mint has sold 46,500 ounce of gold eagles...8,500 one-ounce 24K gold buffaloes...and 2,568,000 silver eagles. The Comex-approved depositories showed that they received 797,388 troy ounces of silver on Friday...and shipped 740,519 ounces of the stuff out the door. The link to that activity is here. Well, Nick Laird dropped a bomb on me last night. I'd been waiting impatiently for the second quarter derivatives report from the Office of the Comptroller of the Currency...and it was posted yesterday. Table 9 on Page 33 tells us a lot about what's going on in the precious metals derivatives market. But the shocker was that instead of including the top 5 U.S. banks, this report only shows the top 4 U.S. banks. They dropped off HSBC...the second largest precious metals derivatives holder. I'm sure they still hold these derivatives, but they're no longer in this report...and Nick's graph below reflects that. All his data comes from that table on that page.
(Click on image to enlarge) After exchanging a couple of e-mails on this issue, I finally came up with the reason why Table 9 [and a bunch of others] may be down to four banks...and here it is: Hi Nick, If you check Table 1 on page 25, you'll see that the 'big 4' U.S. banks hold 93% of all the derivatives in the U.S. banking system...and HSBC in No. 5 spot, despite the fact that it holds a huge derivatives position in the precious metals, is now small potatoes in the grand scheme of things at only $4.47 trillion...1.96% of the total. As you said, you just checked it's history and when they OCC started, they had 9 top banks in Table 9...then 7 - then 6 - then 5, and now 4...and that's probably the reason why we're down to 4 banks. The rest are basically immaterial. Ed 93% of all derivatives in the U.S. banking system are held by 4 banks. They are JPMorgan, Citibank, Bank of America, Goldman Sachs...and in very distant fifth position is HSBC USA I have the usual number of stories for a Tuesday...and that's quite a few. It's impossible to tell whether the price rallies during the New York trading session yesterday were short covering or new longs being placed. Ben Davies: Revolting PIIGS...a golden hope? Breaking News: Regulators to Classify Gold as Zero-Risk Asset. Top Seven Reasons Gold Producers Will Soar: Jeff Clark, Casey Research ¤ Critical ReadsSubscribeU.S. Banks Aren't Nearly Ready for Coming European Crisis: Simon JohnsonThe euro area faces a major economic crisis, most likely a series of rolling, country-specific problems involving some combination of failing banks and sovereigns that can't pay their debts in full. This will culminate in system-wide stress, emergency liquidity loans from the European Central Bank and politicians from all the countries involved increasingly at one another's throats. Even the optimists now say openly that Europe will only solve its problems when the alternatives look sufficiently bleak and time has run out. Less optimistic people increasingly think that the euro area will break up because all the proposed solutions are pie-in-the-sky. If the latter view is right -- or even if concern about dissolution grows in coming months -- markets, investors, regulators and governments need to worry not just about interest-rate risk and credit risk, but also dissolution risk. What's more, they also need to worry a great deal about what the re-pricing of risk will do to the world's thinly capitalized and highly leveraged megabanks. Officials, unfortunately, appear not to have thought about this at all; the Group of 20 meeting and communiqué last week exuded complacency and neglect. This op-ed piece by Simon Johnson was posted on the Bloomberg website on Sunday afternoon. Johnson, who served as chief economist at the International Monetary Fund in 2007 and 2008, is a professor of entrepreneurship at the Massachusetts Institute of Technology's Sloan School of Management. I thank reader "Tom in Thailand" for sending it...and it's a must read. The link is here.  Mohamed El-Erian: Fed keeps messing with marketsPity Ben Bernanke and his colleagues on the Federal Reserve's main policymaking committee. Once again they felt compelled to do something to be seen as countering a renewed slowing of the domestic economy that is compounded by a deepening European crisis and less buoyant emerging economies. But in continuing to act on its own, all the Fed will do is buy some time that will again be wasted by the country's politicians. Meanwhile, collateral damage will mount, making the next policy steps even more excruciating. It is not so long that the Fed was discussing how to exit the unconventional policy phase initiated in the midst of the 2008 global financial crisis. Instead, and having already ballooned the balance sheet to 20 per cent of US gross domestic product, it will now exchange even more of its short-term Treasury holdings (up to 3-year maturities) for longer-dated (6-30 year) bonds. This extension of "Operation Twist" has, as an intermediate objective, repressing market interest rates to push investors to assume more risk, trigger the wealth effect, and reignite animal spirits. This story, headlined "The Fed's Second-Best Solution" appeared in the Financial Times last Wednesday...and is posted in the clear in this GATA release. It, too, is worth reading...and the link is here.  Lawmakers reworked financial portfolios after talks with Fed, Treasury officialsOn Jan. 23, 2008...John A. Boehner (R-Ohio) met Paulson for breakfast. Boehner would later report the rearrangement of a portion of his own financial portfolio made on that same day. He sold between $50,000 and $100,000 from a more aggressive mutual fund and moved money into a safer investment. The next day, the White House unveiled the stimulus package. Boehner is one of 34 members of Congress who took steps to recast their financial portfolios during the financial crisis after phone calls or meetings with Paulson; his successor, Timothy F. Geithner; or Federal Reserve Chairman Ben S. Bernanke, according to a Washington Post examination of appointment calendars and congressional disclosure forms. The lawmakers, many of whom held leadership positions and committee chairmanships in the House and Senate, changed portions of their portfolios a total of 166 times within two business days of speaking or meeting with the administration officials. The party affiliation of the lawmakers was about evenly divided between Democrats and Republicans, 19 to 15. So, what else is new? This story showed up in The Washington Post yesterday...and I thank Washington reader S.A. for sharing it with us. The link is here.  As RBS' ATM "Glitch" Enters Fifth Day, The Bailed Out Bank Issues A StatementOver the past week, various entities controlled by bailed out UK-bank RBS, focusing primarily on NatWest, have seen clients unable to access virtually any of their funds, perform any financial transactions, or even get an accurate reading of their assets. The official reason: "system outage"... yet as the outage drags on inexplicably for the 5th consecutive day, the anger grows, as does speculation that there may be more sinister reasons involved for the cash hold up than a mere computer bug. Branches of Royal Bank of Scotland will open on a Sunday for the first time this weekend as RBS Group struggles to deal with the aftermath of technical problems that have affected up to 12 million customers. The taxpayer-owned group took the unprecedented step of extending the hours of more than 1,000 RBS and NatWest branches that normally open on a Saturday to 6pm, and opening them again tomorrow morning, as it faces an angry backlash from people unable to access accounts, withdraw wages or pay bills and mortgage payments. This story showed up over at the zerohedge.com website on Saturday...and I thank reader Bob Fitzwilson for sending it along. The link is here.  All the bail-out systems under the sun cannot make the eurozone workAnother week, another summit. This week's shindig of EU leaders in Brussels will be bound to focus on efforts to shore up the euro and...once again, it is likely to disappoint. The main issue is well-known; bail-outs for indigent, non-tax-paying southerners at the expense of hard-working northerners. But the real issue goes deeper. All the bailout mechanisms under the sun cannot make the euro-zone work. Such bailouts are still, in the end, loans. Even if the interest rates are set very low, interest is due to be paid and the debt eventually to be repaid. What would make some difference is if the money provided were not some sort of loan but rather an outright gift. Such gifts can be made in advance (although they rarely are) or after the event, when they are called write-offs. Sometimes a recipient itself turns what was once a loan into a gift. This is called a default. But northern countries understandably don't want their past loans turned into gifts, and they don't want to be forced to make new gifts until the crack of doom. LOL!!! That pretty much sums it up. This story was posted in The Telegraph on Sunday evening local time...and I thank Roy Stephens for his first offering of the day. The link is here.  Imagining the Unthinkable The Disastrous Consequences of a Euro CrashIt wasn't long ago that Mario Draghi was spreading confidence and good cheer. "The worst is over," the head of the European Central Bank (ECB) told Germany's Bild newspaper only a few weeks ago. The situation in the euro zone had "stabilized," Draghi said, and "investor confidence was returning." And because everything seemed to be on track, Draghi even accepted a Prussian spiked helmet from the reporters. Hurrah. Last week, however, Europe's chief monetary watchdog wasn't looking nearly as happy in photos taken in front of a circle of blue-and-yellow stars inside the Euro Tower, the ECB's Frankfurt headquarters, where he was congratulating the winners of an international student contest. He smiled, shook hands and handed out certificates. But what he had to tell his listeners no longer sounded optimistic. Instead, Draghi sounded deeply concerned and even displayed a touch of resignation. "You are the first generation that has grown up with the euro and is no longer familiar with the old currencies," he said. "I hope we won't experience them again." The fact that Europe's top central banker is no longer willing to rule out a return to the old national currencies shows how serious the situation is. Until recently, it was seen as a sign of political correctness to not even consider the possibility of a euro collapse. But now that the currency dispute has escalated in Europe, the inconceivable is becoming conceivable, at all levels of politics and the economy. This story showed up on the German website spiegel.de yesterday...and I thank reader Donald Sinclair for bringing it to our attention. The link is here.  |
| Four King World News Blogs/Interviews Posted: 25 Jun 2012 09:17 PM PDT  The first is with Richard Russell...and it's entitled "This Terrifying Financial Collapse & Gold". The next is with James Turk. It bears the headline "Capital Controls, Panic, the Great Depression & Gold". The third blog is with Bob Fitzwilson of The Portola Group...and it's headlined "read more |
| Argentine nervous savers withdrew 522 million dollars in the last week Posted: 25 Jun 2012 09:17 PM PDT  Foreign-currency deposits fell to 10.52 billion on June 15, the central bank said in a report Friday. Those deposits are overwhelmingly US dollars, which Argentines view as a safe haven amid times of economic uncertainty. The loss of dollar deposits still isn't a serious threat to banks, as they represent less than 10% of their total deposit base. However, the dwindling stock of dollar deposits likely will make export financing more expensive. The outflows also have dented the central bank's international reserves. |
| Imagining the Unthinkable The Disastrous Consequences of a Euro Crash Posted: 25 Jun 2012 09:17 PM PDT  It wasn't long ago that Mario Draghi was spreading confidence and good cheer. "The worst is over," the head of the European Central Bank (ECB) told Germany's Bild newspaper only a few weeks ago. The situation in the euro zone had "stabilized," Draghi said, and "investor confidence was returning." And because everything seemed to be on track, Draghi even accepted a Prussian spiked helmet from the reporters. |
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