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Friday, October 26, 2012

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Exelixis Stock Treads Water Ahead Of FDA Decision

Posted: 26 Oct 2012 12:07 PM PDT

By Brian L. Wilson:

Shares of the oncologic drug developer Exelixis (NASDAQ: EXEL) saw a giant slide in August on a steep miss in Q2 2012 revenue, which was exacerbated by a public offering of 20 million shares and a huge $225 million pool of convertible senior subordinated notes (announced August 6th, 2012 in this press release.) Shares dropped about 25% on the dilution, and struggled to breach the psychological $5/share barrier until September. $5/share is a key level to watch, since any stock that is below 5 is traditionally considered a "penny stock", which scares away many asset managers who would have been happy buying shares of the company otherwise.

While it's true that negative connotation with sub-five dollar stocks isn't as prevalent in the biotech sector due to their frequency, recent trading in EXEL suggests that the market is hesitant to bring EXEL out of penny stock status. Basically, we are seeing


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Serious Supply Concerns In Platinum Could Lead To Price Spike

Posted: 26 Oct 2012 11:47 AM PDT

about:PTM includes:PALL, SLV, GLD, AU, GFI,HMY,GM,FXI

 We are seeing some healthy profit taking in gold (GLD) and silver (SLV) after making an explosive breakout over the summer. Investment demand after QE3 is increasing as investors seek alternatives to fiat currencies which are being devalued by Central Banks all over the world.

We may see consolidation and volatility in the markets until after the U.S. Presidential Election, when most investors realize that not much will change. All over the world governments are looking to boost unhealthy economies and this will continue regardless of who is in office.

Major infrastructure projects will probably be announced after the election both in the U.S. and China to boost employment. Additional means to boost the velocity of money and encourage risk on investments will be promoted by punishing hoarders of cash and treasuries.

In addition, we have serious supply concerns as the majors delay large mines and South Africa one of the largest producers of gold, platinum (PTM) and palladium (PALL) is facing the worst and most violent labor crisis in decades. This will not end quickly and may continue to plague the South African mining industry. This will not only put pressure on the supply of gold, but could cause platinum to spike as more than 80% of the world's supply originates from this questionable jurisdiction.

A Recent CBSMarketwatch interview where I was quoted stated:

"…Jeb Handwerger, a natural-resource analyst and editor of GoldStockTrades.com, said that reduced supply from South Africa, combined with rising investment demand from emerging markets, could spur platinum prices to outpace gold.

"Platinum is still 20% below pre-credit-crisis highs, while gold and silver are approximately 80% higher," he said. "This deviation from historical means will not last forever….Meanwhile, gold output in South Africa is a worry too. As of mid-October, strikes among Africa's largest gold producers have cut the nation's gold production by half, according to Bloomberg."

Read the full article on CBS Marketwatch by clicking here…


We stated for many years that investing in South Africa may be a risky proposal and it was no longer a mining friendly jurisdiction. Over the summer we initiated coverage on two North American platinum and palladium as we believed the tumultuous situation in South Africa with violence would escalate and platinum/palladium prices would breakout. Since the strike gold jumped from $1600 to $1800 and platinum jumped from around $1400 to $1700. Now it has pulled back to strong support.

In August the Marikana Miners walked off the job to protest low wages and poor working conditions. Over 36 strikers were killed. This was the most violent clash with police since the early 60′s.

The strikes have spread all across South Africa. Many major gold and platinum companies were already dealing with lower production and higher costs. This turmoil is already putting more pressure on the supply side of platinum and increasing demands coming from the growth of the auto industry in emerging nations.

Platinum producers such as Lonmin who owns Marikana have had to deal with a low platinum prices and rising labor costs as platinum is $100 below the price of gold. Before the credit crisis platinum was more than double the price of gold. Since that time, the South African strikes are continuing to be a major thorn in the side of the South African miners such as Anglogold Ashanti (AU), Gold Fields (GFI), Harmony (HMY), Impala (IMPUY) and many more.

The workers have refused pay raises and it does not appear that the strikes will be ending anytime soon. Do not forget that working conditions in South Africa are much more challenging than other regions as miners descend to much greater depths underground where ventilation is a major concern.

Remember in 2007, over 3000 workers were trapped underground. This led to some mines being shut down including one of the nations largest gold mines. South Africa used to represent over one third of gold production in the early nineties, now it is probably close to a tenth.

This implies that new discoveries around the World will need to make up for this decline. In addition to supply pressure on gold, South Africa is the third largest exporter of coal. But the real concern right now is platinum. Remember South Africa supplies about 80% of platinum to the world.

Platinum supply is only a tenth of gold and a hundredth of silver . Platinum is not only a monetary metal, but it has a strong connection to the automobile and jewelry industry which is showing increased demand especially from emerging nations.

General Motors sold more cars and trucks in China this past year than in the United States for the first time ever in its 100+ year history. This signifies the fundamental shift in demand coming from the rising middle class in China. This rise in demand will need increasing supplies of platinum and palladium which is used in the catalytic converters to reduce noxious air emissions.

The reduced supply from South Africa combined with increased investment demand for platinum coming from the emerging economies could spur the platinum price to far outpace gold.

It's time for our readers to pay attention to platinum as it begins to receive more notice from the mainstream media. Platinum is still twenty percent below pre credit crisis highs while gold and silver is approximately 80% higher. This deviation from historical means will not last forever.

Gold and silver have gained investor's attention as a store of wealth, while platinum has been significantly overlooked and undervalued. The public is still viewing platinum as an industrial metal disregarding the fact that platinum has a history of being used as a store of value for over 300 years. Many still do not realize that platinum is 30 times rarer than gold, yet currently it is trading more than a $100 cheaper than gold.

During good economic times platinum has been usually double the price of gold. Before the credit crisis, platinum reached a high of $2252 when gold was below $1000 an ounce. Despite current pricing, demand especially from emerging nations has far outstripped supply for many years. Now that South Africa which controls more than 75% of world platinum supply is in danger, the rarest precious metal may soar outpacing gold.

We believe very strongly in diversifying across the metals universe to reduce volatility. Portfolios should include not just gold, but silver, platinum, uranium, rare earths, copper and other critical metals needed for emerging, modern industrial nations. We may see gut wrenching inflation due to historic monetary accommodations.

In such an environment where we transition from deflation to inflation, platinum may outperform. This may be the beginning of the outperformance of platinum over gold. Platinum's inflation adjusted high is around $3000. It is trading now below $1650. Given the global currency debasement, platinum could double from these levels to just keep pace with gold and silver. The reason platinum is not the flavor of the day is that it is not yet as liquid as gold and silver.

Major hedge funds and large banks have not participated yet. Once they enter the arena…watch out for an explosive move. Now it is time to Look For Platinum Projects In Mining Friendly Jurisdictions. The implications of the South African supply crisis will accelerate investments in politically stable platinum projects which we continue to highlight.

http://goldstocktrades.com/blog

Disclosure: I am long GLD, SLV. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

about:PTM includes:PALL, SLV, GLD, AU, GFI,HMY,GM,FXI

The US Elections, Dollar, Stocks, and Gold

Posted: 26 Oct 2012 11:44 AM PDT

Based on the October 26th, 2012 Premium Update. Visit our archives for more gold & silver analysis.


With the US presidential election drawing near, it is beginning to look like Mitt Romney may actually have a shot at the white House. This prompts gold investors to wonder how such an outcome might affect financial markets and especially gold. What if Mitt Romney wins? The election may impact everything from mortgage costs to the cost of financing the U.S. debt. Trillions are at stake.


The theory goes that Romney will replace Fed Chairman Ben Bernanke whose current term will expire in any case on January 2014. He has said as much. This might slow down the perpetual money printing machine, which would be a bearish signal for gold. It would add uncertainty to monetary policy and increase market volatility.


If Romney were to be elected, a front-runner for the Fed Chairman post is Glenn Hubbard, Dean of Columbia Business School and Romney's top economic adviser. Hubbard is not enamored with Bernanke's methods.


A new Fed Chairman might raise interest rates which would lead to a short-term economic contraction and increase the government's cost to service its debt. Only last month the Federal Reserve unveiled a program to keep interest rates at or near zero until 2015. If a new Fed chairman raises interest rates that would be a bearish signal for gold since it would make bonds more attractive to investors. Bernanke believes that rates should not be raised before the recovery is firmly "entrenched." He says that removing the stimulus too early would tilt the economy back into recession. A more conservative Fed Chair appointed by Romney may think that recession is an acceptable cost for getting off the perpetual money printing train.

Both candidates talk about reducing the deficit, both want to extend tax cuts to avoid the upcoming fiscal cliff. Romney may talk about reducing spending by $5 trillion but has also called for a whopping $2 trillion increase in military spending. We better not hold our collective breaths for any debt reduction. If Romney were to actually follow through, this could be seen as a temporary negative signal for gold since it would make the dollar look more trustworthy.


Romney has stated that if elected president, he would label China a currency manipulator, which could lead to a trade war with the dollar being devalued versus the yuan. Romney believes that China's currency is being kept artificially low, to the detriment of U.S. manufacturers. "The president has a regular opportunity to label them as a currency manipulator but refuses to do so," he said during the last debate, and repeated his pledge to do just that if he's elected. (Coincidence or not, China's yuan hit a multi-year high Wednesday against the dollar.) Any currency war, a decline in the dollar and a further discrediting of fiat currencies would be bullish for the price of gold.


Romney has talked about establishing a gold standard commission, which if put into effect, would be incredibly bullish for gold.


It is interesting to note that Romney owns gold, between $250,000 and $500,000 according to his disclosure.


No matter who wins the election, we believe that gold and other precious metals should be a part of any gold & silver investor's portfolio. The US economy is in trouble and there are no quick fixes. If spending levels are cut and the quantitative easing program derailed, the economy would contract bringing the U.S. to center stage in a Greek style tragedy. If, on the other hand, the U.S. continues its Keynesian policies, the country could face serious inflation. So it won't matter much to the price of gold if it is Obama or Romney who occupy the White House this January. Deficit spending and money printing will ultimately continue like there is no tomorrow even though gold could dip if Romney does indeed win. If Obama wins, we will likely see a quick rally in the precious metals in the short term. The long-term picture will remain bullish in either case.


To see what we can expect on the precious metals market in the short term, let's move on to today's technical part. This time we will focus on markets that can impact the precious metals market in the following days and then we will move to the strength and direction of this impact. We'll begin with the analysis of the US Dollar Index (charts courtesy by http://stockcharts.com.)

In the medium-term USD Index chart, we see a small possibility of another retest of the declining support line. While lower index values are still possible here, it already seems that the consolidation period has ended and the USD Index is ready to move higher. Moves to the upside appear to be more likely than not. These implications are based on this chart alone however.

Turning now to the short-term USD Index chart, this is where we find the key details concerning the USD Index this week. We have seen a breakout here and it has been verified by three consecutive daily closes above the declining resistance line. The index now appears likely to move higher. Please keep in mind, however, that the cyclical turning point will soon be reached.


Since the USD Index has been moving higher of late, the cyclical turning point will likely coincide with a local top. It seems this will be fairly soon, likely at the end of October or early in November. There appears to be a good chance that the Index could move to the lowest Fibonacci retracement level (80.74), which is slightly above Thursday's close. While a move a bit higher to the 50% retracement level (81.38) would not surprise us, a move above this next level is unlikely. This is because it would invalidate the very long-term declining resistance line, something which is highly unlikely.


Consequently, the very short-term picture remains bullish here but beyond that the situation is rather unclear.  A local top will likely form within the next two weeks (more likely next week), but it is too early to discuss the next moves for the dollar. How soon the top is formed as well as how high the index goes before reversing are both critical pieces of information which are missing at this time. What we have now, however, seems enough to form a strategy for precious metals, because their charts provide other important pieces for this puzzle.


Now, let us have a look at the general stock market's long-term picture.

While stocks have failed to hold above their 2008 highs, they have not declined below the rising support line (shown in red). It was created by the 2011 and 2012 lows, which means that it is a fairly strong support line and likely to hold at least until Election Day. In short, the short-term downside potential appears very limited.


What happens to the stock market after the elections will to a considerable extent depend on who wins.


Let's move on to Correlation Matrix to see whether the situation on the currency and the general stock market will influence gold and other precious metals.

The Correlation Matrix is a tool which we have developed to analyze the impact of the currency markets and the general stock market upon the precious metals sector. It's interesting to note this week that the recent short-term correlations between the precious metals and the USD Index have been almost non-existent. The previous significant relationship is now neutral as the precious metals' prices actually declined recently without a rally in the USD Index.


This is not a sign of strength but rather a sign of weakness in the precious metals themselves. Their correlation with the general stock market is still fairly strong, so it seems that the limited downside potential in the stock market likely applies to the metals as well.


Summing up, the short-term outlook for the USD Index is for a rally but likely not a big one. The opposite outlook holds for the general stock market. Although the short-term trend is down, the medium-term support line is close, so significant declines are not likely, especially just before the elections. The decline in gold is likely not over but relatively close to being over.


In order to make sure that you won't miss any of our free essays, we strongly suggest that you sign up for our gold & silver investment mailing list. Sign up today and you'll also receive 7 days of access to our premium updates, market alerts, premium charts and tools. You'll also receive 12 best practice e-mails as a starting bonus.


Thank you for reading. Have a great and profitable week!


Przemyslaw Radomski, CFA

Founder, Editor-in-chief

Gold & Silver Investment & Trading Website – SunshineProfits.com

* * * * *


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.

Gold Mining Margins Will Expand Further

Posted: 26 Oct 2012 11:43 AM PDT

Longtime readers know that we are a fan of intermarket analysis. The movement of certain markets influences other markets so it is always wise to analyze a handful of markets rather than just a single market by itself. Several years ago we learned from others before us how intermarket analysis can help us get a handle on the margins of gold (and silver) miners. Generally, Oil (energy) represents about 25% of the cost of mining while industrial metals prices can be a proxy for the costs of trucks, chemicals and blasting agents (like cyanide). It has been a while since we've looked at these charts but with the gold stocks having put in a major bottom it is time to analyze whether it is sustainable or not.

Simply put, we look at Gold relative to oil (bottom) and Gold relative to industrial metals (top). These ratios were quite low in 2007 when share prices were driven more so by positive sentiment and high valuations then by positive fundamentals. As you can see, the financial crisis was a major catalyst for the gold mining industry. Gold surged against oil and industrial metals. During the weak recovery these ratios held their ground and are reaching higher levels once again.

Next, we want to look at these markets by themselves. Industrial metals prices are on top while oil is on the bottom. Do these markets appear to be any threat to move much higher? Industrial metals have substantial resistance at 500 and have made obvious lower highs and lower highs in the past year. GYX is threatening a move below 350. Oil has also made lower lows and appears far more likely to test $78-$80 then to rebound above $95.

Meanwhile, Gold continues to hold up quite well within a consolidation. Predictably, its rebound ended at $1800. Yet, the market has a very strong bottom in place and has good support just below $1700.

As you can see, according to this simple straightforward analysis, Gold mining margins should continue to expand. The commodities that represent mining cost inputs are not only trending bearish but are little threat to move much higher anytime soon. Meanwhile, Gold is trading in a healthy range and once it breaks $1800 will be within a month or two of breaking to a new all time high.

In the early years of the boom, gold stocks performed quite well even as cost inputs surged. The reason was the market was willing to pay more and more for gold stocks. Presently we have a very different situation. The fundamentals for gold producers are improving yet the market is attaching low valuations to these companies. Our view is that if Gold breaks to and sustains a new high then the current valuations of these companies will increase materially.

All this being said, it is important to understand that gold mining is an extremely difficult industry. Despite this positive analysis, a fair portion of the industry will struggle. It is geologically and mathematically impossible for major producers to grow consistently. Small miners often lack the expertise and manpower to be successful. Most are aware of the 80-20 rule. We just returned from a tour of one of the best producer's projects. We heard that this management team believes in the 95-5 rule. In other words, in the gold mining industry, 5% of the people produce 95% of the profits. You should keep this in mind when evaluating producers and potential producers. This is also why we focus on stock selection. In this sector, it is crucial to achieving great returns.  If you'd be interested in professional guidance in uncovering the producers and explorers poised for big gains then we invite you to learn more about our service.

Good Luck!

Jordan Roy-Byrne, CMT
Jordan@TheDailyGold.com

Welcome to the Currency War, Part 4: Corporate Revenues Plunge

Posted: 26 Oct 2012 10:08 AM PDT

The Eurozone meltdown has sent capital pouring into (temporarily) safe haven currencies like the US dollar, which rose by nearly 12% between October 2011 and August 2012...

Read

Greg: Gold & Silver Will Skyrocket Because Of The Fed's Actions.

Posted: 26 Oct 2012 09:34 AM PDT

Greg: Gold & Silver Will Skyrocket Because Of The Fed's Actions.

from gregvegas5909:

~TVR

What To Expect With Gold Assaulting $1,700 & Silver At $32

Posted: 26 Oct 2012 09:31 AM PDT

from kingworldnews.com:

Today Tom Fitzpatrick spoke with King World News about the recent action in both gold and silver. Fitzpatrick has been astonishingly accurate in forecasting the movements of gold and silver. With remarkable precision, he called the entire move from the low $1,500s, to the highs right at his $1,791 target. Fitzpatrick then turned bearish at the dead highs, calling for a reaction. Now Fitzpzatrick lets KWN readers know what to expect next.

Keep on reading @ kingworldnews.com

James Turk – The Entire German Gold Hoard Is Gone

Posted: 26 Oct 2012 09:29 AM PDT

from kingworldnews.com:

Today James Turk shocked King World News when he stated, "The entire German gold hoard was gone because it had been leased into the marketplace. Meaning, the vaults holding German gold were emptied by 2001 because of the Bundesbank leasing activities."

Keep on reading @ kingworldnews.com

The Gold Money Index and gold's fair value

Posted: 26 Oct 2012 09:15 AM PDT

Any reasonable saver who has seen the virtue of accumulating gold should be asking himself the crucial and necessary question of when to part with their gold, or at least when to reduce his allocation ...

A Reality Check on a Basel Bull

Posted: 26 Oct 2012 08:07 AM PDT

Following a brief recovery on Thursday gold prices headed back down towards the sub-$1,700 value zone this morning. Overnight lows were seen at $1,699.90 per ounce.

CNBC MOPE: Actual Existence of Gold Reserves is Irrelevant

Posted: 26 Oct 2012 08:04 AM PDT

I know MSN is full of liars and BS artists, but John Carneys remarks are still stunning. Does he really think people are so stupid they will believe it doesn't matter if the bullion banks do or don't have the gold in storage they say they do?

CNBC MOPE: Actual Existence of Gold Reserves is Irrelevant, It's the Bookkeeping That Matters!
October 26, 2012 By The Doc 1 Comment

With this week's reports that Germany repatriated 1,000 tons of its gold reserves from the Bank of England between 2000-01, and is repatriating 150 tons of its gold reserves from the NY Fed over the next 3 years, clearly the awake participants have realized the music stopped long ago, and are grabbing their physical gold chairs.

It is now inevitable that an avalanche of central banks, hedge funds, and wealthy investors worldwide will begin to emulate Venezuela and Germany and request physical delivery of their unallocated (rehypothecated) 'gold'.

In an amazingly weak and futile attempt to stem the inevitable onslaught of delivery and repatriation requests, CNBC's senior editor John Carney has released an editorial claiming that it matters not whether the gold held at the NY Fed and the BOE is filled with tungsten, has been leased or swapped, or that it even exists- all that matters is the Fed's bookkeeping ledger that states the gold is there.
CNBC begins by attempting to claim that it doesn't matter whether Germany's gold reserves held at the NY Fed are actually there and tungsten free, as long as the Fed says it's there:

In reality, it does not matter one bit whether the Federal Reserve Bank of New York actually has the German central bank's gold or whether the gold is pure. As long as the Fed says it is there, it is as good as there for all practical purposes to which it might be put. It can be sold, leased out, used as collateral, employed to extinguish liabilities and counted as bank capital just the same whether it exists or not.

Carney then attempts to claim the gold serves no actual purpose unless the Bundesbank wants to go into the gold watchmaking business:

The actual presence of the gold wouldn't make a lick of difference unless, say, Germany's central bank decided it wanted to start using the gold for some practical, non-monetary purpose like making watches.

CNBC would love investors to believe it's not the actual physical Central Bank gold reserves that matter, it's their book ledgers!

For almost all imaginable operational purposes, the actual existence of the gold in Fort Knox or in the vault beneath the FRBNY's Liberty Street headquarters is irrelevant. The bookkeeping is what really matters here. So long as the Fed says Bundesbank owns X tons of gold, the Bundesbank can act as if it did own the gold—even if the gold had somehow been swallowed into a gold-eating galactic worm hole.

At least Carney is rational enough to acknowledge what happens when the jig is up:

I'm sure the Bundesbank officials understand this quite well, even though the German Audit Court does not. There is nothing to be gained by inspecting the gold. If it is all there and pure, there is no difference from an undiscovered absence. But if the gold isn't there, well, calamity could follow as trust in the central bank gold depositories evaporated instantly.

Where there is smoke, there is always fire. Rather than investigating the source of the smoke, CNBC goes into overdrive MOPE denying the existence of the smoke.
Unfortunately for the Fed and the BOE, Hugo Chavez & now the German Audit Court have triggered a coming avalanche of physical gold delivery and repatriation requests.

http://www.silverdoctors.com/cnbc-mo...-that-matters/

Sprotts Charles Oliver Sees Momentum Building for Gold and Silver

Posted: 26 Oct 2012 07:07 AM PDT

Silver Futures: Concentration, Confidence and the COT Report

Posted: 26 Oct 2012 06:47 AM PDT

The real value of the Commitment of Traders or COT Report for silver traders lies in revealing the marked concentration of short silver futures positions held by the major bullion banks, who are classed as commercial traders.

from silvercoininvestor:

~TVR

Silver Linings When A Currency Diess

Posted: 26 Oct 2012 06:44 AM PDT

What will be left when the dust clears after this monetary collapse, will be the few hard assets that have not already been re-hypothecated by banks and brokers. Silver and gold happen to be the only hard currencies available to most investors, and silver even more so than gold.

from silvercoininvestor:

~TVR

Silver Update: Sham Silver Stockpiles 10.25.12

Posted: 26 Oct 2012 06:43 AM PDT

brotherjohnf: Silver Update 10/25/12 Sham Silver Stockpiles

from brotherjohnf:

~TVR

S7: Silver the BiPolar Metal and HEMP

Posted: 26 Oct 2012 06:41 AM PDT

Silver, BiPolar Metal & a HEMP surprise. My comments on the silver markets and big surprise in HEMP.

from syyenergy7:

~TVR

Bullion to Rally After Predicted October Correction

Posted: 26 Oct 2012 05:54 AM PDT

The low of $1,699.65/oz seen two days ago on Wednesday may mark the intermediate low. However gold could continue falling until Oct. 31 as month ends often mark intermediate lows or could even continue falling until the US election or soon after.

Indian Gold Demand Absent as 'Bearish Trend' Remains

Posted: 26 Oct 2012 05:27 AM PDT

US dollar gold prices traded just above $1,700 an ounce throughout Friday morning in London, following an overnight reversal of yesterday's rally, while European stock markets traded lower this morning following losses in Asia.

Is the manipulation over?

Posted: 26 Oct 2012 05:08 AM PDT

Via Ed Steer/Nick Laird

http://www.caseyresearch.com/gsd/edi...been-gone-2001

Here are three charts courtesy of Nick Laird...and they're all inter-related. The first one is the Intraday Average Gold Price Movement for the month of September...next is the same chart except it's a 12 month rolling average...and the last one is the 5-year rolling average...a chart similar to the one that I posted many times in this column.

It's very easy to see how the price patterns have changed over time. The current price trading pattern is totally unrecognizable from what it was five years prior...or even twelve months ago. The London bias that I [and others] have spoken of at length over the last year or so, has vanished completely. I guess it was becoming too conspicuous.


(Click on image to enlarge)

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(Click on image to enlarge)

Metals, Crude Oil May Recover on US GDP Sentiment

Posted: 26 Oct 2012 05:08 AM PDT

Commodities are under pressure but third-quarter US GDP figures may help offset negativity. Such an outcome stands to boost growth-anchored crude oil and copper prices. Meanwhile, gold and silver may likewise rise.

D-Word Hurts Prices as Central Bank Buys Cheer Gold

Posted: 26 Oct 2012 04:51 AM PDT

The market appears to be concerned with the "D" word – deflation – but more central bank gold buying news cheered gold. Brazil added 1.7 tons in September while Turkey added 6.8 tons.The buying is expected to continue.

Gold Trading Jumps in London

Posted: 26 Oct 2012 04:38 AM PDT

World's wholesale center sees biggest jump in Gold Trading since summer 2011's record prices...

read more

Golden Stability vs. Fiat Currency Chaos – Part II

Posted: 26 Oct 2012 04:17 AM PDT

The claim that the gold standard exaggerates economic fluctuations is based on an incorrect understanding of the business cycle and especially, since it is most often cited, the 1920s post-First World War gold exchange standard.

Gold and Silver Market morning, October 26, 2012

Posted: 26 Oct 2012 03:00 AM PDT

James Turk: German Gold Has Been Gone Since 2001

Posted: 26 Oct 2012 02:43 AM PDT

¤ Yesterday in Gold and Silver

Most of gold's price gain was in by around 9:30 a.m. BST in London...and it pretty much traded sideways from there, before getting sold off a bit as the day wore on in New York.  The high tick [$1,719.20 spot] came shortly after 10:30 a.m. Eastern time.

Gold closed at $1,710.30 spot...up $8.80 from Wednesday.  Volume was pretty decent...around 174,000 contracts.

It was pretty much the same story in silver, with most of the day's gains in by 10:00 a.m. in London...with the New York high tick [$32.35 spot] printing around 11:00 a.m. Eastern.

Like gold, silver got gradually sold down once the high was in...but rallied back as the day wore on...and then moved sideways after 3:00 p.m. in electronic trading.

Silver finished the Thursday session at $32.11 spot...up 38 cents on the day.  Volume was around 41,500 contracts.

The dollar index opened at 79.96 in Tokyo on their Thursday morning...and began to slide from there, with its nadir [79.71] coming at mid-morning in London.  From that point it began to rally...hitting its zenith of 80.13 at 4:30 p.m. in New York...before sideways into the close.  The dollar index finishing the Thursday trading session above 80.00 at 80.04...up about 8 basis points.  It's taken a month full of attempts to finally close above the magic 80.00 mark.

Gold and silver rallied until the bottom was in for the dollar index...and despite the 33 basis point rally from that point, the precious metals traded mostly sideways from there...a pretty decent showing, all things considered.

It will be more than interesting to see if the dollar index can build on those gains going forward.  As it is, it's hanging onto the 80 mark by its proverbial fingernails as I write this.

The gold stocks gapped up about 3 percent at the open...and held those gains for the rest of the day.  The HUI finished up 3.21%.

The silver stocks put in a pretty decent performance as well...and Nick Laird's Silver Sentiment Index closed up 3.53%.  One thing well worth noting on this chart, is just how well the silver stocks are holding up again the engineered price decline in the metal itself.  The SSI is trading sideways even though the silver price is down over three bucks off its early October highs.  I suspect that this is deep-pocket smart money buying the dip.

(Click on image to enlarge)

The CME's Daily Delivery Report was another yawner, as only 2 gold and 2 silver contracts were posted for delivery on Monday.

There were no reported changes in GLD yesterday...but an authorized participant added a smallish 145,245 troy ounces of silver to SLV.

There was no sales report from the U.S. Mint.

The Comex-approved depositories reported receiving 606,932 ounces of silver...and shipped only 20,867 troy ounces out the door.  The link to that activity is here.

Here are three charts courtesy of Nick Laird...and they're all inter-related.  The first one is the Intraday Average Gold Price Movement for the month of September...next is the same chart except it's a 12 month rolling average...and the last one is the 5-year rolling average...a chart similar to the one that I posted many times in this column.

It's very easy to see how the price patterns have changed over time.  The current price trading pattern is totally unrecognizable from what it was five years prior...or even twelve months ago.  The London bias that I [and others] have spoken of at length over the last year or so, has vanished completely.  I guess it was becoming too conspicuous.

(Click on image to enlarge)

(Click on image to enlarge)

(Click on image to enlarge)

I don't have a lot of stories today, so I hope you have time to read the ones that interest you the most.

There are forces in motion under the surface that indicate a paradigm shift in prices and sentiment is coming.
Uneasiness in the Netherlands about national gold reserves. Prison may be the next stop on a gold currency journey. New York Sun: The 'Rosa Parks' of the dollar. China Silver Demand to Climb to Record.

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Get Ready: Everything Is Going to Cost More Next Year

Consumers will have to dig deeper into their pockets next year to pay for costlier health care, more expensive grocery bills and higher taxes, an extra drag on the country's already slow-moving economy.

 The additional outlays look set to test the resilience of consumers, whose spending accounts for around two-thirds of the U.S. economy.

"We think it's going to be a difficult six to nine months," said Scott Hoyt, senior director of consumer economics for Moody's Analytics. "If anything, conditions are likely to get worse, particularly at the start of the year."

This story was posted on the CNBC Internet site at noon Eastern time yesterday...and I thank West Virginia reader Elliot Simon for our first story of the day.  The link is here.

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This is an assault on living standards set to run and run

Today's third-quarter GDP figures are widely expected to show the UK economy emerging from its double-dip recession – indeed the Prime Minister virtually confirmed it in PMQ's yesterday. Unfortunately, this totemic piece of good news doesn't really reflect the underlying reality, or the degree to which paying for the excesses of the past through tax increases, spending cuts, unemployment and erosion in real wages is eating into living standards. These are suffering much more severely than the raw output data suggest.

This is no doubt what Sir Mervyn King, Governor of the Bank of England, had in mind when he warned this week that the next generation may have to live under the shadow of today's economic correction "for a long time to come".

The Governor is still as reluctant as ever to concede the central bank's own culpability in the crisis – no mention of that in this week's speech - but it is hard to disagree with the thrust of his comments – that though the policy response may have smoothed the adjustment, it can't eradicate it, and it may now have reached the limits of its capacity to do even that.

Jeremy Warner, the associate editor at The Telegraph, points out the obvious...that money printing has already gone as far as it can go...and "helicopter money" is all that's left.  This editorial was posted on their website on Wednesday evening BST...and I thank Roy Stephens for sending it.  The link is here.

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Eurozone nears Japan-style trap as money and credit contract again

Data from the European Central Bank show that the tentative rebound in the money supply over the summer may have stalled again in September.

The broad M3 gauge -- watched by experts as an early warning signal for the economy a year or so ahead -- shrank by €30bn and is now down by €143bn since April. This is highly unusual.

The narrow M1 gauge watched for signals of activity six months head has held up better but also contracted in September, falling by €16bn.

"The message is clear," said Lars Christensen from Danske Bank. "The ECB needs to stop obsessing about fiscal issues and do real quantitative easing (QE) if it wants to stop the eurozone going the way of Japan."

This Ambrose Evans-Pritchard offering was posted on the telegraph.co.uk Internet site last evening BST...and my thanks go out to reader David Ball for finding it for us.  The link is here.

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The World from Berlin: 'Euro-Zone Plans to Fix Greece Have Failed'

Greece says it has been granted an extra two years to meet austerity targets. The EU and IMF deny it. According to press reports, Athens needs an extra 20 billion euros in aid. It is difficult to determine exactly what might come next for the country, but commentators say it is clear that Europe is at a crossroads.

What is going on in the never-ending negotiations between Greece and its international creditors? That depends largely on who you ask. If you ask Greek Finance Minister Yannis Stournaras, Athens on Wednesday was given an additional two years to reach its budgetary target of reducing new lending below the EU-mandated maximum of 3 percent. Instead of 2014, Greece would have a new deadline of 2016.

European newspapers on Wednesday were full of reports that a draft "Memorandum of Understanding" included the two-year delay. Furthermore, Germany's business daily Handelsblatt, citing an unnamed senior euro-zone source, reported that Greece would need an additional €16 billion to €20 billion in aid. The sum was consistent with previous reports, including one in SPIEGEL in late September, on how much a two-year delay might cost.

This story showed up on the German website spiegel.de yesterday...and I thank Roy Stephens for sending it.  The link is here.

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Amid Cutbacks, Greek Doctors Offer Message to Poor: You Are Not Alone

Life in Greece has been turned on its head since the debt crisis took hold. But in few areas has the change been more striking than in health care. Until recently, Greece had a typical European health system, with employers and individuals contributing to a fund that with government assistance financed universal care. People who lost their jobs received health care and unemployment benefits for a year, but were still treated by hospitals if they could not afford to pay even after the benefits expired.

Things changed in July 2011, when Greece signed a supplemental loan agreement with international lenders to ward off financial collapse. Now, as stipulated in the deal,  Greeks must pay all costs out of pocket after their benefits expire.

About half of Greece's 1.2 million long-term unemployed lack health insurance, a number that is expected to rise sharply in a country with an unemployment rate of 25 percent and a moribund economy, said Savas Robolis, director of the Labor Institute of the General Confederation of Greek Workers. A new $17.5 billion austerity package of budget cuts and tax increases, agreed upon Wednesday with Greece's international lenders, will make matters only worse, most economists say.

This 2-page story was posted on The New York Times website on Wednesday...and is another offering from Roy Stephens.  The link is here.

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Catalan MEPs ask for EU help against Spanish army

The deputies - centre-left MEP Maria Badia, Greens Ana Miranda and Raul Romeva i Rueda and Liberal Ramon Tremosa - wrote to EU justice commissioner Vivianne Reding on 22 October.

The letter says: "We are writing to you to convey our deep concern over a series of threats of the use of military force against the Catalan population ... In these circumstances, the European Union should intervene preventatively to guarantee that the resolution of the Catalan conflict be resolved in a peaceful, democratic manner."

It notes that politicians from the centre-right People's Party of Prime Minister Mariano Rajoy have spoken of article 8 of Spain's constitution, which says the army can be used to protect Spanish sovereignty.

It adds the commission should: "Make a public statement insisting on the withdrawal from the public debate of any military threat or use of force as a way of resolving this political conflict."

This short story showed up on the euobserver.com Internet site early yesterday morning local time...and it's Roy Stephens final offering in today's column.  The link is here.

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French rogue trader Jérôme Kerviel jailed for three years and ordered to repay €4.9 billion

Jérôme Kerviel, the most spectacular rogue trader in financial history, today lost his appeal and was jailed for three years and ordered to repay €4.9bn to his former employer.

Kerviel, 35, claimed during appeal hearings in June that the French bank Société Générale tacitly approved his risky trades and exploited the collapse of his position in 2008 to "bury" its own losses in the US sub-prime debacle.

The Paris appeal court today ruled that Mr Kerviel was solely responsible for the €4.9billion loss – the biggest in trading history – because he had evaded internal controls to make colossal, one-way bets of up to €50billion on European stock-market futures.

Mr Kerviel, now earning €30,000 a year in a computer company, is expected to seek leave to appeal to France's highest court, the Cour de Cassation. In theory, even if he handed over all his after-tax earnings, it would take him around 300,000 years to repay his losses to SocGen.

This item, filed from Paris on Wednesday, was posted on the independent.co.uk Internet site...and I thank London, U.K. reader Tariq Khan for sharing it with us.  The link is here.

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German gold has been gone since 2001, Turk tells King World News

GoldMoney founder and GATA consultant James Turk, whose 2001 commentary first posted at his Free Gold Money Report Internet site, "Behind Closed Doors" -- and republished at GATA's Internet site -- marshaled the evidence that the United States had swapped gold with the German Bundesbank f

German gold has been gone since 2001, Turk tells King World News

Posted: 26 Oct 2012 02:43 AM PDT

German gold has been gone since 2001, Turk tells King World News

GoldMoney founder and GATA consultant James Turk, whose 2001 commentary first posted at his Free Gold Money Report Internet site, "Behind Closed Doors" -- and republished at GATA's Internet site -- marshaled the evidence that the United States had swapped gold with the German Bundesbank for market-rigging purposes, told King World News yesterday that all the German gold vaulted abroad is gone, leased into the market, for 11 years.

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