Gold World News Flash |
- SD Weekly Metals and Markets: Why The Fed Won’t Taper…Yet
- Euro and Sterling Momentum Fades
- Japan’s Leader on 3/11: Most don’t know, but Reactor 1 melted down in 5 hours
- GLD remains constant but SLV loses 1.445 million oz/gold and silver rise/Massive adjustment of gold out of jPMorgan’s registered (house account)/Dealer gold rests tonight at a low 14.146 tonnes
- Gold: Not the Inflation-Hedge You Might Think
- Gold Investors Weekly Review – December 13th
- Silver – A Rigged Market Coming To An End
- Silver – A Rigged Market Coming To An End
- Shanghai Gold Exchange Physical Delivery Equals Chinese Demand, Part 2
| SD Weekly Metals and Markets: Why The Fed Won’t Taper…Yet Posted: 14 Dec 2013 06:40 AM PST from silverdoctors: In this week’s SD Weekly Metals & Markets The Doc & Eric Dubin discuss: 1. No taper next week, but expect jawboning and an attempt to smash gold & silver- will June’s lows hold? |
| Euro and Sterling Momentum Fades Posted: 14 Dec 2013 06:15 AM PST Unbeknownst to many, the Canadian dollar was the strongest of the major currencies last week, appreciating almost 0.5% against its US counterpart. The euro (and the Swiss franc and Danish krone which are nearly pegged to it) gained half as much. The weakest currencies were the Australian dollar, with the help of the governor of the central bank giving the market a clear target ($0.8500), and the Scandis, which have reported soft data and where Sweden's Riksbank could cut rates next week.
The breadth of the dollar's decline in recent weeks appeared to have narrowed to essentially the euro and sterling. The take away from last week's price action is that those two currencies have seen the upside momentum fade and some deterioration of their technical condition. It could simply be some pre-cautionary position adjustment ahead of the FOMC meeting and year-end.
The dollar had fallen against the euro and sterling even as the Bloomberg survey showed a doubling of the number of people who expect the Fed to taper next week over their November survey to a full third. The technical condition suggest, as counter-intuitive as it may be, that the dollar may strengthen if the Fed does not announce a slowing in its purchases.
The euro's upside momentum faded after three attempts to establish a foothold above $1.3800 failed. The Relative Strength Index has turned lower and the MACDs are poised to cross. The $1.3700 area has offered initial support. It probably will take a break of the $1.3600 area, however, suggest an outright correction as opposed to a consolidative phase.
Sterling put its high on December 10, a day before the euro's peak, and moved lower. Despite more strong data (construction spending) before the weekend, sterling traded below its 20-day moving average for the first time since mid-November. Initial support is seen now near the old highs from Oct around $1.6240. The key to the medium term outlook is the trend line drawn off the year's low set in early July just above $1.48 and the Nov 12 low near $1.5850. It comes in on Monday near $1.6130 and rises to about $1.6165 by the end of next week. Both the RSI and MACDs have turned lower, though without the development of more bearish divergences.
The dollar quietly slipped to new two-year lows against the Swiss franc in the first half of last week, before a light bout of short-covering helped it record some modest upticks. The greenback finished last week on a soft tone and the CHF0.8945-CHF0.9000 band needs to be overcome to heal the technical damage. The MACDs have not turned up and the RSI is neutral. That said, there appears to be little in the way of technical support for the dollar ahead of the CHF0.8550-CHF0.8500 area.
The dollar made a new five year high against the yen in Asia before the weekend, and then reversed lower in Europe and North America. Although the pullback was nearly a big figure, the dollar largely held above JPY103, which is where the 5-day moving average can be found. The yen's corrective upticks appear to be largely position squaring ahead of the Tankan Survey (early Monday in Tokyo), the FOMC meeting, and reflecting some cross adjustments, especially against sterling.
There are bearish divergences in the daily RSI. Although the dollar as made new highs this month, it was not confirmed with new highs in the RSI. There are less pronounced bearish divergence in the daily MACDs. Key support extends from JPY102.00 to JPY101.60.
The Australian dollar appeared to have been stabilizing before the governor of the central bank offered the market a specific downside target, which the bearishly disposed market was happy to run with. While we envision the $0.8500 area will be visited next year, the downside momentum eased ahead of the weekend and the Aussie finished near session highs. Initial resistance is seen in the $0.9000-20 area and again near $0.9080. A move above $0.9140, roughly the 20-day moving average, which had turned back three attempts to recovery since early November, is needed to begin repairing the technical damage.
The US dollar recorded an outside up day (traded on both sides of the previous day's range and closed above the high) on Thursday last week. It initially saw follow through buying on Friday. However, it reversed lower and finished on the session lows. Support for the US dollar is found in the CAD1.0560-CAD1.0530 area. A convincing break could spur a move toward CAD1.04. The MACDs are rolling over. The RSI has moved trended gently lower over the past week, but is now at the lower end of where it has been since late October and is not generating a strong signal. On the upside, the US dollar tried three times in vain to close above CAD1.07 and this area marks the near-term cap.
The US dollar remains within the broad trading range against the Mexican peso seen since late September between roughly MXN12.80 an MXN13.20. Mexico's Congress approved liberalization in the energy sector and this appeared to help spark a peso recovery at the end of last week. It may require a convincing break of the MXN12.75 area to signal a break out. The technical indicators are not generating strong signals presently.
Observations on the speculative positioning in selected CME currency futures:
1. The net long euro and Swiss franc positions continued to grow. Of note, the net long franc position nearly doubled and, at 12k contracts, is the largest since early 2013, which itself was a two year high.
2. The largest gross position change was the 14.4k contract increase of the speculative short Canadian dollar position. It stands at 88.6k contracts, which represents a doubling since early November. The other substantial gross position adjustment (more than 10k contracts) was the re-establishment of long peso positions. The 12.3k contract increase offset the prior week liquidation of nearly 11k gross long contracts.
3. The net short yen position was reduced for the first time in five weeks, but at 130k contracts, remains extreme.
4. The gross and net sterling and Australian dollar positions were little changed. Recall in the previous CFTC reporting period, the gross long sterling position jumped 17k contracts and the gross short Aussie position grew by almost 14k contracts.
5. The gross long euro position of nearly 92k contracts is the largest among the currency futures. Its gross short position of almost 76k contracts slipped into third place behind the gross short yen position (~148k contracts) and gross short Canadian dollar positions (~89k contracts). |
| Japan’s Leader on 3/11: Most don’t know, but Reactor 1 melted down in 5 hours Posted: 14 Dec 2013 05:40 AM PST We almost lost 1/3 of nation due to Fukushima — Tepco: Reactor 3 melted earlier than reported, water went in wrong pipes — NHK: Investigation into how such massive amounts of radioactive substances were released from ENENews: NHK World, Dec. 13, 2013: New findings on Fukushima accident to be released [Tepco] says the early breakdown of a reactor cooling system, coupled with failed attempts to inject water into the reactor, likely led to the meltdown of the number 3 reactor [...] water injections by fire engines started shortly after 9 AM on March 13, but they could have been ineffective because of leaks from the piping. TEPCO plans to disclose the findings to the public later on Friday. The utility says it will continue its investigation to find out why massive amounts of radioactive substances were released and how this happened. Jiji Press, Dec. 13, 2013: TEPCO admitted the possibility that the failure speeded up the unfolding disaster at the plant. Kyodo, Dec. 13, 2013: TEPCO [...] said it has confirmed that water supplied by fire trucks flowed into some pipes not leading to cores at the Nos. 1 to 3 reactors. |
| Posted: 14 Dec 2013 05:24 AM PST by Harvey Organ, HarveyOrgan.Blogspot.ca:
Gold closed up $9.70 to $1235.70 (comex closing time ). Silver was up 16 cents at $19.56. In the access market today at 5:15 pm tonight here are the final prices: gold: $1238.30 First let us see how London set its GOFO rates this morning: GOFO rates are now slightly positive and no longer in backwardation Here are today’s readings with yesterday’s comparison: i) One Month: +.001670000000% vs yesterday: -.00000000% |
| Gold: Not the Inflation-Hedge You Might Think Posted: 14 Dec 2013 05:20 AM PST by Greg Guenthner, Daily Reckoning.com:
Things got really hot. There was some yelling, and at one point, Harry stood up and tossed his mic in frustration. I thought they might go at it. I want to tell you about this debate… Peter Schiff is the chief strategist at the brokerage firm Euro Pacific. He has a radio show and has written some books. He's probably most known as calling for a collapse in the dollar and being generally bearish on the U.S. economy. |
| Gold Investors Weekly Review – December 13th Posted: 14 Dec 2013 04:45 AM PST In his weekly market review, Frank Holmes of the USFunds.com nicely summarizes for gold investors this week's strengths, weaknesses, opportunities and threats in the gold market. The price of the yellow metal went lower after two consecutive weeks of gains. Gold closed the week at $1,238.26, which is $9.21 per ounce lower (0.75%). The NYSE Arca Gold Miners Index lost 0.15% on the week. This was the gold investors review of past week. Gold Market StrengthsThe implementation of the Volcker Rule over the next two years is likely to reduce big banks' dealings in gold and silver for their own speculative purposes. The Rule prohibits banks with federally-insured deposits from trading activities undertaken for their own benefit, such as proprietary trading. In theory, the new rule should prohibit banks such as Goldman Sachs and JP Morgan from trading in gold forwards, futures and options contracts, except on behalf of customers. The new law shoud result in gold and silver fundamentals taking a greater role in price determination, as speculative trades are reduced. The dollar will no longer be among the best performing currencies in 2014, according to Thomas Stolper, Goldman Sachs' Chief Currency Strategist. Stolper, who correctly predicted this year's dollar weakness against the euro, is challenging the strong consensus built around a stronger dollar next year. According to Stolper the dollar will continue to weaken, as any Federal Reserve tapering will be offset by interest rates being kept at about zero. In addition, Stolper is of the opinion that tapering is already priced in, and there seems to be no other source of dollar strength in sight. The dollar strength talk and expectation of higher interest rates has weighed heavily on gold and commodity prices throughout 2013, and a reversal in consensus will likely result in gold strength. Gold Market WeaknessesBCA Research published a note in which it attempted to forecast gold price action based on historical averages, suggesting gold may trade down to the $1,000 level based on historical production premium, and to $660 when using the median, real-adjusted price since the Bretton-Woods era. The flaw with this type of reasoning is that gold cannot be valued in the context of commodities. The market has ruled that gold is a financial instrument as evidenced by gold trading historically with a contango, just like S&P 500 futures do. In other words, gold prices are not mean-reverting as are oil and copper, which typically trade in backwardation with forward prices converging towards an average. It is for that same reason that nobody forecasts future prices for the S&P 500 by using its long-term average. Gold prices fell mid-week as congressional negotiators reached a U.S. budget agreement. There had been lingering concerns over whether legislators would reach a budget agreement before having to shutdown government next January as the funding deadline approached. The approved budget will not reverse the growing U.S. fiscal deficit, but it has been interpreted as one less obstacle before the Federal Reserve can go ahead with its quantitative easing tapering program. Gold Market OpportunitiesThe Wall Street Journal published an article saying China's reforms may boost gold investments in the country. Beijing pledged after its Third Plenum last month to give the market a more decisive role in a number of sectors, which could lead to policies that make it easier for investors to access gold investments. The implications are substantial. Despite China becoming the largest gold consumer this year, the per capita consumption is 4.5 grams, compared with a 24-gram global average. The low consumption level and the increase in investment demand for gold from the Asian nation will likely result in stronger global demand. Gold rose strongly earlier in the week in what appeared to be a short-squeeze motivated rally. Gold rebounded from the $1,200 level and reached its highest level since mid-November. As seen in the chart below, open short positions as reported by the Commodity Futures Trading Commission rose back above the 0.1 million level, which was the level that led to a rebound off the $1,200 level in June. As BMO analysts report, that summer rebound off the $1,200 level led to a 40 percent rally in the GDM Index.
Gold premiums continue to soar in India as the nation moves into wedding season. Gold importers are demanding record premiums for the scarce metal. Premiums reached $180 per ounce over London prices for immediate delivery, as jewelers argue there is no gold available anywhere in the country following a severe slowdown in the recycled gold trade. About 300,000 jewelers and bullion dealers are demanding the government ease import rules on gold with many jewelers being forced to shut down shop. The hope for change appears in the form of Narendra Modi, the main opposition party's candidate for next year's general election. Mr. Modi is not only a staunch Hinduist, where rites and ceremonies are abundant, he is also the head of India's most prolific Gujarat province, where he has led economic growth of 10 percent per year over the last decade on a platform of eliminating red tape, and limiting government interference with private enterprise. Gold Market ThreatsFred Hickey, writer of The High-Tech Strategist, brings some market data that may have you rethinking your portfolio allocation strategy. For starters, the Investors Intelligence Sentiment survey reports that only 14.4 percent of respondents are bearish on the market; a level only seen leading into the 1987 crash. In addition, investors are pouring money into equity mutual funds at the fastest pace since the peak of 2000. Furthermore, the Shiller price-to-earnings (P/E) ratio for the S&P 500 is now over 25, a level seen only three times in the past; 1929, 2000 and 2007. Do you see the pattern? His conclusion is that fear has simply left the building. However, fear is exactly what investors should be feeling since a rise of interest rates to "normal" would destroy the housing market, and 27 percent of auto loans are subprime and back to 2007 levels. The cherry pick is the fact that the notional value of global derivatives is no longer in the trillions of dollars, as it was just before the 2007 crisis when Warren Buffet described them as weapons of mass destruction, but has rather soared into the uncharted territory of $1 quadrillion. David Rosenberg of Gluskin Sheff continues to argue that signals of imminent inflation can not be ignored any longer. Wage inflation will be the next driver as fast-food workers across the country are demanding $15 hourly wages, arguing that profit margins among public companies are at a record 11.1 percent, nearly doubling the historical average of 6 percent. But this is not the only inflationary pressure, according to Rosenberg. The current supply and demand dynamics of the labor market are reaching a boiling point. Rosenberg illustrates that the pool of labor supply is narrowing mostly due to a structural change in demographics. On the other hand, demand for labor continues to increase, and the laws of supply and demand are such that these curves dictate wage inflation is coming in the next few months. |
| Silver – A Rigged Market Coming To An End Posted: 14 Dec 2013 04:24 AM PST No one can question the fact that the demand for silver has grown exponentially in the past few years, record sales for American Eagle coins being one small example, record buying in India, another larger example. Demand has never been greater. Supply, on the other hand, keeps diminishing. Global mining production is at its lowest in the past decade. The annual Consumption/ Production ratio is indicative of acute deficits. Whenever there is a situation where demand rises sharply, while supply commensurately declines, it is a recipe for higher prices, and usually, much higher prices. This is true, unless one is talking about the silver market. Under the conditions of record rising demand and considerably less supply, the price of silver is at its lowest levels in the past three years. With talk of silver going anywhere from $150 to $500 higher, it currently struggles to hold $20, why is this so? The answer is not to be found in the myriad supply and demand figures, no matter how cogently presented: as absolute numbers, or dramatically presented graphs, and with so many comparisons to other times/situations. Facts and figures do not lie. Politicians and bankers do.
Debt = Wealth. That is the motto for the elites who charge their central banks with running up as much debt as possible for every man, woman, child. and country. The more debt, the more interest owed to the 1/10th of 1% who own the world's wealth. As an example, what was the answer to resolve Greece's unmanageable debt problems? Have that country borrow even more!
The Western central bankers have been leasing, hypothecating and re-hypothecating gold with impunity, no country ever strong enough to challenge Western financial supremacy. Then, in the 1990s, China wanted its gold back from the United States. "Sorry, Chinks!" was the arrogant response from the US. It was gone, "leased" out to keep a controlled lid on the world's price of gold. Central bankers were running a scam, one of the largest Ponzi schemes, ever. Huge mistake. It is now payback by the Chinese. Now aligned with Russia, Brazil, India, and South Africa, the BRICS nations have formed a trading alliance outside of the US petro-dollar. The world's reserve currency has not only been challenged, it has fast become irrelevant, except in West and EU, and even in the EU, that is changing. The golden genie was let out of the bottle over a decade ago, and all the central bankers cannot put it back. Every attempt has been made to keep a lid on the price of silver and gold by central bankers desperate to hang onto their waning power. This is why Germany was told it would have to wait seven years to get its gold back from the Federal Reserve Bank of New York. It simply ain't there, anymore. Gone. Guess where it is? China. Retribution can be a bitch. The East is over taking the West, and they are doing it by buying all the available physical silver and gold. Even more. China has been on a shopping spree, buying as many precious metals mining operations around the world as are available. Here is your largest demand factor, followed by the remaining BRICS nations. What about diminishing supply? What about the almost empty vaults at COMEX and LBMA? What about the demand of 68:1 claim for each ounce of gold? What about… insert your own example of how supply is being exhausted. All factual, all true.
There was a reason why, in the Wizard of OZ, the theme was to "follow the yellow brick road." The all-controlling Wizard behind the curtain was a fraud. The all-controlling elites behind the central bank curtain are also a fraud, but a more sinister one that has been cornered like a rat, and they are fighting back. The way in which the elites are fighting back is why silver is under $20, right now. If the price of silver were allowed to rally and reflect reality, the exponentially higher prices would expose what lies behind the central bank fraud. The market is rigged. The sad truth is all markets are rigged. The Libor interest rate market, the Federal Reserve taper-on stock market, the OPEC oil market, the De Beers diamond market, the US world-wide drug trade market, the pharmaceutical market, the food supply market. Each factor that controls a specific market is also ultimately controlled by the elites, the New World Order. If you want an idea of what to expect for the future price of silver, one only has to look at Bitcoin. It is not a government regulated market, and it is one that has taken the world by surprise. Just a few years ago, Bitcoin was under $1. Recently, it ran up to over $1,200. The appetite for any fiat alternative is huge. Bitcoin is not a currency, nor does it have the history of being currency-backed like silver and gold do. Once the lid is taken off the precious metals markets, they will leave Bitcoin in the dust. The good news is: every single fiat currency throughout the history of the world has failed. An ounce of silver is still the same ounce of silver from thousands of years ago. The bad news is: no one knows for how much longer the elites can keep control, via their central banks, in suppressing the price. The good news to the bad news is that the end is near. We are looking at the sale of the century for the price of silver, right now. There is a reason why China, Russia, and India have been huge buyers of physical silver and gold. Because of silver's properties of being an indispensable necessity for industrial use, it has been used up considerably more than has gold. Both will rise incredibly in the not too distant future, and odds based on the gold/silver ratio favor silver. One is likely to experience a greater return on investment in silver over gold. There is never any guarantee, but using historical relationships between the two makes silver a better buy and hold. The ratio is around 62:1. As both metals rise, once freed from central bank tentacles, the probability is that the ratio will move more toward 20:1. Wherever it goes, anything less than 62:1 makes silver preferred, on that basis. This remains the best opportunity to be buying and holding physical silver. Only buy the physical metal, in coin or bar form, as you can afford. Do not buy silver in any form of paper, for you are unlikely to ever received physical, if promised. Plus, the fine print will tell you that delivery can be made in some form of paper payment in place of physical delivery. If one has learned anything over the past few years, it is that governments cannot be trusted, and there is zero credibility in banks, all thieves, given the opportunity. Does it make sense to wait for the "best price possible?" Not as far as we are concerned. Silver may not be available at any price, or in very limited quantities, at some point. Plus, the reasons for buying are about wealth preservation that will eventually lead to increased wealth, when price finds its eventual true level. It is not worth the risk if you intend to accumulate silver and then not be able to buy any. There could be one more new low in the near future, but that does not mean the physical will be commensurately lower. It is a personal choice. The time to buy is now, in the present. When silver eventually reaches over $150 the ounce, will it have made any material difference if you paid a dollar or two more or less the ounce? We live in an increasingly Orwellian world. Name, address, and SSN may be required, at some point. Anonymity will be lost. The past cannot be changed, the future has not yet happened, so we can only deal with the present tense. The use of charts has its detractors, many simply from an inability to understand them, some from misapplying them, and a few from saying the charts are not real because they reflect the paper market, which is rigged. True, true, and true. However, paper valued or not, even the price for the physical is dictated by the paper market, [at least for now]. Until that changes, it is the only game in town. Most people have something to say about the silver market. Here is how we see what the silver market has to say about the people trading it. For anyone not overly used to looking at charts, they do convey a certain degree of logic, and the message can, at times, be incredibly helpful. A chart reflects the directional momentum of price behavior exhibited by participants. It is a way of tracking the results of all bets being placed, and it is the best way to see how the most skilled and informed, what we call smart money that moves markets, operate. Smart money trades with prevailing price direction, called the trend. They buy low and sell high, axiomatically, so it pays to have an idea of what they are doing. A monthly chart provides the overall history and context of a market, and it is closely followed by smart money. Most traders/investors do not even look at monthly charts. We look for any existing synergy between the various time frames, for it tells a more compelling "story" about what is likely to happen. To the degree any synergy may be apparent, the greater the degree of logic one can glean from the charts. According to the charts, the price of silver is not ready to reverse its trend. The monthly chart, and the lower time frames, clearly indicate the trend as down. Knowledge of the trend is the most important piece of information one can have, as a starting point. |
| Silver – A Rigged Market Coming To An End Posted: 14 Dec 2013 04:20 AM PST by Michael Noonan, Edge Trader Plus:
Global mining production is at its lowest in the past decade. The annual Consumption/Production ratio is indicative of acute deficits. Whenever there is a situation where demand rises sharply, while supply commensurately declines, it is a recipe for higher prices, and usually, much higher prices. This is true, unless one is talking about the silver market. Under the conditions of record rising demand and considerably less supply, the price of silver is at its lowest levels in the past three years. |
| Shanghai Gold Exchange Physical Delivery Equals Chinese Demand, Part 2 Posted: 14 Dec 2013 03:30 AM PST by Koos Jansen, In Gold We Trust:
In this post I will further analyze the structure of the Chinese gold market, display new findings on how we can measure Chinese gold demand by the amount of gold withdrawn from the Shanghai Gold Exchange (SGE) vaults, discuss the consequences from these findings and touch upon a few other aspects of Chinese demand. Because of my belief that this is highly important information, I will try to be painstakingly accurate in this post and support my analysis by appending various sources. SGE physical delivery year to date is 2023 tons, second number from the right (累计交割量) is gold withdrawn YTD in Kg, and will be 2146 tons by year end. Total demand including PBOC purchases will be over 2500 tons en net import 2000 tons. |
Good evening Ladies and Gentlemen:
I was in St. Kitts last week for the Liberty Forum conference, where I was a speaker. I also moderated a debate pitting Peter Schiff against Harry Dent on the inflation-deflation question.
No one can question the fact that the demand for silver has grown exponentially in the past few years, record sales for American Eagle coins being one small example, record buying in India, another larger example. Demand has never been greater. Supply, on the other hand, keeps diminishing.
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