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And The Winner, After Bernanke's Humphrey Hawkins Dog & Pony Show, By Unanimous Decision Is.... Gold

Tyler Durden's picture


Stocks dumping, dollar at all time lows against a plethora of FX pairs, while gold (and silver) is sticky as superglue and remains just a few dollars away from its all time nominal highs, and just short of $1,600, which we expect will be taken out as soon as the world realizes that the Greek 2 Year spread to Bunds is now over 30% and that Europe is not fixed. Perhaps Bernanke would like to take another stab at that whole "is gold money" question...

Stocks versus Gold and Silver: by unanimous decision....

And Greek 2 Year spread to Bunds:

In the meantime, the market remains totally schizophrenic, as QE3 goes from ON to OFF, based on how the Chairman wants to move the market. Remember: QE3 will not begin until the S&P is below 1,000. Although schizophrenia is nothing new, and merely a continuation of yesterday's deranged activity, as explained by Art Cashin:

Thank Ye, Bernanke - or - Maybe Not - The financial media claims that yesterday’s action was all about Chairman Bernanke’s Congressional Testimony. While it was a significant influence, it wasn’t the whole story. In fact, yesterday’s market was an interesting tutorial on market reaction.

The market’s firmer tone began in the wee small hours of the morning with the solid economic data out of China. It was evident that the recent series of rate hikes and reserve tightening had not crippled the Chinese economy. That was one less thing to worry about, keeping the concern areas to Europe and the U.S.

The firming market was further aided by some cooing noises on Italy from the rating agencies - not an actual upgrade but reassurances nonetheless. And dawn had not even hit New York yet.

Then, around 9:00, Boston Fed President Rosengren strode to the podium. He called Friday’s payroll data “dismal” and said that Fed policy must remain accommodative. That seemed to reinforce the hint of a QE3 that the markets thought they sensed in the FOMC minutes Tuesday afternoon.

So, as the opening bell neared, futures were predicting an up-move of about 50 points in the Dow. That’s what happened and almost immediately stocks began to consolidate in front of the Bernanke testimony.

At 10:00, the text of the testimony was released and markets and pundits seized on his presentation of possible further stimulative moves. They proclaimed it QE3, confirming that image from both the FOMC minutes and from Rosengren’s comments less than an hour earlier.

The result was instantaneous. Within minutes, the Dow was up over 100 points and rocketing higher. By 10:30, the Dow was up 165 points. Stocks then paused as the testimony continued.

As the testimony moved on, analysts began to re-examine the text. The further measures did not appear a foregone conclusion. Some skeptical comments began to show up on the TV screens.

Then shortly after 1:00, Dallas Fed President, Fisher began to speak. He seemed to say the Fed had done enough and should engage in watchful waiting. That made the likelihood of a quick QE3 seem a lot less certain. Bids began to fade. By 2:30, stocks had given up over half their gains.

Around 3:00, some more aggressive selling began. After the close, some attributed that selling to some remarks by Speaker Boehner on the debt ceiling stalemate. That may have been the case but we didn’t hear it on the floor at the time.

At any rate, the 3:00 selling continued for over a half an hour. At that point, traders began to worry that we might actually fall into negative territory. Luckily, they got bailed out (a bit) by market on close buyers. Lots of action in response to lots of influences. A lot better than recent robo-trading.


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Thu, 07/14/2011 - 12:54 | 1456547 Ancona
Ancona's picture

Fucking golden!

Thu, 07/14/2011 - 13:48 | 1456796 slaughterer
slaughterer's picture

Once the debt ceiling agreement is reached, Gold will drop $100 in 5 minutes, and silver will drop $5 in 2 minutes.    Both are technically unstable at these levels.   Any good news will knock them down in a second.    

Thu, 07/14/2011 - 14:27 | 1456937 caerus
caerus's picture

I would tend to agree...Uncertain about the causality, but we got a big move in EGC since 7/5.  Considering it took us about 2 1/2 months to break 1550 area I would expect and welcome a breather (after the sharp increase that began 7/5) long as 1550ish holds

Thu, 07/14/2011 - 15:45 | 1457273 Silver Kiwi
Silver Kiwi's picture

Good theory but where's the good news coming from??

Greece is still just days away from default,

Italy & Ireland are not far behind,

China's shell game is about to be exposed,

Global & US inflation is still steaming along at a great rate of knots regardless of BS stats to the contrary,

US housing & employment are getting worse every week,

US debt's trajectory has taken over from the Shuttle space program,

Libya & the rest of MENA is still in turmoil & showing no signs of abating (regardless of being ignored by MSM) and the oil wars haven't even started yet,

oh and don't forget that our good friend & media mogul, defender of the (bankers) faith and the greatest enemy of the sheeple the world has seen in 60 years, Rupert Murdoch, is about to be thrown to the wolves for committing the greatest sin; getting caught. Well this actually is good news, the sooner they close down Fox News and all his other propoganda machines the better off the whole planet will be.



Thu, 07/14/2011 - 16:25 | 1457390 SeverinSlade
SeverinSlade's picture

Comes down to the banksters not wanting to end the Ponzi scheme quite yet.

QE3 is going to come before the fiat currencies collapse. 

Gold and silver have gone up in pricing due to inflation worries and the problems in the Eurozone.  PPI and CPI are sure to show that inflation is [temporarily] slowing.  And the fact that JPM just issued a downward revised GDP forecast shows that the Bernank will use the threat of deflation to knock the markets down and strengthen the dollar.

Bernanke can't announce QE3 with a weak dollar and strong markets.  ZH is right.  The markets WILL dump and metals will follow (although will hold most of their strength).

Thu, 07/14/2011 - 16:15 | 1457348 SeverinSlade
SeverinSlade's picture

Have to agree well.  Seems that most PM bulls think that as soon as $1600 is taken out that $2000 will follow immediately.  They fail to realize that Bernanke is STILL in control.  He's going to end the Ponzi scheme at some point but not quite yet.

I also find it interesting that as soon as gold hit its new high my inbox was filled with soliciting emails from bullion dealers saying, "Gold almost to $1600 buy now!!!"

Don't you buy on weakness?

Once the debt ceiling deal is agreed upon, the poor economic data and decrease in inflation will take the wind out of the sails of PMs.  Like ZH has pointed out on a number of occasions, equities, commodities AND PMs will trade down leading up to QE3.  Simple point is they have to.  With the Eurozone falling apart, investors will have [temporarily] renewed confidence in treasuries.  A strong[er] dollar with the threat of deflation will have Wall Street and Washington begging for QE3.

Thu, 07/14/2011 - 16:54 | 1457535 LongBalls
LongBalls's picture

More debt is bearish for gold? Even if they approve cuts in spending they will no doubt be pushed to the outlying years and assume pie in the sky tax receipts to fund the programs that will remain. In order for those pie in the sky tax receipts to come in the economy must grow. With the export gap we have the only way to do that is to do what? DEVALUE THE CURRENCY! Our manufacturing base has been gutted! Protect yourself. You have been warned. This is a race to the bottom while consumers run from the burden of credit.

Fri, 07/15/2011 - 08:56 | 1458979 SeverinSlade
SeverinSlade's picture

In the short term, yes (I'm talking weeks though).  Long term, of course not.  Just reminding people that there will almost surely be a significant dip in the coming weeks.  Doesn't mean you should stop stacking physical.  I'm sure as hell not.  I do have cash reserves though to back up the truck if/when that dip comes.

Thu, 07/14/2011 - 12:55 | 1456548 Archimedes
Archimedes's picture

Where is Methman! He said silver would be at $5 dollars by now! I wanted to BTFD!

Thu, 07/14/2011 - 13:01 | 1456571 barkingbill
barkingbill's picture

yeah where is that asswipe? now that his silver bubble theory has embaressment....

Thu, 07/14/2011 - 13:34 | 1456708 camaro68ss
camaro68ss's picture

I need to get more It's "tradition" in my safe.

Thu, 07/14/2011 - 14:12 | 1456891 r101958
r101958's picture

...where is Robotripe?

Thu, 07/14/2011 - 15:32 | 1457234 jomama
jomama's picture

some people have no sense of humor.

Thu, 07/14/2011 - 12:55 | 1456549 ads56
ads56's picture

Gold is not money.

Thu, 07/14/2011 - 13:06 | 1456597 Fanatic
Fanatic's picture

"It's tradition."

Thu, 07/14/2011 - 13:10 | 1456606 darkhorse007
darkhorse007's picture

I love how we moved from "Transitory" to "Tradition"

Thu, 07/14/2011 - 13:18 | 1456644 Vergeltung
Vergeltung's picture

traditional gold, but transitory.

Thu, 07/14/2011 - 13:44 | 1456718 akak
akak's picture

It's a transitory tradition in the soft patch of the Goldilocks economy after it experiences its soft landing --- not to be confused with its double dip.  And there is no bubble in the housing market, and the subprime mortgage crisis will be contained and not spread to the broader economy.  And I can see Russia from my ivory tower!

Thu, 07/14/2011 - 13:22 | 1456656 Sgt.Sausage
Sgt.Sausage's picture

Are peas money? At least ya can eat 'em. I keep hearing "Ya can't eat gold!" but the Big O said we should eat our peas.

Thu, 07/14/2011 - 12:57 | 1456556 TaxSlave
TaxSlave's picture

Cigarettes, whiskey, and sex.  The new money.

Thu, 07/14/2011 - 12:58 | 1456561 Incubus
Incubus's picture

People still smoke? Lol.


Thu, 07/14/2011 - 13:32 | 1456695 ljag
ljag's picture

There are alot of folks out there that haven't seen the inside of a grocery store since their mama took them off the teat. Russian hotties were throwing themselves at anyone that looked like they might have 2 nickles to rub together when their country broke up. Yeah, nails, booze and sex will definitely be traded this decade.

Thu, 07/14/2011 - 15:48 | 1457282 HungrySeagull
HungrySeagull's picture

There be a grain of truth in that o' wise ant.

Thu, 07/14/2011 - 12:58 | 1456559 baby_BLYTHE
baby_BLYTHE's picture

Robotrader's prediction of DOW= 15k Gold= $1650, will fail

Gold will reach $1650 and the DOW will still be well below 13k

Thu, 07/14/2011 - 13:04 | 1456585 Vic Vinegar
Vic Vinegar's picture

Ballsy call.  I like it Blythe.

Thu, 07/14/2011 - 13:21 | 1456652 SheepDog-One
SheepDog-One's picture


Thu, 07/14/2011 - 13:42 | 1456766 Smiddywesson
Smiddywesson's picture

Maybe Robo had a fat finger event and meant DOW 1,500 and gold=$16,500.

Thu, 07/14/2011 - 12:58 | 1456560 entendance
entendance's picture

I beg to differ, the winners are folks not salivating after fed

Thu, 07/14/2011 - 12:58 | 1456564 ThoughtCriminal
ThoughtCriminal's picture

nah, just lunch break for Blythe and crew

Thu, 07/14/2011 - 13:02 | 1456573 Max Fischer
Max Fischer's picture

ZeroHedge used to post the daily commentary of Art Cashin with his infamous cocktail napkin musings all the time.    

If you don't mind me asking, why did ZH stop?  That was always good stuff.  And what ever happened to Nic Lenoir?

- Max Fischer, Civis Mundi  

Thu, 07/14/2011 - 13:31 | 1456694 lookma
lookma's picture

And what ever happened to Nic Lenoir?

Who knows, but we all need to give a hearty "pat on the back" to whoever is responsible for the cessation of that stream of utter rubbish!


Thu, 07/14/2011 - 13:39 | 1456740 akak
akak's picture

Now if Tyler(s) would only pull the plug on the Keynesian ravings of little leo quislingasskiss.

Thu, 07/14/2011 - 13:03 | 1456579 alexwest
alexwest's picture

blah blah blah ..

#continuation of yesterday's deranged activity, as
#explained by Art Cashin

there's alwways some kind of smart ass who exactly would explain why/what/how HAPPENED YESTERDAY..

yet to hear what will happen tomorow.. hey mr 'jerk me off' (H)art(d) Cashin.. any details?


Thu, 07/14/2011 - 13:03 | 1456584 monmick
monmick's picture

He actually meant to say "you can't eat gold".

Thu, 07/14/2011 - 13:05 | 1456589 KCMLO
KCMLO's picture


Thu, 07/14/2011 - 13:06 | 1456598 economists_do_i...
economists_do_it_with_models's picture

I have no position either way, but the GLD:UDN relationship seems a bit strained on a short-term basis.  The other recent times featuring such a sharp run-up were May 2010 and Nov 2010.  Both featured a flight to safety (UUP, TLT, VXX, etc) while risk assets (SPY, commodities, FXA, FXE) suffered.  I think GLD & SLV will pause/dip before moving higher.

Thu, 07/14/2011 - 13:18 | 1456614 Threeggg
Threeggg's picture

The big purchasers (Large Volumes) of PM's are moving in now with the drawdown and capping  going into the Comex close.

20 minutes to go.


Thu, 07/14/2011 - 13:14 | 1456618 worldlymrb
worldlymrb's picture

Gold the 4,000 year tradition

Thu, 07/14/2011 - 13:13 | 1456619 surfwon
surfwon's picture

that fucking liar will eat those words

Thu, 07/14/2011 - 13:16 | 1456632 YesWeKahn
YesWeKahn's picture

Gold will be 10000000$ by the time this idiot resigns with total disgrace.

Thu, 07/14/2011 - 13:34 | 1456704 theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

I think when he gets hanged or gullotined a pile of gold eagles should be the last thing he gets to see

Thu, 07/14/2011 - 13:17 | 1456636 LawsofPhysics
LawsofPhysics's picture

No surprise here as more and more search a safe store of value and hedge against inflation.  Any comments on the recent bond auction?  Rates starting to be forced higher yet, bond rout and greece x14,000,000,000,000?

Thu, 07/14/2011 - 13:20 | 1456647 The Alarmist
The Alarmist's picture

Gold is not money, therefore it is out of the control of Bernansky, and therefore it might actually be useful as a store of value and therefore worth something, therefore it goes up.  Or is the dollar going down?  Whatever.

FM Baby, FM!

Thu, 07/14/2011 - 13:23 | 1456662 SheepDog-One
SheepDog-One's picture

Gold is not fake money, therefore central fractional reserve banksters have no use for it. Cant derivative a gold coin...therefore no use.

Thu, 07/14/2011 - 13:44 | 1456773 JohnG
JohnG's picture

The LBMA can.

Thu, 07/14/2011 - 13:45 | 1456776 JohnG
JohnG's picture


Thu, 07/14/2011 - 13:22 | 1456659 Caveman93
Caveman93's picture

Just got a major boner!

Thu, 07/14/2011 - 13:25 | 1456669 zorba THE GREEK
zorba THE GREEK's picture

 The real question is not; whether or not gold is money, but whether or not fiat 'toilet paper'

 dollar is money.

Thu, 07/14/2011 - 13:26 | 1456676 lookma
lookma's picture

Its almost as if the Euro was built to solve the dollar reserve currency debt problem through a revalution of its gold reserves...oh wait, that is the fundamental point of the EMU's structure.

Who knew?  Hint--->>>



Thu, 07/14/2011 - 13:41 | 1456752 PaperWillBurn
PaperWillBurn's picture

if only there was a simple way to solve the debt crisis....oh wait, Look!! ^^^^^^^^^

Thu, 07/14/2011 - 13:26 | 1456677 Texas Ginslinger
Texas Ginslinger's picture

Methman probably quaffed a quantity of his namesake when silver went north.


Thu, 07/14/2011 - 17:28 | 1457665 fuu
fuu's picture

He and Hamy last seen in a crack pipe 69.

Thu, 07/14/2011 - 13:30 | 1456689 PaperWillBurn
PaperWillBurn's picture

I bought the very small dip today. I don't know if I'll be able to purchse under 1600 again

Thu, 07/14/2011 - 13:41 | 1456751 YesWeKahn
YesWeKahn's picture

All they do all day long is trying to make the bankers rich and save the market. They really need to be out of the panic mode, panic is meant to be short term and impulsive.

Thu, 07/14/2011 - 14:03 | 1456852 thunderchief
thunderchief's picture

Mexico will monetize silver soon.  The comex will default as the CFTC lets JPM and HSBC cover their shorts.  Silver will move back to its ratio of 15:1.  Run for the hills.  Run for your life.

Thu, 07/14/2011 - 15:25 | 1457212 jomama
jomama's picture

i don't necessarily disagree, but haven't we been singing that tune for months if not years now?

Thu, 07/14/2011 - 15:30 | 1457223 MiningJunkie
MiningJunkie's picture

Just buy the gold and silver juniors and sit back and relax.

Federal Reserve Notes are a wasting asset.


Thu, 07/14/2011 - 15:49 | 1457290 HungrySeagull
HungrySeagull's picture

What about tomorrow close wipe out of all paper shares in gold and silver?

Thu, 07/14/2011 - 16:39 | 1457452 trevorparsons
trevorparsons's picture

I mentioned the same thing in the previous post about gold. No one said shit.

Thu, 07/14/2011 - 16:41 | 1457466 HungrySeagull
HungrySeagull's picture


That cannot be a good thing. The great happy ship papermetal is sailing into a iceberg named Frank-Dodd.

Are they really that stupid?

Thu, 07/14/2011 - 16:40 | 1457456 trevorparsons
trevorparsons's picture

I mentioned the same thing in the previous post about gold. No one said shit.

Also, APMEX just opened up one of their flash sales for 5 oz. silver bars at $0.99 over spot. Hmm...

Thu, 07/14/2011 - 16:42 | 1457473 HungrySeagull
HungrySeagull's picture

I stay with Bullion Direct. I cannot bring myself to touch AMEX or Crimex etc.

Thu, 07/14/2011 - 16:49 | 1457503 trevorparsons
trevorparsons's picture

Was moreso referring to APMEX's thought process and intentions behind offering a 24-hour "sale" at this very moment.

Thu, 07/14/2011 - 16:51 | 1457521 HungrySeagull
HungrySeagull's picture


Now I see where you are going with this.... damn it's 5 PM eastern right now isnt it?

I am so blind. You see better than I do.

Thu, 07/14/2011 - 16:57 | 1457546 trevorparsons
trevorparsons's picture

Precisely. The sale is scheduled to end right at NY close. Maybe I'm looking into this too much or missing something obvious, but perhaps anyone looking to pick up some phyz should wait until tomorrow night.

Thu, 07/14/2011 - 17:19 | 1457621 HungrySeagull
HungrySeagull's picture

I have some on hand and the prices already exceed my targets for buying. I for one intend to sit tight and wait a while. This is one show worth watching.

Thu, 07/14/2011 - 17:08 | 1457588 Shineola
Shineola's picture

Gold is not money.

And the Teleprompter in Chief is not an illegal alien.

Thu, 07/14/2011 - 18:04 | 1457749 Alchemist
Alchemist's picture

Gold gonna be sub 1550 within a week

Thu, 07/14/2011 - 18:24 | 1457795 Urban Redneck
Urban Redneck's picture

Do you think Congress & the White House aren't going to agree to raise the debt ceiling?

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