This page has been archived and commenting is disabled.

Gold/Copper Ratio Surges By Most Since June 29

Tyler Durden's picture




 

As Credit Suisse points out, today the Gold/Copper ratio is up by over 4% to 3.32, which happens to be the biggest one day move since June 29, and confirms that not only the copper run may be over, but that derisking and the flight to safety trade is truly back on. Although one hardly needed to see this chart to come to that conclusion: even as the market continues to expect an announcement from Bernanke that CTRL-P Central (f/k/a the Marriner Eccles building) will start printing crude any minute, the wait may end up being quite protracted. And while gold has not been touched yet, and in fact continues to trade at all time highs, we wish to repeat our warning that should the crunch in the S&P continue (even if it is modest by historic amounts), it is very likely we may see liquidations in HF precious metals holdings considering the HF margin debt position is at virtually all time highs, meaning the toxic spiral of plunging prices and broad deleveraging in advance of margin calls, will lead to a sell off in anything and everything that is not nailed down.

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mon, 03/07/2011 - 15:20 | 1027038 trav7777
trav7777's picture

price action in Pd and Pt also worrisome...bitchez

Mon, 03/07/2011 - 15:49 | 1027147 asdasmos
asdasmos's picture

Realty Mogul, Sam Zell, Talks Inflation - says we're not seeing inflation because the CPI is distorted. (Mar. 3 2011)

 

http://www.cnbc.com/id/15840232/?video=3000008436&play=1

Mon, 03/07/2011 - 16:01 | 1027177 Math Man
Math Man's picture

And what happened in the 30 days after June 29, 2010....

Gold and silver went down 6% and the S&P went up 2.5%.

 

Mon, 03/07/2011 - 16:06 | 1027196 tmosley
tmosley's picture

Yes, because there has never been such a thing as a correction in any bull market.

Sorry, boy, you're early or wrong.  Either way, you're a loser.

Mon, 03/07/2011 - 16:09 | 1027199 nope-1004
nope-1004's picture

If Silver drops 6%, I'm all over it like white on rice.  And since I bought my largest chunk at $26, no need to even lose any sleep, frankly.  If it drops 20%, I might start to pay attention.

 

 

Mon, 03/07/2011 - 16:10 | 1027208 IQ 145
IQ 145's picture

 Agreed. If it's off 6% I'll be in there right beside you, helping to put that "white on the rice".

Mon, 03/07/2011 - 16:10 | 1027203 clickjaw
clickjaw's picture

Math man is RNR. He's a Soros paid troll!

Mon, 03/07/2011 - 16:30 | 1027274 NotApplicable
NotApplicable's picture

I would've thought that Soros could get a lot better ROI than that!

Mon, 03/07/2011 - 16:19 | 1027238 mt paul
mt paul's picture

it's hard to beat 

6 $ silver ...

no matter how big 

your correction stick is ...

speak softly but

buy every freakin dip....

Mon, 03/07/2011 - 16:22 | 1027240 EscapeKey
EscapeKey's picture

How does your disinformation database work? Do you search by keywords, or do you search for a preconceived conclusion you want to come to, and then it automatically cherry picks the data to suit that basis?

How much does it pay? Do you work from home?

Mon, 03/07/2011 - 15:22 | 1027041 Salvatore CFA
Salvatore CFA's picture

Salvatore bats second, the Middle Finger dude, leadoff.

Beat Turd to the punch.

The ratio will continue this trend.

Mon, 03/07/2011 - 15:21 | 1027043 Mongo
Mongo's picture

Don't miss the IMF pressconference from IMF HQ about how they will enslave the entire human race...

 

http://www.imf.org/external/pubs/ft/survey/so/2011/NEW030411A.htm

Mon, 03/07/2011 - 15:21 | 1027046 Diplodicus Rex
Diplodicus Rex's picture

Sorry, for the uninitiated, what does HF mean? High Frequency?

Mon, 03/07/2011 - 15:27 | 1027068 JohnG
JohnG's picture

Hedge fund in this case.

HFT - High Frequency Trading

BTFD - Buy the fucking dip

 

We need a glossary....

Mon, 03/07/2011 - 15:36 | 1027103 disabledvet
disabledvet's picture

well...that's it.  "those two."  that would "the glossary."  when they say "it ain't rocket science" they ain't kiddin'.

Mon, 03/07/2011 - 18:17 | 1027635 Silver Pullet
Silver Pullet's picture

Need one more.

Whats "FUBM"?

After posting...is it a suggestion to Blythe?

Mon, 03/07/2011 - 15:40 | 1027113 Oh regional Indian
Oh regional Indian's picture

HF's mostly hold SLV. Paper in some form. their sale will only move the fiat monkey around.

Physical problems will remain.

I do believe, in a classic inversion sue to these generally inverted and invereting times, Freegold will actually prove to be freeSilver.

Good to ask the deeeeeper questions. 

The obvious is never true.

ORI

http://aadivaahan.wordpress.com/2011/03/04/astrological-and-other-deep-insights-from-ca/

Mon, 03/07/2011 - 15:40 | 1027116 Temporalist
Temporalist's picture

Glossary

http://www.zerohedge.com/taxonomy_vtn

 

HF isn't on there though (hedge fund wannabes is) and neither is HFT (although High Frequency Trading is maybe they should put the initials for the masses), BTFD isn't either...someone needs to do some updating.

Mon, 03/07/2011 - 15:27 | 1027069 Jendrzejczyk
Jendrzejczyk's picture

Hedge fund I believe.

Mon, 03/07/2011 - 15:27 | 1027074 glenlloyd
glenlloyd's picture

hedge fund

Mon, 03/07/2011 - 17:31 | 1027458 Diplodicus Rex
Diplodicus Rex's picture

Thanks for the glossary lesson. I'll go back to watching Strictly Come Dancing now.

Mon, 03/07/2011 - 15:24 | 1027052 drink or die
drink or die's picture

Can we revalue our currency in terms of oil?  That way we could print oil, just by saying it is "future oil discoveries".

Mon, 03/07/2011 - 15:29 | 1027076 velobabe
velobabe's picture

first drink then die!

Mon, 03/07/2011 - 15:34 | 1027089 hedgeless_horseman
hedgeless_horseman's picture

Good news, Velobabe!  Sugar Daddies are rolling in it:

The rich are different from you and me: They're buying real estate.

 

After four straight years of declines, sales of million-dollar homes and condos rose last year in all 20 major metro areas, according to DataQuick Information Systems. On average, these cities saw an 18.6% jump in high-end home sales.

 

http://finance.yahoo.com/news/Milliondollar-homes-sales-cnnm-687577347.html?x=0

Mon, 03/07/2011 - 15:49 | 1027146 Yardfarmer
Yardfarmer's picture

multi-million home sales in Aspen Co are surging. look who's buying. 

http://www.theaustralian.com.au/news/executive-lifestyle/aussies-join-in...

Mon, 03/07/2011 - 16:29 | 1027270 Confucious 222
Confucious 222's picture

Who knew Anna-Lisa Klittersberg made that much dough?

Must be exciting, or excitable.

Mon, 03/07/2011 - 18:27 | 1027677 chumbawamba
chumbawamba's picture

Well, with a name like Klittersberg, excitability is a daily phenomenon, I'm sure.

I am Chumbawamba.

Mon, 03/07/2011 - 16:33 | 1027277 serotonindumptruck
serotonindumptruck's picture

The elevation should save them from the massive tsunami and EQ events over the next couple of years. Their proximity to the Yellowstone caldera should be of some concern however.

Mon, 03/07/2011 - 15:40 | 1027112 Goldenballs
Goldenballs's picture

Just sell what dosen,t exist,everyone else is.

Mon, 03/07/2011 - 15:23 | 1027056 LOWNskater52
LOWNskater52's picture

Please let there be a massive PM liquidation on Friday.  That is when I'll get my paycheck and be able to stock up big time.

Mon, 03/07/2011 - 15:39 | 1027109 disabledvet
disabledvet's picture

i like that.  won't happen.

Mon, 03/07/2011 - 15:25 | 1027057 savagegoose
savagegoose's picture

so the gold price is levereaged to buggery?

a drop isnt a flight to safety its a flight to delevering?

Mon, 03/07/2011 - 17:57 | 1027566 slewie the pi-rat
slewie the pi-rat's picture

 

one person's drop in buggery may well be another person's flight to delevering!

Mon, 03/07/2011 - 15:24 | 1027060 Bastiat
Bastiat's picture

Physical demand will choke off any selloff in PMs, imho.  A collapse of PM futures prices -- essentially derivatives due to the 100/1 leverage off the physical -- will get arbed.  Insane volatility will result but not sustained collapse in PM prices.

Mon, 03/07/2011 - 15:35 | 1027098 trav7777
trav7777's picture

do not underestimate the futures markets' ability to move price, at least in the short term, in a counterintuitive direction.

However, there will be strong buying support in a safety trade.  Remember, though, that if the deflationists are correct, then the entire $50T Z1 credit base will unwind and gold will return to $23/oz.  The price of everything else will collapse as well and bank deposits, bonds, stocks, etc., will vaporize with the FRN.

Even in the 2008 deleveraging, physical gold could be had for not so much more than spot.  As the stresses increased, availability shrank and retail dealers were forward selling supply not on-hand.

On the flipside, with the margin hikes implemented by various exchanges, they've already pre-chased some of the leverage OUT of certain commodities, inc. gold and silver.

Mon, 03/07/2011 - 15:27 | 1027064 Bastiat
Bastiat's picture

In the mean time it's nice to see Blythe getting it on her silver position and copper position at the same time.

 

Mon, 03/07/2011 - 15:27 | 1027066 TradingJoe
TradingJoe's picture

Until Oil reverses course, we won't see ANY meaningful "correction" or sell off of any kind or magnitude! When the oil trade is over so will the S&P hit the wall! And PMs(paper) and all other stuff!

May the crude trade be your last "perfect" one before we hit the beaches! And leaving behind a "wall of warring" PUTS :)))!

Mon, 03/07/2011 - 15:25 | 1027067 glenlloyd
glenlloyd's picture

Fed official (Lockhart) says maybe more stimulus.....

http://money.cnn.com/2011/03/07/news/economy/Lockhart_Fed_QE3/index.htm

Mon, 03/07/2011 - 15:32 | 1027082 TWORIVER
TWORIVER's picture

The Head and Shoulders present in the weekly Copper chart is likely an important top for the whole commodity space and we should see a massive revaluation lower across the board in the coming weeks. The US$, whatever you think of it, is going to rally strong as well.

Mon, 03/07/2011 - 16:02 | 1027186 trav7777
trav7777's picture

didn't you just say that about the miners space?  Then it failed to confirm the H&S

Mon, 03/07/2011 - 16:21 | 1027237 Rogerwilco
Rogerwilco's picture

Confirming Dr. Coal's H&S of recent. In a couple of months the bag holders will be shaking their heads, wondering how they could have been so stupid buying into the parabolic blow-offs.

Mon, 03/07/2011 - 18:33 | 1027692 chumbawamba
chumbawamba's picture

Copper to $10/lbs by end of summer 2011.

I am Chumbawamba.

Mon, 03/07/2011 - 15:33 | 1027086 Bastiat
Bastiat's picture

It's a known fact that chart formations create physical supply.

Mon, 03/07/2011 - 15:35 | 1027097 TWORIVER
TWORIVER's picture

No they do not do that but they do show the supply/demand relationship very well. We'll see what happens over the next few weeks. The $/CHF is probably the best place to be to benefit from the probable rally coming up.

Mon, 03/07/2011 - 15:40 | 1027115 Bastiat
Bastiat's picture

No they do not do that but they do show the supply/demand relationship very well.

. . . in healthy, functioning markets that are driven by supply/demand.  This would not describe precious metals, ihmo -- although silver is phase shifting towards price discovery.

Mon, 03/07/2011 - 15:36 | 1027096 topshelfstuff
topshelfstuff's picture

[ covers/ their Silver Short, and BTW the Gold/Silver Ratio broke through 40 today. It was just above 70 when Chna "urged" their citizens to Buy Silver.

 

http://www.zerohedge.com/article/jp-morgan-denies-it-holds-more-90-coppe...

JP Morgan Denies It Holds More Than 90% Of The Copper Market... No Statement On Whether It Holds 89%

 

Mon, 03/07/2011 - 15:35 | 1027101 Steroid
Steroid's picture

Gold to copper ratio? This is an abomination here.

For god's sake, the inverse is the (real) price of copper.

What has the world degraded to!!

Mon, 03/07/2011 - 18:35 | 1027700 chumbawamba
chumbawamba's picture

Explain, please.

Mon, 03/07/2011 - 15:38 | 1027106 depression
depression's picture

Please I pray someone just recorded this interview with Jim Cramer talking about the Oil market, opening the SPR, what did he say "Obama needs to show this futures market who is in control here... ". This is stunning. Please someone post this interview.

Mon, 03/07/2011 - 15:40 | 1027108 baby_BLYTHE
baby_BLYTHE's picture

IS inflation[dot]us a scam?

http://www.youtube.com/watch?v=QWIenEil1fc

I REALLY HATE snake oil salesmen!

Mon, 03/07/2011 - 15:48 | 1027136 Temporalist
Temporalist's picture

I wouldn't call it a scam because they use factual, albeit maybe sensationalized, information and they make good videos.  One can choose to take their advice or not.  I wouldn't buy any stocks they recommend.  I am skeptical, and others think they are scam artists, but if you don't get invested in them and just watch their videos for what they are there is no scam.  One problem I have with them is their cross referencing their own investment channels and websites yet they never alert the visitor to that nor do they inform people who they are and who is involved in their organization.  You can search ZH for posts by/about them and see the comments...

Mon, 03/07/2011 - 15:48 | 1027144 baby_BLYTHE
baby_BLYTHE's picture

Thanks.

I know Jon Lebed... Also apparently that G4T got "fired" or quit working for them a little time ago.

Must have "cashed" out or worse!

Mon, 03/07/2011 - 15:41 | 1027120 disabledvet
disabledvet's picture

you can't print oil..."but you can invade it."  just like you can't fight city hall.."but you can..." well, i won't finish that thought.  you all know the deal.

Mon, 03/07/2011 - 15:53 | 1027122 plocequ1
plocequ1's picture

Deleted

Mon, 03/07/2011 - 15:48 | 1027142 working class dog
working class dog's picture

  In today’s society folks say it is important to invest in precious metals.  I am here to tell you that an ancient formula for success still exists today and will inevitably prove essential in the coming Armageddon.  This is the art of alchemy; particularly changing lead into valuable substance.  This formula and process has existed as early as the 1400s.  Here is the basic formula

 

1.        Obtain a quantity of lead, saltpeter, carbon, and sulfur

2.       Make sure you have a means of sufficient heat, in a pinch a camp fire could work

3.       Make an appropriate die of sufficient size and shape for the melting and molding of your lead

4.       Utilize a formula of 75% of saltpeter, 15% of carbon and 10% of sulfur to make a magical mixture

5.       Take a hollowed out steel pipe and load you mixture with the lead on top Thus creating you magic wand.

 

NOW HERE IS THE FINAL CRUCIAL PART AND MUST BE REPEATED IN STEP WITH CLARITY  (I have taken the liberty of translating to English)

 

6.       Point your magic wand at a person that has the precious metal you so desire and repeat the magic incantation “Give me your Money Bitch”

 

  If done correctly you will successfully have turned lead into gold, of for that matter whatever you want

Mon, 03/07/2011 - 16:13 | 1027226 Bastiat
Bastiat's picture

You might get your throat cut while trying to light the match, bitch.

Mon, 03/07/2011 - 15:54 | 1027163 lieutenantjohnchard
lieutenantjohnchard's picture

the selloff in all things not nailed down might very well happen. those holding paper investments will worry alot more about their holdings than those of us with physical since we probably will hold until the end anyway.

Mon, 03/07/2011 - 15:55 | 1027164 Horatio Beanblower
Horatio Beanblower's picture

If you're not doing anything important...

 

Selling Off Britain - http://www.channel4.com/programmes/dispatches

 

For the interactive types amongst us - http://sellornot.channel4.com/

Mon, 03/07/2011 - 16:00 | 1027175 DosZap
DosZap's picture

Lets say the worst happens, WHAT does that do to the dollar?,THATS a flight to saftey over PMS???

Someone explain should you dump metals or HOLD.

And convert to Dollars again, what a friggin nightmare.

Mon, 03/07/2011 - 16:01 | 1027178 baby_BLYTHE
baby_BLYTHE's picture

Welcome to my nightmare!

Mon, 03/07/2011 - 16:54 | 1027338 Flakmeister
Flakmeister's picture

The key to owning PMs is that you never put yourself in a position that you have to sell. You may *choose* to sell, that is another story. If you are worried about day-to-day expenses with the funds allocated to PMs, you are then a speculator, Caveat Emptor applies.

I tell my clients you buy gold and you hope it goes down in value over time...

Mon, 03/07/2011 - 17:00 | 1027352 Idiot Savant
Idiot Savant's picture

Half in PMs and half in cash - hedged for inflation/deflation equally. Be prepared for either extreme while we're dancing on the razor's edge.

Mon, 03/07/2011 - 17:08 | 1027372 Flakmeister
Flakmeister's picture

And the other half in oil assets, NG and fertilizer... :)

Mon, 03/07/2011 - 16:16 | 1027232 irishlink
irishlink's picture

With copper about to do a possible reversal, do one now short the overall market or concentrate on the high sky miners?

Mon, 03/07/2011 - 16:33 | 1027278 Creed
Creed's picture

Gold & silver are money.

We're in a currency crisis of biblical proportions.

Boo-yah.

Mon, 03/07/2011 - 16:52 | 1027326 DosZap
DosZap's picture

Creed,

So your saying hold PM's, have to be worth more than FRNs, there is no SAFE haven in ANY US PAPER.

Mon, 03/07/2011 - 17:12 | 1027383 Duffminster
Duffminster's picture

I moved all my IRA based SLV to PSLV because i trust Sprott and I don't trust JP Morgan.   I jumped out at 33.5 and got back in after we bounced from above 32.5 and am still all in.  

I believe long term silver is going to be more precious than gold because like gold it is money and therefore a long term hold but the stuff is so dang useful and it gets consumed at pace that mines just can barely keep up with and the rest of the physical is coming from scrap supplies and there are no bank reserves to speak of.  Silver $300 or even $1200 wouldn't surprise me.

I think the physical silver is increasingly in stronger and stronger hands and that regardless of the HF noise, the global paradigm on silver is that it is about as good as it gets when it comes to holding value and as defacto money anywhere in the world.  

I believe manipulation will continue as the western fiat world continues to fight retreating skirmishes but because of the growing understanding of the mechanisms and strategies employed by the manipulators, this understanding is allowing the stronger hands to accumulate more and more physical silver or what I consider truly reliable physical trust accumulation through funds like PSLV.

We have talked about exogenous events that could precipitate a commercial signal failure and the massively manipulated silver and gold markets and it may be well be the food inflation induced growing global revolution that is in fact that event.  Although from where I sit it could hardly be described as "exogenous" as anyone with a modicum of economic intelligence could have seen this coming for at least 2 years in my opinion.

For today, I hold my silver and for tomorrow, I'll hold it as well.  The funds may be buying everything on margin but the long term wealth of silver remains with those buy cash and hold physical or very reliable proxies.  Silver is a minimum 10 year investment starting today in my opinion.   It may be a 100 or 500 year investment given how useful the stuff is and how the supply situation looks.

Just a few thoughts,

Duffminster

Mon, 03/07/2011 - 18:08 | 1027606 slewie the pi-rat
slewie the pi-rat's picture

 

well, duffmeister, this is another positive endorsement for PSLV. 

i could care less, bacause i am broke, but, just out of curiosity, if we add that "P" in front of the "SLV", does it make it more difficult to, uhh,...short?

Mon, 03/07/2011 - 18:09 | 1027607 Mossy
Mossy's picture

Is that particular chart availible online?

Mon, 03/07/2011 - 19:32 | 1027855 Stuck on Zero
Stuck on Zero's picture

The gold/copper ratio is just proof that despots would rather escape their countries with private jets full of gold than ships full of copper!

Mon, 03/07/2011 - 20:27 | 1027986 lsjcma
lsjcma's picture

To wear the mermaid wedding dresses could be called the dream of every woman. I think whoever you are, to get married with the man your love is a holy thing. And we all firmly believe that marriage will not kill your love, on the contrary, wedding dress is just the beginning. So the bridesmaid Dresses chooses the wedding dresses carefully. Naturally, they want to become the most beautiful bridesmaid dresses and the unique sheath wedding dresses. The dresses in our online column wedding dresses store are their best choices.

Tue, 03/08/2011 - 01:00 | 1028745 Grand Supercycle
Grand Supercycle's picture

COPPER daily chart gives bearish signal and downside is expected.

http://stockmarket618.wordpress.com

Do NOT follow this link or you will be banned from the site!