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Morning Gold Fix: July 27
Commentary courtesy of www.fmxconnect.com
Gold Option Expiration
Expect absolutely nothing to happen today, with the possible exception of a counter trend move higher due to residual pull from the August 1200 strike. That said, lots of interest in the 1150 put already today.
Where to from here? The stock market is in love with itself now. Many cite the lack of volume as a reason to fade the rally, and we are inclined to agree with them. The Flash Crash has done much to scare away any retail money thinking of sticking its toe back in. But yet the stock market continues to rally.
Banks with unlimited access to ZIRP money and nothing else to do except pump the very equities they are selling to their clients have successfully sold themselves on the strength of this market. It’s a liquidity / credit driven market, not a fundamental one. These type of rallies are unfun.
At some point the Fed’s ability to keep real interest rates at zero will force the weaker hand and smaller balance sheet public to capitulate and go all in on stocks again, just as it forces fund managers to chase returns. Then we will get higher volume rallies. That will be the distribution move. Then I feel stocks and bonds will crap out. When I don’t know. In the mean time. Long bonds, gold stocks, gold bullion, MLPs, LATAM real estate.
The sheeple will be left holding the bag once again. For that time, Gold will be depressed in price as the risk-on crowd has its way.
If we are entering the QE2 pricing zone, then do not expect gold to explode higher. Expect it to keep pace with the dollar’s devaluation / inflation rate. And right now those are muted in the market. If you are a buyer, buy weakness, not strength. We are still in liquidation mode.
-Elizabeth Thawne
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You're funny!
There's talismanic belief out there that you can somehow control interest rates with central bank gold sales.
This latest sell-off right before COMEX open says that it means Eurozone moves regarding their own interest rate measures, namely that they are about to drastically slash their own rates is not too far off.
Sooo..., in the interest of keeping with their own belief in the efficacy of selling gold, and propping up the Euro, they give it their best college try.
It doesn't even occur to them in the least that voluminous physical sales directly into the bullion markets has the effect of increasing the liquidity of these markets as you would in the bond markets.
We are now very close to the 34week EMA and should be testing that limit.
anyone trading au/ag on the comex is part of the problem. go buy physical and hold on to it. every comex trade you make contributes to increasing/maintaining the leverage of paper metals over the real thing. not to mention small players will get regularly washed out by larger positions with insider information. easy profits to the market manipulators that help them keep their game going.
Amen.
Oh, we're gone physical, and it still doesn't go up :-)
Please re-read what he said...sheesh.
No, that was intentional, though fictional. I'm just tired of gold bugs, permabulls and permabears of all sort.
And just what is a "gold bug" anyway?
Is that phrase not just an automatically pejorative slap-down and dismissal of anyone who, at any times, believes in or advocates holding gold? What about all the rabid "stock bugs" on CNBC and elsewhere, or the head-in-the-sand "bond bugs" who ignore the exponential growth of governmental debt? Well, what about those "bugs"?
They'll get squashed, too, like all bugs.
LOL!
Well said Martel.
Is there gold and silver in the vaults to back up all the paper claims? If not, at what ratio would you start to cry foul? Is 10-1 okay? 100-1?
Fractional reserve minting, naked shorting stocks, kiting money from the Fed to the treasury and out through the system through all these programs that we will owe money for while bankers get bonuses, hiding loans off the books in special "vehichles" (get away cars?), mark to model vs. mark to market, jobs overseas and none on the horizon at home? Help me friend, I'm not just a bear, or a perma bear, I'm a fucking doomer.
Show me why you have hope. Show me why you are sick of me. Show me. I pray you got the facts to help me out on this. Please convert me. NOW! I will be grateful. I'm sick of me too, sick of this point of view. Help me.
I refer you to my earlier post in this thred: http://www.zerohedge.com/article/morning-gold-fix-july-27#comment-490695
If fiat is junk, then just put the money where your mouth is. When gold is $15,000/oz, you can drive by in your Maybach or Maserati, and drop a nugget into my begging bowl.
Fiat is not junk because it has no value, it is junk because, unlike gold, it never holds its value. EVERY fiat currency throughout history has been a steadily depreciating one, with no exception. As such, it is simply another vehicle for the confiscation of wealth by our poitical and financial overlords. Holding gold allows us to negate that confiscation-by-stealth-via-inflation (well, as long as they don't try to criminalize the holding of gold itself).
what a great way to put it... "never holds its value"
i can clearly picture fiat as a "value holding" colander, and hard assets as ... well ... the hard assets they are...
however, i don't believe gold is at all immune from the same devaluation shenanigans, but i'm pretty certain that as insurance, the value of gold will be far more comprehensible to my neighbors than that paper.
its value can be bent with marketting and GLD-type machinations, but it's got a much much better history than paper, gold does.
Yowza, yowza, yowza....
Under Law, the Treasury/Mint are required to mint and make available for distribution all gold coinage as the public so desires.
But WTF anyhow, that's just a law and the gubamint (pun!) don't need to abide by any laws, do they?
Everybody saying the bullion banks are selling here are on detention and have to stay after class.
You will write on the blackboard 100X:
"Central banks provide the capitulation move in the gold markets."
Its only paper trades, whats the ratio to physical 100 - 1 if they are lucky.If you are sad enough to own em,demand your physical and listen to them bleat.More Gold in a tonne of seawater than those tons of worthless paper.Whats the difference between fiat currency and paper gold certs - maybe a $ a ream !!!!!!!!!
*:<(
*delete*
Ben Davies was just on CNBC mentioning gold undervalue, CBs buying it, currency of first resort, Asia CBs tiring of being US creditor, documented historical CB manipulation...video probably available soon.
i went to my dealer to get some gold and he closed early--he ain't selling his gold at these prices
You have a lousy dealer, that' all. Other dealers keep their shops open and make money.
i went to my dealer to get some gold and he closed early--he ain't selling his gold at these prices
gf,
i don't know how many people realize how relevant your comment really is. and not just with respect to gold.
'they' can give you a spot price all day long, but if you won't sell at any price but the one you (and those around you) establish, they are toast. and that is when 'it' will be broken. consider that from both local and international perspectives.
right now, we have zillions of amerikan paychecks taking 15% and automagically buying in various vanguard/fidelity/tiaa-cref etc. funds with no regard for the actual market trends or value. this is the force you fight each market day: large blind buying in... those that bundle those purchases just sit on those fund blocks until volume is low, and buy it up for the greatest impact... as they should, both for their commissions and their customer's better interests... while the loop is working.
this is not cynical, it is life and it makes sense.
but it lends nothing to real market price discovery, which is what your dealer is doing. it is critical that natural markets do this. those amerikans are essentially stooges who are eternally "buying at market"... no matter how high that "market" goes, or who sets that price. they have no idea what their purchases are worth, and must simply be assuming that someone else will buy in after they do, or when they want to retire. "just as it's always been".
until it isn't.
PPT props it up and it keeps working when things get tight.
i can't figure out how it ends yet. but the system is there, doing what it does, and pretty well, it seems. so long as every "does what they're supposed to"
and your dealer won't sell low. none of us will. not 'till we're *really* hungry. that's the real market for those that are paying attention at all. but we're kinda stuck dealing with this other market... - whether we like it or not.
Excellent comment.