Steve St. Angelo is an Independent researcher who started to invest in precious metals in 2002.
It had been a relatively quiet session overnight when as reported previously, the geopolitical situation in the middle east changed dramatically in a moment, when NATO-member country Turkey downed a Russian fighter jet allegedly over Turkish territory even though the plane crashed in Syria, and whose pilots may have been captured by local rebel forces. The news promptly slammed Turkish assets and FX, sending the Lira tumbling, pushing lower European stocks and US equity futures while sending 2 Year German Bunds to record negative yields.
This is a commentary which should never have needed to be written.
The traditional view of the impact of low oil prices seems to be, "It is just another cycle." Or, "The cure for low prices is low prices." We are doubtful that either of these views is right.
Yes, what we are about to show you is simply a collection of anecdotal data points.
As a result of the global commodity weakness, global stocks have fallen for the first time in six days as the sell-off in commodities continued, dragging both US equity futures and European stocks lower. However, putting this in context, last week the MSCI All Country World Index posted its biggest weekly gain in six weeks: alas, without a coincident rebound in commodity prices, it will be merely the latest dead cat bounce.
If the government’s official statistics are to be believed the U.S. economy is moving full steam ahead. Consumer are spending, the job market is expanding, real estate has recovered, stocks are soaring and the U.S. dollar is stronger than it has been in a decade. But if you have yet to realize it, billionaire investor Eric Sprott says "it’s all a lie." The manipulation of precious metals, coupled with the supply and demand fundamentals which Sprott says will lead to shortages over the next few years as mining companies reduce output or close up shop, will leave many investors who think their gold holdings are easily convertible to physical assets with nothing more than depreciating Yellen Bucks at exactly the moment they’ll need precious metals in their possession.
Someone decided that the exact opening of Gold futures trading on a Sunday night - ahead of a holiday week in the US - was the perfect time to liquidate over $161 million notional of 'paper' precious metals contracts... Currencies were unmoved, stocks are leaking higher and bonds lower.
"The global dollar standard, that is now the longest-lived of these artificial monetary systems, has developed a bunch of stress cracks and is in the process of imploding right now. There is going to be before the end of this decade, most likely, another emergency meeting of a bunch of finance ministers and economists to try and hash out another world monetary system. It is just history repeating, and it is a natural consequence of a man-made, artificial manipulation of the free market."
Fed Speak became hawkish to telegraph to financial markets that the December meeting was a potential live meeting for a rate rise.
Importantly, while the "bias" of the market is to the upside, primarily due to the psychological momentum that "stocks are the only game in town," the mounting risks are clearly evident. From economic to earnings-related weakness, the "bullish underpinnings" are slowly being chipped away.
Despite soaring physical demand, and a clear unwillingness to give up precious metals, gold's "price" is on pace to close down for the 5th straight week at its lowest in 6 years. So where do the banks think gold goes next?
European Union countries are preparing to crackdown on virtual currencies such as bitcoin, and anonymous payments made online and via pre-paid cards "in a bid to tackle terrorism financing after the Paris attacks, acording to a draft document."