The vast under-performance of industrial metals compared to precious metals may be a warning sign regarding the strength of economic demand and/or investor skittishness. Furthermore, if recent history is a guide, the stock market may have a difficult time defying gravity much further as the industrial metals continue their relative deterioration
BofA summarizes the latest flow as a "reversal in Shanghai Accord flows" noting the "1st outflows from EM debt funds in 13 weeks; largest Japan inflows in 10 weeks; and 1st outflows from TIPS funds in 14 weeks; 1st" and adds that EPFR reports another week of risk-off flows: $5.8bn equity redemptions vs $2.8bn bond inflows & $1.8bn precious metals inflows (= largest in 11 weeks).
Once again the Chicken Littles of the U.S. mainstream media are “warning us” that the sky could fall, because of “bubbles in China”. Somehow, all of the U.S.’s gigantic/precarious bubbles are completely invisible to these Chicken Littles. Whose bubbles are bigger? Whose bubbles are worse? The answer could not be more obvious.
The weakness in precious metals - as the dollar soared - after yesterday's Fed minutes has extended this morning as Fed's Lacker unleashes even greater hawkish-ness. Gold is back at 3-week lows, back below $1250 with its biggest drop in 3 months...
After yesterday's algo-driven mad dash to close the S&P green both for the day and for the year following Fed minutes that came in shocking hawkish, the selling has continued overnight, led by the commodity complex as rate hike fears have pushed oil back down some 2% from yesterday's 7 month highs, which in turn has dragged global stocks lower to a six-week low, while pushing bond yields higher across developed nations as the market suddenly reprices the probability of a June/July rate hike.
On one side, we have the Specs. On the other, the Banks. Which side will win? With open interest near record levels in both gold and silver, we're likely not going to have to wait much longer to find out.
Buy gold and silver coins and bars for delivery and storage has advocated a leading financial adviser in Ireland. Eddie Hobbs has given advice to his clients and says that they should buy bullion in order to protect from the coming global financial crisis.
“I am optimistic that the depository will be up and running at the end of this year or the beginning of next year,” Capriglione said, "at the depository, Texans will be able to open accounts similar to checking or savings accounts at traditional banks - and monitor them online."
It has been more of the same overnight, as global stocks piggybacked on the strong US close and rose despite the lack of good (or bad) macro news, propelled higher by the two usual suspects: a higher USDJPY and a even higher oil, if mostly early on in the trading session.
We can talk about technical charts, supply and demand fundamentals, and price manipulation, all of which point to significant increases in the value of gold and silver for the foreseeable future. But according to Golden Arrow Resources CEO Joseph Grosso, who is credited with the discovery of the largest silver deposit in history, the single biggest reason that retail investors, institutional players and governments around the world are gobbling up physical precious metals, resource stocks and ETF’s at unprecedented levels is that they are scared to death of the state of the global economy and where it will go next...