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Gold To See “Massive Shortages” and “Typical Investor” Will Not Be Able To Get Bullion - Rickards

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Today’s AM fix was USD 1,254.00, EUR 921.04 and GBP 749.82 per ounce.

Yesterday’s AM fix was USD 1,265.25, EUR 928.83 and GBP 754.52 per ounce.
Gold fell $6.20 or 0.5% yesterday to $1,259.30/oz. Silver remained nearly unchanged at $19.04/oz
 



Gold extended losses to a third straight day yesterday and is down over 3% in three sessions.  Gold bullion in Singapore traded sideways prior to a bout of concentrated selling in late trading in Singapore (0615 BST) saw gold quickly fall from $1,258/oz to $1,252/oz prior to a slight bounce back to $1,254/oz.

It fell to 16 week lows, possibly due to slightly weaker physical demand in top buyer China and technical selling.

In China, gold premiums ticked slightly higher to $2 to $3 per ounce. They have remained roughly the same since before the price drop, which suggests demand in China has not picked up on the price falls.


We are bearish in the short term and technically, gold is vulnerable to further falls. Potentially to test what appears to be a double bottom between $1,180/oz and $1,200/oz. Gold is particularly vulnerable in the very short term, in other words, today, tomorrow and early next week.

Gold in U.S. Dollars, Daily, 1 Year - (Thomson Reuters)

It is also worth considering seasonal trends and in recent years, June is one of the weakest months for gold. Gold's five year and ten year average performance in June is negative. We will look at this in more detail tomorrow.

While gold is vulnerable technically to further falls, it’s 14-day relative strength index (RSI) has dipped into very oversold territory, at 28.9 currently.

This morning Russia, Belarus and Kazakhstan signed the historic Eurasian Economic Union which will come into effect in January 2015. "The just-signed treaty is of epoch-making, historic importance,"Russian President Vladimir Putin said.

The Eurasian Economic Union expects Armenia to join within a month, Kyrgyzstan within a year.

Cutting down trade barriers and comprising over 170 million people it will be the largest common market across the ex-Soviet states. The troika of countries will cooperate in energy, industry, agriculture, transport and monetarily.


Special Notice Regarding Reduction In GoldCore Premiums: Gold Bars Reduced To 1.6% Premium - Click Here

“Massive Shortages” In Gold Coming and “Typical Investor” Will Not Be Able To Get Bullion - Rickards


Financial expert, Pentagon insider and bestselling author James Rickards has warned that “typical investors” may not be able to acquire physical gold when prices begin to surge hundreds of dollars a day as “massive shortages” will take place.

In another fascinating interview, this time with the always worth a watch Greg Hunter, formerly of ABC and CNN and now of USA Watchdog, Rickards said that gold will become the preserve of the “big guy” in the form of sovereign wealth funds and central banks.

This is something we have warned of since 2003. There is another risk in the form of ultra high net worth individuals (UHNWIs) in Russia, China and elsewhere also attempting to corner the physical gold and silver markets.

In the 1970’s, the Hunt Brothers made the mistake of not accumulating enough physical silver outside the reach of the U.S. authorities. Some billionaires today will likely not make the same mistake.

Rickards latest book, ‘The Death of Money’ predicts “the coming collapse of the international monetary system” and is being very well received. In recent days alone, Rickards has conducted a huge amount of media interviews with most leading financial networks.  

One of the signposts of the coming collapse of the international monetary system is countries like Russia declaring it will no longer use the U.S. Dollar as a reserve currency in international trade.

Rickards explains, “Putin said he envisions a Eurasian economic zone involving Eastern Europe, central Asia and Russia.  The Russian Ruble is nowhere near ready to be a global reserve currency, but it could be a regional reserve currency.”


Rickards is surprised at how fast the economic situation is unfolding.  Rickards says, “If you ask me what has happened since you finished writing the book that comes as a surprise, I would say a lot of the things I talk about in my book are happening faster than I would have expected. Things that I thought would happen in the 2015 or 2016 time frame seems to be happening now in some ways.  If anything, the tempo of events is faster than expected. “

“Therefore, some of these catastrophic outcomes may come sooner than I wrote about.”

Rickards told Hunter that “right now, we are on the precipice now”.


“When you are on the precipice, it doesn’t mean you fall off immediately, but you are going to fall off because you can see the forces in play.  What I tell clients and investors is it’s not as if we are going to make some mistakes and some bad things are going to happen.  The mistakes have already been made.  The instability is already in the system.  We’re just waiting for that catalyst that I call the snowflake that starts the avalanche.   You don’t worry about the snowflakes; you worry about the snow and that it’s unstable and it’s just waiting to collapse.  That’s what the system is right now; we are just waiting for a catalyst.  People ask me all the time, what could it be?  Technically, my answer is it doesn’t matter because it will be something.  It could be a failure to deliver physical gold.  It could be an MF Global financial failure.  It could be a natural disaster.  It could be a lot of things.  The thing investors need to understand is the catalyst doesn’t matter.  It’s coming because the instability is already there.”

On gold manipulation and when it will end, Rickards says, “It will end when the physical shortage gets to the point that someone fails to deliver; which, at that point, there will be a buying panic.  There could be a buying panic or what some people call a demand shock.  One of the things I said about gold manipulation is if I was the manipulator, I would be embarrassed at this point.  The manipulation is obvious.  The evidence is coming in from all directions. . . . The manipulation is clear.  When will it end?  It will end when there is a physical shortage that pops up somewhere, or it will end with a short squeeze.”

“We are going to get a very large demand shock coming from China and India”, said Rickards.


“Let me explain those two cases.  We have a brand new government in India, and they are going to repeal the import tax on gold.  We also have the wedding season coming up. . . . So, India is set up for a very large surge in demand in the fourth quarter.  Now, over to China, this is one of the things that it’s happening faster than I originally thought.  The credit collapse story is happening in real time.  I said (in my book) this might be a 2015 event, but it looks like it is happening now.  Defaults are piling up.  We are seeing money rise.  We’re seeing people march down to the banks . . . trying to get their money back. . . . So, if they can’t buy foreign stocks, domestic stocks, don’t want to put their money in the bank and are getting out of real estate, then what’s left?  The answer is gold. . . . I see a demand shock coming from China. . . . You could see a scramble to buy gold.  It is going on anyway, but you could see it accelerate.  That will take down the manipulation.  Once the markets prevail over the manipulators, then watch out.”

Rickards, Washington and Wall Street insider, is certain the collapse will happen. He is just not sure when it will happen.

“It is the thing you won’t see coming that will take the system down.  Things happen much more quickly than what investors expect.”

“What will happen in gold is that it will chug along and then all of a sudden–boom.  It will be up $100 an ounce, and then the next day it will be up another $200 an ounce.  Then everyone will be on TV saying it’s a bubble—boom.  It’s up $300 an ounce, and before you know it, it will be up $1,000 per ounce.”


“Then people will say gee, I better get some gold, and they’ll find out they can’t get it because the big guy will get it.  You know, like central banks and sovereign wealth funds will be able to get the gold.  The typical investor will run down to the coin shop and they will be sold out, and the U.S. Mint will say sorry, we’re not shipping.”  

“You’re going to find out you can’t get it because the whole thing is set up for massive shortages in supply.”

Rickards interview with Greg Hunter is well worth watching and can be seen here


 

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Mon, 06/02/2014 - 07:07 | 4816227 MeelionDollerBogus
MeelionDollerBogus's picture

Good thing this is nothing I've ever seen before, wouldn't want to get bored or anything.

Step right up folks, step right up!

Get yer gold ounces right now for under 1299.99!

Thu, 05/29/2014 - 15:02 | 4806838 Gordon_Gekko
Gordon_Gekko's picture

"BOOM!"...love it!

Thu, 05/29/2014 - 14:47 | 4806742 russwinter
russwinter's picture

Putin Knows Something:

http://winteractionables.com/?p=12053

Thu, 05/29/2014 - 14:43 | 4806721 discopimp
discopimp's picture

This is something we have warned of since 2003...no shit, thanks for helping me lose money in the grestest stock market bull scam ever...anyone can predict it will all come down, but you clowns geezzz "is going on anyway, but you could see it accelerate.  That will take down the manipulation.  Once the markets prevail over the manipulators, then watch out.” No shit sherlock, you make money doing this? Why not put your money where you mouth is and rebate the cost of your book by X date if it doesn't happen, then mabye I will listen...

Thu, 05/29/2014 - 14:41 | 4806681 Kreditanstalt
Kreditanstalt's picture

"short-term oversold"..."potential for $1180"..."move lower"...'resistance at X or Y"...blah blah blah

You can BET that as soon as "the gold price" - the fake one - reaches about $1280~$1300+/- these clowns will say it's "overbought", "prone to weakness", "set to turn down", etc., etc.

Whatever happened to $1900/oz.?  Was THAT "overbought"?  Justified or unjustified?

I'd just like to ask them what they think fair value, based on real demand and supply, for physical bullion should be.

Thu, 05/29/2014 - 14:35 | 4806657 mogul rider
mogul rider's picture

The only thing missing is

"INCREDIBLE CHARTS SHOWING FANTASTIC INFO"

 

 

 

.....

Thu, 05/29/2014 - 14:32 | 4806644 mogul rider
mogul rider's picture

you can tell that the gold pump is dead. 4 years ago there would have been 6000 posts

 

now there's 9

 

Thu, 05/29/2014 - 14:36 | 4806623 mogul rider
mogul rider's picture

See?

Just like clockwork "da pump" starts around 1200 as it starts to sink.

No one is buyng and the stuff is gonna crap out and these pumpers have no one to sell to cause Johnny Clueless just loaded up AAPL and GOOG and NETFLIX and.....

It must be awfully lonely sitting there with bricks and bricks of this crap at 1900 and no one to sell to...

The great news is these were the pumpers who got caught. Imagine that....

I'll buy it from you for 600 bucks an oz

line up to the left with the silver fools

 

 

Mon, 06/02/2014 - 07:20 | 4816242 MeelionDollerBogus
MeelionDollerBogus's picture

You don't sell gold, you barter it for other solid goods. You trade paper but you never sell gold or silver for paper. Ever.

Thu, 05/29/2014 - 19:16 | 4807192 silverserfer
silverserfer's picture

mougul,  You sound like  the last bitter drunk dude at the bar after all the ladies have left and is just  staggering around ranting about things to the bartender who is evaluating wheather he can get u to buy another diring or thow you out on your ass. 

Thu, 05/29/2014 - 14:21 | 4806588 ATM
ATM's picture

Gold is real money with no counterparty and no CB devaluing it every day. 

Eventually all fiats die as governments race to devalue excesss debts. If you beleive we do not have excess debt then by all means do not move any fiat into real money.

However, if you beleive that fiats will die and that the entire world is awash in debt then you probably should own some physical gold. Better to have in your possession something that has been a store of wealth for  thousands of years than a chit of paper that will become worthless overnight.

Thu, 05/29/2014 - 14:31 | 4806639 mogul rider
mogul rider's picture

no actually cash is real money and gold is an insurance policy against zombies, nazi concentration camps, and marxists.

 

Get a job then you'll understand

Mon, 06/02/2014 - 07:22 | 4816245 MeelionDollerBogus
MeelionDollerBogus's picture

Paper is not real money which is why every paper money that ever was made failed. There's a few around now that haven't failed yet but they're going to very soon. What was paper money 2000 years ago? 5000? Even 200 years ago? None of that's money now is it? Today in 2014? None.

Get a job then you'll understand: you can't pay for anything with your job income with 100000000000% inflation. Your wage will buy a loaf of bread, a wage for an entire MONTH. One loaf of bread.

Thu, 05/29/2014 - 14:43 | 4806718 Aussiekiwi
Aussiekiwi's picture

Stock up on as many US dollars as you can get  mogul, hold as many as you can get for say 10 years, then I would like to have a discussion with you about the purchasing power of your dollars. Dollars are just made up, need to balance the budget, make another 1,000,000,000,000 up. In ten years time when you realize the purchasing power of your dollars is half it is now you might want to re-consider what money is.

Thu, 05/29/2014 - 14:16 | 4806564 Obama_4_Dictator
Obama_4_Dictator's picture

Been hearing this for years now....still waiting

Thu, 05/29/2014 - 14:08 | 4806510 disabledvet
disabledvet's picture

silver is much harder to mine for actually.

Thu, 05/29/2014 - 13:39 | 4806355 quasimodo
quasimodo's picture

This ranks right up there with King World News.

meh

Thu, 05/29/2014 - 14:21 | 4806585 BigJim
BigJim's picture

Rickards is usually much more sober in his predictions. Either he's decided it's better to talk like the sky-is-falling crowd... or he has reason to agree with them.

Thu, 05/29/2014 - 13:35 | 4806332 Minburi
Minburi's picture

Here in Bangkok, Thailand, a "friend" of mine went out to the gold shop about 5 hours ago to buy a little physical at the Mall Bangkapi.

He was turned away because there was a man in front of him in the shop with a big bag of baht notes buying up all of the 2.5-5 ounce bars of 96.5% pure gold.

Thu, 05/29/2014 - 14:42 | 4806309 Colonel Klink
Colonel Klink's picture

Please wake me when it begins to happen.

Only time I've seen a "massive shortage" where investors weren't able to get their metal was The Tulving Company!

That fucking crook deserves to be in a "bang you in the ass" prison!!

EDIT:  I see Tulving is still free and surfing ZH, much like Corzine.

Thu, 05/29/2014 - 15:01 | 4806835 DoChenRollingBearing
DoChenRollingBearing's picture

+ a big fat one for the Tulving still out news.

Tulving has a record of defrauding people.

Thu, 05/29/2014 - 15:40 | 4807012 Colonel Klink
Colonel Klink's picture

For those dipshits who are uninformed with the downvotes:

http://about.ag/tulving.htm

http://tulvingbankruptcy.com/

Read it and weep fuckers!

Thu, 05/29/2014 - 13:11 | 4806217 lasvegaspersona
lasvegaspersona's picture

With the small exception of a few trinkets and coins sold to the little people all gold trading is paper. the Forex market does a couple of hundred billion of XAU per day.

Any thought given to physical is a distraction.

Thu, 05/29/2014 - 15:33 | 4806291 Ham-bone
Ham-bone's picture

Hard to say re gold...but...

Silver price averaged $23.79 in '13...so far in '14, average is about $20.50...and you can see the slowing production and collapsing scrap supply at that price.  '14 will be much worse from a supply side. 

However, 50% of all silver demand is faily inelastic as it is industrial...and physical investor demand will likely set a new record in '14. 

Both '12 and '13 saw 7% and 11% supply deficits...'14 will be much larger.  At some point, this growing imbalannce may be a real physical problem.

Supply

 

2012

2013

Mine Production

792.3

819.6

Net Government Sales

7.4

7.9

Scrap

252.6

191.8

Net Hedging Supply

-47.0

-41.3

Total Supply

1,005.3

978.1

Demand

 

2012

2013

Jewelry

181.4

198.8

Coins & Bars

139.3

245.6

Silverware

44.6

50.0

Industrial Fabrication

589.1

586.6

…of which Electrical & Electronics

237.0

233.9

…of which Brazing Alloys & Solders

60.3

62.4

… of which Photography

54.4

50.4

… of which Other Industrial

237.4

240.0

Physical Demand

954.4

1,081.1

Physical Surplus/Deficit

51.0

-103.0

ETF Inventory Build

55.1

1.6

Exchange Inventory Build

62.2

8.8

Net Balance

-66.3

-113.3

Thu, 05/29/2014 - 13:07 | 4806198 lasvegaspersona
lasvegaspersona's picture

There is pleanty of (paper) gold to go around.

Thu, 05/29/2014 - 15:00 | 4806824 DoChenRollingBearing
DoChenRollingBearing's picture

Actually (and I suspect you know this), there is plenty of physical gold to go around as well.  What we have distorting this is too low a price (paper gold).

At some point, physical gold will be much more valuable.  It will be at a much higher price.

Thu, 05/29/2014 - 12:53 | 4806106 Puncher75
Puncher75's picture

I am buying now, will buy on dips later, and will buy until I can no longer because it isn't available.  That is my position. 

Thu, 05/29/2014 - 12:45 | 4806041 Ham-bone
Ham-bone's picture

I'm not a gold bug but...

great news…there is nothing but bad news for PM's…PM companies slashing capex, slashing exploration, high grading production, and inputs (esp. oil) just keep rising…and still losing money. Demand continues ramping vs. present and future supply being slashed and inventory's and scrap drawndown…if you love that which is unloved, there is no better news. The lower the prices go, the longer the price stays down is the greatest gift PM holders can ask for…and the greater the ultimate rebound.

From MW...

“In particular, the top 10 gold companies slashed capital expenditures by 25% to $16.6 billion, cut exploration expenditure by 33% to $1.2 billion, and decreased corporate costs by 8% to $1.2 billion, the Citi research said. The companies also prioritized higher grade ore in order to cut on-mine unit costs.

But despite these cost-cutting measures, Citi estimates that about 75% of the industry is still burning cash. “The fact that gold companies tend to burn cash in good or bad markets to us accentuates the industry’s poor fundamentals,” the analysts wrote.”

http://blogs.marketwatch.com/thetell/2014/05/29/gold-miners-are-stuck-in-a-cycle-of-value-destruction/?mod=MW_home_latest_news

Thu, 05/29/2014 - 14:24 | 4806608 Bay of Pigs
Bay of Pigs's picture

Its a shame people cannot connect the dots on this. This is the reason and evidence for the coming shortages.

Poor fundamentals for gold? LOL...thats pretty rich.

Thu, 05/29/2014 - 15:32 | 4806814 DoChenRollingBearing
DoChenRollingBearing's picture

Yes.  Patience is what we all need, as patience is not natural to the Bearing Guy.  My understanding is that the fundamentals for the miners continue to get worse.

Most gold miners currently run at a loss.

Buy the Au, not the miners.

Thu, 05/29/2014 - 12:31 | 4805979 Hongcha
Hongcha's picture

Breathless pumping.

Thu, 05/29/2014 - 12:58 | 4806139 Lord Koos
Lord Koos's picture

"Gold extended losses to a third straight day yesterday and is down over 3% in three sessions."

 

Means it must be time for some emergency propaganda...

Thu, 05/29/2014 - 17:38 | 4807517 RaceToTheBottom
RaceToTheBottom's picture

Breaking News:

"Goldman Sachs discovers Perpetual Motion Machine".  Details at 11

Thu, 05/29/2014 - 14:41 | 4806706 daveO
daveO's picture

It's seasonal weakness. The best time to buy will be within the month. The FED's not even finished tapering yet. There'll probably be more downside, or retest of lows, between now and the 6 month period after Tapering is complete(if the FED can hold out that long before triggering the next avalanche). Only if the FED completely tapers or starts raising rates (positive real rates) will gold stop rising for good. If banks are that healthy, then gold's finished. Measuring by Japan's 24 year bank bailout, we're only 5 years in. We're not Japan, either. We have reserve status to lose.  

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