What Happened To Precious Metals?

Tyler Durden's picture

Correlation may not be causation but it seems more than a few funds were using precious metals as collateral for their levered longs in AAPL...

Something changed on the evening of 1/23... (hint)...

as Gold's almost perfect correlation with stocks fell apart the moment AAPL reported... margin calls anyone?


...and for those wondering about Gold's relationship with stocks - today's equity push and gold weakness takes the ratio of the S&P 500-to-Gold perfectly to the average level post-Lehman...


Coincidence, perhaps?


Charts: Bloomberg

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Jonas Parker's picture

I thought the symbol was Bs

TahoeBilly2012's picture

The "silver apples" of the moon...(Yeats)

TrumpXVI's picture

Yup.  I noticed that, too.

And posted that thought on a previous thread.

Water Is Wet's picture

The sell-off in the metals can also be highly correlated to the House vote to suspend the debt ceiling.  FYI.

Lordflin's picture

Ah... Of course...Now I get it... Congress shows a complete lack of fiscal restraint... What could be more bearish for the metals?

Are you kidding??

Water Is Wet's picture

Not really.  I wear a little tinfoil.  I think any circumstance which should show weakness for the country's finances/the dollar/the bond market is met by the President's Working Group on financial markets.  Are you kidding?

juslen's picture

That fiscal restraint sends them the singal that the government is willing to continue monetizing debt which is bullish for the stock market. People think a new rally is in the works, so they are cashing out of paper gold and silver to jump on the bandwagon. People who own physical aren't selling, not unless they are in financial trouble or they inherited it. It's not that they are bearish on gold, it's that they are bullish on equities. Anyone who owns paper PM's was never bulish to begin with. They just wanted to be out of cash. People appear to be dumping bonds as well, which explains interst rates rising.

fonzannoon's picture

Who needs apple when you can own a mining stock.

francis_sawyer's picture

Newton would tell you that gravity works on both...

Frozen IcQb's picture

Mining pm stock prices are not contigent on consumer spending.

silverserfer's picture

who needs mining stock when you can own your own claim?

NuckingFuts's picture

you can't eat AAPL's. 


jmcadg's picture

Nah, bollocks, this is just the Gold Options expiry smackdown. Nothing new.


ghengis86's picture

We should always be thankful when they will take less of their paper Bernanke Bucks back for physical. PMs are the only true BTFD play out there.

Thanks Crapple longs, HP inkjets and all the other fiat fuckers!

ParkAveFlasher's picture

Last chance to dance?  Harvey Organ says the Swiss want theirs back from the Fed, too.

"He that sells what isn't his'n, must buy it back or go to pris'n."

swissaustrian's picture

Don't worry, op/ex is on Monday...

gjp's picture

so what's the collateral for the leveraged longs in every other manic (and much more massively overvalued) stock that the algos and hedge funds are all over?  e.g. AMZN, CRM, FB, LNKD, HD.  These stocks are all up 20% or more in a little more than a month and keep going up every day.  Where does it end and does it too somehow mean that cautious gold owners take as much of the pain as the criminal idiots fueling this rally?

outamyeffinway's picture

Makes more sense than anything else I've read (nothing).

ebworthen's picture

I was just the other day regretting not buying some Gold on the last dip down to $1,651.

Looks like it's time to buy some anti-AAPL (anti-FED, anti-Equity, anti-Risk Asset) GOLD.

geewhiz190's picture

the gold as collateral thesis may be correct, I'm more inclined to believe that the metals sense a rise in interest rates which increase carrying costs on an asset that pays nothing to offset that expense

Kreditanstalt's picture

The gold vs. AAPL correlation is as plain as the nose on your face.  Hint: why is the USD not moving even as precious metals "fall"?  And why is the "dash-for-trash" in stocks in full force again? - POMO

Frozen IcQb's picture

This exercise is the modern equivalent to executive order 1602 and will be deemed the largest transfer of wealth from the “have not” to the “have” in the history of humanity to date.

A Nanny Moose's picture

...an asset that pays nothing to offset that expense

I don't disagree with your general premise as a possible interest rate respons, however....

Doesn't this last part sort of assume that the gold just sits around, that GAAP are used, and that such hard assets not used to further lever up? Rehypothecation?

Panafrican Funktron Robot's picture

Some other stuff that blows up with a rise in interest rates: 

1.  Fucking everything.

Kreditanstalt's picture

And it's not even real gold.  It's a travesty these gamblers are allowed to play around with non-delivered precious metals "bets" and influence the "price"...

MFLTucson's picture

Fraud, deceit, government suppression, a corrupt banking cartel shorting naked.   Need any other reasons?

Bansters-in-my- feces's picture

Hey ,when you can get paid (-0.44%) for a one year lease rate on gold,well of coarse gold is going to get nailed. Today,ALL lease months are negative BIG TIME again for gold lease rates.


Ps....Fuck You Timmy and your ESF.

Criminal. fuck you.

Northeaster's picture

As Blackrock and JPM look to get approval for their copper ETF's, isn't it worth considering, especially in JPM's case, if they can control the market position on PM's at will, why are people upset at moves like this, including expiry days?

I understand the disconnect between physical and paper, and the divergence of collateral in existence, but I think this can be played out indefinitely, short of a call for ALL collateral.

Isn't it possible that the few with large positions could kill the price at will?

Glass Seagull's picture


Central banks liquidating gold reserves to raise cash to buy Apple to boost markets to boost perceptions to boost nominal growth to further boost perceptions to further boost markets?

caimen garou's picture

master O slammed the evil oil speculators but not a word about the pm speculators, what a heaping pile of_____________

ebworthen's picture

And now that the market has topped, and come back to 2008 levels, the ASSHOLES on the T.V. are saying:

"Now is the time to buy!"

"You'd be a fool to be in fixed income!"

"These mawkets are going nowhere but up!"

Jesus H. Christ.

Oh yeah, let me buy equities now, sure.  Then I can have a generational loss AGAIN and take it in the ass AGAIN.

Let's say I left the money in for the past 5, 10, 15, 20 years.

I'm not "earning" money or "making" money because it is trappped in the casino!

If I take it out, I get taxed out the ass because I'm not half-dead yet, or as a reward for "investing" in the American Kleptoligarchy.

Most people are HELD HOSTAGE to Wall Street, the greatest Cabal of blood-sucking societal parasites in all of history!

CheapBastard's picture

So what's next? Only way now is up?


goldenbuddha454's picture

That right shoulder on the S&P is forming daily and should it break 4% or more below the neckline, watch out below!  Two months tops before it all comes tumbling down IMO.

francis_sawyer's picture

So what's that?... Like ~ The 'Robert Conrad Eveready Battery' formation?...

Uncle Zuzu's picture

Dollar strength against the Yen isn't helping either.

steve from virginia's picture



Um ... maybe AAPL longs were leveraging their positions with AAPL stock.


That's generally how margin-for-sale-or-rent markets work.


AAPL is subject to AAPL margin call. Maybe producing 'goods' that don't do anything special but require components made around the world across 60 different countries isn't such a hot business plan.


One thing modern industrial enterprises are good at is making wasteful junk and pretending it's 'haute'.



Kaiser Sousa's picture


     WHAT HAPPENED??????????????

come on man, ya'll know exactly what the fuck happened....

the phony paper doesnt matter any more period!!!!!

until its n triple digits im just gonna ignore it so i wont fucking go out and kill a fucking banker and miss out on the day Silver does exactly what it has been trying to do now for 4 years....




have g nice day u guys..........

PS: send this out to loved ones and friends who understand where this is headed but get discouraged on days like today and weeks like this week...i view it cause it lifts my head and reminds me of our purpose...cheers all real money folks....



Anglo Hondo's picture

Cmon guys,  this is obvious.   Apple were gold-plating their iPhone 5s, and sales fell flat.  Lots more gold in the market as a consequence.

Next, they are trying platinum, watch the price point there.  It also has the added advantage of reducing iPhone emissions...


azzhatter's picture

I just counted my stacks again this morning. Shiny as ever

Canadian Dirtlump's picture

In other news, American Eagles are sold tou from the US mint and the Canadian mint is rationing maples. Same old fukkin annoying charade.

also imminent options expiry, as well as the world on the verge of going full retard - I would think we have more than a little timely meddling going on as well.

unrulian's picture

rationing?   i bought 10 slv maples and 1.5 gold maples last week...and still not shipped from silvergoldbull, hopefully shipped next week...wtf is going on??

Canadian Dirtlump's picture

Unrulian, The Mint apparently informed their primary dealers that they would be "allocating" maples in certain quantities to it's dealers. So things didn't dry up but apparently they are definitely tight. So of course the situation isn't depserate but this seems to show either a tight silver availablilty, OR a desire by the mints to simply limit their production. Either way it is telling.


You're locked in at least SBG will get you your metal. I picked up 20 trivium and 20 slave queen silver bullet silver shield coins from them today.


edit - let's not forget that junk silver has all but dried up and premiums have gone full retard.

unrulian's picture

Thanks....my local store has some junk...and a lot of pre64 dollars but no maples and no gold...i also picked up some slaves for fun.

jimmytorpedo's picture

no maples,

may I sugest some 100z NTR's

much more fun to stack

throw in some cushions from the couch and you can build a fort!

edifice's picture

There's plenty of metal out there, except for the silver AE vehicle. I will say, the premium over spot for them is a bit ridiculous, right now.

fijisailor's picture

Saying there is plenty og Ag out there in physical form is just an opinion unless you have at least a decent link to back that up.

edifice's picture

Just go to APMEX and try putting random 100oz and 1oz bars, 2013 Maple Leafs, and junk bags in your cart. Plenty out there.

KnightTakesKing's picture

NW Mint has 8 - 10 week delivery times. I ordered some SAEs in December and the estimated deliver date is mid-March.