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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Fri, 01/25/2013 - 16:03 | 3186296 Jonas Parker
Jonas Parker's picture

I thought the symbol was Bs

Fri, 01/25/2013 - 11:37 | 3185589 TahoeBilly2012
TahoeBilly2012's picture

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

Fri, 01/25/2013 - 11:37 | 3185590 TrumpXVI
TrumpXVI's picture

Yup.  I noticed that, too.

And posted that thought on a previous thread.

Fri, 01/25/2013 - 12:06 | 3185690 Water Is Wet
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.

Fri, 01/25/2013 - 12:16 | 3185715 Lordflin
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??

Fri, 01/25/2013 - 12:21 | 3185735 Water Is Wet
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?

Fri, 01/25/2013 - 14:01 | 3185966 juslen
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.

Fri, 01/25/2013 - 11:37 | 3185591 fonzannoon
fonzannoon's picture

Who needs apple when you can own a mining stock.

Fri, 01/25/2013 - 11:47 | 3185632 francis_sawyer
francis_sawyer's picture

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

Fri, 01/25/2013 - 12:38 | 3185720 Frozen IcQb
Frozen IcQb's picture

Mining pm stock prices are not contigent on consumer spending.

Fri, 01/25/2013 - 15:15 | 3186143 silverserfer
silverserfer's picture

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

Fri, 01/25/2013 - 11:37 | 3185592 NuckingFuts
NuckingFuts's picture

you can't eat AAPL's. 


Fri, 01/25/2013 - 11:37 | 3185593 jmcadg
jmcadg's picture

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


Fri, 01/25/2013 - 11:57 | 3185669 ghengis86
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!

Fri, 01/25/2013 - 12:20 | 3185723 ParkAveFlasher
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."

Fri, 01/25/2013 - 11:39 | 3185598 swissaustrian
swissaustrian's picture

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

Fri, 01/25/2013 - 11:41 | 3185605 gjp
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?

Fri, 01/25/2013 - 11:41 | 3185608 outamyeffinway
outamyeffinway's picture

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

Fri, 01/25/2013 - 11:42 | 3185609 ebworthen
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.

Fri, 01/25/2013 - 11:43 | 3185615 geewhiz190
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

Fri, 01/25/2013 - 12:20 | 3185729 Kreditanstalt
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

Fri, 01/25/2013 - 12:47 | 3185793 Frozen IcQb
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.

Fri, 01/25/2013 - 12:33 | 3185763 A Nanny Moose
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?

Fri, 01/25/2013 - 18:04 | 3186711 Panafrican Funk...
Panafrican Funktron Robot's picture

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

1.  Fucking everything.

Fri, 01/25/2013 - 11:43 | 3185616 Kreditanstalt
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"...

Fri, 01/25/2013 - 11:48 | 3185630 MFLTucson
MFLTucson's picture

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

Fri, 01/25/2013 - 11:47 | 3185638 Bansters-in-my-...
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.

Fri, 01/25/2013 - 11:48 | 3185640 Northeaster
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?

Fri, 01/25/2013 - 11:48 | 3185641 Glass Seagull
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?

Fri, 01/25/2013 - 11:50 | 3185643 caimen garou
caimen garou's picture

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

Fri, 01/25/2013 - 11:53 | 3185650 ebworthen
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!

Fri, 01/25/2013 - 11:51 | 3185651 CheapBastard
CheapBastard's picture

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


Fri, 01/25/2013 - 11:51 | 3185652 goldenbuddha454
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.

Fri, 01/25/2013 - 12:02 | 3185672 francis_sawyer
francis_sawyer's picture

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

Fri, 01/25/2013 - 11:54 | 3185658 Uncle Zuzu
Uncle Zuzu's picture

Dollar strength against the Yen isn't helping either.

Fri, 01/25/2013 - 11:59 | 3185667 steve from virginia
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'.



Fri, 01/25/2013 - 12:00 | 3185668 Kaiser Sousa
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....



Fri, 01/25/2013 - 12:05 | 3185685 Frank N. Beans
Frank N. Beans's picture

+1 for rant

Fri, 01/25/2013 - 11:58 | 3185671 Anglo Hondo
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...


Fri, 01/25/2013 - 12:00 | 3185674 azzhatter
azzhatter's picture

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

Fri, 01/25/2013 - 12:05 | 3185676 Canadian Dirtlump
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.

Fri, 01/25/2013 - 12:19 | 3185722 unrulian
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??

Fri, 01/25/2013 - 13:22 | 3185820 Canadian Dirtlump
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.

Fri, 01/25/2013 - 13:39 | 3185902 unrulian
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.

Fri, 01/25/2013 - 15:52 | 3186255 jimmytorpedo
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!

Fri, 01/25/2013 - 12:22 | 3185733 edifice
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.

Fri, 01/25/2013 - 12:38 | 3185776 fijisailor
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.

Fri, 01/25/2013 - 13:55 | 3185951 edifice
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.

Fri, 01/25/2013 - 15:47 | 3186240 Bay of Pigs
Bay of Pigs's picture

Tulving has plenty too.


Fri, 01/25/2013 - 17:04 | 3186486 KnightTakesKing
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.

Do NOT follow this link or you will be banned from the site!