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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PontifexMaximus's picture

as long as products such as SLV and GLD exist, this will be daily business. nothing to do with phys. but making the market in seconds going round.

ZeroAvatar's picture

The Dow bottom in March '09 was a 'once in a lifetime event' doncha know.  It can't happen again for generations. 


Bullshit.  It crashed, but no lessons were learned.  Fed printing like a runaway freight train has pumped it back to the levels it was prior to the crash.

   But, what has changed?  Banks are 'healed'?  Bullshit.  Economie's  running on all cylinders? Negatory.


Since nobody learned from the first lesson, there's going to be another one, soon.  After THIS crash, it truly will be generations before we see another one like it!

Jason T's picture

Armstrong bitchez, Armstrong!

JimRogers's picture

Gold was supplanted as the smart money's geopolitical and fiat hedge. 

ZH has been behind the curve for years regarding price movements of gold. Last good call ya'll made on gold was selling it after the Goldman kiss in Spring 2012.

jomama's picture

smart money = those who have advance warning of flagrant, illegal manipulation?

Mad Mohel's picture

This is a long game. All shorts must die!

El Hosel's picture

Gold stocks act like gold is going back to $32 an ounce.... The machines have it all worked out, gold is Evil doers stuff.

MrBoompi's picture

I think they've succeeded in totally divorcing the price of gold and silver from supply and demand in the physical markets.

youngman's picture

Yes there is the Casino gold and silver...a paper chip sort of....and the real gold and silver....a precious metal....the HFT´s play the paper chip market...so do the governments....just think if gold was $4,000 and ounce today....what would a central banker do....their fiat would be iffy

tyrone's picture

I reckon this rant was heard around the country the last day or two as all the rest of the people holding premium miner shares, howled about the beatdown for yet another "reason".

constantine's picture

I don't buy this margin call explanation... If hedgefunds only sell gold and silver when they need to raise money to cover their margin calls, then the paper price of gold will be $10 in five years.  I find it interesting that the day after HSBC buys an amount of physical silver, the price starts dropping again by a few percent. 


This space is massively manipulated.  My hard asset MLPs are crushing my precious metals investments over the last few months. 

Just bought some CVRR at 24.98 to cash in on the crack spread, which should remain high this year.  Carl Icahn and management hedged it wide for 2013 with this MLP that is guiding for around 20% distribution yield.  When we start to have serious inflation, I expect the spread between WTI and Brent to widen even more as exploding costs of transportation force further dependence on local economies but this may be a few years off.

Jim B's picture

HUI has lead gold down.....  Suspect HUI is being smashed to make gold shorts golden....

tawse57's picture

Is this why SLW (Silver Wheaton) is also down since Wednesday?

Caracalla's picture

I don't know why everyone is hung up on owning physical PMs.  I have over half of my portfolio invested in gold/silver/platinum ETFs and mining stocks and I see these as a safer and more liquid way to own PMs.  I don't have to worry about storage, security or transport and if the market dictates, I can liquidate or buy at the click of a mouse.

Bansters-in-my- feces's picture

Caracalla. The word "loser" comes to mind when i read your comment.


ClumsyBoatman's picture

And the same theory was applied by all those savvy investors who held MFGlobal paper. Turns out they had a little trouble liquidating at the click of a mouse, because the cunts stole their fucking money.


Wake up man.

BubbleBobble's picture

It seems gold is becoming less and less correlated to EURUSD, AUDUSD, (and even CNY and INR) and more correlated to USDJPY.    As the FXY goes, so does GLD these days....  (looking at a 3 year rolling 60 day correlation observed in the last 6 months)

Smuckers's picture

I'd like to make a 1,000 oz silver dildo and have it rammed up between Ben's pimply diseased, fiat-shit encrusted ass flaps.

Conax's picture

It's sad that so much investing experience can't be put to better use. In this 'market' nothing makes sense because there is a program to smash PMs and keep them that way- down.

It will continue until the phyzz is gone and everyone knows it.

Who said "You can't tell who's swimming naked until the tide goes out?"

Until it runs out, this despicable game continues.


DowTheorist's picture

Maybe the AAPL collateral calls was the last straw that broke the camel's back. However, gold and silver weakness was  technically visible since 12/20/2012 when the Dow theory flashed a primary bear market signal.


Such weakness also infected the miners. Thus, on Jan 23, the Dow Theory signaled a primary bear market for the gold and silver miners ETF.


Thus, AAPL collateral calls merely preyed upon something that was already weak.  Weakness in gold and silver has been pervasive since October 4, 2012.


ClumsyBoatman's picture

A lame, rotational shake out of the weak hands. PM investors really are pant-wetters sometimes.

Go dump your slave dollars into CUNTBOOK SHARES! or US TOILET PAPER BONDS!