• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

Gold Retraces GDP Shock On Correlation Extravaganza

Tyler Durden's picture




 

It would appear this morning's spending and income data (and the fact that US equity markets opened down) was enough for a de-correlated explosion in risk-assets in general. Gold has retraced its post-GDP spike (and Silver is close) but with the USD weaker (thanks to risk-lever of all risk-levers EURUSD) Stocks are surging and bonds tracking along as 10Y breaks back above 2.000% once again. A nicely engineered stop-run to ES 1500 and 10Y 2.00% or real money 'rotation' - you decide... The anti-correlation is typically unsustainable - so who will win today? Stocks lower or gold/oil higher?

Gold and Silver roundtrip from yesterday's GDP...

 

and risk-assets in general decouple today... or was it all enegineered to get ES to run stops at 1500?

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Thu, 01/31/2013 - 11:21 | 3202384 Say What Again
Say What Again's picture

BULLISH

There is no way the Bernank will allow RUT, INDU, etc. to be down for two days in a row.  Therefore, we can conclude that we should buy early today and sell on the close.
That was easy.

Thu, 01/31/2013 - 11:29 | 3202421 Alpo for Granny
Alpo for Granny's picture

 Before Earl's passing (God rest his soul) he told me that when that young man Benny prints money, that I will be safe because of all the shiny coins in the attic. The bald young man is printing an awful lot of money, but every morning, right after my tea, the line on the silver and gold chart always seems to go down and to the right very abruptly. Granny is getting up there in age now and I am no doubt vitamin deficient from my daily staple of Alpo and my faculties are not what they used to be. Can someone help granny out and explain this? Was Earl (God rest his soul) wrong?

Thu, 01/31/2013 - 11:34 | 3202441 Dr. Engali
Dr. Engali's picture

They can hammer the paper price of gold all they want with their unlimited fiat. Eventually lack of supply will break gold free from the paper price. So no Earl wasn't wrong. Since Earl was a stacker maybe you can upgrade to Fancy Feast or something.

Thu, 01/31/2013 - 11:34 | 3202450 Alpo for Granny
Alpo for Granny's picture

Thank you good doctor. And just to let you know, my hip feels great now and I will look into Fancy Feast.

Thu, 01/31/2013 - 12:16 | 3202645 flacon
flacon's picture

I hope these markets burn, muther fucker! I've had just about enough of this "shitty deal" system that I can take! Boy that S&P was one "SHTITTY DEAL"!

Thu, 01/31/2013 - 12:46 | 3202792 trav777
trav777's picture

at least we know you silverbugz don't beat your wives every day silver doesn't go up because there's no freakin way you could ever get a woman

Thu, 01/31/2013 - 14:19 | 3203143 strannick
strannick's picture

This coming froming the guy who the other day complained about women being too frosty??

Im going to tell you something your XBox buddies shouldve told you long ago. Your bad luck with the ladies isnt cause ''their too frosty''.

Thu, 01/31/2013 - 16:18 | 3203682 akak
akak's picture

Trav, your irrational hatred of silver, and silver owners, is beyond Nadleresque --- it is positively pathological.

Now shut the fuck up and go back to your usual shtick: hatin' on the niggers and all your other "racial inferiors", and working on your designs for new and improved gas chambers and crematoria for the racial "Final Solution" of your dreams.

Thu, 01/31/2013 - 11:53 | 3202498 Pegasus Muse
Pegasus Muse's picture

Granny might want to listen to this.  William Kaye, Founder, Vice Chairman and Senior Managing Director of the Pacific Alliance Group of Companies. 

A most enlightening interview on Gold and Silver in which he says, based on all the paper gold and silver shenanigans, has the potential for "making the biggest short squeeze in any financial instrument in the history of mankind":

http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2013/1/30_William_Kaye.html 

Grant Williams@ttmygh tweeted this morning, "A great interview with a VERY smart guy: Bill Kaye on King World News..."

Thu, 01/31/2013 - 14:22 | 3203152 Pegasus Muse
Pegasus Muse's picture

Another good piece: 

 

Germany Repatriates Its Gold

Mises Daily:Thursday, January 31, 2013 by

---snip ---

In a world flooded by debt, gold is the ultimate safe haven. Central bankers know this better than most people, even if they have to pretend in their day job that such concerns are irrelevant. Does it mean the Eurozone is approaching its end game? I don't think so, but the protagonists are no longer playing softball.”

---snip---

Peter Klein, from the University of Missouri, notes that “Gold is the ultimate long-term inflation hedge, and holding physical gold is more secure than holding legal title to gold stored elsewhere. We don’t know if the Bundesbank’s move is purely symbolic or reflects real concerns, but it’s an important signal nonetheless!” Klein also notes, “Equally interesting is why the US government is not returning the gold all at once, but in stages. Is the US holding fractional reserves?”

Professor Philipp Bagus, a native German teaching at the University of Rey Juan Carlos in Spain, and the author of The Tragedy of the Euro, was also curious: “It is startling that they (the shipments of gold) will last until 2020 in order to bring the gold back. This reinforces the suspicions that the Fed and other central banks have lent gold to bullion banks who have in turn sold the gold depressing its price. To unwind these contracts it will take some time without upsetting the gold market. The Fed needs time to get its gold back. For all we know, it may not be there physically. That is probably the reason it will take until 2020.

On a more fundamental point, Bagus noted, “Of course, this is great news since by repatriating German gold, the importance of gold for monetary purposes is stressed, and it becomes available for any possible monetary reform Germany may want to do during the Euro crisis.”

http://mises.org/daily/6351/Germany-Repatriates-Its-Gold 

Thu, 01/31/2013 - 11:59 | 3202567 malikai
malikai's picture

I don't know who they are, but the action in gold/silver was completely expected around these parts.

http://blog.quantsig.net/2013/01/31/goldsilver-continued/

Thu, 01/31/2013 - 12:20 | 3202674 sessinpo
sessinpo's picture

As a question of intellectual debate. If globally things are economically bad, and perhaps to get worse, what will be the industrial demand for gold and silver such as electronics, etc? What will be the demand for jewelry?

 

The same can be asked of oil, btw, which doesn't surprise me that oil is still below $100/barrel and gold is below $2000/oz. I understand holding PM's as a store of value as I hold American Eagles and Maple Leafs as part of my portfolio. Yea, I wish PMs were much higher, but I don't honestly project them to soar until the fiat is killed for a time.

 

So, outside the "money" component of PMs, until fiat is killed, what is the supply situation of PMs in a downturning global economy?

Thu, 01/31/2013 - 13:10 | 3202887 lasvegaspersona
lasvegaspersona's picture

Supply and demand has little to do with the price of gold. The supply of paper is infinite and the supply of physical is always getting bigger. There is minimal industrial use, but gold is hoarded (it's best use) and so on the physical side the price (of currency) determines whether one sells or continues to hoard.

Jewelry is essentially the same as investment in gold (ie in Indian it gets classified as wearable and it is but the reason for buying is not the same as in the USA.)

Thu, 01/31/2013 - 15:54 | 3203596 sessinpo
sessinpo's picture

lasvegaspersona:  "Supply and demand has little to do with the price of gold. The supply of paper is infinite and the supply of physical is always getting bigger. There is minimal industrial use, but gold is hoarded (it's best use) and so on the physical side the price (of currency) determines whether one sells or continues to hoard."

 

Comment: Nice try. You didn't answer my question, you danced around it. We were talking physical, which means supply and demand have everything to do with it.

Look at my questions. Why do think I specifically mentioned PHYSICAL use of PMs such is electronics (gold is a good conductor of electricity) or jewelry? Those are PHYSICAL uses in which a company would have to aqcuire PHYSICAL assets of PMs, not paper

 

Supply and Demand ALWAYS is relevant, Just because the supply of gold MAY be getting bigger, that doesn't mean the the supply is rising faster then the demand. And by the way, I am asking these basic assinine questions on purpose to may YOU and others think. I have been in finances and yearss (well over a decade).

 

I have consistently presented logical debate on why PMs will only rise moderately relative to other goods until fiat is killed. My main thesis, that NO ONE, including your post, has refuted or presented a logical counter argument, is this:

As long as debts are denominated in fiat. PMs, will only rise moderately relative to other markets. Why, as aonther thread TD posted that supported my position, he suggest gold was being sold to meet certain margin calls. In other words, to settle debts, domestically and abroad, people, financial institutions, and even governmnents, would sell their gold to settle debts priced in fiat currency. And that is also part of the supply/demand equation so yes, supply/demand is always important. Supply/demand is basic 101 OF ANY MARKET despite it being rare of infinite.

 

 

Thu, 01/31/2013 - 19:24 | 3204352 sessinpo
sessinpo's picture

Once again.

No reply. Just down arrows.

No logical, reasoned response to my post. You down arrow people are are a part of the liberal 50% of America that is destroying this great nation. So I ask, for that person ( or persons as more down arrows could appear), present yourself. Stop being cowardly.  Refute my post and what I said, what I asked. Debate me.

 

I await.

Thu, 01/31/2013 - 21:56 | 3204785 RockyRacoon
RockyRacoon's picture

Some of us have already learned this lesson.

Thu, 01/31/2013 - 22:03 | 3204802 akak
akak's picture

 

For those who are touchy about down arrows, just start every post with a quote (you know, the " mark on the tool bar above the box in which you write your comments), and arrowing on your comment will be precluded.  It doesn't even have to be a word --- you can 'quote' an empty line, as I did here.  That might force some of those who just downarrow and run to actually respond with something more than a click of one button.

Notice that this post cannot be up or down-arrowed.

Thu, 01/31/2013 - 14:16 | 3203141 Blizzard_Esq
Blizzard_Esq's picture

"Eventually lack of supply will break gold free from the paper price."

Oh and the US government just won't seize all the gold then to keep the card game afloat a bit longer to keep supply up? By the way Germany didn't waste any time in 1930's annexing and then invading its neighbors for gold when they started to need it. Would be interesting to see the US Army return to Mexico City or invade Canada a second time. 

Thu, 01/31/2013 - 11:33 | 3202442 Alpo for Granny
Alpo for Granny's picture

Oh and one more thing. I read an article on the AARP website about the mint having record sales of their pretty silver eagle coins. Does the mint selling out of all of their shiny coins like Earl (God rest his soul) collected cause the line to go down and to the right?

Thu, 01/31/2013 - 11:59 | 3202556 Al Huxley
Al Huxley's picture

I believe it has to do with the sun rising in NY.  I'm not exactly sure of the science behind it.

Thu, 01/31/2013 - 12:29 | 3202696 sessinpo
sessinpo's picture

Just about every year, you can buy coins from the US Mint for about a 50% markup ($30 silver coin sold for over $45) that you can get later on from various precious dealers such as Apex at just a $2 dollars over spot. US Mint uses various methods such as "non-circulated" coins to "enhance" their product price. But let's face it, most of us are buying for content value, the metal. These Eagles are not rare collectors coins.

 

I would be happier paying $32 for a 2011 silver coin instead of $45 for a 2013 Eagle just minted. It has the same amount of silver (content).

Thu, 01/31/2013 - 19:40 | 3204388 sessinpo
sessinpo's picture

LOL. This is a perfect example of what we "real" Americans face today.

 

I presented a  non partisan post. I presented logical and factual information that MOST see. I presented data that would save YOU money. Yet, I get a down arrow, from a liberal (and probably anti American liberal/progressive/liberal).

 

This should be a lesson for the rest of you real American conservative/libertarians of how damaging the liberals are. And how they have infiltrated and indoctrinated many citizens. I go after ANYBODY on CONTENT, not personal attacks unless they first attack me personally. We have a shitload of liberal trolls now on this board that provide no content, no debate and no substance in their posts.

 

Anyway, as of substance. I think that the US Mint data is not a good data to follow. Anyone of knowledge wouldn't buy US mint coinage if their intent is money preservation. Here is why. The US Eagles are not of rare quality. You are paying a 50% markup for nothing as I presented in my last post on this thread.

 

It is 6:36 pm Eastern time US. I openly challenge that person to present themselves and explain why that person gave me a down arrow for the rest of us to see.

 

 

Thu, 01/31/2013 - 22:03 | 3204803 RockyRacoon
RockyRacoon's picture

Not into windmills, thank you for your invitation all the same.

Thu, 01/31/2013 - 11:19 | 3202391 buzzsaw99
buzzsaw99's picture

gold going nowhere fast

Thu, 01/31/2013 - 11:27 | 3202419 kliguy38
kliguy38's picture

Precisely the message that needs to be sent to maintain CONtrolfidence, and funny we are getting such a lengthy triangle in MANY indices leading into tomorrow......things that go hmmmmmmmmm. Something needs to give.

Thu, 01/31/2013 - 11:32 | 3202440 buzzsaw99
buzzsaw99's picture

One of the problems with gold is that many holders of "paper gold" are not true believers like many at zh. All they care about is a quick flip for a fast buck.

Thu, 01/31/2013 - 11:55 | 3202540 kliguy38
kliguy38's picture

Brilliant plan by the boyz....find a liquidity sponge to soak the suckers while they can control the price and shuffle the chairs on the Titanic. The peeps high five one another on a dry deck not realizing the play. Suddenly the water swirls around their ankles and they look down......too late.......sharks win again.....and that is exactly what will play out. Everyone thinks they can get out of the boat "in time".

Thu, 01/31/2013 - 12:48 | 3202796 trav777
trav777's picture

losers with a persecution complex...bet you're a silverbug too eh?

Thu, 01/31/2013 - 22:06 | 3204817 akak
akak's picture

Why do you hate silver so much, Trav?

I mean, it IS the white metal, after all.

Fri, 02/01/2013 - 02:37 | 3205344 ItchyBeard
ItchyBeard's picture

Jeeeeeesus

Thu, 01/31/2013 - 12:09 | 3202605 Meat Hammer
Meat Hammer's picture

You may have heard this a time or two...

 

BTFD!!!!

Thu, 01/31/2013 - 11:33 | 3202439 Sophist Economicus
Sophist Economicus's picture

Thank God!  One cannot ever have enough at these prices....

Thu, 01/31/2013 - 12:05 | 3202590 I need more cowbell
I need more cowbell's picture

Oh yes it is; it's going east.

Thu, 01/31/2013 - 13:13 | 3202894 lasvegaspersona
lasvegaspersona's picture

buzz

mine is not

Thu, 01/31/2013 - 14:36 | 3203256 AgAu_man
AgAu_man's picture

Here is where Kitco's Jon Nadler ("Needler" in German or Yiddish), needles the gold bugs:  http://www.kitco.com/ind/Nadler/20130125.html

"To top it all off, the perception that the much-feared debt “bomb” and attendant US credit rating downgrade have been (at the very least temporarily) defused, is adding to the woes of the doomsayers out there. Such apprehensions have chipped away at gold’s safe-haven premium really since last fall; it’s just that the perma-bulls have not acknowledged it; then, or now"

What can one say?  Except be pissed at him and the saying:  "Don't fight The Fed!"  They outgun and outlast just anyone.  Sad, but true.  Saying FTFF (Fuck The Fucking Fuckers!) feels good at the moment, but is not what we nee.  We need a GAME-CHANGER.  There needs to be a veritable stampede for PM hard bullion.  Else, everybody is either 'wanking', shilling or 'selling'.  Well, don't just frikkin up/down-arrow.  SAY something (constructive & actionable).

 

 

Thu, 01/31/2013 - 22:09 | 3204823 akak
akak's picture

 

SAY something (constructive & actionable)

Hang Jon Nadler!

Thu, 01/31/2013 - 11:25 | 3202404 Orly
Orly's picture

OT but hilarious...posted by Seer on another thread:

Get your own predator drone now!  They're really affordable!

http://www.amazon.com/Maisto-Fresh-Metal-Tailwinds-Endurance/product-reviews/B004JFMOGK/ref=cm_cr_dp_see_all_btm?ie=UTF8&showViewpoints=1&sortBy=bySubmissionDateDescending

Gotta read the comment section.

:D

Thu, 01/31/2013 - 11:50 | 3202510 Alpo for Granny
Alpo for Granny's picture

Thanks Orly. ZH should throw this up as comic relief tomorrow. Hilarious.

Thu, 01/31/2013 - 16:02 | 3203636 TN Jed
TN Jed's picture

Doesn't everyone have their own drone by now?  I love mine!

(not my videos but these give you an idea)

http://youtu.be/86qO2WKjMHI

http://youtu.be/AobDcQwueZ4

 

Thu, 01/31/2013 - 11:26 | 3202405 Sudden Debt
Sudden Debt's picture

no shit... gold has ruined the rest of my day...

Thu, 01/31/2013 - 11:30 | 3202428 Thomas
Thomas's picture

The metals are certainly doing their best to demoralize their supporters.

Thu, 01/31/2013 - 11:37 | 3202457 Nothing To See Here
Nothing To See Here's picture

For one I totally saw it coming. Been a few times that metals soar after FED annoncements only to waterfall down moments later. Just stay the course, ignore their tactics, know you are right to hold.

Thu, 01/31/2013 - 11:31 | 3202436 kliguy38
kliguy38's picture

I was in the PM market in the late 70s and it was never this extreme, but it was manipulated then by several players that at least provided some play for the little guys. When gold was eventually crushed in 81 it was thougt the miners would follow but the counterintuitive superspike once again caught the retail peeps out of the trade and the real players raked in their chips. Patience on this trade or just store Alpo my friend

Thu, 01/31/2013 - 11:42 | 3202482 Sudden Debt
Sudden Debt's picture

well, now it's like there's a camera behind my back and every time I buy options, the hole market is going the other way....

If you wanne be a billionaire, just come sit next to me and to the oposite of everything I do....

 

Thu, 01/31/2013 - 12:00 | 3202570 kliguy38
kliguy38's picture

No.......you're pre-programed and if you are leveraged or if you are in a closing window (options) then you are an even easier target for them unless you can think like them an most peeps cannot get that dark. Mitigate your potential damage by eliminating leverage and time.....they use these against you. Use your only advantage in the paper market which is your ability to sit tight on your trade. You also don't have their disadvantage and that is they need liquidity. Stay out of their traps...AAPL AMZN etc......they're killing fields.

Thu, 01/31/2013 - 12:10 | 3202613 Meat Hammer
Meat Hammer's picture

I think I'll go see the coin man for his 1% off sale on Kruggerands.

Thu, 01/31/2013 - 11:26 | 3202408 Lewshine
Lewshine's picture

By "RETRACE" you mean; Hammered once again by the central planners who want to make the stock market your only venue of invesment...Then, I agree.

Thu, 01/31/2013 - 11:25 | 3202409 Al Huxley
Al Huxley's picture

I now set my watch by the time of day the price of gold crashes.  If those fuckers in NY ever get stuck in traffic or call in sick it's going to mess my schedule up pretty bad.

 

Good to see it's not rigged at all, though.

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