February's Strange Divergence In Precious Metals

Tyler Durden's picture

February has been an odd month for precious metals to say the least. On-again, off-again fears of Bernanke removing the punchbowl (and endless sell-side strategists discussing Great Rotations and the end of the gold cycle) have led to prices for gold and silver sliding notably. However, while all this price deterioration has been going on, demand for physical gold and silver has surged - entirely disconnecting from January's apparent demand-to-price correlation - and Silver set to break all-time record demand highs for a February. We know who was buying in January, as Reuters reports Russia and Turkey were significantly adding to their bullion reserves; and while the divergence between demand and price coincided with Chinese New Year - leaving a large marginal buying nation on the sidelines - we suspect the drop is more to do with hedge fund reflexive selling - now caught offside. It seems at least one smart player was using lower prices to build their stack; manipulation or no manipulation.


Cumulative demand for Gold vs Spot price... (corrected)


Cumulative demand for Silver vs Spot price (corrected)


and this month looks set to see the biggest demand for silver (for a Feb) ever...


Source: Bloomberg and US Mint

(H/t Alex Gloy)

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SilverDoctors's picture

In other precious metals divergence news, according to a Cincinnati 5/3rd branch manager, a CIA agent confiscated 2 dozen gold krugerrands stored in a safety deposit box a Cincy man inherited from his grandfather, but left all fiat notes in the box.
Anecdotal account, but wouldn't be surprised that stealth federal gold confiscation has already begun


Alpo for Granny's picture

Ok they took the Gold and left the Fiat.

So it was either an Asian, a Russian, an Indian, or a Zerohedger.

Come on people..fess up.

The Juggernaut's picture

Corporations create backwardation... the CEO's and politicians picking up the physical.

nope-1004's picture

The warped minds at the COMEX think lower prices = less demand.  Absolute brilliance..... keep it up, please.


AllThatGlitters's picture

LOL - He should have just bought generic gold bars. He would have lost less.

AllThatGlitters's picture

Speaking of genric gold bars.  Anybody heard of OPM?  

On this page: http://www.pmbull.com/gold-price/

I keep thinking "Other People's Money" and can't help but think it is a new business founded by Corzine.

Stackers's picture

The papers futures markets need to be gutted and overhauled. The tail is officially wagging the dog.

Nothing To See Here's picture

You should always keep gold-plated tungsten bars in the places likely to be searched by federal governement agents.

Mr. Fix's picture

This is what the endgame looks like. There is now lawlessness on every conceivable level, the investing public is about to get royally screwed, those that planned ahead and stashed their gold, are getting it stolen by the government, those that invested in futures are getting their life savings stolen by the banks, only physical gold and silver in your own possession will survive what is  coming.

 To say the very least, it won't be much longer, charts like that don't lie. There is no possible way to sustain this price.

 My biggest fear, is that they are going to collapse the entire system long before they release the metals.

 There will be nowhere to run, and nowhere to hide. That appears to be the plan.

James_Cole's picture

Russia was buying from itself (as usual).

Gold demand was down yoy 2012-2011 by 4%.

Muppet of the Universe's picture

HEYHEYHEYHEY, every once in a while I come back and drop some knowledge:




If you are gonna own gold and silver, its best to do it under another name, or purchase from the general public / or a regular name brand.  Why you would want to own us mint gold and silver?  IDK, that certainly seems more trackable...



Now anyone with half a fucking brain, understands that what makes gold and silver money, is that they are gold and silver.  not that they have text written on them.  The text helps to assure their validity.


So, their being from the US mint DOES NOT ADD VALUE, unless you have a flood of fucking morons who will pay top dollar for us mint g&s.  So while all the idiots were buying expensive us mint g&s, all the smart people were either already long or long a cheap regular brand.


Muppet of the Universe's picture

but to be honest, there's a reason i stopped posting on zh, and its b/c it became overrun with idiots.

silverserfer's picture

the pile of dog shit controls the dog by remote control

DoChenRollingBearing's picture

@ AllThatGlitters

OPM = Ohio Precious Metals

OPM had an ad in the recent debut issue of American Hard Assets.  They apparently are (one of?) America's only COMEX good delivery suppliers.  Here is their website:


Tulving sells their 1 kg gold bars.

BaBaBouy's picture

Otherwise, They Would Just Name Themselves PAPERMAN Sacks ...

BaBaBouy's picture

SackMan Gold Wants Your GOLD!

We Hear All The Bullshit, Buy Sell, Butt They WANT Your GOLD, Period.

McMolotov's picture

Ok they took the Gold and left the Fiat.

Leave the gun. Take the cannoli.

akarc's picture

Kinda like they leave the guns but take the bullets.



redpill's picture

There are a lot of things wrong with that story.

Cognitive Dissonance's picture

Possibly the story teller's version of 'I lost all my Gold in a boating accident'?

fonzannoon's picture

Funny Simon black says keep it in a safety deposit box in a foreign country. So when you wake up in a cold sweat and think it's gone (every week) you have to jump a flight and take a week off work to check.

akak's picture

Folks, for the last time, it is a "safe deposit box", NOT a "safety deposit box"!  It is a box for making safe deposits, not a box for depositing safety!  (Unless somebody has figured out how to store safety in a box.)

That's as bad as hearing people talking about "PIN numbers" and "ATM machines" and "I could care less".


redpill's picture

Irregardless, we should literally touch basis and flush this list of annoying misuses out.

fonzannoon's picture

it is anything but a safe or safety deposit box so i don't exactly give a shit about getting it right.

TPTB_r_TBTF's picture

Yes, its all irregardless.  The point is mute.  And for all intensive purposes one should use more tack when addressing towards another poster.  Its the principle of there issues which effect the affects to.  But their all a climatic allusion too illicite a response from a reader.  Your welcome than.

Bananamerican's picture

you sure know how to loose your reeders

akak's picture

Their all lost anyways.

TheFourthStooge-ing's picture

Theirs always a first time.

VulpisVulpis's picture

Its not quiet what won wood think of as an example, for instantaneous, Michelangelo painting the Sixteenth Chapel, or Magellan circumventing the globe. Of coarse, extra century perception is, in today's world, the prodigal wolf in cheap clothing.

stacking12321's picture

vulpis is the prodigal wolf in cheap emperor's clothing!

Ctrl_P's picture

Gentlemen, well done.

A dam fine discourse regarding our mother's tongue. Funny enough, none in our family had they're mouthes washed out with soap for fowl language.




StychoKiller's picture

Time flies like an arrow, fruit flies like a banana!


bilbert's picture

Oh, man - after THAT blast I need to get myself orientated!!

As to Safe vs. Safety, I believe the point is mute.


glenlloyd's picture

Irregardless is not a word

medium giraffe's picture

What? Yes it.  I got taught it at University. And don't you not know that? Do a search.

nope-1004's picture

Tell that to the relatives of Scotia Mocatta.  And BTW.... you're richer than you think, you know.  Go buy something.


Cognitive Dissonance's picture

I don't need your stinking permission to buy stuff I don't need with money I don't have. :)

nope-1004's picture

lol, COMEX instituting price controls, now Scotiamocatta imposing quantity controls.  From the bottom of this page:

* Please note that there is a C$9500.00 purchase limit per 24 hour period (this limit is subject to change based on market volatility).


Al Huxley's picture

'However, there is no shortage, and we expect prices to be significantly lower this year, so really, why even bother buying...'

RockyRacoon's picture

That is suspiciously short of the $10K reporting requirement.  Must be a tangential message there.