Gold Soars After 200 DMA Breach, As ETFs Finally Resume Buying

Tyler Durden's picture




 

Recall what we said first thing this week when we remarked the latest surge in Chinese physical gold buying: "As we have said before: keep an eye on the "gold holdings" of the GLD and other US paper gold ETFs, whose drop in holdings for now has offset Chinese accumulation on the margin. Once GLD gold holdings solidly resume their climb higher, that will be the key upward gold price inflection point." Perhaps it is a testament to the power of paper of physical gold (if only for now), that while yes, we were correct, and gold is now indeed soaring, having finally broken above its 200 DMA as we reported yesterday, all it took was the predicted rebound in gold ETP holdings which have finally ended their liquidation cycle.

 

As Bloomberg reports "Assets in the SPDR Gold Trust expanded 1.2 percent to 806.35 metric tons, the highest since Dec. 20. The biggest ETP backed by gold, which shrank 41 percent last year, is up 1.2 percent this week, headed for a third weekly advance."

Sure enough, gold is now surging, and is back to levels last seen in November of 2013.

Of course, should the paper accumulation accelerate from here, with physical inventory vastly depleted thanks to relentless Chinese buying, the reflexive cycle may result in a dramatically rapid move higher from current levels as gold finally returns on its path ever higher.

 

As Silver also breaks above the crucial $21 level...

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Fri, 02/14/2014 - 09:07 | 4436003 GetZeeGold
GetZeeGold's picture

 

 

Barbarians at the gate!

Fri, 02/14/2014 - 09:11 | 4436011 Doubleguns
Doubleguns's picture

I thought they were relics. 

Fri, 02/14/2014 - 09:13 | 4436016 GetZeeGold
GetZeeGold's picture

 

 

You must be thinking of Chuck Munger.

Fri, 02/14/2014 - 09:19 | 4436032 JohnnyBriefcase
JohnnyBriefcase's picture

Nobody saw this coming.

Fri, 02/14/2014 - 09:26 | 4436053 No Soup For You
No Soup For You's picture

Typical day - not a single article on Yahoo Finance about Gold, not one.

They're really making it too easy - just fade the MSM, traditional financial gurus, and anyone in the .gov with a microphone.

Fri, 02/14/2014 - 09:30 | 4436061 HyBrasilian
HyBrasilian's picture

But wait! We'd better wait to see what Dennis Gartman says about this!

Fri, 02/14/2014 - 09:32 | 4436068 GetZeeGold
GetZeeGold's picture

 

 

CNBC is probably all over this.....those cats love their gold.

Fri, 02/14/2014 - 09:34 | 4436084 SoilMyselfRotten
SoilMyselfRotten's picture

Miners are kicking rectum

Fri, 02/14/2014 - 11:33 | 4436438 Dr.Vannostrand
Dr.Vannostrand's picture

Rectum? Damn near killed him!

Fri, 02/14/2014 - 11:41 | 4436460 BaBaBouy
BaBaBouy's picture

G..G..G.. GOLD B1tchez...

Fri, 02/14/2014 - 09:36 | 4436086 strannick
strannick's picture

And to all you idiots who actually buy paper gold etfs instead of gold, buy gold.

Fri, 02/14/2014 - 09:45 | 4436113 SoilMyselfRotten
SoilMyselfRotten's picture

Don't totally agree. One route could be using leveraged products(NUGT, JNUG) to take advantage of the big pop already underway and convert back into phyzz or phyzz related ETF's(PHYS, PSLV).

Fri, 02/14/2014 - 10:01 | 4436147 Help Is Not Coming
Help Is Not Coming's picture

True, you could do that and make good money. But given the increasing shortage of physical I'd be worried that it wouldn't be readily available when I cashed out and went to buy physical. At least not in the quantity and form that I wanted.

Fri, 02/14/2014 - 10:11 | 4436183 SoilMyselfRotten
SoilMyselfRotten's picture

For clarification, i already own phyzz. What i was referencing above was using these products in my self directed 401K to get max benefit. Not poo-pooing owning  phyzz whatsoever.

Fri, 02/14/2014 - 14:01 | 4436901 silverserfer
silverserfer's picture

ya but your feeding the beast. knock it off! don't be a paper monkey, you will get deservadlty burned eventualy.

Fri, 02/14/2014 - 10:21 | 4436213 tmosley
tmosley's picture

Ask the Mt. Goxers how much the leverage their exchange provided is worth now.

It will be the same in the paper PM market.

Fri, 02/14/2014 - 11:02 | 4436335 DoChenRollingBearing
DoChenRollingBearing's picture

It is important not to be discouraged when gold (paper gold) gets beaten down as it was in 2013.  Buy it if you don't already have "enough" (based on your income, circumstances and comfort level in how much gold you own).

Gold is wealth.  There is no better protection, and the upside is huge.

Gold looks like yet another one of those things that moves very slowly..., then it happens all at once (sort-of quoting Hemingway).  Don't miss out when gold blasts off, buy it and be patient.

Fri, 02/14/2014 - 09:56 | 4436138 caShOnlY
caShOnlY's picture

CNBC is probably all over this.....

They will blame the weather

 

Fri, 02/14/2014 - 10:46 | 4436286 HamRove
HamRove's picture

I'd say that was an accurate statement

U.S. manufacturing output unexpectedly fell in January and recorded its biggest drop since 2009 as cold weather disrupted production, the latest indication the economy got off to weak start this year.

http://www.cnbc.com/id/101417530

Fri, 02/14/2014 - 12:42 | 4436650 Urban Redneck
Urban Redneck's picture

It's sad when TPTB at ABC Media, LTD decide to nuke what was an clearly an outline of suspicious inconsistencies coupled with and what was also clearly identified as speculation as to one possible reason. Too much truthiness, too many lawyers, and too many dumb-ass sheeples, coupled with too many bought and paid for legislators, regulators, and State enforcers... makes for a dull world, but ZH is still worlds above CNBS and offers the best subscription price relative to content quality in the industry.

Do you own due diligence, the prospectus is only the starting point, and a document drafted by a lawyer is generally drafted to give his client the maximum flexibility to achieve his stated ends, hence the origin of loophole, the utilization of which must be inferred from the legalese construction of the facade.

STREETTRACKS(R) GOLD TRUST - AMENDMENT NO. 5 TO Form S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
http://www.sec.gov/Archives/edgar/data/1222333/000095013604004007/file00...
TRUST INDENTURE OF streetTRACKS(R) GOLD TRUST AGREEMENT
http://www.sec.gov/Archives/edgar/data/1222333/000095013604003776/file00...
STREETTRACKS(R) GOLD TRUST PARTICIPANT AGREEMENT
http://www.sec.gov/Archives/edgar/data/1222333/000095013604003776/file00...
SPONSSTREETTRACKS(R) GOLD TRUST SPONSOR PAYMENT AND REIMBURSEMENT AGREEMENT
http://www.sec.gov/Archives/edgar/data/1222333/000095013604003776/file00...
STREETTRACKS(R) GOLD TRUST ALLOCATED BULLION ACCOUNT AGREEMENT
http://www.sec.gov/Archives/edgar/data/1222333/000095013604003776/file00...
STREETTRACKS(R) GOLD TRUST UNALLOCATED BULLION ACCOUNT AGREEMENT
http://www.sec.gov/Archives/edgar/data/1222333/000095013604003776/file00...
STREETTRACKS(R) GOLD TRUST DEPOSITORY AGREEMENT
http://www.sec.gov/Archives/edgar/data/1222333/000095013604003776/file00...

http://www.sec.gov/Archives/edgar/data/1222333/000095013604003776/000095...
http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001222333...

Fri, 02/14/2014 - 14:04 | 4436915 silverserfer
silverserfer's picture

TPTB @ ABC media = NEW TYLER DURDEN. 

Very shitty. 

Fri, 02/14/2014 - 11:00 | 4436240 Cacete de Ouro
Cacete de Ouro's picture

Gartman said this yesterday ... trying to back-peddle his idiotic timing strategy

Dennis Gartman: "I'm Quietly Bullish on Gold"

http://goldnews.bullionvault.com/gartman-gold-021320143

Fri, 02/14/2014 - 17:53 | 4437761 StychoKiller
StychoKiller's picture

Well, best be hiring me some illegals @ $5/hr to dig up some nuggets...

Fri, 02/14/2014 - 09:28 | 4436060 GrinandBearit
GrinandBearit's picture

Short term:  You're correct.

Long term:  I saw this coming years ago.

TPTB will do their best to knock it back down... today, tomorrow, who knows.

Mon, 02/17/2014 - 21:42 | 4446443 MeelionDollerBogus
MeelionDollerBogus's picture

filed under hoocouldanode

Fri, 02/14/2014 - 09:29 | 4436044 Sudden Debt
Sudden Debt's picture

Relics at 1320 a ounce. FOR ALL I CARE THEY CAN CALL IT CRAP! But it's still 1320 a ounce and rising and I love it :)

Fri, 02/14/2014 - 09:33 | 4436079 ParkAveFlasher
ParkAveFlasher's picture

We wants the precious a thousand per ounce,

To fill up our boatses before any bounce.

Fri, 02/14/2014 - 11:16 | 4436376 DoChenRollingBearing
DoChenRollingBearing's picture

Au is very cheap at $1320

Ag is very cheap at $21

Both will still be cheap at $2000 (gold) and $30 (silver).  Just be patient.  The huge price increases will happen in good time.

Fri, 02/14/2014 - 12:41 | 4436386 douglas
douglas's picture

Reflecting on how significant up-days scare me more, here's a (slightly modified) post of mine from a down day in metals...

If at this stage you are not COMPLETELY convinced that PM's are highly manipulated to maintain control of a colapsing fiat monetary system then you probably have no business owning any precious metals besides personal jewelry - I would recommend that at this point you stop reading here, close out Zero Hedge and turn on MSNBC.  

If on the other hand you are awake and can see that not only are we waist-deep in manipulation but ever-nearer to a Global Monetary Colapse, then you should be COMPLETELY convinced that it's only a question of time before TPTB lose the ability to continue said manipulation.  If this is the case you should like me be rooting for the price of PM's to go down so you can acquire more. Rather than complaining about the manipulation, be thankful for it and continue to increase your holdings. After all, the day TPTB finally lose control, the world will become a much sadder place and comforts which we now enjoy will go away for the majority of the people of this world - in fact I suspect there will be significant loss of life...  Widespread wars could affect even those of us that have prepared for the worst.

Heres something to think about (coming from someone who is well over 60%-In PM´s, with physical holdings as large as 99% of ZH´ers) ... The best part of all this is that even if we´re wrong about the current economic situation (which all evidence proves we are not) your life will be no worse for having a large horde of Gold and Silver, on top of that you'll sleep much better...  Note:  I hope its my paranoid instinct, but this current move up scares me more than any recent one, I´ve got a bad feeling that this could be ¨THE ONE¨...

Fri, 02/14/2014 - 09:11 | 4436015 unrulian
Fri, 02/14/2014 - 09:17 | 4436021 BandGap
BandGap's picture

Silver is rocking even harder.

I want "soaring" to mean 10+%. But I'm greedy that way.

When does rock (gold) finally beat paper?

Fri, 02/14/2014 - 09:24 | 4436052 Sudden Debt
Sudden Debt's picture

2% A DAY KEEPS THE DOCTOR AWAY!!

nice saying...

to bad i... I NEED MY PRESCRIPTIONS!! WHOEHAHAHAHAHAHAHA!!

Fri, 02/14/2014 - 09:30 | 4436064 HyBrasilian
HyBrasilian's picture

fonestar to change his BTC rhetoric to Ag in 5...4...3...2... [he'll have to pay for BAND CAMP this summer from his Ag stack instead of BTC's]...

Fri, 02/14/2014 - 09:33 | 4436080 natronic
natronic's picture

BTC is sick.....pretty soon it will be $0.25 per whatever can't even call em coins.

Fri, 02/14/2014 - 10:08 | 4436143 Prisoners_dilemna
Prisoners_dilemna's picture

TPTB can't contol BTC.

TPTB can control GLD. and gold.

They've capitulated and realised it is far better to allow the sheepp to hold rocks than unicorn farts that kill with one whif.

 

And the dinosaurs here at ZH cheer for their masters.

You guys are sick.

 

I've been in phyzz since 2009 when I was 25 or 26. Fuck this GLD shit. It's just another aspect of the casino.

"The price of gold may be affected by the sale of gold by ETFs or ... and recovery may be limited, even in the event of fraud, to the market value of the gold at the time." GLD Prospectus

 

 

Fri, 02/14/2014 - 10:31 | 4436191 superflex
superflex's picture
Silk Road 2 loses $2.7m in bitcoins in alleged hack

http://www.bbc.co.uk/news/technology-26187725

No one can control BTC except...

Bwahahahahahaha

Fri, 02/14/2014 - 10:18 | 4436200 quasimodo
quasimodo's picture

"TPTB can't contol BTC."

Your 100% sure you want to stand by that statement?

Fri, 02/14/2014 - 11:42 | 4436305 HyBrasilian
HyBrasilian's picture

  "TPTB can't contol BTC..."

TPTB can control GLD. and gold.

~~~

I'll illustrate 2 ways in which BTC can be controlled wherever & whenever...

 

#1 ~ See Above ^^^ [bitcoin hacks]... While BTC geeks like to think they live under an invincibility cloak... There are 2 things that are compelling:

a) Since NOBODY really knows who conjured up bitcoin, there is really no way of knowing if it isn't an NSA/TPTB operation to begin with... Argue all you want that it's not possible, but you're only fooling yourselves & being disingenuous in the process if you do so... There have already been several 'hacks' which have been performed [which is a HUGE chink in the 'invincibility' armor/argument]... As for 'TRUSTING THE SOURCE'... Bwaahahaahaah!... Schiff, Warburg, Kuhn & Loeb, Rothschild's & all the others who 'CREATED' the FED, did so under the guise that it would 'STABILIZE' the markets & the eCONomy... What's incredible TO ME is that all the BTC 'dinosaurs' have fallen for the same old gag...

b) Notwithstanding (a)... All TBTB really needs to do is 'DISCREDIT'... Which means, before it ever takes off & goes mainstream [which it has NOT ~ despite all the publicity ~ & which is represented by the fact that 12.5 million bitcoins mined X the wildly fluctuating value can, at BEST, = only $10 billion notional dollars versus the 1 quadrillion notional value of world 'assets' [derivative based or not]]...

 

#2 I've already presented a method [here on ZH], where it would EASILY be possible for any central bank [or even a simple high market cap entity like Google or Apple], to hijack the entire BTC market... When you're talking about something as small as $10 billion [whereby ~ by resident 'experts' here like fonestar have POSITED & ADMITTED that 80+% of it is 'inert']... ANYONE with cash [printed or not], could set up millions of small 'dummy account' wallets & thereby have the ability to use these in a HFT manner to flood the exchanges & manipulate the price [up or down]... This idea is NO DIFFERENT [in practice] than 'naked paper contracts' which are used as leveraged to CONTROL commodity markets... NO DIFFERENT AT ALL... Call the idea 'microspopic options' [if you will]... The ruse is that instead of using LEVERAGE to overwhelm [by establishing 100x times accounts & printing all the money needed to execute them]... You go the other way... Because the # of BTC's is, apparently FINITE... You systematically establish millions upon millions of individual SMALL wallets... Hell ~ You even PRINT your own counterfeit currency to fund those 'little' accounts, [it would cost only 3 days of QE to buy the ENTIRE BTC market]... When you have effectively 'cornered' the market, you can make the PRICE sing and dance any way you want [because you start TRADING with yourself]...

Upon examination ~ the ABOVE ^^^ hypothesis would be an 'exquisite' hypothetical explanation of the strange BTC price SURGE [last winter], then, collapse, THEN, surge... & now ~ selloff... It ABSOLUTELY fits with a concentrated 'periodocity' of EXACTLY what I described...

Fri, 02/14/2014 - 12:09 | 4436540 fonestar
fonestar's picture

"TPTB can't contol BTC."

Your 100% sure you want to stand by that statement?

 

fonestar is willing to stand by that statement.

Fri, 02/14/2014 - 14:11 | 4436943 silverserfer
silverserfer's picture

stop snorting bat guano fonestar, I know that shit's cheap and the buzz is epic, but there will come a day when you will need to get a real job panhandling or something.

Fri, 02/14/2014 - 11:24 | 4436397 RaceToTheBottom
RaceToTheBottom's picture

When money is free, the cost of buying anything is also free.

That applies to BTC as well.

>>>>>  Then selling becomes free as well.

>>>>> Things like selling huge amounts of GLD at market make no difference.

I cannot be any clearer than that...

Mon, 02/17/2014 - 21:35 | 4446423 MeelionDollerBogus
MeelionDollerBogus's picture

wrong: they do control it and just DID show you that control by stopping bank accounts connected to BTC and by smashing the price selling bitcoin THEY HELD, AND by setting regulations & punishments to stop adaoption of BTC.
That's 100% control.
BTC = bow & worship your slavemasters = dollar
no difference. ONLY TANGIBLE HARD ATOMIC GOODS like silver, gold, etc., can break it. Bitcoin is never that.

Fri, 02/14/2014 - 09:33 | 4436070 thatthingcanfly
thatthingcanfly's picture

I've got a fever, and the only prescription... is MOAR COWBELL!

Fri, 02/14/2014 - 09:33 | 4436072 Oh regional Indian
Oh regional Indian's picture

Silver...like bandgap said. Smile inducing but not whoop inducing yet.

ori

Fri, 02/14/2014 - 09:47 | 4436107 Sudden Debt
Sudden Debt's picture

150 calls on 20$ okt. 2014 help... :)

Fri, 02/14/2014 - 10:05 | 4436152 tip e. canoe
tip e. canoe's picture

hypothetical, but serious question for silverbugs:

at what per oz price would you be willing to value 2 1964 Kennedy Half Dollars for an hour's of one's time for helping with another's garden/farm/homestead (friendly favors not included)?

best answer is one that considers both from the giving side and the receiving side.

Fri, 02/14/2014 - 10:20 | 4436208 Scoobywan
Scoobywan's picture

Melt is about 8 bucks per.

But it already in a nice sized coin, I wouldnt take less than 15 for any of my Kennedy Half(s). And realistically I don't trade metal for anything, but I trade other shit for metal all the time.

Fri, 02/14/2014 - 10:40 | 4436268 tip e. canoe
tip e. canoe's picture

so you see silver primarily as a store of value then?

Fri, 02/14/2014 - 12:11 | 4436539 Scoobywan
Scoobywan's picture

Currently....

When paper money fails it'll be used to acquire things and services I need which if I've done my due diligence won't be much.

This is assuming I'll be kissing my gas, cable, power bills good-bye. Property taxes will be collected by force or not at all, and mortgages will be forgotten. Pretty scary shit for most people, but thats when silver stops being a store of value for me but a means for survival.

Fri, 02/14/2014 - 14:29 | 4437033 tip e. canoe
tip e. canoe's picture

thanks for the honest answer.   always smart to have a SHTF stash, just wondering if there is a place for "junk" as a practical means of exchange in more of a slow burn scenario.   and at what USD price?    

maybe, when it's valued more like 1 KHD = 1 hour of 1's time, i'll ask the question again.

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