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Eric Sprott On The "Golden Opportunity"

Tyler Durden's picture


Submitted by Eric Sprott of Sprott Asset Management

Don't Miss this Golden Opportunity

Gold declined from $1,900 in September 2011 to $1,188 on December, 19, 2013. Silver declined from $48.50 to $18.50 over approximately the same time frame. Precious metal equities declined by approximately 70% over this period.1 This move down played out exactly as was scripted. However, let us review the causes of this decline. We start out with the most important words ever written by a regulator: BaFin, the German equivalent of the SEC, said that precious metals prices were manipulated worse than LIBOR.2 What are we to read into this, particularly the word “worse”? Obviously, worse than LIBOR could not mean that more money was fraudulently earned since the LIBOR markets are many orders of magnitude larger than the precious metals markets. Then it must mean that the egregiousness of the pricing dysfunction was materially larger in precious metals.

The chronology goes as follows:

  • November 27, 2013, BaFin announces an inquiry into precious metals manipulation on the London Bullion Market Association (LBMA).3
  • Mid-December 2013, BaFin is reported to have seized documents from Deutsche Bank (DB).4
  • January 17, 2014, BaFin announces that the manipulation is “worse” than LIBOR.1 On the same day, DB also announces its withdrawal from the LBMA gold and silver price fixings.5

Let’s imagine how this played out. Our guess is that BaFin, having reviewed DB’s trading practices, reported their findings to DB’s senior management. They are horrified at the findings (cough, cough) and decide a retreat from LBMA is required. This seems logical to us.

Let’s now discuss why bank traders get involved in price manipulation. In the most simple of all analyses, they don’t do it for the bank, but they do it to fraudulently receive higher bonuses. Otherwise, why take such personal risk? If we assume that manipulation of precious metal prices was the reality, as a bonus seeking trader, when do you want the price to be the most favorable? The answer is simple: by year-end and mid-year periods, when bonuses are calculated.

Figure 1: Gold Price Bottoms at Mid-Year and Year-End
Source: Bloomberg, Sprott Asset Management LP

If we look at what happened in 2013, the two lowest gold prices were on June 27th and December 19th (Figure 1).

Perfect! And perfectly obvious…

Now let’s deal with some reality in the real physical gold market in 2013. As we discussed in 2013, the supply/demand data suggests to us that physical demand was overwhelmingly greater than mine supply (Figure 2. See Markets at a Glance January 2014, October 2013, July 2013, May 2013 and February 2013 for more information on the shortage of physical gold).

Figure 2: World Gold Supply and Demand 2013, in Tonnes6

It is obvious to us that precious metals markets were manipulated in 2013. It is also obvious that demand far exceeded annual mine supply. Now let’s analyze what should happen, going forward, with these revelations. If gold prices are back on their long-term trend, ex-manipulation, a linear progression of the gold chart from 2000 to 2014 would suggest a price of $2,100 now (62% higher than the current $1,300 level) and $2,400 by year-end (Figure 3).

Figure 3: Gold Price is far from its Long-Term Linear Trend
Source: Bloomberg and Sprott Estimates

Figure 4 shows estimates of cash flow per share (CFPS) for different sized gold miners under gold prices at both $1,300 and a $2,000 per ounce. As you will note, the potential returns vary from 180% for the lumbering seniors to 420% for some of the smaller producers.

Figure 4: Upside Scenarios For Different Types of Gold Miners
Assumed Cash Flow multiple: 10. All Figures in US dollars. Estimates are for FY2014.
Source: Sprott Estimates and RBC Capital Markets. For illustrative purposes only. Eric Sprott and/or Sprott Asset Management Funds beneficially (directly or indirectly) may own in excess of 1% of one or more classes of the issued and outstanding securities of the above issuer). 

Are these gains likely to materialize? So far in 2014, the senior miners are up 27%1, while the junior miners are up 42%7. Not a bad year. But, we are only seven weeks into the year.

Gold and silver have broken their downtrends and have surpassed their 200 day moving averages. The golden cross (i.e. the fifty day rising through the 200 day) still awaits, but it is most likely to happen within weeks.

When was the last time that an obvious reversal of an anomalous, yet explicable market dysfunction allowed you to imagine that you could expect multi-hundred per cent returns over a short time period?

Again, don’t miss this Golden Opportunity!


1 NYSE Arca Gold Miners Index.
6 GFMS data comes from the WGC’s “Gold Demand Trends” publications for 2013 Q1, Q2, Q3 & Q4. Chinese mine supply comes from the China Gold Association for 2013. Russian mine supply comes from the Union of Gold Producers and is up to 2013 Q4. Chinese data is taken from the Hong Kong Census and Statistics Department and covers the period Jan.-Dec. 2013. Changes in Central Bank gold reserves are taken from the IMF’s International Financial Statistics, as published on the World Gold Council’s website for 2013 Q1, Q2, Q3 & Q4 and include all international organizations as well as all central banks. Net imports for Thailand, Turkey and India come from the UN Comtrade database and include gold coins, scrap, powder, jewellery and other items made of gold. The data is for 2013. ETFs data comes from GFMS as well.
7 MV Junior Gold Miners Index.

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Thu, 02/27/2014 - 22:26 | 4487373 Oldwood
Oldwood's picture

I wish I gave a damn.

Thu, 02/27/2014 - 22:28 | 4487378 kliguy38
kliguy38's picture

you will.....but it'll be too late for u

Thu, 02/27/2014 - 22:29 | 4487384 BlackChicken
BlackChicken's picture

Rather have one coin in hand than 2-bits in the bush.

Thu, 02/27/2014 - 22:31 | 4487388 dryam
dryam's picture

There's logic like that displayed by Sprott, which I happen to agree with.

However, there's also logic such as 0's & 1's which allows computers to function.  Those computers allow for electronic option exchanges which set the price of gold.  As long as those exchanges are functioning (as in being manipulated) I'm not sure if we'll ever see Sprott's logic come to fruition.  Diversify and hedge accordingly.

Thu, 02/27/2014 - 22:35 | 4487400 BlackChicken
BlackChicken's picture

We all know the exchanges, regulators, bankers, and politicians are full of shit; that's why I have always loved metals.

One day these bastards will have their emperor is naked moment, then the real party begins. 1's and 0's can only lie so long before reality seeps out.

Thu, 02/27/2014 - 23:15 | 4487518 Scarlett
Scarlett's picture

"LIBOR markets are many orders of magnitude larger than the precious metals markets."  


Not for long

Thu, 02/27/2014 - 23:47 | 4487606 James_Cole
James_Cole's picture

Haven't seen a sprott ad on here in a while, he's finally come out of his shame-induced hiding?

So, perseus is his latest pump and dump? Duly noted. 

Fri, 02/28/2014 - 00:05 | 4487650 boogerbently
boogerbently's picture

Obama lied. Any repercussions ???

Banks caused recession, govt numbers for GDP, inflation, unemployment......(yada yada) all BS.

Bribery called lobbying, insider (congressional) trading deemed legal, HFT's manipulate stock market price manipulated !


Being identified WON'T change their behavior.


Fri, 02/28/2014 - 02:30 | 4487877 SilverIsKing
SilverIsKing's picture

"Precious Metals markets are not manipulated"

Says Trader Dan Norcini.

Fri, 02/28/2014 - 03:50 | 4487936 stacking12321
stacking12321's picture

tekoa da silva's recent interview of eric sprott on youtube (7 min):


Fri, 02/28/2014 - 10:48 | 4488785 LMAOLORI
LMAOLORI's picture




Right you are booger even Bloombergs jumped on the manipulation bandwagen now but big deal nothing will change the banks (payed) donated plenty of money to obama to see to that.


Gold Fix Study Shows Signs of Decade of Bank Manipulation

Thu, 02/27/2014 - 23:53 | 4487602 BLOTTO
BLOTTO's picture

In July of 1924, Drs. Miethe and Stammreich announced that they had changed mercury into gold in a high-tension mercury vapor lamp. The experiment produced $1 of gold at a cost of $60,000, equivalent to over $2 million (gold then sold for $330/lb). Miethe used a potential of 170 volts applied for 20-200 hours. The lamp consumed 400-2,000 watts. A minimum potential difference is necessary. The yield of gold was minute: 0.1-0.01 mg. The mercury and the electrodes were analyzed and determined to be free of gold before the experiments. Miethe was not able to attempt to prove the production of a or b rays, hydrogen or helium. (22)


Anyway, their go some people trying to act like gods again...nice try.

Thu, 02/27/2014 - 23:52 | 4487615 James_Cole
James_Cole's picture


"So um how we achieve this is like.. nano tech and micro and like quantum and then the processor and like electrostatics, differential geometry, facebook and then boom cost effective. We've checked with experts, it's all legit."

Thu, 02/27/2014 - 23:55 | 4487626 BLOTTO
BLOTTO's picture

K, lets wait for the 1st kilo they produce, watch the video of this type of production process...and we can all discuss.

Fri, 02/28/2014 - 00:15 | 4487663 James_Cole
James_Cole's picture

The bigger question is how long are they going to hold onto the cold fusion bullshit until they give it up? Another 30 yrs? Every few years they manage to absorb current things into their revised hypotheses. 

Fri, 02/28/2014 - 01:30 | 4487815 MeelionDollerBogus
MeelionDollerBogus's picture

so... long tungsten,

and Fort Knox is now fully stocked, equivalent, because it's only a matter of shoving the tungsten bars into the magic masheen?

Sat, 03/01/2014 - 12:46 | 4493572 mkucstars
mkucstars's picture

Gold that glows... wonderful

Thu, 02/27/2014 - 22:35 | 4487403 RevRex
RevRex's picture

! have 110k sitting here, do I pay of my house  or buy more silver? Decisions decisions....

Thu, 02/27/2014 - 22:44 | 4487433 thamnosma
thamnosma's picture

3rd choice -- send it to me.

Thu, 02/27/2014 - 22:46 | 4487440 Thadeous
Thadeous's picture

Being debt free is the obvious smart choice. Investing at all should come secondary.

Thu, 02/27/2014 - 23:11 | 4487506 johnQpublic
johnQpublic's picture

no such thing as a debt free house

Fri, 02/28/2014 - 04:42 | 4487956 Rock On Roger
Rock On Roger's picture

A house is a liability.

A home is an asset.


Stack On

Fri, 02/28/2014 - 05:14 | 4487971 samcontrol
samcontrol's picture

can't believe nobody told you to diversify..

40k on paying down the house.
40k in silver... 10k boating accident, 10k pslv, 10k SLW , 5 k at home, 5k aGQ option.
10k the Bernanke product with a 10 percent stop loss SVXY.
10 k stash at home or usefull shit... very wide range ..weapons,fine wine, 25 year old plus whiskey, camping shit, simple home improvement (plant a tomato)..a cool mag lite or check if needed..ect ect...people here could give you a long list.

so we have 10k left ...
SPEND IT NOW, or yourself wife and/or kids..
holidays, a bimbo, some un usefull electronic bs toy..,,whatever makes you
tic.we only live once.

good luck

Fri, 02/28/2014 - 07:31 | 4488040 negative rates
negative rates's picture

All those things are fine, but right now all I need is an education.

Thu, 02/27/2014 - 22:49 | 4487447 Kreditanstalt
Kreditanstalt's picture

Sell the debtload/house and RENT.  THEN buy PMs.

Thu, 02/27/2014 - 22:55 | 4487456 LetThemEatRand
LetThemEatRand's picture

Pay off the house.  Rent from yourself (pay yourself what you would pay in rent to someone else).  Use the rent money to buy PMs. In a few years you'll have both a house and a bunch of PMs, but leave some for repairs and taxes.  And learn how to fix shit in your house if you don't know already.

Thu, 02/27/2014 - 22:56 | 4487464 D-liverSil-ver
D-liverSil-ver's picture

If you have mortgage under 4% interest, I would buy silver.

Thu, 02/27/2014 - 23:06 | 4487496 RevRex
RevRex's picture

My mortgage is 3.5%. Payment is $664, about half of what I could rent the place for. I could only rent a dump for $664 around here.

The house was appraised at 165K when I bought it. About 180K now

I got the deal for 110K, and had to borrow 116K to cover everything including closing costs. I have paid off 6K so 110K would pay it off clear.

My other option is list it this spring, slum  in a rental till the RE market bottoms, then buy another place.

Thu, 02/27/2014 - 23:31 | 4487561 zaphod
zaphod's picture

Absolutely do not pay off the mortgage. A mortgage is the only form of leverage against devaluing paper money us serfs are allowed. Bankers get to borrow millions/billions at fractions of a percent, you get 100K at 3.5%

That does not mean to take the money you would have used to pay it off and buy crap. Invest that money in PMs or whatever you want. It essentially means that you are getting a zero interest loan (in real terms) to invest in real assets. Buy a basket of domestic natural gas MLPs, they will pay you around 6-7% with growing distributions. That will cover your mortage payment and in time lead to extra over your mortage that you can further invest. Buy PMs with that extra. In 30 years you'll have a lot of PMs. 

Thu, 02/27/2014 - 23:01 | 4487470 FredFlintstone
FredFlintstone's picture

Take out a HELOC and buy PMs with it. The run away to a pacific island.

PS: I agree with LTER. My house is paid for.

Fri, 02/28/2014 - 00:39 | 4487705 Braverdave
Braverdave's picture

Do both.

Stack precious and pay off debt. Pay off debt and stack precious.

I live in Canada. My mortgage is a fixed rate at 3.29 at my local credit union and one year to go until it is time to renew. I expect more or less the same rate this time next year.

Most (just a little over half but I like saying "most" of it belongs to me) of my home is paid for now. I make bi-weekly payments and pay an extra 20% each payment that goes directly against the principal (they will let me adjust it down if I want/need). And I have a tax-free savings account where I am piling up a little cash to make a lump sum payment too.

And I stack. Just like my Dad taught me even if he didnt think he was teaching me with his silver coin collection. When canadian silver coinage stopped being silver he already had a collection of really old stuff from 1910s and 1920s and continued to save a fair bit of 50s/60's junk silver.  He gifted me the collection a few years ago and I have bought junk silver coins too at various times. And bullion in both silver and gold. Dipped into that savings account mentioned above to grab a bit more of each a few times last year :)

Thu, 02/27/2014 - 23:07 | 4487499 Charles Nelson ...
Charles Nelson Reilly's picture

I would personally sit on dry powder right now & read ZH everyday to be weeks in front of the markets next move.

Fri, 02/28/2014 - 01:23 | 4487801 MeelionDollerBogus
MeelionDollerBogus's picture

I don't think you can actually pay off your house.

You can't own a thing if it can be taken from you if you don't pay rent on it, and those property taxes are rent, for which non-payment leads to confiscation, and you can't just pick up the house and leave with it like gold or silver. Where you are, really, do you believe collapse will pass you by, or that you can endure it? If you have any doubt then paying off the house isn't nearly as smart as unloading it and renting for real (without the collateral on the line) instead of renting while pretending you're an owner (with massive debt & confiscation at-will, not your will).

I can't decide for you but I hope my commentary is a helpful reminder of the facts for anyone reading this.

Fri, 02/28/2014 - 01:02 | 4487759 Donewidit
Donewidit's picture

They say that there's nothing like a gold rush, i don't think we've seen a gold rush yet.

It will have 100+ days soon. Just look at the dow/gold ratio long term chart, speaks volumes.

Fri, 02/28/2014 - 01:21 | 4487796 MeelionDollerBogus
MeelionDollerBogus's picture

hm, actually right down to it the 1's and 0's are for your benefit, the logic of the computer itself is which voltage, high or low, or ground, it will use to trigger switches or run a signal on a loop like for a latch.

It's not options or computers that set the price of gold: it's humans who believe gold is better value in someone else's hands than in their own. No matter the tools, if that collective belief inverted the entire system would be upside down. A computer is just a tool. A human who thinks gold or silver are more useful OUT of their hands... is a fucking tool.

Thu, 02/27/2014 - 23:02 | 4487484 Oldwood
Oldwood's picture

The whole damn thing is manipulated. Gold, sure! stocks hell yes! Interest,housing prices, fuel, food, lumber, everything. There is no real market for much of anything. If they can't control supply they will control the demand through propaganda and nonstop marketing. Why in the fuck are people still trying to game this shit and then bitching about how manipulated it is. STOP FUCKING GAMBLING! STOP FEEDING THE MONSTER! Do we really think we are going to beat JPM or Goldman and the multitude of others who run the casinos? People like Sprot are gaming this mess to maximize THEIR income, not yours. They are all the same. Trying to use our fear and greed to make money. Wouldn't it be grand to invest your money into something that actually did something, made something, provided something rather than setting on a shelf. If all of the money that has been invested into the stock markets had been invested in small and midsized business, how many jobs would have been created?

Fri, 02/28/2014 - 03:52 | 4487937 Doña K
Doña K's picture

Stay nimble my friends.

Save save save and invest on things that are divisible, weigh little, defy decay, are portable, are non-taxable, can not be destroyed by fire and are easily bought and sold.

If cash is part of your stash. keep it in a good safe and wrap it in welding blankets which can withstand 2200 degrees temp.


Fri, 02/28/2014 - 05:18 | 4487973 samcontrol
samcontrol's picture


Que harías con un Million ?

Fri, 02/28/2014 - 07:36 | 4488042 negative rates
negative rates's picture


Fri, 02/28/2014 - 08:04 | 4488072 Doña K
Doña K's picture

Whatever meets the specs, makes you feel good and is neither illegal immoral or fattening and as long as it does not hurt anybody.

Thu, 02/27/2014 - 22:34 | 4487386 Leveraged Algorithm
Leveraged Algorithm's picture

It may go so bad that nothing will have value except your pantry.

Thu, 02/27/2014 - 22:35 | 4487398 fonzannoon
fonzannoon's picture

So this dude who was preaching, and of course selling, PM's right up until and through the smash down says it played out exactly as scripted (but he did not have a copy)...because it's clearly manipulated.... except of course when he was screaming to buy it, that was was a free market..

The he concludes by using technical analyis in a clearly manipulated market to proclaim why it will go higher...


Thu, 02/27/2014 - 22:49 | 4487427 Grande Tetons
Grande Tetons's picture

Fonz, are a smart guy...quite creative to boot. After 2 years...and still...a bag on your head avatar....what gives? 

Maybe, something like this....just a thought.


Edit. Looks like the down arrow gang from Oshkosh is looking for a brawl. 

Thu, 02/27/2014 - 22:56 | 4487462 fonzannoon
fonzannoon's picture

I don't know man. i was fonzanoon but got put in timeout for a bit. it's longer than 2 years and feels like 20.

as for the bag, it just seems to fit. i always say i'm going to get a tatoo but can't think of anything i really want. i guess it's sort of the same idea.

Thu, 02/27/2014 - 23:02 | 4487476 Grande Tetons
Grande Tetons's picture

Get the Tyson tattoo! That takes balls the size of Jupiter. 

Have a good one. Out. 

Fri, 02/28/2014 - 02:09 | 4487859 Colonel Klink
Colonel Klink's picture

And the intelligence like the vacuum of space.

Fri, 02/28/2014 - 04:06 | 4487945 Doña K
Doña K's picture

<<< So this dude who was preaching, and of course selling, PM's right up until and through the smash down says it played out exactly as scripted (but he did not have a copy)...because it's clearly manipulated.... except of course when he was screaming to buy it, that was was a free market.. >>>

What if... One of the manipulators calls a big player like this dude and says: "look we are going to push PM's down to level x and we are going re-buy on Thursday the 15th of next month."

You are now that dude. What do you do? You call the FBI? You talk to the press? You call O'Bummer's top cop? Or you dump your silver and rebuy?

Human quadrillema and all of us know the answer. 



Fri, 02/28/2014 - 07:38 | 4488044 negative rates
negative rates's picture

Nope, I check the books, look at the numbers, and wait for the clock.

Thu, 02/27/2014 - 22:35 | 4487399 thtmnbhndthecrtn
thtmnbhndthecrtn's picture

down-manipulate MORE!

Thu, 02/27/2014 - 22:35 | 4487404 Sashko89
Sashko89's picture

So is he saying that there are going to be no more "price smackdowns of gold in terms of dollars"? and the bull run shall begin? Or is he just stating that it was manipulated? 



Thu, 02/27/2014 - 22:39 | 4487422 fonzannoon
fonzannoon's picture

yes all of that. and anything else it does that he does not forsee will happen exactly as scripted.

Thu, 02/27/2014 - 22:40 | 4487423 Oldwood
Oldwood's picture

Nothing is certain but death and taxes, and death taxes. The system is fucked. Worrying about the price of gold is a waste of time. Our problem is a huge government that will do whatever the fuck they want and a stack of gold will not save us. It may make us a target. At least lead can be returned with some velocity.

Thu, 02/27/2014 - 22:47 | 4487438 Kreditanstalt
Kreditanstalt's picture

I have trouble believing miners are up 27% and 42% this year.  WHAT miners?

With some of my mining stocks down @90% since 2011 - in one case from $0.25 a share to as low as $0.015, 42% doesn't help much.  And I'm not alone.

Thu, 02/27/2014 - 23:23 | 4487536 GoldenDonuts
GoldenDonuts's picture

By miners he means miners not TSX or OTC stock plays.

Thu, 02/27/2014 - 23:45 | 4487604 MeelionDollerBogus
MeelionDollerBogus's picture

meh. If you picked good entry times for slw & fnv you'd be happy, it wasn't that long ago. I saw 'em and thought of FNV calls but I saw agq calls and decided they moved so well together there's no point in having both, just the one with bigger payout. Now agq reverse split, though agq1 tickers are there, I see a much bigger payout in fiat for uslv.

Of course there's no arguing against fiat failure: any paper gains must be converted to tangibles immediately. Food, ammo, water, silver, gold, bugout vehicle, you name it. Leaving it as cash would simply be foolish.

If I was that dumb I probably would have bought ponzicoin.

Fri, 02/28/2014 - 05:20 | 4487974 samcontrol
samcontrol's picture

EXK, pZG, PAAS just examples.

won't even start with slw and agq options...


Fri, 02/28/2014 - 07:40 | 4488046 negative rates
negative rates's picture

Yea but we can end one there.

Thu, 02/27/2014 - 22:50 | 4487449 rosiescenario
rosiescenario's picture

" BaFin, the German equivalent of the SEC, said that precious metals prices were manipulated worse than LIBOR"


Of course as Eric mentioned, the LIBOR rigging has a far, far greater impact as so many contracts peg their interest rates to LIBOR....the damaging effects of the LIBOR rigging are impossible to put a number to.


It is simply unbelievable that the very banks bailed out by our government using our money engaged in totally illegal practices and that they have been allowed to continue to do so and that no one has been jailed. Clearly our legal system has been taken over by the TBTF banks.


AND lets add to that, our IRS is being used to harass the political opposition....just as in any good banana republic.


I think every elected official has given their tacit approval to what has and is transpiring in D.C., perhaps with 2 or 3 exceptions, though Paul is the only names that springs to mind.


It is so unfortunate that all of the TBTF banks are allowed to continue in business and that their management is not in prison.


Thu, 02/27/2014 - 22:52 | 4487453 krispkritter
krispkritter's picture

Speaking of 'miners', was going to poke some fun at the BitcoinGox issue and thought this vid never made it.  Just found it online and YT dumped the corrected version as a dupe so this was the early attempt with errors: Hitler's Bitcoins are 'Mt.Goxed'

Thu, 02/27/2014 - 22:52 | 4487454 Robot Traders Mom
Robot Traders Mom's picture

I wish Sprott would come out and say: "Listen, I'm done breaking down the technicals on this bullshit. The market is fraud. The only price that matters is the price you can buy physical at."

Thu, 02/27/2014 - 23:23 | 4487538 quasimodo
quasimodo's picture

No shit. The whole thing reminds me of the folks that made real money during the gold rush, the ones selling the pick axes and ancillary supplies. 

Fri, 02/28/2014 - 00:22 | 4487680 kito
kito's picture

I wish sprott would come out and confess "I'm an opportunistic lying scumbag who is buying Mexican bonds in furtherance of an american recovery"

Fri, 02/28/2014 - 00:36 | 4487711 Robot Traders Mom
Robot Traders Mom's picture

What has he lied about?

Fri, 02/28/2014 - 00:46 | 4487730 kito
kito's picture

The two faced shit has been preaching implosion of the banking system, the implosion of America, and has been buying Mexican bonds because he preaches an American recovery. Any other questions??. Read the link.

Thu, 02/27/2014 - 22:55 | 4487459 Big Brother
Big Brother's picture;range=my;c...

GDX appears as though it's bounced off long-term support.


Thu, 02/27/2014 - 22:58 | 4487468 devo
devo's picture

Gold mining stocks during high inflation are going to be incredible.

Thu, 02/27/2014 - 23:21 | 4487530 Hongcha
Hongcha's picture

Reloaded USLV today near the close.

Thu, 02/27/2014 - 23:42 | 4487598 MeelionDollerBogus
MeelionDollerBogus's picture

want moar now. Have to wait till payday. While I always keep my eye on this stuff, especially now USLV, I never forget to stack the food & water first, to reasonable excess, before even stacking phyz. Soon, though, very soon.

Thu, 02/27/2014 - 23:24 | 4487541 trip kitchen
trip kitchen's picture

What will probably break the backs of the cartels will be the trickle up fundamentals, where the price action and premiums paid at street level sales ( LCSs, smaller online suppliers) will start reverberating upward and show up on the CONex etc. as exercised deliveries. As long as the street level premiums stay rangebound, the manipulators have free will to do as they please.

It may take a broad hyperinflationary event where 20% price increases per month occur simultaneously in several major economies to finally get the collective John Q Sixpack to realize he better get what gold (and silver) he can, at whatever the fuck price he can, as quick as he can, cost be damned.

I know these private sales are relatively small amounts compared to the contract sizes on the futures markets and the CONex, however if a street level PM vacuum is deep enough and lasts long enough, it may be the tail that will finally wag this old flea bitten mutt.

Thu, 02/27/2014 - 23:34 | 4487570 POpatriot
POpatriot's picture

Ok Dumb question...why are Hong Kong net imports and Hong Kong net exports additive for demand?

Thu, 02/27/2014 - 23:49 | 4487613 Diablo
Diablo's picture

LOL, this douchebag fucker has been MIA for over a year. now that gold/silver are up he pops his ugly fucking head up to spout his usual bullshit. fuck you you dumb scam artist fucker.


Thu, 02/27/2014 - 23:56 | 4487629 qazwsx
qazwsx's picture


Fri, 02/28/2014 - 00:01 | 4487641 Cacete de Ouro
Cacete de Ouro's picture

What's a Canadian billionaire to do?

I suggest that Eric hire some well paid and well skilled spies to eavesdrop on the London gold fixing and the Comex traders and also the BIS gold traders and the Fed.

Surely more economical and more bang for the buck than guessing (as is the case now)

Fri, 02/28/2014 - 08:07 | 4487950 Doña K
Doña K's picture

The London gold fixing is not the problem. The 24/5 paper/electronic trade is the problem.

Think of it as a poker game where one player has unlimited recourses and can also see your cards on every hand and if there is a dispute the brother in law of that player in whose house the game is taking place is the arbiter.

Only when the physical dwindles to nothing prices will start represent reality relative to fiat     

Fri, 02/28/2014 - 07:42 | 4488047 negative rates
negative rates's picture

The dude almost overdosed the other day, he will resting on the couch till further notice. What else you got?

Fri, 02/28/2014 - 01:12 | 4487782 Lordflin
Lordflin's picture

I have been hearing tales of the end of manipulation for years now... Just a couple of years ago Jim Sinclair was predicting that gold would never see 1600 again (he meant that it would never go that low)..

It will end when it ends... I am starting to suspect this whole thing will come down at once... At that point the dollar price of metals may well be moot.

In any event I am sick to death of this whole damn system... all the self appointed experts, and so called elites, and billionaires with their rehypothecated wealth. The world as we know it is not sustainable, morally, financially, or otherwise. As such it will change, that much is guaranteed.

Fri, 02/28/2014 - 02:01 | 4487851 Mercuryquicksilver
Mercuryquicksilver's picture

Help me understand:


"It is also obvious that demand far exceeded annual mine supply."

From Fig 2

2307+1371+881-4548= 11 Tonnes Gold left over

Supply matched demand perfectly right?

Fri, 02/28/2014 - 05:59 | 4487947 fijisailor
fijisailor's picture

Yes we've had huge demand but what comes next with the Thai, Turkish, Indian, Russian and Chinese currencies under attack?  I believe there is a concerted Western effort to destroy the gold buying power of those countries.  Gold demand may drop dramatically.  Ultimately though gold must keep up with real inflation or the miners shut down.

Fri, 02/28/2014 - 07:28 | 4488036 orangegeek
orangegeek's picture

As we mentioned repeatedly and months ago, wave 4 up is going to draw in buyers over the slow and painful climb up.


So Sprott and all the rest of the "pump it" crowd are trying to clear positions as gold inches higher - wait a few more months and there will be some very good shorts in gold.

Fri, 02/28/2014 - 07:50 | 4488055 GFORCE
GFORCE's picture

Eric Sprott has been massively discredited in the recent plunge in Gold. Just another emotionally-addicted "analyst" with his finger off the pulse, invested in theories with little historical bias.

Fri, 02/28/2014 - 08:04 | 4488077 Papasmurf
Papasmurf's picture

Last time silver dropped, Sprott was pumping his metals funds the same time he was liquidating his own account.  He's no better than the rest of the pump n hump'ers.  Fuck you Sprott.

Fri, 02/28/2014 - 08:22 | 4488115 Sufiy
Sufiy's picture

Dollar Crashes Below 80.00, Euro Breaks $1.38 - Somebody Read James Rickards' Book "The Death Of Money" Already

  We have quite a morning today. In the early trading hours US Dollar was crashed below the all-important 80.00 level to 79.84 and Euro has broken $1.38 level. With all the ongoing Currency Wars and China pushing Yuan down Gold Demand is going strongly up. Now recent increase in demand for Gold to the record numbers in China can be put in another perspective. 

 23h Stronger & as explained in Ch 5 & Ch 9 of . Just back from the printers in NY

  Somebody has read James Rickards' new book "The Death Of Money" and playing along with it. As we have noted before, Ukraine is another battle to be lost by the US dollar as The Reserve Currency of Choice. Who is selling US Treasuries today? Is it only angry Russia or is it China raising cash to Buy Barrick Gold's vault in the ground at Pascua Lama?    Now with Yuan pushed down and US Dollar going down after the highest number on record of Chinese selling US Treasuries, Gold has no other way but to go much higher. Short squeeze will help, as some banks were encouraging to sell gold again after this very initial advance, after bottoming in 2013. We have seen nothing here yet. The Mother of Short Squeeze in Gold and, particular, in Silver is still to come. Ukraine, Syria And Global De-Dollarization: USD To Go Down And Gold Up TNR.v MUX RGLD GDX GLD ABX

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