This page has been archived and commenting is disabled.
Silver (And Gold) Are Breaking Out Again
Despite the utter deluge of "this won't last" explanations of why yesterday's surge in gold and silver is transitory (and nothing to worry about), the sell-side is staring agog this morning as the precious metals markets are breaking out to new cycle highs. While the CCFD unwinds appear the clearest driver, Yellen's aggressive inflationist bias, and unintended consequence of increasing supply destruction (as prices were manipulated below production costs) appear to be trumping any short-covering, opex-related reasons for the push higher.
PMs are breaking out again...
Much to the chagrin of the analysts:
NY Trader (via Bloomberg) - Gold Spikes on ‘Massive’ Hedge Fund Short Covering in NY
Spot gold touched $1,322.12, strongest since April 15, partly on buying led by leveraged accounts that included hedge funds, according to an FX trader based in North America.
Gold Spike Yday May Be Related to Quadruple Witching: BMO
Yday’s 3.3% spike in NY gold futures to $1,314/oz “may simply be a function of closing out or rolling over large futures and options positions” that are part of today’s so-called quadruple witching, when four futures, options contracts expire, writes BMO technical analyst Russ Visch in note.
He notes last “dramatic spike” in gold in March was during that month’s quadruple witching, after which gold retreated from nearly $1,400 to $1,240/oz
Says long-term downtrend in gold is “probably not” over
Watching for 200-DMA to turn higher, which wold increase the chances that a bottom is in.
SMRA - Be Skeptical Of This Gold Rally
Make no mistake; the latest data from the CFTC regarding Commitments of Traders reveals nothing to suggest that there was a cathartic level (i.e., a contrarian extreme) of disdain toward gold at the late May/early June lows. For this reason, we think the gold market lacks the psychological foundation for the recent rally to be the start of a major turnaround. Instead, as the chart below shows, gold is rallying as part of a predetermined pattern (triangle), with the primary source of inspiration for the late May/early June reversal being the yellow metal's extreme undervaluation vs. equity prices.
But it appears other factors are at play.
As CCFDs unwind..
Here's how that might work:
In the gold markets, the paper or synthetic 'demand/supply' dominates pricing as opposed to the non-precious metals which have at least a grain of fundamental sense to them still
Throughout 2012/2013 - as the gold CFDs were booming, Chinese demand for physical gold was soaring as the price plunged (due to the forward hedging required in the CFD transactions which pressured gold swaps/futures lower and thus dominated pricing)
As CFD unwinds hit en masse, these flows must unwind (cover hedges and ensure the underlying physical is there... and if not buy it)
This will pressure gold futures prices higher and because unlike in non-precious commodities where spot markets wag the tail of the futures markets - spot gold will likely be dragged higher also (as we know the demand for the physical has been high).
So unlike in the industrial commodities - where the CCFD unwind drives prices down as the image above shows, thanks to synthetic manipulation and domination of the paper gold (and silver) market, the opposite occurs in PMs.
... and perhaps most importantly, supply destruction is starting to bite:
Mining Company Is Canada’s Second Chapter 15 of 2014
Mining company Veris Gold, which listed debt of as much as $500 million, is the seco d Canadian business to file a Chapter 15 petition so far this year. Veris sought court protection in Nevada and Fox Rothschild is debtor counsel. While Canada was the biggest source of Chapter 15s in 2013, Brazilian companies are the biggest source of these cases this year.
Meaning less and less gold is produced as there is virtually no margin at current prices, which means supply will soon tumble or force more consolidation. The end result, far less supply even as demand from China, be it for funding deals or otherwise, continues to rise.
»
- 28931 reads
- Printer-friendly version
- Send to friend
- advertisements -
Happy days are here again.....
Hey depend!
Don't start the circle jerk quite yet! These forkers don't like when shit don't go their way.
They will try and force it down before quarter day.
If they can't ,it will be an even bigger tell.
PMs are up, miners are down, and penguins fly.
Armstrong: If a braek out low doesnt occur this year, it will be pushed off into 2015.
VIX = 10.34, miners are DOWN, silver is up.... I'd short silver here for a short term smack-down.
Well it's a nice morning to be flying out to a gold mine....
Has anybody figured out who actually bought this $0.5 billion worth of gold yesterday?
Gold chart here is just impressive though.
I thought the China missing metals warehouse scandal was bearish...
Now it's bullish?
Commodities bearish. Precious bullish. This has been covered extensively.
Yeah. yeah....And if it doesn't happen in 2015 it will happen in 2016. That's some piss poor analysis there. Pms have been and will continue to be manipulated until the system breaks down. These moves mean nothing to a physical buyer other than it gets more expensive to purchase.
In the meantime, keep loading up the boat.
Time and again bankers have proven predictable to do one thing and one thing only. They pull money out of their ass, from thin air or whatever we'd like to call it. The economy is not generating enough revenue to support government at all these levels.
Massive government layoffs or reductions haven't been put in place (yet). Nobody is serious about reducing government largesse least of all the banks which depend on the debt and resulting paycheques for themselves.
Inflation is going up everywhere and there's not a darn thing the banks or government can do about it. They can talk up interest rates hikes but in a world where investors are starving for yield, they know they can't really afford to pay more than they're paying now.
Defaults or haircuts a la Greece, Cyprus, Spain, Portugal, Italy, Argentine and on and on the list goes..
If not then, then 2016....
What if a prison has been built around us, and now we can't get out?
We all live in a multitude of prisons. First, your skin. Second, the universe. Third, your perception of this universe. There are merely varying degrees of oppression depending on scope.
A bit late on that one.
LOL
The conundrum is even if one could escape, where is "less" worse?
The past two days mean little IMO. Physical gold, held still for a long time, is its highest and best use.
Do what the Old Money has done for generations, buy gold and hold on to it!
Yeah, it's a fucking conspiracy:
Q1-14 sales: $35.6 mil
Q-14 net (loss): ($14.3 mil)
"cash costs per ounce declined from $1,509 in Q1-13 to $1,283 in Q1-14"
"At March 31, 2014 the Company had a working capital deficiency of $ 177.3 million (December 31, 2013 – $167.1 million) and an accumulated deficit of $ 459.4 million (December 31, 2013 – $445.6 million). On January 28, 2014, the Company received a Notice of Default under the terms of the Senior Secured Gold Forward Facility held with Deutsche Bank AG. The Notice of Default arose from the failure of the Company to deliver the required gold as at December 31, 2013 and subsequent months until March 31, 2014 or pay the cash equivalent of the gold delivery shortfall as required under the Agreements."
Good analysis, but someone bought 5 bil worth of futures before market open yesterday. To me that's someone wanting volatility and short term yield, shooting the PM's up through resistance creating a "break out". May not necessarily be a commited long. JPig games it on the way up for 5-10% and will short it on the way back down, all in a matter of weeks.
100% criminal market. Long term PM's are a stong buy, but I've seen these short term gyrations all too often.
That's a very interesting idea. I personally hope it's true, because I want PMs on sale for as long as possible.
Very good point.
This may be a classic pump & dump.
Then again, if we see ten straight days of this, it may not be.
We haven't seen two straight days of "this"!!
You're right on target about JPigs. They let the PM's go up just enough to squeeze some of the shorts and make a few mil. They could just step aside and let gold rise to its correct market value and make billions on their long gold positions, but their Master Lords won't allow it because it would expose the $'s worthlessness. Also, they are still massively short in silver (thanks to Bear Stearns), so they can't let gold rise to fast because silver would follow it up like a lost puppy, and they would lose their shorts (get it? sorry couldn't resist).
Absolutely right... Options expire next week. If metals clime through that, or even hold their own, perhaps. A better indication will be a solid breakthrough of major overhead resistance... Somewhere between 1360 and 1370 for gold and 22 for silver.
No such thing as overhead resistance.
#1 sell contracts for gold that doesn't exist
#2 drop margin requirements to go long
#3 once too many are margined long, raise margin requirements.
As if this wasn't obvious by now.
I wouldn't get all giddy just yet.
Once, the war really gets rolling and scarcity is the watch word of the day, then and only then would I start to anticipate an earnest run in pm's
Until then it is just another page in the script to placate the masses and keep them lulled into the stupor of this false economy.
Full Disclosure: I own pm's aplenty and have for years, even before it was fashionable.
DaddyO
"Full Disclosure: I own pm's aplenty and have for years, even before it was fashionable."
Oh, you shouldn't have said that here. Now EVERYONE knows you have PM's. You better run, not walk to the nearest boat dealership and have a boating accident, STAT!! =)
Apperantly, you missed my post about the horrendous jon boat accident I had several years ago.
I know where it capsized and will mount a recovery effort when the price of pm's exceeds the costs of reclaiming them from the deep.
DaddyO
Actually my favorite was what someone posted a while back. Get hundreds of coke cans and bury them all over your property with a dildo in each. As they scan and dig each one up looking for your stash, it will remind them what dick heads they are. Mr Miffed was captivated by the idea. We knew it would be easy to procure the coke cans but when it came to the dildos, the cost, the neighbors seeing boxes of such things shipped to our home and the strange flag by the NSA, we decided to nix it.
Miffed;-)
WOW.
I missed that original post.
I'm in like Flint on this one (especially considering that last mention over the sybian)
Ok that was too funny and I have hot coffee up the nose. I should have told you after looking at that picture I couldn't figure out how to use it. I was too embarrassed to ask you so I showed it to Mr Miffed for an explanation. Damn near bust a gut laughing. "You mount it my darling" You should have seen my shocked face! So, here's my question. How does 2 men ( assuming you are one) know about this and I am clueless? I can't speak for Mr but I'm suspicious you are really Flakmeister! ;-)
Miffed;-)
You could always carve some broomstick pieces to look like phalluses, just be sure to add some nails to each Coke can as well!
That's why it is time to celebrate! They are clearly losing control. Take Shrillary C. for instance (please), she is sinking like a stone! They whack PMs again (one last time)- great, we back up the truck. May you live in interesting times!
Ha ha! But, point taken, we are living in interesting times.
what? her probablility of being the next "commander in chief" (LOL!) went from 96% to 94.5%? ... wow that's exciting
The only 94.5% about her is needing another round of Botox within the next 6 months.
i have only bought Silver (so far) this year. is it stupid??? that is what they want you to FEAR!!! HAHAHAHA!!!!
"While the CCFD unwinds appear the clearest driver"
Clark County Fire DepartmentSeriously, any unusual acronym should be defined (written out expanded) at least once in a goddamn essay, when it is first used. No, we don't need FBI or GE defined, but CCFD is not on the tip of every reader's tongue.
I realize that this means something about the Chinese rehypothecation of metals in warehouses but can't place what the damn letters really mean.
Fuck you. Once upon a time this was a financial site. If you can't do the most modest of due diligence to follow this shit then GTFO. Seriously. You also would understand (or at least be familiar) if you had read even a few articles over the last couple of weeks.
Maybe you don't have the brain power to hang out, or maybe you're just another lazy-ass welfare fuck. Either way, figure it out or go back to the sandbox.
ok. rant over.
Translation - I want to have sex with you because, unlike me, you do not live here all day long and are not a financial gnostic familiar with obscure abrreviations that the careless authors are too lazy to define.
Hey, shhhh! Do what I do...google it. Then come back here and pretend you knew what they were talking about the whole time...
Otherwise they will just chew you up and spit you out.
Wait... No 8:30 AM slamdown is now a breakout?
Yes.
Imagine you are some battered housewife. Everyday your hubby comes homes and kicks the shit of you. However, every once in awhile the fucker passes out at the bar and does not arrive for the ass whoppin. Those are the good days. Welcome to the world of investing in pms.
Point taken, but damn what a brutal analogy:-)
so far so good
But every once in awhile that meek little housewife surprises everyone, and hubby finds himself on fire in his own bed...
He never saw THAT coming...
Or, his dick is laying on the floor 8 feet from the rest of his body.
Actually, Lorena Bobbitt drove around with it awhile, then tossed it out the car window into a field...And they FOUND it, re-attached it, and he went on to do porn.
So maybe this time IS different...Lol!
Wishful thinking...When Mr. Dollar is buckled over, clutching his bleeding groin, the Fed will not be able to wisk him into surgery to repair the damage this time. They won't even be able to locate the missing member...it will be hauled away by critters and eaten. No glorious porn career awaits...
"FrankenPenis™" FTW!
Farrah Fawcett approves this message.
Her teeth were evil. She looked pretty bad at the end, too.
So in your analogy, we deserved it
In fact we are asking for it.
Yeah, we just wouldn't shut up with that BTFD bitchez, gold bitchez, to the moon bitchez, back up the truck bitchez, the train is leaving the station bitchez, bitchez bitchez. We were warned, STFU bitchez. But we just wouldn't listen.
bitchez
And you've already been told. Twice!
......not to trade silver
*tears in eyes* That was beautiful...
Rare Earth Metals--.....LONG AVALON
It gets fun from here! How do you pump S&P Dow and Nasdaq while printing down gold and silver when the US $ is being abandoned as the reserve currency. Must be time for a bail in.
Easy, just conjur up more money out of thin air. Digital dollars are cheap for them to manufacture, and can be created in mere seconds. They can goal seek any number they want. You really believe the Fed is telling us the truth about what its balance sheet really is? All you have is their "word" for it, nothing more.
If gold can't get through 1320 first and move higher, this is just a bullshit move. The last time gold attempted to get back to 1350, it was stopped dead at 1320 and that same thing is currently in progress. Without a move through and close over 1320 today, it's dead meat and furthermore, it needs to continue moving next week or it's dead meat. I would say gold needs a 133x close today or the move yesterday was meaningless.
uplifting stuff, thanks. How many more times can you call for it to be "dead meat"?
wrs1, i guess you are saying if gold does not go up every frickin day then its all a bullshit head fake? if it hits $5000, then it must go higher or else, look the only thing that matters is what cnbc says cause they are paid to spread the feds policy, bagdad bob will be standing in front of a 10yr chart of PM.s and claim the chart clearly shows gold is dead meat as you say LOL
I am just telling you how it is. Follow through comes the next day, not four days later. The last time we tested 1320, it failed. There was a $20 up move followed by a $20 down move and then some support at $1300 for a couple of days followed by several days of $10-20 drops back to $1240 from where we have been digging out. I am just going from memory here and not any particular chart but 1320 is a line in the sand, that much is obvious.
Nope: that's not how it is.
This is how I did it last time:
http://youtu.be/sxbdKOKDaOU
http://youtu.be/EeZmU3a4kis
Your choice of time-frames & specifying future limits is way, way off from how the math actually works.
Well, I would say that the price of gold as measured in dollars is what's truly meaningless. Or anything else, for that matter.
What should it be measured in, peanuts?
ALL the moves are bullshit moves.
Gold could easily drop 50 then gain 200.
That's what gold does. It could do it in 3 months, it could do that in 24 hours. That's what gold prices do.
No heuristic or time-series will give you accurate numbers on 'later up' or 'later down' any more than 20% chances of being right if you're picking a number and ONLY thinking of the last few days data and next few days prediction.
The time series analysis to get the next 30 days could take 5 YEARS of daily-data pumped through an algorithm.
I know, I've done it before.
NOOOOOO!!!! owning silver and Gold is STUPID!!!!!
noooo.. not wearing a rubber while fucking a whore is stupid...
>> not wearing a rubber while fucking a whore is stupid...
So I'm Hati, see, and I've got a whore up in my bungalo. And then I realize I ain't got no rubbers, see. And then I sez to my self, when the fuck and I ever going to be in Hati again?
But...but...gold...demise...relic...barbarous...
Shanghai to Start International Gold Trading in 4Q
http://www.bloomberg.com/news/2014-06-20/shanghai-to-start-international...
They have changed the start date from mid July.
All sorts of things are now set for Q4.
Don't be in USD denominated assets by then. looks like the fat lady will
be giving a Fall concert performance.
Correct me if I'm wrong, but they were supposed to "start" last year.
Let me be a little fortune tellery right here...we seen this script many a times..There is going to be a nice selloff in the coming week "unexpectedly" or should I say manufactured by the Fed probably below 1900 on the S&P...WHY?
Whenever Oil and Metals get too lofty it is what they do..they are gonna try to smash oil down to 100 or 101 and Gold back to about 1230/1250 and then sneak it back up again end of week or a week from now in the futures and presto...never changes.
Avalon Rare Earth MEtals - BAsed in Canada // HATHOR will acquire it next 2015 or South Koreans.... Strong Buy
And now without further ado our King World Metals wrap!
(LOL)
Do I care about the paper price of gold or silver? Not really, other than the fact that I hate when it gets more expensive to buy my monthly financial calamity insurance premium.
i awoke in 2007...
and still im embarrassed to admit that it took me that long to ask the MOSY IMPORTANT QUESTION...
"What is money..." i knew something was wrong but did not achieve enlightenment until i asked and proceded down the "rabbit hole".
so all ya'll who have been accumulating and r holding the only 2 forms of real money hold tight and marvel at the show that is about to unfold...
we were right and we shall be vindicated.
i know only 2 money :
"This is my Rifle, This is my Gun. One's for Fighting. and the other's for Fun!"
My ounces are quite secure and haven't "broken out" of anything. Who care what paper PMs do (unless everyone with a paper claim demands physical nothing changes).
PMs are the last to bubble..maybe its time now...we should be at $5,000 an OZ
Got a long long way to go before we can call PMs in a bubble. Lets talk in 2016.
2016 is not that far away if you've been buying for a decade. I'm willing to wait until 2030, cuz when this blows, holy crap!
>> wait until 2030
Great. I'll be a rich man in a nursing home.
My bed will be available by that time....Ill keep it warm for ya
Should be are the words ($5000 / oz)... But, when will it happen.
I have said it here before. Maybe, just maybe it is our turn. No happy days. Just cautious optimism. We shall see. Have not wavered from my quality miners, physical gold and silver. You guys can keep CMG AMZN PCLN GS KBH and GM.
Buy bug spray..and head nets and bed nets too. The tropical diseases of 3rd world countries has arrived in the US.... Major driver? Increased poverty in US.
http://www.plosntds.org/article/info%3Adoi%2F10.1371%2Fjournal.pntd.0002760
..and here I thought the economy was doing well. Oh and the local army navy store that sells said equipment will take silver and gold.
papa, thanks for that link, many on ZH would do well to read it...biological warfare has come to America, and .gov cannot report it as such, it would mean all our .gov spying and groping of children and old women of America is a failure and useless which it is.
Then this event yesterday would interest you...
http://www.cnn.com/2014/06/19/health/cdc-possible-anthrax-exposure/
Just keep this shit contained, k?
WHO | Ebola virus disease, West Africa – update
Ebola is very inefficient virus. It immobilizes and kills its host very quickly (days) thus limits the spread. Now should it become more efficient ( take weeks) then we would have a different ball game. Much harder to stop the spread. Look at HIV... Takes years to kill much less show symptoms. This is an efficient virus ( from a biological standpoint).
I agree with your hypothesis, but would be terrified to see someone test it in the slums of any major metropolitan area.
While not as efficient as others the incubation period can be up to twenty one days.
Men that recover can still spread the virus up to seven weeks afterwards via seminal fluids.
"Mosquito control programs are often well organized"
Boy I'll say!
http://www.consumerhealth.org/articles/display.cfm?ID=20000830164126
ZH posts an article about gold and silver "breaking out" and whaddyaknow? gold and silver start to selloff and stawks blast higher. Funny, that!?
Ya. Almost like ZH is part of the machine...
No rumors on wht the new leadership of India is going to do. Wedding season arrives in September and much of the gold jewelry business moved to Pakistan with smuggling bringing it back into India. Does India want the tax money coming in for gold? If so then a legalization could boast consumption. Just saying.
Wish I had put my PMs in the sealed cooler when I boated across the lake. The sinking was tragic especially the 3 days afterwards looking for it with no success.
That's a bummer! It reminds me of the time I went shooting and had all of my guns in the back of my truck. Like an idiot, I forgot to close the tailgate and wound up losing ALL of them somewhere along 50 miles of highway. They never were found.
I was so bummed!
Gold breaking out to -$4.00? I'm sure it's just me but I'd rather gold collapse to +$4.00.
Meh its friday...may see some positions go liquid into the weekend (London)....thats the problem with paper gold. Of course I would not be surprised either to see someone make a big buy move at the very end of the trading day (NY).
Perhaps I'm ignorant but why are gold CCFDs different to those of other commodities?
Think of it like the banks in China that decide they want to see the metals that they supposedly have as collateral in some warehouse. Suddenly its time to see the physical gold. If they don't have it in possession they have to suddenly get it. This is the result of rushing to get it.
look at those fucks in London defending $21 on thier close...
http://www.kitco.com/charts/livesilver.html
London is the epicenter of the fraud aka "the fix".
She should keep her mouth shut forever.
"Better to remain silent and be thought a fool than to speak and to remove all doubt."
"We all know that light travels faster than sound. That's why certain people appear bright until you hear them speak.”
? Albert Einstein
The gold that is bought to become wealthier is fool's gold.
The gold that is bought to preserve wealth in times of calamity is wise gold.
Aye. It's better to be not poor than to be not wealthy.
It was a brutal takedown from 1392 back in March. I'm not getting my hopes up here...
Sale on ebay for APMEX 2014 ASE's, today only-
http://www.ebay.com/itm/2014-1-oz-Silver-American-Eagle-Coin-Lot-of-20-C...
$548 for $420 worth of silver doesn't strike me as being a good deal.
LOL they just ended the 24 hour sale, I picked up 20 for 475.00
$475.00 now thats a lot better at $23.75 a coin... I could handel that but not at $27.ish
Yet, he has 320 sold. At least someone is profiting short term from AG.
I shop around and find Provident to have good pricing and they are in Dallas, close enough to make an in person trip.
$547 dolalrs? Thats a good deal? 547/20 = $27.35 a coin in US Dollars. That's 30% + premium...
I would think that the price will come down next week (after the 25 June 2014).
This is because the settlement date is the 25 June 2014 for contracts for the period 6 Oct 2012 to 25 June 2014.
This was the same situation last month when settlement date was 27 May 2014; the price rose and then fell again.
The best part about Veris going BK is that DB has already sold forward their Gold prodution, oops.
Ugh. ZH jinxs it again.