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Gold Rises, Silver Surges on Short-Covering and Physical Demand – Greece, Ukraine, Russia Risks

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Gold Rises, Silver Surges on Short-Covering and Physical Demand – Greece, Ukraine, Russia Risks

- Gold rises over 2% while silver surges 4.4%
- Speculators caught off guard as prices rose forcing them to cover their short positions
- Concerns re defaults by Greece and Ukraine
- Geopolitical risk of conflict in Middle East and with Russia remain
- Price rises were accompanied by strong physical demand

Precious metals had their best day since January yesterday as the price of gold and silver rose substantially.

Gold rose over 2% and is now back above the important $1,200 per ounce psychological mark while silver surged 4.4% and is now comfortably above $16 per ounce.

goldcore_chart1_28-04-15
Gold in U.S. Dollars - 1 Week

Many factors seemed to have come together to generate the rise in prices but the primary cause seemed to be buying in the futures market which led to short covering which quickly propelled gold from $1,180 an ounce to over $1,205 an ounce in a short period of time.

Silver prices surged from around $15.80 an ounce to $16.45 an ounce or 4.1% prior to selling which capped prices below the $16.50 level.

goldcore_chart2_28-04-15
Silver in U.S. Dollars - 1 Week

Physical gold demand in the major Asian markets was positive after last week's price fall, dealers told Reuters, with Shanghai premiums moving up toward $4 an ounce suggesting a return to more robust demand in the world’s largest buyer China.

Risk appetite remains high as seen in buoyant stock markets but some investors may be getting nervous about the near inevitable Greek default - and rightly so. European stocks have seen falls today.

The uncertainty regarding the outcome of such an event has been getting more attention in the media in recent days with the general consensus being that nobody has any idea what the knock-on effects might be - but that it would be far from pretty and could be a “Lehman moment” for the EU.

Greece must pay $3.8 billion to the IMF over the course of the next month and most analysts believe they will not be in a position to do so unless they can access the outstanding $7.2 billion in funds that form part of the existing program.

These funds are being withheld by Greece’s “partners” because the Greek government has not put forward reform proposals that are acceptable to the Troika.

The Eurogroup of EU finance ministers have grown exasperated with Greek finance minister Yanis Varoufakis following the failure of the latest round of talks in Riga.

Greece has reorganized its debt negotiating team sidelining Yanis Varoufakis after the poor results from last week.

He was described by fellow ministers as a “time-waster”, a “gambler” and an “amateur.” Such name calling, so late in the process shows how little progress has been made over months of negotiations and will likely be counter productive as the Greek people rally around their recently elected and appointed Finance Minister.

Gold remained strong supported by a weaker dollar and short covering on worries that the Federal Reserve may push out the rate hike and maintain zero percent interest rates due to recent poor economic data. The U.S. dollar fell to a three week low which helped gold.

The U.S. FOMC begins its policy meeting today with its statement to be issued on Wednesday.

Ukraine have also been flirting with a default. Earlier in the month “Kiev warned investors that it was prepared to allow the state-owned bank to default unless a deal could be agreed” according to The Financial Times.

That particular crisis has been resolved but Ukraine is still under severe pressure. There is a $40 billion financing gap, according to the FT and a deal will need to be reached with the IMF by June if Ukraine is to get funding.

But credit agencies do not have a lot of faith in Ukraine and have “cut the country’s rating to one level above default” according to the FT.

Skirmishes continue in the East of the country and if they were to escalate again it might preclude Ukraine from IMF funding. The IMF is not allowed to finance a country that is at war.

Tensions between the U.S. and NATO on one side and Russia on the other remain very high.

The Ukrainian military and pro-Russian separatists in eastern Ukraine have traded accusations, reviving concerns that a peace deal signed in Minsk in February may collapse. Although international monitors said the violations were still relatively limited.

A senior U.S. official has strongly criticised Russia for allegedly threatening to use nuclear weapons. In an interview with Japan’s Kyodo News, Rose Gottemoeller, the under secretary of state for arms control and international security, criticized Russian President Vladimir Putin for threatening to use nuclear weapons.

"We are concerned when there's loose talk about nuclear weapons being useable, nuclear weapons being raised to higher alert levels," Gottemoeller said, Kyodo reported. "There is no threat out there that would warrant talking about a role for nuclear weapons."

Vladimir Putin recently signed and enacted a new Russian military doctrine which proposes that Russian nuclear weapons defense systems near the EU be expanded. Importantly, this is being done through joint defense projects with China, India, and other countries. This suggests that Russia is not as isolated as some claim.

Respected former Soviet leader Mikhail Gorbachev has warned that the Ukraine crisis may transform into World War III and has warned that a nuclear war between Russia and the U.S. is possible.

In this context, the very large Russian central bank gold purchase of 31 metric tonnes in March should be seen as a geopolitical gambit and another volley in the ongoing currency wars. The IMF figures show that Russia was the largest central bank gold buyer in the month.

The next phase of currency wars is likely to be gold wars where nations use gold reserves as a monetary and geopolitical tool and weapon in order to gain economic and strategic advantage.

The continuing accumulation of gold reserves by nations for diversification, monetary and geo-political purposes - especially Russia and China may accelerate in the coming months leading to a lack of available liquid bullion in large formats which then spreads and leads to shortages into the smaller coin and bar market.

The old adage that he who holds the gold makes the rules will be better understood when there is a lack of available supply due to the very small size of the physical supply of gold above ground and refined globally.

Important Guide: 7 Key Gold Storage Must Haves

MARKET UPDATE

Today’s AM LBMA Gold Price was USD 1,201.40, EUR 1,100.56 and GBP 788.17 per ounce.
Yesterday’s AM LBMA Gold Price was USD 1,182.75, EUR 1,090.52 and GBP 780.85 per ounce.

Gold climbed 2.02 percent or $23.80 and closed at $1,202.40 an ounce yesterday, while silver soared 4.2 percent or $0.66 closing at $16.38 an ounce. Spot gold in Singapore  was at  $1,200.90 an ounce near the end of day trading.

In late morning trading in Europe gold for immediate delivery was up 0.21 percent at $1,203.14 an ounce. Silver  was up 0.22 percent at $16.38 an ounce, while platinum fell 0.05 percent to $1,141.09 an ounce.

Breaking Gold News and Research Here

 

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Tue, 04/28/2015 - 20:46 | 6040977 Jungle Jim
Jungle Jim's picture

I have a feeling that nothing too spectacular will happen to metals prices this week.

Tue, 04/28/2015 - 22:32 | 6041287 Chauncey Gardener
Chauncey Gardener's picture

Surges? This is a surge? 

Tue, 04/28/2015 - 20:59 | 6040935 teutonicate
teutonicate's picture

It has been amazing how weak gold and (especially) silver have been recently given the gross monetary mismanagement by the cabal - except when one considers what the cabal's objectives are and the tactics they have used to perpetuate this imbalance.

Their interests are best served by a slavish adherence to US$ overvaluation because only by preserving artificially valued fiat currencies is their power maintained.  Any serious student of the PM markets has witnessed massive abuse of the paper PM markets at the hands of central and money center banks in their (so far) successful attempt to supress PM prices.  The CFTC and other regulatory agencies have been complicit in allowing them to violate regulations that govern position size limits which are designed to protect ethical price discovery, producers and traders.

Bottoms are difficult to call, but it is hard to deny that at some point the reality of economics needs to set in.  As PM prices increase, and as equity markets inevitably correct, portfolio allocations are likely to shift to a higher commitment to precious metals – more in line with historical norms.  Given the total amount of capital currently committed to equities, even a modest shift of portfolio allocations toward PM’s will result in continued futures pressure and shortages of physical.  Exact timing is difficult to predict but the number of recent coincident price supportive events and the price strength in the last couple of days suggests that we may have hit an inflection point in PM pricing.

One additional wildcard is that if in fact China is begining a "disallusionment curve" with regard to real estate and equity pricing, there could by a massive reallocation soon by the Chinese to assets that are not geographically dependent.  When you look at the population effected and potential cash flows associated with such a shift, this could also contribute to a global mindset change with regard to PM's.  We all know that when sentiment changes in the PM market the pricing effects can be dramatic.

Wed, 04/29/2015 - 02:26 | 6041668 GuusjA
GuusjA's picture

K2: "We're doing God's work. Iemand moet de zwakke dieren opruimen. Banken die niet goed functioneren, verdienen het te sneuvelen."

 

http://www.trouw.nl/tr/nl/4492/Nederland/article/detail/3984622/2015/04/...

 

Om de druk op de onderhandelingen tussen netwerk Juncker en de PenningMASTER van Stichting Met Elkaar (de voorzitter weet officieel van niets) wat op te voeren is BloemigeJeroen ook begonnen om willekeurig wat kamerleden te informeren dat ...

 

http://nos.nl/artikel/2032990-ook-consument-is-weer-motor-voor-de-econom...

 

... met het invoeren van het DAB-systeem (met een @basisinkomen voor eenieder) ook de stress tussen (rechts)personen in Nederland kan worden verminderd. 

 

http://www.trouw.nl/tr/nl/4496/Buitenland/article/detail/3986659/2015/04...

 

De Russische autoriteiten hanteren een andere strategie om de 3e SpinozaGolf te overleven en hebben de registratie geschrapt van de politieke partij van Aleksej Navalny. Volgens het ministerie van 'waarheidsvinding en verzoening' heeft de Vooruitgangspartij verzuimd zich in ten minste de helft van de Russische regio's te laten registreren.

 

http://www.trouw.nl/tr/nl/4492/Nederland/article/detail/3984622/2015/04/...

 

Wed, 04/29/2015 - 05:57 | 6041811 GuusjA
GuusjA's picture

De 3e SpinozaGolf werkt zodanig dat het Europees Hof van Justitie zich niet gaat branden aan misstanden die zijn voortgebracht door de werking van het systeem 'Liegen om te Leven'. 

 

http://www.volkskrant.nl/economie/eu-hof-schuift-oordeel-over-woekerpoli...

 

Het EU-hof stelde dat het aan Nederlandse rechters is of informatie (van het RENTE=BELASTING-plan die netwerk @euHvR al informeel had gedeeld met netwerk WitteGejT)  ook vooraf hadden moeten worden gegeven aan klanten die bij het afsluiten van beleggingspolissen nog niet op de hoogte waren van het systeem 'Leven en Laten Leven'.

 

http://www.volkskrant.nl/dossier-derk-jan-eppink/amerikaanse-toestanden-...

 

Derk Jan Eppink schreef vandaag dat Europa en de VS al overeengekomen zijn om vol in te zetten op een wereldwijde cultuur van waarheiddelen. 

 

http://www.volkskrant.nl/economie/griekenland-presenteert-vandaag-hervor...

 

Dit ziet de Griekse minister van Financiën wel zitten en zet netwerk Juncker verder onder druk om ...

 

Wed, 04/29/2015 - 07:07 | 6041906 GuusjA
GuusjA's picture

Netwerk @0ranjePapegaaY heeft het voor elkaar. De rechtbank in Rotterdam oordeelde in een zaak uit 2008 dat NN klanten van extra informatie had moeten voorzien. Door dat niet te doen handelde de verzekeraar in strijd met “open en/of ongeschreven regels”. Het hof in Luxemburg zegt nu dat de Rotterdamse rechtbank dit inderdaad mocht eisen. Nu de Rechtelijke MACHT in de EU en in Nederland heeft aangegeven dat de “open en/of ongeschreven regels” van de 'Logica van de 1' boven de psychosegelovige regels van het systeem 'Liegen om te Leven' gaan, kan netwerk @SuperWil alle spelers in de 'virtuele economie' betichten van 'corruptie en fraude'. 

 

http://www.nrc.nl/nieuws/2015/04/29/nn-lijdt-nederlaag-bij-europese-rech...

 

De rechtbank in Amsterdam heeft vanddag ook bepaald dat de vorderingen van de curatoren van DSB en stichtingen van gedupeerden zijn afgewezen, dus nu kunnen alle financiële instellingen worden onderworpen aan het GELD=ZUURSTOF-paradigma.

 

http://nos.nl/artikel/2033033-dnb-draait-niet-op-voor-schade-dsb-bank.html

 

De Verenigde Naties zijn op de hoogte gebracht dat 'verwarde mensen' kunnen genezen door de toepassing van de 'Logica van de 1'. 

 

http://www.volkskrant.nl/dossier-vluchtelingendrama-middellandse-zee/vn-...

 

Indien iedere asielzoeker recht heeft op een wereldwijd @basisinkomen dan is het gedoe rondom het 'bed, bad en brood' ook in de EU ineens opgelost. Het recht van een @basisinkomen wil de UNHCR - de vluchtelingenorganisatie van de VN - nog niet op tafel leggen, omdat ze officieel nog geen weet hebben van de context van de 'wiskundige definitie van de absolute waarheid'. 

Tue, 04/28/2015 - 19:16 | 6040675 Buster Cherry
Buster Cherry's picture

Wake me up when the surge puts silver at $45 again.

Wed, 04/29/2015 - 00:35 | 6041542 Automatic Choke
Automatic Choke's picture

That's a deal, buster.  I've got a nice stack piled up, let's just agree that you'll buy it all from me when it hits $45.  Deal?

 

Tue, 04/28/2015 - 21:34 | 6041134 teutonicate
teutonicate's picture

There is an old saying that you have all heard that probably bears repeating.

Bulls make money and bears make money, but pigs get slaughtered.  If you need to wait until $45 to be woken up, you will probably miss the ride.

Tue, 04/28/2015 - 22:34 | 6041297 Chauncey Gardener
Chauncey Gardener's picture

You're missing the point, IMHO. "Surging" a few cents an ounce is an MSM headline. It's bogus "news." This is not news. Wake me up when it hits $20.00.

Tue, 04/28/2015 - 18:05 | 6040405 johny2
johny2's picture

After 2007 it was predictable that before collapse dolar will get very strong. check that as something that happened. Also it was predictable that when the end of dolar is close, there will be attempts to distract attention by starting a big war. So far, the false flags, economic attacks, propaganda have all yielded less than desired by the luciferians, but it is expected they will go to any lows in their search to hide the truth in a very big smoke. For this, ZH and others like that, deserve respect for trying to save many lives by being a real news site. 

Tue, 04/28/2015 - 16:40 | 6040042 Ban KKiller
Ban KKiller's picture

JP Morgan buying up silver also?

Tue, 04/28/2015 - 14:27 | 6039301 CarpetShag
CarpetShag's picture

"Caught short" as in being desirous to take a shit but finding no facility available?

Tue, 04/28/2015 - 13:56 | 6039180 Burt Gummer
Tue, 04/28/2015 - 13:19 | 6039011 Creepy A. Cracker
Creepy A. Cracker's picture

"Price rises were accompanied by strong physical demand"

Huh...  When has that mattered in recent history?

Tue, 04/28/2015 - 13:05 | 6038942 Weaponized Innocense
Weaponized Innocense's picture

Predictive bot says with dollar we should have an even in July. But for true dollar issues it will be in the fall. The fall issues will start in August ...... September issues will catch more attention and then October we will be in full bloom w dollar devaluations.
Although stackers have started early. Bot didn't directly cover gold this time but has been recently calling for a rise from here on out pretty much. This earlier in this year was ur lowest low nibble. Golds been stubbornly hanging around 1200 lately as all dips don't last too long..."

Tue, 04/28/2015 - 16:40 | 6040045 Monty Burns
Monty Burns's picture

Forecast deadlines for dollar blowout have come and gone for years. Max Keiser said not later than April of last year....

Tue, 04/28/2015 - 12:47 | 6038855 FrankDieter
FrankDieter's picture

$1400 will work for those miners that have sliced $200 off cost of production due to efficiencies and reduced oil cost.

Newmont Q1FY15 results appear to be the catalyst.

$600 production cost is key.  $800 margin is sweet spot for them.

 

Tue, 04/28/2015 - 12:45 | 6038843 KnuckleDragger-X
KnuckleDragger-X's picture

Paper gold pump and dump time...again....

Tue, 04/28/2015 - 10:44 | 6038146 BailoutBandit
BailoutBandit's picture

Wake me when it's $2000

Tue, 04/28/2015 - 21:30 | 6041124 teutonicate
teutonicate's picture

There is an old saying that you have all heard that probably bears repeating.

Bulls make money and bears make money, but pigs get slaughtered.  If you need to wait until $2000 to be woken up, you will probably miss the ride.

Tue, 04/28/2015 - 16:53 | 6040104 Diet Coke and F...
Diet Coke and Floozies's picture

AU or AG? :)

Tue, 04/28/2015 - 14:48 | 6039409 Stuck on Zero
Stuck on Zero's picture

Will do Rip.

Tue, 04/28/2015 - 21:39 | 6041149 Captain Debtcrash
Captain Debtcrash's picture

For anyone acquiring precious metals here is a program that helps you buy dips. Better than dollar cost averaging that's for sure:

http://debtcrash.report/entry/debtcrash-metal-purchase-program

Do NOT follow this link or you will be banned from the site!