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Gold $1700 Again As Equities Shrug Off Credit Concerns

Tyler Durden's picture




 

Credit markets closed at their best levels of yesterday and traded in a very narrow (much less risk hungry mode) range as stocks zoomed 1% higher than yesterday's best levels on volumes considerably less than the year's average so far. With tonight's PSI 'news' unlikely to be a surprise (and certainly not unexpectedly bullish as CACs are enacted and likely to trigger CDS), overnight China inflation, and tomorrow's NFP print seemingly priced into the market for perfection, it is apparent the marginal equity trader is far more comfortable with uncertainty (remember participation does not mean agreement still) than the marginal credit trader. The usual suspects did well with Materials, Industrials, and Financials all outperforming (and the majors bouncing back) but we do note that the average contract size in ES (the e-mini S&P 500 futures contract) was its highest in five weeks (even if it was roll week). Treasuries melted slowly higher in yield all day continuing yesterday's trend to complete the largest two-day rise in 30Y yields in six weeks. This de-risking along with JPY weakness and AUD/EUR strength supported risk but we do note that CONTEXT (our broad risk asset proxy) lagged Equity's excitement all day even as it leaked higher. Commodities benefited from USD weakness with WTI managing to get back over $107 briefly and back to positive for the week, Gold getting above $1700 and a wild ride in Silver leaving it in line with Copper -2.5% on the week so far.

Credit markets were much less sanguine that stocks today...again...

 

S&P 500 futures have retraced around 76.4% of the recent sell-off after finding some support at the 50% line earlier...

 

But commodities rally on the day with Silver and Copper resyncing as well as Oil and the USD as Gold pushes back above $1700. We suspect teh resync in Silver and Copper is looking forward to tonight's China inflation data.

 

 

Treasuries are generally higher in yield on the week now with 30Y leading the way +7bps with the rest of the curve huddled around 3-4bps higher on the week. 30Y is over 11bps off Tuesday's low yield print.

In FX, the USD leaked lower all day led by EUR and CHF strength. EURUSD back around 1.3275 is its best of the week as the USD moves to its worst of the week -0.4% or so. JPY weakness also helped drive the carry FX side of things. AUD hiccupped into the US open but regained its strength as the day wore on.

Charts: Bloomberg

 

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Thu, 03/08/2012 - 17:47 | 2237389 tekhneek
tekhneek's picture

GOLD, BITCHEZ.

Thu, 03/08/2012 - 17:47 | 2237395 spiral_eyes
spiral_eyes's picture

No blythe, you believe in paper.

Thu, 03/08/2012 - 17:51 | 2237411 camaro68ss
camaro68ss's picture

This is bullspit! When is the economy going to crash.... i've been waiting for 2 years now. I want to get this show on the road.

Thu, 03/08/2012 - 18:00 | 2237434 fourchan
fourchan's picture

no doubt, i feel like the can being kicked down the road.

Thu, 03/08/2012 - 18:25 | 2237510 bbq on whitehou...
bbq on whitehouse lawn's picture

October 2014. Althou the world of the psychic may have other dates in mind. Enjoy http://www.youtube.com/watch?v=Kiiuc0M4L40

Thu, 03/08/2012 - 18:57 | 2237598 oldman
oldman's picture

Dear Camaro

WE are in the crash and have been since 1999. We will be crashing for another decade or so.

Try not to be so impatient, please. This is very painful for many people and only this pain spread wider by every CB lie will eventually bring about change.

That we are changing slowly is most obvious to this oldman. His careless off the wall comments which, during a lifetime spanning seven decades, have always brought crys of derision or the "love it or leave it" response, are now finding agreement about half of the time on this site. This is a huge shift that he cannot account for from his experience.

Since I am too fragile to fight anymore my only way of hanging in this lifelong battle against arrogant and ignorant authority is to 'sting like a bee'(from my favorite american--thank you, Ali) under an anonymous handle. I, truly, am most grateful to be here with each of you.

But if it has taken 70 years to get started----patience, dear friend, is what is required. Whether you resist passively, actively, or simply do nothing more than bang the keyboard here at ZH-----you are a part of the unknown new order that is coming and this may take longer than we think.

South America is only two hundred years into its revolution, but anglolandia is just beginning-----------------it does not make a whit of difference because we are all brothers and sisters with each other and all individuals of all species.

Just part of the natural world in the order of the universe                      om

Fri, 03/09/2012 - 00:10 | 2238464 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1

Well said, this 56 yr old appreciates you post.

Fri, 03/09/2012 - 00:29 | 2238494 Braverdave
Braverdave's picture

And all the brotherz and bitchez said "amen".

Fri, 03/09/2012 - 00:47 | 2238528 oldman
oldman's picture

@braverdave

Thanks, dude

It is a little 'preachy'------

I have to laugh with you at an oldman's arrogance                om

Fri, 03/09/2012 - 08:15 | 2239086 Death and Gravity
Death and Gravity's picture

Us youngsters salute you, oldman.

 

Keep kicking a bit more, some do appreciate the nuggets of wisdom occasionally accumulated. :)

Thu, 03/08/2012 - 22:37 | 2238324 absente reo
absente reo's picture

LOL!

Thu, 03/08/2012 - 18:14 | 2237471 JPM Hater001
JPM Hater001's picture

I'm gonna pretend your a chick whether you are or not..."gold bitchez" is hotter that way.

Thu, 03/08/2012 - 17:46 | 2237390 mayhem_korner
mayhem_korner's picture

 

 

Back so soon, 1700?  We hardly missed you.

Thu, 03/08/2012 - 17:50 | 2237401 spiral_eyes
spiral_eyes's picture

Nouriel's face is turning red.

Thu, 03/08/2012 - 18:06 | 2237442 Xkwisetly Paneful
Xkwisetly Paneful's picture

Can't win, it is hilarious.

If the world ends gold and silver will be liquidated en masse to meet margin calls.

If the world doesn't end your boat is already full.

Where the buyers coming from beyond direct government money printing which is just as likely to end up in equities where the retail investor is currently non-existant-a buyer not already in neck deep.

I was at the taco bell drive in and the woman asked if I wanted some gold or silver with that.

Thu, 03/08/2012 - 18:14 | 2237472 Black Forest
Black Forest's picture

If the world ends gold and silver will be liquidated en masse to meet margin calls.

As we are living in socialism (again), such a liquidation would not necessarily induce a significant decline of PM prices.

Thu, 03/08/2012 - 18:19 | 2237483 Burnbright
Burnbright's picture

I honestly think you should win the worst troll award based on the fact that you actually believe what you are saying. Congrats!

Thu, 03/08/2012 - 18:20 | 2237493 fuu
fuu's picture

If the world ends who will make those margin calls?

Thu, 03/08/2012 - 19:14 | 2237643 Bansters-in-my-...
Bansters-in-my- feces's picture

Fuck Off x_paneful or we'll bitch slap ya...

Thu, 03/08/2012 - 19:23 | 2237680 tswenson
tswenson's picture

My boat is full of real currency; not the shit you will have to burn at night to stay alive.

Thu, 03/08/2012 - 20:38 | 2237932 Freebird
Freebird's picture

Baboons' cheeks are always red Speyes

Thu, 03/08/2012 - 18:22 | 2237500 kito
kito's picture

@mayhem...dont worry, with no printing coming from the fed this year, you will be well acquainted with good ole 1700...............

Thu, 03/08/2012 - 17:51 | 2237405 Freddie
Freddie's picture

I love that paper gold.

Fri, 03/09/2012 - 00:14 | 2238470 DoChenRollingBearing
DoChenRollingBearing's picture

I love REAL gold!  

Or did I miss sarcasm?  My BS and Sarcasm Meter barely functions, I am one of THOSE who likes the /sarc (and similar).  Hey, bearings can't think, they just roll with the flow.

Thu, 03/08/2012 - 17:58 | 2237430 4horse
4horse's picture

 

rhinegold

"I was shocked. First they said there is no list. Then there were lists, but they were secret. Then they told me that inquiries endanger the trust between the German Federal Bank and the U.S. Federal Reserve."

Philipp Missfelder,  mp CDU 

 

http://www.gata.org/node/11090

Thu, 03/08/2012 - 17:59 | 2237432 Motorhead
Motorhead's picture

Charts, bitchez!

Thu, 03/08/2012 - 18:22 | 2237458 DavidPierre
DavidPierre's picture

Now risk off?

 Was ever risk on?

Global equity markets have turned down because the March 9 deadline to conjure up a deal on Greek debt is tomorrow and it looks like investors are not going to accept a haircut shoved down their throats. Especially a haircut that it looks like the ECB and IMF will not participate.  Their bonds will not be impaired ... everyone else's will.

This really is going to be a defining event for the financial system because a default is going to occur.  There are rumors that nonpayment has already occurred. Greece cannot pay and the marketplace is obviously saying that it will not roll over any more paper as evidenced by one yr. Greek paper trading over 1,000%.

No matter what the ISDA says, this is a default and someone, somewhere has to take a loss.

The ECB can do whatever they like and price Greek debt at par or even a premium if they like.  Bankrupt is bankrupt!  All the perfume in the world cannot make this shit smell like anything other than what it is.  The end of the long line of sweeping dog crap debt under the rug. The amazing thing is that equity markets have waited until the decision to make a move.   So much for "it's all priced into the market".

 Nothing is priced into the market.

  There are no markets anymore!  

 Everything is Wag the Dog, painted charts and assets priced for perception alone.

 Let's take a look at Gold.  Gold was lambasted because supposedly no more QE would be forthcoming.  Down because it is a risk asset and a Greek problem will be bad for Gold.

Has anyone in Washington or Wall St. really thought this one through?

A Greek default no matter how it is handled is going to cause massive disruptions. No default trigger leads to CDS owners getting stiffed and sitting naked with uninsured lossed on their bonds, or it is a default trigger and CDS sellers get buried. 

Someone, somewhere is going to take a loss. 

Someone gets buried bigtime.

The problem... financial globalization is real!  This concept is not a farce and one of the very few truths told.  It was a good story on the way up.  The fact that it is real means that it's a trainwreck story on the way down.

The global interconnected financial orgy has insured that once one goes, they all go.

Another few minutes and another 1% down for Gold.  Cramer says that a Greek deal failure is bearish for Gold? How?

A sovereign government is going to defaut! 

 All paper assets are interconnected and reserved by each other.  Banks, brokers, hedge funds, sovereign countries and their central banks are all dependent upon each other for survival.  One fail ... all fail!  Cramer explained it as "this time it's different", saying that you don't buy Gold during a deflation..."in this era".

Bullshit!

You buy, own and retain Gold especially in this era because it is the only money on the planet.

 Everything else is debt.  

Dollars are debt. Euros are debt, as are Pounds, Yen, Pesos and every other paper currency on the planet. You do not sell real money immediately ahead of a deflation where sovereign debt of every shape, size and colored ink will not perform.

 Talk about counterintuitive, the current action is counter reality!

www.lemetropolecafe.com

Thu, 03/08/2012 - 18:36 | 2237540 MolotovCockhead
MolotovCockhead's picture

"No matter what the ISDA says, this is a default and someone, somewhere has to take a loss."

You are damn right, someone has to take the loss!!

But those bastards involved in the circus have other ideas. Neither the buyers nor the sellers have to take any loss but everyone else has to endure what is call austerity!

Fri, 03/09/2012 - 00:22 | 2238481 DoChenRollingBearing
DoChenRollingBearing's picture

@ DavidPierre

+ $55,000

 

Paper is going to burn.  Greece is just the first warm-up act.  Others in Europe will follow (Portugal, probably Italy and Spain).  And money will be lost yet again.

10% of your wealth should be in gold.

Fri, 03/09/2012 - 00:35 | 2238504 Braverdave
Braverdave's picture

Simmered low and slow ... it's a nice recipe for Frog Soup.

Fri, 03/09/2012 - 01:32 | 2238609 oldman
oldman's picture

@davidpierre

Come on, now, Bill----sit down over here laddie, we're going to make it right; don't you worry.

You're one of us and an associate---

here's the deal----

we've formed an insurace ring---everyone is in and we'll square the books after the fireworks are over without a penny of risk because all bets have been called in and lumped into the same pot.

When the hand's over---we split it up evenly and the fed gives us the difference.

So, don't worry, laddie----its just a big show

everyones covered except the fed---and they have the 'full faith and credit of---------'

Thu, 03/08/2012 - 18:08 | 2237460 fourchan
fourchan's picture

only a moron would sell physical now.

Fri, 03/09/2012 - 00:23 | 2238482 DoChenRollingBearing
DoChenRollingBearing's picture

I bought!

Thu, 03/08/2012 - 18:14 | 2237473 Death and Gravity
Death and Gravity's picture

I'm tempted to say.... BTFD!

Thu, 03/08/2012 - 18:18 | 2237484 PicassoInActions
PicassoInActions's picture

gold now is highly correlated to eur/usd and risk on... i guess every1 here wants the euro to go up

Thu, 03/08/2012 - 18:21 | 2237497 fuu
fuu's picture

I dunno about everyone else, I just want a pony.

Thu, 03/08/2012 - 18:32 | 2237527 bbq on whitehou...
bbq on whitehouse lawn's picture

A pony is fun for the first 5 seconds then it bites you or kicks you.

Thu, 03/08/2012 - 21:25 | 2238089 grey7beard
grey7beard's picture

>> A pony is fun for the first 5 seconds then it bites you or kicks you.

Unless, of course, that Pony is a Troy Bilt Pony tiller.  The Pony does a fine job of tilling a garden.  I just upgraded to one this year and had great results putting in a 3,000 sq ft garden.  Choose your pony wisely.

Fri, 03/09/2012 - 00:36 | 2238506 Braverdave
Braverdave's picture

And a green sky!

Thu, 03/08/2012 - 18:28 | 2237518 Black Forest
Black Forest's picture

Correlations are prone to be broken from time to time.....

 

Thu, 03/08/2012 - 18:18 | 2237486 slewie the pi-rat
slewie the pi-rat's picture

the marginal equity trader is far more comfortable with uncertainty (remember participation does not mean agreement still) than the marginal credit trader.

is the fringe calling the marginal out, BiCheZ?

 

 

Thu, 03/08/2012 - 18:21 | 2237496 PicassoInActions
PicassoInActions's picture

hourly

 

EURUSD 100 81.5 90.2 EURUSD XAGUSD 81.5 100 97.3 XAGUSD XAUUSD 90.2 97.3 100 XAUUSD

 

daily

EURUSD 100 89.7 81 EURUSD XAGUSD 89.7 100 94.5 XAGUSD XAUUSD 81 94.5 100 XAUUSD

weekly

 

EURUSD 100 76.8 -32.2 EURUSD XAGUSD 76.8 100 2.4 XAGUSD XAUUSD -32.2 2.4 100 XAUUS


Thu, 03/08/2012 - 19:05 | 2237607 reTARD
reTARD's picture

The only fix to a broken COMPLEX financial/monetary world is to return to the SIMPLICITY that is gold and real assets and currencies.

There will always be irrational markets and mis-allocation of wealth when multiple variables are constantly changing at the same time. We currently have monetary supply (and thus value) changing or subject to change as well as interest rates, reserve ratio requirements, etc. Try troubleshooting and fixing a machine by changing multiple variables at a time and see how logical deduction works for you. Or try remembering to factor in interest rates, taxes, write-offs, etc the next time you make a "knowledgeable" purchase.

COMPLEXITY leads to irrationality and unknowledgeable market places. SIMPLICITY leads to logic and rationality and knowledgeable market places.

Thu, 03/08/2012 - 19:56 | 2237797 4horse
4horse's picture

COMPLEXITY leads to irrationality and unknowledgeable market prices

simple enough. which is exactly what bankers want

Thu, 03/08/2012 - 19:16 | 2237649 sheepgetslaughtered
Thu, 03/08/2012 - 20:31 | 2237907 justsayin2u
justsayin2u's picture

I'd rather inflate my way to the poorhouse than deflate my way anyday.  Keep them presses runin boys.  Risk on.

Thu, 03/08/2012 - 21:21 | 2238074 dolph9
dolph9's picture

The manipulators are trying to convince the world that gold is a "risk on" trade.  You can see it everywhere in the propaganda.

It isn't.

Gold is the inverse of the fiat petrodollar.  That's a trade I'm happy to make.

Thu, 03/08/2012 - 21:32 | 2238115 dcb
dcb's picture

yeah yeah yeah, tomm should vbe down, which should represenst a buy opp\ortunity, but it isn't a real bottom at all for buy purposes.

it just so stupud the algos kniow where they need to go, the question is the path, the path goes the way that it does because central bankers won't do anything to fix the markets.  

Thu, 03/08/2012 - 22:24 | 2238284 Sandoz
Sandoz's picture

Business Insider reporting that Australian "non-monetary gold" sales have "collapsed." Their link from the Australian Bureau of Statistics shows that gold exports fell a seasonally adjusted 56%! 

http://www.businessinsider.com/australian-gold-sales-collapsed-2012-3

There could be a number of reasons for this, so it's difficult to tell what this really means in terms of gold demand. 

Fri, 03/09/2012 - 00:06 | 2238456 AgShaman
AgShaman's picture

Gold is a bubble....1 % of the populace has got some bits and pieces of it.

(Must be like Lawrence Welkish' tiny bubbles.....fairly tame at this juncture)

Fri, 03/09/2012 - 00:28 | 2238493 Isherwood
Isherwood's picture

I got 21 oz of gold and 600 oz is silver..... Is that a good start or am I too late?

Fri, 03/09/2012 - 00:41 | 2238514 Braverdave
Braverdave's picture

It's good ... to me at least.

Fri, 03/09/2012 - 02:32 | 2238746 Darkness
Darkness's picture

That SLV gotta make me some $$ tomorrow so I can turn it into more SLV. 

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