This page has been archived and commenting is disabled.

As Gold Rebounds Over $1600, Some Thoughts On Why The Liquidation Snapback Is Here

Tyler Durden's picture





 

Yesterday when gold was trading in the $1570 we suggested that based on the very volatile shifts in the funding environment for gold, whereby the gold lease rate had moved from record negative to borderline flat, the plunge in the yellow metal is likely coming to an end. Less than 24 hours later, gold has just passed $1600 yet again. And as the following note from Sandeep Jaitly of First International Group (whose interview with Max Keiser exposing economics for fraud back in June was quite the hit) observes, by analyzing the continued funding unwind pressure, the recent liquidation move in gold is one that has to be taken advantage of. To wit: "The movements in the bases confirm that the recent downward move in gold against Dollars was as a result of Dollar funding pressures. Gold was lent on the swap against United States Dollars. This swap must be unwound and where a bid for gold was sought to raise Dollar liquidity, an offer of gold will be sought to unwind the swaps. The co-bases for Feb-12 and Apr-12 gold contracts are starting to advance – an exceptionally bullish signal following the selloff and a sign that physical buying is being prompted by these lower prices. It would be very prudent to accumulate gold against United States Dollars aggressively over the next fortnight."

From First International Group, Gold Basis Service

LONDON, Thursday 15th December, 13:43 HRS BST. Spot gold is currently $1,584.25/45, and the gold/silver ratio is currently 54.56/54.63. The conclusion from the last missive sent on 23rd November read:

“The movements in the December gold bases are still pointing to further upside for the gold price in fiat currencies – especially the Dollar, Euro and Pound Sterling (note the drop of just referring to the United States Dollar.) The ratio of the December gold/silver bases is pointing to downside for the gold/silver ratio.”

Gold was $1,687.15 bid at the time. Subsequent to that, it rallied to a high of $1,763.01 on 2nd December, before falling back to its current $1,584. The movements of the basis and co-basis during this time told all.

The chart to the left displays the normalised co-bases for The Dec-11, Feb-12 and Apr-12 COMEX gold contracts (left hand scale), as well as the gold price on the right hand scale.

Point 1 on the chart shows the December contract going into backwardation (a high of +0.7% was reached on 30th November), just as the price of gold began to escalate. Point 2 shows the backwardation in the December contract starting to decrease and fall rapidly – a few days ahead of the contraction in the price from 2nd December’s high. Point 3 shows the co-bases for Feb-12 and Apr-12 advancing higher towards a possible backwardation (likely to occur by the beginning of January by historical standards.)

A lot of reasons have been given for the correction in the gold price – futures liquidation being a prime candidate. However, this is not the case as movements in the bases tell otherwise. There has been continued Dollar-based funding pressure in the money markets of late (witness the escalation in LIBOR which has doubled over the past few months.) The escalation in the gold lease rates – that prompted gold to go into backwardation – was caused by gold being borrowed with the intention of providing Dollar liquidity (by selling the gold in a ‘sale and repurchase’ transaction.) The fall in the gold price being accompanied by a fall in the co-basis points to signs of physical gold being liquidated not futures. Massive futures’ liquidation would see the co-basis rise and basis fall – the complete opposite of what actually occurred.

The salient points to remember here are: that the borrowing of gold caused lease rates to escalate above money market rates and that gold was borrowed ‘on the swap.’ The former point can only be explained by the fact that the physical gold market is very tight (in terms of both supply, and loanable gold.) With the latter point, one must remember that swapped (and sold) gold must be returned (and therefore bought.)

The Feb-12 and Apr-12 COMEX gold contracts are already advancing towards backwardation with the co-bases for each having bottomed on 9th December (Point 3 on the chart above.) This is an exceptionally bullish sign for gold priced against fiat currencies. As the gold price has been correcting, physical interest is dominating the gold market.

The amount of gold stored at COMEX warehouses remained static over the past quarter as can be seen in the chart to the left. However, there was an important mix shift at the end of November into December: around 1m ounces of gold (around 10% of total inventory) was shifted from the ‘eligible’ category to the ‘registered’ category. That is ‘registration’ for sale. This again points to gold on the swap being the cause of the price decline.

The gold/silver ratio has remained range bound, currently at 54.56 bid v. 53.16 bid at the last missive. There is insufficient data for 2012 contracts to provide a change in this stance.

The fourth quarter’s Course of The Exchange will be published soon. As patrons of this service have known since the beginning of the year, the Dollar’s resurgence against other fiat currencies was expected. We will be reiterating the (unchanged) reasons for the continuance of this trend going forward. Issues surrounding the Eurozone will be covered from a multi-century historical perspective. United States equities, bonds or both for 2012? This will be a central issue to be discussed as well.

CONCLUSION…The movements in the bases confirm that the recent downward move in gold against Dollars was as a result of Dollar funding pressures. Gold was lent on the swap against United States Dollars. This swap must be unwound and where a bid for gold was sought to raise Dollar liquidity, an offer of gold will be sought to unwind the swaps. The co-bases for Feb-12 and Apr-12 gold contracts are starting to advance – an exceptionally bullish signal following the selloff and a sign that physical buying is being prompted by these lower prices. It would be very prudent to accumulate gold against United States Dollars aggressively over the next fortnight.

 


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Fri, 12/16/2011 - 08:59 | Link to Comment Saxxon
Saxxon's picture

I was long DGP a day early for a flip but I was and am never concerned.  To my surprise, not a single negative emotion has passed through my mind re this position - I cannot not even generate one via contemplation.  That is how confident I am of these trades.

Unless you need the money or margin forces you out, you need not take a loss on a long gold position.  History and very large social forces are on our side.

Fri, 12/16/2011 - 09:04 | Link to Comment GMadScientist
GMadScientist's picture

Shares?

Lulz

Fri, 12/16/2011 - 09:36 | Link to Comment clones2
clones2's picture

Uhhhhhhhh - it was down 10% in 4 sessions.  And was oversold (RSI under 30).

How's that for explaining the 1.2% surge in pre-market....?

Fri, 12/16/2011 - 10:02 | Link to Comment Pladizow
Pladizow's picture

So Roubini is wrong?

Fri, 12/16/2011 - 10:44 | Link to Comment SRSrocco
SRSrocco's picture

Pladizow... Roubini is an idiot.  When Nouriel Roubini and Nassim Taleb dicussed the events taking down the markets in 2009 on CNBC http://www.youtube.com/watch?v=hk4TgUxX0fQ, Roubini sounds like that typical monotone professor we had in college that bores the living hell out of you.  Taleb on the other hand is passionate and speaks the real truth which makes Roubini look like the fool he is.

Furthermore, it isn't just the gold lease rates going negative that created a bottom in gold.  Tom Szabo from the metal Augmentor has been writing about the gold basis, and lease rates for years.  You might want to check out his recent article:

Negative Lease Rates and the Ticking Time Bomb

http://news.goldseek.com/GoldSeek/1323964800.php

Fri, 12/16/2011 - 10:58 | Link to Comment Pladizow
Pladizow's picture

The question was sarcastically rhetorical!

Fri, 12/16/2011 - 11:03 | Link to Comment SRSrocco
SRSrocco's picture

Plad... I knew that.  Roubini is typical of those who are the BLIND LEADING THE BLIND.

Fri, 12/16/2011 - 11:42 | Link to Comment Montecarlo
Montecarlo's picture

I hope people remember that plenty of "thought leaders" or those who pose as experts get paid for their "research."  Something as ignorant as Roubini's comments in this area look paid for.  Occam's Razor.

Fri, 12/16/2011 - 11:54 | Link to Comment Elmer Fudd
Elmer Fudd's picture

Would they be Nouribugs or Roubibugs, and "where are they now?"

Fri, 12/16/2011 - 10:14 | Link to Comment Scottj88
Scottj88's picture

"Thoughts on why the gold market is rebounding?"

Is this a serious post? ;)

Fri, 12/16/2011 - 08:59 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Over the next fortnight? Just as the Dollar index accelerates into a pre-death reach for the sun? Hmmmm.....

ori

/this-that-and-the-4th-reich/

Fri, 12/16/2011 - 14:16 | Link to Comment akak
akak's picture

Yes, I will admit to not running to Google for the answer, but what in the Hell is a "fortnight" anyway?  Is that like spending a night in a fort?

I wish ZH would edit out all dialectical and local slang from their reposted articles --- it makes the site appear sloppy and unprofessional.  Like all those foreign misspellings of the words "while" and "learned" with "t"s in them.

Fri, 12/16/2011 - 15:04 | Link to Comment pointer
pointer's picture
1 fortnight = 14 days
Fri, 12/16/2011 - 15:12 | Link to Comment WonderDawg
WonderDawg's picture

LMFAO The uber-intellectual and worldly akak doesn't know what "fortnight" means. That's precious.

Fri, 12/16/2011 - 15:14 | Link to Comment akak
akak's picture

Thank you for trolling.

Sat, 12/17/2011 - 08:29 | Link to Comment Haddock
Haddock's picture

You could look up 'ignoramus' too...

Fri, 12/16/2011 - 09:02 | Link to Comment Paper CRUSHer
Paper CRUSHer's picture

Oh, here's a little more for y'all ya folks out there that are into heavy metal:

http://www.safehaven.com/article/23670/negative-lease-rates-and-the-ticking-gold-time-bomb

Fri, 12/16/2011 - 09:01 | Link to Comment spiral_eyes
spiral_eyes's picture

All of this is statistical noise. If Bernanke is looking for something "transitory" it is this gold slump.

Bitchez need to look at the long term gold trends to understand the real reality.

http://azizonomics.com/2011/09/06/america-priced-in-gold/

Fri, 12/16/2011 - 09:02 | Link to Comment My Taint
My Taint's picture

Every other article is about gold. I would call that group think...Makes me want to see it go under a grand.

Fri, 12/16/2011 - 09:47 | Link to Comment tmosley
tmosley's picture

You are an idiot.  The last one was about rising production.

Also, ZH isn't the street.  All the trolls make that exact same mistake.

Fri, 12/16/2011 - 10:01 | Link to Comment Popo
Popo's picture

True.  But one must responsibly point out that ZH does tend to have blinders on when it comes to gold.

After all:  All commodities are green today.  http://finviz.com/futures.ashx

Oats, Lumber, Copper and Sugar are significantly outperforming gold.  Which would seem to call into question Tyler's theory on why "Gold" is rebounding.

'Just sayin' 

Fri, 12/16/2011 - 11:44 | Link to Comment tmosley
tmosley's picture

That is Tyler, not Zerohedge.  Zerohedge includes all the Tylers and the commentors.

As you yourslef point out a difference of opinion you have with Tyler, so do many people have their own theories.  There may be a prevailing wisdom, but there is no shortage of differing opinions.  The point is that the prevailing wisdom on ZH almost never overlaps with the prevailing wisdom on the street.

Fri, 12/16/2011 - 12:02 | Link to Comment defn8Dog
defn8Dog's picture

There is ususally a time differential, with ZH being somewhat early to way early.

Fri, 12/16/2011 - 11:59 | Link to Comment Spitzer
Spitzer's picture

what about august ?

and gold is up on the year. most stuff isnt

Fri, 12/16/2011 - 10:14 | Link to Comment Haddock
Haddock's picture

You are quick to call people idiots, but unfortunatley the thin content of your posts does not justify your haughty arrogance.

Fri, 12/16/2011 - 10:57 | Link to Comment WonderDawg
WonderDawg's picture

Tmo gets very emotional about his PMs. He's good entertainment, though, when him and Trav get going. Fun to watch, but keep a towel handy for when the spit starts flying.

Fri, 12/16/2011 - 11:10 | Link to Comment Haddock
Haddock's picture

He is emotional for sure, but has a one dimensional view and refuses point blank to enter any dialogue which questions this view.

His habit of labelling anyone with a view contrary to his as a troll or sheeple or idiot bugs the shit out of me, and the hordes on here that follow this line is turning the ZH comments section into a gold/silver pumping ground, nothing more.

Fri, 12/16/2011 - 11:35 | Link to Comment JOYFUL
JOYFUL's picture

U B Tru Capt...but as an old salt, u will surely realize that the taint was jus baitin the hook...an Mosley luvs anything shiny!

in a desert every second sentence may involve the word Water

so in a world devoid of fiscal reality why shouldn't every second article involve the word Gold?

Fri, 12/16/2011 - 11:40 | Link to Comment WonderDawg
WonderDawg's picture

I'm with you. Back in the spring when silver was bolting towards $50, I suggested that there would be a big correction, and Tmo and akak absolutely trashed me, called me every name in the book, including "statist". Hilarious, considering my views about the MIF complex. But, because I suggested PMs weren't going to the moon, I was junked into oblivion. Whatever.

I feel bad for one guy on here, don't remember who it was. Silver was at $45 and still rising, and he said he was selling everything that wasn't nailed down, and would max out his credit, to go all in on silver, as the pumpers were telling him how smart he was to do so. Bummer for him for listening and buying into the emotional pumpfest that was going on.

And just for the record, I'm not anti-PM, I just want to maximize my purchases.

Fri, 12/16/2011 - 11:52 | Link to Comment Libertarian777
Libertarian777's picture

agreed.

As in any context one has to look at your entire portfolio as a whole.

Yes there are strong bullish arguments for unprintable gold and silver, but holding something that is this volatile would not help a retired person who needs a steady income stream TODAY.

Sure if he bought 100% gold/silver back in 2003 he'd be fine now, but he'd have been just as fine if he bought pets.com and amazon.com in 1995/6 and sold out in 1999.

Hindsight is always perfect.

I believe in the shiny stuff, I just believe more in risk management. For better or worse, we are stuck in the current financial system and HAVE to use USDs to buy and sell stuff. Whether I believe a FRN is counterfeit or not, or whether or not I would accept gold and silver in payment, doesn't help if 99.99% of the rest of the population wouldn't pay $50 for a gold eagle.

So while it might be nice if you could negotiate with your bank to pay your mortgage in gold / silver, they won't accept it, so it leaves you having to sell a gold coin every month to cover your mortgage and then you have high transaction expenses, bid/ask spread from the dealer and the potential of coming up short due to volatility in any particular month

Fri, 12/16/2011 - 13:22 | Link to Comment trav7777
trav7777's picture

akock and mosely-claven are like that.

They get adulation and virtual popularity from shamelessly pumping.  So what if they create massive bagholders and wipe out life's savings along the way?  It's not about truth for them, it's about drawing sychophants and getting favorable attention.  In reality, they are no different from people like politicians or those who lead cults.  Any dissenters must be punished.  It's the height of irony that ZH has an orthodoxy and if you cross it, these same "freethinkers" call to have you sent to a virtual gulag.

Someone who CARED would have advised extreme caution at $49, as I did.  In fact, I called out specific technical indicators flashing HUGE warning signs.  I'm not here to win your friendship; I am here to tell you the truth, whether you LIKE that truth or not. 

I have noticed that a LOT of the so-called ZH glitterati are really in this more to have an audience of drooling supplicants...they're would-be cults of personality.

Fri, 12/16/2011 - 13:33 | Link to Comment WonderDawg
WonderDawg's picture

Yep, and I view those guys as entertainment. Unfortunately, others take them seriously. That's what I love about this place; I find the truth, which can be disturbing, but those guys are around for comic relief. You sure know how to push their buttons LOL.

Fri, 12/16/2011 - 14:37 | Link to Comment akak
akak's picture

If memory serves, you made quite a number of posts at the time slamming the ownership of PMs in general, NOT just silver at that particular point in time, as well as spreading gross misinformation (or disinformation) over monetary matters, and especially over monetary history, distorting it with a pro-fiat statist bent.  That was why I attacked you back then.

Fri, 12/16/2011 - 14:58 | Link to Comment WonderDawg
WonderDawg's picture

Wrong on all counts, akak. My posts suggested that PMs would rise and fall, not just rise, and when they blew out, I suggested there would be a correction. For this, you slammed me, called me names. I could just picture you frothing at the mouth, eyes bulging, veins popping. I thought it was kind of funny how badly you misread me. I've done a lot of analysis, and I believe we'll see deflation before hyperinflation, and for this you also slammed me. But it's happening right before our eyes, and you don't see it. Whatever. Although you and I agree on most things, you get so fucking bent out of shape if someone doesn't agree with your projections on PMs and hyperinflation, you go straight off the fucking deep end.

Whatever. You're funny like a clown. You are here for my amusement.

Fri, 12/16/2011 - 15:07 | Link to Comment akak
akak's picture

You just proved yourself a low-class act, Wonderdawg, by attributing to me words and thoughts that I NEVER expressed nor held.

Please show me ONE POST in which I even implied that PMs were heading "to the moon", or will rise in a straight line.  Let me save you time --- you can't. 

But I know for a fact that you grossly misrepresented monetary history time after time, taking the deceptive and dishonest deflationary line, never acknowledging, and even denying, that EVERY government issuing a fiat currency and taking on exponentially-rising debt has sooner or later ended up radically depreciating their currency, wiping out the savings of their citizens in the process.  Anyone suggesting that we have more to fear from deflation (or anything to fear from it at all) rather than so-called "inflation" (which should be called what it really is, currency debasement) is either living in a fantasy world devoid of any historical perspective, or is just another malicious shill of the financial and political elite, furthering their agenda by scaring the sheep with dire threats only to make them run directly into the slaughtering house.

Fri, 12/16/2011 - 15:09 | Link to Comment WonderDawg
WonderDawg's picture

LMAO There you go again. So predictable, but that's part of your charm. Tweek.

Fri, 12/16/2011 - 15:11 | Link to Comment akak
akak's picture

Thank you for trolling.

Fri, 12/16/2011 - 16:47 | Link to Comment tmosley
tmosley's picture

More complete post below.

Fri, 12/16/2011 - 15:12 | Link to Comment akak
akak's picture

Trav, in addition to being a vile, hate-filled racist, you are an utterly shameless liar.

I have NEVER "pumped" silver, nor gold, nor ANYTHING here, ever --- and I challenge you to find one single post in which I did.  I have also NEVER advocated nor even discussed the short-term trading of PMs, unlike you, always taking a long-term view instead, as I firmly believe that the day will come when all short-term and paper PM traders are going to be burned, just as MFG clients were recently burned.  Any comments that I have made about the wisdom of owning precious metals in a time of profligate, debt-ridden governments and the manifest dangers in relying on their fiat paper Ponzi schemes have been completely general and non-specific in nature, and would have been just as applicable five or ten years ago as today.

In short, YOU LIE!

Fri, 12/16/2011 - 16:47 | Link to Comment tmosley
tmosley's picture

If Trav were Jim Carry from Liar Liar, all of his comments would look like this:

http://www.youtube.com/watch?v=Dx32b5igLwA&feature=related

Trav does nothing but lie and ignore the truth.  He to this day claims that I said that everyone in Tokyo would be dead or evacuated within a couple of weeks of a post back in late March.  I did say that, but he allows the reader to assume that I was talking about radiation, when I was in fact talking about the fact that the water supply had been cut off, and that all the stores were out of bottled water.

Further, he is purposefully dense when it comes to my calls.  He pretends as though I didn't start saying "buy" until silver was $49.  When I tell him my cost average only recently passed $18, he claims that I was pumping silver without buying it myself, showing that he doesn't know what an "average" is.  Why would ANYONE listen to this goon?

The answer?  They would listen to him because he confirms their bias against PMs.

Fri, 12/16/2011 - 13:31 | Link to Comment Zero Govt
Zero Govt's picture

WonderDawg   "But, because I suggested PMs weren't going to the moon, I was junked into oblivion."

You're being the party pooper, what did you expect?

Try suggesting a 1% spending cut next time the Super Committee meets and see what reaction you get   ...'duck!'

Anyway it's nice to get junked into oblivion every so often, keeps your feet on the ground  ;)

Fri, 12/16/2011 - 13:34 | Link to Comment WonderDawg
WonderDawg's picture

That's right, ZG. Gotta stay grounded ;-)

Fri, 12/16/2011 - 22:01 | Link to Comment fuu
fuu's picture

"I feel bad for one guy on here, don't remember who it was. Silver was at $45 and still rising, and he said he was selling everything that wasn't nailed down, and would max out his credit, to go all in on silver, as the pumpers were telling him how smart he was to do so. Bummer for him for listening and buying into the emotional pumpfest that was going on."

 

What kind of moron does that? Seriously he was a chasing a get rich quick scheme and you feel sorry for him?

Fri, 12/16/2011 - 11:48 | Link to Comment bernorange
bernorange's picture

Not sure how one can view the actions of central banks, FX markets and globalist groups like the IMF, World Bank, etc. and not have an interest in what's happening with the gold markets.  Have you read Rickards' Currency Wars book?  I think there are larger issues playing out people should be paying attention to.

That's not to say that constant pumping isn't annoying, just that keeping a focus on what's happening with gold is deserving of regular commentary here.  My $.02 anyway.

www.pmbug.com

Fri, 12/16/2011 - 12:01 | Link to Comment tmosley
tmosley's picture

Uh-huh, I guess you haven't been paying attention to the habits of certain posters, who in fact, continuously register new user names for not other reason than to bash PMs.  The same two or three idiots have been doing so for at least a coupe of years now.  It is easy to point them out by their writing styles.

For example, Max Fisher is Texas Gunslinger is RedNeckRepugnicant among others I have forgotten.  "My Taint" is likely the lower class troll who has had dozens of names, starting with "MeTarzanUJane", and ending with one who actually stalked me through the internet and tried to have me fired from my job.

There are plenty of people with contrary opinons that we have good discussions with.  Topcallingtroll is a good example.  But the fact is that there are very few people who are able to argue against a PM bull market, or even against a "to da moon" argument simply because damn near all the facts are on their side.

The only time I become "emotional" is when assholes like Trav and the name-changing troll brigade try to hurt people with lies, half truths, mischaracterizations, etc.  This is OFTEN.

Fri, 12/16/2011 - 12:44 | Link to Comment Elmer Fudd
Elmer Fudd's picture

@MyTaint:

You dont think much, do you?  Didn't do well in math or science either, huh, too hard on that old brain, right?

Fri, 12/16/2011 - 09:02 | Link to Comment achmachat
achmachat's picture

I was able to BTFD.
I am a happy camper.
how about you?

Fri, 12/16/2011 - 09:03 | Link to Comment SWRichmond
SWRichmond's picture

Caught hoping for more dip....dammit.

Fri, 12/16/2011 - 09:35 | Link to Comment WonderDawg
WonderDawg's picture

Sit tight. It's coming.

Fri, 12/16/2011 - 11:26 | Link to Comment tekhneek
tekhneek's picture

Yeah I'm with WD. I'm one of those "i bought a long time ago and have kept buying" types but the way this shit's trading I wouldn't be surprised to see it drop much further. Does it make any sense? Not to me but I'm convinced every time I buy it goes down another 2-3% if not more. Every time I execute a trade on fundamentals I get hog tied too so, I'm going against my instinces now and it's worked out pretty well so far. Timing's a bitch though with these PM's sometimes.

I'm saving in US dollars because I'm pretty sure when the euro shit finally hits the fan it won't be a pretty picture for anything... at least that's what I'm counting on. If I'm wrong and the euro "collapse" causes gold to "shoot to the moon" then whatever, I still have some, just not as much as I want.

Fri, 12/16/2011 - 15:34 | Link to Comment akak
akak's picture

You know, WonderDawg, it is curious how you ONLY comment on the precious metals in the context of "warning" that they are about to fall in price.  According to your posts and your comments, the prices of gold and silver are apparently ALWAYS about to fall, so it is NEVER a good time to buy them. 

Hmmmm, just what Kitco representative does this "advice" remind me of?

But please, with your oracular wisdom, do let us know when gold and silver reach their final price bottoms.

Fri, 12/16/2011 - 16:00 | Link to Comment WonderDawg
WonderDawg's picture

I could say the same about your constant pumping. I'm a firm believer in having a position in physical, I just don't advise going all in at the top, like you do.

Fri, 12/16/2011 - 16:16 | Link to Comment akak
akak's picture

Thanks for proving yourself to be a shameless liar, as I have never once "pumped" gold or silver here in any post.  I have only talked about the wisdom of owning them generally, and NOT about buying them at any particular moment.

In contrast, you only appear here to talk them down, again and again, just like that snake Jon Nadler.  Yeah, according to you, gold and silver are ALWAYS about to fall in price --- so never, ever buy now!

Both a liar AND a fool.

Fri, 12/16/2011 - 16:20 | Link to Comment WonderDawg
WonderDawg's picture

Wrong again, akak. I'm starting to suspect you're wrong on purpose. I've been adding a little here and there on the way down, and I've posted that here. I would recommend to anyone that doesn't have a position in physical, to start now. But as I've said many times, keep some powder dry for when they REALLY go on sale. Yes, I believe they will fall further. So far, I've been right. What about you?

Fri, 12/16/2011 - 16:45 | Link to Comment akak
akak's picture

But as I've said many times, keep some powder dry for when they REALLY go on sale.

Give us dates and prices, since you are apparently so sure.

And tell us, Nadler, just when do the PMs bottom out for good?  I mean, there have been a number of price bottoms for both silver and, especially, gold that have never been revisited in the last ten years, so predicting this should be a simple matter for you, Oh Oracular One. 

Oh, and by the way, when does the paper PM Ponzi market finally explode, and turn all PM traders and paper PM holders into bagholders, as it assuredly will at some point?  That is an integral part, in fact the MOST important part, of the equation as well, but one which both you and Trav conveniently ignore.  Then there is the inevitable US dollar currency crisis, which is likely to "come out of nowhere" and cut 50% to 90% from the value of the US dollar, and unravel the markets (if the paper PM markets don't collapse by themselves first) --- when can we expect THAT to happen, according to you?

I guess, in other words, I look at those buying AND selling any significant portion of their PMs at this point as equivalent to those canceling and then repurchasing their homeowners insurance on a daily basis, based on their hour-by-hour estimation of the chances of windstorms, fire and flood: blinkered and short-term obsessed fools.

Fri, 12/16/2011 - 17:36 | Link to Comment WonderDawg
WonderDawg's picture

Refusing to answer my question, akak? I'll give you one thing, you've really been practicing your misdirection. Doesn't work on anyone here, but you keep trying little fella.

Fri, 12/16/2011 - 18:01 | Link to Comment akak
akak's picture

Since you didn't ASK me a direct question, what am I supposed to answer?

God, you are such a lying, disingenuous troll.  Nadler and you should really get a room.

Fri, 12/16/2011 - 11:18 | Link to Comment zapdude
zapdude's picture

Yep.  Happily exchanged FRN's for an additional 5 oz. of the precious.  My precious. 

No hesitation and no regrets.

My only question is to ultimately sell/transfer value into something else just BEFORE or AFTER the apocolypse? 

When is that, by the way -- the apocolypse?

Fri, 12/16/2011 - 15:02 | Link to Comment Bananamerican
Bananamerican's picture

are you free for dinner?

My mother-in-law is coming at 6:00

Fri, 12/16/2011 - 09:03 | Link to Comment Saxxon
Saxxon's picture

ORI, I am in no hurry.  That's the third factor.  And I still have 2/3 of my dry powder - a fourth factor.  Are your people still buying ?

Fri, 12/16/2011 - 09:06 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Saxxon, Gold is falling in India these past 5 days but demand is also slumping. Too expensive. Silver, OTOH is staying firm to gaining. The rupee has also CRASHED in the past week+, throwing the market into a bit of a tizzy (totally import dependent).

Slow is awesome though. And I think the real buying opportunities are still ahead. We have not seen head-snapping daily moves yet.

ori

Fri, 12/16/2011 - 10:13 | Link to Comment grey7beard
grey7beard's picture

>> demand is also slumping. Too expensive.

Now that price is down, demand is slumping because it's too expensive?  So gold was a better deal and more in demand $200+ ago?  Something doesn't seem to connect.

Fri, 12/16/2011 - 10:52 | Link to Comment qussl3
qussl3's picture

Gold dropping 10% is nothing when your currency drops 20+%.

Gold is holding pretty steady in most of Asia.

Definitely not seeing the same discount as you do.

This isnt a sale - yet.

Fri, 12/16/2011 - 12:07 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Still too expensive is what I meant to say. 

ori

Fri, 12/16/2011 - 10:50 | Link to Comment Shineola
Shineola's picture

The alchemists of our day are wise enough to turn paper into physical gold. (Silver) Amazing that we can still find enough knaves to meet the demand.

Fri, 12/16/2011 - 09:04 | Link to Comment fonzanoon
fonzanoon's picture

I thought dollar funding pressures were going to increase substantially as these banks and soveriegns start getting picked off. Would that not continue to force the price of gold down, albeit temporarily?

Fri, 12/16/2011 - 09:09 | Link to Comment Saxxon
Saxxon's picture

Fonz, of course.  But it's not due to dollar 'strength' or the strength of character of any of the people in power.

You just can't be in a hurry.

Fri, 12/16/2011 - 09:40 | Link to Comment MsCreant
MsCreant's picture

Check out the dollar chart and the gold chart on Mish's site. Not the correlation you would think.

http://globaleconomicanalysis.blogspot.com/2011/12/dear-nouriel-roubini-fundamental-case.html

Fri, 12/16/2011 - 10:19 | Link to Comment gmrpeabody
gmrpeabody's picture

Nice find. The correlation we would normally think of would be to compare gold to the value of the dollar (inflationary) and not the value of the dollar as compared to other currencies.

Fri, 12/16/2011 - 11:32 | Link to Comment RobD
RobD's picture

It seems that the CBs are doing an excellent job of deflating there fiats in unison and therefore the DXY holds steady. As has always been the case, gold shows what really is happening.

Fri, 12/16/2011 - 10:54 | Link to Comment qussl3
qussl3's picture

ECB, PBOC, BOJ print, DXY shoots to the moon.

Gold spikes as well.

Nobody is solvent.

Everyone needs a couple extra zeroes.

Fri, 12/16/2011 - 09:11 | Link to Comment fonzanoon
fonzanoon's picture

Saxxon thank you thats exactly what I was saying. I am waiting. But the premise here seems to be to buy over the next few weeks. It just seems contradictory.

Fri, 12/16/2011 - 09:23 | Link to Comment Saxxon
Saxxon's picture

Fonz, by waiting you may buy $1500 gold which a lot of people are bantering about.

I think all trades, when scrutinized, will appear contradictory.  There are always counterweights in my mind before I get into something.  Only a few times in ten years have I seen a virtually sure thing.

I swing trade so I buy dips and sell spikes and very often I am in pain a few days because my timing is imperfect.

That's why I take fractional positions and keep dry powder.

This is a hobby for me.  I thank God I do not have to do this for a living.

Fri, 12/16/2011 - 09:51 | Link to Comment Smiddywesson
Smiddywesson's picture

Yes, with ample evidence that TPTB can move whole markets contrary to logic, I think it's a very wise thing to mistrust what people consider logical and avoid going all-in on any trade.  So many of these smackdowns have defied reality (the drop when the SNB intervened in the Swiss Franc comes to mind) there's nothing to prevent TPTB from doing a return to break out head fake before driving gold prices lower right after you jump in, whether they have to eventually unwind these trades or not.  The article is probably right and gold will probably pop from here, but I would scale in and not be greedy.  The most powerful market participants are gunning for the gold bugs and they don't seem to mind the costs of doing so.

All we know for sure is there's a prospect for a paper trade here, but there's a guaranteed deal on physical whether they push the price down further or not.

Fri, 12/16/2011 - 09:12 | Link to Comment PulauHantu29
PulauHantu29's picture

My broker told me buy oil, silver and oil drillers.

Anyone else like these?

Fri, 12/16/2011 - 10:07 | Link to Comment Pladizow
Pladizow's picture

All but the broker!

Fri, 12/16/2011 - 09:17 | Link to Comment Saxxon
Saxxon's picture

Pulau, oil is black gold imvho.

Fri, 12/16/2011 - 09:17 | Link to Comment fonzanoon
fonzanoon's picture

How is he telling you to buy oil? The USO?

Fri, 12/16/2011 - 09:19 | Link to Comment firstdivision
firstdivision's picture

Gold shot up due to the DXY falling off a cliff, same with WTI.  The 10Y doesn't seem to be buying this shit yet.

Fri, 12/16/2011 - 09:20 | Link to Comment LeBalance
LeBalance's picture

i think it might be instructive from now on to explicitly state the term "paper gold" whenever discussing this con game.  As ZHers know very well paper gold is a fractionally reserved con-cept used to create the financial industry.  It is "nothing from nothing."

but, and it is unfortunate, there are a few (very few) folks that do not get this distinction.

certainly you have the capability to "buy" physical gold.  but the unwind is in the wind.

whatever route it takes there may be a time when physical actually achieves the mathematical value it would spring to if all the Con paper rushed into its "real" value.

but this is a common analogy and this is an irrational world.

making sense and being logical is the last thing that ever takes place.  :)

Fri, 12/16/2011 - 10:01 | Link to Comment Smiddywesson
Smiddywesson's picture

whatever route it takes there may be a time when physical actually achieves the mathematical value it would spring to if all the Con paper rushed into its "real" value.

But that would crash the system, so using logic, we know we can't see that happen until the system crashes.  Gold and silver will channel and appreciate by the central bank approved, decade old tradition, of 20% per year until the system crashes.  Then we get a big payout, not before.

My best case for a paper trade now is yes, they have to unwind the recent shorts, but also, they have always allowed gold to move up 20% a year for the last ten years.  We have quite a lot of price to reach that target.  If that doesn't happen, something significant is going on in terms of reaching End Game.

Fri, 12/16/2011 - 09:29 | Link to Comment Fred C Dobbs
Fred C Dobbs's picture

I added a 1904 Liberty Double Eagle today for 1655 federal reserve notes. I wanted to buy more but did not have the notes.

 

 

Fri, 12/16/2011 - 09:35 | Link to Comment cowdiddly
cowdiddly's picture

+1 20 dollar gold piece. 

Fri, 12/16/2011 - 09:30 | Link to Comment blindman
blindman's picture

Magical Egypt
http://topdocumentaryfilms.com/magical-egypt/
.
http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2011/12/16_...
Egon von Greyerz
.
Jim Rickards - The US Treasury Shorts the Dollar
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/12/16_J...
With tremendous volatility in the gold market, today King World News interviewed KWN
resident expert Jim Rickards, senior managing director at Tangent Capital Markets, to get
his take on the situation. When asked about the gut-wrenching moves that have been
dominating the gold market as of late, Rickards replied, “Well, I always think it’s
important, Eric, to separate fundamentals and long-term trends. That’s one thing you have
to understand and get right. But there are short-term technical factors as well. Gold
responds to both. In the long-run the fundamentals will prevail, but in the short-run the
technicals can definitely dominate and this was a week where the technicals dominated.”

.
When asked about the US dollar, Rickards responded, “Some legislation authorized a $100
billion line of credit from the United States to the IMF. It suddenly occurred to me how
this actually works. The IMF puts in the borrowing notice for the $100 billion and the
Treasury sends the $100 billion to the IMF. They (the IMF) then use it to bail out
Europe.
But here’s what happens, the Treasury sends the money and the SDR gives the Treasury a
note because it’s a borrowing. So that’s very significant because for the first time in
history the IMF would be leveraging its balance sheet. But the note they give the
Treasury is not denominated in dollars, it’s denominated in SDR’s.
The SDR includes dollars, but it also includes other things such as Swiss francs, pounds
sterling, euros, Japanese Yen and eventually the Yuan. Now when the note matures, the IMF
pays you back in the dollar equivalent of the SDR at that time. In other words, they
don’t give you $100 billion back. They take the SDR equivalent back and convert it into
dollars at whatever the exchange rate is at the time.
What that means is that the Treasury is going short dollars. Think about the significance
of that, Eric. The Treasury sponsors the dollar. You take a dollar bill out of your
pocket and look at it, the Secretary of the Treasury signs every dollar bill. It’s
sponsored and backed up by the Treasury and yet the Treasury is shorting its own currency
by taking SDR notes from the IMF. My question is, if the Treasury is shorting the dollar,
shouldn’t the rest of us be shorting the dollar too?”

Fri, 12/16/2011 - 09:45 | Link to Comment MsCreant
MsCreant's picture

I read this last night and almost posted it myself. The US will get paid back in SDRs!!!! This is big, if true.

Fri, 12/16/2011 - 15:37 | Link to Comment pakled
pakled's picture

One has to wonder how deep this rabbit hole goes....

I first had to try and comprehend Rickard's point about the T shorting the USD.... hmmm, so when it's time to pay back the loan, all non-dollar currencies must be converted to USD... thus is the USD happens to have fallen in relation to said currencies... more dollars can be purchased back then when the loan was made.,. thus the T makes a 'profit' on the loan, in addition to any interest paid. So yes, in effect the T, all else being equal is betting the dollar will drop in value, i.e., shorting the dollar.

IF, all else is equal. The chart that Ms Creant pointed to earlier comes into play here. Makes me wonder the term length would be imposed on such a loan.... and gee, how much certainty of even getting paid back! That makes me wonder about the SDRs being used. Rickard's, in his recent book Currency Wars (HIGHLY recommended), stated repeatedly tha the IMF had the right to literally create SDRs out of this air. That assertion has NOT been born out in recent articles I've read that all infer that the IMF must be funded to in turn loan.... yet if Rickard's assertion is correct that adds a new dimension to the idea of loaning against SDRs....

I wonder how many other moving parts there are to this concept.......?

Fri, 12/16/2011 - 18:31 | Link to Comment blindman
blindman's picture

it is all rabbit hole from here on out, all rabbit hole.
.
check these links.
http://archive
.wbai.org/
.
Guns and Butter
Friday December 16 9:00am
interview with michael hudson.
.
Gary Null - The Natural Living Show
Friday December 16 12:03pm
interviews outline the boldface moron
complexion of the usa national narrative, ongoing.
pnac global empire lies exposed.
also check 12/15/2011 natural living program.
interviews with, including, j galbraith.
we're going, going, gone to hell in a hand basket explained.
,
ps. sdr just another derivative level of hiding insolvency
and more derivative debt. decanting of the surfs from the masters
at the global zionist empire holiest of ho lies. it's the law as
hAS been handed down.
what a joke. but i love how the financial system will starve
itself by bankrupting, by stealing, the finances of the
farmers and workers who feed them out of the sacred love
of money, stealing and fraud. what a bunch of ignoramous and
useless idiots, ivy league and all, while the media encourages
infantility for advertizing dollars and mass manipulation. we are
a lost people with an unpleasant destiny, guaranteed; after all,
we must have infinite war to destroy the gifts of god.

Fri, 12/16/2011 - 09:31 | Link to Comment thunderchief
thunderchief's picture

Amazing all the big media bashers that came out the last few days.  They were all over Bloomberg and the rest.  A gold and silver bashing orgy.

I am never astonished at violent takedowns in the metals, and then the parade of shills coming out to cheerlead the end of the gold and silver. 

The good thing is they go away quietly, until the next knock down.

Fri, 12/16/2011 - 09:32 | Link to Comment dumpster
dumpster's picture

next fortnight

fourteen nights  or two weeks

Fri, 12/16/2011 - 09:38 | Link to Comment WonderDawg
WonderDawg's picture

Give yourself a gold star, Dumpster.

Fri, 12/16/2011 - 09:37 | Link to Comment Smiddywesson
Smiddywesson's picture

The Treasury shorting the dollar with the SDR is only one example of them doing anything to kick the can.  

I have to agree with the premise of the article, that the attack on PM prices is over (for now).  But as conditions worsen in Europe, another will follow hot on its heels.  

These attacks will come increasingly closer together and the price dips will become more severe as we reach the end of can kicking, so paper traders beware about what they think has to happen, and physical stackers enjoy and don't get too greedy and hold out for bargain basement prices.  IMO, stakers should keep scaling into the dips and paper traders should mind those stops.

Fri, 12/16/2011 - 09:41 | Link to Comment RobotTrader
RobotTrader's picture

Poor General Jim's $1,650 might very well be resistance.

 

 

Probably grind around $1,600 for a few days until the last CIGA finally throws in the towel in disgust.

When every single over-leveraged, F12-punching, CIGA and GATA clown has capitulated after figuring out that they were taken to the cleaners by Blythe and the PigMen, then gold will resume its rise.

However, it will be a very long and slow rise which could take years.

"If I had only invested in retail stocks instead!"

Fri, 12/16/2011 - 09:44 | Link to Comment WonderDawg
WonderDawg's picture

Fuckin A! I am heavily invested in retail stocks. LNKD, NKE, LULU, XRT. I've got puts on all of them.

Fri, 12/16/2011 - 09:47 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

Nice to see you back. :)

Fri, 12/16/2011 - 09:50 | Link to Comment firstdivision
firstdivision's picture

How my Zynga are you picking up today?  I'm hoping that you'll sell all your gold to buy Zynga shares. 

Fri, 12/16/2011 - 10:42 | Link to Comment dark pools of soros
dark pools of soros's picture

what's more real in a fake world?

Fri, 12/16/2011 - 09:51 | Link to Comment tmosley
tmosley's picture

Oh look, it's Robo, back with his dumbshit lies.  Must be done with his seventh bankruptcy proceeding in five years.  Trying to beat old Trump's record, eh?

CIGAs don't use leverage, you fucking idiot, nor do they "throw in the towel" after a correction.  If they did, they would have gone away a long time ago.  

Fri, 12/16/2011 - 10:09 | Link to Comment grey7beard
grey7beard's picture

>Poor General Jim

Poor Jim?  In what way?  He looks to be doing pretty well by my perspective.  I'm sure he doesn't grab a pillow to gnaw on every time the price moves.

Fri, 12/16/2011 - 10:09 | Link to Comment Smiddywesson
Smiddywesson's picture

LOL Robo.  Funny, but not subtle enough to qualify as your best stuff.

Years?  In this market?  A month is a year in this market.

Fri, 12/16/2011 - 10:14 | Link to Comment fredquimby
fredquimby's picture

Just added another 2g phys gold and 400g phys silver to the stash.

Doh, guess I capitulated and threw the towel

Fri, 12/16/2011 - 10:35 | Link to Comment junkyardjack
junkyardjack's picture

Great call on TLT

Fri, 12/16/2011 - 12:41 | Link to Comment tocointhephrase
tocointhephrase's picture

What was the Scarecrow's song in the Wizard of Oz?

Fri, 12/16/2011 - 09:44 | Link to Comment bill1102inf
bill1102inf's picture

"Fortnight" = 14 days. What type of asshole uses terms like that? Oh I see, some asshole named 'Sandeep'

 

Long at $1596

Fri, 12/16/2011 - 10:12 | Link to Comment Pladizow
Pladizow's picture

What type of asshole has a problem with a person who uses any particular word?

Fri, 12/16/2011 - 10:41 | Link to Comment bill1102inf
bill1102inf's picture

Ahoy bitch! Ya plank spanking jackwagon, I hearee da shiny dabloons is goin ova $1600!!! Thar precious might have to hit 1500 but dont look a gift horse in the mouth for a forthnight may pass and youll end up with your fender skirts in a bind.

Fri, 12/16/2011 - 11:02 | Link to Comment barkingbill
barkingbill's picture

actually fortnight (not forthnight) is a pretty common expression outside of the u.s.

Fri, 12/16/2011 - 12:48 | Link to Comment JOYFUL
JOYFUL's picture

I know this is kind of hard to believe, but several of our Cracker friends here do not actually acknowledge the phrase outside of the u.s to have any meaning other than my backyard...indeed, it's the explosive growth in backyard gardening that has fueled the cultivation of  commercial varieties of the poppy and cocoa species.

Serial gardening advocates like Bilbo here are firm ethusiasts of fertilizing these backyard plots with the blood n bone marrow of Merikan youth.

Seems to make all the difference to production quotas!



Fri, 12/16/2011 - 13:01 | Link to Comment ViewfromUnderth...
ViewfromUndertheBridge's picture

outside of the U.S.?...hell, that would be tha "pre-market"!

Fri, 12/16/2011 - 11:37 | Link to Comment GoldenGal
GoldenGal's picture

Bill, Fortnight is old English for 14 days...The term fortnight is still used by the British

much like the Canadians use serviette for a napkin

Fri, 12/16/2011 - 14:49 | Link to Comment akak
akak's picture

Canadians and their crazy accents!  They always amuse me --- they can't even figure out the difference between "stock" and "stalk", or "Don" and "Dawn".  But then again, neither can US west coasters.

Fri, 12/16/2011 - 13:04 | Link to Comment ActionFive
ActionFive's picture

Buying gold? What gives?

Fri, 12/16/2011 - 16:15 | Link to Comment tmosley
tmosley's picture

Jefferson's #1 Rule of Writing--never use two words when one will do.

Fri, 12/16/2011 - 09:46 | Link to Comment blindman
blindman's picture

this was recently linked and relinked here..
.
Copyright Martin Armstrong All Rights Reserved December 15th, 2011
http://www.inflateordie.com/files/Whats%20Up%20With%20Gold%2012-15-2011.pdf
.
Our logic is really messed up on terrorism. It is like that on ICE.
When you drink vodka over ice, it can give you kidney failure.
When you drink rum over ice, it can give you liver failure.
When you drink whiskey over ice, it can give you heart problems.
When you drink gin over ice, it can give you brain problems.
Obviously, ice is really bad for you.

Fri, 12/16/2011 - 09:48 | Link to Comment Shizzmoney
Shizzmoney's picture

Methinks the banks don't have as much money as they say they do.

Either that, or they are greeder than ever.

http://bottomline.msnbc.msn.com/_news/2011/12/15/9470807-bank-loans-to-small-business-fall-to-12-year-low?ocid=twitter

Fri, 12/16/2011 - 09:50 | Link to Comment LookingWithAmazement
LookingWithAmazement's picture

Gold and silver fully depend on Bennie B.'s printing press.

Fri, 12/16/2011 - 16:17 | Link to Comment tmosley
tmosley's picture

Really?  Then how did they have value prior to the invention/institution of central banking?

Fri, 12/16/2011 - 09:51 | Link to Comment lairdwd
lairdwd's picture

I'm gonna go against the consensus view here and say that the cartel still has more ammo and this is a bear trap. S&P downgrade very possible for tonight. If so, look for the cartel to hammer it down one more time in a blowoff bottom.

Fri, 12/16/2011 - 09:55 | Link to Comment WonderDawg
WonderDawg's picture

Um, do you mean bull trap?

Fri, 12/16/2011 - 15:20 | Link to Comment akak
akak's picture

Actually, I think he meant to say "bull crap" --- like your absurd and distorted misunderstandings (at best) of monetary history and dynamics.

 

"Mommy, there's a deflation monster hiding under my bed --- make it go away!"

Fri, 12/16/2011 - 09:57 | Link to Comment vegas
vegas's picture

Duhhhh, dead cat bounce on Friday for all those accounts who were short. After all, if you had any profits for the week, why would you go into the weekend short. Nonetheless, nice charts though.

 

http://vegasxau.blogspot.com

Fri, 12/16/2011 - 09:57 | Link to Comment Al Huxley
Al Huxley's picture

I'm gonna stick with Roubini and Gartman. They've made some bad calls in the past, but that must mean they're overdue for a win, right?

Fri, 12/16/2011 - 14:51 | Link to Comment akak
akak's picture

I'll wave to the three of you as you plummet past my 30th floor window.

Fri, 12/16/2011 - 10:00 | Link to Comment bill1102inf
bill1102inf's picture

btw, it would  be nice if gold could spend more than 40min over 1600 before calling a 'REBOUND Over 1600', fn cheerleaders

Fri, 12/16/2011 - 10:09 | Link to Comment Pladizow
Pladizow's picture

It would also be nice if you waited 40 min before posting more stupid comments!

Fri, 12/16/2011 - 10:32 | Link to Comment bill1102inf
bill1102inf's picture

i know some  of you are well aware of how ironic that statement is

Fri, 12/16/2011 - 11:31 | Link to Comment onebir
onebir's picture

According to XE it hasn't even hit USD1600 today (16 Dec):

http://www.xe.com/currencycharts/?from=XAU&to=USD&view=1D

(If there's a better place to get live gold prices, please let me know...)

Fri, 12/16/2011 - 10:06 | Link to Comment dumpster
dumpster's picture

armstrong

gold 1420 lol strong support 1250  or such

he is living in a computor hard drive coma

 

Fri, 12/16/2011 - 10:06 | Link to Comment bill1102inf
bill1102inf's picture

what a piece of shit call this was

Fri, 12/16/2011 - 10:06 | Link to Comment Zola
Zola's picture

"The salient points to remember here are: that the borrowing of gold caused lease rates to escalate above money market rates and that gold was borrowed ‘on the swap.’ The former point can only be explained by the fact that the physical gold market is very tight (in terms of both supply, and loanable gold.) With the latter point, one must remember that swapped (and sold) gold must be returned (and therefore bought.)"  

When are the CBs and bullion banks going to buy back "swapped"gold from 2002 onwards ...

Fri, 12/16/2011 - 10:21 | Link to Comment High Plains Drifter
High Plains Drifter's picture

what goes down , must come up.

 

signed 

 

chairsatan..

Fri, 12/16/2011 - 10:29 | Link to Comment junkyardjack
junkyardjack's picture

Appears to be back under $1600, I guess the lease rate still has some room to breathe

Fri, 12/16/2011 - 10:35 | Link to Comment High Plains Drifter
High Plains Drifter's picture

every morning about 8:30 cst ,  suddenly gold and silver fall off a cliff on the charts.........interesting , no?   

 

been going on now for about 3 years.......

Fri, 12/16/2011 - 10:43 | Link to Comment yabyum
yabyum's picture

Drifter, You can damn near set your watch to it.

Fri, 12/16/2011 - 13:14 | Link to Comment ViewfromUnderth...
ViewfromUndertheBridge's picture

one of the pm pundits posted on youtube the difference between being long gold and being long gold "overnight"only...ie, buying on the US close and selling before the US open each day...diference was somewhere between 3 and 5 times greater appreciation in US dollar terms since 2001.

The US is selling gold...the pre-market, (aka Rest of the World). is buying.

Fri, 12/16/2011 - 10:58 | Link to Comment bill1102inf
bill1102inf's picture

At 9:56:08:01 Gold hit $1600 !!! Que rebound cheerleaderzzz!!

Fri, 12/16/2011 - 11:43 | Link to Comment ebworthen
ebworthen's picture

I got mine at the low.

Gold and Silver moving fast at retail.

Regular people voting to buy Gold and Silver in exchange for dollars.

Fri, 12/16/2011 - 12:35 | Link to Comment tom
tom's picture

I think we should ban the term "negative lease rates" until somebody proves they exist.

A "negative lease rate" means that banks will charge less interest to lend unsecured than they charge to lend against gold collateral.

Who would do that? Well, nobody really. But a bank might charge less interest to lend unsecured to, say, HSBC, than it would charge to lend against gold collateral to, say, Unicredit.

Moreover the unsecured lending market tends to be populated with banks of very high standing like HSBC whereas the gold forwards market tends to be populated with more desperate borrowers.

So some clowns take the average unsecured rate, measured by Libor, subtract from that the average gold forward rate, measured by LMBA Gofo, and when it's negative, call it a "negative lease rate."

Horsefeathers. Banana oil. Negative lease rates.

 

Fri, 12/16/2011 - 15:06 | Link to Comment DollarMenu
DollarMenu's picture

I thought 'negative lease rates' were kind oflike a pawn shop operation.

They were/are so desperate for dollars, they will give $100 in AU for $95 in cash;

or whatever the math works out to be for the rate.

Fri, 12/16/2011 - 22:19 | Link to Comment dolph9
dolph9's picture

Putting my order in this weekend.  Would be buying more if my local bank hadn't fucked up a transfer.

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