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Gold Wins As Financials And USD Deteriorate

Tyler Durden's picture





 

With Europe's credit traders on vacation, volumes overall were muted today in Europe but average in the US. The lack of discipline that normally occurs when the credit boys leave the room helped lift sovereign credit in Europe and implicitly US equity futures (ES) into the open today, which marked the top for the day (back in the green after an ugly Sunday night) as dismal macro data dragged debt and and equity markets back down to overnight lows. Credit and equity moved in sync in general but across broad risk-assets, correlations were loose at best as Gold was very stable holding gains from Friday while Silver exhibited its high beta ebullience and Copper and Oil followed stock's path down and back up. Treasuries leaked higher in yield with a steepening in the curve (though 10Y and 30Y outperformed 7Y as the Twist pivot maturity seemed most active). EUR strength was sustained from early morning in Europe with JPY weakness providing some support for stocks but it seemed both VWAP and the 200DMA were the key levels today and despite two stop-runs in the afternoon, we flushed down at the last minute (off near day's highs - thanks to Egan-Jones' UK downgrade news) to close red for ES (2nd day in a row below 200DMA). Financials (which are close to red for the year and about to cross below Healthcare and Staples) did not participate in the swings as much with JPM and MS worst today -3% (with the latter now 25% lower than the March 2009 market trough levels) and the other TBTFs around -1.9%. VIX oscillated rather like ES today - as usual but popped back above 26% to close marginally lower on the day. While correlations did drift today, stocks remain a little too full of hope still against overall risk markets but with UK closed again tomorrow, we may have to wait for Wednesday to see how Europe (and implicitly the rest of the world) feels.

S&P 500 e-mini futures had quite a day. Limping higher from a horrible overnight dip into the US open where heavy volume and large average trade size dominated and pushed the market lower as macro data disappointed. The leak lower progressed until Europe closed and then again we pushed higher on low volume stop-runs each time halted by heavy and large average trade size hitting the tape... the close brought the UK news and snapped ES back below VWAP.

YTD S&P 500 Sector performance... financials converging down to Unch, Staples, and Healthcare

and from the March 2009 market lows, financials' performance is very dispersed... (MS -25% and WFC +206%)

Gold outperformed as the USD leaked back 'down' to resync from Friday's moves. Treasuries are selling off a little but so are stocks as it would appear for now that Euro repatriaton from liquidating US assets is occurring and Gold is benefitting from more safety bod...

HYG remains an underperformer - holding below its intrinsic value - and we worry that this kind of weakness will leak back into real bonds and drive down an already illiquid market as today saw dealer net buying (buy-side net selling) for the first time in a while...

and the hump-shaped move in the Treasury curve was clear as 7Y underperformed 5s, 10s, and 30s...

as 5s7s10s butterfly bounces off record lows...

Charts: Bloomberg

 


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Mon, 06/04/2012 - 16:30 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Buy gold and silver - Crash the Banking System!

Buy gold and silver - take back the real money supply!

Mon, 06/04/2012 - 16:31 | Link to Comment Transitory Disi...
Transitory Disinflation's picture

dangerous times ahead.

Mon, 06/04/2012 - 16:33 | Link to Comment Colombian Gringo
Colombian Gringo's picture

Gold and Silver, Bitchez.

Mon, 06/04/2012 - 16:36 | Link to Comment SilverTree
SilverTree's picture

China seems to be WINNING this game.

Mon, 06/04/2012 - 17:16 | Link to Comment Thomas
Thomas's picture

The folks who rolled their metals into metal-based equities are the real winners. About two weeks ago the ratio seemed to peak (short term, at least). There is at least a factor of 2 arbitrage left.

Mon, 06/04/2012 - 18:04 | Link to Comment ArrestBobRubin
ArrestBobRubin's picture

I'm turning Chi-hi-nese oh yes I'm turning Chi-hi-nese I really think so....

Mon, 06/04/2012 - 19:30 | Link to Comment Ookspay
Ookspay's picture

+1 LOL

"No sex no drugs no wine no women no fun no sin"

All of which will require PM's Bitchez! Keep stackin'!

Tue, 06/05/2012 - 01:33 | Link to Comment silvermaister
Tue, 06/05/2012 - 08:21 | Link to Comment gold-is-not-dead
gold-is-not-dead's picture

Tx, let there be a silver linning for everyone! :)

Mon, 06/04/2012 - 16:38 | Link to Comment bigdumbnugly
bigdumbnugly's picture

and once again, back by popular demand...

http://www.youtube.com/watch?v=-fU6VLVbA2A

Mon, 06/04/2012 - 16:33 | Link to Comment Transitory Disi...
Mon, 06/04/2012 - 16:38 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Hhmm.  A bunch of very "wealthy" retirees in the western world sort of hoping things will "fix" themselves so they still recieve all their benefits.  FAIL.

Mon, 06/04/2012 - 16:45 | Link to Comment Seize Mars
Seize Mars's picture

LOL.

LawsofPhysics you magnificent bastard. How you keep the vitriolic energy going I don't know. But I hope you never stop.

Rock on my man.

Mon, 06/04/2012 - 16:38 | Link to Comment Fuh Querada
Fuh Querada's picture

You can make a small fortune from Graham's investment advice if you start off with a large one

Mon, 06/04/2012 - 17:07 | Link to Comment Lore
Lore's picture

Thanks Transitory,

No thinking person in these countries can dare say that s/he did not see this coming.

Mon, 06/04/2012 - 19:54 | Link to Comment Alpacanio
Alpacanio's picture

+2 Thanks Transitory.

Mon, 06/04/2012 - 16:34 | Link to Comment BlueCollaredOne
BlueCollaredOne's picture

I lurk the chat, and you're last blog entry was good. (no matter what chumba says).

Post that link sir.

Mon, 06/04/2012 - 16:37 | Link to Comment Eireann go Brach
Eireann go Brach's picture

Don't worry about this stuff Amerika, just go out buy a bunch of thingamijigs on your credit cards, and when I am out of office you can go declare Bankruptcy! By then it is some one else's problem:)

Sincerely

Barak Obama

p.s excuse my spelling as I am on my balackberry

Mon, 06/04/2012 - 17:08 | Link to Comment peekcrackers
peekcrackers's picture

“Paper is poverty,… it is only the ghost of money, and not money itself.”

Mon, 06/04/2012 - 17:10 | Link to Comment Canadian Dirtlump
Canadian Dirtlump's picture

I am hoping for the tuesday smash - it's payday this week and I want to get me some maples.

Mon, 06/04/2012 - 16:33 | Link to Comment spastic_colon
spastic_colon's picture

Nice stick save AAPL.....$40+ round tripper...saved all the averages today....again

Mon, 06/04/2012 - 16:35 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

King Gold!

Mon, 06/04/2012 - 18:01 | Link to Comment ArrestBobRubin
ArrestBobRubin's picture

Roll On.

Mon, 06/04/2012 - 16:35 | Link to Comment Fuh Querada
Fuh Querada's picture

The top graph looks like a cross section through Angela Murkle in a supine position

Mon, 06/04/2012 - 16:52 | Link to Comment monkeys.pick.bottoms
monkeys.pick.bottoms's picture

Gold is just money. I don't care for it. Let me show you something really precious:

http://www.youtube.com/watch?v=BOByH_iOn88&feature=channel&list=UL

Also, I don't completely believe the gold and silver story, I'm only 95% of savings in both metals.

Mon, 06/04/2012 - 17:08 | Link to Comment Lore
Lore's picture

Booze is also money.

Mon, 06/04/2012 - 17:40 | Link to Comment Clint Liquor
Clint Liquor's picture

For something to be 'money' it must not only be a medium of exchange, but also a store of wealth. Booze is consumed and therefore an inferior store of wealth.

Mon, 06/04/2012 - 17:42 | Link to Comment markovchainey
markovchainey's picture

Wish I'd read this before I consumed a fifth of my wealth.  Or was it a handle?  Damn!

Mon, 06/04/2012 - 23:45 | Link to Comment beachdude
Mon, 06/04/2012 - 16:56 | Link to Comment FieldingMellish
FieldingMellish's picture

HUI going in the correct direction...

Mon, 06/04/2012 - 17:45 | Link to Comment headadoor7
headadoor7's picture

Hmmm China gold imports up 900% and price stable despite steady rise in US$, and it is against the law to export (remove) gold from China. The plunge protection team cannot stop its rise.  Gold price "To the moon Alice" and soon

Mon, 06/04/2012 - 17:48 | Link to Comment RationalPrepper
RationalPrepper's picture

Gold will not win according to Karl Denninger, who understands leverage much better than I ever will.  Does he believe that governments and central banks will somehow come to their senses, stop printing, and let the markets clear?  That's the only way hard asset prices deflate, rather than inflate, correct?  I respect KD, but his thoughts on gold confuse me.

Mon, 06/04/2012 - 17:55 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

everything was pretty mixed today, imo

the 4 commodity indices here Commodity Futures Online Trading - Bloomberg  were: 2up/2down

miners outperformed;  gold was down a wee bit

hello?  is anybody listening?  L0L!!!  fielding_mel;  check.  anybody else?   

Mon, 06/04/2012 - 18:00 | Link to Comment ArrestBobRubin
ArrestBobRubin's picture

No one could see that coming, that's for sure. Shocking. Just shocking.

Mon, 06/04/2012 - 19:03 | Link to Comment johngaltfla
johngaltfla's picture

I have to respectfully disagree. If Precious Metals continue their historic retracement of the 1979-1980 time period in real time, a short term, sub-volume rally should roll over and provide a huge buying opportunity between $1280-$1400. If for some reaon current events (aka, war) or the Euro collapse on June 17th is completed via a Grexit, then all bets are off and food and ammo are worth more.

The charts indicate that gold has had a reflex rally on low volume and the GLD was still anemic in its move.

Holding it is smart. Paper gold/silver holders are about to get toasted. Rape them for the physical and enjoy your rewards.

 

Warning: Possible Head Fake Breakout in Gold and the GLD
Mon, 06/04/2012 - 19:06 | Link to Comment silverserfer
silverserfer's picture

I panned out 2 grams of gold this weekend from nor-cal and you apreciate this higher price level more after you dig it out of the ground yourself. Honest pay for an honest days work.

Fuck the bankers!!!!!!!

Mon, 06/04/2012 - 19:38 | Link to Comment Fix It Again Timmy
Fix It Again Timmy's picture

Ben Bernanke - The Butcher of Bucks - wanted for Crimes Against Humanity.........

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