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Market Snapshot: Gold & Silver Recover As EU Doubles Down

Tyler Durden's picture




 

S&P futures managed an impressive 2.5% rally today making it back to the closing level from last Wednesday (Bernanke-Day) amid merely average volume. The leaked rumors of the EU's octuple-down CDO^2 bet on themselves was enough to get the buy-the-rumor juices flowing and we rapidly squeezed higher. IG outperformed, ending the day notably tighter than respective equity and HY spreads would expect as even though risk seemed on, we did not see a mad scramble for high beta and HY bonds remained offered in general. Gold and Silver managed a huge bounce off intraday lows ending the day -1.5 to 2% while the dollar sold off into the close (as EUR rallied) to end the day unch from Friday. ES ended a little rich relative to risk-assets in general as the small cap short squeeze seemed to take-over.

While much hope was place in 'Operation Twist' having similar portfolio rebalancing effects as QE2, it is clear that the reach-for-risk is not occurring as up-in-quality remains evident with IG notably outperforming (in CDS and cash). HY kept pace with ES today as can be seen but single-names underperformed and HY bonds were net sold all day as both index arbitrage and unwinding macro hedges as long exposure is sold down helped HY optically.

TSYs sold off and steepened quite significantly on the day but even more so from early morning low yields to closing levels. 30Y yields increased over 15bps from low to high today - ending +9bps from Friday's close. 2Y and 5Y are now both 6bps or so higher in yield from pre-Bernanke, 7Y marginally higher in yield, 10Y only 4bps lower while 30Y maintains over 20bps of yield compression since FOMC-day.

There was a very strange move in HYG (the HY bond ETF) as the EU's SIV was announced. Significantly out of the ordinary volume surged as HYG jumped 1-2%. This move was unaccompanied by ES, S&P, JNK, interest rates, HY CDS, or HY bonds. It had the very strong feeling of someone being forced-in as perhaps margin calls or a short was squeezed to make uneconomical trades. The move is extremely evident when we look at it in the context of SPY, VXX, and TLT (which can be used to construct an arbitrageable opportunity).

 

The spike in 'Model' in the chart above shows the dramatic disconnect - as big as we have seen while following this framework and the profitable
convergence of that ETF arbitrage over the next hour or so. Given how wide HY spreads are and access to CDS markets, perhaps someone had been using HYG as their macro cover and as it broke resistance highs of the last couple of days and filled the gap up to Bernanke-Day lows, it was all they could take. Decent volume and net-selling in HY could also help explain as perhaps the ETF manager was forced to create units and had to buy what everyone was selling in cash? It remains a mystery but worth watching HY CDX and cash markets for any fallout (BWICs) - and we note a large VWAP order (to sell) at the close.

While HYG was an interesting sideline, Gold and Silver recovered from a disastrous early session and was the real show of the day. Silver was down over 16% in the early hours of the morning only to recover to down only 1.2% by the close. Gold managed to pull back from over 7% down to less than 2% down. Oil and Copper pulled into the green as risk was bid again in the afternoon but traded very much in sync all day long - though not particularly focused on FX volatility.

The dollar managed a wholly unimpressive 0.3% drop from Friday's close but the moves were not particularly high conviction even as EURUSD managed to creep back over 1.35 into the close as it seems levering up German taxes is good for the currency of choice. By the close, every major was stronger vs the USD with CAD and JPY the least strong of the pairs (and SEK the strongest).

All-in-all, the rise in S&P futures was impressive (though low volume as usual) and risk-assets in general followed suit for the initial move (as seen below) but as it wore on it seemed to become a combination of a search for Bernanke's Day bottom as well as a small cap short squeeze that drove ES notably expensive in the context of carry FX, gold, oil, TSYs, and credit. As we peaked, average trade size rose which always has the smell of professionals selling into strength but we have seen these kind of squeezes last longer than we expect before.

Charts: Bloomberg & Capital Context

 

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Mon, 09/26/2011 - 16:54 | 1712907 Deadpool
Deadpool's picture

hope you got your fair share

Mon, 09/26/2011 - 17:56 | 1713060 Libertarians fo...
Libertarians for Prosperity's picture

 

 

Thank god I waited until silver collapsed to buy some SLV, instead of getting lured in at $35, $40 and $45 like all the goons did.  YTD gains in silver is 0%, so basically I didn't miss anything for the year.  When you add the huge premiums for physical, I bet everyone's cost average for the year is ~$40 or more. 

Not me!  Got some SLV at $28 this morning, and felt awesome about it.  No retarded premiums, no holes in the backyard, extremely liquid, and can sell it in a second by hitting the return key. I'll probably add a stop around $26.

SLV rules!  Now I'm a silver bug! 

To the moon!  Parity to Gold!  Ra! Ra! 

Mon, 09/26/2011 - 17:59 | 1713070 DoChenRollingBearing
DoChenRollingBearing's picture

Will it be the Faux Libertarian or the Rolling Bearing who laughs last?  Hmm.

None of that SLV for me pal!  But, I did eat my own dog food and bought (physical) gold and platinum today.  Details below.

Bitchez!

Mon, 09/26/2011 - 20:10 | 1713381 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

I heard dog food is great "with some fava beans and a nice chianti":)

Mon, 09/26/2011 - 18:14 | 1713097 margaris
margaris's picture

I dont care about the price of silver... I bought at 35... so what?

Then was my monthly accumulation buy, and then is when I bought.

I dont care about the price... I am accumulating every month...

I bet I get more silver this way than you do... because I do not wait for cheap price to buy!

 

Wait... you bought SLV? Why do I even bother talking to you, lol...

GET PHYSICAL... do you want to stay a virgin your whole life?

Mon, 09/26/2011 - 18:32 | 1713108 Libertarians fo...
Libertarians for Prosperity's picture

 

 

You don't care about the price of silver?  You just hoard it indiscriminantly?  

THAT'S REALLY WEIRD!

You belong in an Oliver Sachs book.

The Man who Mistook his Wife for a Silver Eagle. 

Mon, 09/26/2011 - 18:33 | 1713137 LeonardoFibonacci
LeonardoFibonacci's picture

dude buy physical not paper silver.  SLV could backfire on you one day!

Mon, 09/26/2011 - 18:47 | 1713165 margaris
margaris's picture

An ounce of physical silver is an ounce of physical silver.

Get what you can while you can!

Why do you choose paper over metal? That just doesnt make any sense to me...

You are trading one paper for another... now thats just really silly!

Of course we all need paper money to live... but I would advice everyone to start accumulating something REAL for a change.

DIVERSIFY!

Mon, 09/26/2011 - 19:01 | 1713195 Long-John-Silver
Long-John-Silver's picture

For every ounce of physical Silver in the market, 100 paper ounces of contract Silver is traded around SLV and all the other naked paper silver traders out there. The time is rapidly approaching when that 99% of the paper silver market evaporates leaving only 1% to divvy up between all the paper silver traders out there. The higher the volatility the closer that contorting trader comes to that fall off the cliff.  

Mon, 09/26/2011 - 19:09 | 1713214 duo
duo's picture

real men use leverage...Oct 90 AGQ calls

Mon, 09/26/2011 - 19:28 | 1713258 JW n FL
JW n FL's picture

 

 

I am all for people using leverage to buy physical.

+1 from me.

Mon, 09/26/2011 - 20:01 | 1713360 duo
duo's picture

If you going to pay the "collectable" tax rate for SLV gains, you might as well trade options using leverage and put less money at risk.

Either that, or hold CEF for over a year and file the IRS forms for a PFIC,  Form 8562, I believe.

Mon, 09/26/2011 - 22:15 | 1713553 JW n FL
JW n FL's picture

 

 

When I say physical..

I mean by the Box..

in 1 oz form..

so that I can have some walking around money, given some type of event renders paper (fiat) money useless.

"C"?

Tue, 09/27/2011 - 00:09 | 1713432 tmosley
tmosley's picture

If you were playing Monopoly with someone, and they offered to give you a dollar for every 30 monopoly bucks, would you buy it?  If they offered you a dollar for every 300?  Every $3000?  If there was no other way for you to get dollars?

But you are so stupid, you probably won't understand the metaphor, or see the real world implications.

Mon, 09/26/2011 - 21:32 | 1713581 pupton
pupton's picture

Hitler when you sell you will have to pay capital gains taxes...when we sell physical nobody knows...

Mon, 09/26/2011 - 20:13 | 1713392 Dugald
Dugald's picture

And when silver is eleven bucks an ounce....and no takers...will you still feel cocky??

Mon, 09/26/2011 - 19:12 | 1713221 tmosley
tmosley's picture

Where do you trade that you can sell and get cash in your hand in thirty minutes?  Because I can do that with physical.  

Mon, 09/26/2011 - 20:12 | 1713335 Libertarians fo...
Libertarians for Prosperity's picture

 

 

And you're the same guy who admits to paying 50% premiums.  Go sell your silver tonight to your goofy coin dealer in Armpit, Texas.  He'll offer you $25.  By the time you calculate the premium that you pay when you buy and the discount you get when you sell, you'll realize just how much retail arbitrage on physical screws you. 

I guarantee there are guys here at ZH (reasonably intelligent people) who paid >$50 (including premiums), and if they sold today, would get ~$25.  Huge loss! 

If all I have to worry about are some HFT'ers in Greenwich frontrunning me by 1/4th of a penny, I don't really care.  Sure as hell beats your 25% premiums. 

Mosley, you're so dumb, you sit on the teeeveee and stare at the couch.

 

 

Mon, 09/26/2011 - 20:19 | 1713405 Newsboy
Newsboy's picture

Sounds like troll blather to me. "Armpit Texas"? "T.Mosley dumb"? You get paid by the word for this stuff?

I got in on a silver pool at $29.45. My dealer trusted me to the afternoon. I paid an additional $3.50 per Philharmonic round. By the time I got in to pay at 4PM, silver was up by a dollar, reducing my premium to $2.50 per ounce. It was part of a purchase pool, a significant service, since physical silver is gone at these dip prices.

This is Austin Texas, People are not stupid. Lots of guns, places in the country stocked-up, and of course self-defense technology remains very popular and broadly disseminated.

I don't think you bought SLV. I think you bought a burger, fries and a shake, and the remains are sitting in front of you as you work.

Mon, 09/26/2011 - 20:32 | 1713442 tmosley
tmosley's picture

Nice absudity there.  I SAID that I PAID a 50% premium for silver when spot was $8.  What part of "past tense" don't you understand?  And here we are, with conditions being tuned for a repeat of 2008, and you think it's crazy that premiums might go up?  Of course, you are so stupid that you don't understand that there is a fixed spread at coin dealers, and that that is the same no matter the premium.  If the Premium rises to ten dollars over spot, they will buy at seven dollars over spot.

The rest of your blather isn't even worth reading.

Mon, 09/26/2011 - 20:01 | 1713359 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Ha! Ha!  Good luck getting real physical when an EMP weapon explodes over Colorado in December!

Mon, 09/26/2011 - 20:53 | 1713504 mayhem_korner
mayhem_korner's picture

@Libertarians for...

When you're finished polishing your stinger to a buff shine, know that lots of posters here bought Au at 3-digits, and some even bought silver at single-digit prices.

Mon, 09/26/2011 - 21:42 | 1713602 Marty Rothbard
Marty Rothbard's picture

Just don't hold it until the rubes figure out SLV is a "PAPER" tiger.  By the way you are aiding and abetting JPM, and are thus evil by proxy.  When I sold my SLV last year, and went physical, I got silver bullion coins for $28 delivered.  I'd held SLV for some time.  Max Keiser convinced me to go physical.

Mon, 09/26/2011 - 22:33 | 1713685 doomz78
doomz78's picture

you didn't get physical at 28 an ounce....   no, no, no.    You got slv.   That's a vehicle for the retarded.  A Fiat 500 with a clown nose with shit smeared on it's paint.  REAL physical silver still had a premium at 28.  I don't believe that you timed the market that perfectly anyways.  It''s easy to say that you got the best possible deal after the fact.  You are lying.  that just happened beatch.  Swallow it. 

Mon, 09/26/2011 - 17:01 | 1712937 Jehu
Jehu's picture

Man I wanted in on silver... ya snooze ya lose. Kids can be expensive in so many ways.

Mon, 09/26/2011 - 17:25 | 1712996 Josh Randall
Josh Randall's picture

Follow JPM's stock price as the Morgue has one more shot to get Silver down below it, before the Silver rocket runs and the physical price and paper price offically separate.

Mon, 09/26/2011 - 17:31 | 1713005 XenoFrog
XenoFrog's picture

I was feeling pretty horrible about picking up another 30 ounces over the weekend @31 when I woke up and saw $26. Thankfully patience overcame panic.

Condolences about the crotch goblins.

Mon, 09/26/2011 - 18:44 | 1713160 UP Forester
UP Forester's picture

Yeah, I felt pretty horrible exchanging 250 FRNs for $10 of quarters and dimes.  First time I've been at that jeweler's shop since he was ripping us off as kids for baseball cards.

He had it comin'....

Mon, 09/26/2011 - 19:58 | 1713352 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Yes, but they are the best investment in the whole world.  No metals are as precious as a child especially the children of one smart enough to look out for their future by buying metals and getting out of fiat!

Tue, 09/27/2011 - 00:06 | 1713801 AustriAnnie
AustriAnnie's picture

And your kids will provide real "social security" in your old age!  Your loss in PM's now will repay you later!

Mon, 09/26/2011 - 17:02 | 1712938 RobotTrader
RobotTrader's picture

Today could be a setup for a massive run in PM's.

Funny how the PM stocks have been woefully underperforming, well, now we know why.  The "big shakeout" has now happened, that is what they were pricing in all along.

Mon, 09/26/2011 - 17:10 | 1712962 DavidPierre
DavidPierre's picture

"...massive run in PM's."

"Due to current market volatility, Sprott Money Ltd. supply of bullion products in Canada are temporarily unavailable. We regret the inconvenience this may have caused."

Mon, 09/26/2011 - 17:36 | 1713012 DoChenRollingBearing
DoChenRollingBearing's picture

David Pierre, nice piece of news, thanks!  I always look forward to your comments, please comment MORE!

OK, Mr. Sprott..., OK...

That's why I don't mess with any "Paper Gold", ANY!

And, I went and ate my my own dog food today, buying gold (when spot was $1601, I paid $1686, so call it a 5% premium) and a Proof Platinum Eagle (Rocky R, feel free to email me!).  

Fear not!  The future of gold is better than ever.

What, anyone believe that Europe or the USA has FIXED anything?  BWAHAHAHAHA!

Mon, 09/26/2011 - 19:49 | 1713268 DavidPierre
DavidPierre's picture

DoChen:

Ask ... Ye shall recieve.

How my friend Jack, from up north of me, sees things.

"The volumes of over the counter sales and purchases of silver went through the roof. Although much silver was offered we sold far more, so much so; we had to book orders for shop inventory twice on Friday.

I would have made a third booking had I been able to get through to one of my suppliers. As a vendor, when your inventory is being sold below cost it is vital to book new inventory on the basis of the current price. Failure to do that could result in serious losses being realized if you end up replacing the sold inventory at higher prices. Consequently it creates a great deal more work when trading in a falling market. As if that wasn't enough, my XRF testing unit arrived and required receiving.

My first order was with Kitco and it took at least fifteen minutes to get through to an corporate account agent. I was also told that most retail customers were unable to get through to book orders due to the volume of calls. My second order about an hour later was for a different product I deal with a private vendor for. Fortunately I have a cell phone number and was able to reach him.

By the end of the day most of my booked orders were presold and I will have to order more on Monday.

My shop is in Red Deer Alberta and we had buyers driving up from Calgary which is 150 km ( ~100 miles) away because the vendors there, one of which is a major RCM distributor; were all sold out of bullion bars.

We buy silver maples, eagles, and philharmonics for a dollar over spot and pay full spot on smaller bars so we tend to get a lot of material offered since I know of no other vendors in Alberta paying over spot from the public.

There is a steady flow of offered bullion as people sell for many different reasons. They could be stale longs, doing estate planning or just taking profits. The lower silver prices brought a few panic sellers in but it was remarkable how many buyers took advantage and bought.

That is the biggest difference in attitude I see in the holders of specie since opening in 2004. Another very positive aspect of this correction is the number of new buyers who are eager to enter the market at current price points.

On another note.... Thursday night I had a conversation with my friend who has a high ranking connection in Norway. The Norwegian Central Bank is very concerned about the demand for Kroner. Norway is not a participant in the Euro and there are those who are taking positions in their currency causing it's value to appreciate. Norway is a resource exporter with oil as it's largest source of revenue. That oil is mostly sold in for US dollars which have fallen against the Kroner causing a squeeze on royalty revenue and oil profits.

Norwegian financial authorities were looking at controls to dampen speculative demand but the IMF has requested they hold off until a more COMPREHENSIVE PLAN INCLUDING ALL OR MOST WESTERN CURRENCIES CAN BE IMPLEMENTED. Apparently banks proprietary trading desks realize their greatest revenue from FX and related derivatives and any locks or restrictions have to take that into account.

My friend was told that should the US dollar or Euro move out of an acceptable exchange rate draconian measures would be implemented. A deal was also made that would see the Euro supported as more bad news emerges from European countries with debt issues.

My friend's source still prefers silver rather than gold for financial protection. His concern is that of punitive measures being put into place to contain demand should the public start buying gold in earnest. He also extrapolated that to smaller countries facing political pressure for holding "too much" gold. In spite of his caution I still favour gold over silver or platinum group metals.
Clearly things are not well in "fiat moneyland".

When the banking holiday arrives it's a safe bet that it will involve more than those in one nation or region."

www.lemetropolecafe.com

Mon, 09/26/2011 - 17:49 | 1713048 wang (not verified)
Mon, 09/26/2011 - 18:40 | 1713153 Manthong
Manthong's picture

Um.. maybe that means that Mr. Sprott does not care to part with inventory at current levels.

Just sayin..

Mon, 09/26/2011 - 19:51 | 1713286 DavidPierre
DavidPierre's picture

Manthong:

Whom shall ye believe ?

"Just sayin.."

Sprott Money President Larisa Sprott today tells King World News today that the coin and bullion dealer's silver supply was temporarily wiped out by huge demand prompted by this week's huge decline in silver future's prices.

An excerpt from the interview is posted at the King World News blog here:

http://kingworldnews.com/kingworldnews/KWN_Dai
lyWeb/Entries/2011/9/23_Sp...

"In Bangkok the gold market has gone berserk.

Thailand has a very strong gold culture with gold shops virtually on every main street where one can purchase gold bars on demand until recently.

Now with the recent price slam down you have to get a queuing ticket and wait for two to three days to obtain your bars.

Strange the price is collapsing as demand for physical has soared here in Thailand !

I admire the great work GATA is doing in the fight for honest money."
www.lemetropolecafe.com

Mon, 09/26/2011 - 20:42 | 1713466 Manthong
Manthong's picture

Heck, Apmex hasn't been asking me for any green boxes back yet and I don't see scarcity locally.

As of last week, Bill Haynes on KWN  hasn't noted a supply problem yet. 

I hope it dries up one of these days.. I don't doubt it will in Asia first.

Maybe it's a bit thin up in Hoserland, too.

Sprott's OK.. I own his ETF's.

They ain't getting my physical for a long time, it's the only real money anymore.

I'd like to get some of my fiat back from his diggers. though.

http://www.insidermonkey.com/hedge-fund/sprott+asset+management/238/#/

 

Tue, 09/27/2011 - 01:37 | 1713873 PaperWillBurn
PaperWillBurn's picture

I doubt that but I'm checking on it just in case. I live in BKK when I'm not at work. Gold shops are on every street. It's hard to imagine having to wait to obtain gold in Thailand. The physical market is large and everywhere.

Tue, 09/27/2011 - 01:46 | 1713881 PaperWillBurn
PaperWillBurn's picture

Actually to confirm or deny this I am going to have the wife go to tesco(a grocery store) and buy a 1 baht bar (15.244 grams of 96.5%) common size in Thailand. I'll report back.

Mon, 09/26/2011 - 17:42 | 1713034 Al Huxley
Al Huxley's picture

That was a pretty violent selloff last week. I'd say it'll take a while to recover. Sure did a good job of crushing sentiment in the sector, though. Would be just like the miners to break all established patterns and just launch from here.

Mon, 09/26/2011 - 20:20 | 1713408 Dugald
Dugald's picture

 

Yah think????

 

Mon, 09/26/2011 - 17:02 | 1712939 ZeroNuclear
ZeroNuclear's picture

A shipwreck containing 200 tonnes of silver worth about £150m
has been found in the Atlantic - the largest haul of precious metal ever discovered

http://www.bbc.co.uk/news/uk-15061868

Shipwreck of SS Gairsoppa reveals £150m silver haul

Mon, 09/26/2011 - 17:07 | 1712953 mixle
mixle's picture

Damn you beat me to it!

Mon, 09/26/2011 - 18:17 | 1713107 MsCreant
MsCreant's picture

Man, I have been looking for that boat, I am so greatful, really, thank you so much. I will, of course, give you a cut for your trouble!

Mon, 09/26/2011 - 18:19 | 1713111 MsCreant
MsCreant's picture

I had some guns too, did you find them?

Mon, 09/26/2011 - 17:17 | 1712975 Dr. Gonzo
Dr. Gonzo's picture

150 million Euro ain't that much money. Multiply that sum by another 1.5 million and that's how much fiat it would take to bail out Europe...and that might not even be enough...and that doesn't even count the U.S.

Mon, 09/26/2011 - 17:21 | 1712979 Pegasus Muse
Pegasus Muse's picture

I wonder how much of this silver has been lost due to reaction with hydrogen sulfide and/or sulfur dioxide or bacterial action given the metal has been immersed in a soup of dissolved salts and tiny critters for 70 years.  Any biologists or chemists out there?

Snip ----

"Silver is particularly susceptible to the effects of the sulfide radical. This is best demonstrated by the formation of tarnish on silver objects that are exposed to sulfur in any form, particularly hydrogen sulfide and sulfur dioxide, which can convert to sulfuric acid.

In a marine environment, with its abundance of soluble sulfates and oxygen-consuming, decaying organic matter, sulfate-reducing bacteria utilizes available sulfates under anaerobic conditions to form hydrogen sulfides as a metabolic product. The hydrogen sulfide reacts with the silver to form silver sulfide. The overall reaction proceeds in the same process as described earlier for iron:

2Ag + H2S >> Ag2S + H2

In anaerobic marine environments, silver sulfide (Ag2S) is the most common mineral alteration compound of silver (North and MacLeod 1987:94). It is commonly reported from shipwrecks in the Caribbean and Australia and constitutes the most prevalent corrosion compound on silver objects from marine sites. Most marine-recovered silver artifacts have a thin sulfide surface layer, which has removed some surface detail, such as inscriptions, marks, and stamps. A large percentage of the artifacts, however, are completely converted to sulfide; others have only minimal metal remaining."

--- Snip

http://nautarch.tamu.edu/crl/conservationmanual/File13.htm 

Mon, 09/26/2011 - 17:33 | 1713013 Shineola
Shineola's picture

Excellent research, Peg! 

 

BTW, how would this sulfide radical effect the body of Osama Bin Laden?  :)

Mon, 09/26/2011 - 17:45 | 1713038 Panafrican Funk...
Panafrican Funktron Robot's picture

You're assuming he's dead and/or ever really existed and/or was actually dumped in the ocean.  This is a big assumption.

Mon, 09/26/2011 - 17:37 | 1713022 BandGap
BandGap's picture

I'd bet most of it is still there.  There may be a layer of Ag2S on the outer bars but the conditions are not good for this reaction - low oxygen, and very cold environment. And I wonder if hydrogen formation is suppressed by the extreme pressures at that depth, shifting the equilibrium to the left.  It's all about thermodynamics.

Mon, 09/26/2011 - 17:42 | 1713032 Joe Sixpack
Joe Sixpack's picture

Silver sulfide is the normal black you see on silver that needs cleaning. It will create a small layer, and stop most likely.

 

http://en.wikipedia.org/wiki/Silver_sulfide

Mon, 09/26/2011 - 17:55 | 1713063 Conax
Conax's picture

Still there? Probably. But hey, it's over 15 THOUSAND feet deep. That's deep.

And inside the rusting hulk of a ship.  I liked the asteroid mining daydream some were speaking of, too.

Easier than asteroid mining, (LOL) but verry expensive to go after.

Tue, 09/27/2011 - 02:04 | 1713894 cynicalskeptic
cynicalskeptic's picture

Carribean shipwrecks - Spanish Treasure Fleet ships - have had more than enough silver recovered; losses seem minimal in what's been recovered  The conditions there are warmer and shallower - and the wrecks far older.  

Here you're dealing with a much shorter time period, and deep cold waters.  Reactions are much slower under such conditions.

Mon, 09/26/2011 - 17:55 | 1713061 LongBalls
LongBalls's picture

ure'a' smart somebish. Thanks fur the edumacation! I wish I culd trade my educatun fur yurs. I'm smart enugh to figur buyin' more silver though.

UP URs BERNAK.

Mon, 09/26/2011 - 19:15 | 1713230 tmosley
tmosley's picture

If it only removes some surface detail, then it clearly isn't eating much.  Maybe 5% at most.

Mon, 09/26/2011 - 18:19 | 1713062 Quinvarius
Quinvarius's picture

So we are basing this haul off of an insurance claim where the insurer was the UK government?.

>>>a mixture of privately owned bullion insured by the UK government and state-owned coins and ingots.

Researchers used records including insurance documents from Lloyd's War Losses Register to work out how much was on board.<<<

Hmm.

Also, wouldn't that be more like 74.65 tons?  600,000 pounds worth of silver ingots, as in money pounds.  1 pound was about 4 dollars.  1 dollar was worth 1 ounce of silver. So that is 2.4 million ounces.  32150 troy ounces are in a ton.  So I get 74.65 tons.

Mon, 09/26/2011 - 18:45 | 1713163 Paul67
Paul67's picture


Gee that will cover the world’s physical demand for Silver for a whole two months, then what?

 

The supply of paper Silver on the other hand is unlimited provided you pony up with more paper promises in the future.

 

Speaking of which was anyone able to close a physical sale at these low prices? (i.e. paper for physical delivery).  I wasn’t, the price didn’t budge from what it was a few days ago.

 

Seems to me that only paper promises were changing hands at these prices?

 

Here is a crazy idea, how about the spot price of commodity is only recorded when someone exchanges paper for a commodity they actually take delivery of?

 

If someone wants to place a bet on future spot price, go right ahead but these bets shouldn’t have any bearing on the spot price.

 

Imagine if horse races were determined by the bets and not by who actually won the race?


 

 

Mon, 09/26/2011 - 20:37 | 1713455 Prometheus418
Prometheus418's picture

It won't cover the world's demand for silver at all- unless it is re-smelted and sold as bullion.  As is, if they recover it at all, it'll go to a combination of museums and private collectors for it's numismatic value as coins sunk in WWII and recovered from 15,000 feet under the water. 

As such, it's relative value has almost nothing at all to do with bullion spot prices.  I see Mercury dimes going for over $200 on ebay now and then because they're an error, or a rare date, or they're extra shiny, or whatever.  That has nothing to do with spot price, it's all about collector's value- and this stuff will be the same.

Mon, 09/26/2011 - 17:10 | 1712960 Magnix
Magnix's picture

Do you think the silver price will go down more to the $20's this Fall (or Winter)?

Mon, 09/26/2011 - 17:13 | 1712968 BrocilyBeef
BrocilyBeef's picture

it could... I'd watch those premiums though. I'm gonna start buying again when we see under $29 again and run about 1/4 of my wad each purchase (about 2-3 weeks apart)

Mon, 09/26/2011 - 17:11 | 1712964 BrocilyBeef
BrocilyBeef's picture

gonna wait for silver... when I can get an ASE for $30... back the trucks up!

Mon, 09/26/2011 - 18:45 | 1713162 MissCellany
MissCellany's picture

Hang in there, Beefy! I picked up silver Maples this morning for $30.50 apiece (spot was about $28.50, but boy was it whiplashing around!) from GoldmastersUSA.com.

(Good folks -- been dealing with them since silver was under $7. I never see anyone else recommend them. Their prices are usually decent, their website is very basic (like circa 1998!) but works just dandy, and they DON'T backorder.)

Not sure what the going rate was for ASEs; I was looking to load up reliable coins on the cheap.

Mon, 09/26/2011 - 17:11 | 1712965 Atch Logan
Atch Logan's picture

What a recovery:  as of this minutre, gold: 1,629.  Silver 30.75.

 

Who are the good guys?  Who are the fuckers?

Mon, 09/26/2011 - 17:13 | 1712970 BrocilyBeef
BrocilyBeef's picture

wow... and $30.75 is too rich for me !! WTF!

Mon, 09/26/2011 - 17:19 | 1712985 swissaustrian
swissaustrian's picture

Tommorow is options expiry. Maybe even the bad guys liked the spike.

Mon, 09/26/2011 - 17:13 | 1712969 JW n FL
JW n FL's picture

 

 

$3 Trillion in New Printing that will be SWAPED at the U.S. FED Window at least in large part to stabilize Europe. More U.S. Dollars Dilluted. Of course they will say that is not going to happen, until it does happen.

http://www.youtube.com/watch?v=sj8xBe_HFog

Uploaded by on Sep 26, 2011

It is set to be another bouncy week for investors, wracked with worry about eurozone debt.

But the weekend in Washington may have produced some promise.

The annual meeting of the International Monetary Fund was attended by eurozone leaders.

It was no time for small talk.

There is a sense now that leaders appreciate the size of the problem.

But political divisions could yet scupper a deal.

Al Jazeera's Jonah Hull reports from London.

Mon, 09/26/2011 - 18:57 | 1713186 Boxed Merlot
Boxed Merlot's picture

Hey JW,

How's that fed software treating your firewall?

Mon, 09/26/2011 - 19:26 | 1713253 JW n FL
JW n FL's picture

 

 

I push FED info thru Twitter with my few followers.. and facebook both..

my real name (James Edward Workman) is available to any and all that would want to know..

and I would hope they could find someone with big enough balls to cross me an any fucking way at this point.

I want War more than the FED does and anyone who kind of knows me knows this mannnnnnnnnnnnnn.

BURN THESE MOTHER FUCKERS DOWN!

Mon, 09/26/2011 - 20:41 | 1713468 Prometheus418
Prometheus418's picture

A fine case in point of why getting paranoid about a car parked in the alley behind your house is foolish.  

If the FED was going after anyone on the comment boards here, JW would have to be pretty high on the list- and as you can see, his pirate flag is still flying.  

Keep it up, JW.

Mon, 09/26/2011 - 22:17 | 1713568 JW n FL
JW n FL's picture

 

 

Those Fed's want to retire...

not be traped in a bottle neck firing lane with me on the other end.. and level 4abcdefghijklomnop body armor aint gonna get NO ONE to 1st base with me!

whats the saying?

COME AND TAKE THEM!! BITCHEZ!

and besides! the FED is going to destroy all the records just like the SEC did for all those wall street bankers, NOT! LOL!

Mon, 09/26/2011 - 23:16 | 1713738 DoChenRollingBearing
DoChenRollingBearing's picture

Green for a big set JW!

Maybe I should think again about buying that .338 Lapua...

Mon, 09/26/2011 - 18:57 | 1713188 Manthong
Manthong's picture

Thank God that the Fed is backing up the truck and loading up the balance sheet with shiney reserves of precious European debt.

Everything will be just fine from now on.

Mon, 09/26/2011 - 17:21 | 1712988 SparkySC
SparkySC's picture

The Durden of DOOOOOOOOOOOOOOOOOOOOMMMMM!!!!!!

 

Durden & Glooooooooom!

Mon, 09/26/2011 - 17:23 | 1712992 Dr. Gonzo
Dr. Gonzo's picture

Never mind Gold and Silver. Platinum is at $1550. I might be calling Tulving tonight and doubling down on some of the noble metal. Don't bother with APMEX. They don't have any for sale.

Mon, 09/26/2011 - 18:01 | 1713031 DoChenRollingBearing
DoChenRollingBearing's picture

Platinum Eagles are VERY hard to get.  Today by chance I bought a Proof Platinum Eagle for $1950 ($400 over spot), normally I do not pay up for numismatic (or close to numismatic).

I like the Eagles and normally do not buy platinum in its other forms (Nobles, Maple Leafs, etc.).  But, I have had to buy a few foreign pieces over the years.

Gold?  AGEs only.

Mon, 09/26/2011 - 20:46 | 1713487 Prometheus418
Prometheus418's picture

Why domestic coin only?

Is it to avoid capital gains, or some other reason?  Personally, while I like the pre-1964 (why don't we call it sterling rather than "junk") and the ASEs, I've been thinking that it'd be amusing to have some Austrailian Koalas, Chinese Pandas, etc.  Also have been eyeing up those Mexican Liberdads lately.  Still haven't bought any, but I've been mulling it over.

Might as well have a variety, IMO.  Ounce of silver is an ounce of silver- or is it different with the gold and platinum markets?

Mon, 09/26/2011 - 21:21 | 1713565 UP Forester
UP Forester's picture

while I like the pre-1964 (why don't we call it sterling rather than "junk")

 

Just a guess, but isn't sterling 92.5%, and "junk" 90% Ag content?

Maybe....

Mon, 09/26/2011 - 23:31 | 1713744 DoChenRollingBearing
DoChenRollingBearing's picture

@ Prometheus

Various reasons, mostly idiosyncratic:

1)  AGEs stack nicely into those mint tubes, same w/ Pt and Ag

2)  There were (are still?) slightly better (lesser) reporting rquirements to the IRS w/ domestic PMs

3)  I live in the USA, the American would be a bit more recognized and accepted.

I have NO PROBLEM with anybody buying anything re PMs, I just have my preferences.  I only bent them when I felt (a year or two ago) I HAD to get more yummy platinum, so took in some Nobles.

Mon, 09/26/2011 - 17:23 | 1712993 disabledvet
disabledvet's picture

sounds more like collapse prevention in the euro if they botch the trillions necessary to create a "European Treasury Department." The more likely outcome is that this doesn't happen at all in which case you still have a disaster--which means pm's must fall and could fall spectacularly as these are the biggest holders of precious metals outside of the US itself. Add a run on sovreign wealth funds which are WAY overinvested in Europe and i think people really need to start questioning where the money to buy pm's "en masse" would come from. obviously silver will get a bid due to its use in the solar space. of course prices are collapsing in that space so obviously silver must not be all that critical. anywho buy Dunkin Donuts--and hold it for sixty years. that's my advice if you have ten grand lying around.

Mon, 09/26/2011 - 17:29 | 1713002 Shineola
Shineola's picture

The key point is this;  Neither gold nor silver will ever become totally worthless.  And neither helps to fund the banksters.   

 

There aren't very many safe options for money in the world right now.    Yes, there is the risk of further downside price in dollar terms, but only until more dollars are created from nothing. 

Like Bogie said to Hepburn in  "African Queen".  "You pays your money, you takes your choice".

Mon, 09/26/2011 - 17:36 | 1713020 rambler6421
rambler6421's picture

Marc Faber says that Gold can go down to 1100.......if 2008 happens all over again. 

Mon, 09/26/2011 - 17:44 | 1713036 DoChenRollingBearing
DoChenRollingBearing's picture

Well, who really knows.

But, I bet we NEVER get below $1040 ("The India Put" when they bought their 100 tonnes some 2 and 1/2 years ago).  Too much demand for physical as the price goes lower.

The 24hgold/eBay widget shows a pretty high 16% premium of eBay price over spot (AGEs).  Normally that runs between 6% - 9% or so.

www.24hgold.com

Mon, 09/26/2011 - 17:57 | 1713067 Manthong
Manthong's picture

The economic and market landscape is a lot different this time around.

There might be a slew of whales that won’t let the price get that thin before gobbling up all that they can before  the reset.

Tue, 09/27/2011 - 00:26 | 1713813 AustriAnnie
AustriAnnie's picture

I think ppl afraid of buying now because it "might go lower" need to remember that if it gets too low, there won't be any inventory to buy.

We see what is happening now with dealers selling out (or pretending to because they don't want to sell at that price, doesn't matter either way, you can't buy it if they aren't selling it.)

There are a lot of people willing to pay at a slightly higher price to know they have it in their hands.  Nobody knows what the situation could be "if 2008 happens all over again".

Price + availability + willingness of seller to part with it, all are necessary.

Mon, 09/26/2011 - 17:37 | 1713023 TradingJoe
TradingJoe's picture

I am not "buying" this EUROZONE ALL IN HYPE! It is politically unattainable because of 17 sovereign nations with a multitude of laws and rules and regulations, obviously this plan would leave the Germans holding the bigger share of the bag, saint happening!!!
It's window-dressing and then some, that's all! We'll be below 10K in the DJ very early next week!

Mon, 09/26/2011 - 17:51 | 1713052 Panafrican Funk...
Panafrican Funktron Robot's picture

Yeah, the thing is though, they constructed it to get around the unanimous consent rule.  It's convoluted as fuck, but they'll effectively be able to do something akin to a big ass TALF (read:  ~$2 trillion euros).  Humorously, this will likely boost the value of the euro relative to the dollar, and because more total fiat is in circulation, this only leaves one direction for gold.  

Mon, 09/26/2011 - 17:40 | 1713029 Shineola
Shineola's picture

Sweet!  I'd have to buy more at $1,000! 

 

Silver hits $25, I'm going to have to add more, even though I haven't bought any since it was $17 range. 

 

I'ml keeping about $5K in green cash, to pick up guns and motorcycles when the bank runs start. 

Mon, 09/26/2011 - 17:47 | 1713043 RazorForex
RazorForex's picture

For all you Euro bears, you better watch tomorrow we may get some bullish price action on the eur/usd

The 1.3400 was rejected today.

http://razorsforex.blogspot.com/2011/09/relief-rally-for-euro-currency.html

Mon, 09/26/2011 - 17:59 | 1713068 jomama
jomama's picture

still down 30%+ over the last 72 hours of trading is considered a recovery?

Mon, 09/26/2011 - 18:02 | 1713083 DavidDavid
DavidDavid's picture

Gold & silver recovered?  What a joke!  It was simply a "dead cat bounce."  Nothing more.

Mon, 09/26/2011 - 18:13 | 1713102 Robslob
Robslob's picture

 

 

DavidDavid...Welcome new guy...14 weeks!

Tue, 09/27/2011 - 01:13 | 1713857 Jalarupa
Jalarupa's picture

"I don't hate fools, I pity them!" - Mr T

Well I took your dead cat for 30 ounces at $27.40

Buying 20 more today...

Mon, 09/26/2011 - 18:16 | 1713106 htp
htp's picture

China has a lot to do with this sell off of precious metals, explained here.

http://www.hturning.com/index.php?action=topic&id=118

Mon, 09/26/2011 - 19:32 | 1713277 Conax
Conax's picture

Thanks much, that article made some sense. So the Chinese have thrown in with Wall Street.

All this wll really do is delay. The physical supply will never be enough at these prices.

Heck, it takes about 30 pounds of Ag to build a cruise missile. Special batteries, you know.

http://bullioncrypt.blogspot.com/2010/05/pentagon-in-race-for-raw-materi...

 

All we need do is refute the bearish propaganda, and the physical market will wipe the shelves clean.

Then, Martha bar the door!

Mon, 09/26/2011 - 22:04 | 1713634 ali-ali-al-qomfri
ali-ali-al-qomfri's picture

wow, thanks for the link, if mic-ptb need to re-stock then the ag price may be supressed until such time as the need to launch arrives. good and scary.

Tue, 09/27/2011 - 02:18 | 1713907 cynicalskeptic
cynicalskeptic's picture

China geets to buy on the cheap, the bullion banks get to cover their short positions at a much more affordable level.  A 'confluence of interests'.  Make no mistake, China is still converting paper $US to hard assets - mining companies in Australia and South America, long term energy contracts and Gold and Silver.  China has cut a number of deals with US miners to refine ore concewntrates (CDE was a recent one as I recll).  As is China is not letting domestic production of gold and silver leave the county, and is adding to their inventories by doing the 'dirty work' of refining for others.  And they're simply buying outright.

China isn't the only country adding to precious metals reserves.  The long term upward trend remains.  None of the fundamental problems in the financial world have been dealt with - the can keeps getting kicked down the road - but the charade is harder and harder to maintain.

I suspect this has been an orchestrated slamdown - helped by margin driven liquidations. 

1) COMEX expiration is coming up - a traditional slam down time.  At recent prices it was getting harder and harder to cut back the huge short positions being held - and regulators have been under pressure to set some limits.

2) Europe is in trouble - the US has been having increasing trouble selling  debt - the Fed has been a big buyer - taking inventory off the hands of primary dealers after recent auctions.   You don't want people fleeiong to gold - but want them buying ionto the  dollar 'safe haven' meme MOPE economics - manafgemewnt of perspective - manipulation of the way people see things.

3)

Mon, 09/26/2011 - 18:32 | 1713136 Dingleberry
Dingleberry's picture

Pms are insurance.  Against the bullshit of euro bonds, QEs, secret swap lines, bailouts, etc. etc. etc......the PMs are just waiting for the Central Banksters to blink, and then it's FUCKING LIFTOFF BITCHEZ!!!!!!!!!

Mon, 09/26/2011 - 18:40 | 1713155 PulauHantu29
PulauHantu29's picture

$2 Trillion is what I heard on TV news is what the ECB special fund will ulitmately cough up with additional donations pledged from India, etc....

I'd like to see it in print....$2 Trillion of newly printed, crispy euros.

Mon, 09/26/2011 - 19:06 | 1713208 Zola
Zola's picture

What was this stupid rally in the markets today ? How many times will the PPT defend the support ?? This is getting tired now.

Mon, 09/26/2011 - 19:31 | 1713273 Spigot
Spigot's picture

Watching this drop in gold/silver, my gut says "tsunami", as in watching as the tide rushs out and all the tourists walk out to look at the pretty sea shells and ... oh, shit, here comes a big MF-ing wave gonna smash my @ss! Head for the hills, Tonto!!

Mon, 09/26/2011 - 19:37 | 1713287 Conax
Conax's picture

hope you're right, Kemosabe!

Mon, 09/26/2011 - 19:43 | 1713298 Spigot
Spigot's picture

This kind of sudden, severe wash out is not indicative of a bear market, on the contrary is a sign of a bull market. It will regrind higher. I'm pretty sure the $100 over night spike down to 1540 was the low print for this move.

Mon, 09/26/2011 - 19:48 | 1713320 Kina
Kina's picture

Kinda looks like somebody is playing with the market. Per usual.

 

Guess we will have to get used to $100 moves up and down as good fights evil fights fear.

 

The fact that these guys bust their guts to supress gold and silver ought send out the hint to people.

Mon, 09/26/2011 - 19:43 | 1713300 Kina
Kina's picture

I am thinking that if China wanted to buy a nations gold or part thereof they would go direct to the source nation and 'make arrangements' and not through the markets. So I don't see China participating in a gold take down for that particular reason.

 

Would sound kinda strange Biden arranging with China to push down gold and silver so China can pick it all up on the cheap. Though that is happening anyway. Wouldn't Biden think to himself....I wonder why the Chinese want all this barborous relic?

Mon, 09/26/2011 - 20:01 | 1713357 Conax
Conax's picture

"Wouldn't Biden think to himself....I wonder why the Chinese want all this barborous relic?"

If Biden ever had an original idea it probably had to do with barnyard porn.

Tue, 09/27/2011 - 00:45 | 1713829 Kyle Reese
Kyle Reese's picture

Anyone seen this news on the newest addition to the global silver pile.  

 

http://news.yahoo.com/treasure-hunters-eye-huge-silver-haul-wwii-ship-18...

Tue, 09/27/2011 - 01:37 | 1713872 ssoniindia
ssoniindia's picture

The premium for physical silver in the INdian market is nearly 15% over the COMEX price. There is no silver dealer willing to sell physical silver less than that. It seems as if the physical market is getting distanced from the futures market. The dealers are saying you want it at the COMEX price, go and buy it on the COMEX and try your luck. You will never get the delivery. If you want physical today, pay the premium.

This has never happened before. Just shows that the COMEX price is totally manipulated and out of sync with real world conditions.

Tue, 09/27/2011 - 01:57 | 1713889 PaperWillBurn
PaperWillBurn's picture

Silver has gone full retard

 

$6 price swings in 1 day??

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