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Monetary “Floodgates” And Geopolitical Unrest To Support Precious Metals

Tyler Durden's picture


From GoldCore

Monetary “Floodgates” And Geopolitical Unrest To Support Precious Metals

Today’s AM fix was USD 1,730.50, EUR 1,339.81 and GBP 1,073.64 per ounce.
Yesterday’s AM fix was USD 1,742.75, EUR 1,352.23 and GBP 1,081.71 per ounce.

Silver is trading at $33.15/oz, €25.78/oz and £20.56/oz. Platinum is trading at $1,657.75/oz, palladium at $676.80/oz and rhodium at $1,025/oz.

Gold is a tad higher today in most major currencies. Investors await the policy decision by the US Federal Reserve and Fed Chairman Ben Bernanke’s news conference at 1815 GMT.

Yesterday’s German Constitutional Court’s decision allowing Germany to ratify the €500 billion ESM with strict conditions sent gold to its highest price since last February (in dollars) and silver back above $34/oz briefly.

Silver 5 Year Chart – (Bloomberg)

Gold was down only $0.10 or 0.01% in New York yesterday and closed at $1,732.00. Silver hit $34.065 yesterday and then dropped to as low as $32.482 and then also rebounded, but it finished with a loss of 0.6%.

It is worth remembering that gold, silver and the platinum group metals (PGMs) have seen strong gains in the last 30 days and therefore a correction is possible.

In the last 30 days (since August 13th), platinum has risen by 18.9%, silver by 18.7%, palladium by 18.4% and gold by 7.6%. All remain well below their nominal record highs (see charts) and more importantly well below their inflation adjusted highs.

All will most likely continue to rally especially if the Fed announces QE3 today as investors turn to precious metals to hedge substantial money printing by governments and the real risk of future inflation.

"The Euro bailout measures and the opening of the monetary policy floodgates by the central banks are likely to result in higher inflation in the medium to long term," says today's Commerzbank commodities note.

The strikes and violence in South Africa's gold and platinum industries are supporting and may contribute to higher prices.

Machete-wielding strikers forced Anglo American Platinum, the world's No.1 platinum producer, to shut down some of its operations in South Africa, sending spot platinum to a five month high of $1,654.49. 

Spot palladium gained 0.9% to $677.20, and reached $680.50 earlier in the session -- a four-month high yesterday.  

Platinum Monthly Chart 1992-2012 – (Bloomberg)

Palladium’s record nominal high was $1,045/oz back in January 2001.

South Africa gold production fell 5% versus a year ago further confirming South Africa’s has reached peak gold. 

Spreading labor unrest in the nation’s mining industry has deepened concern of a credit-rating downgrade for South Africa.  South Africa’s bonds slumped and the cost of insuring the nation’s debt jumped more than any other country yesterday.

Palladium Quarterly 1994-2012 – (Bloomberg)

The rand weakened 2% against the dollar, extending its loss over the past month to 3.1%, the worst performer among 16 major currencies.

Geopolitical risk continues to support gold with riots and attacks aimed at American interests spreading across the Middle East, North Africa and even into West Africa. 

In the aftermath of the storming of the US embassy in Libya and killing of the U.S. ambassador, violence has flared in Egypt, Tunisia and in Yemen this morning and there are concerns of violence in Nigeria.

Hundreds of Yemeni demonstrators stormed the US embassy in Sanaa today and security guards tried to hold them off by firing into the air. Once inside the compound, they brought down the US flag and burned it.

Nigeria boosted security at foreign diplomatic buildings and Nigerian police are on “red alert” and ensuring “24-hour water-tight security in and around all embassies and foreign missions in Nigeria,” spokesman Frank Mba said today in an e- mailed statement from Abuja, the capital.

Cross Currency Table – (Bloomberg)

Protesters have attacked the U.S. embassies in Cairo and Tunis. In Tunisia, police used tear gas to stop hundreds of protesters from storming the United States Embassy. US embassies in Tunisia and Algeria warned Americans to avoid crowded places because of expected protests. 

In Egypt, the powerful Muslim Brotherhood called for peaceful nationwide protests tomorrow “outside all the main mosques.”  Security guards maintained the Egyptian U.S. embassies' perimeter against protesters, some who hurled Molotov cocktails.

Geopolitical risks remain elevated and means that an allocation to gold remains important.

For breaking news and commentary on financial markets and gold, follow us on Twitter.

 Gold steady ahead of Fed, platinum near 5-mth high - Reuters

Fed Seen Starting QE3 While Extending Rate Pledge to 2015 - Bloomberg

Gold May Gain Before Fed Policy Decision Amid Record ETP Assets - Bloomberg

Rich-Poor Gap Widens to Most Since 1967 as Income Falls - Bloomberg



How Gold, Shares, Deposits and House Prices Fared Five Years After Northern Rock – The Telegraph

Developed World in Financial Decay – How Long Before Money Collapses? - GoldSeek

The Rise of the Barter Economy - Bloomberg

The euro’s demise may be the final chapter of the ERM debacle – The Telegraph

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Thu, 09/13/2012 - 08:21 | 2788827 LawsofPhysics
LawsofPhysics's picture

All things physical, that is all.

Thu, 09/13/2012 - 08:24 | 2788836 GetZeeGold
GetZeeGold's picture



......and then reality set in.



Thu, 09/13/2012 - 08:34 | 2788861 Precious
Precious's picture

You didn't mock that prophet.

Thu, 09/13/2012 - 08:35 | 2788865 GetZeeGold
GetZeeGold's picture



As a general rule....I don't spit either.


Thu, 09/13/2012 - 09:10 | 2788991 Precious
Precious's picture

We are still borrowing money from China to give to Egypt.

Thu, 09/13/2012 - 08:41 | 2788881 DosZap
DosZap's picture

The strikes and violence in South Africa's gold and platinum industries are supporting and may contribute to higher prices.

Ya think?, Plat was $1,398.00, 5-6 weeks ago.

Thu, 09/13/2012 - 08:35 | 2788860 DosZap
DosZap's picture

Glad those first printed prices were changed, thought someone was hitting the Jack Daniels early.

Thu, 09/13/2012 - 10:33 | 2789489 Imminent Collapse
Imminent Collapse's picture

All analysis is bullshit until the price manipulation ends and the real market sets the price.  Prices are still cheap.  Stack while you can.

Thu, 09/13/2012 - 08:24 | 2788837 NIRee
NIRee's picture

The ESM is €700 billion , not 500.

Thu, 09/13/2012 - 08:27 | 2788842 GetZeeGold
GetZeeGold's picture



Noted....thanks for pointing it out.


Thu, 09/13/2012 - 08:32 | 2788853 disabledvet
disabledvet's picture

They don't call them "War Pigs" for nothing. I look at UNP and see the real...ahem...(tm on that btw) "winner." as in "I see your gold...and raise you a State." I must say I am fascinated...and truly amazed at the price difference between gold and the other "far more precious" in palladium and platinum. Good luck if your a debt trader...

Thu, 09/13/2012 - 08:32 | 2788854 malikai
malikai's picture

Pre-FOMC chartporn: http://blog.quantsig.net/2012/09/13/pre-fomc/

I have various orders and positions in that mix. Will be interesting to see how it works out.

Thu, 09/13/2012 - 08:32 | 2788855 AvoidingTaxation
AvoidingTaxation's picture

GoldCore is the man

Thu, 09/13/2012 - 08:33 | 2788857 JohnG
JohnG's picture

"Machete-wielding strikers..."

Has a nice 'ring'to it.

Thu, 09/13/2012 - 16:15 | 2791840 Colonel Klink
Colonel Klink's picture

Almost as nice as "rope wielding mobs"!

Thu, 09/13/2012 - 08:34 | 2788859 johnnymustardseed
johnnymustardseed's picture

18.9% rise in silver, until JPM sells about 600 million ounces short in a milli-second and it crashes again. Fuck JPM

Thu, 09/13/2012 - 08:36 | 2788866 DosZap
DosZap's picture

until JPM sells about 600 million ounces short

That does not exist on the PLANET.

Thu, 09/13/2012 - 09:22 | 2789040 No Euros please...
No Euros please we're British's picture

"That does not exist on the PLANET."

Well just fuck JPM anyways. And while I'm on a roll, fuck GS too.

Thu, 09/13/2012 - 08:42 | 2788883 caimen garou
caimen garou's picture

like they just got the button pressing monkeys right after jobless claims report, i second that fuck jpm!

Thu, 09/13/2012 - 08:35 | 2788863 youngman
youngman's picture

Japan..1 trillion..Britain...1 trillion..USA 2 trillion..EU..1.5 trillion...this is for just next year.....add in global worries....looking good for hard metals...I also think the paper metals problem will show up this next year...where a Comex or  a London misses a delivery

Thu, 09/13/2012 - 08:37 | 2788871 GetZeeGold
GetZeeGold's picture




If you hold my bag of crap....I'll hold yours. Hopefully no one will notice.


Thu, 09/13/2012 - 08:38 | 2788873 JohnG
JohnG's picture

I'm thinking comex gold fails.

Thu, 09/13/2012 - 08:40 | 2788877 GetZeeGold
GetZeeGold's picture



Paper burns.....gold sez.....screw you.


Thu, 09/13/2012 - 08:42 | 2788884 JohnG
JohnG's picture

Ya.  I just wonder if that's why Sprott filed another shelf.  He's a smart bastard, I think he's getting while he still can.

Thu, 09/13/2012 - 08:56 | 2788934 Snidley Whipsnae
Snidley Whipsnae's picture

youngman... I am hoping for a slow and steady rise in PM prices.

A too fast rise might trigger a panic (or provide an excuse) at the Fed/treasury and cause another 'confiscation event' as happened under FDR... the very last thing we need.

Marc Farbar says his biggest worry in gold now is confiscation by the US Gov... His latest interview (that I know of) is at KWN and near the end he inserts the confiscation comments.

Easy does it is ok by me.


Thu, 09/13/2012 - 08:37 | 2788872 LFMayor
LFMayor's picture

Hey Simon Black, why don't you jet into there and see if you can sniff up some quaint little back street shops where a real deal can be found?

Don't mind the pangas.

Thu, 09/13/2012 - 08:46 | 2788902 adr
adr's picture

Could all of this be staged to cover the massive inflation coming from QE3? Nothing like geopolitical tensions to use an excuse for inflation.

Even breaking out the Nigerian chesnut. That should be good to cover at least $15 in the spot price of crude.

You couldn't have written a better script for President Choom.

Thu, 09/13/2012 - 08:47 | 2788907 lolmao500
lolmao500's picture

Geopolitical floodgates... like that?

- MoD Says U.S. Experts Assess Georgian Air-Defense Capabilities


- One killed as hundreds storm U.S. Embassy in Yemen over anti-Islam film, 13 wounded in Egypt protests


- China must teach Japan a lesson, says Chinese daily


- Taiwan sends patrol boats near disputed islands


- U.S. strike on Iran could lead to all-out Mideast war, experts say

A more ambitious military campaign designed to oust the Iranian regime of hardline clerics or force an undermining of Iran's influence in the Mideast would require the U.S. to occupy part or all of the country, the report said.

"Given Iran's large size and population, and the strength of Iranian nationalism, we estimate that the occupation of Iran would require a commitment of resources and personnel greater than what the U.S. has expended over the past 10 years in the Iraq and Afghanistan wars combined," the report said.


- US officials say 2 warships moving toward Libya


Thu, 09/13/2012 - 09:36 | 2789116 lolmao500
lolmao500's picture

Somalia has a president? He's recognized by how many people? Less than 10??

Thu, 09/13/2012 - 08:50 | 2788915 Quinvarius
Quinvarius's picture

Silver technical target, FWIW.  The flag pole runs from 8 to 49.  The current breakout from the flag was at 28.  49 - 8 = 41.  41 + 28 =  "69".  That is if you think technicals are all that important. 

Thu, 09/13/2012 - 08:52 | 2788925 LULZBank
LULZBank's picture

Money prints, PMs go high, "distant friends of printers" make some extra cash as a gift for their services... PMs hammered back to previous levels.

Rinse, repeat...

Thu, 09/13/2012 - 09:07 | 2788975 Yardfarmer
Yardfarmer's picture

thats 1015 EDT

Thu, 09/13/2012 - 09:22 | 2789042 ratpack1968
ratpack1968's picture

The end game is .... DEFLATION and millions of government dependent zombies.

Thu, 09/13/2012 - 09:56 | 2789269 ParkAveFlasher
ParkAveFlasher's picture

I would not play platinum long-term.  Its chief consumption is in catalytic converters, and you as a regulatory body now kneeling before the republicans, could always say, fuck it, let it all burn dirty.  Hence, less platinum production will be simply met by less consumption.

And, the conspiracy theorist in me states:

1) auto industry profit contraction squeezes unions.

2) Unions with international reach or simply connection strike on the raw material supply side. 

3) expensive raw materials like platinum become too costly to use in products like catalytic converters - after intense lobbying, "clean burn" is no longer a prerogative.

4) auto industry is able to pass that newly acquired cost headroom into their own and the unions' coffers.  A big bbq happens in the GM parking lot and even the board members come down from their towers and eat cheeseburgers with the grunts.

5) short term platinum players will collect profits on the inside lobbying info, just before the new regulations and the dump, and then funnel all that new cash into ...

6) gold bitchez!

You see, I don't see it as labor vs. owners, I see it as a single body - labor unions being the legs and owners being the egg head.

Thu, 09/13/2012 - 10:50 | 2789594 MrBoompi
MrBoompi's picture

The only correction I'd like to see is an end to price manipulation, which is so obvious it's a joke.

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