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Is That A NIRP In Your Pocket Or Is Gold Just Happy To See Negative Rates?

Tyler Durden's picture


Gold and Silver are spiking once again, after experiencing quite a roller-coaster ride of rips and dips in the last week or so but this latest spike is suggesting the market's concerns at NIRP is growing. Moments ago, when noting the recent drive for NIRP at the ECB, we noted, that "once [the EUR747 billion in ECB deposits] has to pay to stay, it is certain that nearly $1 trillion in deposit cash, currently in electronic format, would flood the market." Judging by the dramatic move in gold in the last few minutes, at least the PMs appear to already be discounting just such a move.


Chart: Bloomberg

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Wed, 06/27/2012 - 09:39 | 2564689 mrktwtch2
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do they make this up every morning?? take a poll to see what the favorite rumor should be today??.id short it here..

Wed, 06/27/2012 - 09:44 | 2564711 Al Huxley
Al Huxley's picture

Yes, negative interest rates are always the signal to go short real things and long bonds.  After all, you might even get almost all your money back (long as they're not Greek, Spanish, Italian, Portuguese, French, any bank,....) and you'll be doing your bit to help bail out the banks and pay off sovereign debt. 

Wed, 06/27/2012 - 09:49 | 2564729 SheepRevolution
SheepRevolution's picture

NIRP = No Interest Rate Policy?

Wed, 06/27/2012 - 09:51 | 2564742 tmosley
tmosley's picture

Negative Interest Rate Policy

Wed, 06/27/2012 - 09:54 | 2564753 SheepRevolution
SheepRevolution's picture

Almost the same thing these days though...

Wed, 06/27/2012 - 12:59 | 2565409 derek_vineyard
derek_vineyard's picture

i have negative interest in negative interest

Wed, 06/27/2012 - 11:05 | 2565039 whatsinaname
whatsinaname's picture

Anybody understand how the EUR can gain against the INR in this environment and if that will impact gold buying habits in India.. ?

Wed, 06/27/2012 - 11:05 | 2565040 whatsinaname
whatsinaname's picture

Anybody understand how the EUR can gain against the INR in this environment and if that will impact gold buying habits in India.. ?

Wed, 06/27/2012 - 09:39 | 2564690 machineh
machineh's picture

NIRPS is PERPS in my book.

Thu, 06/28/2012 - 19:37 | 2571565 Bearish News
Bearish News's picture


Wed, 06/27/2012 - 09:40 | 2564695 SeverinSlade
SeverinSlade's picture

The punchline for the goldbug's joke is this:

Watch what happens to the price of PMs WHEN the remaining 99% of money begins to flow into gold & silver.

Wed, 06/27/2012 - 09:40 | 2564701 midgetrannyporn
midgetrannyporn's picture

the chart is bearish.

Wed, 06/27/2012 - 09:41 | 2564702 Al Huxley
Al Huxley's picture

Yeah, traditional bearish argument against gold is that it costs money to hold it, because of storage fees, etc...  Wonder how that argument's working out now?

Wed, 06/27/2012 - 09:55 | 2564756 TrumpXVI
TrumpXVI's picture

The, "It costs money to store it" argument I have always thought was particularly weak.  If one has enough money to buy physical gold it seems to me one would probably have any number of other things that would require safe keeping; documents, deeds, titles, firearms, heirlooms, etc.  So, the "cost" of storing gold is simply discounted against the need for safe keeping in general; as an ongoing necessity for multiple reasons.

Wed, 06/27/2012 - 10:15 | 2564844 Alea Iactaest
Alea Iactaest's picture

(a) Gold has less counterparty risk than the ECB

(b) Gold has more counterparty risk than the ECB


Now please remind me why I would pay the ECB for their help?


Wed, 06/27/2012 - 10:16 | 2564845 Chaffinch
Chaffinch's picture

That's a good point Trump.
But if, on the other hand you have a pile of potentially worthless fiat, NatWest might hold it for you at no charge... - not very appealing given their current problems! You'd be a lot better off paying to keep something real safe!

Wed, 06/27/2012 - 11:23 | 2565099 ParkAveFlasher
ParkAveFlasher's picture

Storage fees, summarized.

Wed, 06/27/2012 - 09:43 | 2564706 GeezerGeek
GeezerGeek's picture

Money invested at NIRP is similar to having dry ice. Eventually it all evaporates. Or, as one might have heard on South Park, "...and...it's gone!"

On the other hand, the stack of PMs under my mattress will not evaporate. I'll have the same amount tomorrow as I have today. I just wish there was enough under my mattress to make sleeping uncomfortable.

Wed, 06/27/2012 - 09:43 | 2564707 RobotTrader
RobotTrader's picture

Up one day, down the next.  Totally psycho market dominated by conviction-less F12 punching futures traders hoping to "make a killing".

Wed, 06/27/2012 - 09:45 | 2564713 SeverinSlade
SeverinSlade's picture

More like BIS/JPM naked short sellers.

Wed, 06/27/2012 - 09:49 | 2564728 AUD
AUD's picture

I always thought you are a trader hoping to "make a killing".

Wed, 06/27/2012 - 13:42 | 2565588 akak
akak's picture

I always hoped he was a trader/traitor going to get killed.

Wed, 06/27/2012 - 09:47 | 2564719 AUD
AUD's picture

Anyone know a decent website for gold, FX, commodities prices, etc?

24gold sux big bags of shit now.

Wed, 06/27/2012 - 09:50 | 2564739 obvious_sarcasm
Wed, 06/27/2012 - 10:41 | 2564969 Alea Iactaest
Alea Iactaest's picture

Bloomberg is comprehensive if you don't need real time or don't have access...


Everything in one place.

Wed, 06/27/2012 - 10:35 | 2564944 Overfed
Overfed's picture


Wed, 06/27/2012 - 09:50 | 2564736 lsbumblebee
lsbumblebee's picture

Options expiry over. PM's now allowed to show some semblance of an actual free market.

Wed, 06/27/2012 - 09:53 | 2564749 TWSceptic
TWSceptic's picture

Bottom not in yet, have some patience.

Wed, 06/27/2012 - 09:54 | 2564751 GOLDTEETHSILVER...

Follow the yellow brick road...

Wed, 06/27/2012 - 10:05 | 2564804 Pladizow
Pladizow's picture

Dorothy's slippers were originally silver and it was thaught the symbolism was too strong and changed to ruby!

Wed, 06/27/2012 - 09:58 | 2564777 Confundido
Confundido's picture

Guys, here's another way to look at NIRP: 

-Destroys whatever safe source of income Euro banks still had access to: 25bps

-Forces banks to charge on deposits or not to accept deposits, exactly at a time when deposits are the only genuine source of funds they have: Equity has been wiped out, unsecured debt is non-existent/subordinated, collateral has been pledged and downgraded....so...deposits are their last source. But policy makers, in their wisdom, are going to ensure that the banks can't even rely on deposits....

Not sure this should be bullish of gold at all. If banks go belly up and counterpart risk explodes, margin clerks are going to dump all the gold they can.

Wed, 06/27/2012 - 09:59 | 2564779 fonzannoon
fonzannoon's picture

what am I missing? metals still look like a shit sandwich today...

Wed, 06/27/2012 - 10:06 | 2564815 MJ
MJ's picture

Like real rates weren't negative already.  ECB should shut up and make it happen, I'm getting bored.

Wed, 06/27/2012 - 10:07 | 2564820 walcott
walcott's picture

one year chart dollar 


one year chart silver


The trend is not your friend for silver. Absolute nose dive 1 yr chart.

Wed, 06/27/2012 - 20:31 | 2566944 Bringin It
Bringin It's picture

Charts are useless in a manipulated market.

Who cares where the bernark pissed in the snow.

Wed, 06/27/2012 - 10:19 | 2564856 TrumpXVI
TrumpXVI's picture

I don't consider that little move to be a "spike".  Gold is still tracking the dow in lock step at an 8:1 ratio.

Wake me when this relationship again decouples and drops to something more like 6:1 or lower.

Wed, 06/27/2012 - 10:24 | 2564889 BBullionaire
BBullionaire's picture

Thanks, everytime I see the gold chart spike up or down I now somethings happened. I always come to ZH to find out what it was.

best blog on the net and I follow a lot:  http://bulletsbeansandbullion.blogspot.co.uk/

Wed, 06/27/2012 - 10:37 | 2564955 TideFighter
TideFighter's picture

Barney reports sighting of a purple NIRPle. 

Wed, 06/27/2012 - 10:41 | 2564966 mirac
mirac's picture

I don't think NIRP will happen, as it's too dorky an ancronym

Wed, 06/27/2012 - 11:14 | 2565068 Temporalist
Temporalist's picture

I'd like to formally submit to the Tylers that "NIRP" now be called "Roshambo" (Rochambeau) in honor of Eric Cartman:


Wed, 06/27/2012 - 10:54 | 2565013 Bastiat009
Bastiat009's picture

"Gold and Silver are spiking once again"

WTF???? Are you high or doing handstands? It's not about liking gold or not, it's just about facing the music. Facts are facts. Gold is absolutely not spiking up.

Wed, 06/27/2012 - 11:06 | 2565045 paulypaul
paulypaul's picture

bing bing, last call for gdxj! about to leave the station.......



Wed, 06/27/2012 - 11:18 | 2565084 Temporalist
Temporalist's picture

How does anyone have the balls to make a statement like this:?

"indicating the real estate industry is firming three years after the start of the economic recovery."


Wed, 06/27/2012 - 11:32 | 2565133 ghostzapper
ghostzapper's picture

Based on what I am looking at Gold has been in a clear cut downtrend since August.  There was a parabolic move in July and August and a blow off top.  Since then it has stayed within a descending channel despite all the reasons why it makes sense to buy it and QEuphoria.  Don't get me wrong I agree with all of the reasons consistently stated here at ZH but the chart is what it is.  I'll wait to get back in long. 

Wed, 06/27/2012 - 20:34 | 2566956 Bringin It
Bringin It's picture

The channel, the chart is a painted picture. 

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