Oil And Gold Excited As USD Leaks Lower
As EURUSD toys with 1.38 and AUD outperforms, the USD is leaking lower (-0.2%) from Friday (after closing the week almost perfectly unchanged Friday-to-Friday). Gold and Oil appear to be basking in the glow of increased macro and geopolitical tensions as $1795 and $99.50 (respectively) have already been broken this evening. It appears Silver and Gold are tracking each other as Oil follows the USD and Copper is the major outperformer so far (in early trading).
Commodity (and USD) performance from Friday's close - Gold/Silver (+0.35%) outperforming Oil (+0.14%) as it tracks the USD and Copper outperforms (+1.39%).
UPDATE: TSYs just opened (after being closed Friday) with a 4-7bps bear steepener and 2s10s30s rising 8bps. ES is pretty much in line with CONTEXT at 1269 now all the risk drivers are open.
Chart: Bloomberg
(2 votes)
»
- Login or register to post comments
- 11013 reads
- Printer-friendly version
- Send to friend
Huge moves coming in gold and oil to record highs....the currency vigilantes are going to re-train their sights away from EU and into the U.S. of A as the SuperCommittee struggles to figure out how to impose "austerity" onto Joe SixPack.
No "austerity" will be imposed. The cuts are over ten years, and they probably won't even start right away. In addition, it's not like they're actually going to pay down the debt..they'll just be overspending less than they were otherwise planning on overspending. The debt super committee is really just politicking over the best way to hide the fact that they're not going to cut spending. Regardless, oil and gold will rise because the only way to keep the game going is kicking the printers into high gear.
Washington defines a cut not as a reduction in current spending but as a reduction in future spending INCREASES.
So they are guaranteed to spend more then they are right now, just not as much as the hoped.
How is spending more, a cut?
FUCKING CROOKS!
yeah, slower growth = cut in DCspeak
I had some time to kill today so I made you a theme song video.
Trav's Theme
Now that was fucking hilarious!
Somewhere, a gay leather nightclub is missing its music.
<bow>
The long answer to your rhetorical question begins with y = x2.
A quicker answer:
Using an extreme example, if you double GDP and spending remains the same in nominal terms, you could say spending is cut in half. Your pants wouldn't catch on fire and you'd be considered a viable candidate for the Senate.
... parabolas that can cause cardiac arrest in a yak - W.Allen
Is it raining frogs yet?
It sounds as daft and nebulous as saying we saved a million jobs. Not created...saved.
In bedrock...twitch, twitch.
the "super committee" is a joke...november 23 here we come
they better be wearing tap shoes to keep it interesting - a rerun of this summer's debt ceiling drama will do nothing but piss everyone off for the holidays. . . I would think but, who the fuck knows?
Joe FourPack?
Joe Man-Can.
Yes and no. If you have physical. amen to that brother. However, if you are trading paper, you may be put through Hell.
Paper is the domain of The Dark One. You can't beat The Dark One at his own game. Only a fool believes he knows where paper will go.
When the great collapse comes, one possible result is that everyone can run to USDs and paper gold collapses just before the almightly buck. Of course, that will seize the phyaical markets and bring about the grand decoupling, but the path of paper is the path of pain.
Cashing in the 401k now, before income taxes go up will nullify that 10% penalty. Physical not only eliminates the counterparty risk of paper, it protects one from unreasonable taxation and means testing for everying you have chipped in for during all of your life.
Barring Iran invasion or outright QE3 by FED, no chance of WTI moving much higher from here. It's already stiffling growth. Rest assured WH already discussing more SPR releases if we break $100. However, gold still has room to rise as a safe haven as global currency uncertainties remain.
i would argue the dynamics very different for oil and gold
oil has strong negative feedbacks (i.e higher price will cause less demand and more (slightly) production)
gold will have positive feedback - the more people that own it/want it, the more it will go up.
note: i strongly believe we will never see $150 again in oil and that we will see $2500 in gold next year
two of gaddafi's sons escaped. their former sas bodyguards (mercenaries) have said that the libyans are a people of revenge. if and when the resistance there recovers and starts operations again, what if libyan oil is disrupted? then couple that with any idiotic move against iran and to say we will never see 150 oil again is a bit premature, correct?
There is some powerful analysis on oil and its price and how there MAY be a cap on it from demand.
$120 oil could smash the global economy GDP and that, of course, smashes consumption (remember, always, consumption is not the same as demand). With consumption destroyed, the price would fall.
You could have trouble getting $200 oil for this reason. It guarantees widespread death and killing.
well you are using arguments based upon fundamentals. let us look at interest rates. the fed is charging between 0 and 1/4 percent for money to primary dealers. the fed maintains the interest rates no matter what happens in the real world. could it not be said that oil prices could be controlled in a similar manner for whatever reason? just sayin......
Correct. And another simple way to destroy the "never" argument is to go back 3 years when gold was around $900 FRNs. Most would have said it would "never" double in price, and yet it has. Inflate the dickens out of fiat and a loaf of bread could even cost a trillion deutsche marks. What a shock.
remember when prechter was going around saying gold was going back to 600...........ha ha ha
I remember when he said it would never get to $600.
I also remember when someone asked him what it would take for him to abandon his negative position on gold. He said if it got over $400.
Hey Robert Prechter, watch my hand: here's an "Elliot Wave" for you, as I wave bye-bye to your "crushing deflation". But you just keep holding those dollar bills under your mattress, waiting for that historically-unprecedented appreciating fiat currency. Maybe, in the meanwhile, you can argue with Karl Klownshoes Denninger over which one of you is going to be the next president of the Flat Earth Society (or, in Karl's case, Der Flacheerdenfuhrer).
Gold is not relevant to the argument. It doesn't define GDPs as oil does.
I am receptive to the idea of attempts to create oil by decree. I think they will be tried. But . . . unlike 0s and 1s and unlike Eurostat or BLS numbers, oil is burned. It disappears after it is used. You don't recycle it. It doesn't return to the economy. It's gone.
Again, it's not really oil PRICES that are relevant. It's barrel total. This is the schism of reality. This is the apex point where hand waving sciences like economics and finance come face to face with a science like physics.
Physics can't be changed by decree, but I agree 100% they will flail about and try. They will declare good news here and there and more or less cover up towns dying because trucks had no fuel to bring them food. They might even try to decree an oil price, but see, the problem with that is a decree by a consumer country can be ignored by a pumper country. Or a pumping company.
I probably won't be around to see it but I think what happens in the Arctic will be interesting in the next 50 years or so.
Agreed, but short of a real physical disruption, I do not see Brent above $130 for a sustained basis. The economy simply starts shutting down...
Does anybody remember Silver?
silver who?
Hi Ho Silver? He went away.
Silver is just hiding from the Manipulators. Silver knows not to shoot for the moon at this time, just a slow steady pace upward, for now.
Yeah, because silver is sentient that way.
the silver surfer was
When I'm travelling down The Road, my bludgeoning weapon of choice is a sock full of silver coins. Maybe an ingot thrown in for good measure.
I remember when quarters were 80% silver and would buy a glass bottle of pop.
Today that same quarter buys $5-$7 so yes silver is money, has been for 3000 years!
90% silver pre-63
Actually, that would be pre-1965 (why do SO many people continually get that year wrong?).
And Steelrules above would be correct, if he/she is Canadian (post-1920, pre-1968).
Guilty as charged.
Jesus.
Some folks have the attention span of a walnut.
did they have a bunga bunga going away party yet?
Burlesqueoni is the proper spelling I believe.
Whats wrong with walnuts? You nuts or something?
SILVER WILL MORE THAN LIKELY TAKE OUT ITS PREVIOUS HIGHS IN THE NEXT 2-4 MONTHS
Furthermore, total world silver production will probably decline in 2011 compared to 2010. United States silver production is down 10.3% JAN-AUG from same time last year according to the USGS Silver Mineral Survey. The Red Dog mine which was the largest silver producer in the USA in 2009 has decreased an estimated 33% in silver production in the first 9 months in 2011.
You can read in more detail from my post on the SILVERGOLDSILVER forum at the link below:
http://www.silvergoldsilver.com/index.php?option=com_smf&Itemid=39&topic=199.msg3445#msg3445
silver's production peak will give it a price tailwind, but it's heavily industrial these days. If industrial production starts to crawl downward, less silver will be needed or used. Simple as that. It will track oil consumption like other industrial metals
You underestimate silver's monetary role. When fiat disappears, people will try to save their wealth.
people always discount silver as being mostly industrial. maybe, maybe not. we shall see..........
They almost always mention emulsion film camera technology.
It's 2011 Hello!!!
Still using a fucking Kodak Brownie?
Agreed. I tend to be somewhat bullish on silver ....maybe a little undervalued right now ...
When fiat disappears.
Hahahahahahaha! Woohee!
That was a good one.
The world is run on USDs and when the USD disappears, it will pave the way for the rest of fiat to disappear..at least momentarily. The USD is coming right near the end: when the 10 year yield gets above 5%..game over, when oil hits $200..game over, if Italy defaults..game over, when housing tanks hard again..game over because 50% of mortgage holders are already underwater and the gov. is on the hook for almost all mortgages.
If solar ever gets its merde together, Ag will have a material industrial underpinning, which could run for some time.
i wish they would. if they ever start bugging me about that damn smart meter bullshit i just might go offline. the hell with it...........
trav7777..... While it is true that industrial silver demand might decline in a depression, so will silver production. This was shown in my PEAK SILVER REVISTED article: http://www.marketoracle.co.uk/Article30905.html
Even though there might be less silver needed in industry, investment demand will shoot towards the heavens. Eric Sprott was asked by Jim Puplava if he was going to do another offering in his PSLV - Physical Silver ETF. Eric replied by saying that he was going to do one, but was not going to announce it before hand due to the fact that the market (shorts) would front run it and destroy the high premium. Instead Eric is going to have institutional buyers come in and do the offering overnight. Smart man
The world is sitting on the biggest PAPER PONZI SCHEME in history. Gold and silver will be some of the best and safest stores of value to be in. The small decline in industrial demand will be a mere blip on the screen when the Wind Turbine hits the Cow Excrement.
Silver is trading like copper. Is silver copper?
Any new PSLV offering would be underwritten at or very close to the NAv anyways, so it's a moot point whether shorts come out to take out the premium.
7777;
U seem bent on displaying your vast knowledge to the world.
The only problem we see is that it's only half-vast.
If the U.S. dollar goes the way of Zimbabwe (as I believe), the replacement cost of both oil and gold as defined by dollars will go straight north. Hence, the dollar values for gold and oil will be record highs despite different dynamics for each.
an English Italian translation service will be in order along with a guide to the intricacies of parliamentary procedures/loopholes in Italy as headlines in the coming weeks will focus on the support or lack thereof for 3card - I wonder what the budget is for making contributions to Italian politicians?
Can I just off myself now - so fucking depressing.
Why so depressed? Global economic meltdown? Endless wars? Climate change? Running out of oil? Financial repression?
Almost out of Skittles....
you (and we all) need to diversify. it's good to have gold and silver but we should all have some weed.
+lol
Word up on that weed thingy
Dont forget vagina and wine in your diversification plan.
Man, living life as a muslim must be hell.
No weed no vagina no wine.
topcallingtroll,
i am no muslim but aren't they, like mormons, allowed to have several wives? i kinda like that aspect of their religion.
Very true, but on the upside, you can beat or even kill your wives with little regard for any legal or moral complications. Plus, they don't allow their women to vote, or to even drive!
I tell you, those Muslims have their shit together.
Hey Mr. A.
Looks like you're in fine form this evening!
Have a great week!
Thanks wb!
As I celebrate my birthday, I reflect on my good fortune in not having been born a leo --- there but for the grace of God go I.
Was going to let this go but just couldn't. Thank god I was born a woman - one thing I am truly greatful for! Happy BD Akak and many more.
well they do have little boys though.............
as bankers out-kafka kafka, wot, you out-omar omar, whose rubaiyat can not hold a candle to. . .
vagina and wine
not another fucking word
take as many bad guys with you as possible, the more the easier your name will be remembered
delete
Just try stacking a few of those American Eagles and Canadian Maple Leafs and you'll feel better in no time. Great passtime for what ails you.
I think there may have been a message in the above comment "delete"
ZH's first 'attempted'? so sad becasue to be here and a witness to history is so much better
Arkadaba, please stay with us, it's all about the ride
Still here :-) I'm much too egotistical to off myself (ZH reader?) and I enjoy the ride. But everyone once in a while .... I do find that the outlook is somewhat grim. But I have a few relatives under the age of 10 - if there is anything I can give to them, I will.
It could be worse. You could be participating in the forum discussed here:
http://gizmodo.com/5840532/mexican-drug-cartel-brutally-attacks-two-crit...
And here:
http://www.readwriteweb.com/archives/drug_cartel_murders_another_blogger...
Could be worse.
It could be raining.
http://www.youtube.com/watch?v=9AFf0ysgNiM&feature=results_video&playnex...
what was it in that last debate? they gave ron paul 90 seconds all night long? what's that about?
Ron was more presidential in those 90 seconds than Obama or any of the Republican contenders could manage in two full terms.
Somebody ought to dig up Lennon and have him write a new verse -- Imagine this man as President of the United States:
http://www.youtube.com/watch?v=1tZDdWf3fIg
Pretty horrible and again a under reported story. What is happening there?
Many years ago I misspent (don't actually believe that ) some of my youth travelling and working in Mexico. I will always remember sleeping on the beach in Oaxaca and the crowded subways when working in Mexico City.
But it was somewhat safe even for a young woman. I loved it.
Any background articles detailing how things got to this point ? I know they have been going in that direction for awhile but the violence seems to have accelerated over the past few years.
Here's another story, the one I was originally looking for:
MEXICO CITY - (AP) -- Mexico's hyperviolent Zetas drug cartel appears to be launching what may be one of the first campaigns by an organized crime group to silence commentary on the Internet.
The cartel has already attacked rivals, journalists and other perceived enemies. Now, the target is an online chat room, Nuevo Laredo en Vivo, that allows users to comment on the activities of the Zetas and others in the city on the border with Texas.
Already, three apparent site users have been slain, and a fourth victim may have been discovered Wednesday, when a man's decapitated body was found with what residents said was a banner suggesting he was killed for posting on the site. Chat room users said they could not immediately confirm the victim's identity, because people all post under aliases.
Despite such precautions, users are highly vulnerable, and the Zetas could be tracking them from clues they leave online, experts said Thursday.
http://www.newsday.com/news/mexican-drug-cartel-tries-to-silence-interne...
Las Zetas is sponsored by the U.S. government. They're getting weapons, immunity, and cash for taking down the other cartels to destabilize Mexico. The death count is at least 35,000 but probably much higher. Mexico and parts of the southwestern U.S. are warzones. Operation Fast and Furious with the ATF shipping thousands of guns to Las Zetas is just the tip of the iceberg.
Eric Holder, super genius!
http://www.youtube.com/watch?v=Ye3cIHH62_A
Eric Holder is a puppet
+lol though I hate the road runner!
. . . come round-up, perhaps some select little doggies will have been found to be
. . . after round-up, perhaps some very select little dogs, of war, will have been found to be. . .
Arming them
rounding-up their own militia all along
RedRivers
yeh. git along little goyim