What if central banks have NOT lost control of gold?

Count your secretary/treasurer among those who have been expecting the commitment of traders signal to be validated again for the thousandth time. But insofar as it is not validated and the monetary metals continue to rise, your secretary/treasurer can envision two possible explanations and offers them here with the justification of a slow-news Sunday night and the expertise of a high school graduate.
That is, either central banks, the biggest participants in the gold market, have lost control of it, the physical gold part of the market is overthrowing the paper gold part of the market, and the market is in the midst of the fabled “commercial signal failure.”
Or else central banks have not lost control of the gold market, and the gold price continues to go exactly where they want it to go.
That would mean that the consensus policy of central banks in regard to gold has changed recently — that they now want gold rising again, most likely to assist in the devaluation of their currencies, particularly now the U.S. dollar, as well as devaluation of the world’s debt, and that the huge short positions of the banks in the futures markets are actually central bank positions that must continue to increase even to unprecedented levels to keep this devaluation “orderly,” to use a favorite term of central banking. (Really, who else but institutions that are authorized to create infinite money and that hold large gold reserves could accept the risk of such shorting?)

This post was published at GATA

Even the Australian Financial Review warns about paper gold

One of the strongest arguments against investing in gold was that the metal yielded no interest while you were holding it so it stands to reason that the environment of low interest rates should be friendly for investors in precious metals.
That argument, while valid, has lost significant merit, because investors don’t get much of an interest rate holding government bonds or bank deposits. Indeed in several countries interest rates have gone negative, which means that investors are paying governments for the privilege of holding their bonds.
The price is set every night in derivative trading on COMEX in New York. The gold price is also nominally fixed in London. The London market is theoretically a physical market, but in practice it is really a derivative market with very few physical deliveries.
The big holders of gold are in China and other Asian countries. So the price is being set by derivative traders who hold little or no gold, while Asians are continually amassing the physical metal.

This post was published at GATA

Agnico Eagle CEO: We Don’t Need M&A to Grow

Agnico Eagle Mines delivered strong earnings for the quarter. Higher gold prices and strong operating performance from all its mines helped boost the bottom line and the company is on track to meet the top end of its production guidance for the year. Sean Boyd, CEO and vice chairman, says the company prefers to be dominant in its local markets instead of growing everywhere through acquisitions.

This post was published at bloomberg

75 million Turks on course for visa-free travel in E.U., despite not meeting key targets in refugee swap deal

Turkey is on course to be handed visa-free travel to the European Union for its 75 million citizens, despite not meeting a series of key targets.
On Wednesday the European Commission is expected to recommended a radical loosening of travel conditions for the country.
The giveaway is part of a 6bn aid-for-deportations migration deal struck with Ankara, which has resulted in a steep fall in the number of refugees attempting to cross into Europe.
Turkey has warned that if it is not given the visa waiver – which will grant automatic access to the Schengen zone for tourists for up to 90 days – then it will ‘terminate’ the migration deal.
But E.U. sources admit that Turkey has only met around 60 of the 72 ‘benchmarks’ it has set to unlock the visa-free travel rights.

This post was published at The Telegraph

Europe’s liberal illusions shatter as Greek tragedy plays on

Greece is running out of money. The government in Athens is raiding the budgets of the health service and public utilities to pay salaries and pensions. Without fresh financial support it will struggle to make a debt payment due in July.
No, this is not a piece from the summer of 2015 reprinted by mistake. Greece, after a spell out of the limelight, is back. Another summer of threats, brinkmanship and all-night summits looms.
The problem is a relatively simple one. Greece is bridling at the unrealistic demands of the European commission and the International Monetary Fund to agree to fresh austerity measures when, as the IMF itself accepts, hospitals are running out of syringes and buses don’t run because of a lack of spare parts.
Athens has already pushed through a package of austerity measures worth 5.4bn (4.23bn) as the price of receiving an 86bn bailout agreed at the culmination of last summer’s protracted crisis and expected the deal to be finalised last October.
If this all sounds like Alice in Wonderland economics, then that’s because it is. Greece is being set budgetary targets that the IMF knows are unrealistic and is being set up to fail. It will then be punished further for being unable to do what was impossible in the first place.

This post was published at The Guardian

Oil-Sands Cash Burn Deepens as Cheap Canadian Crude Saps Profits

In a week when oil prices are rallying, financial results from one of the world’s costliest places to extract crude are a reminder of how bad things have been for energy producers.
Developers of Canada’s oil sands were burning through cash in the first quarter as they saw negative profit margins from the production of bitumen, the thick, asphalt-like substance they blend with lighter oil to flow in pipelines. Together, Suncor Energy Inc., Husky Energy Inc., Cenovus Energy Inc. and Meg Energy Corp. made less than half the cash they did in the first three months of last year.
‘So far, 2016 has been a brutally challenging year for our industry,’ Brian Ferguson, chief executive officer of Cenovus, said Tuesday on a conference call to discuss the results.
Cash flow from the four Calgary-based producers fell 54 percent to C$1.17 billion ($930 million) in the quarter, according to data compiled by Bloomberg from filings released this week.

This post was published at bloomberg

Michael Pento-Market Losing Faith in Value of the Dollar

The following video was published by Greg Hunter on May 3, 2016
Money manager Michael says inflation has nowhere to go but up. Pento explains, ‘We have printed enough for this to go hyperbolic. We have plenty of excess reserves. We have already hit our core (Fed) inflation target. We are already up 2.2% year over year. If you want to be honest, we already have the condition much like the 1970’s of stagflation. . . . The Federal Reserve promised us we were on the road to recovery. They said we would be growing at 3% and we are growing at 0%. They said they could raise interest rates and normalize the Fed Funds Rate, and they can’t do it. The dollar index went up to 100 on the belief that this was going to be the case, and it is absolutely not true. That’s how the market is losing faith in the value of the dollar. We are in a condition of stagflation, make no mistake about it.’
Are we also in a recession too? Pento says, ‘They can do this indefinitely until inflation becomes intractable. In the United States, we are running up on 90 months of 0% interest rates, and what do we have for that? Fourth quarter GDP was 1.4%, and that was bad enough, but first quarter has a zero handle. It was 0.5%. That’s what we get for blowing up the Fed’s balance sheet to $4.5 trillion? That’s what we get for manipulating bond yields down to 0% for 90 months? We are virtually in a recession. If we are not in a recession, we are in a flat line or dead line economy, and it’s zero.

Commodities – Will the Rally Continue?

Pros and Cons The recent rally in commodity prices has surprised many market participants and has greatly supported the stock market’s rebound. It has also made bulls out of a number of former stock market bears, as one of its side effects was to cause an improvement in market internals. But does the rally actually make sense?
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As always, there are arguments both for and against the idea. We will take a look at several of them below.
The Secular Trend First of all, it is widely held that the ‘commodity super-cycle’ as it used to be called (i.e., the secular bull market that started in 1998) is definitely over. One could well say that there is a near 100% consensus on this question. After all, the CRB Index has declined to a 43 year low, i.e., to levels last seen in the 1970s.
Anyone who has watched commodities over recent years must surely wonder how this is even possible. For instance, crude oil recently bottomed at around $28, or 180% above its low of 1998. Gold bottomed at around $1,050 – more than 300% above its 1999 low. As far as we know, the only major commodity that has come anywhere near its lows of 18 years ago was natural gas.

This post was published at Acting-Man on May 3, 2016.

How A Collapse In South America Could Trigger Martial Law In The U.S.

If an economic system collapses in the woods and no one is paying attention, are there any consequences outside the woods? Well, yes, of course. As with most situations financial and global, however, consequences are not usually taken very seriously until they have spawned a vast bog of sewage we all have to then swim through.
The issue is and always will be ‘interdependency,’ and the dissolution of sovereign borders. Take a close look at the European Union, for example.
You have a large network of fiscally interdependent nations struggling to maintain a sense of principled identity and heritage while participating in the delusion of multiculturalism. You have a system in which these nations are admonished or even punished for attempting to become self-reliant. You have a system which encourages a Cloward-Piven-style forced integration of incompatible cultures. You have unmanageable debt. You have a welfare addicted socialist population plagued by naive assumptions of entitlement. And on top of it all, you have a political structure dominated by cultural Marxists who would like nothing better than to see the whole of the old world go down in a blazing inferno.
This EU dynamic can only end in one of two ways – the complete dismantling of the supranational body and a return to sovereignty, or, a socio-economic crisis followed by even more centralization and the end of all remnants of sovereignty. Either way, the consequences will not be pretty.

This post was published at Alt-Market on Wednesday, 04 May 2016.

The Hire That Could Be The Difference Between A Fed Rate Hike And BoJ Helicopter Money

Back in March, Japan’s Global Pension Investment Fund appointed Norihiro Takahashi as its new president. Few paid much attention to it, but it may very well end up being one of the most significant events that occurred as we look back in twelve to eighteen months.
The GPIF manages roughly $1.2 trillion in assets, with over 60% currently allocated domestically between equity and fixed income. Given the state of the stock market and the negative interest rate policy in Japan, it would make sense that an incoming president would take a hard look at the current asset mix policy and adjust it to best suit the needs of its members, something outgoing president Takahiro Mitani has been vocal about in recent years.
Recall that back in 2014 under pressure from Prime Minister Abe to move the fund into riskier assets, Mr. Mitani reluctantly rebalanced its portfolio away from domestic bonds, and into domestic equities, something that clearly did not make him happy. “Our sole objective is not to invest so that the Japanese economy will be better; our job is to invest with the people’s money in a safe and efficient manner so we can protect and manage their funds” the Financial Times quoted him as saying.

This post was published at Zero Hedge on 05/03/2016.

Are The Miners On The Verge Of A Correction Or About To Go Parabolic?

First published Sun May 1 for members: I never suggest trading on emotion, yet the ‘fears’ I expressed last week may be developing as the reality on the ground. With the continued strength this past week seen in the miners, one has to question whether the more immediately bullish ‘green count’ is what is in play, with us heading directly to the 40 region without any further 2nd wave retracements.
While I still would prefer to see an appropriate wave ii correction take hold, the market does not care about what I ‘prefer,’ so we have to follow the market’s lead rather than fight it. Remember, we don’t control the market, and despite what most believe, no one does. But, the market does provide clues that we need to follow, even if it does not meet with our ideal expectations.
Last week, we were looking for a signal that a deeper correction would be seen, or if we were heading into our resistance box:
in order for me to believe the ‘correction’ has begun in GDX, and the overhead resistance will not be struck, we will need to break down below 22.20 to make it less likely that this drop is a 4th wave in the last 5 wave structure higher. Moreover, any strong break out over 26 in GDX places me in the green count, and in the heart of wave 3 of iii, and on our way over 40.
This past week, the GDX spiked down to the 22.19 level during premarket action (with 22.37 as the low struck during trading hours), and reversed strongly to begin this current rally, with us now pushing up against the 26 region resistance. Clearly, support has held, and we saw upside follow through into our target/resistance box. So far, the market is respecting our Fibonacci Pinball levels to the penny.

This post was published at GoldSeek on 4 May 2016.

US Futures Tumble After China Devalues Yuan By Most Since August Collapse

The ‘odd’ regime shift in the relationship between USDJPY and US equities continues overnight. Following some visible-handedness and follow-through momentum, Yen is weakening against the USD – normally a big flashing green sign for risk-on pajama traders but China’s biggest Yuan devaluation in 9 months (since the August turmoil) seems to have stolen the jam out of the bull’s donut as US equity futures extend losses, AsiaPac credit risk jumps, and USD strength is weighing on crude prices.
China sent another strong message tonight…

This post was published at Zero Hedge on 05/03/2016.