Gold and Silver Divergence – Precious Metals Supply and Demand

Gold and Silver Divergence – Precious Metals Supply and Demand
Last week, the prices of the metals went up, with the gold price rising every day and the silver price stalling out after rising 42 cents on Tuesday. The gold-silver ratio went up a bit this week, an unusual occurrence when prices are rising.
Everyone knows that the price of silver is supposed to outperform – the way Pavlov’s Dogs know that food comes after the bell. Speculators usually make it so.

This post was published at Acting-Man on February 6, 2017.

Things Are Looking Up for Gold

This is the 3rd piece on gold that highlights how unloved gold remains today. Considering the 2016 rally in gold and the turbulent times we now find ourselves in, to be honest I’m rather surprised there are not significantly more gold traders all over this market. Part 1 and Part 2 cover the initial stages of this rally from the December lows. Below is an excerpt from the Financial Tap Member weekly weekend report.
I am rather surprised to read across the blogosphere how a majority of Gold Traders appear to discount and undermine the current gold market. I can appreciate that the longer term cyclical outlook remains unresolved, but in the short-term at least, I believe the gold sector looks to be in great shape.
My view comes with the hindsight of the Cycle count. From what I can see, we recently completely a clear 1st Daily Cycle Low and have already moved higher to new Investor Cycle (Weekly Cycle) highs. Historically, with the second Daily Cycle just starting out, we are now in the most bullish portion of a 26 week Cycle. That means the performance over the next 3-4 week normally shows the best return for the entire Investor Cycle period.
In looking at the chart below, I see that new highs on Thursday confirm that we have a new Daily Cycle in motion. The DCL was relatively mild and short, but then again being a 1st DCL this is not unusual or particularly surprising. And if we consider the 1st DC rally was orderly and not excessively overbought, then there was no real need to see a punishing Cycle decline to counter that rally. Because the 1st DC that was extremely right translated, my most favored outlook is to expect a significant surge in gold over the coming 10 to 15 trading days.

This post was published at GoldSeek on 6 February 2017.

Will Janet Yellen Lend Trump a Helping Hand?

CNBC claims that the Fed has been ‘crying wolf’ and will back off raising interest rates even a tiny bit more. There are reasons why they might want to back off. China is selling US securities, other central banks are selling, and the Fed might be afraid to sell any of their holdings, which would have to accompany a rate increase. It was fear of a collapse in the federal bond market in the first place that brought us all the frantic QE bond buying with newly created money.

This post was published at Ludwig von Mises Institute on Feb 06, 2017.

Chinese Auto Dealers Hit Panic Button As Tax Hike Triggers “Inventory Early Warning”

With the US automakers facing an “inventory bubble,” hope for any momentum rested squarely in the shoulders of China… until today. China Automobile Dealers Association just unleashed their “Inventory Early Warning Alert” for January 2017, citing sales-tax increase on small-engine cars and Chinese New Year holiday.
As we detailed previously, J. D. Power analyst Thomas King warned, 2016 ended with an inventory “bubble” that will require less production or more incentives to clear.
With near record high inventories of 3.9 million vehicles…

This post was published at Zero Hedge on Feb 6, 2017.

According To Credit Suisse, This Is The Only Thing That Matters To Markets

And, it will probably surprise no one, it has to do with president Donald Trump.
In a report by Credit Suisse analyst Lori Calvasina, to better understand the short term performance trends seen in the aftermath of the US Presidential election, and which trades may be most sensitive to shifting winds in Washington going forward, the Swiss bank analyzed how a handful of major macro indicators, stock market indices, styles, themes, sectors, and industry groups have been trading relative to trends in Trump’s favorability since the election, as tracked by Real Clear Politics.
What it found is that US stocks have been trading closely with shifts in Trump’s favorability, as have 10 year Treasury yields, the Dollar, and crude oil. Within US equities, small caps, value, Financials, cyclicals, domestic revenue producers, and high tax payers have been particularly tied to shifts in Trump’s favorability, as has the performance of companies headquartered in states that voted for Trump.
Said otherwise, everything is trading in lockstep with Trump’s shifting approval rating!
In short, in addition to reflecting asset prices across virtually every asset class, what happens in the S&P (or any other market) has a direct impact on Trump’s approval rating. Or perhaps vice versa – the direction of causality is not exactly clear on this one.

This post was published at Zero Hedge on Feb 6, 2017.

Another State Is Dumping The Fed Dollar & Making Gold & Silver Legal Tender – Episode 1197a

The following video was published by X22Report on Feb 6, 2017
Former Finance Minister Yanis Varoufakis is urgning Tsprias to turn his back on lender and create their own currency. American biggest companies are slashing jobs. Bad news the economy is in a recession and it is slipping into a depression. The market could be in for a 50% correction. Gold bullion banks are allegedly going to open their vaults to become more transparent. Arizona along with Utah are pushing bills to make gold and silver legal tender bypassing the Fed dollar. Deutsche bank take full page ad out to apologize for cheating people out of their hard earned money. Draghi is already blaming Trump the collapse of the system

The 46-Year Record of Platinum-Gold Ratios

The gold to silver and platinum to gold price ratios determine the relative value of the precious metals and are useful parameters in deciding which metal to buy at any given time (Mercenary Video, March 19, 2016).
In a previous musing, I documented the history of gold and silver prices and gold-silver ratios from the United States’ abandonment of the gold standard in August 1971 to present (Mercenary Musing, May 9, 2016).
In today’s precious metals analysis, I focus on the distribution of platinum-gold ratios over the past 46 years.
The monthly average price charts for each metal from January 1971 to present are shown below:

This post was published at GoldSeek on 6 February 2017.

The Mortgage-Bond Whale That Everyone Is Suddenly Worried About (Fear Of The Great Unwind!)

While the New England Patriots miraculous come-from-behind win in the first-ever sudden death Superbowl game is unprecedented, it is only the second most incredible come from behind win. The first? See the bottom of this page.
Now, on to agency mortgage-backed securities and the whale in the room.
Bloomberg – Liz McCormick and Matt Scully – Almost a decade after it all began, the Federal Reserve is finally talking about unwinding its grand experiment in monetary policy.
And when it happens, the knock-on effects in the bond market could pose a threat to the U. S. housing recovery.

This post was published at Wall Street Examiner by Anthony B. Sanders ‘ February 6, 2017.

Cut, Don’t Reform, Taxes

Many Americans who have wrestled with a 1040 form, or who have paid someone to prepare their taxes, no doubt cheered the news that Congress will soon resume working on tax reform. However taxpayers should temper their enthusiasm because, even in the unlikely event tax collection is simplified, tax reform will not reduce the American people’s tax burden.
Congressional leadership’s one nonnegotiable requirement of any tax reform is ‘revenue neutrality.’ So any tax reform plan that has any chance of even being considered, much less passed, by Congress must ensure that the federal government does not lose a nickel in tax revenue. Congress’s obsession with protecting the government’s coffers causes reformers to mix tax cuts with tax increases. Congress’s insistence on ‘offsetting’ tax cuts with tax increases creates a political food fight where politicians face off over who should have their taxes raised, who should have their taxes cut, and who should have their taxes stay the same.
One offset currently being discussed is an increased tax on imports. This ‘border adjustment’ tax would benefit export-driven industries at the expense of businesses that rely on imported products. A border adjustment tax would harm consumers who use, and retailers who sell, imported goods. The border adjustment tax is another example of politicians using tax reform to pick winners and losers instead of simply reducing everyone’s taxes.

This post was published at Ludwig von Mises Institute on Feb 06, 2017.

Shock Poll Shows Merkel Losing Chancellorship If Elections Held Today; JPMorgan Stunned

Overnight we reported that Germany’s default swaps spiked to the highest level since Brexit as a recent poll showed that Merkel’s lead in the polls had slid to multi-year lows ahead of Germany’s elections later in the year, provoking some concerns that a formerly unthinkable “tail risk” outcome was becoming more likely. However, according to new data unveiled today, Merkel’s headaches are only just starting, because in a brand new poll released this afternoon, the CDU would get 30% of the vote, while the suddenly resurgent SPD would get 31%. This means that the SPD’s new head, Martin Schulz, would enter any coalition talks as the leader of the largest party, hence becoming Chancellor, leading to a stunned reaction by JPMorgan.

This post was published at Zero Hedge on Feb 6, 2017.

California Senate Leader Admits: “Half Of My Family” In Country Illegally With “False Social Security Cards”

In testimony provided before the California Senate’s Public Safety Committee, Senate President Pro Tem Kevin De Leon (D-Los Angeles) decided to admit that “half of his family” is residing in the United States illegally and with the possession of falsified Social Security Cards and green cards. Lest you think we’re exaggerating, here is the exact quote:
“… I can tell you half of my family would be eligible for deportation under [President Donald Trump’s] executive order, because if they got a false Social Security card, if they got a false identification, if they got a false driver’s license prior to us passing AB60, if they got a false green card, and anyone who has family members, you know, who are undocumented knows that almost entirely everybody has secured some sort of false identification. That’s what you need to survive, to work. They are eligible for massive deportation.”
The quote came from a hearing being held on SB54, a California Senate bill that was introduced by De Leon that would make the entire state of California a “Sanctuary State” (we discussed SB54 here: “California Considering Legislation To Become First Ever Sanctuary State“). Fast forward to the 1:27:00 mark for the relevant comments from De Leon:


This post was published at Zero Hedge on Feb 6, 2017.

This Gutsy Call Could Cost You a Fortune…

The Super Bowl is all about gutsy plays.
Last-minute drives and incredible comebacks like we saw during last night’s overtime thriller show why football is still America’s favorite sport.
Great athletes like Tom Brady often talk about being in the zone and letting their instincts and training take over during these critical moments. And because the business world loves sports analogies, we often try to apply these ideas to life and the stock market.
But when it comes to trading, this stuff just doesn’t work. The market is a manipulative machine. It will twist your mind – and your wallet if you aren’t careful.
In an unpredictable market like we’re experiencing right now, a gutsy call can cost you a fortune. Listening to your heart (instead of your mind) is a great way to lose money and confidence in your trading abilities.

This post was published at Wall Street Examiner on February 6, 2017.

Yield Curve Inverts, Swap Spreads Spike Signal Panic As Debt-Ceiling Looms

US swap spreads (indicative of bank counterparty/liquidity risks) is surging once again, to its highest since June 2012 signaling a growing concern at the looming US debt ceiling deadline.
With about five weeks until the expiration of the U. S. debt-ceiling suspension pact, Bloomberg notes, swap spreads are suggesting traders are getting nervous that any hiccup in efforts to remove the burden could trigger a shortage on short-term government securities.

This post was published at Zero Hedge on Feb 6, 2017.

Stocks And Precious Metals Charts – Send in the Clowns

As noted previously, stocks are wafting along on a cloud, anticipating some hefty new era tech IPOs.
I expect the market to correct shortly thereafter, based on the perspective that it is utterly mispricing certain risks, for a number of reasons.
But it may do so sooner, if The Donald stumbles over something essential while doing his Presidential imitation of Rodney Dangerfield in Caddy Shack. He is certainly capable of better, even while pursuing his political objectives of ‘draining the swamp.’ I am not sure his supporters expected him to bring a swamp of his own.
Gold and silver had a nice rally today, having passed the test of the Non-Farm Payrolls report, and the pull of the overhead resistance from which it broke and ran today. There is still more to go. Both in terms of resistance, and the struggles to overcome them and assert the dynamics of the physical markets in a highly leveraged and overly financialized casino.

This post was published at Jesses Crossroads Cafe on 06 FEBRUARY 2017.

BofA Sees “Head And Shoulders” Everywhere It Looks

In his latest slidepack, BofA’s chief technician Paul Ciana sees nothing but head & shoulder reversal patterns in virtually every currency pair and rate chart: i.e., the unwind of “Trump trade.” As he writes in a just released note, “many US dollar and euro crosses, US rates, US 2s10s and US 10y TIPS have just formed or are developing a head and shoulders reversal pattern. The breadth of these patterns suggests the January correction of the 4Q16 trends will continue in 1Q17, or at least delay a continuation of stronger USD and higher rates.”
This appears to be the chartist validation of the recently concluded Trumpflation trade, which is now being appreciated by technicians and other squiggle-drawers everywhere.
As Ciana further notes, FX crosses have broken more necklines, while US rates are still forming the right shoulders. These patterns are confirming bearish RSI divergences and TD Sequential signals.
First, looking at FX, BofA has spotted head and shoulders in USD and euro crosses. Bearish patterns have formed in US dollar indices such as the DXY and BBDXY. Crosses showing this technical reversal pattern include CCN 1M, USD/SGD, KWN 1M, EUR/RUB and EUR/NOK. Two crosses, EUR/USD and EUR/GBP, are still forming a right shoulder. Of note, Ciana says that unless the patterns are cancelled, he expects the DXY to slide to 97.86 and the EURUSD to rise as high as 1.108.

This post was published at Zero Hedge on Feb 6, 2017.

Gold Jumps To 3-Month Highs Amid China Tightening, Europe Turmoil, & Trump

OK – so, China tightens (worried about leverage), European sovereign risk spikes (Election uncertainty everywhere), Yen surges (BOJ tested again), gold spikes, Treasury yields tumble.. but US stocks are flat and VIX tumbles…
Off the post-Fed-rate-hike dip, Gold is up almost 10%, Dow’s flat, and bonds are up…
Chinese stocks sank overnight after re-opening following the Golden Week holiday (and after China quietly raised rates)…

This post was published at Zero Hedge on Feb 6, 2017.

FEB 6/GOLD AND SILVER EXTREMELY STRONG DESPITE STRONGER DOLLAR/YEN EXTREMELY STRONG TODAY AND THIS BECOMES THE CATALYST FOR GOLD TO RISE/BIG NEWS THAT EVERYONE MISSED: CHINA IS TIGHTENING! /MERKE…

Gold at (1:30 am est) $1230.00 UP $11.50
silver at $17.67: up22 cents
Access market prices:
Gold: $1235.50
Silver: $17.74
THE DAILY GOLD FIX REPORT FROM SHANGHAI AND LONDON
The Shanghai fix is at 10:15 pm est last night and 2:15 am est early this morning
The fix for London is at 5:30 am est (first fix) and 10 am est (second fix)
Thus Shanghai’s second fix corresponds to 195 minutes before London’s first fix.
And now the fix recordings:
MONDAY gold fix Shanghai
Shanghai FIRST morning fix Feb 6/17 (10:15 pm est last night): $ 1233.11
NY ACCESS PRICE: $1214.45 (AT THE EXACT SAME TIME)/premium $9.23
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Shanghai SECOND afternoon fix: 2: 15 am est (second fix/early morning):$ 1223.23
NY ACCESS PRICE: $1222.82 (AT THE EXACT SAME TIME/2:15 am)
SPREAD/ 2ND FIX TODAY!!: $0.41
China rejects NY pricing of gold as a fraud/arbitrage will now commence fully
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
London FIRST Fix: Feb6/2017: 5:30 am est: $1221.85 (NY: same time: $1222.15 (5:30AM)
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
London Second fix Feb 6.2017: 10 am est: $1226.75 (NY same time: $1226.50 (10 AM)
It seems that Shanghai pricing is higher than the other two , (NY and London). The spread has been occurring on a regular basis and thus I expect to see arbitrage happening as investors buy the lower priced NY gold and sell to China at the higher price. This should drain the comex.
Also why would mining companies hand in their gold to the comex and receive constantly lower prices. They would be open to lawsuits if they knowingly continue to supply the comex despite the fact that they could be receiving higher prices in Shanghai.

This post was published at Harvey Organ Blog on February 6, 2017.

Mario Draghi Hints Trump Will Be Responsible For The Next Financial Crisis

Earlier today, the portfolio manager of the world’s biggest hedge fund, Mario Draghi, whose total assets held by the European Central Bank’s special situations fund amount to 3.72 trillion, or 36% of the eurozone’s GDP…

… said that it is not his gargantuan “portfolio”, or the roughly $14 trillion in global central bank liquidity sloshing around (as lamented earlier today by Bill Gross) that would be the catalyst for the next market crash, but rather that it was Donald Trump’s deregulation of the banking industry that has “sown the seeds of the next financial crisis.”
Cited by Reuters, Draghi argued that lax regulation had been a key cause of the global financial crisis a decade ago, and said the idea of easing bank rules was not just worrying but potentially dangerous, threatening the relative stability that has supported the slow but steady recovery.
“The last thing we need at this point in time is the relaxation of regulation,” Draghi told the European Parliament’s committee on economic affairs in Brussels. “The idea of repeating the conditions that were in place before the crisis is something that is very worrisome.”

This post was published at Zero Hedge on Feb 6, 2017.

“Complacency Reigns Supreme” Loews CEO Warns The Market’s “Major Disconnect Concerns Me”

Jim Tisch, the CEO of Loews, is worried – worried enough that he slashed his firm’s share buybacks in 2016 and explained to an anxious analyst crowd during his earnings call that “complacency reigns supreme. However, my experience has shown me that this state of affairs won’t go on indefinitely.”
Simply put, Tisch warned that investors who bid up the prices of stocks and bonds aren’t accounting for the risks, given global uncertainties about taxes, regulation and trade.
“I want to start by showing my thoughts on the financial markets, as a backdrop to what guided our approach to capital allocation in 2016. I’ve been around long enough to have lived through all sorts of markets. I’ve learned to respect markets, while at the same time being skeptical of conventional wisdom.
I’ve lived through a bond bear markets and a gargantuan bond bull market. I’ve seen bond yields above 15% and below 2%. I’ve seen inflationary spirals, I’ve seen deflationary threats, I’ve seen deregulation and reregulation. I’ve seen the S&P 500 trade as high as 30 times earrings and I’ve seen the S&P trade as low as seven times earnings.

This post was published at Zero Hedge on Feb 6, 2017.

The danger of being bearish in a bull market

One of the biggest contributors to losses for traders in the financial market is the temptation to sell short. Borrowing shares of a company that are not owned by the seller in the hopes of making a massive profit has shipwrecked more traders than probably any other factor. With stories abounding of the quick and easy profits to be made in selling stocks which are supposedly on the verge of plummeting, it’s no wonder that the allure of ‘shorting’ is so irresistible to so many.
Selling short is a simple enough proposition: place a short sale order with your broker for a company whose shares you believe are overvalued or technically ‘overbought’. Then just sit back and wait for the profits to start rolling in. If only it were that easy! The trouble with selling short is that in most cases the odds are against the short seller. This is due to a number of factors, some of which we’ll examine here.
Perhaps the biggest risk for short sellers is the crowded short trade. A high-profile example of what happens when too many traders pile into a single stock on the short side occurred recently – a cautionary tale if ever there was one. It involved the loss of one man’s entire fortune due to a misguided attempt at selling short one of the most widely traded U. S.-listed stocks. It’s a textbook case of what can go wrong when attempting one of the most dangerous of all trading maneuvers.

This post was published at GoldSeek on 6 February 2017.