Gold Market Morning: Feb-20-2017 — Gold is consolidating again!

Gold Today – New York closed at $1,235.60 on the 16th February after closing at $1,239.30 on the 17th February. London opened at $1,234.00 today.
Overall the dollar was slightly stronger against global currencies early today. Before London’s opening:
– The $: was stronger at $1.0619: 1 from $1.0645: 1 on Friday.
– The Dollar index was slightly stronger at 100.87 from 100.69 on Friday.
– The Yen was weaker at 113.17:$1 from Friday’s 112.85 against the dollar.
– The Yuan was weaker at 6.8783: $1, from 6.8654: $1, Friday.
– The Pound Sterling was stronger at $1.2462: 1 from Friday’s $1.2407: 1.
Yuan Gold Fix
Shanghai was trading at 275.30 Yuan towards the close today. This equates to $1,244.90, but allowing for the different quality of gold being traded [0.9999 fineness] it stands at $1,239.90. Shanghai is in line with both London and New York.
If we look back to the time when the SGE started to make speculation more expensive, earlier this year, we see that the price differentials between London, New York and Shanghai have narrowed and when Shanghai is not leading the way the three markets remain in line. This implies that the efforts of arbitrageurs appear to be succeeding in smoothing prices out. This makes the global gold price a reliable one with speculators losing their power to shift the gold price heavily without additional physical gold action.
Consequently, we expect in the future to see fewer violent swings in the gold price between markets. We do see that gold prices are reflecting exchange rate moves, which is what gold should do.

This post was published at GoldSeek on 20 February 2017.

“Fake Data”: Economists Concerned Trump Administration Will Adopt ‘Alternative’ Economic Facts

Over the weekend we noted that the Trump administration was considering changing the U. S. trade deficit calculation to exclude re-exports from the US trade balance, a shift that would make America’s trade gap appear even greater than it has been in recent years, potentially making future trade skirmishes and wars with America’s export-heavy trade partners far more likely (see “White House May Change Calculation Of US Trade Deficit, Boosting Trade War Odds“).
Of course, Trump has made a habit of questioning certain economic propaganda, including the “phony” unemployment figures. Repeatedly on the campaign trail, Trump questioned the logic of focusing on an unemployment figure that excludes those people who have been unemployed for so long that they’ve simply given up looking for work, a favorite statistic of President Obama. Per Bloomberg:

This post was published at Zero Hedge on Feb 20, 2017.

2017 – A Sterling Year For Silver?

I have spent most of my life watching, writing, speaking, trading, investing, and listening to almost any and everything to do with the silver market. Given this, there are several insights that you (the market) have provided me over and over again, at a level rising to conviction about many retail silver market participants.
Although what is written from this point forward will be opinion only, some readers might interpret it to be factual – or at least based upon much experience. Silver Investors – just like the metals themselves – are far more volatile than gold investors. To some people, silver can become a religion. The conviction of a true silver-bug is often comparable to that of a pit-bull. Being open-minded is not always the most highly-rated quality for this type of person.
Something far too many people are serious about, but which should really be taken with a grain of salt, is the annual price forecast for the precious metals. In my journey, it seems there is always someone who claims to have hit the annual forecast number within a few percentage points every year…five years in a row! This kind of ‘hearsay” floats over the precious metals’ market like a fine mist.
Well, I too have once again been asked to forecast the silver price for 2017, giving me the questionable privilege of putting it down in writing for all to see. Trolls who haven’t done well on their own can use it as an excuse to become resentful, and others are afforded the “cost free” opportunity to either dwell upon my guess, or dismiss it out of hand. But regardless of how seriously a reader takes this information, he or she needs to realize that markets are dynamic – that they ‘know’ more than any one firm, software program, or analyst.
True insights into the market are almost always based upon the laws of probability. Predicting human behavior anywhere close to 100% of the time is virtually impossible. High frequency traders using highly complex algorithms, as well as some market participants who are adept at day trading or playing video games for money, can sometimes predict price action within different time-frames.
What I believe is NOT likely this year…
Let’s examine what, in my considered opinion, is unlikely to take place in the silver market this year. First, I do not believe that silver will make a new intermediate term lower print – which means that the dip just below $14 basis the spot market near the end of 2015, was the intermediate term low. There are many out in Internet-land who disagree with this statement. If you are one of them, and believe that my ‘conviction’ is in error, by all means consider this a ‘freebee’ to post your counter-point comments in the public forum.
Silver evokes such emotion in people! I still don’t know why, but it has been obvious to me that on the one extreme are silver haters who shout out that silver is worth about as much as fertilizer, while others insist as an article of faith, that silver will trade at parity with gold – meaning that silver would have to outperform gold by a factor of seventy times!

This post was published at SilverSeek on February 20, 2017 –.

20/2/17: The Effect of GFC on Italian Non-Performing Loans Overhang

In yesterday’s post I covered some interesting current numbers relating to NPLs in the European banking sector. And sitting, subsequently, in the tin can of an airplane on my way back to California, I remembered about this pretty decent paper from Banca d’Italia, published in September 2016.
Titled ‘The evolution of bad debt in Italy during the global financial crisis and the sovereign debt crisis: a counterfactual analysis’ and authored by Alessandro Notarpietro and Lisa Rodano (Banca d’Italia Occasional Paper Number 350 – September 2016), the paper looked at the evolution (dynamics) of Italian banks’ NPLs since the start of the Global Financial Crisis and the twin recessions that hit Italy since 2008. Actual data is compared against ‘the counterfactual simulations”. “A ‘no-crises scenario’ is built for the period 2008-2015. The counterfactual dynamics’ generate a comparative new bad debt rate, which ‘depends on macroeconomic conditions and borrowing costs.’
Per authors, ‘the analysis suggests that, in the absence of the two recessions – and of the economic policy decisions that were taken to combat their effects – non-financial corporations’ bad debts at the end of 2015 would have reached 52 billion, instead of 143 billion.”

This post was published at True Economics on Monday, February 20, 2017.

Political Turmoil Returns To Europe: French-German Spread Blows Out To Five Year Wides

Despite a calm start to European trading, with local equity bourses posting solid early gains, European political fears have returned this morning, leading to a blow out in French government bond yields, pushing the 10y yield now higher by 5bps and 5y up 8bps, as early losses extend after latest poll shows support for anti-euro presidential candidate Marine Le Pen rising in both election rounds.
As a result, the French-German 10Y govt spread has jumped to 85 bps, following an accelerated selloff, to the widest level since July 2012.
As Bloomberg notes, after opening tighter vs core bonds, OATs have been pressured as talks between left-wing candidates Melenchon and Hamon are set to continue, while Bloomberg reports that Emmanuel Macron may have harmed his own campaign after becoming entangled in controversies over France’s colonial past.

This post was published at Zero Hedge on Feb 20, 2017.

German Minister Calls For ‘Plan B’: “Greece Should Pledge Gold, Real Estate For New Loans”

Bavaria’s 50-year-old finance minister Markus Soeder was previously named by German weekly Der Spiegel as one of the Ten Most Dangerous European Politicians (defined as “every politician who is resorting to cheap populism in order to rack up domestic political points”).
For the Greeks, this may well be true.
During the Greek government-debt crisis, Soeder was among the most vocal in calling for Greece to leave the Eurozone. By 2012, he said in an interview: “Athens must stand as an example that this Eurozone can also show teeth.”
And now, according to an interview with Bild, the CSU politician said that:
…new billions should only flow when Athens implemented all the reforms. Even then, however, aid should only be given against a pledge “in the form of cash, gold or real estate”.
Soeder added, “We need a plan B.”
One wonders if this was Germany’s end-game all along?

This post was published at Zero Hedge on Feb 20, 2017.

Gold The ‘Ultimate Insurance Policy’ as ‘Grave Concerns About Euro’ – Greenspan

‘The eurozone isn’t working …’ warns Greenspan
‘I view gold as the primary global currency’ said Greenspan
‘Significant increases in inflation will ultimately increase the price of gold’
‘Investment in gold now is insurance…’
Alan Greenspan, the former head of the Federal Reserve has warned that the euro may collapse, saying that he has ‘grave concerns’ about its future.
The imbalances in the economic strength of euro area countries make the continued function of the single currency area a primary concern, said former US Federal Reserve chairman Alan Greenspan in an interview (February issue of ‘Gold Investor’) with the World Gold Council.
He suggests the inequality is largely down to a north/south geographical divide which means the division between the northern and southern EU countries is too big. The bloc’s more prosperous nations such as Germany consistently fund the deficits of those in the south, and that simply can’t go on, said Greenspan.

This post was published at Gold Core on February 20, 2017.

China Responds To Fed Jawboning March “Live” – Weakens Yuan, Spikes Money Market Rates

After a week of jawboning markets into believing that the March FOMC meeting is now “live”, it appears China has decided to send a little message.
After weakening the fix by the most since Jan 9th, Chinese money market rates are soaring (1 week CNH HIBOR up 303bps) despite notable liquidity injections…
Of course an unexpected rate hike in March is an implicit tightening of the world’s financial conditions and thus liquidity withdrawal… reversing recent improvements in global dollar liquidity.

This post was published at Zero Hedge on Feb 19, 2017.

Trump Dreams Versus Trump Reality – Hope Still Permitted!

For a lot of Trump supporters the past week has been a painful one. Whether we chose to react with abject panic or pretended like nothing happened, something did happen and it was something big: the Tree Letter Agencies pulled-off a de facto coup against Donald Trump by forcing him to fire his most important foreign policy advisor and the man who had dared to declare that he wanted to reform the bloated and largely ineffective US intelligence community.
There is no way of putting a brave face on what happened. Not only because it showed that Trump is not loyal to those who are loyal to him, but because this episode pretty much killed what I would call the ‘Trump dream’. I chose my words carefully here. I speak of ‘Trump dream’ as opposed to the Trump reality. Let me explain.
The ‘Trump dream’
When Trump won the elections the spectrum of hopes about his actions was very wide. It ranged from ‘Trump will forever reshape the international system, end the Empire and bring peace and prosperity to the USA’ to ‘he will never be as bad as Hillary no matter what he does’. On that spectrum, here is what I would list as the key elements of the ‘Trump dream’:

This post was published at Zero Hedge on Feb 20, 2017.

Global Stocks Rise, S&P Futures Hit New Record High Despite US Market Closure

Despite US markets being closed in observance of Washington’s birthday, S&P futures spiked during overnight trading, reaching new all time highs before fading some of the gains. Both Asian and European markets traded modestly higher after paring early gains. The U. S. dollar traded in a tight range ahead of a busy week for Federal Reserve events, while the pound rallied the most in more than two weeks ahead of a House of Lords Brexit debate, while South Africa’s rand fell on political turmoil. Oil advanced for a third day and spot gold rose for the fourth session in five.
The relatively benign moves this morning follow what was also a fairly tepid end to the week on Friday in markets. Equity markets in the US did however manage to eke out another small gain with the S&P 500 finishing 0.17% following a late bounce into the close. That means it has closed up in 11 of the last 13 trading sessions although at the same time has now gone 49 consecutive sessions without closing with a move up or down by more than 1%.
Global volumes have been light with U. S. markets closed for the Presidents Day holiday. MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.1 percent and back toward a 19-month peak reached last week. Shanghai stocks added 0.9% and expectations of solid economic growth in China kept commodities such as copper and iron ore well bid. Japan’s Nikkei closed flat after domestic data showed exports disappointed in January even as imports outpaced forecasts.
With U. S. bond and stock markets shut on Monday for Presidents’ Day, investors are watching developments in Europe. Political risk is in focus after a poll showed public approval for German Chancellor Angela Merkel’s ruling party fell behind the Social Democrats for the first time under her leadership. And in the U. K., some members of the parliament’s upper chamber will seek changes to the draft law that will allow the government to trigger a departure from the EU when it is discussed by the Lords on Monday, Bloomberg reported.
The Stoxx Europ 600 rose and U. S. futures pointed higher even as Unilever slumped after Kraft Heinz withdrew a $143 billion takeover bid. Shares in Unilever fell 6.7 percent; stock remains above level from before Kraft offer was revealed last week. Trading in Kraft and its erstwhile target remains in focus on the back of Friday’s surge in both stocks. People familiar with the talks at the weekend said 3G Capital and Warren Buffett’s Berkshire Hathaway Inc. decided Unilever’s negative response made a friendly transaction impossible.

This post was published at Zero Hedge on Feb 20, 2017.

Visualizing The Stunning Truth About How Students Are Spending Loan Cash

Over the last 15 years the starting salary for recent college grads has declined about $4000. Unfortunately, as details, the amount of student loan debt most students are graduating with has skyrocketed. You can now expect to graduate into a worse job market and with more debt than just a decade ago, which is leading to a serious financial crisis- the average debt load upon graduation is $37,000, and many people can’t even make their minimum payments.
Nearly 60% of student borrowers have no idea when their student loans will be paid off. Over half of borrowers have no idea what their monthly payments will be when they graduate. When you combine these facts with declining wages and rising housing rates, many people will find they just can’t make ends meet.

This post was published at Zero Hedge on Feb 19, 2017.

There’s a Cryptographic Treasure Hunt for Gold Art Objects in a Small English Town

An artist hid five, 1,000 small gold objects around Scunthorpe, North Lincolnshire. If you find these valuable pieces? They’re yours…
It’s not as easy as just finding these objects and cashing in, however. You will have decode encrypted messages starting with five paintings at the local arts centre and the encrypted codes within.
‘I like the idea that ancient objects that were once hidden beneath the earth and were discovered and displayed at the museum are now being rehidden,’ said designer Luke Jerram. ‘I hope the public will enjoy visiting 20-21 Arts Centre and exploring the town and surrounding countryside.’

This post was published at GoldSilverBitcoin on FEBRUARY 19, 2017.