Gold Daily and Silver Weekly Charts – Like a Land War In Asia

There was the usual London-New York hit applied to the precious metals earlier this morning. Nothing new in that.
There was a bit of a bounce into the close for gold, and some action in the mining stocks as well.
Shown below are the Comex reports for both gold and silver for yesterday. I thought it was funny that more gold contracts were stopped than for silver. But this is the active month for silver and not for gold!
Not that even that factoid means anything. Watching the Comex these days is like watching the magicians beautiful assistant move the boxes around on stage, while the magician executives his sleight of hand undetected.
The real markets for precious metals have moved overseas. The West is fighting a holding action in a currency war of attrition. It must be like fighting a land war in Asia. You roll out your best shock and awe, complete with media fanfare, over and over. But they are gaining ground little by little.
I know, let’s flatten our own markets and their economic integrity back to the stone age of rigged prices and perpetual fraud, executed by and for the very few while the domestic public staggers. That will show them who’s in charge: until exhaustion of lies, or the collapse of force.

This post was published at Jesses Crossroads Cafe on 11 SEPTEMBER 2014.

Gold Model Projects Prices From 1971 – 2021

Gold persistently rallied from 2001 to August 2011. Since then it has fallen rather hard, down nearly 40% at one point, but it currently looks ready to rally for the balance of this decade.
WHY SHOULD WE EXPECT THAT GOLD WILL RALLY?
The answer, in my opinion, can be found in my gold pricing model that has accurately replicated AVERAGE gold prices after the noise of politics, news, high frequency trading, and day to day ‘management’ have been removed by smoothing.
WHY DO WE NEED A GOLD PRICING MODEL?
Most of us do not know if a current market price is ‘low,’ about right, or ‘high.’ A few of the difficulties are:
Major ‘Too-Big-To-Fail’ banks are promoting paper, not gold, so they consistently issue bearish reports on the prospects for gold. Rising gold prices are viewed by many as the ‘canary in the coal mine’ regarding loss of faith in the currency and as an early warning sign of consumer price inflation. Hence the ‘powers that be’ want gold prices suppressed. Many well-known gold experts disagree about future prices – so much that some can’t even agree as to whether gold prices will be higher or lower in three years. It has been well documented that a massive quantity of gold has been shipped east to China, Russia, and India from the west in the past decade. It probably benefits both Western and Asian countries, in the short term, to encourage lower gold prices. This phase of selling western gold and shipping it east may be nearly finished.

This post was published at Deviant Investor on September 4, 2014.

Citi Warns Every FX Trade Is The Same Carry Trade Now

In Citi’s Steven Englander’s latest note, he notes that every major FX trade in place right now is a carry trade in one form or another, differing only in their scope and in the risk they entail. This has 5 significant implications…
Via Citi,
This note argues that every major FX trade in place right now is a carry trade in one form or another, differing only in their scope and in the risk they entail. Consider the following trades that encompass the vast majority of FX trades in place:
1) In Asia, long CNH, short USD
2) In G3, long USD, short EUR and JPY
3) In G10 long AUD and NZD, short G3
4) Globally, long EM, short G3
In the short term, we think 2) remains the most robust because acutely disappointing economic outcomes will likely induce ECB and BoJ action. If anything, FX moves are lagging moves in vol-adjusted carry. Fear of more aggressive Fed tightening is the likely driver of higher volatility but this would push spreads further in favor of the USD, offsetting some of the impact of higher volatility. Hence, these carry trades are not as vulnerable as 3) or 4) to Fed-induced volatility. However, we saw earlier this year that long USD against EUR and JPY is sensitive to generalized position unwinds, at least temporarily.
On a 2-4 month horizon 3) and 4) are the most vulnerable because we expect investors to become much less certain that the Fed pricing pace will be as shallow as the market now expects (link), and they would be hit doubly by any backing up of volatility. We look to payrolls and FOMC this week and next as potential triggers for an unwind of these trades, but we think there will be more sensitivity once QE is ended and the unemployment rate falls below 6% — most likely in early November.

This post was published at Zero Hedge on 09/03/2014.

Will asian gold demand continue?

To give you an idea of how important gold is considered in Malaysia, the prime minister was delivering the keynote speech in a recent gold conference.
Can you imagine David Cameron or Barack Obama giving a keynote entitled ‘Gold: Sustaining Future Growth’ It just wouldn’t happen.
The episode has got me thinking about the vastly different attitudes to gold between East and West – and that’s what I want to look at today…
Looking at worldwide gold demand trends, two things are pretty clear. Asian demand is increasing and Western demand is falling.
In fact, world gold mine production (averaging about 2,800 tonnes per year over the last five years) only just manages to cover Asian demand. In the chart below (from Nick Laird at Sharelynx), we see Asian demand in red. It has risen almost inexorably since the early 1980s, while Western demand (the blue line) has been falling since 2003.

This post was published at TruthinGold on September 3, 2014.

Bloomberg Reports on Ruin in Hong Kong But Leaves Out the Larger Picture

To Save the Rich, China Ruins Hong Kong … When they meet on Sunday, legislators from China’s rubber-stamp National People’s Congress are expected to disregard even the most moderate proposals to open up Hong Kong’s political system. In all likelihood the decision will provoke street protests, drive moderates into the more radical pro-democracy camp and call into question the former British colony’s standing as a global financial center and bastion of free enterprise. And for what? The good of Hong Kong, of course. – Bloomberg
Dominant Social Theme: Capitalism creates prosperity, but the Chinese don’t understand.
Free-Market Analysis: What’s going on in China and Hong Kong is ironic because it seems to mimic much that has held the West back in modern times. In fact, much that China suffers from at its current level of development corresponds to a similar evolution in the West.
Bloomberg resolutely avoids making the comparison – though in our view, this article would have provided a perfect opportunity. Instead, Bloomberg tries to treat Chinese authoritarianism as an Asian problem.
Here’s more:
Wang Zhenmin, a Chinese law professor who sat on the committee overseeing Hong Kong’s constitution, laid out the case most blatantly on Thursday, when he told journalists that the interests of the city’s powerful tycoons had to be safeguarded from unchecked democracy.
“If we just ignore their interest, Hong Kong capitalism will stop,” he said. “Democracy is a political matter and it is also an economic matter.”

This post was published at The Daily Bell on September 02, 2014.

US Futures Levitate To New All Time High As USDJPY Surges Above 105; Gold Slammed

Just when we thought centrally-planned markets could no longer surprise us, here comes last night’s superspike in the USDJPY which has moved nearly 100 pips higher in the past few trading days and moments ago crossed 105.000. The reason for the surprise is that while there was no economic news that would justify such a move: certainly not an improving Japanese economy, nor, for that matter, a new and improved collapse, what the move was attributed to was news that Yasuhisa Shiozaki, who has been advocating for the GPIF to reduce allocation to domestic bonds, may be appointed the Health Minister when Abe announces his new cabinet tomorrow: a reshuffle driven by the fact that the failure of Abenomics is starting to anger Japan’s voters. In other words, the GPIF continues to be the “forward guidance” gift that keeps on giving, even if the vast majority of its capital reallocation into equities has already long since taken place. As a result of the USDJPY surge, driven by a rumor of a minister appointment, the Nikkei is up 1.2%, which in turned has pushed both Europe and Asia to overnight highs and US equity futures to fresh record highs, with the S&P500 cash now just 40 points away, or about 4-8 trading sessions away from Goldman’s revised 2014 year end closing target.
Oh, for whatever reason but probably just because “banks are providing liquidity”, both gold and silver were summarily pounded to multi-month lows seconds ago.
In other Asian markets, the Hang Seng, Shanghai Composite, and the KOSPI are 0%, 1.4% and -0.8%, respectively. European stocks advance amid speculation that slower growth will prompt policy makers to accelerate stimulus. German and Italian shares outperform. The yen came close to a five-year low against the dollar, while the pound falls after a survey showed support for Scottish independence increasing. Treasuries drop ahead of reports this week that economists predict will show U. S. manufacturing and employment expanded in August. Oil and gold fall.

This post was published at Zero Hedge on 09/02/2014.

The Fall Is Golden For Bullion Bulls

September is the hottest month of the year for gold prices, rising on average 3% over the past 20 years. As the yellow metal tests hovers off 2-month-lows, Bloomberg notes that “Indian jewelers and dealers will be stocking up in the coming weeks,” ahead of the festival period, which runs from late August to October (andis followed by the wedding season) when bullion is bought for part of the bridal trousseau or in jewelry form as gifts from relatives. As GoldCore’s Mark O’Byrne notes, “a lot of traders are aware of this trend towards seasonal strength… They tend to buy and that creates momentum.”
Some color on the week’s Precious Metals Trading from Alasdair Macleod of GoldMoney,
The pattern of trading in precious metals changed for the better this week. After London’s bank holiday on Monday, for the first time in a long time the market opened in London’s pre-market with higher prices. This indicated Asian or Middle-Eastern physical demand was returning to the market. Predictably, prices drifted lower during London hours as paper trading took over, and all the gains were more or less lost by close of play on Comex in New York.
It was a similar story on Wednesday. Yesterday, (Thursday) started the same way, but this time the move gained more traction; but volumes remain pitifully low, in common with open interest. Today this pattern was not repeated with gold kicking off unchanged on overnight levels. However, gold is up $15 on the week and feels more firmly based.

This post was published at Zero Hedge on 08/31/2014.

Doug Noland: Pondering the Summers of 2012 and 2014

The gulf between inflating global securities prices and deteriorating fundamental prospects widens by the week.
I’d been awaiting a German response to all the Draghi Q.E. jubilation. It is notable that it came from Finance Minister Schaeuble and not Bundesbank President Weidmann. Expectations for aggressive ECB monetary inflation do come at the same time as the anti-German “austerity” movement becomes increasingly clamorous. At the end of the day, I still don’t see how the French, Italians and Germans (among others) share a common currency. The cultures – the views on so many things, including how wealth is created (and shared), how economies should function, and how monetary and fiscal affairs must be managed – are inconsistent and often conflicting. At some point, somebody – the “periphery” countries, the French and Italians, or perhaps the German people – will say “enough is enough – this is not sustainable.”
In this age of monetary inflationism, the Germans provide a veritable oasis of sanity. At its best, “monetary policy can only buy time.” At its worst – the current reality – over time it buys problematic out-of-control Bubbles. Why would European banks partake in higher risk lending for business investment when they can make seemingly risk-free profits buying sovereign bonds? For that matter, why would American CEOs invest in plant and equipment at home when so much “wealth” is created buying back their stock? Meanwhile, two years of massive global monetary stimulus has prolonged historic investment booms in China and throughout much of Asia. This has exacerbated Bubbles, while only worsening the global pricing backdrop and capital investment environments elsewhere. Global imbalances have worsened.
Monetary policy promised way too much back in 2012. As I’ve written repeatedly, at this stage of a most spectacular and protracted Credit cycle, monetary inflation can only make things worse. Where does it end? And not for a minute do I believe the alarming rise in geopolitical risk and instability is unrelated to years of prolonged global monetary disorder. Mismanagement of the world’s reserve currency is replete with huge consequences. Mismanagement of all the world’s major currencies is a complete fiasco.

This post was published at Prudent Bear

Bank of Japan Refrains From Deepening Stimulus

Every year, top global financial policymakers gather in Jackson Hole, Wyoming for a summit. Bank of Japan (BOJ) Governor Haruhiko Kuroda was there, and delivered a disappointing message to those who were waiting for a ramp-up of the bank’s money printing. Although he allowed for future re-evaluation, he said he believed that Japan was on target to reach its 2 percent inflation goal by 2015, and finally break out of its long ‘deflation trap.’
Kuroda Disappoints At Jackson Hole

Some outside analysts don’t agree. By its own admission, the BOJ sees inflation tracking down to 1 percent by December of this year. Morgan Stanley researchers point out that to reach the inflation target, Japan’s core CPI would have to hit 2 percent by April 2015 and stay there through year-end.
[See Related: Detlev Schlichter – Euthanasia of the Japanese Rentier] Reporters at Jackson Hole peppered Mr. Kuroda with questions about possible additional efforts beyond the BOJ’s bond purchases – such as price-level targeting (which would involve a deliberate inflation overshoot to compensate for previous inflation that was below target) or nominal GDP targeting (which would push easing until a nominal GDP target was reached). He demurred, saying that the current program was enough and would stay in place, although he wouldn’t rule anything out for the future.
Abenomics Hits a Wall Japan has never recovered from its early 1990s economic and financial market bust, languishing in sub-par growth for over two decades. In 2012, Japanese Prime Minister Shinzo Abe took office promising ‘three arrows’ to hit the target of economic revival.

This post was published at FinancialSense on 08/28/2014.

Precious Metals Markets: China vs US

In anticipation to the launch of the Shanghai Gold Exchange international board, that presumably will start shifting gold pricing power from West to East, in this post we’ll examine the historical trading volumes of the Shanghai Gold Exchange (SGE), the Shanghai Futures Exchange (SHFE) and the COMEX. By charting the weekly volumes we get a clear view of the size of these exchanges. (In the London Bullion Market most likely the largest volumes are traded, but because this is an OTC market that doesn’t disclose much data we can’t use it in our West – East comparison.)
From now on I will publish the trading data of all three exchanges after every trading week to closely monitor if the gold market’s center of gravity is moving to Asia.
The largest precious metals futures exchange in the world is the COMEX located in the US. This exchange started trading silver futures in June 1963 and gold futures in December 1974. Futures are a derivative of an underlying asset, in this case precious metals, as they are traded on margin. Through futures traders can take on positions in precious metals but only deposit a fraction, the margin, of the total cash value in advance. This provides leverage; price movement is magnified relative to the margin on deposit. Futures can be used, for example, to hedge or speculate. Historically the COMEX has been the dominant futures exchange in the world and plays a significant role in the pricing of precious metals.

This post was published at InGoldWeTrust on August 30, 2014.

Market Report: Summer doldrums coming to an end

The pattern of trading in precious metals changed for the better this week. After London’s bank holiday on Monday, for the first time in a long time the market opened in London’s pre-market with higher prices. This indicated Asian or Middle-Eastern physical demand was returning to the market. Predictably, prices drifted lower during London hours as paper trading took over, and all the gains were more or less lost by close of play on Comex in New York. It was a similar story on Wednesday. Yesterday, (Thursday) started the same way, but this time the move gained more traction; but volumes remain pitifully low, in common with open interest. Today this pattern was not repeated with gold kicking off unchanged on overnight levels. However, gold is up $15 on the week and feels more firmly based.
Measured by deliveries on the Shanghai Gold Exchange, Chinese demand is increasing, with last week’s figure rising to 46 tonnes, having increased every week in August. So far this year over 1,200 tonnes have been delivered, and the extension of trading and therefore potential demand into the Free Trade Zone is due to kick off in September.
The chart of the gold price and open interest on Comex is shown below.

This post was published at GoldMoney on 29 August 2014.

Gold Daily and Silver Weekly Charts – A Tale of Two Metals Markets – Shout and Feel It

Nothing of particular interest was shown in the Comex reports from yesterday. Tomorrow we bid adieu to the August contract. Time to move our eyes to the September month which is active for silver but not gold. The precious metals are unfortunately very politicized in this currency war. That is both a risk, and an opportunity. There was intraday commentary on the metals here. There are obviously two metals markets, one of paper, and one of real metal delivered and taken. One is most expressed in the overnight market with trading in Asia and Europe, and another that starts after the New York opening bell.

This post was published at Jesses Crossroads Cafe on 28 AUGUST 2014.

Silver powers solar

With a history that dates back more than 5,000 years, silver has been an incredibly valuable metal through the ages. It was once used as a trading currency along the Asian spice routes and was even the standard for U. S. currency for a while. However, the precious metal holds far more value than just as a currency. In fact, more than half of the world’s silver is actually used for industrial purposes as it is used in X-rays, low-e windows, and even solar panels. As it turns out, even solar energy wouldn’t work the same way if it wasn’t for silver.
Silver is a unique metal. It has the highest electrical and thermal conductivity of all metals, and it’s the most reflective. These physical properties make it a highly valued industrial metal, especially when used in solar cells.
Silver is actually a primary ingredient in photovoltaic cells, and 90% of crystalline silicon photovoltaic cells, which are the most common solar cell, use a silver paste. What happens is that when sunlight hits the silicon cell it generates electrons. The silver used in the cell works as a conductor to collect these electrons in order to form a useful electric current. The silver then transports the electricity out of the cell so it can be used. Further, the conductive nature of silver enhances the reflection of the sunlight to improve the energy that’s collected. Therefore, if it wasn’t for silver solar wouldn’t be as efficient in turning sunlight into energy.

This post was published at TruthinGold on August 25, 2014.

De-Escalation Algo Pushes Futures To Overnight Highs

It is unclear exactly why stock futures, bonds – with European peripheral yields hitting new record lows for the second day in a row – gold, oil and pretty much everything else is up this morning but it is safe to say the central banks are behind it, as is the “de-escalation” algo as a meeting between Russia and Ukraine begins today in Belarus’ capital Minsk. Belarusian and Kazakhstani leaders will also be at the summit. Hopes of a significant progress on the peace talks were dampened following Merkel’s visit to Kiev over the weekend. The German Chancellor said that a big breakthrough is unlikely at today’s meeting. Russian FM Lavrov said that the discussion will focus on economic ties, the humanitarian crisis and prospects for a political resolution. On that note Lavrov also told reporters yesterday that Russia hopes to send a second humanitarian aid convoy to Ukraine this week. What he didn’t say is that he would also send a cohort of Russian troops which supposedly were captured by overnight by the Ukraine army (more shortly).
Asian equity markets haven’t really followed suit the US/European rally with bourses in Japan, Hong Kong, and China down 0.6%, 0.4% and 1%. The Dollar is softer against the Yen which perhaps added some pressure on Japanese equities. There isn’t much Asian headlines this morning and we suspect parts of the market (HK/China) are still busy with the ongoing earnings season. Asian credits are doing better in relative terms led by sovereigns. Indonesia’s USD bonds continued its march higher (helped by Treasuries) whilst its 5yr CDS spreads are marked 4bps tighter overnight. Asian stocks fall with the Kospi outperforming and the Shanghai Composite underperforming. MSCI Asia Pacific down 0.2% to 148.4. Nikkei 225 down 0.6%, Hang Seng down 0.4%, Kospi up 0.3%, Shanghai Composite down 1%, ASX up 0%, Sensex up 0%. 2 out of 10 sectors rise with health care, energy outperforming and utilities, telcos underperforming

This post was published at Zero Hedge on 08/26/2014.

Gold Seeker Closing Report: Gold and Silver End Slightly Lower

The Metals:
Gold dipped down to $1274.40 in early Asian trade before it popped back to $1280.75 in London and then drifted back lower by late morning in New York, but it then bounced back higher in early afternoon action and ended with a loss of just 0.33%. Silver slipped to as low as $19.333 and ended with a loss of 0.56%.
CME Opens Electronic Futures Trading After 4-Hour Delay Bloomberg
Euro gold remained at about 967, platinum lost $5 to $1413, and copper climbed a couple of cents to about $3.22.
Gold and silver equities fell about 1.5% by late morning and remained near that level for the rest of the day.

This post was published at GoldSeek on AUGUST 25, 2014