• Tag Archives Commodities
  • Gold Price Slips vs. Falling Dollar as Oil Bounces, Bank of England Split Boosts ‘Brexit-Hit’ Pound

    Gold prices held near 5-week lows against a falling US Dollar on Wednesday, trading at $1243 per ounce as commodities rallied but world stock markets extended Tuesday’s retreat in New York.
    As Brent crude oil rallied $1 per barrel from yesterday’s 7-month lows near $45, that pulled the EuroStoxx 50 index of major European shares more than 1% lower.
    The British Pound meantime rallied after a split emerged amongst senior Bank of England policymakers over holding or raising UK interest rates from the current all-time record low of 0.25% with 435 billion ($550bn) of quantitative easing bond purchases.
    Check out Global Liquidity Reaching a Tipping Point
    The Euro currency also rallied against the Dollar but held 1 cent below last week’s peak, the highest level since Donald Trump won the US presidential election last November.
    The gold price for Eurozone investors fell below 1115 per ounce, near its lowest level since January.

    This post was published at FinancialSense on 06/21/2017.


  • Ted Butler Quote of the Day 06-16-17

    As I see it, this is the defining moment for James McDonald, the new enforcement director for the CFTC. Either he will do something about the continuing silver manipulation or he won’t. In the event he doesn’t do anything to interrupt the big commercials like JP Morgan from continuing to snooker the managed money technical funds into and out of COMEX futures positions by illegal spoofing and other dirty market tricks, it will fall to something and someone else. I’m not worried that the silver manipulation won’t end dramatically and soon, but it is not written in stone that it will be the defining moment that McDonald will look back on with satisfaction many years from now. Defining moments can be either good or bad and by definition last forever.

    But it would be a mistake to underestimate the pressure he is under not to do the right thing. Essentially, for him to dismantle the crooked price discovery mechanism on the COMEX for silver (and gold) and on other futures exchanges for other commodities, he must repudiate more than 30 years of prior agency thinking, as well as overcome the secret and illegal agreement made between the U.S. Government and JP Morgan, on the occasion of JPM taking over Bear Stearns in 2008. Admittedly, that’s a very tall order. But the taller the order, the greater the defining moment.

    Certainly, the inability to overcome the standard line from the CFTC for decades, namely, that no manipulation was possible in silver, has plagued others who set out to do so. Gary Gensler comes to mind because he started off in hitting the road running to establish legitimate position limits in 2009 and seemed to be on the right path to doing so. Even Bart Chilton, the former and very outspoken commissioner who talked openly of the silver manipulation, eventually lost his public voice for the same reason as Gensler failed – neither could overcome the illegal agreement with JPM.

    A small excerpt from Ted Butler’s subscription letter on 14 June 2017.

    More precious metals news & information available at
    Ed Steer’s Gold & Silver Digest.
     


  • Global Stocks Slide On Trump Probe Report, Fed Indigestion

    Is it going to be another May 17, when US stocks tumbled as concerns of a Trump impeachment over obstruction of justice and impeachment surged ahead of Comey’s tetimony?
    Overnight, S&P500 futures accelerated their decline following yesterday’s WaPo report that Special Counsel Mueller has launched a probe into potential obstruction of justice by Trump…

    … while European and Asian markets dropped dragged lower by commodities which reacted to the latest Fed rate hike, as copper dropped and oil fluctuated. The Bloomberg commodity index fell to the lowest in more than a year, pressuring miners and E&P companies which were among the big losers as the Stoxx Europe 600 Index retreated for a second day. The dollar advanced after the Fed raised interest rates for the second time in 2017 and Yellen suggested the strength of the U. S. labor market will ultimately prevail over recent weakness in inflation, which however the bond market strongly disagrees with, sending the curve the flattest its has been since October.

    This post was published at Zero Hedge on Jun 15, 2017.


  • Is there gold ‘hype’ and is gold an emotional trade?

    – Very little hype in gold
    – Sentiment is important in the gold market as is other markets particularly stocks
    – Article ignores the large body of research showing gold is safe haven asset
    – Gold may struggle to breach $1,300 in short term
    – Trading gold and short term speculation is high risk and for professionals
    – Important for investors to focus on long term fundamentals which remain sound
    ***
    Earlier this week Shelley Goldberg , commodities strategist for Roubini Global Economics wrote about how gold was set to disappoint the ‘gold bulls – again.’ Goldberg argued that we should ‘throw out all the fancy analysis and realize that gold is an emotional trade.’
    Aside from yesterday’s little hiccup following the Fed announcement, the gold price has had a great year. Goldberg agrees, ‘After breaking through a six-year downtrend line, gold rose last week to its highest level since Nov. 4, and is up an impressive 10.5 percent this year.’

    This post was published at Gold Core on June 15, 2017.


  • Ted Butler Quote of the Day 06-14-17

    A couple of weeks back, a subscriber asked me to explain what I meant by JPMorgan ‘skimming’ off silver from the near frantic and highly unprecedented physical turnover in COMEX silver warehouse movement. I answered him privately, but I’m not so sure I did an adequate job in explaining my premise, so please let me have another crack at it here.

    I’ve always thought that the incredibly large physical ‘churn’ in the COMEX silver warehouses created the opportunity for someone to dip into the turnover and extract metal without it being widely noticed. I mean, if there was hardly any physical turnover in publicly trackable exchange warehouses, as is the case in just about every commodity except for COMEX silver, then there wouldn’t be any real opportunity to dip into a movement that didn’t exist.

    Try to think of it this way. We’ve all seen footage of the bears lining up and positioning themselves for a salmon run in Alaska. There are so many fish running, that no matter how many the bears may catch and gorge on, it hardly reduces the run. When the salmon aren’t running, the bears must eat something else. There have been no big salmon runs in other commodities, just in COMEX silver. This consistent six year salmon run in physical silver between the COMEX warehouses has allowed just one big grizzly to gorge on physical silver nearly undetected and unchallenged by other bears. I think JPMorgan may have secured as many as 150 million oz of its 600 million oz hoard in this manner.

    A small excerpt from Ted Butler’s subscription letter on 10 June 2017.

      More precious metals news & information available at
    Ed Steer’s Gold & Silver Digest.


  • Gartman: “The Nasdaq One Day Will Collapse… But Buying Today On Weakness Should Be Wise”

    As “expert” opinions on Friday’s tech meltdown pile on, here is perhaps the most actionable: that of “world renowned commodities guru” Dennis Gartman.
    THE NASDAQ’S ONE DAY COLLAPSE: Will The Trend Line Hold?:
    Friday’s low was right along this trend line… which if we had space, could be extended well back into ’16. If this is still a bull market… and until proven otherwise it is… then buying the NASDAQ on weakness today should be wise and we shall.

    This post was published at Zero Hedge on Jun 12, 2017.


  • China’s “Bubble Prophet” Sees Unprecedented Surge In Home Prices

    Beijing’s ability and eagerness, to create and roll from one bubble, whether it is in housing, equities, commodities, cars, bitcoin and so on, into the next has been extensively documented, however, of all recurring bubbles to impact the Chinese economy, housing is by far the most important. The reason for that is that housing provides Chinese society with a dramatic wealth effect, far greater than the stock market, and as Deutsche Bank calculated in March, in 2016 the rise of property prices boosted household wealth in 37 tier 1 and tier 2 cities by CNY 24 trillion, almost twice their total disposable income of RMB12.9 trillion (fig.11).

    This post was published at Zero Hedge on Jun 11, 2017.


  • The Inconvenient Truth… Of Consumer Debt

    Oh, but for the days the hawks had a hero in Sydney. Against the backdrop of a de facto currency war, the Reserve Bank of Australia stood as a steady pillar of strength. The RBA held the line on interest rates, maintaining a floor of 2.5 percent, even as its global central bank peers drove rates to the zero bound and beyond into negative territory.
    The abrupt end to the commodities supercycle drove the RBA to join the global currency war. The mining-dependent nation’s economy was so debilitated that policy makers felt they had no choice but to ease financial conditions. In February 2015, after an 18-month honeymoon, the RBA reduced its official rate to 2.25 percent, marking the start of a cycle that ended last August with the fourth cut to a record low of 1.5 percent.
    The Bank of Canada has taken a similar journey in recent years. It embarked upon a mild tightening campaign in 2010 that raised the overnight loan rate from a record low of 0.25 percent to 1 percent in September 2010. The bank maintained that level until early 2015. Two weeks before the RBA’s first cut, the Bank of Canada lowered rates to 0.75 percent. The January move, which shocked the markets, was followed in July 2015 with an additional ease to 0.5 percent, where it remains today.
    Bank of Canada Governor Stephen Poloz, who replaced Mark Carney after he departed to head the Bank of England, explained the moves as necessary to counter the downside risks to inflation emanating from the oil price shock to the country’s economy.

    This post was published at Zero Hedge on Jun 11, 2017.


  • The Great Commodity Bear , Is It Finally Over ?

    There is something happening in the commodities complex that has been going on for awhile now that needs to be addressed tonight. A subtle change actually started earlier this year and has been gaining momentum especially in the energy sector. I know for a lot of you, with the weak US dollar, you are thinking, ‘how could commodities be declining,’ which goes against everything you have learned about how the markets are supposed to work. If the markets always behaved like everyone thinks they should then there would be no markets, because everyone can’t be right. That’s the nature of the beast we’re trying to tame.
    Tonight I would like to show you some bearish rising wedges which have formed all over the place in the commodities complex. Many of the rising wedges took over a year to build out so that sets up a healthy decline. The bigger the pattern the bigger the move.
    This first chart tonight is the ratio combo chart using the TIP:TLT to gauge if we are experiencing inflation or deflation. Earlier this year the ratio in black formed a small topping pattern just below the black dashed trendline, then had a quick backtest, and is now starting to gain momentum to the downside. When the ratio in black is falling it shows deflation. The CRB index along with the GDX are still in a downtrend with the CRB index being weaker than the GDX, as show by the 30 week ema.
    Next lets look at some different commodity indexes to see what they may be telling us. This first commodities index we’ll look at is the old CRB index. This bearish rising wedge began to develop way back in early 2016 with the 4th reversal point taking place a year later at the top of the rising wedge. As you can see the 4th reversal point was a H&S top reversal pattern. The breakout came in March with no backtest. There was a small blue bearish rising wedge which formed in the middle of 2015 which was part of that huge impulse leg down.

    This post was published at GoldSeek on 8 June 2017.


  • David Morgan: Cryptocurrencies Can be Profitable for Nimble Investors

    The following video was published by The Morgan Report on Jun 5, 2017
    Morgan also discusses the metals he’s interested in right now and explains why he thinks gold and the blockchain could eventually be used together.
    David Morgan is best known for his commentary on precious metals, particularly silver, but as he’s emphasized in the past, The Morgan Report covers a wide array of commodities and investment opportunities. At the recent International Metal Writers Conference, he proved that point with a presentation that covered precious metals and the blockchain.


  • RBC Warns Equity Markets Have Entered The ‘FOMO’ Stage

    It’s risk-parity heaven right now, notes RBC’s head of cross-asset strategy Charlie McElligott, with global equities (developed and EM) AND fixed-income all continuing their torrid rallies, but McElligott warns this is a classic “from worst to first” PM-grabbing into a new “Fear Of Missing Out” stage of the equities-rally.
    Bonds remain well-bid on account of the ongoing ‘slowing into tightening’ narrative, with commodities being the only asset class (outside of volatility, of course) that is lower overnight as a ‘signal’ for the lower bond yields. This continues to be ‘falling inflation expectations’ story for rates / bonds: industrial metals continue their struggles (Chinese / PBoC deleveraging efforts, while recent efforts at STRENGTHENING yuan to stem FX outflows will FURTHER FEED global disinflation in coming months) in conjunction with Crude’s inability to get off the mat post disappointing OPEC (market still focusing on US shale supply–especially now, with the thinking post Trump’s Paris Accord drop-out that we’ll see even MORE US oil supply via increased drilling / deregulation).
    #FOMOROTATION: But today is largely an equities-centric story, as stocks can of course view the world in a ‘mutually-exclusive’ fashion from the aforementioned fixed-income ‘slowing growth’ concerns. A goldilocks interpretation of ‘easier financial conditions’ (weaker USD and lower US rates / flatter curves are a POSITIVE for large cap US corporates) against still-expansive data (yesterday’s US ADP print portending + for NFP) keeps stocks in a very ‘sweet spot,’ especially as the world is still awash in liquidity despite the ‘coming’ pivot tighter. To this point, EPFR data last night showed us that cash continues to be deployed in both equities (+$13.7B inflow in global Eq funds, a five week high absolute $ number) and bonds (+$6B inflow) as well. It seems like investors are appropriately taking their cues from very recent CB messaging: cautiously ‘slow and steady’ tightening in light of recently ‘softer’ inflation data.

    This post was published at Zero Hedge on Jun 2, 2017.


  • Reuters Goes To China, Discovers “Ghost Collateral”

    Back in 2014, a scandal erupted when media reports confirmed what many had previously speculated about China’s banking system: namely that much of China’s staggering loan issuance had been built (literally) upon air and that billions (or trillions) in loan collateral had been “rehypothecated” between two, three or many more debtors – or never even existed – forcing banks to accept that they would never recover much if any of the pledged collateral – in most cases various commodities – if the economy were to suffer a hard-landing resulting in mass defaults. The most famous example involved collateral fraud at China’s 3rd largest port, Qingdao, where numerous borrowers were found to have “pledged” the same collateral of steel and copper to obtain funding from various banks.

    This post was published at Zero Hedge on Jun 2, 2017.


  • Quiet Month End Markets Hide “Below The Surface” Fireworks

    It has been another quiet session for global equity markets, with S&P futures flat, as are European and Asian stocks, which is perhaps odd, as there was quite a bit of newsflow and, in the case of China, outright fireworks.
    The main event in DM was the violent move in sterling, which as we first reported on Tuesday afternoon, tumbled for the first time this week after a YouGov poll showed Theresa May’s Conservative Party may fall short of a majority. The currency’s weakness boosted British equities, and the FTSE 100 Index rose even as miners and energy companies weighed on the broader European gauge after another night of sliding commodities in China.

    This post was published at Zero Hedge on May 31, 2017.


  • Gold Market Charts – May 2017

    This monthly column looks at developments and trends in the world’s major physical gold markets via a series of gold market charts created by the GOLD CHARTS R US website. In most cases, the charts featured capture data to month-end April 2017 from official data which has become available during May.
    Separately, the BullionStar website offers a large selection of dynamic charts under the BullionStar Charts menu. The data underlying these charts covers precious metals, major currencies, stock indices and major stocks, other commodities, and also BullionStar bullion products. The charting utilities on the BullionStar Charts page allows every asset / financial instrument featured to be measured in terms of every other asset or instrument featured.
    Shanghai Gold Exchange (SGE) – Gold Withdrawals In BullionStar’s “An update on SGE Vault Withdrawals and SGE Price Premiums“, dated 17 May, it was noted that the SGE’s monthly ‘Data Highlights‘ report for the end of April 2017 stated that the Year-to-Date gold withdrawal total from the Exchange’s vaults was “771.9734 tonnes” which was “44.9 tonnes higher than the figure implied by the summation of the 4 individual months’ figures“. This was because the 4 individual months’ SGE gold withdrawal figures were 184.412 tonnes (January), 179.237 tonnes (February), 192.250 tonnes (March) and 171.174 tonnes (April), which total 727.073 tonnes.

    This post was published at Bullion Star on 28 May 2017.


  • List of Seven Troubles Assailing the US Economy as We Head into Summer

    The following is not simply a list of negative risks to the economy but a list of of serious economic conditions that are already placing drought-like pressures on the overall economy. This list doesn’t include the long-term structural problems with the economy, such as its high debt burden, but just the forces that have risen against it this year.
    First-quarter US GDP growth slowed to a stagnant 0.7% (annualized) – stagnant in that population growth alone should cause GDP to rise more than that. So, really, GDP per capita is in recession, though that is not technically how a recession is called. Moody’s just downgraded China’s credit rating for the first time in thirty years, warning of fading financial strength as economy-wide debt mounts. Moody’s attributed the growing risk to years of credit-fueled stimulus, indicating the Chinese economy has grown reliant on stimulus. China’s debt was growing at an annualized rate of $4 trillion (30% of GDP)! China’s efforts to contain stimulus bubbles are expected to inhibit its economic growth, which will bring down the global prices of commodities like iron, copper and oil with similar collateral impact in the US to what we saw last time commodities like oil crashed. The Shanghai Composite stock index has fallen about 10% in less than two months. (Recall the damage China did to global stock markets from the summer of 2015 through early 2016 as the Chinese market melted down and China had to socialize most of its own stock market to save it from utter ruin. Today the Chinese government market saviors rushed in to prop it up again.) The Federal Reserve appears to be set on lowering Fed stimulus, while it is also becoming clear that no fiscal stimulus will come out of the federal government this year. Even those working on Obamacare and the Trump Tax plan say early 2018 is the best they can now hope for. The Fed has a track record of killing recoveries by remaining headstrong on stimulus retreat once it starts down that path. Markets don’t like uncertainty, and everything investors have been banking on looks increasingly uncertain at the moment. With no fiscal rain at at time when the streams of monetary stimulus are drying up, this promises to be a dry summer. If the Republican-led house and senate become even more divided, just remember Lincoln warned, ‘A house divided against itself cannot stand.’

    This post was published at GoldSeek on 25 May 2017.


  • China’s Lehman Moment Is Coming!

    Before I dig into the coming Lehman moment out of China, you should understand how China has impacted the world.
    First, let’s start with debt. Debt sits at the heart of China’s miracle growth.
    China has more than quadrupled its debt load since 2007.
    Just between 2007-2014, its debt exploded from $7 trillion to $28 trillion (simply incomprehensible numbers).
    China’s addiction for growth (in building mega-cities, bridges, roads, etc…) helped push demand for commodities higher (like iron ore, steel, and oil).
    But the initial day of reckoning came late 2014. The world was unable to absorb the unrelenting Chinese production.
    In the face of massive excess supply, prices collapsed. The ripple effect hit the energy sector first. Then the materials space… then worked its way through the economy from there.
    China’s rulers got scared of it death-spiraling.

    This post was published at FinancialSense on 05/25/2017.


  • Should I Invest My Fortune in Gold? Inaugural Lecture by Dr Brian Lucey

    PRESENTATION HIGHLIGHTS
    – Should I invest my fortune in gold?
    – Lessons from gold and silver: Reviewing the research
    – What precious metals can tell us about finance?
    – What are precious metals and why should we care?
    – What size of market and how evolved over time?
    – Long and detailed history of gold and silver as money
    – What does a tonne of gold look like?
    – Research on precious metals including volatility and inflation
    – Where produced and where demand from and how evolved and who studying precious metals
    – Game of Thrones & Scrooge McDuck’s gold and the Hyperinflation of Smaug
    – Gold and silver manipulation – ‘Was the fix a fix’?
    – Gold a ‘permabubble’ or in correction?
    – Gold costs $1,000/oz to mine so unlikely to fall below that level
    – Drivers of retail coin and bar investment
    – How does sentiment and mood affect precious metals?
    – Why do central banks continue to buy and hold gold?
    – Historical studies of precious metals
    – How much to hold and when?
    – Gold is proven safe haven – rises sharply when uncertainty and in economic crisis
    – Research says 10% a good allocation; 30% is high
    – Silver similar – 1% to 5% and 10% allocation good in crisis
    – One of Ireland’s great exporting services, small to medium size enterprise (SME) is here in the form of GoldCore and can help
    – Do not spend too long staring at and obsessing about gold or might turn into Gollum
    – Question and answer session
    How the economics of gold and silver can help us understand the challenges facing financial economics and whether we should invest in gold and silver was explored in an inaugural lecture by Professor Brian Lucey, Professor of International Finance and Commodities in Trinity Business School.
    In the lecture, entitled Golden Opportunities: What precious metals can tell us about finance, Professor Lucey examined the research space in the financial economics of precious metals.

    This post was published at Gold Core on May 25, 2017.


  • Goldman: “We Have Entered The Slowdown Phase”, But Stocks Don’t Care

    Under normal circumstances, we would say it is strange, if ironic, that the same day the S&P is trading just shy of an all time high 2,400 again, Goldman comes out with a note warning that “global growth momentum appears to be slowing. The ISM has likely peaked, and the US labor market has tightened further. We appear to be in the ‘slowdown’ phase.” It goes without saying that circumstances are anything but normal, and that if the US economy is in a slowdown phase after a quarter in which GDP rose 0.7%, we would hate to see what an all out contraction would look like.
    Sarcasm aside, echoing some of the confusion voiced by Bank of America earlier today, Goldman notes that “so far equities and credit are holding up well relative to historical slowdown phases, while other assets (USD, commodities and Treasuries) are underperforming relative to history.”
    Why the disconnect? Goldman suggests that even though the economy has peaked, “Historically, slowdowns have not necessarily been bad for risky assets, unless a recession results.”
    Wait, isn’t that what markets do: they discount the future? The answer here, obviously, is not under central planning when the market’s only reaction function to any move lower is to buy the dip (see: “Bank Of America: “These Markets Are Very Weird“). However, it would not be politically correct for Goldman to admit that the market’s primary function, anticipating and reaction to the future, no longer works, so it provides some other ideas, claiming that “some asset prices, primarily the Treasury term structure and US HY spreads, tend to reflect recession risk early, while equity momentum tends to fade. The ISM and the unemployment rate also appear to give some advance warning.
    But first things first: why has Goldman, which traditionally was the biggest economic cheerleader, thrown in the towel? The answer.

    This post was published at Zero Hedge on May 23, 2017.


  • The Trump Collapse Scapegoat Narrative Has Now Been Launched

    Last week was a rather crazy one for the news feeds, with cyber attacks and ‘Comey memos’ and a host of other wild mayhem, it may have been difficult for many people to keep track of it all. That said, there was one event that I think went partly under the radar, and I think it is an important signal for anyone concerned with the ongoing process of economic collapse in the U. S.
    Generally, the American public holds very little vigilance when it comes to economics. They are distinctly unaware of fundamental indicators such as commodities demand, energy usage, manufacturing, imports, exports and international shipping, etc. What they do take note of, and what the mainstream news will tell them about in 30 second blurbs, is the state of unemployment and whether stock markets were down for the day or up for the day. These two ‘indicators’ are the extent of the average person’s exposure to fiscal health.
    This is why the Federal Reserve and the establishment have been meticulous over the past several years in their efforts to keep employment statistics highly manipulated to the positive side and why they have been injecting untold trillions into stocks around the world through various measures including no cost overnight loans.

    This post was published at Alt-Market on Wednesday, 24 May 2017.


  • Trump, Watergate and Gold

    Could Trump be facing his own Watergate?
    The president’s firing of FBI director James Comey in the midst of probes into the administration’s possible connections with Russia set off a political firestorm. There has even been talk of impeachment in recent weeks.
    While at this point, much of the rhetoric spinning around the Beltway is political in nature, the controversy surrounding the administration still spells trouble for Trump. Even if there is no fire burning underneath the smoke, political opponents will undoubtedly leverage the chaos to slow the administration’s agenda.
    Head of commodities strategy at Saxo Bank A/S in Copenhagen Ole Hansen told Bloomberg that could mean a bad news for the dollar.
    It’s a political dogfight. That does mean that his ability to act as a president, and to do what he’s promised, is sharply reduced and in that lies the risk of dollar weakness.’
    Trump has struggled finding footing in the political arena since he took office. Republicans still haven’t come through on their promise to repeal and replace Obamacare. And while the administration introduced an ambitious tax reform plan to much fanfare in April, little has happened since.

    This post was published at Schiffgold on MAY 22, 2017.