"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat


Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput

Trader Dan's Work is NOW AVAILABLE AT WWW.TRADERDAN.NET



Friday, February 21, 2014

Commitment of Traders Info

A bit of information...I mentioned a while back (when gold was trading closer to $1200 and the "gold is always manipulated all the time" crowd was crying up their usual blues,) that the reason gold was lower was not because it was being manipulated but rather because speculators were generally shunning commodities in general in favor of high flying equities.

Take a look at the following two charts to illustrate the absurdity of those claims that gold was only lower because it was being manipulated.



Notice that from the peak in outright long positions in gold in October 2012, the TREND in hedge fund long positions was steadily lower until it reached an ultimate low in December 2013. Since that time the number of hedge fund long positions has been increasing while the number of hedge fund shorts has been steadily declining. And what has gold been doing since then...? Answer, why it has been moving higher just like one would expect it to do when the specs are coming back into the market.


Keep this in mind - specs drive our modern markets - when they are buying, prices rise. When they are selling, prices fall. Specs have had no reason to buy gold until apparently the start of this year but more so apparently since the start of this month of February. It has nothing to do with backwardation claptrap, lease rates, JP Morgan, and all the usual BS that so regularly pollutes the web in the gold bug community.

For some reason, commodities in general have been soaring recently. Shorts are getting obliterated across the entire sector with a vengeance. You name it - coffee, sugar, hogs, soybeans, wheat, corn, silver and of course gold. Frankly I am unclear as to what the main driver is for this sudden interest in the commodity sector. I have heard the usual chatter than equities are overvalued and commodities are undervalued, and there is some truth in that, but it seems to me that the weakness in the Dollar of late ( due to the weakness in the recent economic US data) has apparently caused a mass move back into the sector as part of another carry trade.

How far this could go or how long it could last is unclear. Frankly I have no idea what happened to the usual "February Break" but for now the charts in the sector have turned bullish. I have my own doubts that any of this is sustainable but will not argue with those same charts until they show some evidence that the mad buying binge has run its course.

One thing I can tell you, in some of the commodity markets that I monitor, the shorts or the bears if you prefer, have been obliterated. The fact that this has happened in almost every single commodity market makes me suspect that this general rally encompassing the sector is not going to last. A large amount of short covering has been taking place in tandem and that lets me know it is more of a macro trade that is indiscriminate in its buying.

In the meantime, traders, respect the technicals but remain vigilant for signs that this binge buying is fizzling out.



66 comments:

  1. Dan,

    Any comment about the ENORMOUS 12,000 shorts added by the commercials in Silver? That's the most I have ever scene. That's 60,000,000 oz. just imagine how high silver could gone without that taking place.

    ReplyDelete
  2. Isn't that kinda a bad sign, if hedge funds are loaded up and $1300ish is the most gold is amped up vs the 1700 is used to be with the same holdings. I dunno I think this thing could go timber pretty fast, or maybe thump in the night.

    Gilliom - where are you getting that short position info?

    ReplyDelete
  3. Looks like Bitcoin bottoming at $100, could be the buying opportunity of a lifetime.

    ReplyDelete
  4. TPE, I was thinking same thing. Before at those COT levels we are 1700, and now 1320ish lol. I mean that is all you need to know that control is being exerted.
    But like Dan says, who cares. Right now the chart looks great and I would be shocked to not see 1350 but then another big down slope trend line comes in. So both horz and vert issues at 1350. I think there the smack down occurs.
    But listening to Dan, I don't see any signs that say get off......yet. Anyone see something I am not?

    ReplyDelete
  5. Dan -

    Come on. It all makes perfect sense for commodities to rise (sarcasm!!!).

    The US is going to taper. . . .the ECB stops shrinking its balance sheet. . . . and the Japanese continue to expand their balance sheet. The Fed Chairwoman in her first speech said nothing new. Emerging Markets are taking it on the chin (commodity negative).

    There is the weather and its slightly negative affect on sales . . . . so lets start a run in commodities.

    None of these factors should lead to a commodities run, but somehow the combination of all these factors said, "Go commodities!"

    There you have it.

    ReplyDelete
  6. Below is a link to this week's COT. You guys keep talking about gold, but I think the action in silver is more significant. There were over 12,000 silver shorts added by the commercials...15,000 if you include options. This is more than I have ever seen. Each gold contract is only 100 oz of gold, but each silver contract is 5,000 oz of silver so that is a LOT of silver. Had this not happened, I suspect silver could have shot up way more than it has already. Apparently these guys think 60,000,000 oz of silver isn't any big deal to come up with, but the US mint can't even find enough silver to meet the current demand of much less than that.

    http://news.goldseek.com/COT/1393014809.php

    ReplyDelete
    Replies
    1. Gilliom;

      Excuse me for being blunt but your spin on this is simply inaccurate.
      Sure it was a large amount of selling on their parts, but so what?

      Swap Dealers had a NET change in their formerly net long position of 798 to a -6645 or a swing of 7443 including options.

      The End User/Producer/Merchant category had a net swing of 5816 contracts, also including options.

      The two together - 13259.

      My response - so what?

      Why is it only an issue when the Swap Dealers and other large commercially oriented outfits are selling? Why is there not a SINGLE FUSS made by anyone in the gold bug crowd when this category of traders is BUYING?

      For example - back in February of last year, Swap Dealers had been short and began moving to the long side. The week of 2/12/2013, they moved from the net short side to the NET LONG Side by some 5968 contracts and options. The very next week it was a net change of 5,340 contracts and options.

      As far as I know, the Swap Dealers could be instituting hedges for mining companies that they are doing business with or they could be putting on those hedges for their own purposes.

      Silver has been moving higher but the overall environment for commodities, while currently positive, is certainly not wildly bullish as it was back during the "inflation is coming for sure due to QE era". There has been a large amount of short covering by large specs. If you want to be objective, why not comment on the fact that hedge funds were tripping over themselves to cover shorts and were buying like mad this week. Just by themselves, their NET LONG Position increased by a whopping 10,829. If I was so inclined, I could easily turn your argument around by stating that were it not for this massive, mindless buying, silver would be much lower.

      Stop comparing the amount of paper traded in these futures markets to the physical market. It is a non-sequitor. No market out there makes comparison of the nature that you are doing. I could do the same with the amount of soybeans, or corn, or wheat, or cattle, etc. If you want to blame someone for this, blame the exchanges which keep getting permission to INCREASE position limits.

      Last time I looked the number given for actual deliveries of real commodities against the futures contract is less than 3% of the total open interest. My point is your point about 60,000,000 ounces of silver is irrelevant to the nature of commodity futures market functioning.

      Delete
  7. This site is a hidden gem! As far as I could tell, this could be the only place on the www where you can get unbiased, unemotional, down-to-earth outlook on the markets, from a truly seasoned professional. No fairy tails, no wild predictions, no nonsense. Just pure cold facts and sober reflections. It's brilliant!

    ReplyDelete
    Replies
    1. Few are the successful traders who also take time to share their thoughts on the web.
      I know more of them in France, of course.
      One good address there is Gilles, for those who can speak French.
      Here is a late video about Silver.
      http://labourseauquotidien.fr/suivi-du-trade-sur-le-silver-2/

      Delete
    2. I couldn't agree more with this.

      And "Keep this in mind - specs drive our modern markets - when they are buying, prices rise"
      is the greatest lesson I've learned in the last time

      Thanks Dan

      Delete
    3. Abraxas;

      The hardest lesson I have had to learn ( and still have to tell myself over and over again even after all these years ) is to try to stay objective and realize when a market is not doing what I thought it would do. There is an old adage: "The first loss is the best loss" and there is a lot of wisdom in that.

      There is absolutely no shame in getting a trade wrong. We are at best flawed humans who do not know the future. The shame comes in refusing to get out until the loss becomes so big that it destroys you.

      That is why I put so many hours into technical analysis of the various markets that I trade. The opinion of the market is ALWAYS RIGHT ( even if it is wrong!) because that is where the market is going to go.

      Delete
  8. Hello,

    Personally, I'm really following the 1330 area with a lot of attention.
    Because of the red mlh sup going downwards on the weekly timeframe.
    We are about to break through.
    At the same time, stochastic is quite high....so we may still see a correction of this rallye next week, and quickly go back within the pitchfork.
    If not, a main obstacle will be behind the bulls, and my next target would be 1350.
    http://i61.tinypic.com/15e95x5.jpg

    ReplyDelete
  9. SILVER.
    Here is a video (in French) from Gilles Leclerc.
    Even without the sound, you'll see one or two interesting charts throughout the video.
    On my side, on the long-term, and this is not a forecast, just a mention that it is possible because it already happened before :
    - silver already retraced 78% (Fibonacci ratio) of its last rise from 5 to 20 when it corrected back to 9.20 $. Then it shot up to 50 $.
    - 19 $ lows correspond as well to the 78% retracement of 9 to 50 $ move. Conclusion : IF we were to say history will repeat itself, silver's next top may actually be around 100 $.
    I'm NOT saying we are going there. But I'm saying it is not absurd to say we might get there within a couple of years, should we follow the same "crazy" updards move that we saw in 2010.

    Gilles and I see a common target at 23.
    Beyond, I saw a resistance at 21.90 and that's why I sold all my position at that level but I would get back in the train if silver gets through 22.
    I don't think Gilles is using the Fibonacci retracement levels as much as I do.
    For me, they are in many occasion a good tool to determinate inflexion points, but opinions might vary.
    That's why, for me, the real target of silver would be the first Fibo retracement level of the 50-19 $ move, i.e just below 26 $ area, and not 27.
    But I keep in mind that silver can also reverse under 21.90, or under 23, so I don't let those targets become a religion.

    ReplyDelete
  10. One last remark about Gold and Silver, and why I think that 1330 $ and 22 $ areas are KEY levels of resistance, and why I chose to sell some of my positions at those levels : markets have memory on horizontal levels especially.
    Gold and Silver are attacking in sync the bottom prices of the mid-april krach.
    Between 15th and 17th of april, gold and silver bounced in the areas of 1320-1330 $ and 21.80-22 $.
    Those levels hence became imho important horizontal levels of resistance to monitor. Next week will tell.



    ReplyDelete
  11. Tres bon! Merci pour le lien, Hubert.

    A

    ReplyDelete
  12. Dan
    If a picture is worth 1,000 words then a chart of real data is worth 10,000.

    While I miss the Weekly Metals Wrap this forum allows transfer of much more information and it's easy review.

    EXCELLENT!

    ReplyDelete
    Replies
    1. Mike;

      Thanks much for the kind words... As long as I have been doing this for a living Mike, I still enjoy looking at this sort of thing as attempting to discern what the larger mass of traders are thinking is always interesting. It is part of the profession and the one thing about it is that it is NEVER boring.

      Delete
    2. yes, Dan really deserves the thanks.
      I think his relentless posts are teaching many people how to trade and how to avoid most major mistakes not to loose all their money. It is a great benefit to all, and imho especially the gold community. I hope to hear you back soon on KWN.

      Delete
    3. Hubert; kwn is my fading barometer; not an original thought by the interviewees in years; that is why Faber and Zulauf are not invited back since they call it like it is without any customary bullish bullshit; sparks, of course

      Delete
    4. Hi Steve,
      I'm hoping it, not for you or me, but for those who don't know this website yet :)
      Take care,

      Delete
  13. Did anyone catch this silly and crazy article from January? One more guy not to read.

    http://marketsanity.com/no-reason-gold-rise-right-now/

    Did anyone ever tell this guy its about the hedge fund flows? Hee hee.

    ReplyDelete
    Replies
    1. jmsvett;

      That guy sounds like a quack to me... I think I would stick with the "gold is now being manipulated higher" theory. It makes more sense. As a matter of fact, the " entire commodity sector is being manipulated higher" theory is much more plausible.

      Delete
  14. Dan,

    At the risk of sounding like a gold bug AND conspiracy theorist, isn't it possible that CERTAIN hedge funds are run secretly by the Exchange Stabilization Fund or whichever Fed Reserve arm wishes to use to manipulate?

    To prove the Exchange Stabilization Fund MIGHT be manipulating is easy, to disprove it is hard.

    Hence, some of us, like yourself, are proponents of hard money?

    ReplyDelete
  15. Its the Dollar Index which is close to its Critical Support of 78.53 on its 30 year chart.

    Eurocrisis provided some relief to it.

    And Despite Taper 1 & 2, dollar index has stalled.

    Its the Death of Dollar which the world has sensed.

    ReplyDelete
    Replies
    1. Shark, I do not know what charts you are looking at, but the '08 lows on the $Index are all that matter, imho; all the rest of the action around 78, 77, etc, is just noise; sparks

      Delete
  16. India's Gold Ban was also one of the reason for the April 2013 price smash. Since then Gold demand has collapsed there, India being one of the largest importer of physical gold.

    Its Jewlerry sector is the largest employer which is now in serious trouble.

    With elections looming in May, the current UPA led government is on the verge of loosing.

    The opposition party is pro gold and if it wins elections then it will mean a huge uncoiling of suppressed demand. Maybe that is what the hedge funds are sensing and that gold will lead the hyperinflationary outbreak of demand in overall commodities?

    ReplyDelete
  17. Rally in CRB is not pro-growth. Which confirms the falling Velocity of Money. It is led by Precious Metals and Agriculture commodities. Not Industrial metals (Copper, Zinc, Crude oil, etc).

    So maybe the Agriculture Commodities are rallying due to bad weather, and Precious Metals due to Low Real Interest Rates.

    ReplyDelete
  18. Dan, my take on this situation is that gold was manipulated downwards during the April smash last year. An awful lot of gold was bought and as a result of that smash and in order to satisfy that demand an awful lot of gold was sent East by Central banks.

    http://www.silverdoctors.com/alasdair-macleod/#more-39091

    The ETF gold liquidation simply could not satisfy the demand produced by last year's smash and anyone who can apply simple math can work that one out.

    On that note I don't buy that the ETF gold sales are the reason the price dipped so much. A huge amount of gold did leave the ETF vaults but why did this not happen with the silver ETF's when the silver price was hit much harder? Looks more likely to me that ETF gold was in part used to fund the smash down and resultant demand for gold last year.

    Anyway going back to this year. In my opinion the gold price was simply taken too low by last year's smash and physical demand could simply not be met at $1,200. Looks to me like the have had to let demand vs.supply actually begin to dictate the rice this year in order to avoid some kind of delivery default.

    Chinese demand in January was 40% higher than last year plus it looks like Indian import restrictions will be relaxed so why is it so hard to understand why gold is rising? It doesn't necessarily mean it's forecasting inflation it's simply like a cork that was pushed downwards and is now being allowed to float back up to the surface.

    For these reasons the bottom is in in my opinion and we'll see gold begin to approach fair value this year which no doubt is significantly over $2,000. After all how long can a commodity be priced at under the cost it takes to produce it? Bonkers.

    By the way i do believe gold was due a retrace last year but I'm in the camp that a pull back to around $1,550 was where it should have stopped and it was at these levels that the "cartel" really stepped up the interventions in order to bring in all the speculative shorts.

    ReplyDelete
    Replies
    1. Dominic;

      Thanks for the comments.

      Let me start with something really simple - you believe that "gold was manipulated downward during April of last year". Okay fine - that is your view and you of course are perfectly entitled to that. Markets consists of opinions/views/ Some are bullish and some are bearish. If there were never any differences, markets would not be possible as they would be no one for would be buyers to buy from and vice versa.

      Answer me this however - Gold dropped sharply last April plunging through major chart support at $1530-$1525 and then dropping $200 in days. You blame that on "manipulation".

      I say that is rubbish. Why? Because the Goldman Sachs Commodity Index plunged from near 640 all the way to 600 in that same exact time frame. The entire commodity complex was plunging lower. Why the hell should gold be moving higher when the vast majority of tangible goods were cascading lower in price?

      This is what I mean when I talk about folks bringing preconceived or prejudiced views to the market and attempting to READ THEIR VIEWS Into the market instead of listening to what the market is saying.

      The second thing - you say gold "should approach its fair value this year which is SIGNIFICANTLY over $2,000". PLease define "significantly for us.

      More importantly however - and this is not meant to be disrespectful but do you possess some secret esoteric wisdom that none of the rest of us mere mortals possess that you and you alone can tell me what a "fair" value of any good is? How do you know that a fair value for gold is significantly over $2.000? Answer - you do not, nor does anyone else for that matter.

      I will tell you what the "fair value" for gold is RIGHT NOW - are you ready for this... $1326. Yep, that is where it closed on Friday. That price is the BALANCE struck between buyers and sellers in a market that trades thousands of times per day in which some sellers were comfortable selling gold at that price and some buyers were comfortable paying $1326. If MOnday the price moves higher, then the fair value for gold will have arisen. If it falls lower, then the fair value will have fallen.

      No BS, no opinions, no speculations, no guesses, no extrapolations, just whatever the market tells us is the fair value.

      You should embrace this concept because it actually reinforces part of what you stated when you claim that physical demand for gold at $1200 could not be met. There you go - Gold was underpriced at that level. How do we know this? Why simple - the price refused to go any lower at that time. That means sellers did not view $1200 a FAIR PRICE for their metal. Buyers viewed it as undervalued and thus the price moved higher. But we only know that in hindsight. Not because some talking head over at KWN or any other place keeps parroting claims of the metal soaring to the stratosphere.

      The markets exist as a forum in which buyers and sellers can exchange a product at a price in which both parties are satisfied. When the majority view prices as too low, price will rise because sellers will be scarce and buyers will dominate. When the majority view prices as too dear, then buyers will be scarce and sellers will dominate.

      That is all one needs to know to trade. If I could possess this same secret wisdom that you possess, I would never have a losing trade again in my career because I could tell way in advance, exactly at what price level soybeans should be trading, corn should be trading, wheat should be trading, cattle should be trading. Guess what? I might have my ideas but the market could care less about my ideas. And truth be told, and again, no insult intended here, it could care less about your idea of what a fair value for gold is my friend.

      My advice, be careful... check your opinion at the door of price action.

      Delete
    2. "The markets exist as a forum in which buyers and sellers can exchange a product at a price in which both parties are satisfied."

      I have a real problem with that statement. While there is record demand of physical gold the price is still set on the futures exchanges where virtually unlimited short-selling can and does occur. We all know that the amount of paper trading far exceeds the amount of physical Gold that is available, otherwise record demand for Physical Gold would result in higher, not lower prices.

      Koos Jansen from "In Gold we Trust" has very diligently documented how China has imported over 2,100 metric tons of physical Gold in 2013.

      As far as the manipulation of Gold prices, all you have to do is listen to the quote of the former governor of the Bank of England who very clearly outlined why Gold had to be taken down:

      "We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake.

      Therefore at any price, at any cost, the central banks had to quell the gold price, manage it. It was very difficult to get the gold price under control but we have now succeeded. The US Fed was very active in getting the gold price down. So was the U.K."

      Edward 'Steady Eddie' George, Governor Bank of England 1993-2003

      It seems pretty clear-cut to me and anybody who is willing to open their eyes can clearly see that manipulation of Gold and Silver and Libor rates and interest rates and pretty much any financial instrument is completely rigged.

      Delete
    3. AK - who says there is "Record Demand" for gold? If there was, the price would be considerably higher. that is economics 101.
      If you are saying that demand from Asia is strong, I absolutely agree. that has been the case for the entirety of the ten+ year bull market in gold which ended in April when chart support collapsed.

      The problem with your argument and that of those who are constantly pointing to the paper markets is that what you are saying about gold is true about EVERY SINGLE COMMODITY MARKET listed on the US exchanges. Yet somehow, in spite of this, the price always eventually reflects the current balance between supply and demand. If that were not so, there would be no use for paper markets and the entirety of the commodity markets would be unnecessary.

      Do you not understand that there are more soybeans sold on the exchanges than are grown? Same goes for corn, wheat, etc.

      But back to my main point - your claim about "record gold demand" is taken straight from the pages of the perma gold bull camp. here is what is wrong with that argument... Western INVESTMENT DEMAND is part of the total gold demand and the simple fact is that for the last year and half or so, it has been non-existent. No one in the West wanted gold mining shares or gold. Why? Because there were no gains to be made in it... they were busy loading their boats with paper equities. That is a simple fact my friend. Now, we may not understand why people would want to chase stocks higher and higher and higher, but the simple fact is that is precisely what western-based investors have been doing, with pretty damned good results I might add.

      Delete
    4. As far as the quotes from the BAnk of England guy go - sure enough _ I agree that they were concerned about the price of gold - but when was that statement made and what era was he referring to. I promise you it was not made in 2013!

      Why would they need to worry about any "abyss" in 2013 except for the one that commodities were sinking into and disappearing?
      Again, no disrespect intended but some of you guys simply cannot seem to get it through your heads that gold is just another asset category. Sometimes it rises in price; sometimes it falls. It all depends on sentiment. IF sentiment shifts towards one of currency fears or inflation fears, gold rises. If sentiment shifts towards slow, lagging growth, deflationary pressures, etc. - gold falls.

      There are going to be times during which gold moves lower in price. That does not mean it is always and constantly under manipulation as some of these block-headed perma gold bulls insist.

      I maintain the same view I have had for many years now - the Fed is only concerned about the price of gold when the US Dollar is sinking in value and a vote of no confidence in the Dollar is growing in size. when the Dollar is rising in value against the majors - they watch the gold price but have not need whatsoever to worry about it.

      When you can prove to me that the entire commodity sector was manipulated lower by some nefarious, evil force working at the behest of the US government, then I will be your convert.

      If you notice, the entire sector has been rising of late and guess what gold is going - yep - going higher. How hard is that to understand? Do yourself a favor and take off the rose-colored glasses and see the markets for what they are - interrelated and interconnected. Gold DOES NOT TRADE IN A VACUUM.. there are many other factors that go into determining sentiment towards it.

      When you can understand this, the blinders will come off and you will see things as they are in the markets - We live in a shallow, unthinking, ignorant age in which people are far too prone to swallow shallow, insipid arguments instead of putting in the metal energy to really study the entirety of the markets and the various interrelationships that exist among those separate components.

      Does that mean that I believe there is no wrong-doing in the financial markets?Of course not - unlike far too many of these arm-chair analysts and huckster newsletter peddlers, I have to make a living in these markets and thus can tell you first hand about all the crap that occurs in them. I have learned however, that eventually the fundamentals ALWAYS win out.

      Thank you for your comments.

      Delete
    5. Dan,
      Thanks for your reply. You asked at what point the governor of the Bank of England made that comment and I honestly don't know but I understand that he was quoted after the fact when Gold was approaching $1,900 when apparently many of the bullion banks had been trapped on the wrong side of the trade.

      What happened thereafter was clear price manipulation. You as a trader should understand that if you selling a massive amount of paper Gold you are not going to do it in a thinly traded after hours market but you are going to piece meal it to get the best possible price. These massive sell order were designed to drive down the price blow key resistance levels so that the sell algorithms would take it even lower from there.

      In my book this is manipulation pure and simple.

      Delete
    6. AK;

      Sorry to disabuse my friend but that particular quote from the former Bank of England was attributed to him in the year 1999.

      I am under no illusions as to the consternation of the monetary authorities about the implications of a soaring gold price, especially if the Us Dollar is collapsing but the facts are that if you put up the gold chart from its peak made near the $1900 level, the US Dollar chart and the CCI or GSCI chart, it is no mystery what happened to the gold price and why.

      There was clearly official sector selling in gold to try to slow down the rise in the price of gold but many commodities were also soaring at the time. We had record corn and bean prices, etc.. etc.

      Talking about the official sector trying to stem a rapid rise in the price of gold is an entirely different matter than telling me - in full confidence - with complete certainty - that it was the official sector who drove the price of gold down below key support at $1530-$1525.

      Did this same official sector sell across the entirety of the commodity sector at the same time? did they sell corns, beans, wheat, coffee, sugar, and on and on and on? Did they somehow manage to alter the crop growing weather here in the US which was nearly perfect last year? Did they force the S. American growers to plant a record bean crop this year ( prior to the issues that just flared up down there).

      Do you not as of yet realize how utterly silly that appears to those who actually study the other markets and see the interconnectedness between them all?

      Please stop with this already. This is the wrong site for advocating that doctrine. You are of course welcome to read here and post plus I have grown weary and tired of refuting these baseless claims over and over and over again.

      And by the way, let me ask you a simple question? What other markets besides gold do you happen to trade? Do you trade beans? Or livestock? Anything else? the reason I ask is that if you did, you would realize the large orders during the thinly traded Asian session here in the US are all too frequent. It is generally large players pushing prices around in the thin trading conditions to attempt to catch stops above or below the market and influence the technical chart patterns. That is why many brokers will not bother to place stop loss orders during the Asian session - because they become easy pickings for opportunistic players. what you are talking about in relation to gold is not unique to that market and it is unfortunate that those who keep perpetuating these stupid theories have so little in the way of trading experience with other markets or that would know better.

      Believe what you want however my friend. Good luck in trading.

      Delete
  19. Speaking of Gold….as a Canadian allow me to gloat over our Men and Women thumping out USA and Sweden to snag both Golds in Hockey !!

    ReplyDelete
    Replies
    1. Nice going Dean, but I'll take Mikaela Shiffrin's win in the women's slalom!
      Who's your pick for the Wheaties box?

      Delete
    2. Steins

      Hey, I agree. After watching the Women's snowboard freestyle etc. I was wondering if a bunch of super models decided to take up down hill snow sports!
      Most of them were knockouts !
      No argument from me….first thing in the morning I'll gladly stare at Mikaela's pic on the cereal box !!

      Delete
  20. Dan -
    Thank you for continuing to be clear eyed and analytical. As John Adams said, "Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence."
    To the point for me-your refusal to ignore facts allowed me to close most of my positions before the big drop in gold & gold shares April 2013. Pretty much have followed you daily since & picked up some decent trading skills in the process.

    ReplyDelete
    Replies
    1. MDLGTO;

      Thanks for the kind words....I am so glad to hear this... investing is not easy, nor is trading, especially in today's markets but we do the best that we can and stay diligent students and hopefully we can not only survive but prosper somewhat.

      Delete
  21. Thanks for your reply Dan.

    Yes I do believe it was walked down. The sheer size of the sell orders that came through at the time left little doubt in my mind that it could only be someone with almost endless pockets that could execute such a trade. Who ever it was had only one intention and that was to break support and being in all the sell orders. You may say it was the work of hedge funds and that's fine as it's your opinion but I remember reading many different articles around the time about the size of the trades and they seemed to point to a much bigger force at work.

    Also, ask yourself this. If you are trying to control the price of gold (and you at least agree with me that the cartel do step in from time to time to slow gold down) then what better way is there than to break that absolutely critical support? They knew that if they could break it, gold would be severely technically damaged and would no doubt lose another 20% and it would take years to repair this damage.

    What better way to buy yourself more time? And we know that central planners in the West love buying time and keeping their ponzi low interest schemes going as long as possible.

    Additionally you mention the entire commodities sector dipped. Well that's not surprising. Silver follows gold and no doubt gold getting smashed rung a lot of deflationary bells in traders so of course the entire sector suffered. Isn't it possible that the price of gold crashing lead the entire commodity sector down?

    Of course if you were trying to cover up a gold price crash a falling commodities backdrop would work very well wouldn't it... I guess i'm just more cynical as i get older.

    Dan my fair price of gold is derived mainly from the balance sheets and levels of debt that exist. Historically speaking gold is extremely undervalued by these measures.

    A key point here is that you have to realise I am NOT A TRADER. In your game it doesn't matter if the market is right or wrong because the market is always right. You have to smell which way the price is going irrespective of your views on "fair value". I buy, hold or sell based on my long term view of the fundamentals. In this case gold and silver are severely undervalued by almost any metric one could wish to use and I believe that if i employ patience then the price will rise significantly.

    The notion of equilibrium price being set by demand and supply to me seems almost ridiculous these days as so many markets are likely rigged with LIBOR being the tip of the iceberg. Long term though fundamentals always win from my experience.

    You didn't respond to my point about the silver ETFs. Why did they not see the same exodus as the gold ETF's despite their price falling even more??

    Thanks for your advice. Despite our differences I agree with much of what you say and always enjoy reading your daily blog.

    I'm off on holiday now. Take care Dan, I'll check back here in a few days.

    I', an investor so fo rme i

    ReplyDelete
    Replies
    1. Dom;

      I agree that one should own physical gold as insurance against what the monetary authorities are doing but I do not believe it is prudent to do as some of the gold bugs have done and that is sock 100% of their net wealth into all things gold. Those who did something so foolish as to put all their eggs into one basket have essentially killed themselves financially because they continued to listen to all the false gold prophets. I can tell you from first hand emails about many in their older age, who are no longer able to work or have retired and who were putting all of their wealth into gold, who now have watched their retirement years been devastated because of the fact that while gold was falling lower in price and collapsing, they believed the same siren songs from these same people, who should have been discredited by now.

      What I find so terribly sad, is that some folks get burned but keep sticking their fingers into the same fire over and over again.

      That being said, please tell me who "walked down" the price of corn, the price of wheat, the price of coffee, the price of sugar, the price of beans, the price of gasoline, the price of copper and on and on and on? You have the cart before the horse my friend. The rest of the commodity complex did not move lower because some evil force sold gold lower but gold moved lower because the rest of the commodity complex moved lower and the US Dollar moved higher. How hard is that to understand?

      My goodness, if it were that easy to take down the price of corn or meal, I would expect that the livestock producers would form a nice coop to sell all the gold that they could on the futures markets and thereby force down the cost of their feed needs!

      Look at the price charts Dom- they paint the story for you....

      Delete
  22. Hey Hubert; Just a simple question and it is , "where exactly do the pm bulls get their information about how much gold the Indians and Chinese are buying month in and month out"? I just love Maguire and his informed wholesale contacts and so forth, which of course are shills that can no be identified, or as they say, he spoke on the condition of anonymity, hahahah, what a clown; let them buy until the cows come home; we will see how they act and talk when we take another peek down at the so-called double bottom at 1180; sparks

    ReplyDelete
    Replies
    1. Steve,

      This Maguire guy talks to these powerful and secretive "entities" who know everything (I mean EVERYTHING) on a daily basis, and as soon as he finds out what will transpire, he runs to let us know. That's the kind of a guy he is. Perhaps you haven't heard, but a 42-year market veteran just confirmed Andrew's claims. He's also privy to this exclusive information and he also said that chaos will ensue soon bringing collapse and devastation of the entire financial system!!!
      I believe this guy even though he was calling for this imminent and earth-shuttering collapse for the last 6 years, which for some odd and unknown reason didn't happen yet.

      Delete
    2. Three taps and out i have learned on mineset.

      Delete
  23. Steve,

    Regardless of the true numbers, manipulated or not, It was enough buying in India to increase the taxes on GOLD as to reduce the CAD... IMHO, that is a form of manipulation.

    However, Dan is 100% correct that the price is approx $1320 why? I disagree with him that is the free market per se, but because I can go down to any coin dealer and buy the PHYSICAL metal for approx $1320 plus normal markup. When i can no longer do that, the price is manipulated pure and simple... Silver was almost to that point last year when they were getting over $8 per Silver Eagle, because the paper price was not matching the physical price. Having said that, it could have been the coin dealers "MANIPULATING" that one...

    Who knows, but if people think there is NO MANIPULATION, they are ridiculous. It is just a matter of how much and to what extent.

    ReplyDelete
    Replies
    1. BTW, I cannot stand KWN as they are insane with their sensationalism....I do not know the TRUE numbers, nor does anyone else...

      Kind of like unemployment numbers. You have U3, U6, Shadowstats, and the truth...the last one seems to be elusive..

      Delete
    2. Nate; I have been to a few coin dealers over the years, and no offense to them, but they are really not too sharp on balance, but having said that, we shall see what unfolds; I certainly do not know; sparks

      Delete
  24. KWN full of crazy headlines again:

    "Earthquakes"
    "Chaos"
    "Unprecedented Turmoil"
    "Horrifying Collapse"

    Funny thing is that all of the above has already happened.

    In the gold mining sector in 2013.

    Yet how many of these "acclaimed experts" and "40-year veterans" predicted it in 2011?

    None!

    ReplyDelete
    Replies
    1. Mark,

      An outcome of a rain dance has a lot to do with timing. Sometimes several months pass before the rain actually falls, but we all know that would not happen, hadn't those guys in buffalo masks danced like there's no tomorrow.

      Delete
    2. How many experts predicted the crash of 08/09 ?
      How many predicted the crash in housing or the Dot Comm bubble?
      How many do you know escaped all of the above without loss ?

      As far as I am concerned we are being fed nothing but crap from just about every entity regardless of source.

      Delete
    3. Perhaps you shouldn't just look at the headlines but actually read some of the content. Most of these guys are talking about macro-economic facts that are undeniable. It should be obvious to every one that our the mounting debt is not sustainable and at some point there has to be a collapse or a default. With the entire world leveraged to the tune of $1.5 quadrillion in financial weapons of mass destruction also known as derivatives, it is not too difficult to forecast that there will be hell to pay one day. It's anyone's guess how long the powers that be can hold it together but in the end it won't be up to them.

      Delete
  25. Also…. In the last month co-workers and others who I never discuss investments with have started giving me "Hot Stock Tips"
    Most come with claims of easy doubles or 10% + dividends with no risk…blah blah blah….easy money !
    Let me think…where have I seen this played out before?

    ReplyDelete
  26. Dear Mr Dan, One of the reason fr commodity rally is that it is playing catch up with equityies. Generally economy lags equity rally by 6 months. So if economy is about to catchup with equity then commodities are going to catapult higher as they fell while equities rose past 3 years.

    ReplyDelete
  27. Ie if equities sense that economy is going to improve, then 6 months later when economic improvement does start to materialize, it cannot be possible without rising demand for commodities.

    ReplyDelete
  28. "I always believe that prices move first and fundamentals come second" , Paul Tudor James

    We are not the privileged elites so we shall come to know of the reasons after the rally is over!

    ReplyDelete
  29. Not that I hold too much weight to the below, but I hope he is right this time....

    ""For the Records: $2000+ Gold in 2014 EASY!""
    "I do not care what the price is now, it must go there." -CIGA Bo Polny

    Source:http://www.jsmineset.com/wp-content/uploads/2014/02/clip_image002_thumb13.jpg

    ReplyDelete
    Replies
    1. That quote comes from Gann.
      http://www.wdgann-lost-secrets.com/mysteries-pg-4/

      Delete
    2. Jim Silver;

      The odds that he is correct are exactly 50%.
      The day must be sunny tomorrow has the same sort of predictability.

      If you pay him enough money he might just tell you how long you will live also.

      Delete
  30. Replies
    1. Hubert;

      which one was it buddy?

      Delete
    2. Dan is playing mind games with us. This is an elaborate scheme to get us over to the other side and deliver us all to the Dark Lord. The ultimate object of the war is not the ring, but the price of gold, which must be set free by the good guys, and desperately tried to be suppressed and manipulated by the Dark Lord. This is the final battle in which the powers of good will win, despite the overwhelming odds stacked against them.
      Sorry Dan, but you and your Master are going down as will be evidenced by the swift liberation of the physical gold price and detachment from the paper price. Then, when you buy silver, or sugar, or wheat, or copper, you'll have to find a place to store it, my friend, because it'll all be physical. Remember that song from Olivia Newton-John, "Physical, physical...", it's all about the gold.

      Delete
    3. Abraxas;

      You have gotten that one completely wrong my friend. It is not Voldemort that I am serving but rather Sauron... Geesh - how many times do I have to get off of my fell dragon to set the record straight?

      Delete
    4. Sorry man, I always confuse these two for some reason.

      Delete
    5. Abraxas;

      I will let it go this one time but the next time - I am going to turn you into an orc! :o)

      Delete
    6. err...never mind, a long documented one...I may have pressed the wrong button in the end...and failed to post it entirely :)

      Delete

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