“Woe to the land whose king is a child and whose leaders are already drunk in the morning. Happy the land whose king is a nobleman, and whose leaders work hard before they feast and drink, and then only to strengthen themselves for the tasks ahead”. (Eccl 10: 16-17)


"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


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Tuesday, April 22, 2014

Goldman Sachs Saves Gold from Falling Apart

Yes, you read that headline correctly, much to the chagrin of the GIAMATT crowd. What am I referring to? Answer - this morning, two analysts from that firm upgraded their recommendation on the precious metals mining sector to "Neutral" from "Sell". They cited " a more responsible use of shareholder wealth". I found that rather interesting to say the least.

What was even more interesting was the headline that the story came down the Dow Jones wire under: " Gold Miners Now Less Likely to Torch Your Money". While it is a serious matter to those who have been so hurt by investing in this sector, I had to chuckle at the caption that the reporter chose. I think it pretty much summed up the sentiment of many toward these miserable things.

It was this upgrade of the miners which kept gold from utterly collapsing below critical chart support centered around the $1280 level. Hedge fund selling leaned on the market early in the session with a couple of approaches to $1280 on decent volume. Price rebounded away from that support but could not manage to make much upward progress. A big push finally took it down through $1280 but with the gold miners refusing to follow, short covering took the price back up again.

Obviously, there is a fierce battle occurring over this chart level. Whichever side blinks first, is going to lose it. As mentioned in recent posts, speculators are becoming more interested in playing gold from the short side, although, I wish to reiterate, they remain net long still. They are selling while bullion banks are buying to cover shorts. Ignore any talk about this being a plot of the bullion banks to take gold lower therefore.

Hedge funds are already net short copper, very close, if not already there now, net short silver, and are reducing their net long exposure to gold. If the gold price cannot find its feet right here, right now, watch for increasing long side liquidation and a new wave of fresh shorting.

Here is a look at the gold chart:



Notice how it is flirting dangerously with that red line that has held it going back to early this month. If it cannot recover quickly, price should move to test $1260, and then $1240 if that were to fail. Again, were it not for that Goldman recommendation on the mining shares, we would not be talking about $1280 at this point but rather whether or not $1260 is going to hold. Those who keep with this non-stop gold is being manipulated lower by Goldman Sachs and JP Morgan talk would do well to thank them at this point for saving their investment account from even worse harm.

There is nothing gold for the bulls as far as any sort of upside potential unless gold were to push past $1320 for starters. We'll have to see how Asia responds to the move lower this evening. Last night was not exactly a stellar endorsement. Maybe picking up the metal another $7 - $10 lower will make a difference.

Incidentally, those Newmont Mining/Barrick merger rumors are continuing today.

It sure did not help gold any today watching crude oil get whacked lower. It is still trading above the $100/barrel level so it is not exactly falling apart but it does appear that the $105 ceiling is still very much intact.

In yesterday's post, I mentioned the planting progress or more properly, the lack thereof, in regards to corn. The "corn is never going to ever get planted this year" guys pounced all over that driving it back up above the $5.00 mark. That pressured beans as traders are concerned more farmers will have to shift to beans instead of corn. You will have to watch the weather forecasts to figure out which way these things will go from here on out.

 Welcome to the start of grain trading season!

By the way, for those who enjoy inflicting pain upon themselves, try trading coffee if you are bored. After imploding early last week, it went flying upward on Thursday last week just about erasing the losses from the two previous trading sessions. It then fell yesterday but decided to rally over 7.5% today. In the process it managed to score a 9 week high. To put that in a bit of perspective - that is an over $4,200 move in a single contract in one day! Maybe tomorrow or Thursday it will give it all back up again. Seriously, unless you really know this particular market, leave it alone. I know a couple of guys who traded that stuff and ended up having it cost them their commodity trading career.

I mention it only as an example of just how wild and unpredictable these commodity futures markets have become on account of the computer generated buying and selling. It is the norm, not the exception. Remember that whenever you are tempted to swallow that "flash crash" nonsense that constantly surfaces whenever gold has a sharp move lower. These sorts of insane price swings are everywhere, in every market anymore.

Let's see how gold fares the rest of today. Perhaps I will post a more updated chart later this evening depending on how things go. Bulls are piggybacking on Goldman's recommendation to keep the price supported for now.







69 comments:

  1. Thanks again Dan.

    The Ukranian situation seems to be having no effect on gold whatsoever at this point. Nada!

    I'm sure we can take Goldman's word on how to trade the miners as safe financial advice. :-P

    On a seperate note, I see a steady movement towards an increased anti-Saudi MSM meme starting to take shape. What it ultimately leads to as far as US policy or relations with SA remains to be seen.

    But somewhere in the background of an old newscycle is the shadow and spectre of a huge (and militarily ready) Egyptian military that leads the country by edict more or less.

    Mubarek's "departure" at this point seems like a long time ago and it's somewhat amazing to think an event (and military soft overthrow) of that magnitude has gotten lost in the MSM mix but it's probably not far from the minds of the Saudi's how easily a once stable (and US enabled) ally can suddenly go "poof!"

    There is no shortage of examples of how once longtime US allies can suddenly or eventually find themselves on the outside looking in (sometimes from out a prison cell window) once their usefulness has eroded.

    SA is headed down that road.

    ReplyDelete
    Replies
    1. DPH;

      If I were an American ally and watched what has been happening on the current admin's watch, I would be looking very nervously over my shoulder as well.

      Delete
  2. Thanks Dan. Can you do a Silver breakdown too? Do you see a major technical move coming very soon as well? Thanks

    ReplyDelete
    Replies
    1. Bob;

      Silver needs to hold $19 or it will be at $18 - $18.25 fairly quickly. I think silver is dependent on Chinese economic data more so than US economic data to be honest as it is trading more like a commodity / industrial metal at this point instead of a monetary metal. If China continues to slow or if data out of there shows further credit problems, I can see silver being pressured especially if the hedge funds are going to attack it from the short side.

      It still looks heavy to me as it pops its head up and attracts selling rather than buying. So far enough people see value in it near $19 that it is holding. But one never knows where the "value" level can shift to.

      As far as any major move goes - I have no idea and quite frankly no one else does either, in spite of any claims that they might have to the contrary. That is, anyone with some credibility. There are plenty of barkers out there who have all kinds of ideas. I heard a commercial on the radio just today from Lear Capital quoting Sprott ( who has no credibility) that silver would be at $50 soon. Sure it will; so will elephants roost in trees at night.

      When the chart tells us that the metal is ready to run, either way, we will hopefully be able to see it.

      Delete
    2. Awesome Dan, thanks. I concur, China is key. Will be watching Copper too.

      Delete
  3. Was it not you DAN who sed that even the FED would not want GOLD to collapse as it would indicate a severe deflationary environment? Seems to me with the stock market the only beacon of ANY life out there, if the gold bugs run for the hills and imported energy and internal issue here the beacon may stop shining. Just sayin the weirdest market in history and the liquidity and Huge debt really seems like one big Boom.

    ReplyDelete
    Replies
    1. White Wolf;

      Yes indeed, I really do believe that the Fed does not want a SHARPLY LOWER gold price as that is exactly what it would indicate - a severe deflationary contraction. The Fed is scared to death of deflation because there is only so much that they can do to fight that ( QE) whereas with inflation, they feel that they can control that through the short term interest rate market (fed funds/discount rate).

      If gold were to break down sharply, I am pretty sure they would begin to ratchet up the QE rhetoric once again. That would pressure the Dollar and would tend to draw hot money flows back into the overall commodity sector. The problem has been that in spite of the massive amount of QE, they have not been able to produce the inflation that they so sorely want to produce, mainly, in my view, because the job market sucks.

      If the payrolls numbers start picking up, they will feel better about things. If not, Yellen will introduce that element of "flexibility" meaning that the Fed will retain the option to hold off on further tapering. Everything is so doggone data dependent that we all have to sit around and parse every single economic data release ( modern day entrail reading ) to discern what the Fed may or may not do in that regard.

      We no longer have a pure capitalistic system or markets that are efficient. What we have is a casino in which traders place bets on what the Fed may or may not do. it is quite pathetic but then again, it fits with the overall decline and rot that we see infecting the nation in general.

      Delete
    2. without inflation in wages deflation wins, deflation with global stagflation will eat even the fed up

      Delete
    3. You guys know the real farce? Remember when all this was in its beginning of the end stages, when Ben said HE could deflate the Fed balance sheet? Remember those days way, way back when. Remember Barack O's super intelligent Economic advisers? It was all BS. And as far as they are concerned they worked miracles. Wow, what a crock of horse manure. Not one thing that was predicted came true. What did come true is still one of the lowest labor participation rates in history of the US. I still stake my name on the fact that we ARE in a recession and never left it. Who knows what real GDP is? I mean the labor stats are Horse manure, the cpi stats are Cowpies, the only thing they have is the stock market, and Dan you have shown clearly the debt levels are running almost Identical to the Fed balance sheet. With that in mind I now say it was their plan all along. I say they all should be thrown in jail. Especially the CDS manufacturer and dealers. They should be in Jail Corzine should be in Jail. Blythe Masters, Jamie Dimon, Mr. we are doing Gods work blasphemous Blanfein. I mean Americans have been so dumbed down that the whole country does not even know what hit them. If I was a..ahhh..heck. It doesn't matter. Dan thanks for your blog. God keep the faith that HE WILL PUNISH for us. That is the hardest line in the bible, that I have to love these sinners, but , I can still hate their Sins. Have a great night everyone.

      Delete
  4. Yamana Gold is "Exhibit A" on how investing in PM companies can result in a total wipeout of your retirement account.

    A stark constrast to "Botox" manufacturer catering to the "Resilient Consumer", Allergan jumping to new world record highs with many firms pursuing it for an acquisition. Cleared $160 with ease today, that's well over 500% gain in 5 years.

    Stay in the System. The Consumer has never been stronger.

    ReplyDelete
    Replies
    1. Mark, I've decided to sell all my assets and place all the cash from said proceeds in recycled plastic pellets. I'm gonna be rich baby!!

      https://ca.finance.yahoo.com/news/earth-day-2014-u-recycled-181100041.html

      .

      Delete
  5. 4.15pm Update ( of my earlier post on the previous blog):
    "
    1.45 Eastern time
    Gold Price sharply down ( has not yet broken 1279 support) but ^HUI is up nicely- a ( bullish ? ) non-confirmaiton for Gold stocks ? Time to step into GDX and GDXJ again ? Need to wait for the close. SA in Gold and HL in Silver are showing nice strength and I am gradually accumulating.
    "

    ^HUI, GDX, GDXJ did indeed close higher ( an downside up reversal ?) today on decent ( not great volume). Perhaps it was gOD_MAN Slacks . After all Blankfein has openly confessed to doing god's work (Note " g" is not capitalized so as to not violate one of the 10 commandments ).

    Gold stocks appear to have found support. Safer to nibble on GDX, GDXJ till an uptrend is confirmed ( only AFTER Gold crosses 1420 ). Until then play the range with GDX, GDXJ and for risk takers: SA, HL, FSM, AUY

    UEC, a play on Uranium may have been overly sold in last few weeks ( and may rebound to around $1.50 for a 30% move- NO guarantees from mgmt).

    ReplyDelete
  6. Now gold must close above 1300 to become neutral on a daily time scale...as long as it remains within the red pitchfork, the trend is down, and the MACD croissing down, and the CDur going down, is not exactly a bullish setup imho.
    Of course, it is "still" neutral as long as 1280 area is holding...but I don't like the look of it this time, because of all those indicators, plus ma20 down, etc...so...I will pass, this time, and wait to see if at least gold can make it above 1300...or plunge to the abyss.

    http://i61.tinypic.com/amqhds.jpg

    ReplyDelete
  7. One of the reasons why I bought lately at 1280 was that prices were meeting with the mlh inf of the upwards pitchfork on the 2day time unit.
    Also the bollinger inf was near and heading upwards.

    http://i61.tinypic.com/iwspdl.jpg

    This support has been broken now; and the inf bollinger reversed course. There is no range forming on the bollinger bands as I once thought it could.
    Price may reach 1270 in a blink imho.
    So I'm out of the market, both on gold and silver, simply watching.

    ReplyDelete
    Replies
    1. Hubert, from what I've read from your postings you seem to be strictly a trader right? I'm just a little curious at what price you would be a purchaser of the devils metal (silver) if you have any core holdings. I've only been posting on this blog for a short time so I'm unaware if you have disclosed such information in the past. Also, from what I can tell looking at the ten year on silver major resistance on the downside looks like 15.00 and the upside is 26.00. Does that sound about right? Thanks in advance!

      Delete
    2. Hi John,

      I'm posting my trading here because this a blog about trading, but I also have some physical gold, which I bought since 2007.

      I can't really answer your question before I know if you have the possibility and intention to hedge your physical position with paper trading, via futures, CFDs, or options. Also the answer depends on your strategy, which part of your capital do you want to invest in silver, why, etc...
      so it's really a tricky question.
      Let's suppose you can't hedge your position and simply intend to buy silver to try to make a profit on the long term.
      Then I'd probably buy a small line now, but being fully aware that prices may drop to 10 $ someday. We are not very far from the production costs imho, a few dollars down from there.
      So the upside potential for silver in the long term seems much bigger than the downside potential, in terms of nominal dollars you put at risk.
      But still...a few dollars down means a significant percentage of loss. So I'd definitely start building my position with quite a small line.
      I would add up when silver goes through technical resistances above. So I would increase my position while keeping an average buying cost under the price of silver, protecting myself from the risk of a big loss, even with a correction. I would then use T.A to try to follow the trend and buy the dips as long as the upper trend goes on.
      In case silver keeps dropping, well I would accept the losses, and maybe would start buying a little more only in case of a capitulation of silver showing me that it really reached a bottom it doesn't want to break. Then I would accumulate once I see the signs of a reversal, and the average price of my line would be pretty close from that bottom.
      19 is not too bad a price to buy a little bit of silver if you don't have any and if you plan to keep it during the next 10 years if necessary, as it is indeed a support, and one doesn't know yet if it will hold or not.
      But definitely, I would keep it small.
      Silver is volatile, and it can very well collapse and meet 10 $ level again. Who knows?
      But even if it reaches 10 $...it's a loss of 9 $, for a potential long-term gain of 30 $ if we meet someday again 50 $ for the third time.
      So, why not. But really with the money I can spare and will not need in the near future.
      This is my personal opinion. I'm not a professional trader, neither a professional investor. I'm just discussing this with you because you asked, but I don't feel like I should advise you to do it. It's too specific and personal decision. My only advice : don't get greedy.
      Greed is bad for your wealth, unless you have the skills and mind of Gordon :)

      Delete
    3. Hubert, thanks for the reply and don't worry about my following your investment advice. (no offense) I follow the old adage of listen to everybody and follow nobody. What I do with my cash is on me and me alone and I'm just looking to exchange ideas and information with the brain trust. That being said, I understand your dollar cost averaging theorem and that's good advice. What I was really trying to pick your brain about was at what price would you say silver looked cheap. You mentioned silver was nearing the cost of production so at what price would you consider it being a gift? After reading your reply I would guess that you would say around 10.00 or so. I will more than likely start backing up the truck between 12 to 15 dollars. If it spikes lower than that no big deal and I will be happy disappearing several more monster boxes!

      Delete
    4. Hi John,
      Got it finally :)
      Then yes, at 14 $, with a long term point of view, silver would look like a gift to me. A 50% increase would send it already to the 20 $, which I'm confident it would eventually reach sooner or later, even in the case of a strong depressionary scenario in the short term.
      But as you mentioned, I confirm you that I don't exclude completely the possibility to see a short term collapse of silver all the way back down towards the 10 $ level, though the chances seem quite remote to me. That would correspond to extreme deflationary pressures on silver & gold as well (sub 1000), high gold/silver ratio (80 and more).
      As Dan mentioned, the Fed doesn't want the thermometer to move too much...one way or another.

      Delete
  8. I wish you would stop referencing "critical Chart support" as if that had anything to do with anything.

    The impact of fraudulent HFT more than offsets legitimate market trading.

    You can't have true price discovery until the paper futures market is divorced from the physical 'take delivery" market.

    Any discussion of "critical chart support" is meaningless until the charts measure what is actually happening.

    ReplyDelete
    Replies
    1. ton80;

      I've got a better suggestion for you. How about you stop wasting your time ( and more importantly, ours) by coming to this site and reading it. Why you people visit websites that you despise is a mystery I will never be able to comprehend.

      This website is written by a trader - we traders read charts - charts have areas of support and resistance - price breaks of these areas are significant - therefore I will continue to reference them as critical - get used to it or get lost.

      Delete
    2. ton80, did you have the same opinion of a false paper futures price discovery when silver was 48.00 during its parabolic launching? I think this is a pretty legitimate question. Also, if these false paper markets allow you to buy the metals on the cheap in the near future when you think they should be priced much higher isn't that a monster buying opportunity?

      Delete
    3. "Any discussion of "critical chart support" is meaningless until the charts measure what is actually happening."

      @ton,
      basic technical analysis on many time units allowed me to make successful trades during the last years, "right on the spot".
      So to make it short, technical analysis is working and proves all the time that your statement is dead wrong.
      Just claiming that TA doesn't work proves that you are in denial or you just don't know how to use it.
      It's never too late to stop criticizing and start to learn.

      Delete
    4. Dan, Taylor, and Hubert, as regards ton80; Everyone forgets that at the end of the day, most investors, traders, specs, and gamblers really want to lose, and you heard it here first in sparks

      Delete
  9. Steve, I may be the exception because as far as I'm concerned losing brings me no pleasure. Something that brings me zero pride to admit is that I've been involved in some sort of gambling/speculation since I was eight years old. My old man gets all the credit, but nevertheless after 33 years of chasing money the donkey/degenerate in me died years ago. I'm a much happier person now that I'm no longer an action junkie! (nothing like found money though) lol

    ReplyDelete
  10. really ??? Now we say that GS stopped gold from tumbling further ??
    and reason being that they upgraded gold miners when just a couple of weeks ago they kept there call on Gold for 2014 at 1040 if I remember correctly.(please correct me if I am wrong on that number ) At 1040 many of the miners would have to curtail many new developments or put on maintenance many of their existing operations. What I say is that GS has never been objective when it comes to this small part of the market but now with MS and a few other banks getting out of the commodity business. GS may just be the sole big bully on the block. I never heard them upgrade gold today, so why would they upgrade the miners when they are calling their underlying product to crash in 2014 ??

    ReplyDelete
    Replies
    1. I was close, they, so which side of their mouth can you believe as they kept their call at 1050. So now will the miners charting be independent of the gold price for 2014 ?
      http://www.cnbc.com/id/101331595

      Delete
    2. Thats what confused me also. I mean at times there can be a bit of disconnect between bullion and miners but if gold went to 1050 the result for miners would be equally devastating.
      Wonder what GS motive is on this recommendation....

      Delete
    3. Prophet
      Yes just my point..You can talk about charting all you want but when so few carry such a big stick, they can color these charts as they please and yes, if you knew what this big stick was going to do next and from which side of its mouth he would talk at any point in time, you would be in the loop and make money on every turn. Fundamentals do not mean anything at all and all that is left as defense in this sector are charts as they just follow past price action and acted upon accordingly. Those that base their predictions strictly on fundamentals are at the mercy of those that carry the big stick which is at the essence of CRONY CAPITALISM touted as a FREE MARKET !

      Delete
  11. A few days ago I commented on China's decision to import gold directly into China and bypass Hong Kong.
    As a by-product of that, if not one of the secondary reasons, the data available regarding the pace of gold imports (or exports?) will become unavailable or unknown.
    It seems possible that given the current turbulence in China's banking sector (the official one and the shadow one) that some liquidation of gold holdings will take place as some banks will need to sell gold to raise capital during this phase of China's bubble showing some leaks.

    This MW article last night touches on aspects of what I was getting at. With the yuan now weakening incrementally and China needing to slow down the pace of it's decades old multi-trillion dollar/yuan monetary stimulus that mostly went under the radar until fairly recently.
    It seems very possible in the short term that China and it's banks slow down on their imports and possibly export some gold (to Russia?) and they don't want any data indicating that.

    There's something about the recent China/bypassing HK that belies something bigger behind the story imho.
    ¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤

    April 22, 2014, 9:29 p.m. EDT

    Will China drop gold next?
    Commentary: Chinese gold demand vulnerable to yuan carry-trade reversal
    Stories You Might Like

    By Craig Stephen
    HONG KONG (MarketWatch) — Investors have done well in the past with a simple strategy of buying what China was buying. So earlier this year, things were looking up for gold when it was revealed that China had swept past India to become the world’s biggest buyer in 2013.

    Apparently Chinese consumers had rediscovered their affection for the yellow metal and gone bargain hunting after prices shed 28% last year. The China buying dynamic was credited with restoring gold prices to their upward trajectory.

    But now, a succession of holes in the bullish China gold-demand story have appeared.

    Last week, the World Gold Council (WGC) forecast China demand would likely be flat this year, suggesting last year’s surge was a one-off event.

    There was also a worrying explanation as to why Chinese gold demand slowed so precipitously: The WGC revealed that China may have more than 1,000 tonnes of gold tied up in financing deals.

    This suggests a big chunk of China’s gold demand is a part of another growth story, namely the spectacular growth in China’s shadow banking, for which that the government is now trying to apply the brakes.

    Put another way, gold demand in China has become a function of the enormous yuan carry trade, where U.S.-dollar borrowing has been used to fund exposure to all sorts of yuan investments.

    Reports suggest using gold as collateral was just another way to secure U.S.-dollar loans which could then be funneled back into China.

    So resources which the world thought it sold to China for consumption have turned out to be for something else. More likely, those purchases were just another way for shadow-banking liquidity to find its way into speculative areas such as property investment.

    China does not release data on its gold purchases, but one proxy for the size of gold financing deals is the growth in mainland China’s gold imports from Hong Kong — these have leapt from less than $5 billion in 1990 to roughly $70 billion in 2013.

    The collateral connection clearly takes some shine off the China gold narrative. For one, it looks unlikely previously spectacular China gold demand will be repeated. Instead of the 41% growth we saw in the past year, the WGC now foresees Chinese physical gold demand rising at a more pedestrian 25% by 2017.

    One conclusion is that marginal demand growth for gold in China is less about physical buying and more about volatile shadow banking, which the authorities have been trying to rein in.

    This also raises the possibility of a gold crunch, depending on how the People’s Bank of China flushes out the yuan carry trade by orchestrating a weakening in the Chinese currency......(cont.)

    ReplyDelete
    Replies
    1. Here's the link to the 2 page article above...

      http://www.marketwatch.com/story/will-china-drop-gold-next-2014-04-22?dist=beforebell

      Delete
  12. Agnico Eagle upgraded at RBC as bid for Osisko looks like a success

    ReplyDelete
  13. In 1914. noone expected WW I to happen as it happened. Everyone thought victory would be achieved quickly. Napoleon wars were wars of movement, not entrenchment. To everyone's disbelief, once the process started, WW I lasted 4 years and killed millions of people.

    In 2014, noone is expecting WW III to happen. Everyone thinks that nuclear dissuasion makes war against a nuclear power impossible. To everyone's disbelief, once the process will start in Ukraine, WW III may end up blowing up tens of millions of people.

    Carelessness is the greatest danger for the human race.
    Let's keep thinking all future Cuban crisis will be solved without any problem.
    Let's keep thinking Dr Strangelove is a totally absurd movie.
    Let's keep playing Candy Crush on Facebook while armies and navies of two nuclear superpowers keep getting closer to one another everyday.
    There is no risk at all.

    http://rt.com/op-edge/ukraine-seeks-conflict-with-russia-816/

    ReplyDelete
  14. The prevailing sentiment is that Putin is in control and winning the current East/West paradigm underway in the Ukraine (and Syria).

    But is that really the case? How long will it take the Russian populace to start grumbling about there economic condition and there future under Putin once they fully realize that he and his cronies have skimmed tens of billions of dollars/rubles from the Russian economy?

    These failed bond auctions can't go on forever. Putin might be winning the PR battle against the US/NATO but can he win the financial war he's about to realize that he's becoming surrounded by?
    I think not.

    All the anti-USD axe grinders out there who think or hope that Russia or China is about to crush the USD are completely deluded if they think Russia and China are currently in position to do such a thing anytime soon.
    ¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤
    April 23, 2014, 6:57 a.m. EDT

    Russia cancels bond auction as Ukraine tensions rise


    By Sara Sjolin


    LONDON (MarketWatch) -- Russia's Ministry of Finance said on Wednesday it canceled the sale of as much as 10 billion rubles in bonds maturing in August 2013 as demand was too low, according to Bloomberg . The ministry said in a statement on its website it scrapped the planned security sale "due to the absence of bids reflecting adequately the credit quality of placing bonds". The weak demand for Russian bonds comes amid escalating tensions between Russia and Ukraine, with U.S. Vice President Joe Biden warning Russia to pull back its troops from Ukraine's borders. Despite efforts from the U.S. to calm the situation, the crisis has intensified as Kiev accused pro-Russian separatists of torturing and killing two people and of shooting at one of its military planes. Russia's MICEX index XX:MCX -0.70% traded 0.6% lower at 1,327.02.

    marketwatch.com

    ReplyDelete
    Replies
    1. Dark; Very good to hear someone talk down the greatness of China and Russia, vs. the irresponsible perma pm bulls, who have the $ collapsing any minute now. Agreed that we have broken mkts worldwide and I am no admirer of our FED, so why are not all the gold PHYSICAL "stackers" all not moving their families to the aforementioned above countries? sparks, of course

      Delete

  15. National Bank Steve Parson , Yamana, Agnico both clear winners in Osisko deal

    ReplyDelete
    Replies
    1. I am slowly averaging into AUY ( ironical if GG makes a bid for KGC and then it gets half of Osisko at a lower price with AUY stock sharply down) and also into SA, KGC and IAG as possible buyout candidates. Latter two much under book value with IAG having a hidden gem ( a cash generating highly profitable rare earth--Niobium -- mine in safe Canada )

      Delete
  16. ^HUI: If it can cross and stay over 235 that would be a nice double bottom.
    If it fails and then falls in next few weeks to under 216 then that is not a good sign )

    http://finance.yahoo.com/q/ta?s=^HUI+Basic+Tech.+Analysis&t=6m

    ( Ignore conspiracy theories, philosophy and religion when it comes to asset pricing and stick with the message from the market. Some old timers like me will remember Marty Zweig and Stan Weinstein )

    ReplyDelete
    Replies
    1. Two of my best and earliest influences. I can see their books on my shelf from where I sit here at the computer.

      "Don't Fight The Tape"

      Delete
    2. Eric: You appear to be the only one from my era on this blog; another book which I have but have not opened for decades is
      STOCK MARKET LOGIC by Fosbach. Of course all these guys operated in the pre- Bernanke era where there was no Interest Rate suppression and QEnnn. I

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    3. I think I have that one. Thick red hardcover, right? I'll need to go run to the basement to find it, but yes, I devoured every page of that one too.

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    4. This seems like a good time to expand on my post from yesterday about the next 5-10 years in gold and silver. Will I defend it? Will I dig in my heels in the face of reality on the charts about it?

      No! Go with the flow, my friends. Don't fight the tape. The trend is your friend. One of my core problems with the permapumpers in the goldbug industry is their failure along these lines. They make a cottage industry out of fighting the tape. That's a road to ruin. At least for their subscribers, anyway. The perpetrators remain mostly untouched because I believe very few of them have any skin in the game anyway, and live off of subscriptions and coin sales.

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    5. and backdoor deals from penny miners.

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    6. as Mark Twain once may have said, " A gold mine is nothing other than a hole in the ground, with a liar standing over it". or in today's world, the liar may have never even seen the mine, or ever even had dirt under the fingernails, over an entire lifetime. anyway, wasn't someone saying something similar about some shill going by the innocuous nickname of Santa?

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  17. Dark , completely agree … I guess , they will start to wake up at about the same time as the west , in fact I think europeans will wake up a little earlier than the americans … propaganda is too strong in amerika … timing is everything

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  18. There's an interview with Saut on KWN. He's one of the two or three people interviewed there over time that I respect. The interesting part is that the entire interview is about weather and there's not a single mention of gold, silver, not even the markets. Perhaps Jeffrey didn't bring his golden pom-poms to the interview.

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    1. If you want to know what Saut truly believes on a weekly basis ( unfiltered by the King ) go to
      http://www.raymondjames.com/fin_news.htm

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  19. You have to wonder...chicken or the egg ??
    Gold remains idle while shares are on the move...does this mean gold is anticipated to move up or is this a precursor for another move down on gold ?? Just adds fuel to the fire that there is no real fundamentals in this sector anymore.

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  20. Angelo, to try to answer your question, (and sorry I can't post a chart now because of intranet restrictions :)), I see a few potential positive signs once more on the long side of gold, worth monitoring.

    On the daily time unit.
    1) Zoom out on the MACD 9 20 7 and you will see there is a propagation axis linking bottoms of mid april 2013, 1st july 2013 and 1st april 2014. We are above this axis now, but closing in. A bounce of the MACD on this axis once more and a cross of the MACD signal may validate some bullish divergences, depending where prices will be.
    2) I see the important horizontal support area rather at 1270 than 1280. Let's say I see the support area extending down to 1270. So prices may still go there within a few days.
    3) Let's watch prices carefully if they remain in this 1270 - 1280 without breaching it down, because then we may hive nice bullish divergences on the MACD, but also on the OBVD, Stochastic, etc...
    If we get into this kind of configuration, I'll definitely try to buy gold once more.

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  21. "How long will it take the Russian populace to start grumbling about there economic condition and there future under Putin once they fully realize that he and his cronies have skimmed tens of billions of dollars/rubles from the Russian economy?"

    @DPH : imho they already know that. Russian people know exactly who Putin is. Russian already know that they don't live in a fully functional democracy. Russians know how deeply corrupted the system is, in the hands of oligarchs, themselves for now at truce with Putin.
    There would be no scandal for Russians to discover that Putin plundered the country and has a personal fortune of tens of billions of dollars in Switzerland.
    Corruption is part of this country, and it has been accepted long ago.
    Russians are tired of a century of revolutions which led to nothing.
    Russians are tired of so-called heroes bringing hope to them such as Eltsine and who turned out to be hopeless drunkards.
    Russians may not be found of Putin, a guy who won't hesitate to suppress opposition movements such as Gary Kasparov's.
    But they still prefer a strong man who brings a semblence of order than illusions of democracy leading to corruption and chaos.
    Ukraine gave Putin the occasion to gather them under a purpose and an external threat, just after Olympic Games boosted russian patriotism.
    Those people are the ones who didn't surrender Leningrad during the 3 years siege of the city by the nazis.
    If they unite against an external enemy, they will forget internal problems, and are used to endure much more than what the West may inflict them through sanctions.
    I'd be very suprised if you have internal revolution in Russia because of sanctions.
    If that's what the new US team is planning to do there, they are fools who don't understand what drives this country.

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    1. P.S : people like Martin Armstrong who give lessons of what the notion of a country like Russia should be, laughing at Putin and his "policy of the land", are considering this under a cold single angle : economic performance.
      Understand that I'm not a fan of Russia. But I'm trying to objectively understand what is Russia.
      To get a clue, just translate their national anthem.
      Russia is about culture. It is about people. It is about a soul, a language, and definitely about LAND, as described in this national anthem.
      Russia is not an "economic production tool".
      Russians are before all a passionate kind of people.
      Not religious fanatics.
      But passionate about their country, their people, their culture, their language, I have absolutely no doubt about it.
      The greatness of Russia for its people is not only about economy.
      Putin is playing exactly the right chord with them.
      And the west, the wrong one, thinking only about "economic" sanctions.

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    2. Nice historical context HDH on Putin/Russia and the generational acceptance of wanting/needing a strongman as a leader.

      Ditto on Armstrong. I like MA for the fact he doesn't hesitate to throw himself passionately into a subject. That doesn't mean I agree with him 100% but he is thought provoking one way or another.

      I read the "land/territory" post yesterday and came away with sentiments similar to yours. It made me think a bit further on the topic which is never a bad thing. MA's historical perspective is interesting overall but some of the current things he discusses have no relevance at all to events hundreds if not a thousand years ago.

      The US/NATO is "going for it" in Ukraine as far as confronting Russia at this point in time. The calculus for both countries has dramatically changed. Credit the Snowden revelations/situation for most of it imho.

      Escalation between Russia/US into something greater is a given.

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  22. Because of my post a few hours ago, I'm giving you live my position : I'm just entering gold long at 1269.50, as you can see on my previous chart this is the level of my horizontal line of support.
    I decided to get in because it is also a support on the 1 hour candle chart (going down) and the MACD on the 15 minutes candles is quite low and reversed near those levels twice before in the recent past.

    It's not much, but it's enough to buy and put a stop loss very close by, with a target of reaching back towards the daily ma20 near 1300 $.
    I think I'll move my stop loss back at 1269 very very soon if we take a few dollars altitude : much volatility short term, the important 1280 area broken can lead to more short term pressure and I don't want to lose anything else than the small commission on this one.
    But here we go, I'm long 1269, crossing my fingers as usual :)

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    1. Hubert, maybe you are right, but I think we now gun for the Feb lows around 1240. And Darkpurplehaze, be careful on Armstrong, because percentages dictate that when you comment on anything and everything, you are going to be wrong a good portion of the time. As an example, he has his facts wrong on the Nevada situation. Which is not to say that I am a Fed fan. sparks, of course

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    2. Steve...I hear you on Armstrong.
      He has a tendency (one I like) to plow head first passionately into his topics even if I don't necessarily agree.

      There's something to be learned from everyone and everything if it helps broaden (or focus) our overall perspectives.
      A closed minded person is destined to stay in the dark.

      Lots of open (and civil) minds here. }:^)

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  23. Wouldn't it more sense to go short if gold just broke through a key pivatol support?

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  24. Dear Dan,

    What is the reason for JP Morgan to exit their Gold & Commodity Business.
    What is the reason for Barclays to follow suit?
    What is the reason for Deutche Bank to also shut their gold trading business?
    Among the major precious metals/bullion banks only Citi, Socgen & Goldman are left. Maybe these all are under scrutiny under the Gold Fix scam?

    Why is it that whenever a nation collapses, eg greece, ukraine, the first thing is that their Gold is Shipped out?

    What i suspect is that physical gold is running very low and only the hedge funds' are selling on the paper markets on algo's technical signals. Whereas China is buying consistently in the physical market.

    Where there's Smoke, there is a Fire.

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    1. Or maybe cause the gold business will no longer be profitable as a safe haven since the Feds perpetual money printing machine proved it works in times of melt down as in 2008. Will gold be going to 600??

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    2. Shark;

      Big banks are exiting the commodities trading business because they do not see much upside in the sector as a whole this year. That does not mean individual markets within the sector cannot experience rallies. It means, taken as an asset class, they do not look for much in the way of returns.

      China buying has now proved to be a double edged sword with a lot of the gold serving as collateral for dollar loans.

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    3. Dear Dan,
      If gold is used as collateral then what is wrong with that? It has been the best form of preserving wealth for thousands of years.

      The big banks like JP sold their commodity business which means they will no longer be trading commodities for MANY years. Why would they suddenly stop what they have been doing for a 100 years? Maybe they see no revival in economy as deflation keeps exacerbating industrial commodity demand eventually eroding confidence in the USFed's ability to maintain price stability.

      Prophet Elijah u could be incorrect, If Gold is profitable only during meltdown then why did it rise form 250$ to 1000$ from 2003-2008?

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    4. Shark;

      What is wrong with that? Wow - have you ever heard of a loan that goes bad? The collateral is sold to repay the loan.

      You seem to be a guy who is unsure of what is what. One moment you are regaling us with tales of hyperinflation; the next you are speaking deflation.

      Let's just all admit that none of us know exactly how all this is going to play out because we all, none of us, have ever lived through anything remotely resembling this.

      gold rose during those years because the Dollar was declining. Pull up a chart of it.

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  25. God must have loved idiots.... Some many around.

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  26. Hubert, I hope you didnt get stopped out of gold. I would not bet against you under any conditions.

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  27. Hello.
    Quick update about my trade.
    No, didn't get stopped out.
    Remember : this is a very short term trade, as my time units here are : 4h/1h/15 minutes instead of 1 week / 1 day / 4 hours :)
    It means that yes, the trend is down on some time units, even hourly time units.
    But, on the very short term, I identified a few indications allowing me to "play" a counter trend move at 1269.
    I put my stop loss at 1265 actually and I keep it there, as the inf Bollinger Band in the 15 minutes is reversing and now horizontal at 1267. Plus we had a candle with a new low, so that should be it : if gold is to reverse, it is now.
    All the slower time units are down.
    But I don't care, because the deal is here :
    - long 1269
    - stop loss 1265
    - first target = 1290 (for other reasons I won't describe).
    So...potential gain = 21 for the first 1/3 of position.
    Potential loss = 4.
    Ratio = +/- 5 which I think is ok.
    If the price goes just a little bit higher, I'll still raise the stop loss near 1267, so that the potential loss is max 2 points. What do I risk? Peanuts.
    Now it's just wait and see and the market can do what it wants, I don't care.


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  28. Woooohaa!
    Did you see that??
    Mein gott!!

    Ahem, Dan, I think you have the example of the day to condemn firmly the devastating manipulation of the gold market...on the UPSIDE.
    Who the heck is manipulating this market like that?
    Bullion banks?
    It's a scandal :) :)
    Anyhow...out 1/3 at 1291 (there was a panic on the upside, what the hell was that??! but we went up nearly at 1300 i.e the ma20 of the daily time unit. I was sure not so ambitious short term, targetting some ceiling on the 1 hour only), and my stop loss now raised at 1269.
    Maybe I will be stopped out later on for raising my stop loss.
    No problem, because the trade became a win or win more trade.
    That's what's important on the long run, to compensate vs the number of trades which go wrong and generate a small loss every time.
    Small losses. Big leverage. Save capital. Identify potential reversal points. Let the market do what it wants. I hope it made a point to those who still think that T.A and "critical" support areas are useless BS in a "manipulated" market.
    T.A is essential, if it was not, Dan would not be a trader anymore.
    Anyway... I was bloody lucky on that one!! Yes! :)

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  29. Groupthink Or Black Swan Rising? Not A Single 'Economist' Expects An Economic Downturn
    Tyler Durden's pictureSubmitted by Tyler Durden on 04/23/2014 22:06 -0400

    this might mean something; sparks

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