“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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Saturday, May 3, 2014

Further Drawdowns in GLD

The reported holdings of GLD, the big gold ETF, are updated as of the close of trading this past Friday ( 5-2-2014) and they showed another reduction.

For the week, GLD showed a drop of 10 tons in gold holdings. Friday alone brought a drop of 2.7 tons, which I find rather remarkable considering the fact that gold over at the Comex shot up sharply when news hit the wires about the first of two helicopters being shot down over in Ukraine.



I have mentioned previously, that many in the West are looking at rallies in gold as selling opportunities. This seems to be the case with GLD. One might have thoughts that with the safe haven plays that we witnessed across the futures market on Friday ( Yen higher, gold higher, and bonds higher ) , that GLD would register an increase in gold holdings. That was not the case.

Western sentiment towards gold remains dubious therefore. Since the beginning of the year, GLD has dropped 16 tons of gold. Total holdings are now reported at 782.85 tons, a 64 month low!

I put a lot of credence in this big ETF as a gauge of Western-oriented investment gold demand. When gold was in a strong bullish uptrend, reported holdings rose along with the trend. When gold entered its current bear market, reported holdings began to drop alongside the move lower in price. Demand from Western-based investors has thus ebbed and flowed along with price which is as it should be.

When we see these sorts of divergences, with the Comex gold price going one way and the reported holdings of GLD going the other, it indicates that the move higher in price was being primarily driven by short covering over in the futures market. Short covering rallies are often quite spectacular and can be very compelling because they can drastically change the chart picture in a short time, but one needs to exercise caution because they can flame out just as rapidly as they flamed on, especially when the move is due to a geopolitical event. Such things are notorious for generating many wild swings in price.

Traders therefore need to be cautious and remain flexible. If GLD holdings begin to rise alongside of a rising gold price, that will be a friendly development. For the time being however, that is not what is happening.

Let's see how events over in Ukraine fare the rest of the weekend and what the opening of trade in Asia on Sunday evening here in the West brings our way.





67 comments:

  1. At last! A level headed analysis of what a drawdown in GLD might mean, or not.

    Too many of our PM Oracles want to find a way to link it all together into their pet conspiracy theories. Gold being "raided" from GLD by shadowy bankerfolk to send off to the Germans or those nefarious, communist, yet somehow brilliant, Chinese. Ooh, la, la, boogeymen everywhere!

    Couldn't it just be possible that gold buying happens to be focused elsewhere for the period under review? There are other ETF's, there are other markets (like the futures market that Dan discusses above). Perhaps it's all just too simple and mundane to be believable.

    A good juicy conspiracy is a much better seller. Must keep those subscribers on the edge of their seats at all times. :D

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    1. See I just don't get the anger is the response above, with LIBOR and the ongoing investigation of other price fixing (warehousing) schemes how can we be so out-rightly rude and dismissive of the possibility of manipulation of the GLD? Why the vitriol? Do you trust JPM and "we do god's work" Goldman?

      Delete
    2. I detect truthful sarcasm but no anger.

      How the conversation goes from GLD's inventory to implying something about trusting JPM or GS is an unrelated fixation within the gold/silver community. It's like some reflexive/knee jerk response pattern and strawman argument that's always handy.

      For the record...JPM and GS undoubtedly enjoy some sort of advantage (fair or not/ illegal or otherwise) and I'm far from a fan of humongous banks who seem to have skewed the entire market complex and the economies (to some degree) of those markets they reside in.

      Is GLD hugely overleveraged? You bet it is.
      Is there anything you or I can do about it? No
      Is it relevant and deserving of the importance some people have put it on a pedestal as some kind of proof of empty vaults or Chinese importation? I seriously doubt it.

      If so...where's the proof of all the allegations being touted as gospel by some 'bugs? I'd love to see some.

      And I'm not talking about second or third hand insider knowledge...that can't be revealed btw.
      How convenient is that?

      Have a nice day. Hopefully the sun is out today wherever you reside.


      Delete
    3. I think perhaps you've gone from one extreme to the other (based on other posts I've read of your former incarnation), now you want hard facts, yet I perceive you haven't actually tried to find those facts. They do in fact exist. You want an air tight case however, but that won't happen because the system within which the information is contained is opaque, it's not open, it's not transparent.

      Yes it is what it is, but you have almost become an apologist at this point for a system that is not free. Free markets = transparency, nothing short of complete transparency, no transparency and you have hidden agenda's, and some deformed version of free market capitalism.

      I'm glad, as I'm sure you are, that we have access to the markets, that we can play the odds, but your denial of the manipulation and systemic corruption neither negates it or makes it go away. If you think there is no manipulation than so be it, the facts will reach the light if day over the coming years, and when that day comes the matter will be settled once and for all.

      Delete
    4. Nope...you're twisting my words and assuming I'm an apologist for banks and against free markets.

      There's the knee jerk pro-banker accusation again.
      My point is...were all stuck in a lousy, unbalanced market system that's probably been so for a long time.
      Is it even more unbalanced or rigged now then say...the 1930's? Maybe, but I wouldn't know that as being factual although I might FEEL it was probably just as bad or worse.

      Whose to say? That's my point. That doesn't mean I like, condone (or even apologize) for the markets or banks at all.
      We're all stuck in the same skewed markets and CB intervention until were not. I have no idea how that changes or when but I'm stuck in the middle with you and everyone else who realizes that to some degree.
      In the meantime..is asking for some tangible proof of some of the assertions being thrown around as evidence of something hugely nefarious such an unreasonable request?

      China's imports of gold seem to be somewhat supported by the data out there. Can it be trusted or substantiated just like some of the other distorted data out there? I have no idea.

      Seeking verifiable sources of info or proof shouldn't be perceived as such an egregious request or an accusation of being an apologist for the banks or market system currently in play.

      Faith based conjecture on investing that tries to brush aside some specifics or proof would seem to be a leap of faith that some people seem to have no problem with.

      Blind faith is for (fill in the blank).

      Delete
    5. Not twisting words at all! You don't believe there is manipulation and are declaring that you need 'facts', so my remark is, "you have almost become an apologist". Lets place facts, Duestche bank is under investigation in a gold fixing probe, they vacate their seat at the gold fix because they absolutely know that they have a conflict of interest. In my interpretation that means that it will show up in their trades. Regardless, do you know how many other banks have resigned seats at the gold and silver fix? Do you know that there are lawsuits against JPM and Comex for metals warehousing and manipulation of metals prices (not just gold)?

      You must live under a rock to not see that something is rotten. The CFTC had to be entirely compelled against their free will by the sheer weight of the facts to even announce an investigation.

      The CFTC, or the FCC, have failed to even muster one charge against a single person, public or private sector, for the fraud which was the mortgage lender / derivatives fraud which destroyed the U.S. economy in 2007-08. In the Savings and Loans scandal over 180 people were arrested and found guilty and charged. 2008, biggest fraud in modern times and how many prison sentences? Zero.

      If you can't see corruption and fraud everywhere in the economy than all I can say is, congratulations, you have graduated from one cult to another! Quite impressive! Very radical you are! How extreme of you....this is just truthful sarcasm, don't mind it, well, truthful as I see it anyways....

      Stay logical, stay true and don't let an amoral market turn you blind to immorality. People's lives are being destroyed by the tens of thousands due to policies rife with corruption. Don't be blind to that.

      Cheers

      Delete
    6. Ok Angelo...ya' got me.

      I don't believe in manipulation. There...satisfied?
      Holy cow! You keep assuming these knee jerk anti-gold defense mechanisms unless someone totally accepts ALL your beliefs.

      News alert Angelo...I'm fully aware of how corrupt things are. You obviously put the blinders on as soon as you read something I wrote that wasn't as extreme as your beliefs.

      Let me put a question to you or anyone else who feels as strongly as you do and knowing all you do about many of the things I do also....what are you or have you done about it to change it except crab about it?

      I feel the same frustrations but I don't let it consume me and I sure as heck don't assume that those who don't agree with me are against me. An open mind assumes little and tries real hard not to frame things with any certainty or as fact.

      I'm sure you'll read that as me being a non-believer of some kind because I don't guzzle every drop of Kool-Aid that's offered up and repeat it verbatum like a trained lemming.

      I'm not going to continue to explain why my views aren't entrenched and in total lockstep with some stereotypical goldbug fanaticism that I should be following otherwise it makes me suspect of something. Jeesh!

      Anyone out there who considers me a traitor or an enemy needs to simply consider how you're framing that. What would I be a traitor of...some figurehead or special organization (aka virtual cult) that guards against enemies to their extremely cloistered beliefs or leader?

      Seems to me that being portrayed as a traitor is a good thing considering the source if that type of thinking.

      Time for some hockey and a beer. None of this "debate" really matters to me because I'm not consumed by it nor do I need to be right about any of it.

      For some people, for some reason known only to them, that doesn't satisfy them. They want "sparks" flying all the time.

      (Yes Steve...I just laughed at that.)


      Delete
    7. Your very emotional, lol. I am merely pointing out your own arguments. Is there manipulation? Or do you need more facts? If you need more facts than you're not quite satisfied that there is manipulation? Yes? But you know there is manipulation, and would simply prefer more facts because?

      As I understand it you know there is manipulation, and it bugs you, but you don't let it consume you (as it does me...)? Is that accurate. You don't let it get you all up in arms right?

      What do I do about the corruption you ask? I do this, I point out the truth of the matter. I am also a real life trader, as in physical things, I practice a 1:1 ratio :) I only sell what I have! Very weird I know....

      The markets will be reformed in my lifetime, and not due to the people who ignore the scams, but due to the people who fight them, I support those who stand up against corruption, and some of those just happen to be 'gold bugs', a species of which gets a lot of venom from this corner of the web.

      Cheers

      Delete
    8. I think we're mostly agreeing and it's a matter of semantics or how I'm perceiving your manner of questioning. My apologies if that's the case.
      Some of my responses are an unintended two-pronged horn from a previous discussion. I'm in a great mood to be honest and my animated style is more or less some playful poking back and forth.

      I believe manipulation or market forces beyond most people's imaginations exists and their effect or influence on market movements can be pronounced. i.e. ESF

      Is that "fair" for everyone? No. But it is business as usual and it's been going on for a very long time.
      Do I wish my elected officials and their various market or law enforcement agencies would put a stop to some or all of it if it was indeed illegal? You bet.

      The problem is that you or I don't write or enforce the laws. Were stuck. The huge market forces that be do what they do because they can do so.

      I don't see it ending anytime soon and it appears to be getting worse. I'm not ok with that.
      But my opinion on it is meaningless if the elected officials and the law do nothing then there's nothing I can do about it. That's not a good thought and it'll get worse before it gets better.

      I wish you luck in your trading. No harm or attitude meant.

      Delete
    9. Best of luck as well, we'll need it!

      Delete
  2. And what is everyone's perspective on the record level of gold and silver backwardation?

    ReplyDelete
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    1. This comment has been removed by the author.

      Delete
    2. I'm not sure it's relevant to the extent it's being touted or used as a crutch to explain how gold or silver will rise significantly.

      It seems to me that backwardization has been around for awhile now in varying degrees and the effect on PM prices HASN'T been positive unless I'm missing something obvious.

      If there's proof otherwise I'm all ears. Someone's conjecture or FEELINGS on it are just that until it isn't.
      How long are people supposed to wait on this supposed backwardization theory to prove itself?
      Probably as long as it takes for someone else to come up with some other dubious reason why gold/silver is underperforming and at that point is when backwardization is forgotten about.

      It'll always be something once the current crutch of backwardization (or GLD) stops supporting some of the hoped for theories out there.

      Theories at some point need to be backed up by correlation on the price charts. Otherwise it's noise.

      Delete
    3. You keep mentioning crutches, I'm not sure why? The fact of the matter is backwardation is a sign, or signal, like many other signals, one which is at a historical discrepancy.

      Let us assume for a moment, that this 2-3 year bear market in gold and silver reverses (I know, I know, it's impossible....) and gold regains it's historical norm to production costs (another historical discrepancy), does all the vitriol towards the 'gold bug' community just disappear? I suspect it disappears real fast. That being said right now gold is stuck in the mud so to speak so the momentum is in the favor of the shorts, but be cautious of your tone, too much vitriol is never wise whichever side of the fence you sit on.

      To your remark above, you cannot mention the gold market without mentioning JPM and Goldman, whatever the context, so that is hardly a strawman, both Goldman and JPM have been fined huge amounts for fraud and corruption so I don't see your point.

      Cheers

      Delete
  3. With all the talk of 100:1 leverage in the comex I really don't think the hardcore gold investor see's it as a real gold vehicle anymore.

    Cheers

    ReplyDelete
  4. If I had a relevant amount of money and I was invested in GLD and I continued to see gold/gld teetering along a critical support level at $1280 for this long I'd seriously consider liquidating my position into cash or (if my position was large enough) I'd take my phyz metal and sit on it.

    Naturally, some folks in certain quarters will automatically assume the GLD selling is because the London gold vaults are empty or that the gold represented within GLD's holdings doesn't (or ever) exist.

    Were GLD's phyz holdings called into question (besides the paper leverage) when gold was at $1900 and looking like it was headed towards $2000? No.

    Has GLD's phyz holdings depletion become a crutch or excuse to some in their attempt to explain how GLD's inventory is indicative of something nefarious afoot that for all intents and purposes has nothing to do with golds overall price trend? Yes.

    Anyone claiming inside knowledge about London vault inventories or the specific reason why GLD is being depleted (it's ALL going to China is a popular reason) in fact has no way to verify those claims and instead they've inserted their FEELINGS as fact.

    GLD is selling off and inventory is being educed for much simpler reasons then empty vaults or some Chinese intrigue some folks have wrapped themselves up in.

    Koos Jansen has an interesting and recent article on his thoughts on RMB internationalization and gold as a currency of sorts.

    Keep an open mind when you read it.

    Thanks again Dan.

    ReplyDelete
    Replies
    1. Call me old fashioned, but I think a metals exchange should have a 1:1 ratio, anything else and it's a derivative open to manipulation. GLD is useless as an indicator is basically my point, too many people in the 'gold community' shun it, traders use it, but they are traders, and sovereigns don't buy from the GLD, much of their purchases are 'off-market'.

      China's gold buying volumes are understated if anything, what information is available is not a 'feeling', they are consuming more than world production at this point, so someone's reserves are going down.

      Cheers

      Delete
  5. When the banks get long on Gold and Silver you get long too. Too Easy. They know the game better than anyone on earth due to obvious reasons. The stock market will keep flying high into 2015. The precious metals will keep dropping into the same period. Follow the trends all the way until the Trend Breaks and cut your losses fast. The market is the Master Manipulator. Assets always go higher than you think possible and vice versa. This is not a fool's game.

    ReplyDelete
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    1. Is that what happens as a rule? Do we have charts of bank positions and gold price movements? That would be extremely helpful here.

      Delete
  6. Angelo -
    " Do we have charts of bank positions and gold price movements? That would be extremely helpful here."

    http://traderdannorcini.blogspot.ca/2014/03/gold-price-vs-hedge-fund-activity.html

    ReplyDelete
    Replies
    1. Chinese trade data for gold imporst/exports

      http://www.ingoldwetrust.ch/sge-withdrawals-equal-chinese-gold-demand-part-3

      Delete
  7. Wow, that's an interesting chart, and quite compelling, really. I wonder, is there a lag? I mean are these trend follower hedge fundies really pushing the price, or are they just following it? I mean to say that something else is perhaps moving the market, and the hedge fundies are merely echoing it? Is that even plausible?

    One thing I find interesting is that gold is perceived only as a commodity here, or as Trader Dan has said 'it's just another commodity', but is this really true? I think the fascination with gold goes back centuries, and we can debate the reasons for that, but it is definitely considered a monetary metal - central banks use it, that should settle any claim that it's not important right away. I mean once Qaddafi was deposed his countries gold hoard went right to western vaults, on the first day. In the Ukraine, as soon as the coup had been completed the gold was shipped to the U.S, within the first week. Gold is not just a commodity, it is the benchmark of global liquidity, and that is why its volume is so hard to track. I think it is a big mistake to consider it just another metal, there really is no other material that is quite as indestructible, it's value as a 'reset' button has always been recognized, in every major culture, and in every time period for known history. I think the author and personality that understands this best and has the largest audience is James Rickards. It's a fascinating material if you think about it, and there is a reason for its place in the world through time, so as long as there is demand for it (there will be) the price will always revert to the mean, which is obviously somewhere above production costs.

    The bad news is that when the traders are long gone, when it's all algorithms and human's are basically useless at it, there will still be gold bugs....

    Cheers

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    1. I SUPPORT AND BACK YOUR LOGIC. THE TIME IS GETTING SHORT AND THE BEAR CASE IS VERY VERY LONG IN THE TOO THE. ALMOST TOOTHLESS.

      Delete
    2. Intuitively, I think time is short too, there is too much turmoil, too much hot war, and economic sparring, too much political unrest throughout the world (many energy producers), India's going national, Russia's shifting east, her energy with her, global power balances shifting, sides being chosen, markets getting a little bubbly, worsening weather, deeper droughts. Too much complexity and too little resilience.

      Gold is in play over the long term. Production costs x 1.8-2.2 are where gold belongs, for proper exploration and expansion, not just poverty level survival.

      Here's a good article on mining costs:

      http://business.financialpost.com/2014/03/06/exactly-how-much-does-it-cost-to-produce-an-ounce-of-gold/

      Delete
    3. Angelo;

      Just a quick comment in response to this post. Can you please be more accurate when putting words in my mouth? I never said gold is "just another commodity". I said it is as asset class.

      There is a huge difference between the two so please stop twisting what I am saying. I try to be very accurate with the words that I choose.

      Gold trades both as a commodity and as a currency. I have written on this many, many times over the past 10 years.

      Delete
    4. I knew I should have copied and pasted, it was in the comment section in reply to a 'gold bug' tit for tat somewhere on this blog, God know's where, you actually said that gold was just another commodity, though I am open to the idea that it was another poster and I mistook it for you.

      I'll try and locate it otherwise my apologies if I come up empty handed.

      Cheers

      Delete
    5. Angelo;

      during times of currency debauchment fears, gold takes up its age old role as a currency of last resort. We witnessed this back when the US Dollar was threatening to collapse on the price charts. When the market feels that the monetary matters are not a supremely important concern, gold goes back to trading more as a commodity.

      Sometimes it can be buffeted back and forth at the same time between trading as a commodity and as a currency, something I feel it is currently doing.

      As a commodity, one can attempt to look at an average of production costs and discern what might be a potential bottom in the price slide. As a currency, the upside can be nearly unlimited depending on the extent of any ongoing crisis, either monetary or geopolitical.

      Generally speaking, and this is painting a GENERAL principle and not something set in stone, gold tends to trade inversely to the reserve currency, which remains the US Dollar.

      A strengthening Dollar will therefore see gold trade more like a commodity. if the US Dollar experiences any crisis in confidence, gold will return to trading as "the ANTI-Dollar" ( my terms ) and garner buying.

      This is why making predictions as to the gold price in this current environment is so fraught with peril. The perception of the metal ( whether an asset class throwing off no yield or a currency of last resort with no obligation tied to it ) is changing as quickly and as often as a weather forecast.

      That is why I try to focus on the intermediate trend ( weekly ) and the long term trend ( monthly ) to get a sense of where the sentiment of the market is. The Daily chart gets whipsawed more frequently because of geopolitical events and while it is important to monitor it, the longer term trends filter out a lot of this "noise" and give us a better idea of how the broader trading/investing community is approaching the metal.

      Trading is never easy but it is made even more difficult by unforeseen events that we mere mortals are not able to predict in advance. If we were, we would all be retired from trading and enjoying life on a S. Pacific island.

      Delete
    6. As a trader you do what you must, I do appreciate that. Regarding your chart above (someone provided a link), that is very interesting, do you have it on a smaller time scale?

      Do you believe that the gold price direction is as simple as calculating the commercial shorts? Is it really that simple, as another poster suggests? If it was I would think you might be on that S. Pacific Island!? I guess I'm asking if the egg or the chicken comes first, are the commercial shorts following the trend, or are they instigating it?

      Cheers

      Delete
    7. "If we were, we would all be retired from trading and enjoying life on a S. Pacific island."

      Twice you mentioned it, so it's a real wish :)
      I'll try to locate an affordable one for you, but south atlantic is not bad either, especially next to Parati, Brasil.
      Here we go, you have a choice among 300 islands and I can be your broker.

      http://www.ipanema.com/pictours/paraty/paraty7.htm#axzz30ohgEVJM

      I must warn you though that you won't be neighbour to Jim in that case, who prefers an isolated small house somewhere in north Alaska.

      Delete
  8. I don't think that ego call morgan stanley made this past week is directed to us mupets , but to the other six monkeys left playing at comex … imo , we are close to a turn around , its all about the timing , the bear argument is getting old , they may flash it down once more , but there is not much more meat in the trade , whomever is long gold is not going to just get out because it goes down another 100 bucks … now if they manage to take it to 900 bucks , that would get some bulls thinking … that would mean a further 30% downside …. I just don't think so … not with penthouses selling in London for a quarter of a billion dollars , or ford mustangs in america selling for over three hundred grand … anyway … we shall see

    ReplyDelete
  9. in other news Modi new prime minister in India … this is the guy favoured by the gold community in the country .. worth a watch

    ReplyDelete
    Replies
    1. Modi as PM of India is problematic for the US from a diplomatic standpoint.
      I'm pretty sure they had him on some watch list and banned him from entering the US and he still might be under some restricted status.

      Awkward or what?

      Delete
  10. I wonder if you can even trust the GLD holdings chart. Also, if interpreted properly, the COT report shows gold is nowhere near a bottom yet- as far as the commercials are concerned.

    ReplyDelete
  11. The "End Game", "Mega Crisis", "Crisis and Decline", and "Catastrophic End" is already here.

    In the gold market, especially the gold and silver mining industry.

    ReplyDelete
    Replies
    1. And the US has 300 million guns in citizens hands. Cheers Mark.

      Delete
    2. Beans, Bullets and Bandages folks. There is a reason gun ownership is being restricted.

      Delete
  12. Dan you say in your coment,you use gld holdings as a gauge of western demand and seem to dismiss the logical conclusion that if jpm needed physical gold for a client they can buy gld and then redeem the shares lowering gld's holdings to supply their client's needs,and do not even have to warehouse the gold. seems to me gld makes a great warehouse fot the big banks. We do not have to use the word raids to discribe their practices.

    ReplyDelete
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    1. toto;

      In all honesty my friend, and this is not meant to be derisive towards you, what difference does it make if JPM is using GLD to supply some client who might need some physical gold? (this is of course assuming that such a claim is true - something which no one outside of that firm can know or prove ). What it shows, again, if true, is that the SUM TOTAL of gold demand is falling in the West. Remember, a very important part of demand is investor demand. We tend to talk about Asian demand, which is indeed very important, but as I have said many times here, that in and of itself cannot replace Western investment demand.

      Investors here in the West are currently in love with equities because that is where the big gains have been, especially over the last two years or so.

      Just look at the chart of GLD holdings that I posted up and compare it to the price of gold over at the Comex or even the price of GLD itself. Those holdings were rising as the price was in a strong bullish uptrend. Those holdings are now falling. Try to keep things simple and do not let yourself get caught up in the mania for rationale for "sharply higher gold prices any day now".

      Look, as long as the Ukraine issues are on traders' minds gold will be supported in price. Depending on how events over there resolve themselves, it could move higher but could also drop lower just as easily.

      Stay objective and respect the price chart and you will be just fine.
      Good success to you.

      Delete
  13. Dear all,
    Sorry very little time as personal things to handle now, but I'm just posting a chart to show how many resistances for gold on the way up at the moment.
    On the 2day candle chart which I'm using because the ma20 on this timescale has been relevant recently, bollinger bands are heading down along with ma20, which crosses an ex support in the 1315 area.

    Then on the daily time scale, Bollinger are forming a range, and its top is at 1325.
    The road will be long on the way up... :)
    Have a nice weekend,

    http://i60.tinypic.com/t0qm87.jpg

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  14. Hubert
    Would like to hear your thoughts on the new Indian PM when personal things smooth out.

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    1. Hi Mike, I'm a bit underwater as I mentioned, plus I usually shut up about things I know nothing about, which happens to be the case for the Indian PM at the moment.
      Lately, I've only been monitoring a few charts, T.A based, plus Ukraine conflict because of the domino effect is worrying me there (once the Russian Army is involved and fights directly the Ukrainian one, next domino is the West supporting directly the Ukraininan army. And if it happens, then we are at the brink of a full scale war imho because there is no way Russia will loose troops and men every day because Ukrainian army receives continual reinforcements from Europe. Gotta break the supply lines. Blitzkrieg has always been a good tool. Europe is not ready for invasion. Just as the French declared war to Germany in 1939 but got invaded themselves and wiped out in less than a month.)

      Delete
  15. Hubert

    Yes you are correct, there are many, many, many congestion zones GLD must work through if it were to move higher.

    Hands down, the biggest congestion zone is $1,650, where General Jim's fallen "Angels" are still stuck in the Battered Women's Shelter since 2012.

    On the other hand, there is NO RESISTANCE above on the Dow Transports and the NYSE Composite. All blue sky above, uncharted record territory.

    Stay in the System.

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    1. True Mark, but...
      I won't stay in the system 100%.
      I prefer to trade and speculate with a good amount of my capital BUT keep the joker card of physical gold with around 20% of my net worth, which isn't so huge after all if the worst happens.
      Because history taught us that the worst is always unpredictable.
      In the times we live in, I will keep preaching for everybody to keep some real physical gold at hand.
      You never know what tomorrow will be.
      Call me a pessimist :)

      Delete
    2. "physical gold around 20%"

      yup, that's about where I'm at too

      Delete
    3. But I plan to be selling bits on rallies for years to come.

      Delete
  16. Well, General Jim and Dan Duvall have posted over 200 articles bleating about Ukraine, Russian, etc.

    Will any of that matter?

    Probably not.

    Effect on markets so far?

    Zero.

    Nada.

    Zip.

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    1. I don't know Mark; this is not Syria or Libya, or CAR. The more of these things build up, the more nervous I get. Stocks may go higher for so more because they are really something real, but I think the debt mkts hold the key, as they are just Ponzi schemes of confidence on the fascist governments and when that goes, it is just like Will Rogers said, "you go broke little by little and then wham, it is all over". That to me is the key; Various Euro interest rates at bullshit numbers despite all being junk is the area to watch. Gold and silver are just little sideshows; sparks of course

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  17. Here we go again at kwn with Rule now talking about urainium; next up will be Russell and to cap it all off will be the Belvedere prognosticator; they all know that can not be accounted for on bad calls here, as these are very tiny mkts, but whan can I say? sparks

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  18. Brassey.

    Don't forget the mysterious "David P.", some guy Eric picked out of nowhere from Europe, who is now supposed to be the so called "eggspurt" on the gold market.

    After all the other guys like Bo Polny, Lars Lindstrom, and other guys who left the scene with total egg on their face.

    What is the funniest thing of all, is that NONE of these 40-year veterans and acclaimed experts predicted the sharpest, fastest, steepest, longest gold bear market since the late 1990's.

    Essentially, all those who clung onto their "words of wisdom" got Cramerized.

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  19. "What is the funniest thing of all, is that NONE of these 40-year veterans and acclaimed experts predicted the sharpest, fastest, steepest, longest gold bear market since the late 1990's."

    Ron Rosen called this current bear market in PM's before it hit.

    He wrote on May 10, 2011 : "A 50 % or $500 correction (or more) in gold bullion should cause the precious metal shares to have a vicious decline. "

    http://www.kitco.com/ind/rosen/may102011.html.

    Here is what he is calling for now:

    "2014 will be the year of the upside explosion in gold and silver. 2014 will also be the year the S&P tops and the stock markets endure a historic plunge...."

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  20. brassey, Mark

    Gold is up 500% since 2001, its been down from its higher range for just over 1.5 years.

    I have associates that invest and deal with Sprott and Rule, and all I can say is that you only wish you had the smarts these guys did. In ten years, never mind, in 3 years from now, they will be the one's laughing, but they will be graceful about it, they are gentlemen.

    Your vitriol and venom is a bane to the world, your anger gets you nowhere. Trust me in this, one day the egg may be on your face, and then you will remember this comment. For now you'll likely brush it off with some snide remark, but in my view you bring nothing of value except negativity. You might look into attempting to raise your vibration to a more refined level, it will actually help you in many ways, even with regards to investing.

    Cheers

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    1. Angelo,

      Good comments and agreed!

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    2. Angelo...that's their schtick. They are obsessed with KWN then they diss all over anyone who contributes to KWN's interviews. Meanwhile those people can buy and sell these twits with pocket change.

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    3. Angelo; Silver is now entering its 4th year of its bear mkt. Around Labor Day, Gold will also be entering its 4th year. In the meantime, if the trends change, I change. What Sprott and anyone else says has no value for me. Sparks

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    4. So the gold 'bear market' as you call it, started the very day it lost the top, that's interesting. I saw gold over-shoot by a bit (which hurt the miners more than anything - it was bubbly), correct itself, move up again, correct and again move to it's historical norm (based on production costs), share prices were almost equal to the high, at which point gold was hammered down into no-man's land. We have experienced a lean winter ever since! Miners have been preyed upon, many smaller ones have kicked the bucket, their assets now being bought up for pennies on the dollar.

      Take downs happen, they happen in every aspect of live that is predatory, it's reality. The blood was spilled, the assets (meat) is eaten cheap and once the process is complete (see Osisko) than the bull resumes for another round of profits on the way up, this time with hard asset exposure in the deepest sense. Win-Win for the predator.

      We are in a hard asset phase of social/political/economic life where the kings and queens are - oil, gas, food, water, uranium, lithium, silver, platinum, rare earth’s, and so on. We are a finite planet, with a growing population, the math is elementary. In the next fifty years we'll be mining asteroids....

      So brassey, you're a trend follower, with a bad attitude toward investors....nice. Investing is for champions, we pick winners, not momentum, we see reality in a product, not a price chart. You'll make some money.

      Cheers

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    5. I like your avatar/icon Jim!

      Cheers

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    6. steve brassey;


      Well said Steve. It is all about learning to read a chart in order to make wise investment decisions and finding those asset classes which are in favor and which are not.

      too many, even those who post on this blog, are married to their gold and will never sell it even after it breaks through chart support levels and falls into bear market territory.

      Eventually, we can hope that prices will recover to their previous levels and some of the money that they have lost will be regained but their is the story of the vast majority who never learn how to invest with a hard-nosed realism.

      Don't sweat their comments. IF these guys did not sell their gold shares when the chart broke down, they are sitting on massive losses and have lost opportunity cost because they did not rotate out of one sector and into another and therefore missed some excellent investment gains.

      It is more a case of sour grapes that you are reading instead of courageous investment value buying.

      Eventually, as time wears own, the price of the metals will rise and then they can all say how right they were all along. No one ever wants to admit that they made a bad investment choice because of pride, which is the enemy of all investors and traders. Try telling that to comfort the people in their 70's who are running out of years while they wait to recoup their huge losses. I know, I get their emails all the time. Theirs are the saddest stories you can ever read. Their financial lives have been ruined because they blindly followed their gurus like Sprott and others.

      There are some who have made an incredible amount of money investing in shale oil and companies that both drill and provide service to those firms. That is completely lost of the buy and hold forever gold mining share crowd.

      Let them vent - it helps them come to terms with their paper losses while they wait for the price to go back up so that they can break even again.

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    8. Trader Dan, you are talking about the all-in crowd, everything they own into precious metals, I don't think there were many analysts that ever suggested that kind of exposure, obviously there were some. One can like gold for fundamental reasons and still have exposure to other sectors. It's not all or nothing.

      There are very exciting things happening in technology for example, we don't have to be myopic in our world view because we may or may not value gold as something intrinsically valuable.

      Singular exposure, that's what your railing against, and I can agree with that sentiment, but who argued for 100% exposure? And are the people that aim for that type of exposure more akin to speculators than victims? Were they not aiming for da'moon?

      Old folks can be gamblers too, for sure! In fact 80% of the patrons at casino's are elderly folk, pure victims....

      That's not to say there weren't a few unfortunate victims, but the market produces victims all the time, remember 2008? It didn't matter what you owned. Many sold at the lows.

      I'm not emotionally seeking revenge of my losses, I have other exposure, I just can't understand the superiority complex of the short term traders, seeing as that a portion of my portfolio is swing trades. The gold crowd sucks, okay, they're down, great, let's kick them in the teeth, spit on them, much fun! The main contention is the price, one says gold is going up, the other says it's going down. One is currently right, the other is currently wrong.

      This whole thing with referring people to 'guru's', are you not a guru to your readership? I mean seriously Sprott invests in more than gold, why the need to be so divisive? Because he believes something you don't with regards to gold, and you have been right for a period of time?

      If you prefer negativity in your personal arrangement fine, but something to remember, companies don't get built by swing traders or day traders, they get built by investors and those with a stake..... and then eventually those same companies may get consumed by a hedge fund that will take over control of their very soul.....but that's another matter altogether!

      Cheers

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    9. How often do you visit your psychiatrist, Angelo? Sparks

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    10. "A fanatic is one who can't change his mind and won't change the subject."

      I think in a year or two, some of the folks that still dont get it, will get it.

      Its sad how the "guru's" have been taking advantage of the naive, the pensioners, widows and orphans.

      Were 4 years into a bear market - does anyone really think the likes of Greyerz, Sinclair, Turk, etc dont recognise a bearmarket when they are in one?

      Seems like the only way these guys can make money is by screwing others.

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    11. Jasper, they are all on a 1 way street with stopped clocks in their back pockets. We may go sideways between 1180-1550 for years, as they continue hashing over the same tired ideas of Russia, India, China; sparks

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    12. Classy as always brassey, and by now we all know it's 'sparks', but thanks for reminding us all every time you post, lol.

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  21. Sunday: 11.30 pm.

    The jury is out for now; Gold is up $5.

    Re: all the emotional debates ( and yet very useless from a trading or ivnesting standpoint ) posted above, a basic fact whihc cannot be DEBATED: For every seller there has to be a BUYER. So who bought the 10 TONS of Gold which were liquidated from the GLD: ETF?
    Unless this question can be answered, the trail ends for now....

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    1. If silver does not move alongside gold than I would concede it's likely momentum from the Ukraine carrying gold right now, we'll see what silver has in store.

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  22. Most of all I hope that this forum will keep being one of the rare blogs of the webs where everyone can share one's various opinions, and not one of "one mind, one speech, one truth".

    Let's remember that this forum welcomes traders, investors, and newbies :)
    Each of them have different reasons to invest in gold, and on different time scales.
    There is not one truth.
    Even manipulation is not a simple topic.
    You can be right or wrong depending on the words you choose, the period you describe.
    There are many variables.
    For example I would disagree with Dan :) :) about the manipulation actions on gold from Fed happening only when gold goes up too fast.
    If the Fed wants to avoid as long as possible for gold to become a rival to USD, then why would they avoid a cheap and easy occasion to keep its price down and further down in a bear / range market, if it means it will prevent gold from going higher a bit longer?
    So I'd think that if the long term strategy is to destroy gold's credibility of a safe haven vs dollar, then short term tactics of "manipulating" gold down once in a while even now are part of the game.
    It's my personal opinion, of course, don't get angry :)
    But as Dan mentioned, Fed might also be wary and worried about gold prices going too low, too far, which would signal the return of deflation.
    Who knows? Maybe tomorrow they will be supporting prices.

    The only thing I will retain from this is :
    - it is not so important to know exactly what is happening in terms of manipulation.
    - it is more important to admit that manipulation from great actors, whoever they are, whatever their motives, happened at some times in the gold market, which is a small market, vulnerable to such attacks. So, volatility is part of the game, because some actors can decide at any time to cap gold price, or support it, or whatever else, and we have no visibility about it except from what the charts are telling us.
    - techincal analysis is working, yes it is!!, in a "manipulated" market, and it will help everybody, whathever their belief about manipulation, to make money instead of losing it.
    - there are many valid reasons to own some physical gold. Dan is being called a gold bug basher by some, but he owns some phys. gold too. Did someone hear him with only half an ear?




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  23. And on that issue Hubert I see the $1310 - 1330 as critical for gold, needs to hold there and want silver above & sustained $19.20 to indicate the bull is back in play. However a collapse is still possible and then a $15 for silver looms. Would love to recover some fiat cash value in my phys as Dan indicates pgm disciples crave, of course that's just natural.

    Angelo you are regurgitating arguments seen many times on this blog. However clearly trading is different to investing and if you are honest those who bought phys silver & gold at near the highs have oft been forced to remain investors or take massive losses as the price of the metals plummeted. As a 40% investor in mining shares my pension pot has plummeted in value these last three years. Fortunately I am young enough to not have to live off it, but had I been ten years older... Staying in blue chip was the right decision and fabulous wealth has been made on the back of Queasy Money for some who can now buy loads phys whilst it is here near the lows.

    Manipulators or not I am a sheep who has lost my fleece, but given time it will regrow.

    Lucky I have the time and I still have my stack, but yes I was suckered by the pgm guru's who were WRONG in their timing and always pumped the long end.. I know at least three investors personally, who were advised by a certain Maguire, who now are back to working in main street after losing their shirts in his service.

    For investors/preppers the best and most sensible resouce I have found is Peak Prosperity, a paid for subscription.


    However Dan stands tall offering free trading insight and opinions on the market, almost daily and with clarity and logic. He is to be lauded for this even if I disagree with his view about manipulations and the value of the BLS . His posts would have benefitted me enormously had I found him earlier instead of Buying the Dip like a lemming.

    I am long phys but I now have my eyes wide open to the short side. One can throw darts at an image of Corzine and recall Cyprus but still short silver when it pops and on strength as it almost invariably retraces the move as it is in a bear market for now. Just keep those positions small and mind your stops!

    Good luck all.

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