“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, May 20, 2014

Gold Holds Support; Constricts Further

There was some news today dealing with gold demand from out of China, now the world's largest gold consumer, and it was not particularly friendly for the yellow metal.

The World Gold Council announced that Q1 gold demand was 18% less than the previous year for the same time period. It was the 55% drop in bar and coin purchases that was primarily behind the fall off.

India was not exempt either as its gold demand fell 26%.

The WGC data showed an overall drop in global demand by 52% compared to a year ago resulting in a four year low.

Combine this with the big drop in GLD holdings, and you can see why gold has thus far been stymied in any attempt to mount a sustained upward move in price. The demand simply is not there.

That could change but until it does, the metal will continue to attract selling on rallies.

By the way, as an aside, this is another of the reasons that I suggest that the readers here ignore the now commonplace, breathless talk about "gold backwardation". If gold demand were that strong as these non-stop gold promoters insist, the WGC would not be reporting falling demand. Then again, some of these charlatans will no doubt inform us that the WGC is in bed with the powers that be and is distorting its own data in order to steer investors away from gold.

Sweeping away all the cobwebs and clearing the fog from their obfuscations, the gold price chart continues to reveal that pattern that is making me nervous about its fortunes. The pattern of LOWER HIGHS is not changing. Rallies are attracting selling at progressively lower points and while support is holding, the persistent inability of the mining shares to get anything going on the upside, is suggesting ( note - this is not conclusive yet ) that the support level is not going to hold.

The events in Ukraine remain a wild card however. The upcoming vote is going to be closely watched but more so, the reaction to that vote. Also, any further weakness in the broader equity markets will bring, as it did in today's session, more safe haven buying into the yellow metal. Some equity players are unsure whether the weakness in the smaller cap stocks is going to spillover into the larger caps. It seems that anytime stocks waver in the least, gold gets a safe haven bid. It is just one more thing for traders to have to decipher when attempting to approach this market for a trade. One thing is for certain - trading gold has become a shortest of time frame trades. One cannot hold a position for any length of time in this completely unpredictable and volatile environment.



Just today, after the Russell 2000 had managed nice back to back recoveries from the recent selling, it fell lower again. Currently it is down 1.96% compared to the 0.84% fall in the S&P 500 index and a 0.99% drop in the Dow. At the same time, the yield on the Ten Year Treasury has moved slightly lower once more. One can see the corresponding linkage when these safe haven/ risk aversion moves are underway. Small Cap stocks underperforming mid to large caps is a sure sign of this risk aversion trade. Both the Yen and the Dollar are also a wee bit higher at the moment. Disappointing sales numbers from retailers seemed to be the culprit that induced the selling in the equities, brought a bid into gold and the other safe havens.

Here is a chart of the GDXJ. As you can see, it is working on putting in the lowest daily closing price since April 17th of this year; in other words, the lowest close in a month. It is sitting right at a key support level so if the juniors are going to manage a bounce, they are going to have to do it almost immediately or risk another leg down. The ADX is rising once more indicating that the potential for a trending move is now more realistic but until that support level gives way, the index is still in a range, albeit at the bottom of the range.


The Daily Chart of the HUI is not any better. It is working on the lowest closing price in three months.


On the grains front - traders are back to chasing soybeans higher once more,  as if we are going to run completely out of beans before turning right around and throwing them all out. This market is about as convoluted as I can ever recall seeing it, especially the old crop as the situation involving those tight carryover stocks is at the forefront of their minds again. Technically based buying is was seen in new crop beans as overhead resistance levels were taken out which brought in momentum-based buying. That buying then evaporated and sellers took over. Right now the beans are lower but whether or not they stay there or go on another wild tear higher is anyone's guess.

The initial catalyst behind the early session buying was news that China  was into the US bean market as USDA this morning announced a purchase of 110,000 mt of optional origin beans. Combine those two words, "China" and "beans" and the result is always buying in the pit.


KC wheat is outperforming the Chicago wheat market as deterioration of that crop was reported yesterday. While recent rains will have helped ameliorate the slide in condition ratings, traders were looking backward at the damage and felt that perhaps some got too optimistic on prospects too quickly. After all, wheat prices had dropped over $0.80/bushel in less than two weeks time. Throw in the fact that the HRS crop is behind schedule for planting and that was enough to convince some shorts to go ahead and book some gains.

Corn is being pressured however by a strong planting pace ( 73% compared to the 5 year average of 76% and last year's 65%) although some of the northern tier states are running behind the norm. It does look like there is going to be an open window up there however this week so traders are looking at substantial progress to be made by the time next Monday rolls around and we get the new and updated planting progress report. Generally speaking, from this point on out, rains will now tend to be viewed as helpful for the crop.

For corn, 34% of the crop has emerged compared to the 5 year average of 42% and last year's 17%. Beans are 9% emerged compared to an 11% five year average and last year's 3%.

The cheaper corn, along with good pasture conditions, and tightness for feeder supplies is driving feeder cattle prices to record high prices. How high can they go is the big question at this point.

Let's see what we get when the trading for today's session ends. Trying to extrapolate from daily market action nowadays is becoming almost an exercise in futility due to the wild price swings and shifting sentiment. Perhaps we need to just take things on an hourly basis. That seems to be the new "long term" horizon.

Spurs up one game on the Thunder. I like KD and believe he is a great role model but I like the Spurs more.





80 comments:

  1. One thing about the 'gold market' is certain: it's lousy as a price/value discovery mechanism, even moreso for silver, down 60% off its high, trillions of $QE later.
    IF the central bank has an agreement with China to keep the price down, the smackdowns we see - totally irrational trades, from an investment perspective - are exactly what one would expect to see. Ditto if the Fed is doing it for the dollar via the ESF. You don't have to be nuts to believe the first idea - both governments have an interest in a low gold price. To believe the second you only have to look at history books and the results of the CFTC investigation: no laws were broken because PM price manipulation is lawful.
    If either of those is true, you'd have a painted chart with traders trying to read it as if it actually represents the market - again, exactly what the Fed wants. Why did they let the price jump? Who knows: It didn't last long, sucked a lot of money into the market ever since, and has now become a cloud of frustration for stackers, as it recedes into the distance (again, exactly what you'd want if you wanted to keep the price down). Or perhaps the Fed and China had a little disagreement, and the Fed, knowing China's passion for gold, set an example for them.
    As for the WGC figures, they don't coincide with flows in Switerland and HK (see numerous articles at zerohedge.com).They put total inflows to CBs in Q1 at 122 tons. Zero Hedge has repeatedly documented that the Chinese alone are importing many times that amount.
    I know you read charts for a living. But isn't it a little unsettling to be reading charts that Occam's Razor would say are probably manipulated - painted to move people who do what you do in the direction they desire?

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    Replies
    1. Gregory;

      I put no stock whatsoever in anything that Zerohedge might put on their site as they are too biased in favor of gold to be objective.

      Trading/investing is about being objective. Most people ( over 95%) cannot do this and therefore cannot consistently make money at it.

      I mentioned that as soon as those who are perma gold bulls find any statistics that contradict their "gold is so underpriced it is sinful" view, they immediately have to discredit the messenger.

      While it makes for good reading for some, it sucks in the unsuspecting and keeps them from being objective and thus following the flow of sentiment and funds.

      I would also take issue with your view that the so-called "smackdowns" are orchestrated by nefarious evildoers intent on depressing the price of gold. with all due respect Gregory, those who keep advocating that idiocy do not trade the rest of the commodity futures markets for a living. Anyone who thinks gold is run all over the place has never traded soybeans, which make gold look tame by comparison.

      A bit of advice - read what the market is saying and tune out everything else if you want to succeed. All these other clowns are doing is generating clicks on their websites that they make money off of. If they had the least idea what they were talking about, they would be trading for a living. They cannot make it trading therefore they sell ads on websites and publish stuff guaranteed to generate more pageviews to enrich themselves by so doing.

      Best of success to you in the future Gregory.

      Delete
    2. Good response Dan, which does not surprise. Again, I must state, and a lot of people do not like to hear it, but, truth be told, "most traders, investors, and gamblers, deep, down inside are really wanting to lose". sparks

      Delete
    3. Gregory, Trader Dan will not admit manipulation, I've tried to wrestle it from his lips regarding the CPI, it's a no go. He's right though in one respect, as much as I hate to admit it, the market is a momentum game now, unless of course you have massive wealth and can buy the long window - or can purchase railroads and all that jazz - the fundamentals in the market, as they relate to money supply, real inflation, liquidity, are broken. Outside the metals I prefer the Nasdaq, technology will outperform, Tesla (TSLA) has done me well, Micron Tech (MU) as well, Wall Street loves a good tech story, that is where the sentiment is, unless we have an overall market correction than good tech companies will continue to outperform. The Fed needs the market in a growth phase, it's the only thing they have left.....

      Watch gold closely though, I know people have been saying this for some time, but I suspect something big is in the wings. Obviously it could break down but with sentiment at ALL time lows and the support seeming to me to be like a concrete foundation here (cost of production area) and the price coiling around that 200MA something has to give.

      It was just today (deja vu all over again) when a seller off-loaded $520 million worth of notional gold futures (who does that?) and moved the price $7 lower, only to have it bounce right back....If we close above 1330 we'll probably see $1420 again, a close above 1330 and the miners will run about 10-20% back up to $1420 mark, looking forward to that if it occurs! ANV with 40% shorts always provides huge gains on the upside swings....

      Happy gambling, er, I mean trading....

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    4. Angelo;

      I am going to warn you just this once - if you put words in my mouth one more time, I will see to it that nothing you try to post here ever sees the light of day. Am I communicating that clear enough for your narrow-minded, block-headed obstinacy to grasp?

      I have repeatedly written in the past that the CPI is massaged. I doubt that there are many out there who are professionals who will deny that. It is however what it is and the market reacts to it. You can argue left and right, and quote John Williams Shadowstats left and right, until you are blue in the face. The markets do not care about it. Good traders take the markets at their face value and adapt. Losers argue with it.

      Making a leap from a massaged CPI to the government constantly manipulating the gold price is something altogether different. I am not in the GIAMATT crowd as you are. Get over it and get used to it.

      Now, have I made myself perfectly clear to you? Once more, twist my words, or put word in my mouth and you are gone. Test me if you think I am fooling around with you.

      Delete
    5. Okay so you admit it is massaged, got it, though I'm not sure of the difference, I asked you about 3 times regarding the CPI without response, so now I'm clear, thanks.

      The Fed has already admitted to gold price suppression in their minutes going back over 10 years, so I'm not sure how far out you think gold suppression is since it is a monetary metal that most investors look to in order to gauge inflation, if you're into hiding inflation, even a little, than gold price suppression is helpful I would think. I just can't think of an investment vehicle that drops while demand is going up - global demand on a year to year basis - and yes I'm one of those nutters that discounts the World Gold Council numbers....

      Delete
  2. If the gold went down during buying sprees from China and India, maybe reduction in buying from these two countries will send the price up. I write this tongue-in-cheek, but seriously, there's no more rhyme or reason to the market's responses to various news. I'm pretty sure that whatever happens in the market we have innate desire to rationalize it and weave a story around it, but rationalizing does not mean rational. It often means the opposite. My contention is that the markets are broken and the only thing we can read from them are historical data, from which we can draw charts. And yes, determine the current trends.

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  3. Hi Dan, where did you find these numbers from the WGC? According to this article Q1 2013 demand was 1077T vs Q1 2014 demand at 1074T. Regarding India's Q1 demand here is an excerpt from a statement by a WGC managing director:

    "India’s gold demand dropped 26% in the quarter through March from a year before due to high import duty and supply curbs introduced by the central bank to trim the current account deficit (CAD), according to the World Gold Council (WGC).
    However, the demand will pick up in the second half of the calender year due to an expected relaxation in import curbs by the new government, the WGC said on Tuesday.
    "It's not a question of intent anymore but of the timing of the relaxation of different curbs on gold imports by the new government. We are expecting some indications of a policy direction in the up-coming economic survey. We believe some kind of a policy relaxation could take place by the third quarter of 2014," WGC managing director (India) Somasundaram PR told FE. "In the second half and particularly the fourth quarter, if there is policy relaxation, then it could be a robust quarter," he added."

    The WGC expects the country's gold demand is expected to remain in the 900-1,000 tonnes range in 2014, compared with 975 tonnes a year before. Even with all the restrictions prevalent in the March quarter, gold demand still touched 190 tonnes, which means consumption will only rise in the peak festival and marriage season during the fourth quarter even without any policy relaxation.

    Re zerohedge yes there is some goldbuggery there at times but IMHO there is a lot of valuable info there that you won't find at the WSJ.

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    1. Gene;

      the Dow Jones Newswire carried the story and the data. Do you have a link to the report that we could examine for ourselves? It looks like they got the India data correct.

      That report showed worldwide demand fell 52% compared to a year ago.

      It is possible that Dow got the story wrong so if we could see the actual data and learn where they got the numbers it might be helpful.

      Thanks.

      on the ZH thing - I simply do not read it. As a trader I have to be choosy was kind of information I access and it needs to be accurate and unbiased allowing me to form my own view of things. That is why we should make certain that this WGC numbers being reported by Dow Jones are accurate.
      Again - thanks

      Delete
  4. Thank you for your thoughtful reply.
    I wouldn't be so eager to discount ZH, they are pro-gold, but it sounds like you're saying that they are making up the inflows into China, I don;t think they would do that. And if it's true, it turns things on their head.
    You're right that it makes sense to look at the charts to see where things are likely headed. But no other commodity is as tied to the supremacy of the dollar as is gold, so absent strong evidence to the contrary, we should _expect_ manipulation. They lie about and push around everything else, but gold is sacrosanct? On its face that seems absurd. And they do have the legal authority to manipulate prices, do they not? Your charts may tell you where things are going, but the chart is definitely not a pure reflection of market supply and demand. The larger direction is (largely) pre-determined. The market may be able to swamp that determination in a panic, but for long term trends it's whatever is allowed only. You can come up with a lot of reasons why gold should be falling to reinforce the chart they want you to see as the market. Otherwise they could never get away with it. It may be legal, but most people don't think it's happening.
    Disclaimer - I'm not a forlorn stacker, I buy and sell about a thousand ounces of sterling each week in various forms, so lower prices mean cheaper silver when I do want to sock some away. And my items are less sensitive to the market price because some of their value is craftsmanship. But the market still frustrates. I would feel a lot better about it if I thought it was honest.

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    1. Gregory - I am curious - how long have you been actively reading things here at this site? the reason I ask is because I have spent a great deal of my preciously scarce time defining my views about gold manipulation. I am on record as stating that I do believe the feds have had an active role in the past attempting to slow down the rise in the price of the metal as it does compete directly with the US Dollar. You can find my writings here and out on the web detailing this. I was actually on the side of GATA for a good part of the last decade while gold was in a bull market.

      Once gold broke down and entered its current bear market however I had to part ways with what I now term for convenience's sake (GIAMATT crowd) Gold is Always Manipulated All The Time. I categorically reject that view and honestly have grown wearied with the abject stupidly that somehow manages to pass for intelligent, informed market commentary blaming practically every down day in the gold market on some nefarious, EVIL agents of the government.

      here is how I see it - The Dollar is currently rangebound but is holding its own. It is not falling off the edge of the earth into the abyss as many in that camp boldly proclaim loudly whenever they get the chance. Commodity prices as measured by the GSCI are not showing any signs of solid, sustained upside breakouts but are also rangebound in general. There are of course exceptions in individual markets but I am speaking of the sector as a whole.

      That means TWO of the FIVE Pillars in a gold bull market are MIA. Also REAL INTEREST RATES remain positive ( at least they were for a while prior to the yield on the Ten Year falling briefly below the 2.5% level). That is Pillar number three.

      Also, the US deficits are shrinking slightly, I will be the first to tell you that even with these cooked numbers, our nations is on an unsustainable path when it comes to spending.
      That being said, then factors necessary to drive gold sharply higher and put it into a SUSTAINED UPTREND ( not just in some bear market rallies ) are not there at the moment.

      Hedge funds seeing this are using rallies to sell the metal. Just look at the drop in reported holdings in GLD. they are at a FIVE YEAR LOW. that does not happen in a bull market.

      In other words, the big specs are not interested in chasing gold higher at the moment. Could that change? sure it could but I have no way of knowing what the future holds and neither does anyone else in spite of their hubristic claims otherwise. That means I go with the charts and market sentiment which, until it changes, is the accurate picture of sentiment towards gold. When that changes, I change.

      That makes things very simple and more importantly, more profitable. Too many people in the perma gold bull community do not get this no matter how many times one can explain it to them. that is also the reason I wrote my article on why I believe in a "Gold Cult". It has become a semi-religion to many in the honest money camp. That is not only foolhardy, it is guaranteed to make one poor.

      Good success.

      Delete
    2. Thank you.
      Whether there is manipulation occurring or not, you are obviously doing the right thing, at least you have signals to work with.
      I don't believe that gold and silver are manipulated on a daily basis. You concede manipulation happened, and one could argue that there is no reason why any manipulation to the downside would be necessary if this is a secular bear market.
      However, I see no reason, if they have manipulated it before, that they would suddenly find virtue. If gold is favored by our largest creditor and competes with the dollar, why not push it lower, if possible, and cap any rallies.
      I've only visited the site on and off for about a year, perhaps you can address this question, which is a large part of why people believe manipulation is ongoing:
      Absent political and market distress, and usually when the price is relatively flat, giant lots are dumped in seconds in both the gold and silver markets. Here's the latest, have a loo at the chart:
      http://www.zerohedge.com/news/2014-05-20/gold-slammed-panic-seller-dumps-520-million-futures
      This leads me to two questions:
      - What's the psychology at work here, if this market is free of manipulation? As usual, we're talking big money, so these are not amateurs at work.
      - If someone has an interest in manipulating the market, is this one the ways they'd do it? It seems to me that it's a nice bonus for those betting against gold to have the market open like this (It is both legal and possible that these trades are being conducted on behalf of central banks by a proxy, who can be blind to losses).
      (and in the event you are inclined: Do you believe the US government still has 8000 tons of gold, and do we have more than China's unofficial reserves?)
      Thank you Dan.

      Delete
    3. Gregory;

      Let me try to show you why those who are permanently bullish will go to any length to contradict themselves. It was not all that long ago that the biggest fad was the fact that JP Morgan was suddenly taking huge deliveries of gold at the Comex. The COT reports were showing commercial interests having actually finally moved to the net long side of the market.

      This was back in December last year. Cries of "This is IT!" immediately started up among that crowd because now was the time that JP Morgan ( and Goldman Sachs) had finally snookered all those "stupid hedge funds" into selling gold while they took the other side. In other words, the evil bullion banks were now net long because they just knew that gold was going to soar. What happened? Yes we got a rally in the gold price to start off the new year but it then fizzled out.

      What was the explanation given? Well those same evil, nasty bullion banks were capping the price of gold and suppressing its price once again. Mind you, this was just after the same goofballs were telling us that the price was going to soar because the bullion banks were net long. They go from hero to zero. First we are told that the price is going to take off because the hedge funds are now snookered into the short side of the market while the "smart, savvy, always right" bullion banks are net longs. Then the price stalls out and the bullion banks get blamed. Heads - I win; Tails - you lose. No matter what happens, these talking shills always have an excuse.

      When it comes to those big trades you are referring to. It is hedge fund selling pure and simple. Their computers know nothing of finesse. If you have time, pull up a 30 minute chart of soybeans today and then make a case that the soybean market is being manipulated by the feds. It is not - what is happening is hedge fund computers are moving almost all in or all out and are pushing prices in their favor whenever they can do so.

      It is the same in every commodity futures market I trade. I sit here, like I have been doing for 25 years or so, watching prices in a host of futures market move all day long and trading this stuff. If it was just gold, and no other market that traded like what you are referring to, then Yes, I would say something weird is taking place. However, it is not just gold; it is every other commodity futures market. Those who keep pushing this stuff trick everyone who is not a professional into thinking that they are onto something unique to gold. I repeat - it is not.

      About the tonnage of gold the US might or might not have. I honestly do not know. I would hope we have it but I have no way of knowing. I know this might sound simplistic to you but all I can tell you is this - if the market was the least bit worried about any of this stuff that the perma gold bulls keep regaling us all with, the price would respond by moving sharply higher. It has not. Gold holdings in the GLD keep dropping and mining shares are stagnant. right now none of this matters one bit. It will matter only when the market says it matters. Until then, I just tune it all out as it is nothing but noise. It makes those who keep pushing it rich however because their websites generate more clicks and more revenue for THEM, not for their readers who keep drinking this poisoned Kool-Aid.

      When the chart trend turns Gregory, I will turn with it. until then, the rest is meaningless.

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    4. I can't disagree with anything you said, Dan. Your take on trading and market noise is rational and literally the _only_ rational approach.

      However, I'm not sure that your explanations for the smackdowns make sense. I don't dispute that we have to adapt regardless what is happening, but it's not just an academic question. We are forced to use dollars; it is no longer possible to even live unmolested on your own land; if you don't produce dollars on a yearly basis they will take your property and make you destitute. So in the most real sense possible, we are slaves to their fiat, and insult piles atop injury as we are told that we not only have to use this as money, but that we can have no other. It is fiat or risk the wrath of tax authorities, and the system is not global. So _aside_ from the day to day impact on charts and markets, the question of whether gold is being suppressed so that their system can continue is a valid one, and revolves around freedom. With that preface:
      - It seems like a science has evolved around computer trading. It's possible that an all at once dump of a half billion dollars is the best way to make a trade that size, the best way to squeeze every penny out of it (because they squeeze every one they can). Is this the most profitable way to trade a half billion dollars in gold? Or could they tweak their program a bit, as they do in all other things, and maximize their profit?
      - Are large actors legally sanctioned to manipulate other commodity markets as well as Gold? If the government has a legal sanction to act in its perceived best interests, does it ever allow that power to lay fallow?

      You've already conceded that they did it. I will risk putting words into your mouth by saying, transitively, that unless some greater power stops them, they will do so again if they feel the need. If that is not incorrect, the only question is whether they are doing it now. Again, it may be irrelevant to the charts, but it is relevant to how we define our relationship to government (and whether a markets' integrity should exist only if governments permit it to have integrity).
      Greg

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    5. Dan,
      I read your communication with Paul, below. Let me suggest something (you've probably thought of this already and are not doing it for some reason): take ten minutes and cut and paste your replies to some of these questions about manipulation into one place to which you can direct people. You can just paste the link with a note whenever this subject comes up. If the reader brings up a new argument that you want to address, fine, otherwise you can avoid wasting your time with repetition. I have about 50 cut and paste notes I use on a regular basis in my work, it saves me a lot of time.

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    6. Gregory;

      that is a good suggestion. I think Hubert suggested the same. I need to get my act together and make a point of copying those response of mine and placing them where I can access them.

      Thanks!

      One last thing - on the big sell and buy orders that come in seemingly out of nowhere. Things DID NOT USED TO BE this way. Not when I began trading. Guys were more skillful then. They tried to hide their accumulation or distribution and gradually scale into and out of positions. Not any more - hedge funds are the clumsiest traders I have ever witnessed in my entire career. They know nothing of finesse or skill - they just slam markets either up or down, it doesn't matter to them because now the name of the game is SPEED. Beat the next guy to the exit or the entrance and get out or in before he does. I wish it were not so. I actually do not like trading "stupid" but I have had to adapt to it. It makes things very difficult to read at times.

      Best of success to you

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    7. This comment has been removed by the author.

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    8. Perhaps they aren't liquidating a holding but are just selling short and hoping their all in trade will get the ball rolling?

      Here's another idea for the site: A list of positions in easily traded instruments for investment hacks like me:
      If traders think the Yen will appreciate in the next year, they are likely to buy ____. If they think it will depreciate _____.
      If traders..... dollar, gold, silver, euro, posxy (couldn't resist), volatility etc. I can't pick a stock, but I'm often on target with macro events, I just have no idea how to trade in them. Because I'm a hack RE investing (and too busy to learn), I would find such a resource invaluable. Perhaps someone has already done this somewhere.
      Thanks again, Dan

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  5. Hi Dan,

    If you click on the link in my previous comment (this article) it is the WGC's website and gives an overview of the Q1 findings. I will post a link here that has more detailed info (including 7 PDF's). I have not had time to review anything except the overview but I will look at it more closely when I get home. Thanks:

    http://www.gold.org/supply-and-demand/gold-demand-trends/back-issues/gold-demand-trends-q1-2014#package

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    1. Gene; Jasa;

      Thanks for that info and the link. It is much appreciated.

      I am wondering where Dow Jones got the info to report it like that.

      I am looking at the table where they have the total demand listed in Q1 2014 compared to Q1 2013 and I think I see it but am pressed for time right now...

      here is what it looks like they did - they took the total of "official coin demand" for Q1 2014 which was listed at 52.1 tonnes and instead of going to the last column where it showed the actual percentage compared to a year ago, which was down 33%, they used that as the total % of global demand compared to Q1.

      That is a huge mistake to say the least.

      The article from Dow Jones stated that total worldwide demand had fallen:

      Here is their actual quote:
      "The big slump in bar and coin purchases wasn't limited to emerging markets.
      Demand fell 52% worldwide versus a year ago, hitting a four-year low. The
      context: In early 2013, amid heavy selling by Western investors, gold's price
      was falling out of bed. Opportunistic buyers in the physical market were busy
      taking advantage of the price drop."

      It looks like they are talking about total bar and coin demand. But they used the wrong numbers!
      Here is the actual table.


      http://www.gold.org/sites/default/files/downloads/gold-demand-tonnes-Q1-14v3.pdf

      Official coin demand was 52 tons, down 33%
      Physical bar demand was 216.4 tons, down 39%
      Medals/Imititation coin ( whatever those are ) was 14 tons, down 54%
      Total BAR AND COIN DEMAND was 282.5 tons, down 39% from 464.7 tons.

      Investment demand was 282.3 tons, down 2% from 288.1 tons.

      It looks to me like the big drop in gold demand was on bars and coins.

      Q1 2103 demand for those was 464.7 tons combined compared to Q1 2014 demand at 282.5 tons. That was down 39% compared.

      Where they got that 52% number in their article is unclear.

      I will admit that I cannot make any sense out of the numbers in the INVESTMENT table. How can they show drops of 39% in total bar and coin demand and end up with essentially the same number as Q1 for 21013? Total bar and coin demand for Q1 2013 was 464.7 tons compared to 282.5 tons in Q1 2014 and yet they end up with total investment demand essentially unchanged (-2%).

      some of you math geniuses out there are going to have to help me on this one.

      Delete
    2. Dan, CNBC also parroted the numbers from the Dow Jones article. This type of reporting in the MSM undermines its credibility and unfortunately feeds the conspiracy world.

      Delete
    3. Mad Max;

      Yes indeed - there really is no excuse for that kind of sloppy reporting. I should have checked the original source myself but have relied on Dow Jones and they are usually very reliable. I am not sure what happened to them with this one. I am just very glad that we have some astute readers here who pay attention to detail and spotted that for us.

      The table in that link still has me confused. I do not get how they can come up total investment demand being essentially unchanged when the bar and coin demand is down so drastically from the same period last year.

      Thanks!

      Delete
  6. Gold Demand Trends Q1 2014

    20-MAy (World Gold Council) — After an exceptional 2013, gold demand made a robust start to 2014 – virtually unchanged year-on-year at 1,074.5 tonnes. Jewellery demand gained moderately, largely due to the environment of lower gold prices compared with Q1 2013 and seasonal factors in many markets. Divergence was seen within the investment space: net […]

    Gold demand in India to rise, Modi seen easing import curbs

    20-May (Reuters) — India’s gold demand is likely to pick up in the second half of the year as curbs on bullion imports are expected to be eased by the country’s new government, the World Gold Council (WGC) and other industry officials said on Tuesday. Gold imports by India, the world’s No. 2 bullion consumer […]

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  7. Gold is clearly in a wedge on the charts let's see which way it breaks. Personally I am bullish as resistance keeps becoming support as posted previously, however with all those central banks signing the gold co operation agreement who knows? By the way is there any update on the US default on returning Germanys gold? Failure to deliver is a default right?

    ReplyDelete
    Replies
    1. Jasa
      Interesting question.

      Under what terms was the German gold tendered?
      Demand deposit?
      Custodial account?
      ????

      Yes years to return it seems unreasonable but we don't know what's going on in the real world in back of the puppet show curtain.

      Makes me reluctant to offer an opinion.

      Delete
  8. An article has recently been posted on the www.ingoldwetrust.ch website referring to a German TV documentary on manipulation. Koos and I have a history of disagreement, and my account has once again been debarred following my attempts to post the following opinion Go figure for yourself what that tells you:

    Here is an alternative perspective - http://kiddynamitesworld.com/one-month-gold-manipulation-pictures/

    I think prices probably are manipulated - but perhaps not by one single entity or group, probably not tactically intraday but over time, and almost certainly not in the way most people provide "evidence" of

    A recent comment by Jesse to the effect that there had been no economic news, and so the fact that Gold hadn't risen above $1300 was evidence that it had been "capped": if there had been no economic news, then why would you expect the price to rise above $1300? http://jessescrossroadscafe.blogspot.nl/

    Insofar as markets are manipulated, they always have been and probably always will be; nobody is forcing you to invest in precious metals, and if you can't stand the heat, stay out of the kitchen. What are you going to do about it, anyhow?

    As the spoof Kid Dynamite article illustrates, many people are highly selective in choosing their "evidence" of manipulation, and as Trader Dan frequently points out quite eloquently, spiky volatility is not confined to metals, and is very evident in other commodities. Nobody should believe that investing is a one-way ticket to the moon - prices can and do go up and down for all sorts of reasons, not just because the Evil Cartel are out to get you

    What is inexcusable is the selective and highly manipulative distortion of facts by many in the precious metals industry who have a commercial incentive to keep retail investors stacking. Whether it is deliberately misquoting Elke Koenig from BaFin, deliberately ignoring the COMEX settlement mechanism and declaring that only Registered Gold is acceptable for settlement, claiming that paper gold "leverage" is 112:1 or that the natural' Gold:Silver ratio is below 10, THESE are the people who are deliberately and deviously building up false hope, preying on individuals' human vulnerabilities and stoking speculative interest simply in order to get you to buy their products and services.

    There is merit in the notion that Gold has enduring value, and strong evidence of it; there is also evidence that the actions of certain powerful players - whatever their motives - dominate price action in both the short- and medium terms; I have a strong personal conviction that the current financial system is unlikely to persist in its present configuration for much longer, and consequently I hold a large amount of physical metal, in a vault, outside the Banking system. But I also have a visceral aversion to hyperbole, sensationalism and blatant factual inaccuracy - especially where this is deliberate and persists despite being confronted with hard documentary evidence to the contrary


    And my final word of caution is this - beware gossip, passed from one mouth to another, such as where a staff reporter in an obscure Chinese securities journal makes some unverifiable statement about an instance of debt impairment and seized collateral, and that is picked up by a politically-motivated offshore news service, which is then picked up and retweeted by Jim Rickards before being dressed up into a composite Frankenstein's Monster article by Koos before finally making it into a Max Keiser video as evidence that Bitcoin is "real money" and that Gold has (quote) "infinite value". Don't believe everything you read on the internet, don't expect the markets to owe you a positive return, and channel that anger about the Evil Cartel into something you can actually have influence over.

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    Replies
    1. Zhang;

      Thanks for an interesting post as always.
      There is, in what we refer to as the Old Testament book of Ecclesiastes a quote that says it best:"


      That which has been is that which will be so that there is nothing new under the sun".

      Pretty much says it all, doesn't it!

      Delete
  9. "But wait!! Jim Willie says any minute now its all going to blow, Morgan Stanley will get Lehmanned, stock bulls will get obliterated and gold is going to the moon!"

    ReplyDelete
  10. First time over here and I have to say this is actually quite funny to read. There is no other adjective that fits quite honestly.

    I guess I have been at this over 20 years. That makes me ancient in the space but also makes me someone that might be seen in certain circles as having some idea of what he is doing. So without further adieu here it goes.

    EVERY SOLITARY MARKET IS MANIPULATED. The explanation is straightforward and obvious. Margin. Do any of you have any idea at all the margin capabilities of a big player? Any idea at all? Have you ever heard the term haircut?

    If you understand that margin capabilities of a major player and then look at their trading losses you have proof markets are manipulated. Collusion, margin and number of days with losses or lack thereof.

    I don't have any idea how many billions in notional I have traded in 20 years but I can tell you that the likes of Goldman can with the touch of a key send a market skyward or plummeting. I have witnessed it first hand, same for Morgan and all those guys. Hedge funds? Please.

    I guess the pretenders come back and say if that were true then what about 2008-2009? Well, seriously if you spend even a couple of minutes on what happened you realize that the disaster took place in the OTC market and equities were simply a victim.

    But manipulation is so old school. What you have the joy of watching now is the death of equity markets. Computers are struggling against other computers for algo superiority now that speed is taking center stage and going the way of the dodo. Volume is imploding globally. Soon players will walk away, volume will decrease even more, spreads will start to widen and volatility will simply explode or implode. You will not recognize these markets in a few years, that i will absolutely 100% guarantee.

    If you doubt me I will state this. I have a friend that just bought a house for a million plus. he is a market maker. That was in FEB. It is now MAY and he may be out of a job. Why? Go look at what happened to volume post March 30 and then go look at what happened on March 30.

    ReplyDelete
    Replies
    1. Eric;

      I am not sure what your point is but if I had your attitude, I would never be able to make a living doing this. Some guys learn to adapt and succeed. Some never do and so they fade away. I know several former floor traders who could not make the transition to the screen and could not change their trading habits and methods.

      These markets of today are not the same markets that I cut my teeth on. That goes without saying but if you want to succeed, you adapt. Pure and simple.

      As far as every single market out there being manipulated, we would disagree. Then again it depends on how one defines the word "manipulation".

      If by manipulation you mean that the big boyz on the block press and shove markets in the direction in which it favors them, of course that is true. That is what I have been trying to tell the GIAMATT crowd but their ears and eyes are stopped.

      If by manipulation you mean that anytime the gold market moves sharply lower or does not go higher, it is proof positive that the evil powers that be are conspiring to keep it low and dissuade investors from owning it, then we are in disagreement.

      Hedge funds are now the dominant traders in the markets and especially in the arena where I make my living. At one time we feared the commercials. They were the market. Not any more. those guys are routinely run over by hedgies and are constantly having their bona fide hedge positions demolished.

      Even the floor locals can no longer dominant the pits like they once did.

      I agree with you on the changes coming to the markets. Instead of Lord of the Rings with ONE RING TO RULE THEM ALL, it is One hedge fund trying to rule them all because many of them are going bust and are getting shredded by others. They are all sharks and when once all the minnows get eaten, there is nothing left but to cannibalize each other.

      Delete
  11. In 2007 - 8 I performed an interim role as Head of Credit Risk for an international investment firm which has a very large footprint in the USA. I am betraying no commercial secrets in telling you quite bluntly that none of us suspected Lehmans was about to fold - everyone thought it would be Morgan Stanley.

    As it is, one of the major problems posed by Lehman's collapse was the sudden disappearance of the primary price-discovery mechanism for illiquid mortgage-backs and Asset Backed CP - platform called "Lehman Live"

    The collapse or survival of any given financial institution at any given time is not primarily a commercial or economic matter, but essentially a political decision. How Goldman Sachs, AIG and UBS survived beggars belief

    And lest we forget, the main price action in Gold did not take place when Bear Stearns, Countrywide, Lehmans and Northern Rock collapsed, ir when the TARP failed to get through Congress, but some considerable time afterwards

    ReplyDelete
  12. Hey Dan –

    Since you incessantly attempt to quash the notion that gold prices might be manipulated, would you care to explain this quote?

    Thanks.

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

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

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

    ReplyDelete
    Replies
    1. Paul Warfield;

      Can I ask you a personal question? Are you deliberately obtuse or did your mother drop you on your head when you were little and you cannot help yourself?

      I am being serious here - How many stinking times do I have to answer you people? I have said I believe the price of gold was managed to try to stem the rise during the time when it was in a bull market the US Dollar was threatening to implode lower beneath the 72 level basis the USDX.

      Once gold entered a bear market (after it fell below $1530) and the Dollar stabilized, it has not been necessary.

      Please read the post I wrote to Gregory this afternoon at a great expense of my time to answer this. Personally I am sick to death of dealing with folks like yourself who are too damned lazy to actually read what I write and post.

      Good grief.

      Delete
    2. Launching ad hominem attacks is not the most path toward productive dialogue. Having said that, you are are correct that I did not read your response to the comment above. Also. your oft-repeated, simplistic notion that anyone who imagines that manipulation may well be occurring at present is a lunatic "perma-bull" degrades your otherwise excellent analyses.

      Your view is that there are clear technical reasons to explain all of gold's drops in recent years, and that is fine as far as it goes. Where your argument loses strength, in my view, is the notion that it is only the hedge funds and technical signals that drive the market, and that it is (to you) inconceivable that central banks might simultaneously be manipulating through sales of futures, etc.

      Delete
    3. Paul, the PM manipulation is OVER. Period. They smacked it and it can't get back up, gold is now terminal. Gold will continue to drop, the miners will all go bankrupt and gold will be mined no more. We will only hear about it in fairy tales, kind of like dragons...

      Rest in peace our dear shiny friend Au / 5000 BC - 2011 AD

      "It was a great run!"

      In the unlikely event that gold rises from the dead, it will be called Zombie gold....very dreadful, the stuff of horror movies, you will not want to touch it.

      Delete
    4. Sorry Angelo, but I prefer not to feed trolls.

      Delete
    5. Paul; Angelo;

      I am honestly concerned about your mental stability. It is evident that I do not subscribe to your view about constant manipulation of the gold price so what is your point about continuing to come here and both read and post? What are you trying to accomplish?

      Personally, If I find the views of certain websites offensive I no longer frequent them as my time is too valuable to waste. Might I suggest that you simply stop reading here because your will both go to your graves believing that gold is constantly under attack from the powers that be whereas I do not.

      Any further communication is fruitless.

      When and if the chart turns friendly, I will once again turn friendly to gold. Until it does, it is stuck in a range.

      There is more to my life that a piece of shiny yellow metal. I would suggest that you both broaden your interests and get a life outside of the day to day movements in a piece of metal.

      Delete
    6. No need to be concerned Trader Dan, just a jester. I don't take this discussion very seriously, the manipulation is too obvious, I don't trade for a living my investing is a supplement. The comment above by another commentator is spot on, all markets are manipulated, those that pretend they are not, well, okay.

      Life outside the price movements of shiny objects is good, no worries. You can have your blog back without my harassment, I was compelled here in the first place by the vitriol of a particular post.

      Cheers

      Delete
    7. Well, Dan, I'm sorry to hear that your world is so black and white, and that you have no time for those with views – no matter how nuanced – that aren't aligned with yours.

      Delete
    8. Paul;

      "have no time for those with views that aren't aligned with yours".

      if you had spent any length of time here whatsoever Paul, you would have learned that I have already spent a significant length of my precious time OVER THE LAST THREE YEARS dealing with this topic, over and over and over and over and over again to the point of near disgust.

      Most of the readers who come here and comment and read have been put off by the constant bullish drumbeat from the perma gold bull sites which come up with one outlandish, farcical and idiotic prediction after another. Meanwhile, they have done nothing but manage to lose money for anyone who followed their one-sided analysis.

      I try to be objective here and that means interpreting what the market is saying and going with it. It is the reality I have to deal with. My purpose in putting up with the abuse from the perma gold bulls is to reach others who are confused, depressed and lost in a maze of confusion and webs spun by those with an agenda to promote.

      I promote nothing here. I do not sell coins with my image on them. I do not sell newsletters. I do not sell brokerage service. I do not even charge folks like you a dime to read some of the lessons I have learned from trading for a living for nearly a quarter of a century now. And for that, I get to put up with people who want to attack and annoy me because I do not subscribe to their simplistic view of things.

      In that sense my world is black and white. I am either right or I am not right. If I am right, I make money. If I am not right - I lose money. Why would I expect anything else. Shades of grey, or nuance, as you suggest have no place in a trader's profession. We are hard-nosed realists.

      If you want to learn, fine - you are welcome - but if your purpose here is to annoy, continually dispute by rehashing the same claptrap that can be found on nearly all the perma gold bulls websites, where they borrow their thinking from each other, then I would suggest you not come here regularly.

      Some like Angelo, whom I really do hope intends to honor his promise and just leave us alone, are never going to give up their mindset. They will sit on a market and watch it go the other way from what they expect and then blame it on everything and everyone except themselves for being foolish enough to not learn how to read sentiment and react accordingly. I cannot help folks like that. I hope you are different.

      Like I said elsewhere on this blog many times., gold is an asset class. Nothing more and nothing less. There are times when it will be in favor and times when it will fall out of favor. Nothing ever goes straight up all the time. Learning to read a market and think for yourself will inoculate your from the would-be gurus, self-proclaimed prophets and other assorted flim-flam artists out there who invest the gold community. If you can learn what the market is saying, you do not need them or me for that matter.

      Delete
    9. I appreciate that elaboration.

      You may well be a brilliant trader/technician, but as I am not a trader, I don't concern myself with short-term considerations. My primary quibble with your position re: gold is that in spite of their having had both motive and opportunity, you dismiss the suggestion that central banks may have been manipulating the market in recent years because you see other proximate causes as having been exclusively responsible for price action. Perhaps you are correct, though other knowledgeable and serious observers believe, and argue (persuasively, in my view) otherwise.

      Perhaps it is because you are frustrated with those who express contrary views, but whatever the reason, it would benefit you and your readers if you were to make distinctions between obvious perma-bulls and conspiracy theorists from those, like myself, who are simply challenging you and your readers (some of whom sound exactly like the true believers in the gold community whom you mock) to consider the possibility that the market is being influenced by other than objective traders and hedge funds, etc.

      I am invested in gold because I expect there to be a another major financial crisis in the coming years, and because of the obvious risks to all paper under such conditions. I am not concerned about the drop in value in recent years, as I am playing a longer game. I am also eclectic in my information sources, and, ironically you may think, find your skepticism to be useful.

      Thanks.

      Delete
    10. Paul;

      I own physical gold because I want some sort of insurance against currency debauchment. If it goes up in value, that is fine. It is does not, so be it. It is just insurance for me. I have it as a portion of my portfolio which I believe is prudent but I do not obsess over it as so many in the perma gold bull camp do.

      personally, I hope I never have to use it for that reason because the world in which we live will be unfit for us all if the price tag of the metal were to reach some of the levels that some are predicting.

      As a trader I can hedge my holdings by using the futures market or I can trade the metal from the outright short side if the chart calls for that. If the chart says the opposite, I can buy it. It is just another asset class to me.

      There are so many good investments out there besides gold but many in the gold camp with their constant gloom and doom mentality have completely overlooked them. Too many of them are sitting 100% invested in the precious metals and are waiting for the world to end so that they can become fabulously wealthy ( because they will obviously trade in their metal for paper currency at some point if they wish to be able to do anything with it),
      I have kids and want my kids to grow up in a nation where they can have a normal life. I am not wishing for disaster so that my gold price can move higher. That is self defeating.

      See my other posts and replies to the manipulation thesis. the COT reports simply do not bear out the thesis. large specs move markets nowadays - not commercial interests. when large specs are buying, the price rises. When they are selling , the price falls. It is the same in every single commodity futures market whether it is gold, copper, soybeans, cattle or sugar or whatever. it really is that simple.

      Delete
    11. As I'm walking out the door you need just one more dig yeah? Your true character shows through vividly.

      "Some like Angelo, whom I really do hope intends to honor his promise and just leave us alone, are never going to give up their mindset. They will sit on a market and watch it go the other way from what they expect and then blame it on everything and everyone except themselves for being foolish enough to not learn how to read sentiment and react accordingly. I cannot help folks like that. I hope you are different." - Trader Dan

      I've lost a grand total of $15,000 +/- a few bucks in the mining sector (wow), all my gold holding is in the form of jewelry, which I resell at a 200% - 400% mark-up, I own exactly 2 oz of gold bullion, the rest is numismatics that sell for at least a 200% mark-up and is not correlated to the spot price of gold directly. What foolishness are you talking about? My main market investments are in the tech sector, yet you seem convinced I've lost my shirt or something. I deal in diamonds which are far more lucrative than gold, what have I missed? The cult of gold you describe could easily apply to yourselves here, just swap out 'gold' for 'trend traders' or whatever.

      Seeing manipulation doesn't retard my ability to run business' or invest in other things of value. Your projections are way off the mark Trader Dan. You project anger on me, but I sense it's yours to own.

      Later, and good luck over the next decade, in your line of work you'll need it.

      Delete
    12. Angelo;

      Adios... you will not be missed. it is people like you that tempt me at times to go to a feepaid site but having you leave is one more reason for me NOT to do that. I actually enjoy reading most of the posters here. What I cannot stomach is those who mock traders and those of us here who do our best to read the markets and profit. When you accuse us of having a corrupt moral system, you immediately lose any credibility and forfeit any inclination that I might otherwise have to actually read what you have to say. All this because I happen to deny that gold is manipulated all the time and will not change my core convictions and agree with you; therefore, in your mind, I am just a corrupt trader because I take the markets as I find them and not as I want them to be.

      the world is full of angry people like you Angelo... we do not need your kind here. and by the way, "luck" has nothing to do with success. hard work, dedication, long hours and constant learning do. And yes, in my line of "corrupt work" I and many of the other fine people and traders here, will definitely need to stay sharp, nimble, flexible and above all, objective, something that you would do well to try to grasp at some point in your investing life.

      Again, adios,

      Delete
    13. Let's wind it down.

      I'm not mocking you or your trader community, I came to this site because the stench of mockery coming from this blog (comments) was fouling another sight I frequent, someone was posting remarks from here, over there....There are a lot of good people in the honest money camp, to have their losses gloated over by anyone is in bad taste.

      The gold market, the silver market, interest rates, the CPI, etc are all rigged, that you cannot fully disclose this or recognize it does not hide the fact. All this will come out in the wash soon enough, I'm not worried about it. If you work within the beast (we all do to a certain extent) that's fine, but to me you don't simply work within the beast, you justify the beasts actions. You make money trading, that is all and well, kudos to you for it, but the systemic weakness that is creeping in, the corruption, the front running, the hyper leverage, will come back and bite very hard into the stability you now seem to enjoy. As volatility increases, human traders will serve no purpose in the not too distant future. Volumes are down, why is that? Is the average investor basically saying, "Screw this, I'm out"? Why are they leaving, are they tired of being fleeced by wild volatility?

      You seem to show compassion for the losses of those few who have been compelled by the 'con-men in the perma-gold' community, but what about the vastly larger number of investors that have been destroyed by rigged LIBOR, or MF Global using customer accounts (how many farmers went out of business?), or mortgage fraud. In light of these, and numerous other frauds your over the top concern for the fleeced metals investor crowd seems a little exaggerated.

      I agree that luck is not the main component in any success, or as they say you make your luck, but I sincerely mean it, with the way markets are going you WILL need luck in the future, that's exactly why humans will be useless in the field in the next 10-20 years. Don't believe it? That's just your bias showing, as you like to say. We all have bias, so I really get a kick out of that when you say it.

      I'm as angry as the next guy, no more and no less, I'm a hard nosed realist just as you claim to be, I grew up poor and made myself from nothing, and I know bull$h!t when I see it, and to have intelligent people pretend that manipulation is not occurring where and when it is I just can't help but throw them some elbows. You're a hard nosed trader I get that, but don't lie to yourself and pretend things are ok, they are not, we are at an extreme of corruption.

      See your own anger, I read some replies of your before I ever posted, your snarky, rude and condescending words are dished out like a master chef, you are very good at it, just today you suggested someone was dropped as a baby and you questioned my sanity, all well and good, but don't claim freedom from anger, you have your fair share Trader Dan.

      Cheers

      Delete
  13. Paul - do you have an equivalent quote from the period when Gold spiked up in 2011?

    Why is manipulation only ever one wsy? Why do you fear it? What do you propose we should do about it?

    ReplyDelete
    Replies
    1. I personally do not "fear" manipulation, but certainly believe that it distorts markets and is therefore bad for those who imagine that such markets are honestly represented.

      The point of the quote was to show, quite clearly, that central banks have a PROVEN history of manipulating gold prices. Given that, coupled with the obvious fact that it would serve the purposes of such banks (and their Government sponsors) to suppress a historically important barometer of the health of fiat currencies at the moment, I consider it be to naive to imagine that it is not occurring irrespective of other salient variables.

      Delete
  14. Yes, Psul, you are:quite correct. What is the point that you are trying to make?

    Water is wet (and potentially dangerous)
    It is cold in Winter
    Parking Tickets suck
    I don't like paying tax
    Mrs Zhang isnt as pert as she was 20 years ago
    I bought 20 oz the Friday before the Crimea referndum, at 1378

    Whaddya gonna do? This is the Real World we live in, not Turd Ferguson'a Island of Misfit Toys

    The important point of situational awareness is not to bleat about how unfair and beastly all the Big Boys are, but to figure out how to navigate your way through the landscape you find yourself in

    NOTE TO DAN - totally agree about how hard many P
    Open Outcry Pit Locals found it transitioning to screen-based trading; back in the day I used to execute on the floor of LIFFE, and the move first to ATP and then latterly to DTB (Eurex) called for a totally new mindset. Frankly, I prefrrred dressing up in a lurid jacket and flicking tickets at people....


    Anyone referring to "haircuts" in the context of exchange-traded margin doesnt know what he is talking about: "haircut" refers to OTC non-cash collateral

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    Replies
    1. What an odd response. I am not a trader, and am not concerned with short-term volatility. Not sure who was bleating, either, but is wasn't I.

      Delete
    2. Paul, did u enjoy your career more in Cleveland or Miami? swb

      Delete
  15. You are on fire, Zhang. Keep up the good work. "Turd Ferguson's Island of Misfit Toys" is the funniest thing I've seen all day. :D

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    1. Eric you were the biggest Turd poster and fan until metals tanked! I would assume you don't have any money left after reading about all of your buys through out 2012-2013. It looks like Traitor Dan has picked up all of the bitter Turds!

      Delete
  16. Dan
    Don't let the manipulation believers get you down. A lack of rigor is one of the reasons they are what they are.

    ReplyDelete
  17. Wow... what happened on the board? The acerbity and vitriol... :-) This is a great blog. Dan is right about what is going on with gold and the other commods he discusses... I know the Feds have been found to infiltrate boards to create discord when the site is hitting on something worthwhile and not mainstream.

    Zerohedge may have some good articles from time to time, but anyone who has taken their advice has not done very well. I did like what they talked about with respect to USbonds, that's why I stopped shorting them and began trading them long a few months months ago. I think they were correct, new issuance is drying up and the USFed owns a large percentage of them now. Even after tapering.

    But ask this, Why is Zerohedge popular in the alternative media? The typical person has a preconceived view of the markets, economy, politics, and government. For instance, the people I know who think collapse is just around the corner read sites and blogs that conflate with that mindset. Zerohedge, KWN, the patriot shows, etc., cater to these people. Others who think all is well (yes, there are many who think things are just fine - and they are the ones currently making money) read their news from a Bloomberg terminal and WSJ.

    One has to remain objective, understand the view of the writer, and use deductive reasoning to get the least biased news and data available.

    ReplyDelete
  18. Eph; 0Hedge is a bunch of 16 year olds in the locker room > getting thumped 7-2. sad neerdewells, but harmless, as it is pretty obvious that they are all still living downstairs in Mom's basement, while they stack oreos; swb

    ReplyDelete
  19. EPH - actually I disagree with you (and indirectly with Dan) on the utility of reading Zerohedge and KWN

    I think most of it is total bullsh♡it, and worse still, I consider much of it which emanates from tightly-knit self-referential cliques to be not just ignorant, but deliberately skewed and distorted

    The problem is that ths World I am forced to live in is not Black & White, but is cast in shades of grey (and occasionally a brief dash of colour if I happen to call it right once in a while). And no matter how much I research, no matter how clever or wise I might or might not be, and however many years of whatever experience I may have, I woukd die a happy man if I could have got it right 51% of the time

    I have opinions; I believe in my opinions; but they only MIGHT be right, and maybe only some of the time. I need a millstone on which to keep them sharp, and although I may laugh at the absurd photographs on KWN or gag at the blatant distortions on Zerohedge, I still browse them on occasion (though I have never once written a Comment on either)

    The websites which trouble me and provoke my ire are not those which I believe are either just plain absurd (Max Keiser) or just plain wrong (Harfey Organ) but those which dress themselves up as Goody-Two-Shoes bona fide priotectors of all thats Good & Righteous in this World, whilst subliminally, subtly, persistently, deviously and egregious selling their commercial business proposition to an unsuspecting audience. "Charlatans"? No. Snake Oil Salesmen, wannabe PT Barnums and egocentric narcissists eager to reinvent themselves as Metal Gurus after failing in their previous careers and commercial ventures

    So, as my mum always told me as a kid - keep your friends close, but keep your enemies closer still. Having served in the British Army during the height of the Cold War, I consider reading Zerohedge to be akin to Armoured Reconnaissance

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    1. I read ZH more for geopolitical information than investing information (I'm one of those sad sacks more or less invested in metal, but I'm making good money buying and selling it). But this is the first time I've seen someone question the veracity of their reporting, or that of their contributors. Perhaps you meant that the analysis of the news reported there is infantile.
      In either case, aside from the now (again) dead horse of meta prices/manipulation, can you give me some examples of factual innaccuracy or analytical insanity?
      (I don't read a lot of their company-specific articles, memes they milk would be better examples)
      Thank you

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  20. What is great when there is nothing to trade because PMs are in a range on all possible time units :) is that as we get terribly bored, we find renewed inspiration to post on this blog in the meantime.

    I think Dan is getting a bit upset by repeating the same things over 3 years : that's the problem of modern blogs : nothing remains "news" more than a few days, while on the other hand, the blog's popularity brings new readers who have no idea about what has already been discussed even a month ago, and can't be bothered reading the thousands of posts necessary to find the vital information.
    If you had time, I'd suggest once again a blog organization such as the one we can find on wordpress, with a toolbar on top page covering once and for all the most important topics such as your point of view about manipulation, why you own physical gold, etc...
    It would take some time for starters, but imagine how much time (and nerves) you would save on the long run by not having to answer again and again to the same questions :)
    Have a nice day all,

    ReplyDelete
  21. Gregory

    My concern is not primarily with ZH - I am more troubled by e,g. Hiddensecretsofmoney.com and goldbroker.com and therealasset.co.uk but lets take a quick look at Zerohedge over the padrpt 2 days:

    - "Gold Slammed as Panic Seller dumps $520 million in futures" (then the market soikes up, but best not mention that)

    - "Communist Caption Contest" but Putin and Russia are not Communist (and arguably neither is China)

    - "Conflict between China and Vietnam us imminent" - source: Falun Gong (Epoch Times)

    - "Chart of the Day: whose housing bubble?" : China up 6.8% yoy = "a serious downswing"

    -"Of Gold and Geopolitics" : when a country ... offers a good social and political environment, demand for its currency increases. (The Chinese RMB is up around 25% vs US$ since 2005) The Roman Empie invaded Dacia at the start of the 2nd Century BC (actually 105 AD) and 'a new era of disarmament since the Cold War ended' ( www.globalissues.org/article/75/world-military-spending
    I am using a 7" tablet and posts are limited to 4096 characters, but I could otherwise elaborate very considerably on this cursory sample

    ReplyDelete
    Replies
    1. I think there's some irony sometimes that is missed. It's true that China has never officially abandoned communism, yet they are arguably more (at least crony) capitalist than we are.
      RE Vietnam, I wouldn't be quick to dismiss something just because it comes from Fulan Gong. There has been a territorial breach, troop movements, and a lot of deaths and destroyed property.
      China does have a housing bubble, and they seem disinclined to deal with it, and someone typed a BC instead of AD. I think China has a superior social and political environment in the ways that matter to foreign capital.
      In other words, I think you are nit-picking. But to each his own. I like ZH in part because it's one of the few places where you see bright people speaking their minds uncensored (the readers).
      Both the readers and writers are irreverent towards everything farcical. I like that. To each their own; thanks and kudos for the reply.

      Delete
  22. Lets get some humor to start the day. From a buyer of the US long bond. " I dont want any yield at all".

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  23. Looks like another day where gold and gold stocks have a "terrifying collapse" and the U.S. Dollar surges again, along with both stocks and bonds.

    "But Jim, you promised!!!"

    "At the last Q & A meeting!!!"

    ReplyDelete
    Replies
    1. Jim is in the business of saying what you want to hear. thus guy was railing against egomaniac shortsellers that will out their mother in a microwave for money in 2011. I think of jim as the captain schettino or the ayatollah khomeini of the gold market. Do as he does not as he says.

      Delete
    2. I remember around that time he was getting CIGA's to email gold mining companies to protest the shorting of their shares and that they had no balls cause they were not doing anything about the manipulative short selling when clearly they were falling out of favor due to rising costs and mismanagement.

      How is that for egomaniac trying to irrationally dictate the market, lol.

      Delete
  24. Check out IVN.TO. There will be plenty more Ivanhoe Mines coming up the longer gold stays down here. They just announced a highly dilutive stock offering and resumed trading down another 16%. IVN.TO looking like what will be coming down the pike for many other miners.

    If these companies are effectively shut out of the debt markets (the domestic oil plays have no problem tapping debt markets) then stock offerings are the only recourse.

    On a side note, with respect to whom an investor chooses to get his news from - Look at the markets and how they are behaving, then read the news from sites like ZeroHedge, etc (I use ZH as an example). If you cannot reconcile the differences, then that source is probably not the best place to spend one's time reading. For example, A piece of economic data comes out and the equity markets interpret is as very bullish, I will get 8-10 tweets from ZH telling me how terrible the data is. They will publish a couple articles pointing out the bad stuff.

    Yeah, their geopolitical stuff may offer promise, but their analysis on the markets is extremely biased - to the point of actually wondering who is writing this stuff. I wonder if it can be traced back to government servers.

    Just make me wonder about them. Can you actually trust a source that goes by the name of Tyler Durdin? who refuses to tell us who he is?

    many times we don't take advice from our relatives, but we will heed the stuff from a person we do not even know.

    Come on people....

    ReplyDelete
    Replies
    1. Are you seriously suggesting that CNBS is not biased?? The mainstream media is full of normalcy bias. Just as it was when the genius Ben spewed this gem on March 28, 2007:

      "At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained. In particular, mortgages to prime borrowers and fixed-rate mortgages to all classes of borrowers continue to perform well, with low rates of delinquency."

      Or this remarkable prognostication from May 2007:

      "All that said, given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited, and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system. The vast majority of mortgages, including even subprime mortgages, continue to perform well. Past gains in house prices have left most homeowners with significant amounts of home equity, and growth in jobs and incomes should help keep the financial obligations of most households manageable."

      You need to have a good bullshit meter when you read ANYTHING on the internet. Do you really think "how the markets are performing" is in any way rooted in a real, sustainable economic recovery??? Does the way these rational equity markets interpret anything really give you a realistic view of the future? Where do you get your "unbiased" economic news from?


























      Delete
    2. I go to the sources that best explain how the markets are performing. I have friends who are making a killing in equites and real estate. Anyone listening to the alternative media has had their balance sheets serioisly impacted. when the next downturn comes people reading Zero Hedge will not have enough meat on their balance sheet to weather the storm.

      I am giving a good piece of advice. so before someone gets his panties in a twist understand who's writing that trusted article. Come on, you people are smart you can figure it out.

      Delete
    3. for instance I don't go to the alternative sources to explain how gold is performing. I read trader dans blog because it makes the most sense.

      Delete
    4. I could give a crap who writes anything I read. If there is value in it I keep reading. As I said you must have a good filter to discern value in any information. I read (some articles) on ZH and other alternative media because the corporate owned US media is a freaking joke. Much of the info found there is not available on the MSM as the attention span of the average American is limited to the next segment of American Idol or the time it takes to eat Denny's $5 breakfast.

      I don't find much value in some guy telling me how much he just made in RE or the SM. Those guys remind me of 2007.

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    5. i didn't say how much I made. Read carefully. You should care who writes what you read. This is the point I am making.

      Delete
    6. I have read so much useless crap from so called experts that I'm not sure who should judge what is "good" to read. I figure since I am the consumer I will make up my own mind.

      Discernment: Discernment is the activity of determining the value and quality of a certain subject or event, particularly the activity of going past the mere perception of something and making detailed judgments about that thing. As a virtue, a discerning individual is considered to possess wisdom, and be of good judgement; especially so with regard to subject matter often overlooked by others.

      Delete
    7. You mentioned friends who were making a killing and I took it to mean that was where you were getting your advice. Did not mean to misrepresent your post. We probably just see the world a little differently. Cheers

      Delete
  25. I heard a joke last week

    A Gold investor dies and goes to heaven, but when he gets to the Pearly Gates St Peter tells him that Heaven is already up to its quota for goldbugs, and that there isn't room for him

    Just a moment, he says, and he shouts out "Gold is trading at a discount in Hell" and sure enough the gates open and all the Goldbugs race out, but the lone investor looks uncertain, and St Peter asks him why he isn't stepping inside, now that there is room for him

    "Maybe they are onto something.... " he says

    ReplyDelete
  26. Ding, Ding, Ding, Ding......

    General Jim's TRX just printed the "blue light special" price of $1.98 today.

    Congratulations!

    One share of stock right now is now cheaper than a Denny's "Grand Slam" breakfast price from the year 2001, when gold bottomed.

    Last I checked, Grand Slam breakfast at Denny's is up over $5 now.

    TRX share price hasn't even remotely kept up with inflation.

    None whatsoever.

    LOL.....

    ReplyDelete
  27. World Gold Councils website says that the demand was the same in Q1 2013 as Q1 2014. And gold had historic demand last year yet the metal dropped 28%. No rhyme or reason for anything these days.

    http://www.gold.org/supply-and-demand/gold-demand-trends

    ReplyDelete

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