“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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Friday, November 7, 2014

Copper COT Anomaly

Tracking the copper market over this past year has been a rather fascinating study for me as it has produced some very unusual readings that do not occur very often.

I made mention of one such development earlier this year when noting the "Dueling Speculators" scenario in which the hedge funds were on one side of the market while the other large specs such as floor traders, non-registered CTA's and other private traders of size, were arrayed on the opposite.

Now we have yet another rather fascinating occurrence to note. This time it involves the fact that out of the 5 categories of traders that are reported and broken down, all but one are on the net short side of the market. The category carrying the entire weight of the net long position in the market is the Swap Dealers.


The Commercials - Producer/User/Merchant/Processor are net short along with the hedge funds, other large reportables and the general public. I am not sure why this is the case here with copper but it has been the norm for this year to see the Swap Dealers opposite the Commercial category. Both tend to generally be more closely aligned as to the same side of the market, although I wish to emphasize that it is not always the case nor does it need to be.

But it does strike me as rather odd to see the current configuration.

Here is the actual price chart.



As you can see, the market has essentially been slowly grinding lower since January 2012. There is a channel defined but the upward movement has been growing more shallow this year and has not been able to make it to the upper channel line. That is a sign of persistent weakness.

Thus far those on the short side of the market have been on the correct side although the market has not made it easy at times. It has been under $3.00 only briefly before popping higher but over the last month it has made several trips below $3.00 more frequently than at any time in many years. This is a testimony in my view to the overall sluggish nature of the global economy.

Will this market go in the direction in which the 4 categories are positioned and finally mount a weekly CLOSE below $3.00? I do not know but if it does, it will bode poorly for growth prospects.



While such an occurrence might unnerve some, it should be pointed out that it was not until the middle of 2005, that copper prices began any sort of deviation from its historical norm when it comes to price. Just look at the chart going all the way back to 1992 and you will see what I mean.

Copper at $2.00 is not exactly cheap when compared to the 13 years prior to the breakout in 2005. Maybe copper is reverting back more towards its historical average when it comes to price. If that is the case, $3.00 copper might still be considered rather expensive.

All this of course is dependent heavily on what happens in China but I can tell you this, if growth were to slow at a faster rate in China, and again, no one knows for sure what will happen there, but if it does, copper prices would have some substantial room yet on the downside. That rectangular support zone noted on the chart might just not hold after all!

We are all certainly going to see one way or the other. As a matter of fact, I suspect our monetary masters are also keeping a close eye on this chart, along with that of the crude oil markets I might add.

62 comments:

  1. Your comment:

    "Copper at $2.00 is not exactly cheap when compared to the 13 years prior to the breakout in 2005. Maybe copper is reverting back more towards its historical average when it comes to price."

    Can be applied to gold too, as well as many other commodities. If you look at a 200 year chart of commodity prices, you'll see a fairly consistent cycle of up and down prices with peaks occurring roughly every 25 to 35 years. The latest up cycle began roughly in year 2000 and peaked roughly 2011 to 2012. Now they are going down. I am referring to this chart:

    http://www.bing.com/images/search?q=200+year+commodity+cycle&FORM=HDRSC2#view=detail&id=EDDFE04955770D967162B79F45D37EA009F8F6EE&selectedIndex=0

    ReplyDelete
    Replies
    1. eric webber;

      that is a simply fascinating chart! thanks so much for sharing it with us.

      Dan

      Delete
  2. www.tfmetalsreport.com/blog/6304/peter-schiffs-advice-switzerland

    Interesting video with Peter Schiff advocating the gold initiative in Switzerland.

    Also interesting to see they are now taking donations in Bitcoin. Looks like the PayPal account was shut down after all!

    ReplyDelete
    Replies
    1. From the looks of it TFMR just underwent a radical format change and comments have been disabled or eliminated on the public side by all appearances.

      Not that it really matters at this point. At one time lonnnng ago the sites main appeal was the poster diversity and sheer amount of comment quantity that made the site a popular and unique destination.

      But with obviously decreasing commentary traffic from registered users on the site over the past year(s) or so this latest move has more or less extinguished any remaining conversation on there that was the primary source for it's energy and appeal at one time.

      What they've just done is circle the wagons a bit tighter....raise the fences a bit higher....and dimmed the lights on fresh conversation....while papering the windows of transparency that the site once sought in the beginning.

      In the end, a blog with a diminished poster base (now by design) that looks to hide or segregate the poster base they until recently used to tolerate and need, has basically cut off it's nose (poster comments) to spite it's face (survival) because they didn't realize or accept what the core problems were on there 2+ years ago.
      The problem, the entire time, was from within. The same problem that deemed it necessary to spy on their registered users private message system in an attempt to look for enemies of their collective kingdom.

      This latest move and reformat is symptomatic of a greater ailment they didn't or can't recognize until it was too late.
      They can hate the messenger(s) or the manner of the message but to deny or resent the accuracy of the message was a mistake long ago.
      The attempt to quiet or segregate any remaining posters from any type of critical poster mass was the equivelant of a wet blanket on a small tire fire.

      The experiment is over....caught up in a vortex of a negative feedback loop of diminshing returns...or posters. The reformatting has effectively sealed it's fate at the expense of many not soley measured in dollars but also in time.
      And what a waste of it, indeed.

      Delete
    2. Looks like a clear admission that the main street comments were too much of a cesspool, driving off any newcomers who might stumble onto the site. Some of us tried to warn of this 2-3 years ago, to deaf ears. All water long since under the bridge.

      I just noticed the leaderboard is gone too. It had only become a list of the most mentally disturbed, so good riddance.

      Delete
    3. Though the fact is that anyone who was repulsed by that site 2-3 years ago ended up saving themselves a ton of money! Luck? No, just good instincts, properly rewarded.

      Delete
    4. What's left to say?
      Just about anyone with an objective/non-groupie bone has apparently come to their senses over time and realized the message from the top was a cyclops outlook with a persistent marketing salespitch behind it.

      There is nothing Maguire, Sinclair, Sprott, Butler etc could say or do that wouldn't result in it being lapped up while expecting or demanding that others there accept it as some type of gospel from their Fearless Leader.

      In fact, the owner could probably care less what some levelheaded people are now starting to question and wonder exactly what it is they find endearing about the whole experience at this point.
      And who could blame them?

      How could you not start questioning the obsessive attitude or belief/marketing system over there at this point?

      No one there dares entertain the idea that some parts of the PM blogosphere operate on a commission basis or a "you scratch my back, I'll scratch yours" basis in their tight little mutual admiration society.

      There's a reason why hardly anyone rocks the commission boat in the big name PM pond and questions the motives or manner (or their missed predictions) of the perma-hucksters.

      It's all about the money. Other people's money.

      Delete
    5. It's never a bad idea to head in the right direction. I hope that it's not too late to salvage something from TFMR.

      Dan - hope you're not offended at the partial hijack of the thread. For what it's worth I frequent here but don't post much because I don't have a lot to contribute beyond the other knowledgable and savvy posters here. Haven't used your advice to 'make' money but it sure as heck avoided losing the way I would have without it. I am sure you've saved a few others as well. Thanks for all that you do.

      Delete
    6. Hello Happy. Good to see you.
      EO

      Delete
  3. I have been wondering how long copper can keep a 3 handle, especially with silver tanking. Perhaps the copper producers are smarter than the PM miners. As long as they can make money at 3+ why not hedge? I guess they don't believe the hype of 10/lb copper... Added a short gold contract at 5:15 into the weekend. I looked at silver's relatively aneic performance as a tell-tale sign. Gold is the go-to place to be. Think about this, gold, as bad as it has been performing is off 37% from the very top. That really isn't that bad. If a stock is off 37% in this bull market, hardly anyone complains.

    The problem lies in the leverage of paper and the mining shares and the decimation in the silver price. If anyone just bought physical gold with cash, they wouldn't be feeling terrible pain, just the annoying opportunity cost of being in the wrong sector at the wrong time.

    ReplyDelete
    Replies
    1. Hi Eph

      i think the holders of Gold are probably segmented into a variety of categories such as

      1. Bought it long ago, will hold for a long time, price insensitive

      2. Bought/continue to buy at various stages of the cycle, intend ti hokd for a long time, lower price represents an opportunity

      3. Bought somewhere above current levels on expectations of sudden immense wealth, angered that the price has been hammered

      4. In and out as opportunities present themselves, currently slightly peeved at the absence of a viable trend

      5. Fantasists who dont have any signifiant holding, trying to prove a point or sell something

      In contrast, Copper is surely a more specialised - and far less emotive market (from a retail perspective at least): I cannot imagine anyine compulsively hoarding copper for anything other than resale, and from a trading perspective it must surely be primarily speculative.

      Gold is symbolic if many things, copper is utilitarian; Silver seems to fall somewhere between the two, and appears ideally suited to the fantasies of the "get rich quick" crowd

      Delete
    2. Eph 6:7;

      That is my way of thinking as well.. seeing those Commercials with net short positions is evidence, in my mind at least, that they can make some nice profits at $3.00 copper and are securing that with some paper hedges.

      It is always hard to read exactly what the Swap Dealers are up to because we never know whether those are speculative positions or themselves or are hedges against over the counter positions or other forward contracts that they might have on their books.

      Your last paragraph is excellent.

      Delete
    3. Ophelia;

      Very well said..Excellent comments., thanks

      Delete
    4. I bought silver with cash, and I feel the pain :)
      A lesson reminder, quite worth the loss of cash.
      Never lower your guard.
      Have a nice weekend,

      Delete
  4. Dan
    Truly interesting position in the COT. One could easily draw a descending triangle usin the last couple lower highs and say it's getting pinched into a break out up or down. If the single group of longs goes short or even reduces their long positions a bit copper could head well below the support you note. It that happened the investor in me would be looking at the larger producers as potential bargains (if they like the gold and silver miners can survive in a low price market).

    Time will tell.

    ReplyDelete
  5. Another terrific call by the experts at KWN, who predicted the "Terrifying Collapse, Wipeout, and Shockwave" that hit the precious metals sector.

    Meanwhile both the Dow and Transports hit record highs simultaneously, leaving poor Richard Russell scratching his head again.

    List of the experts:

    - Eric "Crybaby" King
    - James "Belvedere" Dines
    - "General" Jim Sinclair
    - James "Bond" Rickards
    - Bill "Wild Turkey" Murphy
    - Rick "I'd Love To!" Rule
    - Paul Craig "Moonshiner" Roberts
    - Richard "The Godfather" Russell
    - Eric "The Billionaire" Sprott
    - Stephen "Squeaky" Leeb
    - David "Blue Hair" Stockman
    - Egon "Egghead" Von Greyerz
    - James "Month In, Month Out" Turk
    - Michael "Screaming" Pento
    - Peter "Smug Face" Schiff
    - John "Squealer" Embry
    - John "The Monk" Hathaway
    - Ben "Prep School" Davies
    - Andrew "Secret Agent" McGuire
    - Jim "T-Shirt" Willie
    - Doug "Don't Cry For Me" Casey
    - "Steaming Turd" Ferguson
    - Bo "Never Heard of Him" Polny
    - John "Slit Eyes" Ing

    ReplyDelete
  6. And our own esteemed Dan Norcini hit the jackpot by calling the exact top in the oil an gasoline market within 24 hours.

    Since then we have seen the most staggering collapse in energy prices since Lehman Bros.

    ReplyDelete
  7. The 10 Commandments of a good website:

    1) Thou shalt not worship any graven image such as being a goldbug, or any other bug.

    2.) Thou shalt not rely on blind belief, which has not been supported by careful reasoning.

    3) Thou shalt not reject others' points of view, except respectfully, and supported by reasoning.

    4) Thou shalt not use manipulative techniques of argument and fallacious reasoning.

    5) Thou shalt not use ad hominems under any circumstances.

    6) Thou shalt not use emotive argument.

    7) Thou shalt not use Straw Man argument.

    8) Thou shalt not be overweening, boastful, and arrogant.

    9) Thou shalt not use trolling methods of posting.

    1 0) Thou shalt not be incapable of understanding that nothing is certain, and almost anything is possible, in this crazy world of ours.

    Respectfully, I say, I hope this is not my final swan song. Crash!


    ReplyDelete
    Replies
    1. Whatizzz zisss point ate?
      C'est impossible, mon ami.

      Delete
    2. I like the list Peter Dykes...... but have you seen any hyperinflation lately? (JK)

      https://www.youtube.com/watch?v=1sONfxPCTU0

      Delete
    3. Gene, you won't catch me on that one! Lol.

      Delete
  8. Dan, I find your site a must read every day. I believe it is the bls web site that has calculator for finding what the current purchasing power of dollar is compared whatever year you want to choose. With that said Is it possible to use the current value of the dollar and compare to historical prices ?

    ReplyDelete
    Replies
    1. silverwood;

      try this out my friend, it is the site that I use for that:

      http://www.minneapolisfed.org/community_education/teacher/calc/

      Delete
    2. Thanks Dan, I guess what I wanted to ask was how can you convert a chart into CPI adjusted prices? What would that make your long term copper chart look like? This inflation thing can become quite confusing.

      Delete
  9. Trader Dan:

    If you had bought and held Gold from $1500-1600, or silver from $22-25, what would you do right now? The horse has left the barn so to speak....

    Would you sell, or just hold and wait now??? Any thought how long the wait will be???

    Thanks.

    ReplyDelete
    Replies
    1. david dorian;

      it all depends on WHY you bought them. If you bought gold for insurance purposes, then I would continue to hold it as most on this site who post do. We do this because we try to be prudent understanding the risks involved in the current monetary system. However, that does not mean we bought gold because we expect it to "go to the moon" making us rich in the process.

      Can you see the difference? The former is prudent, holding some gold in their portfolio as a safe haven and form of insurance. the latter is simply someone who is a pure speculator whether they can admit that or not.

      Why do I say this -because if gold is an insurance policy I am holding, I do not obsess over its price any more than I obsess over the cost of my homeowner's insurance policy.

      If however, I bought it with the intention to "get rich" when the "system collapses" then that is another matter because I tied up capital in that investment that could have been better put to use elsewhere.

      As far as silver goes, I am not a fan of silver. Never have been as a form of insurance. I would own silver not as money but rather as a form of a speculative long term buy based on expecttations of higher inflation down the road. Silver to me is a play on inflation, pure and simple.

      So, you need to see why you bought these metals David.

      Also, what percentage of your portfolio did you tie up in these metals? I am not asking you to put that out here in public but to find out for yourself. If you have more than 50% in these metals, you might want to think about diversifying somewhat as that means you are betting half your net worth on substantially higher prices which may or may not happen any time soon.

      The truth is we do not know the future. Gold was in a bear market for 20 years along with silver. Could it happen again? I do not know but neither would I rule out the possibility. Do you want to take the risk that such a thing is not possible?

      Again, what is your time line in investing? One year, two years, 5, ten, 20?

      what we are talking about here it setting yourself up a sound investment strategy in which you diversify and determine what percentage of your net worth you want to allocate to various asset classes and why.

      I think when you can set down in quiet and determine this, you will answer your own question.

      Delete
    2. David, the horse has left the barn, but he is out in the field kicking his hooves up, and eating fiat dollars merrily as if there was no tomorrow. Eventually he will be sated with these debt based fiat dollars, which will give him a tummy ache with much wind, and will return to his stable for juicy hay, which he has always loved and trusted so much.

      Delete
    3. @ Peter -- seen any hyper-inflation lately. Please let us know when it shows up

      Delete
  10. Hi all,

    Here is a chart I found thanks to Pierre Leconte.
    So..will stocks reverse down soon to favor bonds?
    I'm keeping the chart in a corner of my mind;

    Have a nice weekend,

    http://i57.tinypic.com/mbooqx.png

    ReplyDelete
  11. EUR USD.

    I think that the blue line has proven to be a support to eur usd prices until now.

    http://i60.tinypic.com/15qautg.jpg

    If it is true in the future, it means that Eur Usd will not be under 1.21 even at the end of this year.
    It also means that, though there is still plenty of room between the red and blue lines for now, the market will have to chose which one will fail within less than one year.
    As long as red resistance and blue support are valid, I see Eur Usd as part of a kind of giant descending wedge :)

    http://i60.tinypic.com/15qautg.jpg

    ReplyDelete
    Replies
    1. Good. EUR starts seasonal upswing from Nov 11 to Jan 11

      Delete
  12. Another French stereotype.... not! :) :)

    https://www.youtube.com/watch?v=YpFWbzcvIwo

    Dan, hope you still enjoy doing this blog.
    The day you don't, just stop it.
    In the meantime, my thanks every day for running it.

    ReplyDelete
    Replies
    1. Hubert;

      You are a real credit to this blog! One of the good things about running this and putting up with all the grief from gold perma bulls has been to have attracted such quality people here to the site as yourself and the others who are regulars here.

      Delete
    2. Thnaks a lot, Dan.
      Coming from you, I'm really proud of the compliment.
      Take care,

      Delete
    3. Yep, total agreement with TD.
      I guess it goes mostly unsaid but after reading HDH sometimes I just say "wow" out loud.

      Thanks HDH :-)

      Delete
    4. Dan and a big thank you from all your Uk readers. I just appointed myself their spokesman :) Looking forward to visiting Nashville in December!

      Delete
  13. Copper related...massive Chinese demand!

    "Copper imports (China) climbed 2.6 percent in October from month ago to 400,000 tonnes, beating expectations that it would fall due to the week-long holiday early in the month, data from the General Administration of Customs showed.

    The increase in copper arrivals - the second month in row imports have risen - follows months of falls in the aftermath of a metal financing scandal surfaced in May, and suggests banks have gradually resuming lending and counterparty confidence has improved.

    This is also the first time since April that copper arrivals broke out of the 300,000 range, as a high profile $1.2 billion financing scam at Qingdao Port in China sent shockwaves through the global base metals market and prompted some big banks to temporarily halt financing deals." (cont.)

    http://af.reuters.com/article/metalsNews/idAFL4N0SY04W20141108?pageNumber=2&virtualBrandChannel=0
    ~☆~☆~☆~☆~☆~☆~☆~☆~☆~☆~

    "China's stockpiler far exceeds 2014 copper-buying plan: sources"

    By Polly Yam
    HONG KONG | Fri Nov 7, 2014 5:16am EST

    HONG KONG (Reuters) - China's commodity stockpiler is likely to buy more than double the amount of copper it planned for 2014 as the world's top consumer takes advantage of low prices in the international market, but it has stuck to its target for refined nickel.

    The aggressive buying of copper this year, now estimated at up to 700,000 tonnes, was to meet the country's expanded strategic stockpiling policy and because of low prices, said three industry sources, who declined to be named because of the sensitivity of the matter.

    This year the stockpiler, the State Reserves Bureau, has also bought molybdenum for the first time in 20 years, as well as cobalt, tungsten and rare earths, from domestic producers.

    China's cabinet said on Thursday it aimed to improve the national reserve system for resources, strategic materials in particular, to secure supply.

    The stockpiler's initial plan, set in December last year, was to import 300,000 tonnes of copper in 2014 with target prices below $7,000 a tonne.

    Having placed orders for that amount for delivery in 2014, it then decided to buy about 200,000 tonnes of stocks already in bonded warehouses in China in March-April, when the price hit multi-year lows in the international market.

    And it recently placed orders for 150,000-200,000 tonnes of imports of copper cathode through state-owned firms, the bulk of it to be delivered to state warehouses in the fourth quarter of 2014 and the first quarter of 2015,...(cont.)

    http://mobile.reuters.com/article/idUSKBN0IR0UW20141107?irpc=932

    ReplyDelete
  14. The next Comment might be quite long

    sorry: it has taken me quite a while to write, and I hope people find it worthwhile

    ReplyDelete
  15. The following article by Paul Craig Roberts is being widely quoted as if it represented an authoritative statement of fact; http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/11/8_Paul_Craig_Roberts_Shocking_Interview_On_Criminality_By_US_Fed.html

    I believe, however, that it is based on a number of misconceptions and fallacies, with the reader led towards a preconceived conclusion which is not based on rational analysis, facts be damned. I am posting this critique on this particular thread, because I believe that informed analysis of the COT Report will confirm that Roberts is misguided in his analysis of the Futures markets

    Roberts himself is a talented individual, but surely not of the calibre of e.g. Sir Isaac Newton (who almost went bankrupt during the South Sea Bubble http://www.sovereignman.com/finance/how-isaac-newton-went-flat-broke-chasing-a-stock-bubble-13268/ ). Mozart - a genius by any standard - was a spendthrift and penniless throughout most of his life, as was Karl Marx. Winston Churchill was an intemperate alcoholic with severe mental health issues; even Richard Nixon - for all his failings - was a great and very capable statesman and politician. LTCM was managed by a number of Nobel-winning quant mathematicians, but collapsed nonetheless. My point is that even conspicuously great men (and women) are fallible, and whatever his credentials, there is no reason to assume a priori that Roberts is correct: his analysis stands or falls on its own merits, not his.

    After a wordy intro, I will try to limit my critique to 3 points

    Roberts' assertion is that " banks can print gold futures contracts in unlimited amounts" and that they dump these into the markets at ungodly hours at the behest of the authorities, in order to manipulate the price of precious metals.

    1. Futures contracts are matched on the exchange, and there are no "orphans" : is it therefore not equally true that the purchasers if these contracts also "print contracts?" My understanding - please correct me if I am wrong - is that over the past 18 months it is in fact the Bullion Banks which have been taking the BUY side in these transactions, rather than initiating the Selling (which during the smackdown which took place in the middle of last week was largely from Hedge Funds and Algos). On the basis of the COT Report, therefore, Roberts is clearly wrong in his assertion that the price collapse was orchestrated by the Banks

    2. Roberts asserts that the Banks - or, at least, the agencies who he alleges are manipulating the markets - " can print gold futures contracts in unlimited amounts". So why didn't they? Why did they stop, and why isnt't the price of Gold currently in the low single-digits as a consequence?

    Ignoring for one moment the notion that, according to Roberts, the Banks making the Bid price also have the capacity to "print gold futures contracts in unlimited amounts " and thereby drive the price up to the Moon, the simple fact is that there clearly was a limit, and as Dan has pointed out, the Sellers apparently "Sold Out".

    Not only is Roberts therefore wrong about WHO was behind the selling, he was clearly also wrong about HOW they went about it and almost certainly wrong about WHY

    ReplyDelete
  16. 3. The major downswing last week was initiated at 2pm Hong Kong/Singapore/Beijing time: Roberts asserts that this was " when the Asian physical markets are closed." This too is untrue, because at that time both the Singapore Exchanges, the Dubai Gold & Commodities Exchange and (most importantly) the Shanghai Gold Exchange are very much open for business

    But this is perhaps irrelevant, because my understanding is that - with Gold also quoted and traded as a currency (XAU) the initial large Sell order was in fact executed in the FX market. 2pm Asia corresponds with the morning session in Europe and - more notably - mid morning in Ukraine and Moscow. Who knows what was behind the transaction, but I am fairly certain it wasn't a Bullion Bank selling an unlimited amount of Futures on the instruction of TPTB at a time when the Asian markets are closed. Roberts is WRONG

    It is neithr necessary or helpful to impute motive to Roberts' misguided assertions; however, I hope that the above analysis is sufficiently lucid and objective to at least raise questions about the merits of his article. As for my own motivations, given Peter's speculation yesterday about the P&L dynamics of my own portfolio, and the effect he believes this has on my personal outlook and investment psychology, I am happy to go on the record as stating that my average purchase price is $1328.24, that I have made no significant transactions in Bullion since Q1-2014, that I hold no material positions in either Silver or Mining Shares, and that Commodities and Precious Metals account for less than 15% of what I consider to be a well-diversified portfolio of assets. I am an active Trader, but not in Metals or Commodities

    And Hubert - thanks for the email - both doing just fine

    ReplyDelete
    Replies
    1. Is this the same Dr. Roberts that I saw on Yahoo finance saying that the Fed is shorting gold in order to prop up the dollar? I saw something truly absurd where he claimed that QE should have caused a massive collapse of the dollar. But the Fed prevented that collapse by placing naked shorts on Gold thus causing gold to go down and the dollar to go up. I am amazed anyone listens to this nonsense.

      Delete
    2. Ophelia.
      Maybe we should start a ten steps foundation.

      Goldbugs Anonimous
      Or
      Friends of Trader Dan

      Hello, my name is Mike and I am a recovering goldbug.

      Step One
      Admit you are a goldbug.

      Step Two
      Admit gold is a commodity not money

      Step Three
      Admit golds price is not controlled by evil cartels or any one else.

      Etc.....

      Delete
    3. I also posted that critique on another website, verbatim

      it received an abusive 27 line response including the statement

      "None of what you have stated as fact, to discredit Dr. Roberts, is what actually happened, no matter how strongly you assert it."

      That's it - blanket denial.

      His conclusion: "I don't need to answer all these stupid questions about shit that I don't have a clue about"

      Delete
  17. Here is a thought-provoking article I have just read over lunch in an Irish pub in a very autumnal Belfast: make of it what you will http://www.globalresearch.ca/engineered-economic-crisis-simultaneous-inflation-and-deflation/5412686

    ReplyDelete
    Replies
    1. Ophelia, a damn good paper summing up the state of our current broken mkts. Thank you.

      Delete
  18. Thanks OB...nice write up and valid points.
    I think the overwhelming amount of those large transactions and price movements are indeed FX oriented XAU (or XAG) transactions.
    Given that the size of the FX market is immense....5+ TRILLION DAILY....it's little wonder that at times we see large swings downwards as well as upwards.

    The funny thing about all the manipulation accusations is that they're always framed like some evil banker boogieman was at work while others were safely asleep only to wake up to some startling price movements.

    The US-centric view of his is kind of based on our timezone without recognizing that the other side of the planet is fully awake and conducting business all "night" long.

    There was no sneak attack in the middle of the night but instead just enormous FX trading volumes in markets where a billion plus people live and work everyDAY while others sleep.

    ReplyDelete
    Replies
    1. his remark about Asian markets being closed was not accidental - it was a wilful misstatement of fact intended to create a certain - misleading - impression. It was factually wrong

      Delete
  19. the first time heard gold manipulation I laugh and be so confident my way of trading. Using Toby Crable's Volatility Trading Technique you can long or short big to get home run easily.I really love gold market which everyone involves. West and East meet together at gold price. I got a big time when gold going up and currently get a big time when down. Honestly the way Dan analyzes gold market is the best. Im student of Larry Williams however Larry still seeing COT in an old way.So combining Larry and Dan' here, I have an extremely edge when trading gold. When you right at gold you also right at Sp500 because both inversely correlated. So if next week gold sideway Sp will be so as well. I looking for triple or quadruped my account EOY. Don't worry about me I got quadruped before when gold in a bull phase from 2010-2011 but at that time I was newbie and that just sheer luck

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    1. Linh; Just realize that if you are looking for those kind of gains that you are doing more gambling than speculating. That is ok, but realize that most gamblers end up sleeping in the street. Examples being Livermore, Unger, Jimmy the Greek and on and on. Good luck and I hope you hit a lick and you just might, as wild and wooly as these mkts are. Anything can happen.

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    2. Actually I just waiting for not just looking for. Thank for your concern but Im know what I am doing

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  20. I am sure allwill be pleased to learn that "Tickets to the November 15 th San Francisco Q&A Sesion are Still Available".

    Rhetorical Question - What does this mean?

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  21. More about Gold as a currency unit traded in the FX Markets

    Our friends at Zerohedge are now claiming that the Swiss bank UBS has admitted rigging the Gold market http://www.zerohedge.com/news/2014-11-09/another-conspiracy-theory-bites-dust-ubs-settles-over-gold-rigging-many-more-banks-f

    Read the article ~ that is NOT what it says. Not at all, and furthermore the article is factually wrong in stating that UBS is unique in having a common management structure covering FX and Precious Metals - I know as a certain fact that HSBC, Standard Chartered, Deutsche Bank, ING, RBS and Bank of China also do, and I am confident that this is in factvthe norm

    UBS has never been a participant in the London Gold Fix, and whilst it is quite probable that its metals traders have been playing fast & loose, that is a long, long way from being evidence that it is systematically "rigging" the markets

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    1. ZH is always full of crap. Fade whatever they say, and you'll do well.

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  22. Here is another learned article that leaves me dumbfounded: http://www.24hgold.com/english/news-gold-silver-gold-s-fundamental-supply-picture.aspx?article=5981348920H11690&redirect=false&contributor=Richard+Mills&mk=1

    The author analyses the Sources and Demand fir Gold and reaches the conclusion that

    "The production of mined gold remains well below market demand. As long as demand exceeds mined supply how can gold’s bull run be over? Your author doesn’t believe it can be."

    The inevitable Money Shot is of course that

    "The best way to profit is to buy when everyone else has sold and assets are at rock bottom prices. That would be now".

    The problem is that, whilst meticulously adding up 3000 tons of annual Supply and comparing it to 4000 tons of Demand, the author elects to overlook the 170,000 tons of above-ground stocks, ALL of which remains potentially available for sale. Also, what I find truly remarkable is that the methodology used appears to take no account of wholesale resale: if Bank X takes delivery if 1 ton if physical, that counts as 1 ton if additional Demand; if it later resells it (either into the market or to its Customers) that apparently does not add 1 ton to Supply, because its not recycled as "scrap". Personally, I consider that to be a major flaw

    It is quite clear to me that those smitten by the Gold Bug and those making a living as parasites on their backs are purblind, and can only see what they want to see. It is called confirmation bias and offers a fast track to rack and ruin

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    1. OB-
      It is another argument commonly made by Gold Bugs. The gold price is below the cost of production, gold mines will close and therefore the price will necessarily have to go up to meet demand that is not being met because of the shut in production. The problem is, gold is not consumed and as you state most gold ever mined is above ground and still "available for sale" to meet demand... One can make the "cost of production" argument for oil or any other consumed commodity, but seems it is more difficult to make with Gold.

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    2. Once metal lost it monetary value due to legal tender laws, it became an overabundant commodity. There is a lot of float to consume to extinguish it enough to where mine production enters the picture in a big way, that's gold. I'm thinking silver is being consumed by new industry and inflation hedgers and currency collapse preppers, the hoarders are more likely to grip silver. I don't see much increased production of goods and services, All I see is asset inflation and stock share inflation.

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  23. TT

    this is especially true in the case of Silver, where the COMEX inventories are overflowing

    The CEO of First Majestic - a major Silver miner with operations in Mexico - recently gave an interview in which he noted that his company had held back almost 1,000,000 oz of production and was openly calling for other producers to form a cartel to inflate the price. http://www.futuremoneytrends.com/trend-videos/interviews/mining-ceo-seeks-form-physical-silver-cartel-paper-manipulation

    This incitement alone constitutes a felony under Federal Antitrust legislation, but the bugs were lapping it up, cheering him on

    right up to the point where ge noted that the all-in cost of Silver production had falllen from $16 to $13 / oz, with a Cash Cost below $10 - at which point he (and all the other miners reporting sub-$16 production costs) became liars who were just trying to dupe investors: http://hiddensecretsofmoney.com/blog/Fed-emergency#comment-1652863965 Apparently David Morgan knows better, and he says it costs more than $21 - which of course is why Silver has fallen far below that level whilst the volume of production at First Majestic has risen from Q2 into Q3-2014

    these people hear only what they want to hear, and get extremely defensive if you highlight something which challenges their preconceptopns

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    1. That crossed my mind but I didn't know if it was a Mexican company or American. It's the wild west in Mexico who ever has the biggest gun wins forget about the law in Mexico, there isn't any. There's tow or Three thousand killed just over the line every year. I'm 25 miles off the border.

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    2. I think there was 10 million dollars of investor money sunk into the Shafter tx mine and I don't think they produced one ounce of silver, talk about investors being duped.

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