"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


Monday, June 16, 2014

GLD loses 4.2 tons of gold

It has been nearly two weeks since we have had an updated report of what the current gold holdings are in the large gold ETF, GLD. We finally got one today.

The new number came in 4.2 tons below the last reported tonnage. GLD is now holding 782.88 tons.

That this is occurring against a backdrop of events in Iraq tells me that large traders/investors are using the current geopolitical rally in the yellow metal to sell.

I had remarked some three weeks ago that the first sizeable jump in gold holdings ( nearly 8.4 tons back on May 27th) was the first good news that gold has had in some time. What I wanted to see was whether or not this was the start of a new trend among Western-based investors or more or less a flash in the pan brought on by some value-based buying that was a one-off type of transaction.

From that point, GLD only added another 1.8 tons before today's fairly sizeable drop.

I do not think it coincidental that the drop occurred as gold hit a resistance zone on the price chart centered near the $1280 region. Obviously big sellers were lying in wait to take advantage of the short-lived spike in price set off by the running of buy stops in Asian trade Sunday evening here in the West.

I am noticing that crude oil is continuing to lose some ground this evening as is silver while the Dollar is firming up a tad. A lot can happen between now and European and New York trading on Tuesday but one gets the impression in watching the price action that traders are taking some of the "chaos" premium out of the metal (and the crude) as events in Iraq do not seem quite as dangerous for the immediate moment. That does not mean things over there are not a mess - what it means is that for now, ISIS has been stopped in its formerly unimpeded march south through the country and Baghdad looks to have been granted a reprieve.

With a situation like this however, events are fluid and can change rapidly but the fact that gold could not clear $1300 with what is happening in Iraq makes me wonder what exactly it will take on the geopolitical front to push the metal higher at this point.

In spite of all that is transpiring around us both domestically and globally, it seems like we keep coming back to the same theme - a lack of sustained inflation pressures in a positive real interest rate environment. Such has been the sentiment of traders for some time now. I am not sure what it will take to disabuse them of this notion.

Gold has continued support down near and just above the $1240 level and the resistance level near $1280 has been reinforced on the chart. It is currently back inside of this range.


  1. Hi guys,

    Greetings from Egypt, Hurgada :)
    I must admit I was scared shitless when I realized that the plane that would take us there from Tbilissi (Georgia) was actually not flying over the mediterranean sea, but directly through Syria. In particular, in the middle of the night, we flew over Alep, Damas, so one hour with my hair on the ceiling thinking that the rebels down there (and not only) could be equipped with anti aircraft missile and shoot for fun...anyhow, we made it, now we simply have to go back the other way :)

    Copper : we didn't hit my next target sub3.00, which was given by the mirror of the previous channel. My last target is going up with this new channel and the inf bollinger band on the daily time frame, so I put it at 3.00 at the moment. On the other hand, if prices decide to go beyond 3.07 and the ema15, I will sell my remaining position as well, so in all cases I'm covered and will make a decent profit on this trade.

    Gold : range 1240-1280 i.e fibonacci levels of 1180-1435.
    Have a nice week,


  2. I don't see a positive real interest rate. but I guess the market does. I know, I know , their view counts and mine doesn't. such is life. sigh.

  3. Ukraine pipeline explosion just reported.


    Investors immediately dump gold.

    $1,282 to $1,260

    The "Collapse of House of Cards" is already here.

    In the gold and silver mining area.

  4. TRX getting slammed 5% while investors are pouring money into travel and leisure stocks like NFLX, TRIP, EXPE today.

    Looks like the market is anticipating a booming 2nd half recovery in consumer spending.

    Stay in the system.

  5. Dan,
    What are the variables for the FOMC tomorrow? What could they say to make the market go up or conversely go down? Seems like mkt is at a standstill awaiting the FOMC but I have no idea what they could possibly say to change the direction the market has been heading... straight up up and away?

  6. She's a siren. Do NOT look directly into her eyes or you will wake up penniless.

  7. Lack of sustained inflation? Positive interest rates? Today Core CPI Jumped Most In 3 Years As Food Costs Push Higher. Core CPI hits 2.0 and matches PPI. FED has hit its target!! hooray, all is well!!!

  8. Information from Gold Trading Advisory Company about Gold premiums in India fell to their lowest in four months after the RBI allowed private companies to import gold.


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