Gold and What Moves it.

“We don’t have to worry about a recession — we are in a depression,” says James Rickards.

 

“If you take the classic definition of a sustained, long-term downturn with economic growth below trend, then we are in the midst of a depression,” says the senior managing director of Tangent Capital and author of “Currency Wars.”

 

Rickards doesn’t see Fed Chairman Ben Bernanke as having the solution to the economic malaise gripping the county.

 

“Bernanke’s not a trader, so doesn’t think like a trader; he has no exit plan,” Rickards points out.

 

With quantitative easing, Bernanke has put on a $3 trillion trade, and while some governors on the Federal Reserve believe he should pare back the $85 billion monthly injections, no one is saying the Fed should reverse course.

 

“There’s a good possibility I may never see another rate hike in my lifetime,” says Rickards. ...

The Board said it would be difficult for the gold price to go down for five years, because gold is not only held as a reserve it is also a speculative commodity.

 

BANGKOK(BullionStreet): Thailand's National Economic and Social Development Board said decline in the global gold price will be only temporary and comes on the back of speculation that Italy and other countries in Europe could sell gold reserves for debt repayment.

 

The Board said it would be difficult for the gold price to go down for five years, because gold is not only held as a reserve it is also a speculative commodity.

 

The current decline in its price was because some countries in Europe have insufficient cash reserves to make debt repayments. ...

George Soros, John Paulson, and Steve Cohen, who in aggregate control over $60 billion dollars, have been aggressively buying the most speculative vehicles associated with gold: call options on gold mining stocks.

Hong Kong and Singapore buyers are paying premium of $5 per oz for a gold bar. Dubai buyers are paying a premium of $7-10 per Kg. Turkey was reportedly paying a premium of $25 an oz over London price.

 

By Manisha Gupta
Gold has seen a lot of physical buying interest as its price witnessed the sharpest fall in last four years. Hedge funds have made record shorts in gold trade.

Reports that George Soros has cut his holdings in the past quarter are also putting pressure on the prices. And there is another report from Goldman Sachs predicting more declines in the near term. The regional presidents at the US Federal Reserves, who are asking for reduction in stimulus, are also keeping investors jittery. 

Gold prices have declined 19% in the current calendar year.

While paper gold is getting liquidated and the ETFs are seeing redemption, interest in physical gold has picked up. The demand is so strong that now investors have to pay a premium to buy physical gold. The delivery comes with a waiting period. ...

According to Xinjiang Geology and Mineral Resources Bureau, with gold reserves of at least 53 tons, the mine in Xinyuan county in the Ili Valley is expected to have an economic value of 20 billion yuan ($3.2 billion).

 

BEIJING(BullionStreet): World's largest gold producer China discovered yet another large gold mine in the Xinjiang province.

 

According to Xinjiang Geology and Mineral Resources Bureau, with gold reserves of at least 53 tons, the mine in Xinyuan county in the Ili Valley is expected to have an economic value of 20 billion yuan ($3.2 billion).

 

Covering a length of 3 km and depths of 60 to 300 meters, the mine also holds 31,200 tons of copper, said the Bureau. ...

According to seasonal analysis, precious metals usually peak in the late spring. However, a study of the past 12 years shows that its more apt to say that spring is a turning point.

 

By Jordan Roy-Byrne, CMT

1. Huge rallies begin from these conditions

Below is the NYSE Gold Miners Index which is tracked by the GDX ETF. Look at the RSI. Not only did it reach a multi-decade low but it has remained oversold far longer than during the comparable periods. 

In the four previous periods, the market rebounded suddenly and strongly in percentage terms. Meanwhile, the bullish percent index, a breath indicator is more oversold than in 2008. We plot the indicator with a 10-week moving average that shows it as far more oversold than in 2008. While this indicator does not go back that far, odds are it is likely at a 13-year low.

2. Springtime is usually a turning ...

South Africa's largest gold refinery, Rand Refinery, also one of the biggest in the world, said it will refine huge quantities of gold from the US.

 

OHANNESBURG(BullionStreet): South Africa's largest gold refinery, Rand Refinery, also one of the biggest in the world, said it will refine huge quantities of gold from the US.

According to Rand Refinery's chief executive, Howard Craig, the shipment of unusually large quantities of gold bound for the refinery (worth $1.1-billion) is just business as usual for the company.

 

He said it is nothing out of the ordinary as Rand Refinery does refining of gold and silver for Africa as well as the conversion of gold from various other countries, such as the US. ...

TheProspectorSite.com exists to provide proof via current events and history that precious metals are one of the best ways to preserve and grow your wealth.

 

Storing wealth in physical precious metal is not 100% risk free. It is possible someone could steal what you’ve worked so hard to amass leaving you with no choice other than to start all over. But such a risk is very low and I say this only after countless hours researching the best methods to store silver and gold, both domestically and internationally. I cannot say the same for wealth stored within the reach of an overbearing IRS.

 

The ability to buy and physically own precious metal is one far too many fail to capitalize on considering the volatile age we live. Right now, a person in the United States can legally trade dollars for silver, or gold, without reporting this exchange to a governmental agency (a few exceptions exist so use due diligence). PM advocates often refer to this privilege as the last frontier of wealth storage. I know of no other asset with the same discretionary capability but this window of opportunity is closing as you read these words today.

To argue if metal prices will rise or fall, short-term speaking, is redundant in my opinion considering the discretionary benefits of physical PM.

While some view the latest PM price take down with frustration….. I view it differently. Paper silver at $22, and gold in the $1300ish, help preserve precious metal as an irrelevant asset even as the world disguises our silent depression with denial and printed currency. Think of this PM obscurity as a postponement with a short shelf life. ,,,

America’s ticking debt bomb has been reset. Washington has suspended the debt ceiling, setting a date, and not a concrete dollar sum as a deadline, an unprecedented first in US history.

Ed Steer writes about the sell off in PMs:

 

... One of the other reasons that the sell-offs in the metal are hitting the shares so hard, is that mutual funds are feeling the effects of massive redemptions...and they have to sell whether they want to or not.  The markets are very illiquid...and this just makes matters worse.

 

But the one big question you should be asking yourself is this..."Who is buying all these shares that the precious metals investors are selling in such a panic?"  Think about it.  Somebody is...and whoever they are [and I have my suspicions] they have infinitely deep pockets...and are the very definition of "strong hands". ...

From Bruno de Landevoisin at Slope Of Hope........

It’s painfully clear for all to see that the majestic United States is now firmly caught in the rapacious stranglehold of financial elites which have completely captured it in a grotesque gamed monetary process.  Our country’s once idealistic and industrious free market economy has been hijacked and is undeniably being fraudulently and overtly financialized by the craven clutches and maniacal machinations of a contemptible self-seeking banking class. They have become nothing more than avaricious parasites disgustingly feeding from the grand trough of our treasured human ingenuity and self-respecting industry.

 

Unproductive asset classes of every shape and form are surging in price everywhere as the pumped up folly of the perpetually spewing free money fire hose incessantly flows.  Both privileged institutional and private favored recipients of the free flowing Fed funds are climbing all over themselves snatching up existing assets of all kinds, in a vulgar and narcissistic ferocious feeding frenzy. The gluttonous menu includes: Housing, Commercial Property, Farm Land, Fine Art, Vintage Collectibles, Classic Automobiles, Equity Indexes, ETFs, REITs, Options, Currencies, Futures, Precious Metals and Commodities………………………etc.

 

Just last week the NY auction house Christies, founded in 1766, posted its best week ever in its over 250 year old illustrious history. This is simply non productive wealth formation my twisted malfunctioning friends.  It is profoundly unhealthy and decidedly unearned prosperity, as it provides little to no substantial growth value nor functional benefit for the actual working economy on the ground which so many depend upon.  True prosperity comes from real authentic wealth creation through genuine tangible production with honest determined human endeavor, not speculative and discreditable self enrichment based primarily on asset inflation deliberately engineered by gross and dishonorable monetary largess ....

April 23 (Bloomberg) -- Ron Paul, Former Congressman from Texas, discusses his views on gold, central banks, and the weakened Republican Party. He speaks on ...

... Just as one can never trust the mainstream media to report any truth about the real reasons behind the rapidly growing economic suffering of people all over the world, one can never trust the mainstream media to report any truth about gold and silver markets as well. This is the point of this article. If you develop your beliefs about gold and silver by sourcing mainstream media news, everything you believe about gold and silver will always be wrong.

 

Here is a portion of the text from a Reuters article released early yesterday, with an obvious anti-gold bias filled with many lies: “Gold fell on Tuesday for the eighth of nine sessions, hurt by a firm dollar and persistent outflows from exchange-traded funds, pointing to more downside pressure on the metal…Gold has been hit by a ...

Platinum is a precious metal, as is palladium, though to a lesser degree. However, like silver, both are also industrial metals. Unlike silver, it's their industrial use that is the primary price driver for both platinum and palladium – and that use is undergoing a fundamental shift.

 

The largest source of demand for platinum and palladium is the automotive industry, for use in autocatalysts. In turn, the fortunes of the auto industry are sensitive to the health of the world's major economies. We've been bearish on platinum-group metals for years, primarily because we weren't convinced a healthy – much less roaring – world economy could be sustained when so many governments continue spending beyond their means.

 

We reconsidered the market last year, when strikes in South Africa – home to 75% of global platinum production and 95% of known reserves – threatened supplies. But as we wrote last December, the strikes ended without great impact on long-term supply.

 

Since then, however, the fundamentals of this market have changed. Others may disagree with our economic outlook, which is still bearish, but it's due to supply issues ...

By now everyone who follows the metals pretty closely is aware of the stunning reversal the metals made today after the blatant smash in the silver market at yesterday evening's commencement of global electronic paper futures trading.  A massive number of silver contracts were sold into the Globex electronic trading system, taking the entire market by surprise and wiping out a whole series of stop-loss orders there set below the market.  The silver market was driven down $2.10 (9.5%) in less than 4 minutes.  It was without a doubt  the motivated, premeditated operation of someone who was trying to completely disrupt the silver market.  It was someone who was operating without any fear of being investigated by the market regulatory branch of the Government.

But a funny thing happened.  Once the initial shock had quickly worn off.  The market slowly moved higher the rest of the night.  By 10:00 a.m. Denver time, about 18 hours later, the price of silver was even with its Friday close.  Once that occurred, the market started to quickly run higher in frenzied short-covering.  As I write this, silver is up 2.4% from Friday's close and gold is up 2%.

So what happened?  To begin with, the enormous appetite for physical gold and silver was fueled even ...

Today King World News is reporting on incredibly important developments taking place in the gold and silver markets.  Acclaimed commodity trader Dan Norcini spoke with KWN about the amazing action in both of these key markets and provided four tremendous charts.  Below is what Norcini had to say in his interview.

Norcini has been stunningly accurate in his predictions of the movement in the gold and silver markets.  Now the acclaimed trader discusses these incredibly important developments in both of these markets:  “Gold appears to have successfully retested its former spike low down in that important support level between $1320 - $1340 and held. What is important from a technical analysis perspective is that the volume completely dried up as price worked its way back into that critical support zone noted on the 4 hour price chart. 

 

Bears were hoping to be able to recruit a wave of fresh converts to their side and give them the firepower to pressure the market down through this level, thereby touching off another wave of sell stops and setting up a fresh new leg lower in price. Obviously, there appears to have not been a large contingent of traders interested in selling gold aggressively down at these levels right now. That gave some would-be longs the excuse they were looking for to re-enter the market plus stirred some mild, but not aggressive short covering on the part of the bears. However that all changed rather abruptly! ...

Today Egon von Greyerz told King World News that clients are having tremendous problems getting their physical gold out of Swiss banks as well as other major banks as the shortage intensifies.  Greyerz also discussed the fact that refiners simply cannot keep up with demand, “no matter how much they produce.”  Below is what Greyerz, who is founder of Matterhorn Asset Management out of Switzerland, had to say in this extraordinary interview. 

Greyerz:  “This week I want to talk about what we are seeing in the physical gold market, and why there is a disconnect in that market.  We transfer a lot of gold from Swiss banks and other banks into private vaults for investors. 

More often now, than ever, we are encountering incidents when the banks are putting up all kinds of obstacles for these transfers.  The first sign of the potential shortage of physical gold started with ABN AMRO a few weeks (when they) declared that they would renege on their commitment to redeem gold accounts in physical gold....

A large number of silver contracts were dumped on the Comex open on Sunday evening, a very quiet market period.

This ran the 'stops' and the price.

A similar number of contracts were then bought back at a lower price.  And then the market was roiled, but started to recover from a very obvious price smackdown.  

It is a little hard to see it on the 15 minute chart which just looks like a lot of selling.  I hear that 2500 contracts traded in 15 minutes is a near record for an off hours session.

The action is much easier to see on the 5 minute chart below that.

This looks very much like the Dr. Evil strategy which the banks and funds like to use when the regulators are turning a blind eye. ...

News out of Asia is roiling both the gold and silver markets this evening. Apparently Economy Minister Amari spooked the Forex markets Sunday when he stated that further weakness in the Yen could actually end up damaging the nation's economy. 

Obviously this is the FIRST sign we have seen out of official Japan that the level of Yen is now low enough for the powers that be there. Again, it is just one minister and there is no official change in policy but he is voicing concerns that the currency might have fallen a bit too far, too fast.

His comments are being used as a reason by some Yen bears to partially cover existing yen shorts and realize some gains. The downside to this ...