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Gold and What Moves it.
Tracking all things that relate to and affect the price of gold.
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Eric De Groot: Most Will Live To See $3,500

Eric De Groot writes:

Any experienced trader knows that as long as NY dominates the paper price of gold, it will never, ever breakout after a Fed statement.

While anyone can expire unexpectedly, the vast majority of your readers under the age of 95 and eating their recommended daily servings of fruit and vegetable instead of deep fried twinkies will live to see $3,500 despite the emotional roller coaster of the AB delay. ...
Hal's insight:

Had to laugh at the images. Click through for his charts and the rest of his analysis. Laughing is good, fyi. ;-)

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oftwominds-Charles Hugh Smith: Essays in Fragility: Shadow Banking, Housing Inventory and Liabilities

oftwominds-Charles Hugh Smith: Essays in Fragility: Shadow Banking, Housing Inventory and Liabilities | Gold and What Moves it. | Scoop.it
by Charles Hugh Smith:

Denial doesn't change reality. It only cripples our response to reality.

Psychologists and behavioral economists have found that we deceive ourselves (conceal the truth) to serve our own interests. Perhaps this is why the mainstream ignores the Id Monsters in the shadows: shadow banking, shadow housing inventory and shadow liabilities.

Let's start with shadow banking. Shadow banks are hedge funds and other entities that engage in financial business without being banks. Shadow banking is now larger than conventional banking in the U.S.: via Zero Hedge: The Historic Inversion In Shadow Banking Is Now Complete.
The global picture isn't much different. Shadow banks control 5 times as many assets as public financial institutions. Note that most of the shadow banking sector is in the U.S. and Europe: ...
Hal's insight:

Click over for the full piece. Great article.

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China's influence on the global silver market has surged since the turn of the century | MINING.com

China's influence on the global silver market has surged since the turn of the century | MINING.com | Gold and What Moves it. | Scoop.it
Middle Kingdom set to become world's second biggest producer of the precious metal

In tandem with its economic resurgence China's position on the international silver market has changed dramatically since the turn of the century, with the Middle Kingdom expected soon become world's second biggest producer of the precious metal.

Kitco News reports that a new study on the Chinese silver market published by Thomson Reuters GFMS and commissioned by the Silver Institute says that China has transformed from a "relatively small player" on the silver market as recently as the 1990's into the world's second largest silver fabricator with a burgeoning share of both global supply and demand. ...
Hal's insight:

China has a much longer history with silver. They get it.

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Two Important Charts For Gold & Silver Investors

Two Important Charts For Gold & Silver Investors | Gold and What Moves it. | Scoop.it
By Egon von Greyerz Founder Mattern Asset Management on King World News:

"{... The US now has a National Debt of $16.4 trillion and over $225 trillion of Federal entitlement liabilities. With 125 million people on benefits and 22% unemployed the situation is more than serious – it is desperate.

With this desperate economic situation, most people expected a different reaction to the Fed’s money printing announcement on 12.12.12. But we should have learnt by now that markets always do what they should do but not when we expect them to. Gold and silver went up on the Fed announcement but sold off afterwards and continued to be under pressure. Let us just remember that all we are seeing are little wiggles in a major secular bull market in the metals.

It is always interesting to look at historical comparisons. When the Roman Empire started to fall in the 3rd century, the Roman silver coin, the Denarius, reflected a massive bubble economy that was coming to an end. Over 100 years, the Denarius fell by around 97% as reflected by the lower silver content. The in the late 4th century the silver content fell to zero which means that the currency became worthless. For the next 200 years the silver content of the Denarius reflected a devaluation of around 99%.(see chart below). ..."
Hal's insight:

click over for the second chart and the rest of his analysis.  "Little wiggles" I think is a great way to describe what's been happening the past several weeks.

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It's the real life equivalent of the old fable about the emperor having no clothes - TF Metals

by TF Metals:

"... How come no one besides ole Turd can dare say that QE is all about funding the federal deficit? The "dots" are all there yet no one seems to want be able to make the connection. Countless articles have been written about The Fed essentially owning the entire Treasury issuance past 7 years. The fiscal 2013 deficit is already tracking 20% ahead of 2012 and on pace for $1.7T and suddenly the Fed announces that they're supplying $85B/month ($1T+/yr) in new money...yet no one can see that this is direct monetization of the deficit and debt? It's surreal. It's the real life equivalent of the old fable about the emperor having no clothes. I look around and its as if no one else can see what I see. Bizarre.

"Oh, well, I for one choose NOT to bury my head in the sand and hope for the best. I will use my God-given observation and reasoning skills and think for myself, instead. This leads me to the financial protection of gold and silver and nothing The Cartels does can shake me from my positions. ..."
Hal's insight:

I'm begining to wonder if there's even an emperor. click over for the full piece. 

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The only reason why someone would sell a boat load of contracts in the thinly-traded Far East - Ed Steer

The only reason why someone would sell a boat load of contracts in the thinly-traded Far East - Ed Steer | Gold and What Moves it. | Scoop.it
Ed Steer:

"...The only reason why someone would sell a boat load of contracts in the thinly-traded Far East market is to affect the price...and generate more technical fund long liquidation so the shorts can cover. That's precisely what JPMorgan et al were up to on Wednesday evening...but how successful they were won't be known until next Friday's COT Report. What I found surprising was that there was no downside follow-through during the Comex trading session in New York."
Hal's insight:

Yup.

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Silver analysis – 13th December 2012

Silver analysis – 13th December 2012 | Gold and What Moves it. | Scoop.it
March silver futures closed lower yesterday, reversing the gains of Wednesday, and ending the trading session with a wide spread down bar, finally closing at $32.355 per ounce and reflecting a similar pattern for gold, which also sold off sharply on the day, breaking below the key $1700 per ounce level once again. The price action yesterday for silver was significant, and with the market closing well below the recent short term consolidation in the $32.50 to $33.50 per ounce area, this is now increasing the negative sentiment for the metal in the short term. Silver is an industrial metal, and therefore more closely reflects the broader economic outlook, and with the so called ‘fiscal cliff’ now fast approaching, risk markets are becoming increasingly nervous heading into the year end.
Hal's insight:

Anna's point about the outlook for the broader economy when looking at silver is something to chew on. click through for the rest of her analysis

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Three arrested in UK over Libor rate fixing scandal — RT

Three arrested in UK over Libor rate fixing scandal — RT | Gold and What Moves it. | Scoop.it
The UK anti-fraud agency has arrested three men in connection with the Libor interest rate manipulation scandal that broke earlier this year.
Hal's insight:

Does anyone still believe anything but obfuscation will come of the whole LIBOR thing. My initial though is someone just became the scapegoat.

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The Daily Nugget – Gold unimpressed by Fed | The Daily Gold

The Daily Nugget – Gold unimpressed by Fed | The Daily Gold | Gold and What Moves it. | Scoop.it
by Jan Skoyles:

Gold price below $1,700? But the Fed have just doubled QE, isn’t gold supposed to go up?

Not anymore, as I wrote in our gold investment news on Tuesday – gold almost appears bored by the Fed. Expectations of the Fed’s money printing schemes had already been taken into account by markets, and of course concerns that this round of QE could be ‘limited’ (inflation) are making investors cautious. It seems markets wanted unlimited QE as we saw announced previously.

We are, obviously, also coming to year end. Many are looking to liquidate and square up their positions before the Christmas break. All of these factors are clearly short-term. In the long-term these moves by the Fed are clearly good news for gold. Physical gold investment demand appears to be holding steady, however the price cannot hold against those investors looking to sell and quickly book profits. ...
Hal's insight:

So this could be an interesting opportunity to stack some coin this December. 

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More than half of Dutch gold is at NY Fed, finance minister says | Gold Anti-Trust Action Committee

More than half of Dutch gold is at NY Fed, finance minister says | Gold Anti-Trust Action Committee | Gold and What Moves it. | Scoop.it
THE HAGUE, Netherlands -- A little more than half of the gold of De Nederlandsche Bank is stored at the U.S. Federal Reserve in New York.

Furthermore, 20 percent is in the Canadian central bank in Ottawa, nearly 20 percent is located in London, and only 11 percent is at the DNB itself in Amsterdam.

That was said by Dutch Finance Minister Jeroen Dijsselbloem in response to parliamentary questions from Christian Democratic Appeal Member of Parliament Eddy Hijum.

Hijum inquired because of reports that Germany is making sure that its own gold bars held abroad are really physically on site. ...
Hal's insight:

Haha. Some one in the US is smiling devilishly.

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Levy on gold could be budget windfall - U.S. lawmakers - FAST NEWS - Mineweb.com Mineweb

Levy on gold could be budget windfall - U.S. lawmakers - FAST NEWS - Mineweb.com Mineweb | Gold and What Moves it. | Scoop.it
by Patrick Rucker

U.S. Representative Raul Grijalva and Senator Tom Udall of New Mexico, who jointly called for the GAO report, say taxpayers should also benefit from a gold price surge that has boosted the bottom line for miners.

Revising a 19th-century U.S. law that governs the mining of gold and other precious metals could add billions of dollars to federal coffers at a time of tight budgets, according to some Democratic lawmakers and a government study released on Wednesday.

Taxpayers receive no royalties on metals pulled from federal land, and officials drew a blank when they tried to find out how much gold, silver, copper and other valuable metal is sold.

"Federal agencies generally do not collect data from hardrock mine operators," said the report from the nonpartisan Government Accountability Office which looked at the market in 2010 and 2011.
Hal's insight:

I imagine this will very likely come to pass.

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Turkish jewelers avert Gold loss during jewelry making

ATO said during the processing of one kilogram of gold, about 300 grams of gold dust is created which was wasted.

ANKARA(BullionStreet): Europe's largest gold recycling center Turkey has decided to use several creative methods, allowing shops to earn tens of thousands of Turkish Liras on previously wasted gold each year.

According to Chamber of Trade (ATO) Jeweler Committee in Adana, a southern Turkish city, errant gold dust that is wasted during the jewelry-making process is being recycled via special methods in the city, potentially providing jewelers with several more kilograms of the precious metal every year.

Gold dust wasted in places where gold is processed – on the hands of workers or on the floor of jewelry shops – is being preserved with the use of several creative methods, allowing shops to earn tens of thousands of Turkish Liras on previously wasted gold each year. ...
Hal's insight:

It says something when you start looking at ways to capture gold dust being wasted.

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Colombian armed rebels tighten control over gold mining | MINING.com

Colombian armed rebels tighten control over gold mining | MINING.com | Gold and What Moves it. | Scoop.it
The Revolutionary Armed Forces of Colombia (FARC) and a new generation of drug gangs (known locally as “Bacrims”) are increasingly turning to gold mining to finance their terrorist acts, reveals a report released Thursday by political risk firm Exclusive Analysis.

“FARC and drug gang involvement in gold mining increases extortion and property damage risks, particularly in Antioquia and Putumayo,” said Carlos Caicedo, head of Latin America forecasting.

The expert says that funds coming from mining operations are now the main source of income for the revolutionary groups. In some provinces, he added, it has overtaken drug trafficking, especially in areas controlled by the FARC.
Hal's insight:

A dangerous zone.

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Manipulated And Confused Markets | Chris Ciovacco | Safehaven.com

Manipulated And Confused Markets | Chris Ciovacco | Safehaven.com | Gold and What Moves it. | Scoop.it
Chris Ciovacco writes:

"... Are there concerns? Sure, we always have concerns. The major concern is that manipulated markets are confused markets. What would bonds be worth if the Fed was not artificially suppressing interest rates? What would PE multiples and stock prices look like without low interest rates and mega amounts of printing money being pumped in the global financial system?

"The confusion of market participants has created a situation where "buy signals" and "sell signals" are occurring closer and closer together as measured in days. We currently have buy signals in place, but sell signals could appear in short order. The concepts of triangles, confusion, and short-durations between bullish and bearish signals are illustrated on this chart of semiconductors vs. bonds. Many markets look confused and have similar triangles. ..."
Hal's insight:

Chew on that for a bit.

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Twitter / libertycrucial: Interest rate rigging/Money ...

Hal's insight:

Yup.

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India importers still opt for cheap Thai Gold

India's duty hike means importing gold jewellery directly from select countries such as Thailand will be cheaper than buying gold in India.

NEW DELHI(BullionStreet): Taking advantage of India's free trade agreement (FTA) with Thailand, some importers are engaged in gold trafficking from the Southeast Asian nation.

Analysts said importers are opting for Thailand as duty on gold jewellery imported from there is just 2 percent compared to India's new 4 percent, because of FTA with that country.

India's duty hike means importing gold jewellery directly from select countries such as Thailand will be cheaper than buying gold in India. ...
Hal's insight:

Well, can you blame them?

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In housing debt we trust. | ZeroHedge

In housing debt we trust. | ZeroHedge | Gold and What Moves it. | Scoop.it
The assumption that households are doing much better simply because the stock market is up is really a problematic understanding of how wealth is dispersed across the United States. I vividly remember a handful of parties back during the peak of the bubble where people would often quote how much their net worth went up courtesy of the housing bubble. “My home that I bought in the 1990s is now worth over $1 million.” As all of you know, until you sell the home those gains are largely on paper and many did not sell. In fact, many tapped out large portions of that equity and spent it. This is why even with home prices moderately recovering US households still have close to record low equity in their homes. It probably does not help that low down payment FHA insured loans are such a large part of the market encouraging Americans to make the biggest purchase of their lives with very little down. The Fed reported last week on net worth figures and it is worth digging deep into the data.
Hal's insight:

click over to dig deeper.

 

I think there is some evidence of strength in the housing area but I have to wonder if it isn't just part of the illussion right now that the FED is working. 

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A 'very different' platinum market swings into 600,000oz deficit | MINING.com

A 'very different' platinum market swings into 600,000oz deficit | MINING.com | Gold and What Moves it. | Scoop.it
South African output falls to 11-year low after labour unrest.

The platinum market is forecast to move into a deficit of 400,000 oz in 2012 from a surplus in 2011 according to the interim 2012 Johnson Matthey platinum report released today.

Severe disruption to platinum group metal mining following a series of wildcat strikes and violence on mines that started in August is expected to reduce supplies from South Africa by over 600,000 ounces says the research house. ...
Hal's insight:

Questions is, do the industries that use it care at the moment?

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Fed’s Balance Sheet To Hit A Shocking $6 Trillion

Fed’s Balance Sheet To Hit A Shocking $6 Trillion | Gold and What Moves it. | Scoop.it
Michael Pento tells King World News:

“The Fed recently celebrated the fourth anniversary of zero percent rates and massive expansion of its balance sheet. However, even after this incredibly accommodative monetary policy has been in effect since 2009, the labor condition in this country has yet to show significant improvement. Last month’s Non-Farm Payroll report showed that the labor force participation rate and employment to population ratio is still shrinking.

Goods-producing jobs continue to be lost and middle aged individuals are giving up looking for work. This is the only reason why the unemployment rate is falling. I guess if all those people currently looking for work decide it’s a better idea to stay home and watch soap operas, the unemployment rate would be zero.

But more of the Fed’s easy money won’t help because the issue isn’t the cost of money but rather the over-indebted condition of the U.S. government and private sector. Keeping the interest rate on Treasuries low only enables the government to go further into debt. And consumers aren’t balking on buying more houses because mortgage rates are too high.

The plain truth is this is a balance sheet recession and not one due to onerous interest rates. More of the Fed’s monetization may be able to bring down debt service payments a little bit further on consumer’s debt. However, it will also cause food and energy prices to be much higher than they would otherwise be.

The damage done to the middle class...
Hal's insight:

More debt, more debt, more jobs... No I don't think that's a winning formula either. At some point the worm will turn and things will violently react to the the illusion that becomes undone.

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10 Things You Didn't Know About Gold | ZeroHedge

With gold and silver down this morning - following a mysterious vertical plunge last night (once again) - we thought ConvergEx's Nick Colas' timely discussion of gold was worthwhile.
Hal's insight:

good read. click through.

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oftwominds-Charles Hugh Smith: Essays in Fragility: The Rise and Fall of Phantom Housing Collateral

oftwominds-Charles Hugh Smith: Essays in Fragility: The Rise and Fall of Phantom Housing Collateral | Gold and What Moves it. | Scoop.it
Charles Hugh Smith writes:

How much phantom housing collateral is still on the books? Nobody knows, and that in itself renders the housing/mortgage sector fragile.

Mortgage debt doubled in a mere decade. If we go back to pre-bubble 1997, residential mortgages totaled $5.1 trillion. (Source: mortgage debt outstanding, 1959-2003). This was roughly 50% of real GDP of $10 trillion (source: Real U.S. GDP).

At the top of the bubble, residential mortgage debt was $10.57 trillion, more than double the total of 1997. (Source: Balance Sheet of Households, Federal Reserve). This was 79.3% of real GDP--a rise of 30%.

As a percentage of disposable personal income, mortgage debt rose from 53% in 1960 to 113% in 2003. Income rose over those 43 years, of course, but mortgage debt rose much faster.

Mortgage debt has declined as lenders have written off losses. Mortgage debt has declined from $10.56 trillion in 2007 to $9.48 Trillion in 2012. Is it coincidence that this $1.1 trillion decline equals the Fed's purchases of mortgages since 2009? The World's Largest Money-Laundering Machine: The Federal Reserve (October 8, 2012) "The Fed is now where mortgages go to die" -- Catherine Austin Fitts ...
Hal's insight:

Click over for the rest of his piece.

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Confiscation of Gold - Then What? - Part 1/4 | Julian D. W. Phillips | Safehaven.com

Confiscation of Gold - Then What? - Part 1/4 | Julian D. W. Phillips | Safehaven.com | Gold and What Moves it. | Scoop.it
Several analysts and respected members of the gold community have stated that the confiscation of gold is unlikely because the conditions that precipitated it in 1933 don't exist anymore. We agree wholeheartedly with that view. But we feel that the confiscation of gold is extremely likely for very different reasons.

For the last 40+ year, the world has used un-backed paper money and attempted to discredit gold. This system is entirely reliant on the confidence people have in governments and the central banks that issue the money (at will). Over the 40 years of this experiment, gold has gone from $35 to $1,715, a rise of nearly 50 times. Since 2007 we've seen banking crises across the developed world leaving bankers borrowing money from central banks and lending it back to them, rather than lend it out into the general economies or in some cases to each other.

Before we continue, we would like to stress one point that gold investors must be made aware of. This is not simply an academic discussion. If we are wrong, you will continue to own your gold with it under your full control. If we are right and you haven't acted prudently to protect against confiscation, you will lose your gold. It's all about risks and rewards.
Hal's insight:

The discussion continues.

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Sudan to set up Gold exchange, stop Gold ore export in 2013

According to country's central bank, the Central Bank of Sudan (CboS),the export ban will come into effect from Jan 1st 2013.

KHARTOUM(BullionStreet): In a significant devolopment, Sudan said it will stop gold ore exports from next year and set up a precious metals exchange.

According to country’s central bank, the Central Bank of Sudan (CboS),the export ban will come into effect from Jan 1st 2013.

The central bank however not gave any reason for the decision but said it will focus on developing marketing channels for it locally through the establishment of precious-metals exchange in Sudan.

Gold mining firms will be allowed to export in line with CBoS policies and only after refining it in the newly built Khartoum refinery.
Hal's insight:

Do they really have to give a reason? I should think the idea of gold just walking out of one's country on it's way to other metal hungry countries would be pretty obivous.

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Largest Capital In The World Now Entering Gold & Silver Space!

Largest Capital In The World Now Entering Gold & Silver Space! | Gold and What Moves it. | Scoop.it
Today Rick Rule told King World News that the most massive and most intelligent pools of capital on the planet are now looking to crowd into the gold and silver space. This is huge news for a sector that has been in a state of consolidation for over a year, and strongly supports the thesis that 2013 will be a banner year for gold and silver.

Rule had this to say about this extraordinary development: “The things that support the thesis, particularly with regards to the gold equities, has been the approaches Sprott (Asset Management) has gotten from the very largest sovereign wealth funds in the world, and the very largest suppliers of private capital in the world.

“It’s interesting to see the big money starting to be attracted to the sector. It’s interesting to see that point of view being shared by the largest aggregations of capital on the planet. There are oceans of capital looking for a home.

There are literally trillions of dollars looking for a home....
Hal's insight:

let the games begin.

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Gold dips after Fed announces limited QE4

However they added that physical gold buying demand is expected to pick up after prices fell below $1,700 level.

SINGAPORE(BullionStreet): Gold eased after US Fed announced more quantitative easing at a rate of $85 billion a month for an extended period of time.

Gold for immediate delivery was seen trading at $1693.84 an ounce at 12.00 noon Singapore time while US gold was seen trading at $1701.59 an ounce on the comex.

Analysts said the precious yellow metal lost nearly one percent after the announcement as the Fed linked its monetary policy to unemployment, raising concerns that future economic stimulus could be limited.

However they added that physical gold buying demand is expected to pick up after prices fell below $1,700 level.
Hal's insight:

HFT helped in that down turn in early Asian trading from what I understand.

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