German Gold Hijinx

387
Wed, Jan 16, 2013 - 11:54am

I guess it all depends on how you look at it. Either this is all on the up-and-up or it isn't. Either this is a purely political show or it isn't. Either the gold is really there to be repatriated or it isn't. It's up to you to decide.

Just three months ago, The Bundesbank labeled as "lunacy" the idea that German gold needed to be brought home. They announce today that they're doing it anyway, but in sizes nowhere near what had been speculated. Is this just a political trick to mollify the German hoi polloi? Probably. It certainly doesn't upset the status quo or shake the global banking system in the manner we'd all hoped.

However, you could also choose to look at it this way:

  • In preparation for The Great Reset, the Germans do desire to repatriate as much gold as possible but they also don't wish to bring about The Reset any quicker than necessary.
  • So, they bring home "their French gold" but only do so at the rate of 50 tonnnes/year. Why? If it's just sitting in a vault and collecting dust, why not ship it all home over the next few weeks? What's the big deal?
  • And why leave "their English gold" untouched? Is it because all gold stored at the BoE can be leased, hypothecated and rehypothecated many times over, thereby making reclaiming it impossible?
  • And why bring back just 300 tonnes of "their American gold", again over the next 8 years? It shouldn't be that big of a deal to pull up a few pallets of "barbarous relic" from below the streets of lower Manhattan, drive it over to JFK and load it onto an airplane bound for Frankfurt. Should it?

Hmmmm. Maybe, just maybe, their French gold is long gone and the Frenchy-French need some time to come up with new supply to pay them back? ( https://www.reuters.com/article/2009/12/22/ozabs-mali-gold-idAFJOE5BL01520091222) Maybe the English gold has all been shipped to China and other points East, where it has been resmelted into kilo bars with official Chinese insignia? ( https://www.tfmetalsreport.com/blog/3924/gonefor-good) And maybe, just maybe, the American gold is nothing but paper certificates and IOUs, no more valuable than claims on the GLD? ( https://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/10/25_James_Turk_-_The_Entire_German_Gold_Hoard_Is_Gone.html)

Ahhhhhh....what do I know? I'm just a Turd. A dope with a MacBook. I'm sure it's all just fine. Move along. Nothing to see here. All is well. Go back to sleep.

Anyway, it has been a few days so we need to update the charts. Let's start with gold. Take a look at these two, daily charts. You can clearly see the price double bottom. This also coincides with an open interest bottom in late December. In the big picture, me likes what me sees.

Now check out this 8-hour chart. Besides all of the horizontal and diagonal resistance lines I've drawn, gold will likley run into some tough sledding near the 50 and 100-day MAs. The fifty for the Feb13 contract is currently near $1697 and the 100 is near $1718. Taking it all into consideration, the "all clear" for a rally can't truly be sounded until gold gets up and through about $1710-1715, maybe in a week or two. Until then, I just plan to keep stacking physical. I'm not going to buy any more options just yet.

As you might expect, silver has a somewhat similar picture. It came down in late December and then double-bottomed just below $30 about two weeks ago. Since then, it has seen a steady progression higher. Now it just needs to follow through. It is finding resistance near the highs of 1/2/13 (31.50) and it needs to break that level to draw in more buyers. Once through there, expect slowdowns near the 50-day, currently at $32.01, and the 100-day near $32.60.

That's all for today. I need to go take a little boat ride with all my guns and ammunition. It'll probably take most of the day. More tomorrow...

TF

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  387 Comments

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Pete
Jan 17, 2013 - 11:18am

Classic bullish price action in gold

[IMG]https://i49.tinypic.com/2njj6a8.png[/IMG]

An outside reversal day on the daily in progress...

Byzantium
Jan 17, 2013 - 11:12am

Spain's gold

Also physical in the first instance; plundered from the America's.

Still kept in Spain, or housed elsewhere? Don't know.

Byzantium
Jan 17, 2013 - 11:09am

Italy's gold

Somebody queried earlier why Italy would have so much gold.

Italy was the world hub for fractional banking, before it moved to London. Recall the Italian city states (Florence, Venice etc); great trading hubs, and not short of a bob or two.

Unlike German gold, I would expect this to be the physical variety; and separate from the Vatican's gold.

Byzantium
Jan 17, 2013 - 11:06am

German gold

It was mooted upthread, that Germany's gold (earned through currency FX surpluses on trade) was denominated in gold as a preference, at a time when there was a fixed price for gold in dollars.

This suggests a scenario, where Germany never had physical possession of this gold in the first place, but was accruing 'paper gold' as their trade surpluses grew, in the financial clearing centres of London and New York.

This is an interesting perspective;

a) it means that CB physical gold holdings are double / triple / quadruple counted, to the extent that they originate in this fashion. They were all claims on the Fed's own stack.

b) it becomes clear why the Fed still values gold at $42; that is what it will pay out on any claim, as compensation!

Am I onto something new here, or am I just slow?

SIlverbee
Jan 17, 2013 - 11:01am
fast moverWizdum
Jan 17, 2013 - 10:57am
Wizdum
Jan 17, 2013 - 10:55am

Before or After ?

Is the rebound pop happening before or after the afternoon London PM fix?

Xeno
Jan 17, 2013 - 10:54am

What If...

What if that because Germany is calling home 300 tonnes of gold, that New York has to come up with 30000? You know, because of the leverage ratio. Could be behind the FUBM no?

ReachWest
Jan 17, 2013 - 10:49am

Text Book

Classic FUBM. OH - if only - each monkey smack-down could be met with such action.

JimmyTheHand
Jan 17, 2013 - 10:43am

FUBM

I agree Turd, that is a beautiful sight to behold. :)

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