Not So Happy Tuesday

171
Tue, Jun 4, 2013 - 1:57pm

Lots going on today and I'm off to a late start so let's dive right in.

First, let's talk about the price action today. After the surprising rally yesterday, I asked you to watch the Asia and London trade for clues to the Comex action today. What did we see? After a flat Asian session, the London Monkeys did their usual thing from about 2:00 am EDT on. The London Monkeys have now acted on 14 of the past 17 days. Check this chart from Ranting Andy:

The result was a giveback of more than half of yesterday's gains.

Why did we see this? Hard to say for sure but, with volume light ahead of the BLSBS later this week, I suspect that a lot of this was some Bullion Bank selling that was aimed at lessening some longs ahead of the CoT survey. No doubt the action since last Tuesday is a continuation of the trend of last week's report. Therefore, the banks tried today to lighten a few of the longs they had built up over the course of the week. This also serves the dual purpose of defending the 20-day MA and restoring some confidence to some of the shaky spec shorts. At any rate...we're down a modest $13 as I type. Let's see what tomorrow brings.

Speaking of the CoT, there has been some excellent analysis written in the past few days so I thought I would highlight some here. Again, the positioning of the Commericals vs The Specs has gotten so extreme that it has reached historic levels. Ultimately, how you interpret this depends upon just whom you think is really in charge. Is it The Specs or do The Cartel Banks lead The Specs by the nose into whichever position they would like? Let's start with longtime CoT-watcher Gene Arensberg: https://www.gotgoldreport.com/2013/05/gold-and-silver-disaggregated-cot-report-dcot-for-may-31.html

Next, read this link over at KWN: https://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/6/4_This_Amazing_Chart_Shows_Gold_Set_For_Massive_$1,000_Spike.html. While we might disagree that this chart alone shows that "gold is set for a massive $1000 spike", the interview is helpful and in contains this excellent chart. (Click on it to enlarge.)

Reading that article inspired the Turdite "WildStyleChef" to create the chart below. This shows graphically how Commercial positioning is inversely correlated to price. (Again, click to enlarge.)

OK, moving on. I found this to be interesting. Recall that when the Dutch bullion bank, ABN AMRO, announced their plan to settle in cash a few months back, many of us called it a default. https://www.tfmetalsreport.com/blog/4667/gold-delivery-or-default This article published Friday follows along with that theme. I don't know anything about the author but that's OK. He probably doesn't know anything about me, either. https://www.jcaschipper.nl/2013/05/nationalized-abn-amro-offers-fools-gold/

Still lots of talk out there about Fed QE "tapering". Again, I think is all silly and it may be a non-topic as soon as Friday at 8:31 am. Regardless, as mentioned last week, even if The Bernank was to announce some type of "taper", it would likely come from the $40B/month MBS-purchase side of the QE∞ equation. The Fed could still monetize $45B/month in treasuries directly while cutting the Primary Dealer kickback life support handout welfare bullshit MBS purchases to $20B/month. This would still be $65B/month in QE and silence all the hawks. Not saying that it will happen, just saying that even if it did, it's no big deal! $65B/month is still nearly $800B/year in fresh greenback, created from whole cloth for the purpose of sustaining The Great Ponzi. Read more at ZH: https://www.zerohedge.com/news/2013-06-04/chart-day-feds-taper-perspective And here's how it looks graphically:

Finally, I don't know if you've noticed but lately there sure have been a lot of big mines that have been taken off-line.

So, now, what to make of all this? Well, if you believe that everything is hunky-dory and that there are no supply issues in gold, then this is no big deal. After all, even though The Grasberg mine is the largest in the world, it still only produces about 30 metric tonnes per year or a little over 1% of all global mine production.

If, on the other hand, you think that the Bullion Banks are living hand-to-mouth and frantically trying to keep their Fractional Reserve Bullion Banking system alive, then it is a big deal. A very big deal.

That's a lot of gold...a lot of currently anticipated and expected supply that isn't coming. How much of this production was already sold forward into the market? And if it was already sold forward, what happens when it fails to materialize on schedule? Hmmmm. Could that lead to those contracts being covered? Could it lead to some new long purchasing as a hedge against supply delays, not only from the suppliers but from the end-users, as well? And with the current CoT structure in gold being akin to an overgrown and dried out California ravine just waiting for a spark...

Let's just leave it there for today. I hope that the rest of your Tuesday goes well and I look forward to seeing what tomorrow brings. Again, if I'm right about the cause of today's drop being Cartel CoT-positioning, then we should see a bit of a bounceback on the Globex and overnight.

TF

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tyberious
Jun 5, 2013 - 11:43am

Can Impeachment Save us from

Can Impeachment Save us from the Obama Dictatorship?

Current Episode Direct Audio Links:

Hour 1 Hour 2

Chris Kerr and Michael Evans are first time guests and Gene Epstein returns to talk about the next NYC Junto meeting and the economy.

Recently I met Judge Andrew Napolitano who told me he believes Pres. Obama may well go the way of Pres. Nixon and he said "if so, rightly so." I expect to have Judge Napolitano on this show soon to discuss this further but this week former FBI agent now defense attorney Chris Kerr discusses the use of the IRS by Obama to suppress our Constitutional rights expressed by the Tea Party Movement.

Not only is the Tea Party scandal darkening the Obama regime, but the apparent cover up of the Benghazi disaster is adding to cries for the removal of our latest dictator disguised as a "representative of the people." Show host for "America's Voice Now," Michael Evans, gives his views on the probability of an impeachment of President Obama.

Host Jay Taylor talks about some of the most exciting opportunities he has seen in years for gold and silver mining stocks.

Maximillion
Jun 5, 2013 - 11:39am

Re Serfs for life

Same sort of land ownership here in the UK, but it's called 'Tenant for Life' if you own and have paid for your house. If you die without anyone to pass it on to, it goes back to the Crown (ie the state/Queen). If you take out a mortgage you are simply granting the lender (the mortgagee) the right to take possession if you fail to repay the debt. AND it is the duration of your promise (mortgage) that defines the amount of money the bank can re-lend (fractional reserve banking) to more new serfs. So your promise to pay a life rent mortgage creates the capital for the banks to entrap more would be serfs into a lifetime of debt, PLUS once you've tied yourself to a mortgage promise, you've effectively tied yourself to a location (prison without walls or guards!), making it easier for the state to collect more taxes. Then when you die and leave the property to your kids, they pay inheritance tax. Win win scenario for some!

ag1969
Jun 5, 2013 - 11:39am

Hmmmmmm

France bans shipment of gold and silver in the mail? Frank knotter | 05-06-2013 In France, a new law that sending gold, silver and cash prohibits. Companies gold coins on sale and send by post can not exercise this new law work. Sites are also traders who are prevented by the new law. Operates like eBay

In September 2011, the French government took all measures to limit. anonymous cash purchases of gold and silver Since then, every purchase of bullion with a value of more than € 450 per bank transfer happen. With the new law since June 1 this year in force is also sending by post of banknotes and precious metals restricted.

The new legislation can be found on this website , where under Chapter I, the following Article D1 of the universal postal service and the postal service obligations is:

"L'insertion the billets de banque, the pièces et de metaux precieux est interdite dans les envois postaux, y compris dans les envois à valeur déclarée, lesson envois recommandes et les envois faisant l'objet de leur formalités attestant dépôt et leur distribution. "

Loosely translated the law says that inserting banknotes, coins and precious metals is prohibited in mail. That includes insured and registered mail shipments.

Barrier

For collectors of silver and gold coins the French Government raises a high barrier. If gold or silver to market will have to be resorted to look for another channel, or will be required to drive in order to retrieve it. The metal back and forth To jewelers not too difficult to make, there are exceptions in the law for sending jewelry.

According Express.be the French government seems to have a clear goal: preventing any transaction among individuals that gold and silver is involved. Another explanation is that the French government wants to get the money, more grip for cash and precious metals lend themselves well to.

Big Buffalo
Jun 5, 2013 - 11:38am

Monedas

Monedas sofa king we tall did (say it out loud several times, you'll get it)

indosil
Jun 5, 2013 - 11:37am

Indian Import Duty

Import duty on Gold increased from 6 to 8% in India..they are losing it...!!!!!Gold rallying at the Indian MCX

ancientmoney
Jun 5, 2013 - 11:34am

Monedas reminds me of a heckler at a baseball game . . .

You know the type . . . the one who never stops the needling, and who comes up with some stuff that is downright laugh-out-loud funny. But he sometimes says things that make you wince, too.

I view Monedas as just part of the experience, like that heckler at the game. I picture him as a skinny, early-70's, sun-wrinkled old wizened geezer with a goatee, shouting out for attention.

He hasn't bombed me yet, I don't think, and if he does, I would not give a crap. I played baseball . . .

¤
Jun 5, 2013 - 11:34am

Moderated Posters

It might be voyeuristic but I think if the site were to consider a dedicated "Penalty Box" type thread where fully moderated/banned posters would be confined to it would serve 3 purposes.

1.) It would attract viewers and poster commenting there and increase the curiosity factor for those who wish to do so.

2.) It would make it easier on the moderator to moderate people and be less reluctant to do so because the finality of it would be different.

Posters who are moderated/ banned should have to wait at least 2-4 weeks to be allowed into that thread only. Make the eligible "Penalty Box" people list retroactive.

You'll increase views/comments on the site by creating that unique thread. Plus it'll allow you yo clamp down a bit more but not be completely harsh.

3.) And more importantly....it'll give some folks who stay away from commenting some breathing room if they don't have to worry ( or spare themselves the aggravation) about being around some others who they don't want to associate with.

That's what I see. Get creative and give it a test trial.

Anyone who chooses to view it or mingle will be making choice. Clearly the IU is not working because it only avoids the problem (hands over eye's) or does nothing to curtail the behavior and it gives the impression of tolerance and acceptability.

HT this if you want a Holding Pen with a view.

Sad-descentargentus maximus
Jun 5, 2013 - 11:33am

@Argentus

"At the show the "magician" says "Look at my other hand" at the same time as he reaches under the table for his rabbit."

In this case I don't think they are saying "Look at my other hand" instead I believe it is "Look at my finger"...guess which one.

The Watchman
Jun 5, 2013 - 11:28am

The Demand Is Stronger Than Ever

Tuesday, June 4th 12:05 PM IST

India's Gold bill for April,May hit $15 billion

India is likely to take more steps to curb the rising imports of gold which may include a ban on sale of gold coins by banks.

NEW DELHI(BullionStreet): India's efforts to keep it’s people away from gold seems to have going nowhere as the country consumed more gold in May than in April when prices crashed.

The world's largest gold consumer, India imported around 162 tonnes of gold in May, from April's 142.5 tonnes. For the two months, cost of gold buying hits over $15 billion.

Analysts said with May imports soaring even higher, Indian government is under pressure to look at more measures to rein them in as it is worried over the widening current account deficit, largely on account of the runaway rise in imports of the yellow metal.

The government is likely to take more steps to curb the rising imports of gold which may include a ban on sale of gold coins by banks.

However, the government is cautious about raising import duty further because it is concerned that this could encourage smuggling.

India had raised the duty on gold to restrict its import, the measure did not appear to yield any dividend as high imports of the yellow metal pushed the CAD to a record high of 6.7 per cent of gross domestic product in the October-December quarter of 2012-13.

Country's central bank, the RBI imposed curbs on gold import by banks and also imposed restrictions on them and non-banking finance companies to check loans against gold coins as well as units of gold ETFs.

In a statement, India's finance ministry said ways to curb gold imports was a major topic of discussion during a recent meeting of the Financial Stability Development Council.

Analysts said a good monsoon will boost demand as consumers took advantage of a slide in global prices which coincided with regional festivals when gold is bought for gifts.

The WGC forecasts India's imports to climb around 615 tonnes in the first half of 2013 - implying June imports would have to retreat to more normal levels of about 80 tonnes. It expects second half demand to match 2012's 485 tonnes - putting it on track for a record year

treefrog
Jun 5, 2013 - 11:22am

monedas?

he wasn't a problem to me. the ignore button worked just fine. i decided i didn't have time for his screed months ago.

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