TFMR Podcast #41 - Andrew Maguire Discusses Gold Backwardation and Current Gold Price Trends

135

Today, we conclude our analysis of the current backwardation in gold by visiting with legendary trader, Andrew Maguire.

A couple of things before we get started:

  • If you haven't yet, I strongly encourage you to listen to yesterday's podcast with Sandeep Jaitly before you listen to this one with Andy. I posted Sandeep first for a reason...you need as clear an understanding of backwardation as possible so that you can give this your full consideration.
  • There are good people, like Trader Dan, who have looked at this issue and concluded that there is no current backwardation in gold. Perhaps it all depends on what you're measuring. All I know is that Sandeep and Professor Fekete are global authorities on this stuff and I tend to side with them. Reasonable people can disagree, however, and it is disagreement that helps to make a "market", whether it's gold, silver, stocks, whatever.
  • Andy will have more to say in March and he's promised to come back soon for another podcast. This particular podcast primarily deals with the current backwardation and the implications for price in the short, intermediate and longer terms.

And keep in mind as you listen...Andy is "boots on the ground" in London, the center of the gold trading world for the past 200+ years. The Comex in New York controls paper price but, as you know, the underlying fundamental going forward is global, physical demand and this takes place in London. Where Comex may physically settle 1,000,000 troy ounces (30 metric tonnes) once every two months, London allocates and settles that much physical metal nearly every single day. Therefore, spot vs futures backwardation is a big, big deal. It drives allocation and purchase decisions for many of the central banks and other sovereigns currently racing to convert dollars into hard assets. Therefore, you must fully consider the ramifications of what is happening and I'm confident you'll find that this podcast will promote your understanding of the situation.

TF

p.s. Once again, I urge you to consider a subscription to Coghlan Capital, perhaps only for Andy's detailed and extensive, weekly commentary. He provides the reader with background and information you simply cannot and will not find anywhere else. Along with the commentary, you also get real-time access so you can follow along with Andy's daily trading activity as well as unbiased and objective technical analysis from Paul Coghlan. Yes, it's expensive but what service of real value isn't? At this critical time, it might be the smartest investment you could make. https://www.coghlancapital.com/daytrades-application?ak=turd_army

  135 Comments

BagOfGold
Feb 28, 2013 - 10:59am

Billwilson...I agree with you 100%!...

"Watch the miners on this next push down in PMs (coming very soon). If they hold and move up we could have a bottom.

The move Tuesday was obviously phony as the miners did not follow. Miners always need to lead higher."

When it happens...it will be a beautiful sight to see!!!...

Bag Of Gold

SilverTree
Feb 28, 2013 - 11:00am

Can someone post a chart of

Can someone post a chart of current Comex inventories?

Thanks

DXY soaring...

https://www.marketwatch.com/investing/index/dxy

dropout
Feb 28, 2013 - 11:00am

@SilverSurfers

I'm afraid you are preaching to the choir here! Good for the newb's.

One must remember, that out of total amount of dollars sloshing about, only about 5% is in the form of actual paper notes. The rest is all in the form of digits in computers! Easy come. Easy go. One key stroke.

Ircsum
Feb 28, 2013 - 11:12am

Great podcast, Turd!

I've been looking forward to this podcast since you flagged it up as coming soon. Wow! I certainly wasn't disappointed. Andy comes across as an extremely knowledgeable guy & he's always well worth listening to. Can't wait until you get him for another session.

Ircsum
Feb 28, 2013 - 11:15am

Thanks

Our intention for the next podcast is a discussion of the entire London process of orders and allocation. How it works. Plus a bunch of other stuff. Hopefully next week.

SIlverbee
Feb 28, 2013 - 11:21am

Is it a bunch of other stuff

that happens next week?

I noticed Santa has changed his timings slightly in that he said by his Bday the dip would be distant history, but now it is up to then for the bottom to complete.

As another would state; just sayin!

dropout
Feb 28, 2013 - 11:22am

Interesting Charts

Kevin Wides out of Switzerland has 4 gold charts up at KWN that are worth a look.

¤
Feb 28, 2013 - 11:34am

very cool

Nice job again with another PM community standout.

This podcast comes at a good time and right on the heels of the KWN hype/popularity surrounding Mr. Maguire's recent comments there. Striking while the iron is hot is never a bad idea.

achmachat
Feb 28, 2013 - 11:36am

here's to...

...hoping that the wife doesn't look at the charts today.

or... that there's a massive FUBM and she looks after that :-p

SilverSurfers
Feb 28, 2013 - 11:52am

Good for the Newbs

Well aint that what its all about, to share, and help educate others to another point of view. I got back auto-replies this morning, so I know my missive is being received. I just get an absolute kick out of getting auto-replies from the NY Times and the Whitehouse, it just feel so so good, to poop in their mess kits.

copy what DPH just said

side bar:

"My best life-long pal, is a darkie", Derrick that is so wrong, but funny, but so wrong! Do people really use darkie when referring to people of color?

WTF you talking about. Heads up, my skin is not transparent. It gots a mozaic of tan like colors, pot marked, with old age brown spots, and such like. I AM a person of color also.

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