YES!!!
August 4 - Gold $967.90 up $10.90- Silver $14.69 up 45 cents
YES!!!
Now this is more like it. As oft said here, the key to the gold market is the ability of the physical market to overpower the ability of the bums’ price-capping nonsense … not what the dollar does, although a much weaker dollar is VERY gold bullish. Yesterday the dollar was nailed, breaking down technically below 78. This should have sent gold sharply higher along with other commodities. NADA. The Gold Cartel said, “NO GO.” Gold was only allowed a token gain.
Yet today the dollar was higher and gold blew through key resistance at $960, doing so in minutes, after struggling at that level in the early going. Physical buyers said we want more and are willing to pay up, which they did.
Gold’s progression throughout the day was constructive. The AM Fix was weak at $953.50. The PM Fix was a winner at $960.50. Instead of failing after the PM Fix, gold energized and moved away from this Gold Cartel inspired key technical level.
The importance of taking out $960 gold can be seen by viewing the August gold chart…
http://futures.tradingcharts.com/chart/GD/89
Of equal excitement is the ability of silver to show some serious spunk on the upside. It led the way today, aiding gold…
September silver
http://futures.tradingcharts.com/chart/SV/99
Everyone writing a daily commentary needs some variety and input here and there so as not to be overly repetitious. I would like to thank Dennis Gartman (whom I like personally) for his contribution today via his newsletter…
“Regarding the precious metals, they are of course stronger, but for whatever reason there is strong resistance met by gold at the $955-$960 level. As we have said before, we’ve no idea who the seller is at that level, but it is a formidable foe. GATA may argue that it is government and that it is all conspiracy. We’ll argue instead that it may well be nothing more thanmine hedging and spec selling. We needn’t waste time, effort and mental capital trying to ascertain who the seller is; we note only that the seller is there and has thus far succeeded in keeping prices in check.”
***
Dennis,
Get with the program. It was The Gold Cartel which knocked you out of the box, about $30+ ago on the downside. It was this same Gold Cartel which has been preventing gold from taking out $960. They got beat today, not some hedger. The hedgers are COVERING shorts, not putting hedges on at these levels….
8/3
NOW LESS THAN 1 YEAR’S PRODUCTION
AngloGold reduces gold hedge book by further 1.4 million ounces
South Africa’s top gold miner, AngloGold Ashanti, reduced its gold hedgebook in July to well below a single year’s production…
-END-
Besides, no hedger would have been in there selling BOTH gold and silver so aggresively and so late as occurred going in the Comex close yesterday.
Now this is just for fun and surely will get The DG’s out there riled up. Lookie here…
Geithner loses his cool at regulators meeting-WSJ
NEW YORK, Aug 3 (Reuters) - U.S. Treasury Secretary Timothy Geithner blasted top U.S. regulators in an expletive-laden tirade amid frustration over President Barack Obama’s faltering plan to overhaul financial regulation, the Wall Street Journal said on Monday, citing people familiar with the meeting.
Geithner told regulators that “enough is enough,” the newspaper said, citing one person familiar with the meeting last Friday with Federal Reserve Chairman Ben Bernanke, Securities and Exchange Commission Chairman Mary Schapiro and Federal Deposit Insurance Corp Chairman Sheila Bair.
The Treasury Secretary said regulators had been given a chance to air their concerns, but that it was time to stop, the newspaper said, citing the person.
The Treasury Department could not immediately be reached for comment.
Obama in June unveiled a financial regulatory overhaul, sometimes called the biggest since the 1930s. Among other things, the plan would give the Fed added powers, award the government more power to break up troubled companies, and create a new agency to oversee consumer finance.
Many major banks and industry trade groups however have criticized the plan, as have some regulators wary that any redistribution of power would reduce their own.
According to the newspaper, Friday’s roughly hour-long meeting was unusual because of Geithner’s repeated obscenities and his aggressive posture toward regulators generally deemed independent of the White House.
Geithner told attendees that the administration and Congress set policy, the newspaper said.
-END-
My take, based on today’s price action, is Geithner is in a twit because he knows his gold price suppression scheme is beginning to fall apart and wants more control of the Fed to enhance his ability to get his hands on more US gold … and silver if he can find it … in order to enhance Herr Summers’ Behavioral Finance notions.
The gold open interest rose 5,396 contracts to 383,388, as the specs were buying Dennis, not selling. The silver open interest went up 994 contracts to 100,405.
One more thing Dennis G: you are an apologist for the biggest selfish, self–serving pieces of crud our country has to offer. The jerks who you fawn over have just taken gold down $3 in the lightly traded Access Market. If you are the pro trader you say you are, then you know no one who wants to maximize trading entry points waits until most traders have gone for the day to do their selling. It happens time and time again and it’s people like you that allow blatant manipulation like this to go on without any repercussions.
The yield on the 10 yr T note is 3.68%.
The dollar rose .14 to 77.73.
The euro fell .0016 to 1.4394 and the pound was little changed.
Crude oil dropped 16 cents to $71.42 per barrel.
The CRB went up .45 to 266.73.
More gold goodies:
Monday, August 03, 2009
Comex lock-down
Friday’s powerful $18.50 rise turned out to involve the addition of 8,420 contracts in open interest – 26.2 tonnes. Actual volume at 125,792 lots came in 11.9% above estimate. Considering that the ferocity of gold’s rise just before noon on Friday convinced experienced observers that short stops were being triggered, the amount of fresh buying coming in must have been really substantial.
Comex Gold’s $3 rise in the Dec contract to $958.80 was of course proportionately less than a third than the concomitant fall in the dollar: Gold in Euros actually fell E5 from Friday’s NY close. This result was achieved in two stages. Enough selling to block gold’s rise in the NY morning cut E7 from gold’s up E11 intraday high. A bout of what ScotiaMocatta politely describes as “heavy profit taking” in the last half hour of the floor session more than halved Dec gold’s intraday gain; and gold showed softness in the aftermarket. Estimated volume is said to have been only 97,173 contracts.
No experienced gold observer, as noted this morning, will have been surprised that a day of decisive weakness in the dollar should have seen selling in NY gold: successfully keeping away local specs, apparently.
Gold shares held about two-thirds of their intraday gains. The HUI finished up 2.58% and the XAU up 3.29%. Both have clearly broken above their post-early June down trends. Central Fund of Canada (CEF), an unimpeachable bullion vehicle, interestingly showed the widest premium to NAV in some time, at 13%.
The HGNSI added 15.5 points to 32.3%, about the middle of its range. MarketVane’s Bullish Consensus for gold was static at 80%. So was the GLD ETF at 1072.87 tonnes.
Unless some hero Hedge Fund feels like challenging the seller on Comex again, Gold’s friends will have to wait for Asian physical buyers to outflank this obstacle.
Vietnam local gold stood at a 50c discount to world gold of $956.80 early on Tuesday morning.
***
Tuesday, August 04, 2009
Turkey returns. Seasonals favorable?
Indian ex-duty premiums: AM $4.04, PM $3.47, with world gold at $953.69 and $954. Ample for legal imports. After a strong start, the rupee faltered, and finished at $1=R47.73 (Monday R47.635). The recent firmness of the Indian currency has effectively protected India’s bid to the world gold market. The stock market closed down 0.59%.
As mentioned last night, Vietnam local gold stood at a 50c discount to world gold of $956.80 early on Tuesday morning.
On day session volume equal to 8,981 Comex lots, the active TOCOM contract gained 22 yen. World gold came $1 below the NY close and went out down $1.80. Since Friday open interest has declined 1.12 tonnes (362 Comex) but the public has cut 3.6 tonnes from its long.
Turkish gold imports for July, at 14.09 tonnes, were 31.5% above July ’08 and 225% above last month’s. More importantly, this is the first time since last September this traditionally strong buyer has imported a double-digit tonnage – June in fact was the first month over 1 tonne; 4 have been zero. To supply perspective, Turkish imports have averaged well over 10 tonnes a month – and sometimes 20 – in all but 2 years of the 13 years for which the Istanbul Gold Exchange supplies full data. A return to normality here would be important for the gold market.
Observers concur that gold’s move yesterday was restrained by what Standard Bank calls “good physical selling”. UBS reports “decent selling” at $960 which it pointedly says included profit taking by recent buyers: i.e. was not only profit taking.
The Bank also supplies the happy thought that the upcoming seasonal influence is strongly positive for gold:
“since 1975 there has been a distinct period of outperformance from August to November, although looking at the median most of the gains are achieved by holding gold in August and September with September providing especially large and consistent returns. If an investor had bought gold on the last day of July on each year since 1975, average returns to the end of the year would have been 6.5%, while even the median returns would have generated 2.9%. While there is little to chose between the medium returns if gold was held to September (3.1%) and December (2.9%), it would have been worth holding onto gold over this period because of occasional very large positive return in Nov and Dec.”
While world gold drifted quietly down from the Asian open today, some heroic buyer has stepped forward to challenge the seller in the Comex session this morning. Volume so far is not exceptional: estimated at 40,252 at 10AM.
The ECB’s weekly statement of condition, published today, reports a reduction of E6Mm (0.28 tonnes) in “gold and gold receivables” said to be caused by a sale by one captive CB. This follows an unprecedented two weeks of zero sales. With the final WAG2 year closing at the end of next month, it really seems that the ECB squadron has pulled out of the gold market.
Reports that the Italian legislature is trying to figure out a way to siphon some cash out of the Bank of Italy’s unrealized profits on its substantial gold holdings by means of a tax (meeting ECB opposition) imply that the Italian politicians hold no hope of releasing the revenue by actual sales. See http://www.nasdaq.com/aspx/stock-market-news-story.aspx?
storyid=200908021123dowjonesdjonline000302&title=italy-senate-oks
-government-anti-crisis-decree-including-gold-tax
***CARTEL CAPITULATION WATCH
The trading in the US stock market was quiet, yet the DOW managed to rally 35 points on the bell to close at 9320, up 34. The DOG lost 4 to 2005. If one were to only pay attention to the DOW, it would be normal to conclude the country is on the mend. I don’t buy it.
U.S. economic news:
08:30 Jun Personal Income (1.3%) vs. consensus (1.0%); Spending 0.4% vs. consensus 0.3%
May Income revised to 1.3% from 1.4%; Spending revised to 0.1% from 0.3%. Jun PCE Deflator (m/m) 0.2% vs. consensus 0.2%; PCE Core (y/y) 1.5% vs. consensus 1.7%.
* * * * *
U.S. consumer spending rises in June
WASHINGTON, Aug 4 (Reuters) - U.S. consumer spending rose slightly more than expected in June, lifted by expenditures on nondurable goods even as incomes saw their biggest drop in four-and-a-half years, a government report showed on Tuesday.
The Commerce Department said spending rose 0.4 percent after a revised 0.1 percent increase in May, previously reported as a 0.3 percent rise.
That compared to market expectations for a 0.3 percent increase in spending, which accounts for over two-thirds of U.S. economic activity. However, adjusted for inflation,
spending fell 0.1 percent after being flat in May.
A government report last Friday showed spending fell at a 1.2 percent rate in the second quarter, after rising 0.6 percent in the January-March period.
Personal income declined 1.3 percent in June, the biggest decrease since January 2005, the Commerce Department said. This was worse than market expectations for a 1.0 percent drop and reflected the government’s one-time payments to social security recipients in May which were not repeated in June.
Real disposable income tumbled 1.8 percent in June, the largest decline since last June, the department said. The decline in income saw a decrease in savings during the month.
Savings fell to an annual rate of $505 billion, with the saving rate slipping to 4.6 percent versus 6.2 percent in May. A measure of inflation closely watched by the Federal Reserve, the year-on-year personal consumption expenditures index excluding food and energy rose 1.5 percent after a 1.6 percent increase in May.
-END-
10:00 Jun Pending Home Sales 3.6% vs. consensus 0.7%
May figure revised to 0.8% from 0.1%.
* * * * *
U.S. pending home sales up for 5th straight month
WASHINGTON, Aug 4 (Reuters) - Pending sales of previously owned U.S. homes rose at a faster-than-expected pace in June, a real estate trade group said on Tuesday, more evidence the housing market was starting to claw out of a three-year slump.
The National Association of Realtors said its Pending Home Sales Index, based on contracts signed in June, rose 3.6 percent to 94.6. It was the fifth straight month of advance and the first such streak in six years, the industry group said.
May’s index was revised upwards to 91.3 from 90.7, while the percentage increase was bumped up to 0.8 percent from 0.1 percent. Analysts polled by Reuters had forecast pending home sales to rise 0.6 percent in June.
“Historically low mortgage interest rates, affordable home prices and large selection are encouraging buyers who’ve been on the sidelines,” said NAR chief economist Lawrence Yun.
The Pending Homes Sales Index rose 6.7 percent in June from June of last year. The housing market’s collapse is at the heart of the longest U.S. recession since the Great Depression.
The Pending Home Sales Index in the Northeast rose 0.4 percent to 81.2 in June and was 5.8 percent above the same period last year. In the Midwest, the index climbed 0.8 percent to 89.9. It was 11.6 percent higher than June 2008.
The index in the South jumped 7.1 percent to 100.7 in June and was 8.9 percent higher versus a year ago. In the West, the index rose 2.9 percent to 100.4, but was 0.2 percent below June 2008.
-END-
05:14 GS Goldman Sachs CEO Lloyd Blankfein warns employees not to flaunt their wealth - NY Post ($164.10)
Sources at the bank say Blankfein is actively discouraging conspicuous consumption by workers who are counting on big bonuses at a sensitive time. Blankfein reminded people that bonuses are based on full-year results, and there is no guarantee the bank will be able to multiply Q2’s $2.3B profit by four. Recall that Goldman has been the subject of a fair amount of negative press recently; a recent Rolling Stone article described the company as “a great vampire squid wrapped around the face of humanity.”
Reference Link
” href=”https://www.streetaccount.com/%3E”Related StreetAccount comments: 8/2/2009
* * * * *
03:02 SEC burdened with conflicting interests in policing rescued companies - Washington Post
The decision to file suit against a Regions Financial (RF) subsidiary for selling troubled investments last month would have been obvious before. But SEC officials realized that not filing suit would help protect the government’s $3.5B investment in the institution, making the decision troubled at best. The regulator chose to file, but is increasingly faced with situations where protecting investors can harm taxpayer-owners, and some penalties could be paid with TARP funds. In an interview, the director of the SEC’s enforcement division says TARP status is unlikely to determine the outcome of a case, but officials acknowledge they are thinking about the effects large fines might have on the financial system beyond the intended targets. Experts say cases like Bank of America (BAC), AIG (AIG), General Motors, Fannie Mae (FNM), and Freddie Mac (FRE) are all now problematic due to the government’s stakes in the companies.
Reference Link (registration required)
* * * * *
I normally don’t like to have such long articles in my commentary. However, this one is an exception because it personifies what I believe to be one of the major fiscal problems in the US: lack of revenue to pay for STUFF…
AP ENTERPRISE: Federal tax revenues plummeting
By STEPHEN OHLEMACHER, Associated Press Writer Stephen Ohlemacher, Associated Press Writer 2 hrs 48 mins ago
WASHINGTON – The recession is starving the government of tax revenue, just as the president and Congress are piling a major expansion of health care and other programs on the nation’s plate and struggling to find money to pay the tab.
The numbers could hardly be more stark: Tax receipts are on pace to drop 18 percent this year, the biggest single-year decline since the Great Depression, while the federal deficit balloons to a record $1.8 trillion.
Other figures in an Associated Press analysis underscore the recession’s impact: Individual income tax receipts are down 22 percent from a year ago. Corporate income taxes are down 57 percent. Social Security tax receipts could drop for only the second time since 1940, and Medicare taxes are on pace to drop for only the third time ever.
The last time the government’s revenues were this bleak, the year was 1932 in the midst of the Depression.
“Our tax system is already inadequate to support the promises our government has made,” said Eugene Steuerle, a former Treasury Department official in the Reagan administration who is now vice president of the Peter G. Peterson Foundation.
“This just adds to the problem.”
While much of Washington is focused on how to pay for new programs such as overhauling health care — at a cost of $1 trillion over the next decade — existing programs are feeling the pinch, too.
Social Security is in danger of running out of money earlier than the government projected just a few month ago. Highway, mass transit and airport projects are at risk because fuel and industry taxes are declining.
The national debt already exceeds $11 trillion. And bills just completed by the House would boost domestic agencies’ spending by 11 percent in 2010 and military spending by 4 percent.
For this report, the AP analyzed annual tax receipts dating back to the inception of the federal income tax in 1913. Tax receipts for the 2009 budget year were available through June. They were compared to the same period last year. The budget year runs from October to September, meaning there will be three more months of receipts this year.
Is there a way out of the financial mess?
A key factor is the economy’s health. The future of current programs — not to mention the new ones Obama is proposing — will depend largely on how fast the economy recovers from the recession, said William Gale, co-director of the Tax Policy Center.
“The numbers for 2009 are striking, head-snapping. But what really matters is what happens next,” said Gale, who previously taught economics at UCLA and was an adviser to President George H. W. Bush’s Council of Economic Advisers.
“If it’s just one year, then it’s a remarkable thing, but it’s totally manageable. If the economy doesn’t recover soon, it doesn’t matter what your social, economic and political agenda is. There’s not going to be any revenue to pay for it.”
A small part of the drop in tax receipts can be attributed to new tax credits for individuals and corporations enacted in February as part of the $787 billion economic stimulus package. The sheer magnitude of the tax decline, however, points to the deep recession that is reducing incomes, wiping out corporate profits and straining government programs.
Social Security tax receipts are down less than a percentage point from last year, but in May the government had been projecting a slight increase. At the time, the government’s best estimate was that Social Security would start to pay out more money than it receives in taxes in 2016, and that the fund would be depleted in 2037 unless changes are enacted.
Some experts think the sour economy has made those numbers outdated.
“You could easily move that number up three or four years, then you’re talking about 2013, and that’s not very far off,” said Kent Smetters, associate professor of insurance and risk management at the University of Pennsylvania. The government’s projections included best- and worst-case scenarios. Under the worst, Social Security would start to pay out more money than it received in taxes in 2013, and the fund would be depleted in 2029. The fund’s trustees are still confident the solvency dates are within the range of the worst-case scenario, said Jason Fichtner, the Social Security Administration’s acting deputy commissioner. “We’re not outside our boundaries yet,” Fichtner said. “As the recovery comes, we’ll see how that plays out.” The recession’s toll on Social Security makes it even more urgent for Congress to address the fund’s long-term solvency, said Sen. Herb Kohl, D-Wis., chairman of the Senate Aging Committee. “Over the past year, millions of older Americans have watched their retirement savings crumble, making the guaranteed income of Social Security more important than ever,” Kohl said. President Barack Obama has said he wants to tackle Social Security next year, after he clears an already crowded agenda that includes overhauling health care, addressing climate change and imposing new regulations on financial companies. Medicare tax receipts are also down less than a percentage point for the year, pretty close to government projections. Medicare started paying out more money than it received last year. Meanwhile, the recession is taking a toll on fuel and industry excise taxes that pay for highway, mass transit and airport projects. Fuel taxes that support road construction and mass transit projects are on pace to fall for the second straight year. Receipts from taxes on jet fuel and airline tickets are also dropping, meaning Congress will have to borrow more money to fund airport projects and the Federal Aviation Administration. Last week, Congress voted to spend $7 billion to replenish the highway fund, which would otherwise run out of money in August. Congress spent $8 billion to replenish the fund last year. Rep. Richard Neal, D-Mass., chairman of the House subcommittee that oversees fuel taxes, is working on a package to make the fund more self-sufficient. The U.S. Chamber of Commerce, which doesn’t back many tax increases, supports increasing the federal gasoline tax, currently 18.4 cents per gallon. Neal said he hasn’t endorsed a specific plan. But, he added, “You can’t keep going back to the general fund.”
-END-
Muni bonds lose ratings after Ambac junked. (From the Financial Times, July 31)
Thousands of municipal bonds have lost their ratings and others have been downgraded after Standard & Poor’s this week stripped bond insurer Ambac Assurance of its investment-grade ratings… As of March 31, Ambac guaranteed $232bn of muni debt.
S&P this week cut Ambac’s ratings to double C from triple B after its parent company Ambac Financial warned that it would report a $2.4bn loss on credit derivatives contracts that would put it at risk of violating minimum capital levels required by regulators.
“You may wind up with a generation of muni bonds with semi-permanent illiquidity,” Mr Fabian (managing director at Municipal Market Advisors ) said.
Mexico Mike…
Putting the horse in front of the wagon
Hi Bill!
A big part of the reason for the meltdown last summer can be found in the astonishing lack of awareness demonstrated by most of the analysts on the housing sector. It seems that almost everyone had completely forgotten the nature of housing cycles and no one was even considering the notion that home prices could go down. The huge volume of sketchy loans that were issued to morons with no ability to make payments was just a consequence of the boom mentality. I think we are seeing a similar failure to interpret the economic tea leaves in real time regarding the nature of the rally in the overall markets. It seems analysts are confusing the effects of wholesale money creation and have lost the ability to distinguish real economic growth. A functioning stimulus package would serve the purpose of ‘priming the pumps’ of the economy, creating a positive environment from which normal economic expansion could resume. What we have today is a flood of money gushing into the pockets of the parasites that create nothing that can sustain the economy or build lasting growth. The best example is Goldman Sachs, a company that directs most of its operating profits to its own employees and pays almost nothing in taxes and contributes nothing to the overall economy. There are many other examples where money has been misdirected and it seems that the opportunity to contribute a meaningful stimulus that will have a lasting effect has been squandered.
This morning on BNN I heard an analyst describe the Chinese economy as a ‘bubble’, which he claims is a big concern since China has put its stimulus money into infrastructure and is not ‘doing its part’ to support the consumer economy. I almost fell off my chair! This is exactly the kind of thinking that is going to hit the market right in the teeth. Is there no one in a position of economic leadership with the brains to figure out that writing cheques for billions (and trillions) of dollars to pay for more consumption is not sustainable? That we are digging a bigger hole and building a greater trap in our haste to just bring back one more boom?
The reason that the United States became the economic engine of the world was the strength and vision of its capitalist leaders to invest wisely and build for the future. People were willing to take honest investment risks and work hard to create strong enterprises that built wealth and improved the lifestyle for everyone. What do we have now? What do we produce? The risk takers of today are speculators that deploy huge chunks of borrowed money to gamble on paper futures, producing nothing. When the debts go sour we all lose. It should surprise no one that our standard of living is in decline.
We all know the story of the multi-millionaire patriarchs that left their fortunes to undeserving ‘playboy’ kids, who promptly pissed it all away in a generation. We are now seeing that story play out on a national level.
Contrast that with the behaviour of the Chinese, who have leadership that is able to look more than one quarter into the future, and a nation with the willpower to work hard and actually produce real goods. The wisdom of the Chinese to invest in infrastructure development with their stimulus money is a lesson that has been lost on our clueless analysts, and they even have the nerve to criticize it! This is outrageous and a big symptom of all that is wrong with our economy.
Once this latest ’sugar high’ from massive monetary expansion has blown over and we are left with bigger debts and still have no real economic growth to show for it, what then? We have consumed our seed corn and will have so little left to work with to engineer a recovery. It will go down in history as yet another collapse and transfer of leadership. There are hardly any analysts willing to go out on a limb and state that we need to stop supporting consumerism and start investing back into a productive economy. And the ones that do have that message are blackballed from the major media outlets. Instead, we are bombarded with messages that are counterproductive, and airtime is provided for morons that think investment in infrastructure is a mistake.
So here we are in an age when entire States are foundering on the edge of insolvency, when an unprecedented number of Americans are living in homes that face foreclosure with no end in sight to the housing decline, when the ranks of unemployed and under-employed are swelling, and the average individual is being left to fend for himself at a time when personal debt loads are at record highs. What is the government response to this crisis? They put up a few more billions of dollars to encourage people to buy new cars. A nation of spend-aholics is the legacy of the greatest wealth engine in the history of the world?
Better teach our kids to speak Chinese…
cheers!
MexicoMike
GOLD/SILVER
Professional Trader recommends selling Calls in silver
Bill,
Here is James Cordier , President of Liberty Trading Group on oil last week…
QUOTE
After rallying nearly 50% this year, crude prices hit a major speed bump this week as the dollar has firmed up and inventories have risen.
Oil prices were “well overpriced” in the $70s and will continue to weaken in the weeks and months ahead, says James Cordier, President of Liberty Trading Group and co-author of The Complete Guide to Option Selling.
Rather than increased demand, the recent rally was based mainly on speculative demand driven by government stimulus packages, Cordier says. Most notably, a flood of liquidity in China found its way into commodities and China’s economy now “looks like a bubble,” he says, joining a growing chorus.
More evidence the rally was not demand driven emerged Wednesday, when the Energy Department said inventories surged by 5.15 million barrels in the week ended July 24, the biggest weekly increase since April and vs. forecasts for a decline if 1.5 million barrels, according to Bloomberg.
In reaction, crude futures were recently down more than 5%, on track for their biggest decline in three months.
Cordier, who made a well-timed call on a coming oil rally here in February, now expects crude to fall $10 to $15 from recent levels. In anticipation of that drop, Liberty is making a bearish trade – “selling calls with both hands,” Cordier says.
END
So we know how oil has moved from its $63 low last week to $72 today …it didn’t drop $10-$15 as he predicted so those calls that were sold “with both hands” must be looking pretty good right now!!! And here is the same guy on silver….
QUOTE
http://www.optionetics.com/market/articles/21563
In fact, it is our opinion that silver attained its highs for the year back in June. For this reason, limited rallies in silver over the next few weeks should be viewed as opportunities to sell calls well in excess of the 2009 highs.
Strike prices for call sellers are currently available at levels nearly twice the going value for silver. You can thank the silver bugs and the Hunt brothers for that.
END
I think it is very bullish when we have such a bullish set up in the precious metals, a bearish set up in the dollar and bonds and this “professional trader” wants to sell calls in silver!!!. Well Mr. Cordier, if after losing your shirt on oil you still want to sell silver calls then you can sell them to me!
Cheers
Adrian
Jesse…
The NAV Spreads of Certain Precious Metals Fund and How to Use Them
http://jessescrossroadscafe.blogspot.com/2009/08/navs-of-certain-precious-metal-etfs-and.html
***
The US Dollar Indices are breaking down - Gold should take off.
The LME Metals Index is a leading indicator for the PMs.
U.K. Royal Mint Doubles Gold Output as Demand Swells
Aug. 4 (Bloomberg) — The U.K.’s Royal Mint, established in the 13th century, doubled production of gold coins in the second quarter as demand surged for bullion to diversify investments.
Output climbed to 16,910 ounces from 8,030 ounces a year earlier, according to data obtained by Bloomberg News under a Freedom of Information Act request. First-half production jumped 86 percent to 45,406 ounces, the figures show.
Demand for physical gold as a store of value and hedge against inflation has increased as governments spend trillions of dollars to combat the worst recession since World War II. Bullion holdings in gold-backed exchange-traded products rose to records in the second quarter. Gold is trading about 7 percent lower than the record $1,032.70 an ounce reached in March 2008.
“There’s still interest in gold as a safe-haven asset,” said Stephen Briggs, an analyst at RBS Global Banking and Markets in London. “This whole sector will capture people who don’t have access to the futures market.”
Individual investors typically buy gold coins, bars or shares in exchange-traded products. Holdings in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, were 1,120.55 metric tons on June 30, up 74 percent from a year earlier. Investment in the fund, which reached a record 1,134.03 tons on June 1, was little changed from the first quarter.
Gold for immediate delivery fell 0.2 percent to $954.74 an ounce, snapping a three-day gain.
‘Huge Uncertainty’
The mint’s gold production in the second quarter, when the benchmark FTSE 100 Index of shares gained 8.2 percent, fell 41 percent from the prior three months. The index slid 11 percent in the first quarter, its seventh straight retreat, helping to stoke demand for bullion as an alternative investment.
“Earlier this year, with the crisis, it led to huge uncertainty,” Briggs said. “Things have come off the boil a little bit. There’s not quite that urgency, but there’s still a sense that there’s inflation and uncertainty around the corner.”
The recession may be ending, former Federal Reserve Chairman Alan Greenspan said in an Aug. 2 interview on ABC’s “This Week” program. First-quarter demand for official coins more than doubled from a year earlier, according to the World Gold Council’s latest figures. Rand Refinery Ltd., the world’s largest gold refiner, boosted coin output to the highest in about 23 years in January, while Austrian mint Muenze Oesterreich AG sold a record 1.5 million ounces of gold in 2008. Coin fabrication reached a 21-year high last year, according to researcher GFMS Ltd.
-END- COMEX Warehouse Stocks August 4, 2009
SILVER
ZERO ozs withdrawn from the dealer’s inventory
516,203 ozs deposited in the customer inventory
Total dealer inventory 62.6 Mozs
Total customer inventory 55.6 Mozs
Combined Total 118.2Mozs
GOLD
4,802 ozs deposited in the dealers (registered) category
1,254 ozs withdrawn from the customer (eligible) category
Total dealer inventory 2.81 Mozs
Total customer inventory 6.33 Mozs
Combined Total 9.14 Mozs
Gold movements were again small. There was again no dealer movement in silver (did they all die of swine flu??). The big silver movement was again in the customer inventory. The pattern of movements that has an order of magnitude more metal moving in the customer inventory than in dealer inventory day after day, week after week just is not credible considering it is the dealers that have a monopoly in selling short; how could they sell short all the production on the planet yet have very little metal leave their inventory? If that has a rational and legal explanation then the Pope is not Catholic!
There were a 838 delivery notices issued in gold for the AUG contract bringing the total for the month at 4000 contracts or 400,000 ozs. The OI stands at 3076 contracts. Yesterday Bank of Nova Scotia issued 2,608 notices and was the stopper on 1,730 of them. Today BNS was the issuer of 684 delivery notices and the stopper on 553 of them. In two days BNS has issued 2692 delivery notices but has been the stopper on 2,283 of them or 85%. I am sure there is an interesting story there, but I don’t know what it is…yet!
There were 3 delivery notices issued in silver for the AUG contract. The total delivery notices for the month stand at 36 or 0.18 Mozs.
Yesterday I said “the Cartel is playing a dangerous game of chicken. My bet is firmly on a commercial signal failure. The currency and bond markets are massive…just a tiny fraction of the money that is going to move out of those markets seeking out precious metals will make the Cartel toast. It WILL be a Battle Royale but baton down the hatches we have an excellent chance of winning”. Today’s action was quite impressive because gold took out the very determined resistance at $960 like it wasn’t even there. Both gold and silver moved like tanks in first gear, no exuberance, no fanfare. The sick puppies of the Cartel had to wait for the thinly traded after-market to try to sell down the metals. The chance of a commercial signal failure just ratcheted…we know that, they know that. Who will blink first?
Cheers
Adrian
The HUI went up 4.31 to 374.42. There is no serious resistance for this index until 400. The XAU could only manage a scant .20 gain to 153.71.
Gold is now $5 off its high of the Comex trading session, while silver is 16 cents off its highs. The crybabies threw a temper tantrum following Geithner’s latest example in front of Congress. Once again, no lasting excitement allowed. That’s the bad news. The good news is these bums are going down for the count. We are getting so close to the day gold and silver explode … never to look back. Geithner has reason to be THAT upset.
GATA BE IN IT TO WIN IT!
MIDAS Appendix Nadler got me fired up today!!
Dear GATA Friends:
Doesn’t anyone fact check anymore? Or, as have we as a people simply resorted to the notion that if someone writes it that it must be true? I read with interest Mr. Nadler’s commentary on his Kitco site titled “UnMade in China”.
Mr. Nadler discusses the GFMS synopsis of central bank gold sales with regards to the first six months of 2009. He quoted the following from that synopsis:
“Net sales of gold by central banks in the first half of 2009 plunged by 73% on the year to 39 metric tons, the London-based consultancy GFMS Ltd. said in a report Monday. GFMS said it expected sales by central banks to be slightly higher in the second half of the year, and forecast a net sales figure for 2009 of 140 tons, the lowest level since 1994.
Central banks sold 95 tons of gold and bought 56 tons. Gold purchases were nearly double on the year, but were down 39% compared with the second half of 2008. Most of the sales were by European countries party to the Central Bank Gold Agreement. France was the biggest seller with sales of 44 tons, followed by the European Central Bank at 35.5 tons.”
He then went on by quoting what I find to be the most important aspect of his piece. With his own commentary. Nadler stated:
“Still dazzled by various hard-money newsletters ‘research findings’ that point to China as a ‘massive’ buyer of gold while it reportedly ‘abandons’ the US dollar? Be dazzled no more. Be more like, suspicious:
“GFMS didn’t give a breakdown of purchases by country. The consultancy said it didn’t believe China was a substantial buyer in 2008 or in the first few months of this year. “We see no evidence of large-scale and direct purchases in the open market by this country either in 2008 or during the first few months of 2009.”
Everyone got that? GFMS DID NOT give a breakdown on purchases by country which begs the question, how the heck can they then make a statement stating that one particular country was NOT buying?
Nadler continues by obviously taking a low blow shot to the GATA team:
“They are the very same ‘well-informed’ sources that must be telling the writers of these marketing pieces disguised as ‘news(letters)’ that US embassies have been quietly suggesting that their staff load up on currencies (other than the USD) in anticipation of a dollar ‘collapse’ scenario. Or, the same ‘sources’ that have ‘concluded’ that a surprise US bank holiday and/or US dollar instant devaluation is ‘assuredly’ in the works. Someone skipped their meds again, or has a very marginal grasp on logic (or both) or just wants you to buy one more issue of their drivel. It is your money, it is your mind. What could go wrong?”
Well Mr. Nadler can go on relying on articles which clearly advise that they have no figures about who actually was buying the Gold and rely on opinion garnered from that report to state that China was probably not a big buyer of Gold. Now that is real reporting isn’t it?
Did Mr. Nadler somehow miss or cleverly omit the GFMS report from July 22, 2009? http://www.commodityonline.com/news/China-gold-reserves-to-boost-bullion-market-GFMS-19772-3-1.html
That same agency he is now relying on to rebut the Gold Bugs’ arguments said this just last month:
LOS ANGELES (Commodity Online): The implications of China increasing its gold reserves will be positive and even if purchases are small in the context of the Asian giant’s overall foreign reserves, it could still turn out to be significant for bullion market, according to Philip Klapwijk, Chairman of GFMS Ltd,
In an exclusive article to American Advisor, a quarterly newsletter of Goldline International, he said that the China buying will boost sentiments in bullion market. Klapwijk discusses the significance of China’s increase in its gold reserves and its potential positive effect on future gold prices at length in the article.
“China’s announcement of official bullion purchases can be seen as a defining moment for the gold market,” wrote Klapwijk. “For gold prices the implications of this must be positive… Even if Chinese purchases, as seems very likely, turn out to be small in the context of the Asian giant’s overall foreign reserves, for the bullion market the quantities involved could turn out to be rather significant… A shift from nets sales on this scale to something close to ‘neutrality’ would be highly positive for gold prices, at the very least providing the market with a very solid floor and giving a major boost to sentiment and confidence in the yellow metal.”
“I think many investors will find Philip’s analysis of China’s diversification into gold and away from the dollar to be extremely significant, especially in light of the recent fall in the U.S. dollar and the generally positive signs in the gold market,” said Mark Albarian, President & CEO of Goldline. “We’re extremely honored to feature Philip’s article in our newsletter and look forward to the other articles that Philip will write in future issues.”
Also, Mr. Nadler might be a little more interested in the April 24, 2009 report from Reuters (http://uk.reuters.com/article/idUKN2441409020090424) indicating that “China said that it had raised its gold reserves” Or the April 27, 2009 BBC News report indicating that “China has quietly been increasing it’s Gold holdings” … “China has reported that it has been secretly increasing its gold reserves. It was able to keep it secret by buying domestically produced metal, almost doubling the amount of gold it holds to more than 1,000 tons”. http://news.bbc.co.uk/2/hi/business/8020721.stm
Or how about the State Administration of Foreign Exchange who came out and actually said “that China’s gold reserves now equal 1054 tons, grabbing the market’s attention and showing that China is beginning to increase its gold reserve as its long-term strategy, not only as an important tool to hedge USD risk” http://www.chinastakes.com/2009/4/chinas-long-term-gold-reserve-increase-strategy-surprises-markets.html
There is also the Metal Miner report found at
(http://agmetalminer.com/2009/04/28/china-gold-reserves-jump-on-release-of-new-figures/) that reports on the Chinese spike in reserves.
I will leave with this. Mr. Nadler chooses to rely on the finding of a report of which the writers admittedly do not release any stats on who the buying nations were. Yet, despite the mounting evidence to the contrary he continues to defend his anti gold-bug position with snippets of commentary that supports his view. You see, he doesn’t attack the Gold market or the fallacies in the reports himself but choses to take snippets to try to berate others with a differing view.
I prefer to look at the facts. I Check them twice and then draw my own conclusions. Clearly if China had been stockpiling Gold then it should have been no surprise that they were going to do it via their own methods. The GFMS said in July that China is going to be key in the Gold market and they then contradict themselves in yesterday’s synopsis, provide no evidence as to who the buying nations were and somehow we are supposed to infer from this that the Chinese were not buying? Did he conveniently miss the fact that according to most news surrounding this topic China was able to conceal it’s gold purchases by refining scrap gold purchases and buying domestically?
Did everyone suddenly forget that in November of 2008 the Chinese announced that they were mulling over increasing their Gold Reserves to 4000 tonnes? http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=82afe43d-8d3c-494d-894d-113c196ed750
Nadler can look at self contradicting reports and spin them how he wants. I will prefer to look at the facts. The facts state that China has been buying and might not be finished for a long while. What happened? Did the July 2009 GFMS report suddenly become ancient history?
But then again…who am I? Just do a Google search on China buying Gold, China increasing Gold Holdings, Is China Buying Gold or whatever suits your fancy. The hundreds of stories linked to this story are more that Nadler can handle in his spin of a few words of a report that lists no buyers but concludes that one in particular is not. Fancy stuff there Mr. Nadler. Oh…and Nadler might want to check the US dollar index while he’s at it. Naw!!! That can’t be the Gold Bugs exiting the dollar in droves now can it?
Sincerely,
Fulvio in Toronto
RSS feed