Euro and the Commercial Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest
Euro and the Nonreportable Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest
Sunday, January 16, 2011
Euro Operation Entering Accumulation Phase
Connected interests have purchased weakness, while retail players, following the endless barrage of negative euro zone headlines, have sold it.
Euro and the Commercial Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest
Euro and the Nonreportable Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest
Euro and the Commercial Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest
Euro and the Nonreportable Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest
Reality and Perception Rarely Meet In Gold
While many investors fret over coordinated headline ‘diversions’, they always seem to miss important changes within the paper markets of control. The increased market depth (volatility and volume) provided by the paper operation has allowed ‘connected players’ to cover their short positions in size without their actions placing upward pressure on price. The operation will continue as long as ‘hype’ elicits the desired response and, more importantly, the cycle of TIME permits.
As always, how far the paper market can be stretched in favor of the shorts depends on the strength of physical market. As the article below suggests, the increasing premiums for physical in Asia reflects a tight market unfazed by the paper games. Connected money has been quietly reducing and reallocating their short exposure because they know that Asian demand is not transitory. They covered a big chunk of those short positions last week despite the “rethink long gold” hype since late 2010. This quiet adjustment which does not include the heavy selling towards the end of the week is illustrated below.
Gold London P.M Fixed and the Commercial Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest:
Retail money, highly impressionable to 'experts' selling fear and doubt, were sellers in weakness. What's new?
Gold London P.M Fixed and the Nonreportable Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest:
Headline: Gold prices buoyed by China demand
Source: ft.com
As always, how far the paper market can be stretched in favor of the shorts depends on the strength of physical market. As the article below suggests, the increasing premiums for physical in Asia reflects a tight market unfazed by the paper games. Connected money has been quietly reducing and reallocating their short exposure because they know that Asian demand is not transitory. They covered a big chunk of those short positions last week despite the “rethink long gold” hype since late 2010. This quiet adjustment which does not include the heavy selling towards the end of the week is illustrated below.
Gold London P.M Fixed and the Commercial Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest:
Retail money, highly impressionable to 'experts' selling fear and doubt, were sellers in weakness. What's new?
Gold London P.M Fixed and the Nonreportable Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest:
Headline: Gold prices buoyed by China demand
A spike in gold buying by Asian investors has created a scarcity of investment-grade gold bars in the region, supporting prices even as western investors trim their holdings.
Traders said that gold sales to China had jumped 30-50 per cent since Christmas, driving the cost of kilo bars in Hong Kong more than $3 per ounce above the market price of gold, the highest level since 2008 and an indication of the tightness in the physical market.
Source: ft.com
Mailbox
Alex,
History suggests that nationalization, while always a short-term possibility, is never sustainable over the long-term. Will the same individuals that run the post office for billions in losses be asked to manage exploration, development, and operations of highly-specialized assets?
What's the objective of a nationalized mine once the profit incentive has been removed? Will the refilling of Fort Knox, capping of gold, or some other official or unofficial reason motivate private capital to invest in nationalized interests? If not, can the inevitable disinvestment be overcome by investments from the printing press as some suggest?
If panic drives the government to nationalize resources what does that say about “king dollar” rhetoric. All actions have consequences. Any attempt to nationalize resources will only serve to redirect capital, the lifeblood of investment and economic growth, towards nations or regions that adhere to free market principles.
The collective answers to the questions above, unique to every investor, will direct capital as a whole.
Regards,
Eric
History suggests that nationalization, while always a short-term possibility, is never sustainable over the long-term. Will the same individuals that run the post office for billions in losses be asked to manage exploration, development, and operations of highly-specialized assets?
What's the objective of a nationalized mine once the profit incentive has been removed? Will the refilling of Fort Knox, capping of gold, or some other official or unofficial reason motivate private capital to invest in nationalized interests? If not, can the inevitable disinvestment be overcome by investments from the printing press as some suggest?
If panic drives the government to nationalize resources what does that say about “king dollar” rhetoric. All actions have consequences. Any attempt to nationalize resources will only serve to redirect capital, the lifeblood of investment and economic growth, towards nations or regions that adhere to free market principles.
The collective answers to the questions above, unique to every investor, will direct capital as a whole.
Regards,
Eric
Dear Mr. Eric De Groot,
I am a very long term reader of Mr. Sinclar and also your website, which I find extremely informative. I would be very grateful to you if you can comment or give your opinion on news that are coming out from different writers, especially lately, that gold and silver miners will be nationalised when price of both metals shoot substantially higher and Western countries experience huge budgets deficits. I posess quite some TRE shares and am concerned about that.
Although on the other side I think that most miners are domiciled in West and have mines in developing countries. If Western countries nationalize them they may triger the nationalization of the mines one by one by their home countries. Many of those miners actually do not possess the metals under the earth, but have royalties to extract that metal - therefore no need for nationalization. Also developing countries would have no interest to nationalize as they mainly have no technical know how to safely and efficiently bring metals to the ground. So I somehow belive that I may be quite sure that US and Canadian mines wont be nationalized, at least not in widespread nationalization, when gold and silver will march very high.
That is my take, and would be very kind for your opinion on your blog if you belive that is of some interest for other readers?
Thank you, Alex
Friday, January 14, 2011
Liquidity Warning For Silver From Germany
Liquidity warning for silver from Germany's BullionVault.
Source: gold.bullionvault.de
Source: zerohedge.com
Due to high demand our own silver stocks are exhausted right now.
As BullionVault is only dealing with physical bars which are already in our possession, we are currently unable to offer, silver on our own market. Of course, our market is still open to all our clients act with each other and set their own prices. This situation could lead to buyers and sellers at higher prices. Buyers are asked to check the price again before they confirm their order.
On Tuesday, 18 January 2011, we expect the next delivery for silver.
Source: gold.bullionvault.de
Source: zerohedge.com
Battle Over Perception
What proportion of rising retail sales is driven by inflation? The unexpected strength often cited by headlines as a recession buster quickly disappears when US dollar (nominal) retail sales are priced in stable currency such as gold. Despite the endless hype, gold adjusted, or real retail sales remain in a sharp downtrend that began in 2005.
Gold-Adjusted Retail Sales (RSGLDR) and YOY Change:
Even CPI adjusted retail sales, badly altered by growth dampening techniques over the past thirty years, have reached momentum zone which implies caution.
Real or CPI-Adjusted Retail Sales (RRS) and YOY Change:
Headline: Retail sales rise for sixth month in December
Source: finance.yahoo.com
Gold-Adjusted Retail Sales (RSGLDR) and YOY Change:
Even CPI adjusted retail sales, badly altered by growth dampening techniques over the past thirty years, have reached momentum zone which implies caution.
Real or CPI-Adjusted Retail Sales (RRS) and YOY Change:
Headline: Retail sales rise for sixth month in December
Retail sales rose for a sixth consecutive month in December, with big gains in sales of autos and furniture. The increases lifted sales for the year by the largest amount in more than a decade.
Sales rose 0.6 percent last month to $381 billion, the Commerce Department said Friday. The gain boosted retail sales 13.5 percent above the recession low hit in December 2008.
Source: finance.yahoo.com
Fear and Doubt Create Volatility
Fear and doubt create volatility which hides the covering of large short positions into weakness. As Turk suggests, ‘momentum toward hyperinflation is accelerating’ as global currency devaluation continues without pause. Gold $5,000+ by 2015, supported by long-term cycles as depicted by Armstrong’s work, cannot be achieved within the context of the 2001 linear trading channel. In other words, this cycle driven price target necessitates a geometric acceleration at a time when most are still thinking in linear terms - see chart below This is simply food for thought while fear and doubt rhetoric dominates.
Gold, London P.M. Fixed
Headline: James Turk - Momentum Toward Hyperinflation is Accelerating
Source:kingworldnews.com
Gold, London P.M. Fixed
Headline: James Turk - Momentum Toward Hyperinflation is Accelerating
With gold and silver strengthening off of the lows, King World News interviewed James Turk out of Spain. When asked about the action and gold and silver and increasing inflation Turk stated, “So what we’re seeing here is the money being printed by central banks around the world is going to useful and valuable tangible assets. These rocketing prices are a clear warning that the momentum toward hyperinflation is accelerating.”
Source:kingworldnews.com
Bad Money Drives Out Good
The allure of cashless society is strong within an environment of currency debasement. Gresham's law, the tendency of bad money drives out good, is becoming problematic for the monetary authorities around the globe. Many coin denominations are disappearing from circulation as their melt value rises above their face value. The problem of currency mismanagement, as reveal by changes in coins composition or elimination of often smaller denominations, would be more difficult to identify in a cashless, electronic currency based, society. Monetary management has more about what the public will accept rather than what’s good for the currency.
Headline: Tax refunds on prepaid cards coming
Source:money.cnn.com
Headline: Tax refunds on prepaid cards coming
Thousands of Americans will get tax refunds on a prepaid card instead of a paper check as the government looks to cut costs and give people without bank accounts an easier way to get their money.
The Treasury Department launched the pilot program Thursday, saying it will mail letters next week to 600,000 taxpayers with annual income under $35,000.
Source:money.cnn.com