Sell Stops Cascade Gold Down Below $1400

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Bears have been salivating at reaching downside sell stops for a while now but had been stymied by strong physical buying of the metal which had kept prices supported. With the US Dollar continuing to strengthen, and with commodities in general seeing strong selling pressure, they finally got their wish in today’s trading session.

Price fell through some initial support near the $1420 level which had held the market for the last few sessions but once that gave way, downside pressure intensified until bears took it down to near $1410. Just below that they hit their jackpot and reached the sell stops. It was those stops going off that knocked price through the psychological floor at $1400. That allowed another $10+ fall in the price of gold where some short covering and bottom hunting surfaced right below $1390.

I have noted the next level of chart support for gold. It is currently just beneath today’s session low of $1389 coming in closer to the $1385 level. If that does not attract sufficient buying, price will fall down into the rectangle I have noted on the chart somewhere in the vicinity of $1375 – $1365.

I want to note here yet again how volume continues to increase during these downdrafts. This is not a bullish pattern. Bears are firmly in control until we see the volume shift along with the price action.

With the mining shares completely collapsing, there is really no other catalyst for bears to aggressively cover their positions right now other than booking a few profits. Like it or not, approve of it or not, the US Dollar is the strongest game in town right now as investors globally see the US as the best place to stash money. It is a pity that the Treasury International Capital Flows data is so dated by the time we get it but I would wager good money that the component breaking out the foreign money inflows into equities is soaring.
Either way, the strong Dollar is keeping gold buying in check. One thing I might note here – that same strong dollar is now beginning to impact US exports of agricultural goods.
It’s funny in a perverse sort of way that the Bank of Japan, which is printing about $74 billion each month in an effort to stave off deflation is seeing that extra supply of Yen drop its currency into an abyss while at the same time, the Federal Reserve is printing an equivalent value of some $85 billion each and every month while its currency soars blissfully into the upper levels of the atmosphere. You tell me how to mentally wrap ones mind around this sort of perverseness. All I know is that Bernanke and Friends have concocted a new elixir and discovered the Holy Grail of Permanent, Pain Free, Prosperity. We really are seeing the very concept of “MONEY” redefined right before our eyes!

Gold falls below $1,400 as slump continues

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On Wednesday, gold pices retreated below $1,400 for the first time since April 19

REUTERSOn Wednesday, gold pices retreated below $1,400 for the first time since April 19

Gold futures tumbled below $1,400 an ounce, extending the longest slump in almost three months, as the dollar’s rally eroded demand for the metal as an alternative investment. Silver fell to a three-week low.

The greenback climbed to a nine-month high against a basket of major currencies. The euro fell to the lowest in almost six weeks against the dollar as the euro-area’s recession extended to a record sixth straight quarter. Gold has declined 17 percent this year as some investors lost faith in the metal as a store of value.

Prices retreated below $1,400 for the first time since April 19 as stimulus measures by central banks and record-high equity markets fail to accelerate the pace of inflation. While consumer demand for coins and jewelry helped rally the precious metal by 5.7 percent from a two-year low on April 16, gold is headed for its first annual decline since 2000, halting 12 straight years of gains.

“Physical demand can provide some support, but gold cannot do well in a deflationary environment,” Adam Klopfenstein, a senior market strategist at Archer Financial Services Inc. in Chicago, said in a telephone interview. “The dollar has emerged as the preferred flight-to-quality instrument, and lots of money has also moved to equities.”

Gold futures for June delivery fell 2 percent to settle at $1,396.20 at 1:38 p.m. on the Comex in New York, after touching $1,389, the lowest for a most-active contract since April 19. Prices dropped for a fifth straight session, the longest slump since Feb. 20.

The metal touched a 26-month low of $1,321.50 on April 16, entering a bear market with prices down 26 percent from a closing high in August 2011. Gold reached an all-time peak of $1,923.70 on Sept. 6, 2011.

Yesterday, holdings in exchange-traded products backed by gold dropped 6.2 metric tons to 2,219.7 tons, the lowest since July 2011, according to Bloomberg data.

ETP holdings have slumped 16 percent in 2013 after gaining every year since the first product was started in 2003. While the selloff has been faster than expected, a further drop will probably mean more price declines, Goldman Sachs Group Inc. analysts including Jeffrey Currie said in a report dated yesterday.

Last month’s plunge in prices fueled retail demand. The U.S. Mint said April 23 it ran out of its smallest gold coins, while Australia’s Perth Mint said volumes jumped to a five-year high. India’s bullion imports may surge 47 percent to 225 tons in the second quarter to meet consumer buying, according to the All India Gems & Jewellery Trade Federation. Imports by China from Hong Kong more than doubled to an all-time high in March.

Silver futures for July delivery fell 3.1 percent to $22.658 an ounce on the Comex, the biggest decline since May 1. Earlier, the price touched $22.445, the lowest since April 18.

On the New York Mercantile Exchange, palladium futures for June delivery advanced 0.3 percent to $729.05 an ounce, the highest settlement since April 11. Platinum futures for July delivery fell 0.7 percent to $1,490.70 an ounce.

Source: http://business.financialpost.com/2013/05/15/gold-falls-below-1400-as-slump-continues/

‘Gold rush mentality’ trumps human rights and social needs in B.C. vote

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Today, many people in British Columbia — and indeed across Canada — are trying to determine just how the BC Liberals won the provincial election and what implications this surprise result will have.

Grand Chief Stewart Phillip of the Union of BC Indian Chiefs (UBCIC) was interviewed today by Jane Bouey on Media Mornings, a daily news and talk program on Vancouver’s Coop Radio 100.5FM. Here is an edited version of their conversation.

Jane Bouey: What’s your reaction to the election results?

Grand Chief Stewart Phillip: Needless to say, we’re greatly disappointed. We were looking forward to a change for the better, so to speak, and clearly that did not materialize. We believe the outcome of the B.C. Election represents the drawing of future battle lines between the environment and resource development.

JB: Yes, one of the fears I have … is this government now feels they have a complete mandate to ignore Indigenous rights and the environment.

SP: Yes, I don’t think there’s any question about that. As I watched the results unfold, I began to realize that we are, in all likelihood, moving toward an era of confrontation and conflict, given the fact that under Premier Clark‘s leadership there was no effort to invest in any significant or genuine way in terms of building a closer with the Indigenous peoples of this province. She was quite dismissive and very distant with respect to continuing the work of the so-called ‘new relationship’.

JB: It seems like there was shift, in terms of the policies of the provincial Liberal government from the early years of Campbell over time to Christy Clark’s attitude. What are your thoughts on that?

SP: Well I don’t see any question about that. When Premier Clark assumed the leadership of the BC Liberals she chose to basically cease to invest any time or resources into developing relations between First Nations in B.C. and her government. And I think she will believe that was a proper decision and, with her new mandate, that may deteriorate even further, which again will set the stage for future conflict and confrontation.

I think when one analyzes the results on a riding by riding basis, one notes that there were 12 ridings where the combined NDP and Green vote was larger than the Liberal candidate who won in each one of those ridings. So, in other words, if there had been some strategic agreement between the Greens and the NDP, the NDP would’ve formed government with somewhere in the neighbourhood of 45 seats.

JB: That assumes that those Green votes would have all gone NDP… I wanted to ask you about reports during the election that voters with Indian status cards were being turned away from the polls. Do you have any details on that?

SP: We had heard in our office that there were complaints being filed in Jenny Kwan‘s [riding] to that effect. There was a flurry of calls looking into the matter, and I believe that some of the personnel at the polling stations just weren’t aware that status cards were recognized identification, and I believe the matter was rectified.

JB: That’s my understanding as well, but it must have been very frustrating for those voters at the time… What other issues are of major concern for you, with this government?

 SP: Again, I think this election and its outcome was all about resource development and ‘growing the economy’, and creating jobs. And, again, that may unfold without any consideration or respect for the environment of other social issues. Certainly, child poverty is a major issue in the province of B.C., and the issue of children and families is another major issue that seems to have taken a backseat to these grandiose notions of economic prosperity through resource development. So it’s very much a gold rush mentality at the expense of human rights and the social needs of the people in the province of B.C. who really find themselves challenged in that regard.

JB: Where do we go from here?

SP: I really want to stress this point: the left needs to have some soul-searching about the how the vote is continuously split. The BC Liberals are obviously the beneficiaries of that split. I think there has to be some serious discussion and there has to be a more strategic approach.

I congratulate Mr. Weaver in Oak Bay – Gordon Head, and I think perhaps the Greens should focus on key ridings where they believe they can elect candidates. But to run candidates in all ridings, that guarantees splitting the vote; I think that has to be re-examined.

For the Indigenous peoples of the province, we will continue to protest pipelines, mines, dams … with respect to its infringement on our Aboriginal title and rights interests and the integrity of the environment within our respective territories. That will not change. And I think there will be a greater urgency to us aligning and allying ourselves with other like-minded groups and organizations to carry those battles forward.

JB: I try to remain hopeful about our ability to do that. How do you feel?

SP: Well I think that there’s a lot of soul-searching going on today… I think that people will very quickly realize that alliances are more important than ever now with respect to our efforts to protect the environmental and social values of this province that have been totally eclipsed by the ‘scratch and win’ economic theory of the BC Liberal government under Christy Clark, and that’s going to set the tone of the next four years.

Source: http://rabble.ca/news/2013/05/grand-chief-stewart-phillip-gold-rush-mentality-trumps-human-rights-and-social-needs-bc