5 Incredible Charts Covering Gold To The “Surprise Index”

Today the man who provides macro research and commentary to many of the largest financial institutions and top hedge funds around the world sent KWN 5 incredible charts illustrating covering everything from gold to the “surprise index.” Eric Pomboy, who is founder of Meridian Macro Research, and whose sister Stephanie Pomboy appears in Barrons, also provided tremendous commentary to go along with the 5 stunning charts, as well as what all of this means going forward.

By Eric Pomboy Meridian Macro Research

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July 10 (King World News) – Gold & Silver Charts Of The Day

“The COT data for week ending 7/2 show a 35% reduction in Net Commercial Position to ‐22,776 contracts … the least Net Short reading since Jan 8, 2002 when gold was $279/oz. With a Net Long reading not far off, a significant upside reversal for gold is clearly in the works.

Regarding Friday’s Payroll Report, things are not as rosy as the headline data suggest. First, 195k jobs added sounds like a solid number … but it’s only 79k jobs above the (6mo. average) of Population Growth. Second, if you look at the gap between U6 and U3 number of unemployed (chart below), the monthly change was a staggering +786k persons … the largest monthly jump since December 2008 (+800k), thus the rise in U6 rate from 13.8% to 14.3%.

Third (next chart), the number of full‐time employed dropped by ‐240k, bringing full‐time employed as % of Total Labor Force to 74.4% … still in historically low territory and indicative of a very uneven labor force (full/part time) composition. In the last 3.5 years, 5.43 million full‐time jobs have been created. In order to reach a more ‘ideal’ 79‐80% over the next 4 years (factoring‐in population growth), we’d have to create about 12 million full‐time jobs, or 250k jobs per month … which seems highly improbable. Considering full‐ time jobs dropped ‐240k and part‐time jobs jumped +360k for June, we’re clearly moving in the wrong direction.

Also, the total of Non‐Full Time employed is at a fresh historic high as of the June data…up +400k to over 28 million people. The takeaway from these numbers is: we could get to 6.5% (or even 5.5% or lower) headline U3 unemployment rate in the next few years, yet based almost entirely on part‐time job creation. None of this is good news, as quality of jobs is clearly more important than quantity….

Source: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/7/10_5_Incredible_Charts_Covering_Gold_To_The_Surprise_Index.html

Here Is The Investment Opportunity Of A Lifetime

Rule: “The thing that is most interesting to me right now is the turbulence in energy markets. The energy markets are so large and there has been such incredible turbulence in them that it has definitely caught my attention. The focus of my financial attention has been attempting to get either debt or equity deals done among the micro-cap issuer community in junior mineral or exploration companies. In that I have been unsuccessful….

Eric King: “The sentiment on gold and silver is at the dead lows even though the metals have bounced here.”

Rule: “I think that’s a continuation of an earlier theme, and I don’t think people are paying attention. In the gold and silver markets you have been seeing the futures market for a substantial period of time setting price, as opposed to the physical market.

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At the same time you are seeing the selling pressures that drove the physical market lower begin to abate. Those selling pressures were the unwinding of leveraged, momentum-driven carry trades. These involved either gold futures or the gold ETFs.

All of this has resulted in a massive accumulation of physical gold and silver into very strong hands. This involves players in the Eastern hemisphere, as well as retail investors who are unleveraged, that are buying physical gold and silver.

We are also beginning to see the futures markets bottom out at the same time the physical market is incredibly strong. We have also seen the gold lease rates have gone up fairly substantially. This strongly suggests that a lot of the physical gold, which was in bank hands and available for leasing, has been disposed of into the physical markets.

These are fairly bullish signs. I can’t tell you exactly how it’s going to play out, but I do believe that at the very least, in the near-term, the gold and silver markets will stabilize.”

Eric King: “With things as decimated as they have been in the gold and silver space, many times you see markets come out of the hole and it doesn’t really take news to drive it. The markets just start going higher.”

Rule: “You are exactly right. What happens is that you exhaust the sellers. The interesting thing is that the buyers are somewhat exhausted too. It’s sort of like two ‘world class’ fighters who have been battling for 13 rounds and only have 2 more rounds to go, but neither have much energy left to hit each other.

But what you just said is exactly what I’ve experienced in past market cycles like these. The stocks start to move up because they stop moving down. Again, you exhaust the sellers. Everybody is looking at tax loss selling this year, but people forget that you have to have some gains to shelter with the losses. And U.S. speculators haven’t done that.

Furthermore, in Canada where you can take losses this year against gains that you acquired in the three prior years, what you are finding is that the people usually were able to use up those prior gains with last year’s losses. So I suspect that tax-loss selling this year will be much less pronounced than it has been in earlier seasons.

I strongly believe that the highest quality mining shares will move higher the rest of the year, and I certainly believe that the worst of the pressure is off of the junior stocks. There has just been a lack of buyers to meet the lack of sellers.”

Source: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/7/12_Rick_Rule_-_Here_Is_The_Investment_Opportunity_Of_A_Lifetime.html

We Are In The Early Stages Of A Massive Short Squeeze In Gold

Today one of the most respected institutional minds in the entire financial world told King World News that we are in the early stages of what will be a massive short squeeze in the gold market. John Hathaway, of Tocqueville Asset Management L.P., is one of the great original thinkers in the business, and his fund was awarded a coveted 5-star rating. Below is what Hathaway had to say about the developing massive short squeeze in gold.

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Hathaway: “I think the story of the day is the disconnect between physical gold and paper. I just saw a note this morning about the most current drop in COMEX warehouse inventories. Brinks also reported this week that their inventories were down 55%….

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“We also have what’s been happening with the gold lease rates. This is just another indication of how hard physical gold is to come by. Bernanke also basically made a U-turn on QE by essentially saying we are going to be in this easy money mode for a long, long time. He definitely backed away from ending QE in mid-2014.

I think the shorts had been ganging up on gold with the view that there would be some sort of exit, and now it’s nowhere in sight. So now some of the shorts are running for cover. But if I’m at the Fed, I am looking at a huge mess. We also know that Bernanke is on his way out.

I have a to-do list for the next chairman of the Fed. One would be to open a direct connection so the Treasury doesn’t have to issue bonds. The Fed just gives the Treasury money to fund whatever they need to fund. The other thing they may do is force tax-deferred retirement accounts to own 20% in a Treasury security that has an interest rate ceiling of say 2%. That’s how they are going to try to get out of QE, or the alternative is we are going to have incredible inflation.”

Source: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/7/11_We_Are_In_The_Early_Stages_Of_A_Massive_Short_Squeeze_In_Gold.html