Gold Daily and Silver Weekly Charts

Intraday commentary on the precious metals market is here.

As a reminder this is a holiday week in the US as the markets will be closed on Thursday, July 4 for Independence Day.

And a Happy Canada Day for my many friends and acquaintances in that most decent and honorable of countries.

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I remember,  about twenty years ago, landing in Ottawa. As I came up to passport control, I handed over my paper driver’s license with no picture.

“Have you no passport? Is this how you come into a foreign country?” the official asked, holding up my piece of paper with an obvious disdain. “Yes sir I do, and I am very sorry for this. But I did not think to bring it, because since my earliest days growing up not all that far from the Niagara border, I have always considered Canada like a second home.”

And with an incredulous laugh at my cheek, and a sweeping wave of his hand, he let me through. That would probably not work so well these days, but this is a true story.

For years when we crossed the border at Niagara we only had to state where we were born and were waved through. I had never once thought of Canada as a foreign land. My wife and I have spent many happy days on vacation and on business in Toronto, Niagara, Montreal, Ottawa, and Québec City.   I have been to Vancouver several times, but never on holiday. Alas, those days are no more.

I think we can expect some interesting things in the precious metals this week.

Typically the more senior people on Wall Street will leave on Tuesday evening for their holiday in the Hamptons.

So trading will be light. Interestingly enough a fairly important Jobs Report is due on Friday morning, and they do not seem to be delaying this until next week. Expected is +175,000 jobs.  As you may recall the financiers like to raid the metals on a Non-Farm Payrolls day.

Tomorrow is ‘rally day’ on the equity exchange so let’s see if the bulls can pull themselves together for one last market operation before their begin their festivities.

I do not think most realize the shocking nature of this excessive move downward in gold and silver.

The manipulation in the paper markets is there for all to see. I cannot help but laugh quietly every time I hear the Lord Haw Haws and the spokesmodels on the financial networks talking about how gold and silver have fallen into disfavor, and how low the volume of physical purchasing has been. They desire what they do not have!

One can keep doubling down on a bluff for too long, and eventually they will be called, and their cards must be shown.

Nothing is more clear to me that the paper gold and silver that has been shorted cannot possibly be covered. It has gone entirely too far. And further price declines to free up bullion from the ETFs, as I have pointed out, is very counter-productive because it is now just stimulating more physical buying in size.

We are entering a new phase of the currency wars, and the metals bears and financiers are worried, despite their bluff and bravado. Their arrogance is so typical as they reach the end of their game.

Yes they are still dangerous in the short term, but they must feel the fear creeping up their spines.  One after another their control frauds and schemes are being exposed.  Their perfidy is there for all to see.

They have been weighed, and are found wanting.


New gold rush

A woman selects necklaces at a gold shop in Chinatown yesterday. People flocked to buy gold after the price dropped to below Bt18,000 per baht weight (about 15 grams)

Savers nationwide are flocking to gold shops, enticed by the falling price of the precious metal, which yesterday tumbled to a 34-month low amid fears of an end to the US quantitative easing policy.

Gold bar fell below Bt18,000 per baht weight for the first time since April 2010.

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Wisawa Wisawachaiwat, the owner of Jongluck Gold Shop in Phitsanulok, said the recent plunge had sparked new interest among small savers. “The prices have fallen to the lowest in years and they are expecting huge profits once the prices climb up again,” he said. Some clients took home gold bars worth 50-100 in baht weight.

The precious metal yesterday extended the decline to a 34-month low amid speculation that the US Federal Reserve will reduce stimulus with economic data beating estimates. Held as a safe bet against inflation, gold lost value as unprecedented money printing by central banks around the world failed to spur inflation.

A lack of accelerating inflation and concerns about the strength of the global economy is also hurting silver, platinum and palladium, which are used more in industry.

Bullion has slid 28 per cent this year, set for the biggest annual drop since 1981, after rallying for the past 12 years. About US$62.4 billion was wiped off the value of precious metals exchange-traded product holdings this year as some investors lost faith in them as a store of value.

While gold bullion slid to $1,180.50 an ounce early yesterday in Singapore, the lowest since August 2010, gold prices in Thailand followed the move. Local gold prices were adjusted 15 times yesterday in line with global volatility. At 5pm, gold bar was sold at Bt17,850 while ornaments were at Bt18,250 per baht weight.

Local gold price averaged Bt17,493.18 in April, 2010, when global prices averaged $1,145.72 per ounce and when the baht was at 32.29 to the US dollar.

Jitti Tangsitpakdi, president of Gold Traders’ Association of Thailand, believed that gold prices could decline further but would not fall below $1,100 per ounce. Cheap prices should spur new demand and the local prices could be cheaper if the baht does not weaken further against the US dollar.

Christin Tuxen, a senior analyst at Danske Bank in Copenhagen, who sees gold at $1,000 in three months, said: “The current environment is a fundamentally poisonous one for the yellow metal. Rising yields are upping the opportunity cost of holding gold, the initiation of a fundamental dollar up-trend weighs, inflation expectations are in decline as the commodities super-cycle wears off, and many tail risks have been sidelined.”

Investors sold 583.2 tonnes of gold this year.

“There’re still people who are interested in gold but because prices have fallen so much and so rapidly, they’ll wait for some stabilisation,” said Alexandra Knight, an economist at National Australia Bank. “There’s definitely been a loss of confidence in gold and that’s seen in the ETF liquidations.”

Source: http://www.nationmultimedia.com/business/New-gold-rush-30209352.html

Is this the Rothschild Moment for Gold?`

We’ve all been watching the selloff in the global gold market. Armies of chicken littles are in a frenzy due to suggestions that the Fed may be ending its quantitative easing, so I thought this is a good time to check in with my friend Henry Smyth of Granville Cooper Asset Management Ltd. (GCAM). Henry is a former Coutts & Co. banker and a very astute observer of the global financial markets. We spoke last week in New York. — Chris

RCW: Henry, the gold market has been taking a beating in the past few months. What do you see as the drivers of the gold market today?

HS: Since $1525 support broke gold has been in the throes of stop loss selling. Gold is now over 2% below its 200 day moving average. Physical supply is extremely tight. The precious metals analysts where I trade in Zurich have very good contacts among the refiners. They tell me the order backlog is over four weeks now versus four days in a normal market. Same for Shanghai and Mumbai where you see sharply increasing demand as US Dollar gold prices fall and gold premiums rise. Here in the United States the US Mint cannot keep up with demand for gold and silver eagles.

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RCW: So is this correction a normal reaction to the Fed? Or has the fact of QE magnified the volatility of gold (and everything else)?

HS: The shorts in the market are running out of short fuel. The decline in gold has been going on since late 2011 and is very long in the tooth. Sentiment against gold is virtually 100% right now among Western gold analysts. This is a Rothschild moment.

RCW: This is a reference to the famous dictum by Baron Rothschild: “Buy when there’s blood on the street?”

HS: It is. There seems to be an expectation that the end of QE will be bullish for the Dollar and therefore bearish for gold. My view is the end of QE will be bearish for all those asset classes which require QE for life support and/or do not do well in a rising interest rate environment. That would include the bulk of US equity and fixed income markets.

RCW: So then I take it you currently are a buyer of gold?

HS: Gold is in a primary uptrend and has been since 2001. The long gold strategy of the Granville Cooper Gold Fund II Ltd. began in 2003. We went through a correction in 2004-5 and another in 2008-09. The current correction is longer in duration but similar in percentage change to the previous corrections. Our investment mandate is long term outperformance against the US Dollar gold price. We use corrections to build positions for the resumption of the primary trend. We have buy stops out there now.

RCW: So given the degree of government manipulation of the financial markets, how do you get a clear view of the gold market?

HS: Gold began its uptrend prior to the onset of the first QE. Fed policy can accelerate or retard, but not alter, the primary uptrend in gold. Gold is a global asset class but is viewed in a very provincial way in the United States. We are seeing a tectonic shift in global asset allocation as gold moves from West to East. This is far more significant than the West appreciates. In my view, this shift is it is akin to the movement of gold from Europe to the US following the 1933 devaluation of the dollar via gold by the Roosevelt administration and the promulgation of the Nuremburg Laws in Germany in 1935.

RCW: That is a pretty bold statement. The real driver of wealth migration from Europe to the US was two world wars. How do you see China leveraging their accumulation of gold to build long-term advantage for the Chinese economy?

HS: It appears that China has since the turn of the century had a state policy of encouraging gold ownership by its citizens. Given this policy and the evolution of their bilateral trading and clearing agreements and systems, it is reasonable to assume the Chinese have global ambitions for their currency, and that their gold holdings will be a significant support to the international acceptance of that currency. A reserve currency is the ultimate projection of state power. I think the Chinese get that.

RCW: Thanks Henry. Hopefully somebody in Washington will take heed of your analysis.

Source: http://www.zerohedge.com/contributed/2013-06-28/henry-smyth-rothschild-moment-gold