09 September 2011

Gold Daily and Silver Weekly Charts - Currency Wars, Margin Hikes, Failed Raids, Silver $1,200

The con...

Cleared OTC London Gold hike from $6751 to $9450 (40%.)

The Exchange (CME) acts as the clearer for these OTC products, eliminating counterparty risk (cash deals done in OTC space, is posted / converted into futures via the Clearport platform). The Exchange however does not post Open interest in these OTC cleared forwards.  

DATE : Thursday, September 8, 2011

NOTICE # : 11-317

SUBJECT : Performance Bond Requirements: Agriculture, Coal, Crude Oil, Ethanol, Freight, Metals, Natural Gas, NGLs, and Refined Product Outrights - Effective Monday, September 12, 2011

Cleared Products Margin Advisory

The pro...

“International supervision over the issue of U.S. dollars should be introduced and a new, stable, and secured global reserve currency may also be an option to avert a catastrophe caused by any single country.”

Xinhua, China’s official news agency

The Whoa!
“I think silver will outperform gold in the next decade. If silver should trade at a 16 to 1 ratio (to gold), it will probably trade at 10 to 1 because things tend to overshoot. Let’s use Jim Sinclair’s $12,000 target, that would suggest $1,200 silver, which is a thirty bagger from here...The biggest reason it (silver) should go there is people should fear bank deposits, that’s what I think they should fear.”

Eric Sprott at KWN

And Look Who's Talking Now...

"After rallying nearly 100 USD last week from 1795 to 1895 with demand coming from the official sector and some leveraged players rebuilding length following the severe prior correction we traded to new all time highs of 1922 on Tuesday shortly before the Swiss Franc intervention.

The immediate aftermath was in complete contradiction to prior recent episodes of intervention and what anyone would have expected. Instead of spurring a further gold price rally on the basis that it was one of the few remaining safe haven "currencies" we saw a 50 USD collapse in minutes.

The source of this flow seems hard to pin down with some speculating over whether "authorities" were concerned about the signals of an accelerating gold price and its impact on other fragile markets. Soon after, much of the losses were recovered but the psychological damage had been done and there followed a series of liquidations from within the leverage space with gold closing down 50 USD on the day. This was then exacerbated by a near 60 USD flash crash within 2 minutes during the Asian session."

Goldman Sachs, September 8, 2011

Perception management, start to finish. Gold was not to be viewed as a safe haven during a renewed sovereign default concerns. Without interventions I suspect the yellow metal would have broken out to new highs.

The Ten Year Treasury yield dropped to an intraday record low of 1.89 percent, before settling at 1.92, in an obvious flight to safety caused by renewed talk of a default by Greece.

Still, despite repeated bear raids, especially in the lighter periods of the trading day, gold and silver remained resilient.

"In careless ignorance they think it civilization, when in reality it is a portion of their slavery...To ravage, to slaughter, to usurp under false pretenses, they call empire; and where they make a desert, they call it peace."

Tacitus, Agricola