31 August 2015

Gold Daily and Silver Weekly Charts - Charts Undecided - Goldman Takes A Little More

"Don't get involved in partial problems, but always take flight to where there is a free view over the whole single great problem, even if this view is still not a clear one."

Ludwig Wittgenstein, Notebooks, Nov 1914

We say goodbye to August, and the active month for gold at The Bucket Shop, and welcome the first stirrings of September, which promises to be much more interesting for silver.

Prices were heavy for the metals most of the day, with silver showing a little more perkiness, but gold doggedly hanging on to close for a slight gain.

We have an interesting, if yet undecided, chart formation on the daily gold chart in a potential cup and handle formation that, if activated and confirmed, will target a minimum objective of around $1,255 and even a likely test of the big prior support from the trading range at $1,270.

To put this potential formation to 'work' gold must continue to hold its successful retest of 1120 on the 'handle,' and move to take and break the top of the cup at 1170.   This is no mean feat, since gold is being pressed upon so heavily by the meddlers in the forex crosses.  Despite the propaganda, it most certainly is a currency of the world.

Silver is just coming into its own and September will most likely to provide some fireworks for the beta rocket, depending on which way the black swans start coming home to roost.  We have already seen the first deliveries taken for September, as noted on the clearing report below, of about 835,000 ounces.

I keep hearing stories of retail shortages and premiums that are certainly interesting.  I will be more interested if we start seeing some pressures at the wholesale level.

Gold went out quietly, with Goldman stopping another 49 August contracts for their 'house account.'

I am hearing some talk about leaner times for gold bullion supplies at the LBMA for this booming physical gold market in Asia and India.  There is certainly not much bullion up for sale at these prices in NY. Perhaps the bullion banks will use a quiet September to regroup and reform, if they get a quiet month that is.

Better not to try and guess, and look ahead too much however.   These pool operations, which we are almost certainly seeing now in my judgement, take a long time to reach their natural conclusion.  But they always seem to get there one way or the other.

So perhaps we can use this time to get our own houses in order, to put our pieces on the board where we are sure that we will have them if things get more interesting.  I certainly would not wish to put them in an unallocated pile in some vault managed by the status quo, since possession is nine-tenths of the law to these jokers, as we saw with MFGlobal's default.

I am ambivalent about the miners here, mostly because I am in the position of owning some, which I have not done for quite some time.  But silver is too temping with its 77:1 ratio to gold, and the absolutely beaten down into the ground place of some fairly tempting mining stocks.

Oh well, let's see if we can get something more substantial to hang our hats on, like the activation of a chart formation or some especially bullion friendly news for a change.  The gold trolls were out in force today on the financial networks, so we will have to see what this means if anything.

There was a greater than usual amount of information about the metals posted over the weekend, so you may wish to scroll down and have a look if you have not done so already.   There are quite a few odd little things happening that seem to be missed by most.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - September Song

"The ideological and physical hold of American imperial power, buttressed by the utopian ideology of neoliberalism and global capitalism, is unraveling. Most, including many of those at the heart of the American empire, recognize that every promise made by the proponents of neoliberalism is a lie. Global wealth, rather than being spread equitably, as neoliberal proponents promised, has been funneled upward into the hands of a rapacious, oligarchic elite, creating vast economic inequality.

The working poor, whose unions and rights have been taken from them and whose wages have stagnated or declined over the past 40 years, have been thrust into chronic poverty and underemployment, making their lives one long, stress-ridden emergency. The middle class is evaporating. Cities that once manufactured products and offered factory jobs are boarded up-wastelands. Prisons are overflowing. Corporations have orchestrated the destruction of trade barriers, allowing them to stash $2.1 trillion in profits in overseas banks to avoid paying taxes. And the neoliberal order, despite its promise to build and spread democracy, has hollowed out democratic systems to turn them into corporate leviathans."

Chris Hedges, The Great Unraveling

US stocks came in a bit shaky this morning, but managed to rally back up close to unchanged during the day.

Alas, it was not to be, and stocks sold off in the afternoon, going out on the close at or near to their lows.

This is the 50% retracement area here from the recent big decline last Monday.

Stocks need to own this level, and start climbing back up to at least retest the prior big support area that had formed the bottom of the longer trading range.

If we get too sharp a rally higher that fails, let's say around a Fed rate hike in September or October, then it might be Katy-Bar-The-Door time, because a rally that fails after a steep decline in a long trend rally to these kinds of lofty heights is, in the words of classic technical analysis, 'bad news.'

But lots of things can happen between now and the end of the year.

I would feel better if I thought that the powers-that-be were doing anything close to some real solutions for the economy, and not just playing extend and pretend with an unsustainable quiet riot of upper crust looting and malfeasance.

But that is not in the cards it seems.  And most things tend to fill one with concern.

But nevertheless, let's see what happens.

30 August 2015

Bernie Sanders Interview: 'The Business Model of Wall Street Is Fraud'

Most people are sick and tired of the system as it is now.  And they are once again attempting to reject the status quo, having been badly disappointed by Obama and the Congress.  And this gives rise to popular movements and even third parties.

The biggest problem with popular movements is that they either tend to be co-opted by the most powerful in the status quo and used badly, misdirected and deceived, as in the case of the Tea Party, or diffused by too many factions and  lack of prioritization resulting in a lack of effective cohesion, as in the case of the Occupy Movement.

And so we have the ascendancy of the Wall Street wing of the Democratic Party, and the Koch Brothers wing of the Republicans.

And the corrupting power of Big Money underlies all of it, in part thanks to the Supreme Court ruling in Citizens United that defined corporations as having the rights but not the obligations of people, and money as free speech, while doing nothing to remediate the actual use of free speech by real people except in special zones and restricted venues, subject to some of the most oppressive abuse of the secrecy laws..

Contrast this with the anti-War movement of the 1960's which was driven by a single issue:  end the war in Vietnam.  The message was simple and clear, and it took hold, fritghtening the political establishment and hounding first Johnson to withdraw, and then Nixon to be so weakened and desperately foolish  that he caused his own downfall.

And so we have the more focused, non-establishment campaigns of Bernie Sanders and Donald Trump shaking up the accepted norms in political campaigning wisdom.

I would like to think that finally, after all these misspent years, the 'same old same old,' no matter how artfully the spin machines may brand them, cannot win again.

The probability for change is higher now than in the past.  But how it eventually turns out is another question.  The electoral process is still very young, and many things may happen between now and next November.  And the power of money and of powerful connections between the shadow government and the moneyed interests is still there, still lurking in the shadows and pulling strings.

Interesting times.

Gold Coming Off the LBMA Spiked Last Week

There was a interesting spike in physical gold activity last week on the LBMA.

It could be some seasonal phenomenon connected with the end of August and the approach of the prime season for gold.

But it also seems consistent with the 'tension on the tape' that I have been seeing.  And a number of little indicators and some interesting things, like the generally 'well informed' Goldman taking delivery of gold at the Comex for their house account.

One outcome of this increase in physical gold flows *might* be the realization of the cup and handle bottom formation on the gold chart, and a quick run to target around the 1250 to 1270 area.   And depending on what else goes with it, that might just be for openers.

Or it might once again be ignored and come to nothing.

But it does seem that the gold flows from the West to the markets in China and India are intensifying at these prices based on a number of diverse data points.

One cause of this could be a divergence between the paper price of gold with leverage and the actual physical markets because the price of gold as set in London and New York is below the clearing price in dollars as part of a momentum trend in the forex markets.

If a commodity price is set below the natural clearing price, one would expect to see the demand for the real underlying asset increasing.

Those who flatly dismiss the possibility there can be such a divergence between the market price and the natural clearing price have not been paying attention to what has been going on in any number of rigged markets over the past few years.

The excessive speculation fueled by a surfeit of paper money in a few hands and slack regulation that permits the unsustainable reckless pyramiding of positions is a good contender for the theme of the last two decades.

For what it is worth, I am seeing what appear to be increasing signs of 'fragility' in the precious metals market.   And in a nutshell, I am thinking that we are seeing a bear market bottom.  Trends, especially in forex related markets, often tend to overshoot and overstay their time.

But like the proverbial search for the lost keys, we will find the end of this era of financial madness in the last crisis, and perhaps that will be the one that breaks the Banks.

The chart below was provided by Nick Laird at goldchartsrus.com.

29 August 2015

Leveraged Financial Speculation to GDP in the US at a Familiar Peak, Once Again

"I believe myriad global “carry trades” – speculative leveraging of securities – are the unappreciated prevailing source of finance behind interlinked global securities market Bubbles. They amount to this cycle’s government-directed finance unleashed to jump-start a global reflationary cycle.

I’m convinced that perhaps Trillions worth of speculative leverage have accumulated throughout global currency and securities markets at least partially based on the perception that policymakers condone this leverage as integral (as mortgage finance was previously) in the fight against mounting global deflationary forces."

Doug Noland, Carry Trades and Trend-Following Strategies

The basic diagnosis is correct.   But the nature of the disease, and the appropriate remedies, may not be so easily apprehended, except through simple common sense.  And that is a rare commodity these days.

Like a dog returns to its vomit, the Fed's speculative bubble policy enables the one percent to once again feast on the carcass of the real economy.

'And no one could have ever seen it coming.'

Once is an accident.

Twice is no coincidence.

Remind yourself what has changed since then.  Banks have gotten bigger.   Schemes and fraud continue.

What will the third time be like?  And the fourth?

Do you think that Jamie bet Lloyd a dollar that they couldn't do it again?

Should we ask them to please behave, levy some token fines, watch the politicans yell and posture in some toothless public hearings, let all of them keep their jobs and their bonuses?   And then bail them out, wind up the old Victrola,  and have another go at the same old thing again?

Maybe we can vote for one of their hired servants, or skip the middlemen and vote for one of the arrogant hustlers themselves, and hope they get tired of taking us for a ride before we all go broke.

This policy we have now is the trickle down stimulus that the wealthy financiers have been sucking on with every opportunity that they have made for themselves since the days of Andrew Jackson. Whenever the ability to create and distribute money has been handed over by a craven Congress to private corporations and banking cartels without sufficient oversight and regulation, excessive speculation, financial recklessness, and moral hazard have acted like a plague of misery and stagnation on the real economy.

"Gentlemen! I too have been a close observer of the doings of the Bank of the United States. I have had men watching you for a long time, and am convinced that you have used the funds of the Bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the Bank.

You tell me that if I take the deposits from the Bank and annul its charter I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin!

You are a den of vipers and thieves. I have determined to rout you out, and by the Eternal, (bringing his fist down on the table) I will rout you out."

From the original minutes of the Philadelphia bankers sent to meet with President Jackson February 1834, from Andrew Jackson and the Bank of the United States (1928) by Stan V. Henkels

I believe all of the above is entirely possible.  Because we still have an unashamed cadre of quack economists and their ideologically blind followers blaming the victims,  prescribing harsh punishments for the weak, laying all the blame on 'government' and not corrupt officials on the payrolls of Big Money, and giving the gods of the market and their masters of the universe a big kiss on the head, and expecting them to just do the right thing the next time out of the natural goodness of their unrestrained natures the next time.  What could go wrong with that?

Genuine reform.   It's too much work, and too much trouble.

Related:  Comprehensive Tally of Banker Fraud

h/t Jesse Felder for the chart

Gold Seasonality And Average Intraday Price Movement

It will be interesting to see how gold moves in the latter half of this year.

As for the intraday movement, the impact of the London - New York on the gold trade is hard to miss.

It might not be too glib to say that the Anglo-Americans are sellling, and the rest of the world is buying overnight.

I certainly hope that this sort of long term price manipulation does not catch up to them on the supply side.

28 August 2015

Recent Trends in the Premium For Silver Coins Versus Spot Silver

"One important aspect of the physical market that is often overlooked is the premium it commands over spot price. Right before the Global Financial Crisis in 2008, the spot Silver price fell as low as USD 9 per oz., whereas the price of a 1 oz. Silver Eagle was around USD 17 on the wholesale market and even higher on the retail market! That’s a price premium of 188%!

That means that if you had held 100 oz. of paper Silver, you might have had to liquidate that for USD 900 (assuming the market was not halted for trading then), whereas if you had held 100 pieces of 1 oz. Silver Eagle coins, you would have gotten at least USD 1700 for them if not more."

BullionStar, The Difference in Paper and Physical Gold and Silver in times of Crisis

For the charts below the price data is the 'Ask'  live price from a major online supplier.

As always, if it is data related to the gold and silver markets and it is publicly available, Nick Laird at goldchartsrus.com is probably keeping track of it.

Shanghai Exchange Has 73 Tonnes of Gold Withdrawn In 4th Largest Week In History

There were a little over 73 tonnes of physical gold withdrawn from the Shanghai Gold Exchange in the latest week ending August 21st.

This is the 4th largest withdrawal of bullion in its history.

It is hard to tell what exactly is going on in such a dodgy, highly leveraged market, with its determined attempts to keep the price knocked lower so often during the late London to NY trading hours.

But I am sensing a change in the market, and more things running under the surface than meets the eye.

Goldman is no major player in the gold bullion market, but it did strike me as odd that they are suddenly stopping large amounts of bullion for their own house account this month. It is not that they are a player in gold, because they are not.  But that they are wired into many sources of information, are good at spotting trends, and are more like a hedge fund, comfortable running on the edge of the markets.

And the gold chart, for what it is worth in these times of market interventions, seems to be trying to form a rounded bottom in the form of  a cup and handle, with a successful retest of the handle this week.  This calls out a price around the bottom of the old trend channel at 1270.

It could also be nothing.  I will pursue the details of such a chart formation if we see the right kinds of follow through next week.

And I will certainly be watching silver very carefully for any signs of life.  It may be pivotal next month.

Let's see what next week brings.  Gold is just one market among many, and it is certainly not the largest one in play.

And while I have your attention, I thought I would include a long term chart of the relation of deliverable gold at current prices to open interest.  It might mean nothing.  But it doesn't seem to be anything familiar before 2013

The charts below courtesy of data wrangler Nick Laird at goldchartsrus.com.

Gold Daily and Silver Weekly Charts - Maintaining Confidence - Keep On Dancing

The action was a bit heavy in the metals today, as the Powers-That-Be quietly attempted to restore confidence and a sense of well-being and recovery after the somewhat disconcerting equity market plunge of Monday.

There was intraday commentary here about some interesting Goldman Sachs activity in an otherwise exceptionally sleepy week at The Bucket Shop.

People often ask me for a possible motive as to why central banks might care about gold and silver. Willem Middelkoop does a decent job of briefly explaining why in the first pictorial below.  It is all a part of the confidence game, when a series of bad decisions place a strain on one's full faith and credit.

The goal of the financial class is to keep the music going, and the public out there on the floor dancing so they don't have time to think.

Still out there bottom watching.

Have a pleasant weekend.

SP 500 and NDX Futures Daily Charts - Fly Me To the Moon

Qualis dominus talis est servus.
As is the master, so is the servant.

Titus Petronius

Stocks came in weakly, but managed to rally in the last hour to closely largely unchanged.

The GDP revision for 2Q yesterday was a bit much.

The conversation on financial tv today was replete with interviews from that moveable feast of finance, from the rarified world at Jackson Hole, where the black swans of monetary policy return every so often to molt old forecasts and acquire new ones that are certain to work better than the last seven years of the same old thing.

Mostly it is just the usual nonsense. Alan Blinder had some interesting and surprisingly realistic things to say. Most of the others were just mouth breathing the talking points about our exceptional and improving economy which will allow the Fed to raise interest rates.

The research paper from the Fed asserting that the US is relatively immune (ok they said insulated) from global currency and economic shocks because of the position of the dollar as the settling currency of choice for international invoices was-- interesting.  Why is it that so many economic, and especially monetary, theories feel so comfortable inhabiting an alternate universe where trees are blue and pigs can fly?

And as a particularly astute reader observed, if this is actually true, is there any wonder why the rest of the world would resent the dollar hegemony if it grants that sort of power to the single nation that controls it?  That they are able to wreak havoc on the rest of the world, exporting malinvestment and willfully fraudulent financial instruments, without having to endure any consequences?

Well it doesn't work so nicely as that, but yes they do resent it for other reasons, and they have been doing more than resenting it for some time now.  And that is the basis for the 'currency war' that these jokers still do not understand. They think it is only 'currency devaluations' which, along with tariffs, was the tactic of choice in the last currency war in the 1930's.

But the one that left me gaping was the tendentious conversation this afternoon on Bloomberg about how fragile China and its markets are. And as evidence they cited the 'obvious interventions' in their stock market this week, wherein the Chinese markets slump, but then miraculously recover in the last hours of trading. They are obviously doing this so the leadership will not be embarrassed for their 70th commemoration of the end of WWII next week. Which by the way, the US is gracelessly boycotting.

Knock, knock, hello? Is self-awareness or unintentional irony at home?

Is there any doubt that we have been seeing the exact types of intervention by a powerful unseen hand in our own stock markets this week, on steroids, after the Monday flash crash? Does that mean that our economy is fragile and doomed as well?

Do these people actually believe what they are saying, or is this just some clumsy attempt to try to reassure our public that if their public gets into trouble there is no need to panic because, wait for it, we are so much better, more wisely and so much more virtuously blessed to be led by those archangels of benevolent wisdom in Washington and New York.

One can only wonder.

Have a pleasant weekend.

JPM Customer Issues and Goldman Takes Another 54,100 Ounces of Gold For the 'House Account'

The receipts for another large chunk of bullion changed ownership from a JPM Customer to the Goldman 'house account' at $1,122 per ounce.

With all the usual caveats, and just taking note.

This is especially intriguing since Goldman has been publicly beating the drums for gold to drop well below $1000.  Perhaps, like Rick who moved to Casablanca 'for the waters,' they are merely misinformed.

We ought not to presume anything about how naive the customer might be, or the sly cunning of any particular buyer.  For all we know the 'customer' could be a large and highly competent ETF or fund, and not some naive or desperate or perhaps whimsical individual.

And as for the buyer and its motives, my friend Dave offered some possible insight on this phenomenon here.   

While it is a hypothesis based on a correlation founded in possibly disparate facts, it is no more untoward than those who will simply dismiss the whole thing, and apparently ascribe no significance to almost anything whatsoever, other than the price of gold and silver must go lower. There is no truth, and there are no fundamentals, when things and their values are merely what we say that they are.

And I am sure that all of this is simply more of God's work, and not sly cunning in service to earthly greed, from such a benevolent and public-spirited institution.

27 August 2015

Gold Daily and Silver Weekly Charts - Bottom Watching - Icahn Buys Stake In Miner Freeport-McMoran

Gold took a gratuitous little hit on the NY open/London PM fix this morning. It was held down most of the day.

Silver managed to perk up nicely though, regaining the midpoint to the 15 handle. Next month will be more active for silver, and not so for gold.

Lets see if sparky can carry the day.

Not much ever happens at The Bucket Shop these days, so when Goldman takes 44,200 gold ounces for its house account as they did yesterday it is at least worth of note intraday which you can read about here.

I know, it's not that great, but it's something.  We're hard up for any real action here, except for the daily dump of paper to knock the prices lower in the AM with a slight recovery into the PM and then higher prices overnight.  Rinse and repeat the next day.

Chart formations for the precious metals have not meant much for, oh I don't know, about a year or so now.   Its just a steady knockabout lower, tap tap tap.

It may be dissipating.   Way to early to say.  But let's watch the chance for a rounding bottom here.  No charge for looking.  And after all, Summer is almost over.

Have a pleasant evening.

Related:   Carl Icahn Takes 8.5% Stake In Miner Freeport-McMoran

Check out those 1960's outfits and hairstyles. And that frilly blue cap?  Ouch!

SP 500 and NDX Futures Daily Charts - Walking the Dog

The revision to 2Q GDP came in higher than expected this morning.

Even more importantly, stocks did not fall out of bed overnight, so that gave the Streeters an opportunity to 'walk the dog' back up to less threatening levels after the decline on Monday got out of hand, compliments of the HFT algos.

Both of the futures I follow, the SP 500 and the NDX, have achieved a fifty percent retracement of the big decline. I have marked it on the charts.

Lets see if the dog walkers can keep the pooches in line for the close into the weekend tomorrow.

I know at least two aficionados of this pooch parade, Jan and Stan, who would like to see stocks recover in time for their big rate soiree in September.   Cannot have a paper with the dog messing the rugs.

They might well put down some heavy paper, and then go for it.  They may not get a better chance this year.

Have a pleasant evening.