Gold Daily and Silver Weekly Charts - Où est la masse de manoeuvre?

Winston Churchill: "Où est la masse de manoeuvre?" (Where are your reserves?)

French General Gamelin: "Aucune!" (None!)

Stocks, Bonds and the Dollar were dropping today, while the metals caught a ferocious bid to the upside just after mid-day with silver leading the charge.

The TIC data came in quite negative this morning show a net long term outflow of 67 billion as both public and private foreigners were dumping US Treasuries in size during June.   When traders see a number like that, their first impulse is to start asking around and checking other data to see if this is a one off, or a trend.  So the reaction is often delayed.

From watching the tape during the day you could almost feel the precious metals coiling, as money was fleeing -- just about everything else.  

And since the metals would just not go down and stay down, the bears gave way and there was a remarkable 'pop' as gold moved almost twenty dollars higher in about a minute.  Money came pouring out of overpriced equities, bonds were no haven, and the dollar was in disfavor.   What are you going to do?

This was an absolutely classic flight to safety into the precious metals that triggered a short squeeze.

Some of the miners took off like scalded cats as the heavy propaganda of the last six months evanesced into the big repository for all official myths, the dustbin of history.

Weighed, and found wanting.

So what next.  The metals need to hold their gains over resistance, and not give way to another efforts from the bears to get the price back down.  I think they will have quite a bit of trouble making that work because physical gold is being held by strong hands, and is in very short supply.

Let's keep an eye on this, and see how far we run and what chart patterns continue to evolve as it appears that the great metal massacre is done.

Overseas Private Investors Sell US Financial Assets

Non-US private investors fled dollar asset in January, while their central banks continued to buy.

"Monthly net TIC flows were negative $148.9 billion. Of this, net foreign private flows were negative $158.1 billion, and net foreign official flows were $9.2 billion."

Foreign central banks continued to purchase Treasuries while shedding agency debt. This is largely in support of currency pegs for industrial policy and homage from client states like Saudi Arabia.


Treasury International Capital (TIC) Data for January

Washington —The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for January 2009. The next release, which will report on data for February 2009, is scheduled for April 15, 2009.

Net foreign purchases of long-term securities were negative $43.0 billion.

Net foreign purchases of long-term U.S. securities were negative $18.8 billion. Of this, net purchases by private foreign investors were negative $10.2 billion, and net purchases by foreign official institutions were negative $8.5 billion.

U.S. residents purchased a net $24.2 billion of long-term foreign securities.
Net foreign acquisition of long-term securities, taking into account adjustments, is estimated to have been negative $60.9 billion.

Foreign holdings of dollar-denominated short-term U.S. securities, including Treasury bills, and other custody liabilities increased $30.9 billion. Foreign holdings of Treasury bills decreased $15.4 billion.

Banks’ own net dollar-denominated liabilities to foreign residents decreased $118.9 billion.

Monthly net TIC flows were negative $148.9 billion. Of this, net foreign private flows were negative $158.1 billion, and net foreign official flows were $9.2 billion.

Complete data is available on the Treasury website at www.treas.gov/tic.