Gold Daily and Silver Weekly Charts - Perception Is Everything When You Rule the World

"There are no markets, just interventions."

Chris Powell, GATA

The pampered princes on Bloomberg today suggested there was selling of gold to 'raise capital' today, and that selling was being done by 'central banks.' Perhaps they need to meet some margin calls. lol.

You just can't make this stuff up.

Another QE is coming. The banks are dying on the vine and need another stealth bailout to maintain the bloated standards to which they have become accustomed.

I think the Wall Street crowd have gone barking mad, and imagine themselves to be veritable Bonapartes of the world economy.

And the reintroduction of their hubris to reality is coming and might be rather messy, as it will probably involve hitting some wall, and the limitations to their will to power.

But at the time of reckoning, 'no one will have seen it coming' and those responsible will feign ignorance and non-involvement. And that is the way of a national madness, and a failure of governance.

This is a world ruled by insane people doing insane things. I think they know something is wrong, but just do not care as long as they are getting their way.

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

FOR THE FULL TEXT OF THIS ADVISORY :
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

Gold Daily and Silver Weekly Charts - This Trade Is Bananas

Crazy days in the metal trade as the recent bear raid, using the infamous Dr. Evil strategy, did not stick.

The people and traders of India and China may have liked the buying opportunity, but I suspect it just gave Blythe and her merry pranksters a headache.

Most commentary on the economy carried on the television financial networks is astonishing. How many moons do these people have on their planets?

It is almost a curse to know anything these days. But it is as I forecast it, so it should come as no surprise. The monied interests will keep pushing their agenda until they and the country hit the wall, in the manner of the obsessive-compulsive addicts that they are, like an alcoholic who finally wraps his car around a tree. And then the job of rebuilding and recovery can begin.

The next big events for the metals are likely to be the FOMC September 20-21 meeting, and the Comex October Option expiration on September 27.

I doubt that Obama will say anything useful, other than staging another raid on Social Security with a payroll tax cut, an infrastructure bank, and perhaps a refi program, all vetted by his Wall Street cronies.

The only thing he could do to satisfy this Jacksonian is to fire a number of his appointees in the CFTC, SEC, and Justice, bring in Eliot Spitzer as his Attorney General, William K. Black to head the SEC, Liz Warren at Consumer Protection, Bart Chilton as Head at the CFTC, Robert Reich at Labor, Ron Paul at Defense, Michael Hudson at Treasury, and to let justice be done, though the heavens may fall.

Fat chance of any of that, so gold and silver look like enduring safe havens.

Timmy addresses Jamie Dimon and his troops, Kelly on the Asian trading desk gets her buying opporunity, and Blythe has her shorts in a twist, and a headache.

Gold Daily and Silver Weekly Charts - Predictable Moves in the Bretton Woods Endgame

Obama speaks tomorrow, and the Swiss are joining the fiat flight to the bottom of the barrel, as each nation tries to beggar their neighbor and join the mercantilist daisy chain.

So the financiers had to hit gold to take it out of the spotlight. We may see more bear raids in the paper trade, supported by physical buying as Asia and the developing world recapitalizes their banks with precious metals, shedding the dollar reserve currency, which is a holdover from the declining order of international finance.

The most blatant raids were put on gold last night with orchestrated selling hitting it in the off hours, including a two percent drop in minutes as massive paper selling hit the bids.

"Spot gold dropped nearly $40, two minutes after U.S. gold tumbled about $50 over three minutes. Cash gold prices since regained some lost ground to $1,836.26 an ounce by 0559 GMT, down 1.5 percent. U.S. gold GCcv1 dived to as low as $1,818.2, and was trading at $1,839.10, down 1.8 percent from the previous close. "Someone dumped a big position with little care, which set off stops and caused the price to cascade even lower," said a Singapore-based trader. Some traders talked about some 4,000 lots of gold being dumped on COMEX…"

Reuters

And yet the price found resilient support in the 1820 area where we expected it, despite the overshoot on the big decline into the 1790s.

I bought back some of my gold position today as the price overshot support and dropped below 1800. We have a confirmation of a familiar support level around today's lows.

They try to make these things look complex, and frightening, but they are really not.

The debts will be discharged by growth or by default, or some combination thereof. The defaults will be done largely by printing money.

Growth is a dirty word in the west, because the fortunate and powerful are in control and wish to impose their brand of neo-feudalism, similar to that which is already in place in China and Russia with their own brands of authoritarian oligarchy, masquerading as capitalist markets.

And so we will see printing around the world, by the debtors and the exporters. Where this will all end who can say with certainty. But it will end, and badly.

Gold Daily and Silver Weekly Charts - Refuse to Be Used

As a reminder, the choice between inflation and deflation in a fiat currency system that is not otherwise externally constrained is a policy decision.

In a democratic republic that is also a net debtor with a trade balance problem, the most likely outcome from a financial credit contraction is stagflation.

However, this does not mean that deflation is not possible. I want to be completely clear on this point. A program of artificial austerity, in which painful cuts are visited upon the bulk of the people, further exacerbating slack aggregate demand, with the creation of national wealth flowing to the top few percent, makes a prolonged deflation, economic stagnation, and a national misery, possible.

This is characteristic of many third world countries, wherein the majority live in povery while the few monopolize the nation's wealth and income. The government would have to become a more overtly repressive authoritarian oligarchy to support this for any length of time.

Gold Daily and Silver Weekly Charts

"The terrible, cold, cruel part is Wall Street. Rivers of gold flow there from all over the earth, and death comes with it. There, as nowhere else, you feel a total absence of the spirit: herds of men who cannot count past three, herds more who cannot get past six, scorn for pure science and demoniacal respect for the present.

And the terrible thing is that the crowd that fills the Street believes that the world will always be the same, and that it is their duty to keep that huge machine running, day and night, forever."

Federico Garcia Lorca


"There have been tyrannical gods, and there is the God who makes us free. Tyrant gods, nowadays, do not, as a rule, assume the names of gods. They prefer pseudonyms. But their tyranny remains the same."

Henri de Lubac


"And I looked, and behold, a pale horse, and the name of him that sat on it was Death, and Hell followed with it."

Rev 6:8

Gold and silver have been resilient in the face of the traditional bear raids ahead of the Non-Farm Payrolls number.

Perhaps they are saving their ammunition for Obama economic announcement next week.

The NFP number tomorrow might provoke a counter-intuitive reaction.

Gold Daily and Silver Weekly Charts - Option Expiration Manipulation - Q. E. D.

Gold Daily and Silver Weekly - Surfing Tsunamis

Some option expiration. Can you believe the nerve of these guys?

Bought the dip, and flipped out at the close. Didn't exactly see that coming, but why say no to free money?

I don't think we're in Kansas anymore, Toto. At least not judging by the size of these waves.

I maintained a core position mostly in gold. Some of the swings today in the miners were pretty impressive to say the least. I won't mention any particular names, but watch how miners perform on days like today, and you will be able to sort out the nuggets from the clinkers.

WWBD. What Will Ben Do.

Benny speaks tomorrow. Commentary here intraday.

If the Fed does nothing tomorrow, and only hints around at it, give the market a little time, maybe a week or two, to pry some candy out of Benny's goody bag.

The gold and silver traders are really feeling the stress.

Famed analyst and metals perma-bear Jon Nadler elaborates---

Gold Daily and Silver Weekly Charts - CME Raises Gold Margin Requirements - Updated

Well, it looks like an option expiration week to me.

I pulled my 'defensive positions' in the metals today (short positions), and came out of 'flat' to stick a toe into the gold and silver markets in terms of both metals and a couple of miners that looked rather oversold intraday.

As a reminder, tomorrow is options expiration on the Comex.

You should be able to spot the support on the chart (at 1720, the top of the green trendlines). That *might* hold, but we may not have a bottom in yet.  However, unless there is a game changing event like a sudden balancing of the budget, I would be very surprised if 1658 does not hold in the worst case of a decline, with something north of 1700 more likely. 

But I could be wrong.  It is hard to forecast price movements in the short term when the biggest and most subsidized traders and the government act informally in collusion with the exchanges to put out a spin to support policy decisions.  So we will have to wait and see how far this goes.

A lot of it is going to depend on what Benny has to say on Friday. I have not shorted stocks yet, although the temptation is on the table. Maybe tomorrow ahead of the Fed, once I see how the metals act in expiry.

I was performing useful, real world activities for much of the day.

Those wild and crazy free market capitalists and Wall Street welfare queens want another central bank handout, and might toss a tantrum if they don't get it. I don't expect Ben to actually DO anything this week, but he might drop some hints about playing games with the longer end of the curve.

If he doesn't do or say anything, the markets will test his resolve, next week at the latest.

The dissenting governors are prats, so Ben is really in a tough spot with few allies. His biggest problem is the Congress, the economic luddites on the right and libertines on the left, and of course the spinelessly serpentine Obama, but he can do little about them.

He might have the sack to call their bluffs and let the markets tank, standing on principle, but it is not in the nature of the Fed to do anything like that if it threatens the banking system. Bankers have a bias to propping things up, far beyond the point of hope.

The blatant and heavy handed bear raid in the metals, although a source of some profits and very much anticipated here, still makes one want to gag at its arrogant carelessness and cheap obviousness.

Marketwatch
CME raises gold margin requirements again
August 24, 2011, 5:17 PM.

For the second time this month, the CME Group Inc., the parent company of the main metals and energy exchanges in the U.S., announced late Wednesday an increase in margin requirements to trade gold. It raised the amount of money needed to trade gold contracts by 27% to $9,450 per 100-ounce contract.

The move comes on the heels of a $104-an-ounce drop in gold futures prices, which some analysts had blamed partly on speculation that the CME would raise margin requirement again.

Gold’s approach to $2,000 an ounce “invited excess speculation and therefore margin concerns for exchanges,” said Richard Hastings, a macro strategist at Global Hunter Securities. “The quasi-exponential price behavior was dangerous and the exchanges today view this with significant concern — and act quickly.”

Gold Daily and Silver Weekly Charts - Bear Raid Ahead of Comex Option Expiration

Gold was lifted into the oxygen depletion zone above $1,900 overnight, and as predicted, the bear raids were launched today in force, together with nonsensical commentary from the financial demimonde.

"...the market in physical gold is tiny, and largely comprised of nutcases."

No wonder the Anglo-American financial cartel is in such decline.  Blind is the arrogance of faded empire, when it can no longer succeed by telling their client states what to do.

And of course the television spokesmodels were able to cite the overnight peak and say, "Wow, strap on my seatbelt. Gold is down $60!" Better rush into the rock solid safety of equities. Here are a very nice selection of stocks for you, at recently marked down prices.

Yes, they really are that obvious.

So what next? Gold and silver will probably be subject to additional bear raids as the Comex expiration is not until Thursday the 25th, and Bernanke will be speaking from Jackson Hole on Friday the 26th.

This does not yet have the feel of the May option expiration silver smack down, with its serial margin increases by the Exchange. The gold market has a strong underlying bid now with Venezuela repatriating its gold, and strong buying by non-Western nations and their central banks.

There is a currency war underway, and the primary bone of contention is the nature of the world's reserve currency and fiat based international trading regime.  There are ancillary issues of course, but the position of the US dollar, the petro-dollar if you will, as the world's reserve currency is key.

The biggest risk to Venezuela is not in transporting the gold. It is the counter party risk, of obtaining the return of their sovereign property from the Anglo-American banking cartel.

Gold Daily and Silver Weekly Charts - La Douleur du Monde - Gold to Lofty Heights

A wild day in the markets today as stocks came in much higher and then tanked, with the CDS spreads on Bank of America running much higher along with gold and to a lesser extent silver.

Financials pressed the SP 500 lower all day, and Goldman broke hard to the downside into the close as a story on Reuters suggested that Lloyd Blankfein had hired a white collar criminal defense attorney named Reid Weingarten.

On Friday Bernanke will be speaking at Jackson Hole, and the markets are looking for some indication of the latest subsidy to the markets from the Fed. If not a flat out QE3, then perhaps Benny will speak about a program to control the longer end of the yield curve.

All this uncertainty had investor flocking into the safe haven of gold sending it to the 1890's. This has been a brutal rally for the metals bears.

This Thursday the 25th is the option expiration on the Comex. I have to admit that I am concerned that gold has been allowed to rise up into the oxygen depletion zone here, as had been done with silver not all that long ago, and that applications of bear raids and margin increases will bring it tumbling back down to support.

I wouldn't try and get in front of this comet, because we are not quite sure what is driving it. Chavez' margin call on the Bank of England's gold could be triggering this parabolic run. It would nice if gold consolidated its gains soon. I am playing the markets defensively for now.

Let's see what happens.

Gold Daily and Silver Weekly Charts - Breath-Taking Rally, But Will the Dog Bark, Or Not?

Detective Gregory: "Is there any other point to which you would wish to draw my attention?"
Holmes: "To the curious incident of the dog in the night-time."
Detective Gregory: "The dog did nothing in the night-time."
Holmes: "That was the curious incident."

Arthur Conan Doyle, The Adventure of Silver Blaze

Gold rallied hard on a short squeeze and then settled back and closed around the 1850 area. Somebody stop me! LOL

Comex Option Expiration Next Week.

AND the Fed meets at Jackson Hole at the Kansas City Fed's annual soiree.

Let's see what happens. That may be very telling with regard to what inning of this game we are in depending on how gold acts here, and to what extent we see a correction, consolidation, or a continuation.

There are rumours of margin increases and an indication from a large US broker in the last document below. They do like to run things up so they can then smack them down, as they did with silver.

Besides, we can't let Venezuela's Chavez have his evil way with things can we?

My forecast was for a run to 1850 on the short cover, and that was exceeded. Now I would look for a very serious attempt at a bear raid, and some sort of correction. If that bear raid fails for whatever reason, this thing will have legs to the upside, but watch for the secondary attacks after expiration.

The key variable is a fresh wave of monetary and global crisis or some announcement of some version of QE3, even if it is just an interest rate program on the longer end.

Unless that is, if we are tottering very close to one of those game changing things that catches us by surprise.  Well, everyone except all those who knew it would happen, at least, after it does.

Gold Daily and Silver Weekly Charts - La Douleur du Monde

"People can foresee the future only when it coincides with their own wishes, and the most grossly obvious facts can be ignored when they are unwelcome."

George Orwell

A wild day in the markets as fears of a European credit crunch, and possibly a eurodollar squeeze, combined with renewed fears of a US double dip recession had equities reeling and investors flying into the safe harbor of gold, and to a lesser extent, silver.

The miners were beaten bloody with a few notable exceptions. You may wish to note those who held their ground and even moved higher today.

I think the Philly Fed contraction brought the Ten Year Treasury yield down to the 2 level which is quite amazing. Does that signal deflation? Perhaps, but the CPI came in quite high at .5%. I suspect there is a lot of hot money floating around looking for a place to hide, and it ran into Treasuries and gold.

What next. It really depends on how the equity option expiration goes tomorrow, and how the market frames itself up for the Comex expiration next week.

I would not be buying new gold or silver bullion positions here on a risk reward basis until I see how it goes next week unless we get another curve ball from Europe. But that does not mean I would be shorting them either, except for hedging.

Gold can run higher to the 1850 area without a lot of effort just on a failure to correct and short covering into the weekend. After that, we will have to see. I would like to see it pause occasionally, to avoid a repeat of the silver parabolic rise and craftily engineered smackdown.

And of course next week is the KC Fed sponsored Jackson Home EconoFest. Something is quite possible to come out of that august gathering.

Even with its bounce today, take a look at the dollar chart and ask yourself, 'if that was a stock, would I buy it?'

Gold Daily and Silver Weekly Charts - The Adventures of Pigman - Döllardämmerung

Gold was resilient again today and even managed to drag its little cousin Silver over the 40 dollar mark.

Mr. Chavez of Venezuela has said he will nationalise his country's gold mining industry for the benefit of those in power there apparently. I doubt that this move will entice much in the way of additional Foreign Direct Investments. And he is also asking for the return of his country's bullion deposits from the Banks.

"Venezuela has about 211 tons of its 365 tons of gold reserves held abroad at institutions including the Bank of England, JPMorgan Chase & Co., Barclays Plc, Standard Chartered Plc and the Bank of Nova Scotia, according to a government document." Bloomberg News

A much more modern approach would be to create an ETF that purports to represent his gold bullion holdings, in fractional reserve multiples of its true quantity, and simply take the money of investors without performing any work.

I doubt that Venezuela has enough bullion on deposit that its withdrawal from the mitts of the Anglo-americans would trigger a Herstatt effect, otherwise known as the infamous dominoes of settlement risk. But you never know.

I suspect strongly that this is a move by the BRIC's to 'persuade' the Anglo-Americans out of their stonewalling on the reconstitution of the SDR, and the replacement of the dollar-centric international payments regime with something more to their liking. And as a major oil exporter to the US, Venezuala may be in a position to help them make that point, if they can survive the retribution which will certainly follow.

The rhetoric is getting thicker, and it appears that Wells Fargo has warned that gold is a bubble and could correct quite hard. Thus they take the other side of that august Caesar of the markets, JP Morgan, which has also recently looked into its crystal ball and said that gold will rise to $2500 by year end.

So which of these book-talking bandits would you like to believe?

It must be options expiration on the Comex metals market next week, and yes, so it is. So first a run up with a follow on bear raid with more margin increases might be expected.

Or the rest of the world's central banks could continue to stand for delivery, and hang the Western banks with the rope which they had sold to them.

If it comes to a default, and there has indeed been some coverup of fraudulent selling by the banks, or even the leasing of national gold surreptitiously to the bullion banks and then irrecoverably into the markets, look for scapegoats, preferably suspicious and foreign, to conveniently appear as if on cue. There will never be an admission of guilt, but dissembling and distraction.

Time for another rogue trader? I doubt they can afford to throw one of the TBTF under the bus, but perhaps a smaller fry, a sacrifice to the market gods.

On the domestic front, Matt Taibbi asks, Is the SEC Covering Up Wall Street Crimes? The shredding machine, compounded with a sudden memory loss, organizational non-involvement, and managerial ennui, is the US version of The Official Secrets Act.

And in the meantime, the common people will probably suffer, regardless of outcome, the hapless victims of serial policy failures and malfeasance in the partnership of corporations and the government.

Gold Daily and Silver Weekly Charts

Silver is still struggling, but gold looks like it is getting ready to launch higher, break and run to at least 1810.

Let's see if it can do it. That will scare Benny and his Central Banking cronies.

If it does it may unleash silver, which is like a rocket when it breaks free.

Gold Daily and Silver Weekly Charts, La Douleur du Monde, and The Fall of Troy

"A shudder in the loins engenders there
The broken wall, the burning roof and tower,
And Agamemnon dead."

William Butler Yeats, Leda and the Swan

No this is not a reference to birth of Greenspan, but to the grand arrangement of the allied powers after the war, the Bretton Woods Agreement, and the birth of the world's still reigning wonder, the world's reserve currency, the dollar.

The partnership of the financiers and the government in the States has taken the reserve currency hostage, turning it to its own purposes starting with the closing of the gold window by Nixon some 40 years ago today, and provoked a long, smoldering currency war.

But behind their slanted walls of mighty Wall Street by the Hudson flowing on the plains, the States have seemed implacable, almost invulnerable. And in their pride so have tempted the wrath of the gods.

Will the rest of the world find a champion to contest with the city on the hill? Many have stood so far and seemingly failed, most recently the son of Aërope.

And in his tent, brooding after a long period of unappreciation, is that legendary champion, Achilleus, armored in gold, with his wily companion, Odysseus, dressed in silver.

Is Bernanke the stalwart Hektor to stand against him, and Timmy the persuasive Paris?

And so the story goes...