COMEX Registered Ounces Fall To New Low, Total Gold Steady

“The tyrant is a child of Pride
Who drinks his sickening cup
Of recklessness and vanity,
Until from his heights he headlong
Plummets into the dust of hope.”

Sophocles, Oedipus Rex

Weighed, and found wanting.

Stand and deliver.

 

Gold Daily and Silver Weekly Charts

Retail Sales had stocks on the move higher while gold saw a bit of a pullback after its run higher.

Silver was relatively strong as it continues to play 'catch up' for the year.

Tomorrow we will see the PPI numbers.

Someone presented an argument that the price of gold went down so that the wiseguys could make better buys and ride it back up.

I think this is quite likely, but it is not the only or even the primary reason.  The wiseguys needed some sort of sanction to engage in such a profound market operation.  And making money on the side which they jigger prices goes without saying as a perk.    Few things in life are due to simply one thing or another, but have a buffet of motivations as they have a number of participants with their own motivations.

Much of this back and forth action in trend channels is the 'wax on, wax off' phenomenon, and the point of the Dr. Evil strategy is to disrupt a market to make money on both sides of that gimmickry.

But to disrupt the entire world market in a very visible way requires a bit more latitude than the average trading desk can provide. And understanding this helps one to interpret the data with a bit more insight. There is little doubt in my mind that some very big players found themselves 'staring into the abyss' when the Bundesbank asked for the return of the German people's gold. And this has long term implications. That the market operators were able to use this information for their own gains goes without saying. They are not charitable institutions. They always get to wet their beaks in the pool of official corruption.

Make of this rather obvious comment on the markets what you will. 

SP 500 and NDX Futures Daily Charts - Complacency

Typical summer day trading in stocks with light volume and plenty of games.

Carl Icahn took a largish position in AAPL, and then boosted the price of the stock by announcing he had taken a big position in APPL. Carl would like to see AAPL spur the growth of their stock price by using more of their cash to buy back shares.

Gold and Silver Performance From the Recent Bottom and Year To Date

I wanted to take a look at the relative performance of gold and silver from the bottom of the precious metals market which seems to have occurred around the end of June.

As you can see in the first chart, silver has recently outperformed gold, rising a little over 16% with gold rising 11%.

However if one looks at the year-to-date chart, gold is still outperforming silver by quite a bit, since it did not drop nearly as far in value.

Does this mean that one is better than the other? No, it just means that they are different, that they have different risk factors. Silver is much more volatile than gold, with bigger upside recoveries, but commensurately larger losses on price declines.

One needs to take this into account for your portfolio and your investment objectives. I tend to 'blend' the two metals in my overall portfolio, and hedge them against declines a bit differently.

Silver has a greater industrial usage than gold, which is more of a monetary play. Silver is also more favoured by a different category of investors because of its lower unit price, and greater storage and handling costs for the same monetary amounts.

For purely short term trading purposes silver is the 'hotter play' given its gearing to volatility, provided one is capable of 'timing the market.' 

Sometimes it takes on the nature of a religious debate, silver vs. gold, from those who have bought into the concept of precious metals.  Again, I think both have their functions and attractions, and their particular place in constructing a portfolio.   Most non-professionals don't 'get this' and that is what makes the markets interesting.

To put it in le mode de cuisine, gold is the meat, and silver is the sauce and the spice.  Too much of either can spoil the outcome. 

But most often the particular mix is a matter of taste.