Precious Metals Holdings, Commitments of Traders, and Technical Indicators

Gold and silver are in slightly different technical positions.

Stocks and Precious Metals Charts - The Consequence of Empire

George Frederick Watts, Mammon

"Only the man who has had to face despair is really convinced that he needs mercy. Those who do not want mercy never seek it. It is better to find God on the threshold of despair than to risk our lives in a complacency that has never felt the need of forgiveness.

A life that is without problems may literally be more hopeless than one that always verges on despair. Indeed, the truth that many people never understand, until it is too late, is that the more you try to avoid suffering, the more you suffer, because smaller and more insignificant things begin to torture you, in proportion to your fear of being hurt.

The one who does most to avoid suffering is, in the end, the one who suffers the most: and his suffering comes to him from things so little and so trivial that one can say that it is no longer objective at all. It is his own existence, his own being, that is at once the subject and the source of his pain, and his very existence and consciousness is his greatest torture."

Thomas Merton


"Thus we see how the neoliberal utopia tends to embody itself in the reality of a kind of infernal machine, whose necessity imposes itself even upon the rulers. Like the Marxism of an earlier time, with which, in this regard, it has much in common, this utopia evokes powerful belief - the free trade faith - not only among those who live off it, such as financiers, the owners and managers of large corporations, etc., but also among those, such as high-level government officials and politicians, who derive their justification for existing from it.

For they sanctify the power of markets in the name of economic efficiency, which requires the elimination of administrative or political barriers capable of inconveniencing the owners of capital in their individual quest for the maximisation of individual profit, which has been turned into a model of rationality. They want independent central banks.

And they preach the subordination of nation-states to the requirements of economic freedom for the masters of the economy, with the suppression of any regulation of any market, beginning with the labour market, the prohibition of deficits and inflation, the general privatisation of public services, and the reduction of public and social expenses."

Pierre Bourdieu, L’essence du néolibéralisme


“How good is our God!  When we are no longer able to come to Him, He comes to us.  We are each of us like a small mirror, in which God searches for His reflection.”

John Vianney

The first two charts below, which describe the decline in life expectancy in the US and the rise of negative yielding sovereign debt, are emblematic of a status quo in serious decline, but grasping the reins of power desperately, as they slowly lose control.

Stocks continued their move to the downside today, taking back only a little bit of it into the close.

The NDX finally closed the big gap it had left open a few weeks ago. These gaps keeps getting closed in these moves up. We are not seeing any breakaway gaps. That speaks volumes about these rallies, a word to the wise.

The SP 500 fell back to its 61.8% Fibonacci retracement in the most recent rally.

I have not yet labeled this latest episode as a blow off top, because I want to see it set a lower low first.

Gold held its gains from yesterday fairly well, as the Dollar continued to move even lower.

I was a little concerned about the big gold gain, because a portion of it was clearly due to short covering as the front runners of the Non-Farm Payrolls report short side play got smoked.

The action next week, the first week in August, will be most interesting.

I think we might look with some concern to the autumn, particularly September and October.

Have a pleasant weekend.

Stocks and Precious Metals Charts - Whipsaw City

"Remember, my brothers and sisters, that few of you were wise in the world’s eyes or powerful or wealthy when God called you. God chooses those that the world considers foolish in order to shame those who think that they are wise. And He chooses those that are powerless to shame those who are powerful."

1 Corinthians 1:26-27


"Seneca had made the bargain that many good men have made when agreeing to aid bad regimes. On the one hand, their presence strengthens the regime and helps it endure. But their moral influence may also improve the regime's behavior or save the lives of its enemies. For many, this has been a bargain worth making, even if it has cost them—as it may have cost Seneca—their immortal soul...

The Rome he has been trained to serve, the Rome of Augustus and Germanicus, was gone. In its place stood Neropolis, ruled by a megalomaniac brat.”

James Romm, Dying Every Day: Seneca at the Court of Nero


"'My name is Ozymandias, king of kings:
Look on my works, ye mighty, and despair!'

Nothing beside remains: round the decay
Of that colossal wreck, boundless and bare,
The lone and level sands stretch far away."

Percy Bysshe Shelley, Ozymandias

In a nutshell, the White House issued a statement this morning that the trade talks with China were going well.

Stocks were rallying with a vengeance, regaining much of what was lost yesterday.

And then this afternoon, Trumpolini blindsided the markets with an angry tweet about China, adding a new ten percent tariff to consumer related goods.

And the equity markets and the Dollar took a nosedive, while gold just rocketed higher. They were taking the gold bears out of the pits on stretchers.

But not Citi, rumored to be the big Bank gold short. They were grabbing fistfuls of gold contracts the past two days, as you can see on the clearing report below. Think that they were tipped by some well placed advisor?  Naw, couldn't be. They would never do that.

This would be much more amusing from a greater distance. But today was right up there.

Get right, sit tight.

And have a pleasant evening.

Gold Demand Trends Q2 2019

"Time is coming when markets search frantically for physical collateral to find that paper far exceeds underlying collateral for several metals and other resources. I am warning that when markets fall in sustained negative response to bursting bubbles, widespread deleveraging will reveal insufficient hard collateral underlying traded asset-backed securities.

The words rehypothecation and hyper-rehypothecation may be rediscovered or remembered again, forgotten somehow during much of the decade since the Great Financial Crisis."

Harald Malmgren

You can access the full gold demand report here.

Key highlights

Central banks bought 224.4t of gold in Q2 2019
This took H1 buying to 374.1t – the largest net H1 increase in global gold reserves in our 19-year quarterly data series. Buying was again spread across a diverse range of – largely emerging market – countries.

Holdings of gold-backed ETFs grew 67.2t in Q2 to a six-year high of 2,548t
The main factors driving inflows into the sector were continued geopolitical instability, expectation of lower interest rates, and the rallying gold price in June.

A strong recovery in India’s jewellery market pushed demand in Q2 up 12% to 168.8t
A busy wedding season and healthy festival sales boosted demand, before the June price rise brought it to a virtual standstill. Indian demand drove global jewellery demand 2% higher y-o-y to 531.7t.

Bar and coin investment in Q2 sank 12% to 218.6t
Combined with the soft Q1 number, the H1 total ended at a ten-year low of 476.9t. A 29% y-o-y drop in China accounted for much of the global Q2 decline.

Gold prices shot to multi-year highs
The gold price broke through US$1,400/oz for the first time since 2013. Among the factors driving this rally were expectations of lower interest rates and political uncertainty, with further support coming from strong central bank buying.

Personally I think it is a mistake to merely look at the price of gold in US Dollars.

You may see the price of gold in various currencies here.