Gold Daily and Silver Weekly Charts - Non-Farm Payrolls Next Week - Tail Risk Warning

Gold just will not give us a signal to buy for the short term here yet.  So I remain sitting tight on all my long term positions.  Same with silver.

I did buy a little short side on stocks themselves today.

The action in the precious metals the past few days seemed exceptionally artificial, and that is saying a lot in these markets.

I suspect some of this was end-of-month shenanigans.

The December gold contract is a fairly significant force, and we should start feeling its effects sometime in November.

The Bucket Shop warehouses showed a little more gold passing to the house account at JPM,  and the usual slow leakage out of the silver stores.

The 'nested W' bottom formation is off the table, and now we are in the uptrending range trade, if that can hold as shown on the first chart below.

It has been a long time since we have seen any kind of chart formation working.  This is not a surprise given the obvious price manipulation in gold and silver, similar to what we have seen in so many other markets including the forex which is a cousin to the metals trade.

A Russian bank has joined the Shanghai Gold Exchange, which continues to move impressive amounts of gold bullion from various sources, especially Switzerland and London, into China.

As I have noted previously, the completely new phenomenon of spiking leverage with paper over physical gold in New York and London coincides with the attempt to take the price down after its increase in the most recent leg of the bull market.

I am inclined by what I can see to think that unless the exchanges and the regulators get their act together and rein in the big bullion traders and the mispricing of risk that they are going to have a real mess on their hands if these high levels of leverage get forcibly unwound.

I think the facts bear this out, despite the 'down your nose' scoffing at any risks by apologists and insiders.  But that's just my own opinion, and I doubt anyone involved in the money flows from this trade will care.  And if it does fall apart, 'no one could have seen it coming.'

As Kyle Bass pointed out, no one with a fiduciary (or regulatory) responsibility can ignore what has happened in the gold market since 2013.  But some are, and with an almost reckless disregard.

Let me be clear, since one of the tactics that the apologists use is to purposely misconstrue any warnings.   I am not concerned about a 'default' on the exchange, in the form of a failure to deliver.

Rather, I am saying that the factors that effect tail risks are now so extended in the gold market that even a relatively small imbalance or exogenously driven spike in demand can result in a market dislocation in price that will bring the exchange and perhaps some participants to their knees, and result in a global cascade of grossly mispriced counter-party risks.

Non-Farm Payrolls for October will be reported next week.

Have a pleasant weekend.

SP 500 and NDX Futures Daily Charts - Roll Over Rover

Stocks were weak throughout the session, and the futures started sliding a bit into the close.

This looked quite a bit like the effort to mark an 'end of month print' after a sharp rally higher that looks increasingly shaky.

Let's see if stocks start rolling over next week.

Non Farm payrolls coming on Thursday.

All in all the economic numbers are not good, and the real economy shows signs of slipping into recession. That is if you cut through some of the numbers massaging and spin. We might already be in a new recession. The leadership both in terms of economic and political thought is pretty thin, if not sad.

Happy Halloween everyone.

Have a pleasant economy. Not with these results. lol

Gold Daily and Silver Weekly Charts - Bread and Circuses - Get Ready

"When a candidate for public office faces the voters he does not face men of sense; he faces a mob of men whose chief distinguishing mark is the fact that they are quite incapable of weighing ideas, or even of comprehending any save the most elemental — men whose whole thinking is done in terms of emotion, and whose dominant emotion is dread of what they cannot understand.

So confronted, the candidate must either bark with the pack or be lost. All the odds are on the man who is, intrinsically, the most devious and mediocre — the man who can most adeptly disperse the notion that his mind is a virtual vacuum.

The Presidency tends, year by year, to go to such men. As democracy is perfected, the office represents, more and more closely, the inner soul of the people. We move toward a lofty ideal. On some great and glorious day the plain folks of the land will reach their heart's desire at last, and the White House will be adorned by a downright moron."

H. L. Mencken

I thought we had already been there and done that, several times perhaps, but I suppose it could always get worse.

The US GDP number for the third quarter was pretty bad coming in at only 1.5%. And that number is likely to be revised lower.

The Atlanta Fed is forecasting about the same or lower for Q4.

What is even worse, if you peel back the headline number, the big growth driver in that GDP number was healthcare costs. Talk about an unproductive was of capital in paying too much for healthcare.

Gold and silver were hit by a rather orderly bear raid today with the price declining throughout the day on a steady program of selling. It was most likely a follow up to the FOMC trying to knock down the open interest a bit more ahead of the key month of December.  The Dollar was drifting lower today, so that provided no support for the metals bears.

There was the usual slow bleed of silver out of The Bucket Shop warehouses, and a little more gold passed from the house account of HSBC to JPM. I notice that a little more gold was marked deliverable in the Nova warehouse, and one might speculate that this is some of the recently acquired gold by JPM still held in Nova's warehouse.

Can't prove it without a warrant and a couple hairy-knuckled Federal lawmen to back it up, but I think it fits the model of JPM taking on the role of the bullion provider of last resort for physical bullion demands on the Comex.

The amounts of physical gold moving around in Asia dwarf the action in NY, and accounting for the musical chairs paper flows, provide a stark comparison to London as well.

I hope to put something more out about London and the leverage being used there, in addition to the leverage in New York.

Last night's GOP political debate was embarrassing.  And not all of it was the fault of CNBC but they get an A++ for pandering.  And since that is what they do on their financial broadcasts and commentary every day, it is not surprising.

Is this what we have come to at long last, this clown show?

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Disorder of the Day

The third quarter GDP number this morning was a rather light 1.5%, and likely to be revised lower.

Stocks ignored the real economy, and were trying to hold their gains and push higher, most likely with an eye on the easy money flows from the central banks, and not on real world economic results.

This provides us some information about the broken and disordered relationship between Wall Street and Main Street.

Have some pleasant evening.

NAV Premiums of Certain Precious Metal Trusts and Funds

Premiums are definitely falling on the Central Gold Trust, no doubt due to the acquisition offer from Sprott.

The Sprott Silver Trust has a negative cash balance, although I have just marked it to 'zero.' They will likely sell some bullion to raise money.

Gold Daily and Silver Weekly Charts - US Dollar - Le Douleur Douce du Monde

I saw pale kings and princes too,
Pale warriors, death-pale were they all;
They cried—'La Belle Dame sans Merci
Hath thee in thrall!'

John Keats, La Belle Dame Sans Merci

Today was a classic.  It was like tuning in to an old Milton Berle show and hearing all the familiar jokes, pratfalls, and goofy faces.

Gold came in steady, near to unchanged from yesterday's close.  It was roughly the same for silver.

Both precious metals were jammed higher for no particular reason in the early morning trade in NY, late London.

And both were smacked lower on the 'hawkish' FOMC statement, although stocks were having none of it, not one bit.

The reason for the metals smack can be attributed to their pricing in the dollar cross, as the dollar caught a bid.  Not surprising since most of the developed world is busy cutting rates and trying to devalue for the sake of their economies, and the Fed is talking recovery, even though there really isn't any sustainable recovery evident just about anywhere.  I discuss the stronger dollar a bit today here.

Looking at the end of day we see that silver is slightly higher by about $.10, and gold is down about ten dollars from the close at yesterday afternoon.

I hope you were not caught up in today's exercise in perception management, unless you were a daytrader, in which case you are in God's hands.  Or something to that effect.

I have switched to my second scenario for the gold retracement, taking the intraday low around 1152 as a hit on that objective.

Today was all about the stronger dollar.   I would hope that the stronger dollar's effect on the price of gold and silver in dollars does not require an explanation.

One can also justify higher stock prices by thinking that it will encourage foreign investors to buy our dodgy paper at these fat valuations.

Personally I think it is a mistake to attribute much to these short term antics.   So I will be skeptical for now.

I do not think the Fed can afford to sustain this stronger dollar, especially since they are looking for an excuse to raise rates for policy reasons, ie they want to get off ZIRP so they can cut rates in the future when their latest paper asset bubble ends in yet another financial crisis, without having to resort to negative rates.

It is a hard policy choice to go lower than zero, especially with a well-armed, cantankerous population.

In other news, Deutsche Bank has checked itself into balance sheet rehab for the next two years.  Considering they are a pre-eminent global counter party risk, I suppose that could be interpreted as 'good news.'

There was also intraday viewing of the fruits of neoliberalism with Chris Hedges and John Ralston Saul here.

So let us see how things progress.   I have a feeling that today was a bit of bravado, but it is wrong to underestimate the willful resourcefulness of the white collar criminal class.

Have a pleasant evening.