Gold and Silver Daily Trading Patterns For November 2015

Does anyone see a marked daily pattern in the precious metals for the month of November?

What a surprise!


These charts are from Nick Laird at goldchartsrus.com

Fear, Intolerance, and Anger

In 1990 I was at an international communications conference in Berlin hosted by Deutsche Bundespost Telekom.

On the weekend I took a long autumn walk from my hotel down the Tiergartenstrasse past the park, and up to the Unter Den Linden, and from there to the Brandenburg Gate.  The famous 'Checkpoint Charlie' was no longer standing, but you could see where it had been.

I had wanted to see the Pergamon Museum in what had been East Berlin on 'Museum Island' in the Spree River, to see the famous Pergamon Altar, and the Ishtar Gate and Processional Way.  I also visited the Alte Nationalgalarie.

Some of the other buildings were old and in a state of disrepair.  I remember how many still carried bullet holes and signs of the war, even after so many years.

But on the way there, between the Brandenburg Tor and the Staatsoper Haus, I happened to spot a memorial at Bebelplatz. And in the middle of the square was a metal plaque.

"In Der Mitte dieses Platzes verbrannten am 10. Mai 1933 Nationalsozialistische Studenten die Werke Hunderter freier Schriftsteller, Publizisten, Philosophen und Wissenschaftler."

In the middle of this square on 10 May 1933 National Socialist students burned the works of hundreds of freelance writers, publicists, philosophers and scientists.

In the federal elections of 1928, the Nationalsozialistische Deutsche Arbeiterpartei or NSDAP received only 2.6% of the national vote.  They were widely considered to be an oddity and a joke.

Even though the German economy had stabilized by that time in the aftermath of the Weimar hyperinflation of 1918 to 1924, the Crash of 1929 drove unemployment rose from 8.5% to 30% by 1932.

In the federal elections of  July 1932, the NSDAP received 37% of the national vote, but 230 seats in Parliament, it had become the largest single party.

In the federal elections of November 1932, the last free election in that nation for some time, the NSDAP received 33% of the national vote, and 196 of the seats.

In a January 1933 compromise promoted heavily by industrialists who feared socialism and communism, the NSDAP party leader was named chancellor of a coalition government.

In February 1933 there was a fire that destroyed part of the Reichstag building that was blamed on the communists.  In response, the government passed the Decree of the Reich President for the Protection of People and State , Reichstagsbrandverordnung, which suspended civil liberties and outlawed all other political parties.   This is also known as the Machtergreifung.

In March 1933, in an election marked by violent repression and the silencing of most political opponents, starting with the left but moving quickly to include the Social Democrats and the Zentrum, or Center Party, the NSDAP received 43% of the national vote, and 288 seats out of 647.

The Enabling Act, Gesetz zur Behebung der Not von Volk und Reich, was passed, and plenary power was granted to the Chancellor to enact laws without the involvement of the Reichstag.

By July 1933 there were about 27,000 key political leaders and journalists, in opposition to the NSDAP, housed in newly established concentration camps in Oranienburgm Esterwegen, Dachau, and Lichtenburg.

There were no more meaningful elections until 1949.

In their fear and anger the German people reached for a strong and decisive leader who promised them a return to normalcy and freedom from their confusion, and sought to preserve themselves as they wished to be with the heady fumes of power.   The will to power serves none but itself.

The great majority of the people looked on, and did nothing.

And the rest, as they say, is history.

"Das war ein Vorspiel nur, dort
wo man Bücher verbrennt,
verbrennt man am Ende auch Menschen."

Heinrich Heine, Almansor: A Tragedy

Gold Daily and Silver Weekly Charts - FOMC Wednesday, Quad Witch Friday

There is quite a bit going on next week.

Most of the economic reports before Wednesday afternoon will be interpreted in light of the pending FOMC decision on whether to end ZIRP.

Frankly, I don't see how the Fed can not raise rates now, and maintain their credibility, unless some major exogenous event occurs.   The markets will wonder what the Fed is seeing that they are not, or even worse, what the Fed is hiding.

And I certainly do not think they are more concerned about the real economy now than they are with their own needs to get some policy room below their key rate so they can cut it again when their latest bubble implodes.

The economic reports coming out these days remind me of the painfully obvious special effects from the old 'Batman' television show.

And speaking of painful reports, we saw some inconsequential precious metal deliveries at The Bucket Shop yesterday.  There was some cursory movement in the gold warehouse, with more active 'pushing around the plate' in silver.  That means there was quite a bit of movement, but nothing much to show for it in the end.

The CME is changing their rules for declaring force majeure as noted in this document.

And today was the day for the unscheduled exit of Harriet Hunnable from her post as the Executive Director of precious metals at the CME.

Gold caught a little bid today that felt like a minor flight to safety, and silver barely hung on to the 14 handle.

So let's see what antics the Street might deliver next week, with such a nice one-two events punch opportunity, with the Fed's 'big decision' followed two days later with a quad witch.  Mining stocks might be a roller coaster.  All the better to skin you with, my dear.

Have a pleasant weekend.

SP 500 and NDX Futures Daily Charts - Wobbly Ahead of Next Week

The Fed is widely expected to raise rates next week. I will show the entire economic calendar in tonight's precious metals commentary.

And next Friday is the December 'quad witching' option expiration.

So what is this really, fear of the Fed, or some antics de luxe ahead of the option expiry?

I'd give it even money at the moment with a lean towards cynicism.

Have a pleasant weekend.

Gold Daily and Silver Weekly Charts - Exceptional Hypocrisy

Gold and silver finished largely unchanged in a lightly traded session.

There were no deliveries worth noting at The Bucket Shop yesterday.  Nothing in gold, and a few bars of silver.

The gold warehouses were completely quiet, sitting tight with warranted (registered) bullion sitting at decades long lows, and with little historical precedent for their ratio to open interest.

The Hong Kong warehouses of the CME, of which Brinks is the only one of size, saw drawdowns below the one million ounce mark again.

As for silver, it was just the usual shoving bullion around the plate, with another drop in their registered bullion.

Next week is the FOMC rate decision and the quad witching expiry for stocks on Friday the 18th.

There was intraday commentary on the exceptionalism of the American economy here.

There will be no sustainable recovery until we have substantial political and economic reform.

And there is no use complaining about how you are suffering in rigged markets if you have so little interest in all the other injustice that pervades our financial system.

As the famous conservative politician Edmund Burke noted:

"When bad men combine, the good must associate; else they will fall one by one, an unpitied sacrifice in a contemptible struggle."

If I could do any small thing, it would be to open the eyes of those who feel the sting of injustice when they themselves are subjected to it, so they might see the injustice to which their fellows are subjected.

And it pains me to say that I have never heard a more plaintive, pitiable complaining coming from those who in the face of injustice done to others not only remain silent, but too often speak out in support of it.

They imagine that they have earned good fortune and justice and richly deserve it, while these others deserve the injustice that they get at the hands the same cheats and scoundrel.  They think their hypocrisy is somehow a contribution to the ordering of the moral universe.

They secretly identify with the powerful, in the hopes that somehow they themselves will profit from it, and squeal all the more loudly when instead they receive the same rough treatment from those who make little distinction amongst their victims, as long as they perceive them to be vulnerable.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Economic Malaise - FOMC and Quad Witch

Jeffrey Gundlach is speculating that the Fed might not raise rates next week because the markets are failing and the economy is weakening.

While I tend to agree with him on the economy, and am revolted by those leaning so heavily on the unemployment percentage while ignoring so much other data, as noted in this intraday posting, I do not think the Fed can stand pat next week and do nothing, and retain any shred of their tattered credibility.

The Fed was never acting on rates because of a robust recovery. We have an elite recovery while the broader public stagnates and the middle class, or what is left of it, hangs on by their fingernails.

The Fed will most likely raise rates, and they will do so in order to provide themselves some policy maneuvering room to cut rates when their latest financial asset bubble starts to collapse.

And if the Fed does not raise rates, which is possible, what will the market think? What will you think? See the Fed's problem? They have painted themselves into a credibility corner.

I have included the latest economic figures from this week. And this is a recovery?

Let's see how we end the week, and look forward to the FOMC rate decision and big quad witch option expiration for stocks on Friday the 18th next week.

Have a pleasant evening.