Gold, Silver, and SP 500 Futures Daily Charts

Gold made a new all time high on the weekly close, and the handle is now broken to the upside. Some have been trying to spot a rising wedge in this handle formation, but as you can see it is more of an uptrending channel, as the cup and handle dominates the longer term chart. There is plenty of room for another retracement, and do not expect this to be easy. The premiums on the trusts and funds are low, and there is quite a bit of stubborn bearish sentiment.



Silver is trying to break out above resistance around the 20 level. I suspect it will do so fairly soon.



It is obvious that the SP 500 needs to move higher to break out of this diagonal trading range.



There are so many cats out there talking their books that it is no wonder that the average investor prefers to sit on the sidelines. They do not know whom to trust or believe even on the basics f the economy.

Official Gold Reserves As of June 10, 2010, and Truths Yet to be Told

It is important to remember that these are the 'official' numbers. And it does not show how the reserves are 'encumbered' by leases and loans.

For example, there is circumstantial evidence that the Reserve Bank of Australia loans up to 100% of its gold reserves to the bullion banks who subsequently sell it, and then 'owe' it to the Bank and the people of Australia. The trick of course is the significant counterparty risk in the event of a serious short squeeze.

And they are not the only ones. Since this is an asset owned by the people, a timely and transparent accounting by the Treasuries and the Banks is something that the people of every nation obviously deserve. Whether the financial engineers, who enjoy experimenting with Other People's Money and doing favors for their private sector cronies, will ever willingly provide that information is another story altogether. It will almost certainly be under force of law, or an independent audit.

World Gold Council
Official sector gold reserves as at June 2010

European central banks sold virtually no gold over the past quarter, save a small amount for minting gold coins. Total sales by European central banks have amounted to just 1.8 tonnes since the third central bank gold agreement began in September of last year. The only sales of note made via CGBA3 have been by the IMF, which has sold 38.7 tonnes since mid-February. We expect the IMF to sell at a similar pace this quarter.

Outside of the agreement, the main purchases reported over the last quarter have been by Russia and the Philippines, both of which have long-standing gold buying programmes. The Central Bank of Russia bought another 26.6 tonnes of gold over the past quarter, taking its total gold holdings to 668.6 tonnes or 5.5% of its total reserves, and remains the 9th largest official sector gold holder. The Philippines central bank bought 9.5 tonnes of gold in March, taking its gold holdings to 164.7 tonnes or 13.7% of total reserves.

The Saudi Arabian Monetary Authority reported last quarter that “gold data have been modified from First Quarter 2008 as a result of the adjustment of the SAMA’s gold accounts”, meaning SAMA’s gold reserves are now reported to be 322.9 tonnes or 2.8% of reserves, from 143 tonnes or 1.2% previously....

What Have They Been Doing Since the Financial Crisis Began?

"China is considered a stealth buyer of gold, said Boris Schlossberg, director of currency research at Global Forex Trading. As the world's largest producer of the metal, China often buys gold from its own mines and doesn't report those sales publicly. But in April 2009, China did admit to having added 454 tonnes, or a 76% increase, to its reserves since 2003.

Analysts suspect the country is continuing to buy gold and could in fact, be the world's largest buyer consistently. It simply doesn't reveal it's pro-gold stance proudly, however, because China is also the world's largest holder of U.S. Treasurys.

Announcing an aggressive gold buying spree is not in China's best interest because, for one, it might push gold prices higher. Secondly, it could devalue the U.S. dollar, which would subsequently lessen the worth of the country's portfolio of U.S. government bonds, Schlossberg said."

Central Banks Join Gold Rush - CNN

Just as there are stealthy buyers, how can one refuse to acknowledge the body of evidence that there are also stealthy sellers, hiding behind official secrecy, derivatives arrangements, leases, and accounting frauds that will shock and anger the real owners of the assets when their hidden and conflicted dealings with their cronies in the private banking sector are revealed?

Anyone at this point who says that the Fed would never engage in such obviously compromised and conflicted transactions, and then go to great lengths to hide them, has either not been reading the real news, or is as compromised as the central bankers and their cronies in government and the mainstream media are, morally and intellectually.

And if they will allow the equity markets to be manipulated, as any even modestly sophisticated trader with decent access to tools must now recognize and admit, why would they hesitate to enable and encourage the manipulation of the sovereign bond markets, and those markets that affect them, which are by far the most important markets of all?

The world is not big enough for them to find a place to hide from justice after the truth is revealed. So they will lie and obstruct, extend and pretend, increasingly desperate for power, corrupting all that is corruptible, until the very end, and the final downfall and collapse. And then will come the crocodile tears, and the claims of ignorance, and finally weak apologies that they thought they were doing the right thing, but were honestly mistaken.

Such is the case in all control frauds, white collar crimes, official corruption, and Ponzi schemes.

The banks must be restrained, the financial system reformed, and the economy brought back into balance, before there can be any sustained recovery.

Net Asset Value of Certain Precious Metals Trusts and Funds

The Central Gold Trust shelf offering will complete next Wednesday, 23 June.



On fading Jeff Christian and Jonny Nadler



Stay thirsty my friends.

SP 500 Futures Daily Chart and Gold Sets Handle and Moves Higher

Charts from 10:30 New York time this morning. As a reminder tomorrow is the stock options 'quad witching' expiration.

Stocks look overdue for a pullback, with 1100 providing a key support, and below that around 1090. We're back on the 'short stocks / long gold' trade as of yesterday, believing that the stock rally was artificial and support for the IPO's rolling out under the careful guidance of Mother Goldman.

"In today’s exchanges, strong programs prey on weak ones, humans are hard to find, and the SEC struggles to keep up."

Monsters in the Market, the Atlantic, July 2010

The 'handle' on the gold chart is very well defined, and gold is making a strong move higher this morning in an attempt to break out. I do not suspect it will be successful so easily, but once it does it may gap higher overnight and then say goodbye to these price levels. There are powerful interests which do not like to see gold move higher just yet, because it creates doubt in their financial engineering. Larry Summer's documented this effect in his paper on Gibson's Paradox. Greenspan was right so many years ago when he said that statists hate gold, because it provides a safe haven for the individual, and a stumbling block to the powerful.



Net Asset Values of Certain Precious Metal Funds and Trusts

The premium on GTU continues to be compresses because of the large secondary offering of units. That should be completed on June 23. We would expect the premium to revert to the mean, closer to 8%, once the shares are sorted out.



NAV Added later, as is indicated by the time stamp.