Gold Coin Sales Spike To 3-Year High, Silver Sales Continue At Record Pace [View article]
Finally, an author who gets the insignificance of coin sales in the overall picture of gold trading. The proliferation of articles talking about "record" coin sales to retail investors is an telling indication as to where gold is headed.
Chinese Housewives Buy All The Gold U.S. Money Managers Sell...And Then Some [View article]
In the first four months of the year, 502,000 ounces of gold coins have been sold in the US. That works out to about 16 tons. That's it for four months? Wow, that looks pretty measly when compared to the 300 tons bought by Chinese housewives in just two weeks. (Does anyone really believe that silly story?)
To suggest that gold coin sales are somehow going to counter the massive dumping by various interests, is just nonsense. The booming gold coin market is irrelevant when compared to the magnitude of buying (or selling) by a central bank or hedge fund who may deal with hundreds of tons in just a single transaction.
Contrary to what the author has said, strong retail buying is exactly what one would expect to see at the end of a bull market. The interest of the retail buyer is never something to cheer about when you consider that it is the retail buyer who, without exception, ends up being the sucker at the very end of every burst bubble.
If we should someday learn that a number of central banks are buying several thousand tons of physical gold, that will be a game changer for gold's declining fortunes. In the meantime, let's stop yapping about meaningless retail sales. End of story.
Gold ETF Outflows Persist After Fed [View article]
The most important line of this article is: " Institutional investors and hedge funds are typically liquidating positions in ETFs, with the exception of a few retail investors."
For the month of April alone, gold ETF holdings fell by some 174 metric tons. Now, that is a lot of gold. On the other hand, we have retail investors buying gold coins in record amounts that so far, during the first four months of 2013, has totaled 502,000 ounces. That sounds impressive, until we convert that number to metric tons which works out to be a puny 15 tons! ( for four months)
Many authors and commentators have been making a big deal of the fact that at the retail level, there has been expanded sales of gold coins. The implication is that increased buying by the retail investor is going to overwhelm the dumping going on by the large holders of gold ETFs. Sorry, but the math just doesn't support that supposition. Thus far, the retail investor has accomplished little except to create temporary shortages at the dealer level and unless they further ramp up purchases by a factor of at least 20 times, the retail influence is going remain mostly irrelevant in the bigger picture.
What would send gold up is for sovereign nations to ramp up their purchases in big way. I am talking about a demand in the thousands of tons! The only circumstance that would cause that kind of demand is if gold were to become a widespread currency of choice for international trade, particularly for oil, thus threatening the reign of the US petrodollar. Improbable? Not at all. Iran has made deals with a number of countries to accept gold for oil. Perhaps they are about to find out just how much that pisses off the elite here and in Israel, who are exerting heavy pressure on Obama to start dropping bombs on yet another country.
Now we are told that the banks have been using much of the QE cash to buy up stocks, particularly those in the dividend paying defensive sectors. I guess they are counting on the greater fool (retail investors) to ultimately take the stocks off their hands, preferably before the stock market bubble bursts.
The declining volumes accompanying the new S&P highs is worrisome. Buyers are obviously becoming scarcer with little interest coming from the retail investors, many of whom are still smarting after being thoroughly burnt in the 2007-08 crash. Personally, I already have one foot out of the exit door, just in case things go south in a big hurry.
JPMorgan (JPM) has "transitioned from model citizen to problem child" in the eyes of Washington, the NY Times says. The latest evidence of the shift is a government document (reviewed by the Times) which reportedly says the firm dreamed up "manipulative schemes" in order to wring profits from "money-losing power plants." The Federal Energy Regulatory Commission also says Blythe Masters (mother of the synthetic CDO) "falsely denied under oath her awareness of" certain activities allegedly undertaken by a group of Houston energy traders. It isn't clear whether actions will be taken against JPM, which will have a chance to respond to the allegations. [View news story]
Polly: I couldn't agree more. The tentacles of JPM's influence are spread deep into government. The bankers have become bigger criminals than the mafia ever was and there doesn't seem to be anyone, be they Democrat or Republican, who has the fortitude to take them on.
Physical Gold Demand Continues To Pick Up [View article]
The reported heavy demand for physical gold is being touted by some as evidence of an impending explosive move in the price of gold. True, we have had a strong rebound rally but is it sustainable? Will demand cause a real shortage at the producer level or is it just causing shortages at the retail and refiner levels that could be of a temporary nature?
Hearing that investors are lining up to buy gold from coin dealers sounds wildly bullish until one realizes that these are retail customers we are talking about. Will retail buyers be the driving force behind a new and sustainable bull move for gold? That would mean that the retail investor is the new 'Smart Money'? Hmmmm...let's think that one out. It would be unusual, that's for sure.
I would be a lot more enthusiastic if the really big guns were involved in the buying spree rather then being reported as those who are reducing their holdings.
Outflows from gold ETPs have hit a record 159 metric tons so far this month, bringing YTD outflows to 319mt or 12% of holdings at the year's start. As comparison, gold inflows for all of 2012 were 279mt. The largest of gold ETFs, State Street's (STT) SPDR Gold Trust (GLD) has seen outflows of 11% this month to 1,083mt. [View news story]
The buyer of last resort is always the gold ETF sponsor, who will buy up units and cancel them at a price they deem to be appropriate when there are no buyers willing to bid a better price. When units are repurchased by the sponsor and canceled, no real gold exchanges hands.
Those who think that the ETF sponsors run out and buy real gold to fulfill the demand by the ETFs, are badly mistaken. That's not how it works. It's all done electronically with the holders of physical gold (banks) leasing out their gold on a leveraged basis. Some believe that the same gold is leased to multiple clients. We have no way of knowing if that is true because the banks are not required to report their actions. There appears to be zero over-sight by regulators. Note that 'leasing' is NOT a transfer of ownership!
It seems that the connection between paper gold and the real thing is, at best, tenuous. Some may feel that corrupt would be a better word. Just think about how easy it would be for interested parties to manipulate the price of real gold by buying or shorting the gold ETF's and doing so without ever having to worry about having the real gold to back them up!
The bottom line here is that despite the huge reported outflows of gold from the ETFs, the amount of gold that has actually changed ownership may be substantially less than what the 'outflow' would indicate.
Here a couple of links for those who want to follow up on gold leasing: http://bit.ly/ZZApDM
Fyiavisor: Are you having trouble understanding what AVI is telling us? Maybe I can help. In a nutshell: GLD might rally back to the 142/143 level and maybe even as high has 143.45. However, if it should get past the 149 level, then we might assume that we are in a new bull market. Got that part?
Now, if GLD drops to 138, it might go to 127 and then maybe as low as 123.75. AVI didn't say what to watch for if the 123.75 level is taken out so I guess he will tell us whats next when the time comes. Stay tuned.
That Fibonacci thing that AVI uses isn't so hard once you get the hang of it, but I must confess that I am having difficulty figuring out how to make money with a system that seems to have all possibilities covered. Closest idea I can come up with is to short and go long GLD at the same time! Perhaps that I will know better how to make money using the Fibonacci thing when I understand it better.
How Quantitative Easing Leads To Cheaper Gold [View article]
I think the author is seeing correlation between Central bank easing policies and the price of gold when it is not clear that such a relationship even exists. He has chosen to ignore two of the most important sources of demand for gold: India and China. It is doubtful that anyone buying gold in either of those countries cares or even is aware of America's QE programs when they are lining up to buy their physical gold.
Investor demand by way of gold ETF's are another significant (although negative) factor that should be considered. Demand from Asia is being met by actual physical gold whereas Western demand ( mostly for investment purposes) has been accommodated by paper gold ETFs that are supposedly backed by physical gold. I say supposedly because the reality is that the banks have been leasing out their gold to the ETF sponsors, on a leveraged basis. They can meet any amount of ETF demand by leasing the same gold out to multiple clients. How can the price go up when demand is being met with useless paper? It can't!
Ironically, it is the popularity of the gold ETFs that has enabled the banks to keep the price of gold where they feel it is not a threat to the integrity of paper currencies. If Western investors want to see the price of gold skyrocket, they must demand physical gold in the same way the Asians do. Investing in paper gold is exactly the wrong thing to do if one wants to see gold rise to it's true worth.
Gold And Silver Dead Cat Bounce And More Carnage To Come Or All In? [View article]
Doug: I have a tendency to over react at times. I will have to work on that weakness. However, personality clashes don't prevent me from recognizing the wisdom of another. Your assessment was sound and has got me thinking about whether or not PMs should be included in my portfolio. Gold, in particular, can be exceedingly difficult to get a handle on with corrections and consolidations sometimes spanning many months or even years. It's tough figuring out if the bull market in gold is over or just getting started on a new leg up.
Gold Coin Sales Spike To 3-Year High, Silver Sales Continue At Record Pace [View article]
How To Identify Market Distortions Caused By The Fed [View article]
Chinese Housewives Buy All The Gold U.S. Money Managers Sell...And Then Some [View article]
To suggest that gold coin sales are somehow going to counter the massive dumping by various interests, is just nonsense. The booming gold coin market is irrelevant when compared to the magnitude of buying (or selling) by a central bank or hedge fund who may deal with hundreds of tons in just a single transaction.
Contrary to what the author has said, strong retail buying is exactly what one would expect to see at the end of a bull market. The interest of the retail buyer is never something to cheer about when you consider that it is the retail buyer who, without exception, ends up being the sucker at the very end of every burst bubble.
If we should someday learn that a number of central banks are buying several thousand tons of physical gold, that will be a game changer for gold's declining fortunes. In the meantime, let's stop yapping about meaningless retail sales. End of story.
Gold ETF Outflows Persist After Fed [View article]
For the month of April alone, gold ETF holdings fell by some 174 metric tons. Now, that is a lot of gold. On the other hand, we have retail investors buying gold coins in record amounts that so far, during the first four months of 2013, has totaled 502,000 ounces. That sounds impressive, until we convert that number to metric tons which works out to be a puny 15 tons! ( for four months)
Many authors and commentators have been making a big deal of the fact that at the retail level, there has been expanded sales of gold coins. The implication is that increased buying by the retail investor is going to overwhelm the dumping going on by the large holders of gold ETFs. Sorry, but the math just doesn't support that supposition. Thus far, the retail investor has accomplished little except to create temporary shortages at the dealer level and unless they further ramp up purchases by a factor of at least 20 times, the retail influence is going remain mostly irrelevant in the bigger picture.
What would send gold up is for sovereign nations to ramp up their purchases in big way. I am talking about a demand in the thousands of tons! The only circumstance that would cause that kind of demand is if gold were to become a widespread currency of choice for international trade, particularly for oil, thus threatening the reign of the US petrodollar. Improbable? Not at all. Iran has made deals with a number of countries to accept gold for oil. Perhaps they are about to find out just how much that pisses off the elite here and in Israel, who are exerting heavy pressure on Obama to start dropping bombs on yet another country.
Physical Gold Demand Continues To Pick Up [View article]
Buy In May And Stay To Trade? [View article]
The declining volumes accompanying the new S&P highs is worrisome. Buyers are obviously becoming scarcer with little interest coming from the retail investors, many of whom are still smarting after being thoroughly burnt in the 2007-08 crash. Personally, I already have one foot out of the exit door, just in case things go south in a big hurry.
JPMorgan (JPM) has "transitioned from model citizen to problem child" in the eyes of Washington, the NY Times says. The latest evidence of the shift is a government document (reviewed by the Times) which reportedly says the firm dreamed up "manipulative schemes" in order to wring profits from "money-losing power plants." The Federal Energy Regulatory Commission also says Blythe Masters (mother of the synthetic CDO) "falsely denied under oath her awareness of" certain activities allegedly undertaken by a group of Houston energy traders. It isn't clear whether actions will be taken against JPM, which will have a chance to respond to the allegations. [View news story]
Natural Gas Plunges 6% On Bearish Inventory Data, More Big Builds Could Kill Rally [View article]
Physical Gold Demand Continues To Pick Up [View article]
Hearing that investors are lining up to buy gold from coin dealers sounds wildly bullish until one realizes that these are retail customers we are talking about. Will retail buyers be the driving force behind a new and sustainable bull move for gold? That would mean that the retail investor is the new 'Smart Money'? Hmmmm...let's think that one out. It would be unusual, that's for sure.
I would be a lot more enthusiastic if the really big guns were involved in the buying spree rather then being reported as those who are reducing their holdings.
Outflows from gold ETPs have hit a record 159 metric tons so far this month, bringing YTD outflows to 319mt or 12% of holdings at the year's start. As comparison, gold inflows for all of 2012 were 279mt. The largest of gold ETFs, State Street's (STT) SPDR Gold Trust (GLD) has seen outflows of 11% this month to 1,083mt. [View news story]
Those who think that the ETF sponsors run out and buy real gold to fulfill the demand by the ETFs, are badly mistaken. That's not how it works. It's all done electronically with the holders of physical gold (banks) leasing out their gold on a leveraged basis. Some believe that the same gold is leased to multiple clients. We have no way of knowing if that is true because the banks are not required to report their actions. There appears to be zero over-sight by regulators. Note that 'leasing' is NOT a transfer of ownership!
It seems that the connection between paper gold and the real thing is, at best, tenuous. Some may feel that corrupt would be a better word. Just think about how easy it would be for interested parties to manipulate the price of real gold by buying or shorting the gold ETF's and doing so without ever having to worry about having the real gold to back them up!
The bottom line here is that despite the huge reported outflows of gold from the ETFs, the amount of gold that has actually changed ownership may be substantially less than what the 'outflow' would indicate.
Here a couple of links for those who want to follow up on gold leasing:
http://bit.ly/ZZApDM
http://bit.ly/14JMTHX
Japan: Why The Yen Will Move Lower And The Nikkei Will Move Higher [View article]
Gold's Nice Bounce Won't Last [View article]
Are you having trouble understanding what AVI is telling us? Maybe I can help. In a nutshell: GLD might rally back to the 142/143 level and maybe even as high has 143.45. However, if it should get past the 149 level, then we might assume that we are in a new bull market. Got that part?
Now, if GLD drops to 138, it might go to 127 and then maybe as low as 123.75. AVI didn't say what to watch for if the 123.75 level is taken out so I guess he will tell us whats next when the time comes. Stay tuned.
That Fibonacci thing that AVI uses isn't so hard once you get the hang of it, but I must confess that I am having difficulty figuring out how to make money with a system that seems to have all possibilities covered. Closest idea I can come up with is to short and go long GLD at the same time! Perhaps that I will know better how to make money using the Fibonacci thing when I understand it better.
Gold's Nice Bounce Won't Last [View article]
How Quantitative Easing Leads To Cheaper Gold [View article]
Investor demand by way of gold ETF's are another significant (although negative) factor that should be considered. Demand from Asia is being met by actual physical gold whereas Western demand ( mostly for investment purposes) has been accommodated by paper gold ETFs that are supposedly backed by physical gold. I say supposedly because the reality is that the banks have been leasing out their gold to the ETF sponsors, on a leveraged basis. They can meet any amount of ETF demand by leasing the same gold out to multiple clients. How can the price go up when demand is being met with useless paper? It can't!
Ironically, it is the popularity of the gold ETFs that has enabled the banks to keep the price of gold where they feel it is not a threat to the integrity of paper currencies. If Western investors want to see the price of gold skyrocket, they must demand physical gold in the same way the Asians do. Investing in paper gold is exactly the wrong thing to do if one wants to see gold rise to it's true worth.
Gold And Silver Dead Cat Bounce And More Carnage To Come Or All In? [View article]