Gold & Silver Digest: 2/15/13

Adam Taggart
By Adam Taggart on Fri, Feb 15, 2013 - 7:08pm

The Gold & Silver Digest contains headlines of stories that members of this group deem relevant and/or interesting to precious metals enthusiasts.

If you have articles to submit for the next digest, please email them to me by clicking here.

2/15/13 5:44 PM EST US close metals price quotes from Finviz

Reuters: Gold drops over 3.7 pct in week on technical selling

NEW YORK, Feb 15 (Reuters) - Gold prices finished nearly 1.8 percent lower on Friday, extending a week-long trend when several bearish factors, including a rising dollar ahead of the G20 meeting, conspired to push prices below key chart support levels to lows last seen in August.

Softer investor appetite for the precious metal, a dearth of physical demand from China during its Lunar New Year holiday and gains in the dollar pushed the precious metal down more than 3.7 percent this week, its biggest weekly decline since May.

Gold Seek: Gold Seeker Weekly Wrap-Up: Gold and Silver Fall About 4% and 5% on the Week

Gold fell all of the way to $1598.59 by late morning in New York before it bounced back higher midday, but it still ended with a loss of 1.63%.  Silver slid to as low as $29.681 and ended with a loss of 2.13%.

Euro gold fell to about €1204, platinum lost $30 to $1676, and copper edged up to $3.74.

Gold and silver equities fell over 3% in the first hour of trade and remained near that level for the rest of the day.

ZeroHedge: Gold At $1600, Recoupling With Stocks Post QE2

The media appears to be gorging on the 2% drop today in Gold and 11% drop in the last 4 months. Gold's demise today appears triggered by JPY's dump at around 8amET - though longer-term, it appears gold and stocks are recoupling in the reflation trade from around the start of QE2. At $1600, gold is back at August 2012 levels but +134% from the 2008 Lehman 'event'.

Sunshine Profits: Long-term Trading Cycles in the Gold Market and Their Implications for Future Price Moves

This week price moves in the gold market could certainly give investors the creeps. The yellow metal opened at around $1,668 on Monday, closed $1,634 on Thursday and is currently (at the moment of writing these words) at $1,606.

We have stressed it many times that in order to make long-term investment decision one should put more weight on long-term charts rather than focusing on short-term noise. Today we will focus on the long-term gold chart - it gives the most insight into what may happen in the long run. Let us jump straight into it (charts courtesy by http://stockcharts.com)

Forbes: Gold's Plunge Has Legs To Run Lower

Gold created a lot of excitement in 2011 when it spiked up 25% from $1,500 an ounce to a record high of $1,900 in less than two months. That had gold bugs salivating, and widespread projections of $2,500 gold by the end of 2011, $3,000 to $5,000 gold just a year or two away.

There seemed to be sound reasoning for the expectation. In the summer of 2011 the economic recovery had stalled again, the euro-zone debt crisis was at full boil, global stock markets were down (the Dow down 19% from a top in early May). And it had been expected for several years that the Fed’s easy money policies would eventually create runaway inflation. More than enough reasons to pile into gold, as a safe haven in a slowing economy and tumbling stock market, and as a hedge against inflation.

Business Insider: Gold Is Rapidly Approaching The 'Death Cross'

Heads up: we're seeing a few murmurs about gold approaching the "death cross," which refers to the point where the 50-day average gold price dips below the 200-day average gold price.

It's regarded as one of the most basic sell signals in technical analysis. All it means though, really, is that sentiment toward gold has really headed south recently.

However, as the FT's Jamie Chisholm notes, "traders may position to exploit such a move, thereby exacerbating it."

GoldSilver.com: Hedge Fund Move From GLD To Other ETFs and Safety Of Allocated Gold?

Gold dropped $7.40 or 0.45% yesterday and closed at $1,635.60/oz. Silver finished with a loss of 1.04% at $30.45/oz. Gold’s decline was again a function of dollar strength as gold eked out gains in some currencies. The euro fell sharply yesterday as investors digested weaker Eurozone growth data which created a shadow of gloom ahead of the G20 meetings taking place in Moscow.

GoldSeek: Gold Leaps Into Backwardation!

Since late January, the February gold contract has been in backwardation.  This means that one could make a profit by simultaneously selling a gold bar and buying a February contract.  One would still have one’s gold plus a little extra.  I coined the term “temporary backwardation” (http://monetary-metals.com/temporary-backwardation-the-path-forward-from-2008-3/), to describe this curious and very recent phenomenon.  In our “new normal”, most gold and silver contracts go into backwardation as they get close to expiry.

When the Feb contract first jumped into backwardation, it was well within the “contract roll” period.  The roll is when naked longs sell the expiring contract and buy a contract for a more distant month.  This heavy selling of the expiring contract pushes down its price.  Since cobasis is Spot minus Future (oversimplified slightly), the cobasis rises purely due to the mechanics of this selling.

SilverSeek: Silver Price Targeting and the Will of Central Banks

Indirectly, the price of silver has become a central banking question. Proof of direct intervention is unnecessary. The overwhelming concentration of net shorts on the Comex, whether hedged or not, constitutes the basic violation of the fair market pricing mechanism.

That this concentration is allowed to exist — despite purported and publicized investigation into silver market manipulation — remains a testament to the power of those that stand to profit the most from it.

Resource Investor: The untold reality of gold and silver price controls

The financial backdrop to the current prices of precious metals like silver and gold is that trillions of dollars and other currencies have been created to reflate stock markets and attempt to create a recovery in the property market, which will only serve to re-inflate real estate prices back to their former unsustainable levels once again.  This seems so utterly obvious, and yet it is rarely discussed.

Furthermore, far too many investors continue to rely on and even hope for the continuance of the status quo, despite the fact that their futile wishes for the financial alchemy to prevail — so that the “free lunch” creation of money from nothing but paper and ink will lead to more jobs and economic growth — have been increasingly frustrated.

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1 Comment

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4149
Audit of Fed's gold finds it's safe, more pure than expected

"The audit's results are in: The New York Fed's operations and controls are up to snuff, and the U.S. gold on deposit is a bit finer than Treasury records had indicated.

Still, the audit probably will not lay to rest questions over whether the New York Fed has secretly lent the gold or otherwise encumbered it in a swap transaction with another government or bank.

"There's no way to prove there's not a secret agreement," said Ted Truman, a former assistant Treasury secretary and top Fed official."

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