Gold & Silver Digest: 4/15/13

Adam Taggart
By Adam Taggart on Mon, Apr 15, 2013 - 7:24pm

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.

4/15/13 6:21 PM EST US close metals price quotes from Finviz

Peak Prosperity: This Gold Slam is a Massive Wealth Transfer from Our Pockets to the Banks

I am very disappointed by, but not surprised at, the latest transfer of wealth to the bankers from everyone else.  The most recent gold bear raid has vastly enriched the bullion bankers, once again, at the expense of everyone trying to protect their wealth from global central bank money printing.

The central plank of Bernanke's magic recovery plan has been to get everybody back borrowing, spending, and "investing" in stocks, bonds, and other financial assets.  But not equally so, as he has been instrumental in distorting the landscape towards risk assets and away from safe harbors.

Recommended Book:
Rich Dad's Advisors: Guide to Investing In Gold and Silver:
Protect Your Financial Future

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Reuters: Gold has worst two-day rout in 30 years, stocks drop

Investors dumped commodities and stocks on Monday in a broad selloff that gave gold its worst two-day loss in 30 years after weak demand figures from China fanned concerns the world economy is stumbling.

Gold dragged other metals lower as its price plunged to a more than two-year low. Brent crude fell towards $100 a barrel, while on Wall Street stocks dropped more than 2 percent for the S&P 500's worst day since November 7.

ZeroHedge: Gold Plummets By Most In 30 Years, Stocks Have Biggest Drop Of 2013

A bad day all around. Liquidation continued from Asia and commodities were Baumgartner'd - especially gold and silver, suffering their biggest single-day drop in 30 years. Weak NAHB data stalled any BTFD in stocks and despite a couple of tries at EUR ramps, stocks had their biggest drop in 5 months. The horrible acts in Boston seemed a catalyst for late-day weakness in stocks but there was no bid and heavy volume as homebuilders were hit their hardest in 10 months and US equity indices plunged into the close. Dow Transports had its worst day in 17 months. Away from stocks, FX markets were just as volatile with JPY's 2-day rally the biggest in 35 months (and AUD the biggest down day in 5 months). Swiss 2Y rates dropped to their lowest of the year and US Treasuries were relatively calm (though bid) until Boston hit and then dropped 3-4bps on the day. VIX also surged higher by 5.2 vols to 17.25% (its highest since the Italian elections).

Wall Street Journal: Despite Gold Selloff, Options Traders Bank on Rebound

So gold notched its biggest one-day drop in 30 years. What’s next?

Despite the heavy losses, broken technical levels and waves of margin calls, the options market for the yellow metal is beaming with optimism.

At-the-money calls expiring in one month for the SPDR Gold Trust (GLD), the largest gold-backed exchange-traded fund, cost $5.45 per share, more than at-the-money puts, which are worth $4.95.

Silver Bear Cafe: The Golden Ratio: Using Gold To Price Market Data

Infographic from the Visual Capitalists.

Wall Street Journal: Gold Selloff on Tax Day Perhaps No Coincidence

Here’s a theory: Maybe it’s no coincidence gold’s massive selloff is taking place on the same day U.S. tax returns are due.

It’s an idea that Michael Shaoul, chief executive of $7 billion fund manager Marketfield Asset Management, alluded to in an email to clients, noting this isn’t the first time tax deadlines caused an ugly selloff in the markets.

He points out the tech-heavy Nasdaq 100 index slumped 9.8% on April 14, 2000 (which was a Friday), which amounted to one of the worst one-day selloffs during the bear market that played out when the tech bubble burst.

NPR: The Gold Bubble Is 4,000 Years Old, And It Won't End Now

After rising for years, the is now falling sharply. Lots of people are saying . It isn't.

I have no idea whether the price of gold will rise or fall. But even if gold loses half its value tomorrow, the gold bubble won't be over.

Defining a bubble can be surprisingly tricky, but here's a working definition: when the price of an asset rises to a point that can't rationally be justified by fundamentals. (In that sentence, "asset" basically means anything people buy and sell as an investment. "Fundamentals" basically means the stream of payments the investment generates.)

GoldSilver.com: Jim Grant - The Manipulation and Why I'm Bullish on Gold

April 15 (Bloomberg) -- Grant's Interest Rate Observer Founder and Editor Jim Grant discusses the economy and the price of gold on Bloomberg Television's "Money Moves." (Source: Bloomberg)

GoldSilver.com: Gold’s Luster Brighter Than Propaganda

The New York Times is out again with the typical gold piece that always seem to appear just prior to a break-out in the dollar price of gold. They claim that “now, the worst of the Great Recession has passed. Things are looking up for the economy and, as a result, down for gold,” says the Times.

We will explain why things are not looking up at all for the economy, and then give a few bullish points for the precious metals.

The big deal is that the employment picture is far worse than at anytime in the past, and on top of that, the outlook is not one of improvement, quite to the contrary as we will see.

USAWatchDog: Extreme Nervousness in Regards to Collapse-Gold Silver a Must-Rick Rule

Precious metal expert Rick Rule is not worried about the recent smack down in gold and silver prices.  Rule is motivated by wealth protection.  So, the price decline is a “nonevent.”  Rule asks, “What are the alternatives?  Perhaps you’d like to buy a 30-year U.S. Treasury, something Jim Grant famously described as a return-free risk.”  Rule thinks the financial world is far from healthy and says, “I have extreme nervousness in regards to a collapse. . . . The only way we could avoid collapse is if we inflate away the net present value of our obligations.  In both sets of circumstances, I am personally more comfortable owning precious metals than not.”  Cyprus is a stunning example of why people should store some wealth in precious metals.  Rule contends, “If you were a Cypriot citizen and you had stored your wealth in gold and silver as opposed to having your money on deposit in a Cypriot bank, the Cypriot banking crisis, for you, would be interesting but not relevant.”  If there is war in Korea, Rule predicts, “If a nuke goes off on the Korean Peninsula, the first move in precious metals would be down. . . . The second move would be higher.  I also believe precious metals would hold their value over time UNLIKE most other asset classes.”  Join Greg Hunter as he goes One-on-One with Rick Rule, Chairman and founder of Sprott USA.

People's Daily Online: Low bullion prices lure shoppers

SHOPPERS swarmed into gold jewelry shops in Shanghai over the weekend lured by the two-year low of bullion price after global gold prices plummeted.

China National Gold Group, the country's biggest gold producer, slashed the bullion price from 313 yuan (US$50.55) per gram to 298.50 yuan per gram in its flagship store in Shanghai on Saturday, the lowest level in two years.

GoldSilver.com: Santelli - Is Gold Rumor Sparking Widespread Selling?

CNBC's Rick Santelli takes a look at several generalities that may have attributed to today's massive sell-off in the precious metal

The following transcript has not been checked for accuracy.

take a look at an intraday look at gold. every time you think it's stabilized it's down $1135. lost $30 in the past two minutes. rick santelli watching this incredible intraday action this morning. hey, rick. hi, carl. first of all, and i don't mean to surround like a know it all in anyway. i'm looking at a lot of stories. i've been looking at gold for 40 years and i don't see anything like it. i disagree. there was a period of time in early 1980 where the futures market in chicago, before they owned the contract. ...

SilverSeek: Silver – A Bipolar Roller Coaster

You bought silver with high expectations! Then it crashed while endless news reports informed you that silver would drop even further. Frustration! Misery! Despair! Depression! You have lived it all. There was no light at the end of the tunnel.

Darkness and despair covered the land of silver. There was no joy in silver-ville.

But, then from the depths of despair and ugly bearish sentiment, a rally materialized. But, not just a small rally, a HUGE RALLY – TOTALLY AWESOME! The price doubled in a few months. Then it paused, scared some of us out, and rallied even further. You heard that silver was going to $100 or maybe $200 per ounce. Analysts outdid each other with higher and higher projections. You congratulated yourself on your foresight and financial acuity by investing in silver – sheer genius – forgetting that you almost sold out for a loss at the bottom. The manic phase is great while it lasts…

The Gold Report: Don't Panic, Buy Silver: Rick Mills

It looks bad for precious metals. Gold prices have fallen hard. Explorers are hurting for money. Slim treasuries mean fewer drill programs. Scarce discovery news could lead to fewer listings on the Toronto Stock Exchange. But all is not lost. In this interview with The Gold Report, Rick Mills, owner and host of Ahead of the Herd, points to the fundamentals of silver and the opportunities for stock pickers willing to invest in small bites and wait out the inevitable market ups and downs.

The Gold Report: Precious metal bullion and equities are taking a hit right now in the market. Why do you feel silver is an interesting investment today?

Rick Mills: There is a disconnect this year between silver and gold. They usually trade in lockstep, and their market prices are doing that.

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