Gold & Silver Digest: 5/15/13

Adam Taggart
By Adam Taggart on Wed, May 15, 2013 - 8:24pm

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.

5/15/13 7:41 PM EST US close metals price quotes from Finviz

Reuters: Gold slips below $1,400, down 2 pct on eco. optimism

Gold slid below $1,400 an ounce on Wednesday, losing two percent and hitting its lowest in nearly a month as a record rally in U.S. equities and economic optimism undermined bullion's safe-haven appeal.

The metal fell for a fifth straight session for its longest daily losing streak since January 2011 as the S&P 500 hit a new all-time high and Wall Street has risen for four consecutive sessions. 

CNBC: Traders Agree: Gold Will Keep Dropping

Wednesday was a tough day for gold as it dropped below $1,400 for first time in nearly a month. But traders foresee more pain for the precious metal.

"Once we broke that support at $1,418, you have to look at that as resistance," said Anthony Grisanti of GRZ Energy. "If we settle below $1,400, we're going to take a shot at $1,300."

It ultimately comes down to the dollar, according to iiTrader CEO Rich Ilczyszyn. "The dollar is the tallest midget in the room right now," he said on "Fast Money: Halftime Report." Because the currency has been strong relative to others, gold has suffered from the lack of inflation, the trader said.

ZeroHedge: JPM Eligible Gold Plunges To New Record Low, And Why It Could Have Been Much Worse

Back on April 25, in the aftermath of the latest epic precious metals takedown, we reported [3]that something odd had happened: overnight, total Eligible gold held in the vaults of JPM dropped by 65%, or 260.8k ounces in one day, to a record low of only 141.6K ounces. Contrast that with the 2 million Eligible ounces the JPM vault at the basement of 1 CMP held when it reopened.

Since that moment, many were curious if this may not be the start of the proverbial "run on the vault", and whether JPM's COMEX holdings could actually run out, and if so what happens then. And finally: is the dramatic plunge in gold related to any of this (and certainly to the Bundesbank's repatriation of NY Fed gold for the next five years)?  In the ensuing days, JPM's Eligible gold fluctuated in a tight range, until today, when another 22,780 oz were withdrawn from Blythe Masters' metals cellar, bringing JPM's eligible gold to a fresh record low of only 137,377 troy ounces.

Bull Market Thinking: Don Coxe: Buying Gold May Have Downside Risk, “But The Upside Is Going To Be Enormous”

Legendary investor Don Coxe, Chairman of Coxe Advisors LLP, and former advisor to the $540 billion BMO Financial Group, issued a powerful new commentary entitled, “Money Makes the World Go Round”

In this updated piece, Don spoke to the staggering growth of the U.S. monetary base, indicating that when monetary velocity regains its speed, a “nightmare scenario” could unfold, with gold to money supply ratios exploding from levels, “so far [below] any all-time lows, so as to [defy] the description.”

Smart Knowledge U: Indisputable Proof Paper Gold Markets are Massively Manipulated

What would you think if someone told you the following?

“Three times this week, I am going to tell you the low price of gold with near perfect accuracy, and one of those three times, I am going to tell you events that will precede the low and the exact time that gold prices will crash.”

You would likely conclude that either:

(1) I am somehow directly involved in setting the price of gold in paper derivative markets, or

The Gold Report: The Real Reason Gold Fell—and Why It Has Already Stabilized: Lawrence Roulston

Things are upside down in the gold market. Valuations are irrationally low, while global consumerism fuels demand and supply comes up short. Lawrence Roulston, editor and publisher of Resource Opportunities, advises people to trust their guts as well as the numbers when weeding through prospective investments. In this interview with The Gold Report, he skirts around conspiracy theories regarding the recent gold sell-off and keeps his advice simple: lower expectations, get rid of poorly performing investments and load up on the companies going cheap. If you push against the trend, you might come out with your feet on the ground.

Fox News: 'Lost City of Gold' found deep in Honduras rain forest?

New images of a possible lost city hidden by Honduran rain forests show what might be the building foundations and mounds of Ciudad Blanca, a never-confirmed legendary metropolis.

Archaeologists and filmmakers Steven Elkins and Bill Benenson announced last year that they had discovered possible ruinsexternal-link.png in Honduras' Mosquitia region using lidar, or light detection and ranging. Essentially, slow-flying planes send constant laser pulses toward the ground as they pass over the rain forest, imaging the topography below the thick forest canopy.

SilverSeek: A Different View of Silver

The SILVER MARKET often gets a bum rap. The reason is that often its gyrations are much greater than those of the gold market.

What causes this? There are theories that bankers and investment companies are conspiring to try to manipulate the market. However, buying or selling alone is not a conspiracy. It is called a speculation. Where conspiracy begins is poorly defined in law, especially where it's one through market trading. But one factor is true: market perception can be changed by those with big wallets.

Note: If you're reading this and are not yet a member of Peak Prosperity's Gold & Silver Group, please consider joining it now. It's where our active community of precious metals enthusiasts have focused discussions on the developments most likely to impact gold & silver. Simply go here and click the "Join Today" button.

2 Comments

treemagnet's picture
treemagnet
Status: Gold Member (Offline)
Joined: Feb 13 2011
Posts: 344
Chris once told me

that when the dollar and bonds fall, buy anything - because it'll hold value better than the money.  So in Japan, the yen is falling and the yeilds on JGBs are rising....same deal for them?  If so, why are they just standing there doing nothing?  I'm sure one of you has a good answer.

Remember, if someone can't explain it simply they don't understand it well enough.  I require simplicity - its me, not you.

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5418
are people in japan doing nothing?

Your premise is, people in Japan are doing nothing while the Yen drops.

However, prices generally don't just drop by themselves.  Price movements are the footprints of people taking action.  Sometimes it does happen overnight when some dramatic news event occurs, but usually markets move because of an increase in the number of people wanting to either sell or buy.

News-driven example: the market is in balance with AAPL at 420.  Buyers and sellers equalize at that level.  Then suddenly the situation changes.  AAPL announces a new product that people imagine will do well.  At that moment, a whole lot of people suddenly decide that they aren't willing to sell anymore at 420.  And those buyers are now willing to pay 460, not only 420.  BAM, the price jumps almost instantly to 460.  That's a news-driven price move.  It happened to CSCO this morning.

But what we're talking about with Yen is likely a supply/demand move.  Back last November there were plenty of buyers of Yen at 130 and the market was stable at that price.  Then slowly over time, more and more people wanted to sell Yen.  Sellers outnumbered the buyers at 130, and then at 129, and so on until the Yen dropped to its current level of 97.    The continual pressure of people wanting to "get out of Yen" at ever-decreasing prices has dropped Yen from 130 to its current point.  There was no dramatic overnight move, just a steady flow of people wanting out.

So in my opinion, Japanese people aren't just sitting around awaiting their doom.  They've been steadily fleeing Yen and buying other stuff.  Likely: dollars, and the US equity market.  The price movements we've been seeing are the footprints of fleeing Japanese.

 

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