January 11 - $1660 down $17.30 - Silver $30.37 down 51 cents
An Ape Man Could See It
“Recent smashdowns in the gold futures markets have triggered enormous buying of real metal, causing Swiss refineries to fall far behind in deliveries.” … Swiss gold fund manager Egon von Greyerz
GO GATA!
The question many of us had going into today was whether the no follow-through allowed rule would be implemented yet again by The Gold Cartel for the zillionth time in a row. The odds of them preventing the price of gold trading like any other free market were off the charts in their favor and they didn’t fail to deliver.
It began in the most noticeable of fashions in the Access Market yesterday and then continued when The Gold Cartel traders reported for work in London … giving us PLAN A of course.
Then, a lousy US trade number…
Jan. 11, 2013, 8:30 a.m. EST
U.S. trade deficit widens 15.8% to $48.7 billion
… fueled a further sharp rise in the euro. So gold, which had dipped to $1667 (giving up half its gains of yesterday) rocketed back to the unchanged area when the goon squad reappeared and the price was sent right back down. Not only sent back down, but smashed with another waterfall raid…
At one point gold was pushed back to $1655, which means all of its gains of yesterday were lost in an hour of Comex trading following yesterday’s close. The ludicrous reason offered by The Muppets for the fall will probably be this one…
DJ Fed's Plosser: Wants Fed To Tighten Before Most On FOMC
Fri Jan 11 09:30:04 2013 EDT
SOMERSET, N.J.--The leader of the Federal Reserve Bank of Philadelphia
worried Friday that the central bank won't raise rates soon enough to prevent a
future inflation problem.
While he doesn't expect inflation to rise above the Fed's 2% goal,
Philadelphia Fed President Charles Plosser said, "this expectation is based on
my assessment that the appropriate monetary policy is likely to tighten more
quickly than the Committee anticipated in its latest statement."
Because of the divergence between outlooks, Mr. Plosser said he sees "some
risks to inflation in the medium to longer run, given the current stance and
anticipated path of monetary policy."
Mr. Plosser's comments came from the text of a speech prepared for delivery
before a gathering held by the New Jersey Bankers Association, in Somerset,
N.J. The official isn't currently a voting member of the monetary policy
setting Federal Open Market Committee…
-END-
You have to be kidding me! How many times is The Gold Cartel going to go to their well to raid gold on hypothetical Fed talk? This guy is not even a voting member.
As mentioned on the last hypothetical Fedspeak raid, only gold and silver were affected today. If there was meat to what they are feeding into the market, in coordination with this The Gold Cartel intervention, ALL the markets would be affected, not just gold and silver. But, the euro didn’t budge off its early highs and the DOW barely blinked. Can’t gold beat reporters count to ten?
The gold market has been trading in such a predictable, Gold Cartel influenced way for so long now (EVERY DAY they can be spotted), an ape man could see it. But, since the mainstream gold world pundits do not have the intelligence of an ape man, they never report on what is really going on.
This Kitco guy couldn’t even count before the big hit…
Gold Lower on Chart Consolidation, Bearish Outside Markets - Kitco News, Jan 11 2013 8:21AM
..the key outside markets are also in a bearish posture for the precious metals Friday morning, as the U.S. dollar index is firmer..
-END-
But, not true … look at what his own website showed the dollar trading:
USD 79.45 -0.31
Dave from Denver’s take on the Plosser speech…
This is ridiculous
Plosser says in a speech that inflation is a risk if the Fed doesn't tighten sooner than is reflected in the latest FOMC minutes? He's projecting 3% GDP growth for 2013.
Is this guy living in a cave on Mars? I guess he doesn't follow business and economic news, because the trade deficit for November released today was significantly higher than expected. In fact, the trade deficit was 20% higher than was forecast by Wall Street's brain trust. I can't recall EVER seeing a miss this big to the downside for import/export numbers. The reason cited was Iphones, but that's absurd because 1) Iphone 5 sales have disappointed so far and 2) Import forecasts would have incorporated assumptions about the affect of Iphone 5 sales. Conceptually what this means is that the rest of the world is buying less U.S. exported goods and the U.S. isn't manufacturing the goods being demanded by U.S. consumers. What this means is that manufacturing, one of the primary drivers of GDP outside of consumption, is still declining. It means that anyone who asserts that GDP for 3% is either living in a cave on Mars or is lying, for whatever motive.
What does this mean, it means that GDP esitmates for Q4 will likely be revised to below 1%. Moreover, it is generally acknowledged now that holiday sales for 2012 were disappointing. The consumer is largely tapped out, the number of people dependent on the Govt for living expenses (food stamps, general welfare, social security, social security disability and student loans) rises every month.
Please tell me, Mr. Plosser, where exactly is this GDP growth of 3% going to come from given that the trend in GDP going into 2013 is declining, 1% or less and the main driver of GDP over the last 12 years - consumption - is quickly eroding.
Jim Sinclair calls this nonsense "MOPE." Management Of Perception Economics." Everyone else calls this "Orwellian." This smack on silver is a table-pounding buy.
***
It seemed to me before yesterday’s rally that the waterfall bombings ought to be over for now because the physical markets were just too firm at the bombed out levels. Maybe down there, but not so at higher levels as today was clearly another financial market terrorist attack, attacks which continue to unnerve those on the long side because they occur for no reason and cause huge losses in the futures markets in seconds.
Gold’s eventual low was $1652.70, while silver was trashed to $30.07 before recovering to some degree. Nothing has been done to change the technicals in terms of the bottom formations in each precious metal. But those breakouts mentioned yesterday were shattered.
James Mc lays it all out…
Cartel checklist- 10 for 10
Bill,
1% cap job - check.
Weak trade into the access trade close signaling the next day - check.
No follow through allowed - check.
Gold plummets on bullish news, weak USD - check.
Flash crash for no discernable reason - check.
Down, hard following 1% rally - check.
Lower PM fix than AM fix - check.
Technical points rendered irrelevant - check.
Fresh spec longs mowed down - check.
CFTC as co-conspirators - check.
Just a hop, skip, and a jump now from Feb. op. ex. and FND. Ya think one in a million describes the odds of $1,700 gold by then? It's obvious that the intensity of the rigging is commensurate to the intensity of investors wanting gold. As such, and based on days like today, gold bullishness must be off the charts. Of course like all other charts the cartel renders them meaningless.
James Mc
Everyone in the mainstream gold world should read what James Mc put out today and keeps bringing to our attention. The ape man doesn’t have to read it. It is too easy to spot for him.
Pimco’s Mohammed El-Erian knows exactly what James is talking about and even uses the “M” word regarding markets, but doesn’t go into any specifics…
Ft.com
Beware the ‘central bank put’
By Mohamed El-Erian
Mohamed El-Erian on the split between prices and fundamentals
The investment recommendations made by many financial commentators are now dominated by cross-asset class relative valuation rather than the fundamentals of the investment itself. A typical refrain runs something like this: buy X because it is cheaper than other things out there. This is an understandable approach as unusual central bank activism has artificially elevated certain asset prices. Yet the dominance of this increasingly popular advice comes with potential risks that need to be well understood and well managed.
High quality global journalism requires investment.
Several asset classes now have highly manipulated prices due to experimental central bank activities, both actual and signalled. The more this happens, the more investors come under pressure to migrate to higher risk investments in search of returns. Ben Bernanke, Federal Reserve chairman, said as much at his latest press conference, noting that the aim of policy is to “push” investors to take more risk. True to his wish, many pundits seem eager to discard fundamentals in favour of searching for (and levering) anything that “yields” more…
http://www.ft.com/intl/cms/s/0/bb66425c-54cf-11e2-89e0-00144feab49a.html...
-END-
The gold open interest rose 2564 contracts to 141,122, not that much for such an extensive move in the price. The silver open interest is back above Rocket Rich’s pivotal 140,000 mark, rising 2281 contracts to 141,122. On December 28, with the price of silver at $29.92, the MIDAS headline was:
SHOOT OUT AT OK CORRAL IS COMING
They are still shooting at The OK Corral, with JPM firing on rallies towards $31 and the physical buyers firing back when silver plunges towards $30, or takes that level out.
Behavioral Finance
*The yield on the 10 yr T note is 1.9%.
*Behavioral Finance is the same as Jim Sinclair’s MOPE. An ape man could see what is going on here too. Even the very visible, very establishment Mohamed El-Erian is willing to go there.
While we all are aggravated about what is going on here, there is a silver lining in it all. TW has it right…
Today’s action
Dear Bill,
Please ignore my musings but the frequency of these waterfall attacks suggests that matters may be reaching a critical stage. If the gold price collapses then the cartel have won themselves some more time but the other possibility is that the bad guys are nearly all in and there’s not much more they can do. Also, behind all the shenanigans of the paper market is the real physical market (I always think of a large but slow flowing river) and these takedowns must be accelerating the physical off take and hence the end game. Testing times but I think something may be building.
Best regards
TW
For months a number of us have cited the increased market manipulation intensity by The Gold Cartel and noted it wreaked of desperation. It went into high gear after October 4, 2012 with the price of gold threatening to take out the key $1800 level and silver managing a small close above its pivotal $35 level. The scene…
October 4 - Gold $1794.1 up $16.80 - Silver - $35.04 up 41 cents
That day the euro closed at 1.3017.
Who knows what else is going on behind the scenes, but what we do know is the US is looking more pathetic by the week and month in our inability to solve our fiscal deficit/growing debt problems. They are both out of control and nothing is being done about them. Meanwhile QE3 and DE4 are in full bloom. And based on the information sent our way, the demand for physical gold is stout, to put it mildly.
Yet, since October 4th the price of gold has fallen to $1660 with the price of silver dropping to $30.37.
But, the euro has RISEN to 1.3341. What gives? What about the pundits who kept saying the most important aspect affecting gold is a weaker dollar? Where are they now?
Daily euro
http://futures.tradingcharts.com/chart/E6/
Daily gold
http://futures.tradingcharts.com/chart/DG/
It is ignominious for the US to have the euro soaring like this against the dollar with all the problems they still have over there. There is a reason for it. As long mentioned here, there are NO SOLUTIONS for the US to our growing fiscal/debt issues which are acceptable to the American people and politicians. Kicking the can on tough fiscal issues, and manipulating our financial markets, is catching up to those doing so. Chaos is likely to breakout over these issues in the near future, and they know it. So, a bit of panic has set in. All they know to do is SHOOT THE MESSENGER; defuse the widely watched barometer of US financial market health, that being the gold price. It won’t be long before this nonsense catches up with them too.
Brian Meyers lays it out is coming in this NO SOLUTIONS time in the US…
The only choices available to 'put things right' are:
1) dramatically higher taxes
2) dramatically lower spending
3) dramatic cuts in entitlements
4) dramatically higher inflation
... or some combination, more likely. But only one of those 'options' is politically feasible: the one the public doesn't really understand and won't know who to blame (tho the gov will make plenty of table-pounding suggestions, to include China, the ME, etc... it's their fault, right?), inflation. Of course, against this is the massive deflationary pressures overhanging economy, and it has absolutely nothing to do with the business cycle. It has *everything* to do with 60 years of economic mismanagement.
In the end, the Fed will do *whatever is necessary* to inflate. Weimer-style hyperinflation is a definite possibility. Perhaps low-delta, but any delta on hyperinflation means a lot of someones have screwed up something huge.
***
A picture is worth a thousand words, as they say…
America on a Roll
Mexico Mike…
Ground Hog Day again
Hi Bill!
Today is yet another example of the Cartel standard operating procedure. There is no upside follow through allowed in the PM sector under any circumstances. Never mind that the dollar is dropping like a dying quail, or any other positive fundamentals. This is about management of investor sentiment and nothing more. And I would challenge any of the bozos that suggest there is no manipulation to
present a counter argument on why the reversals occur with such regularity to wipe out any significant gains in a prior session. For the small investors in this sector, every trading day is like another trip to the dentist.
The commentary that gold declined due to higher inflation in China is a joke. The Chinese have been among the most aggressive gold buyers on the planet in part due to their desire to have a bullion hedge to protect against inflation. The idea that any real selling would come from this news is a misrepresentation of the facts. But more
importantly, consider how that selling occurred. The usual high volume waterfall event, probably entirely manufactured from one seller dumping a large short order to destabilize the market. This has nothing to do with the Chinese, except perhaps to help them quietly buy more bullion in the aftermath at a discount.
Again I say, there is a shelf life to all of this nonsense. Perhaps investors in the West are clueless of what is going on. But the real bullion demand is coming from Asia and the Mideast and none of this market rigging is going to discourage these buyers. In fact it will probably encourage even more aggressive accumulation.
I cannot wait to see how the media presents the story when the eventual default event happens. Will it be the usual 'rogue trader' that is blamed for the failure to deliver? Or some accounting error to explain why millions of ounces of allocated bullion disappears from somewhere? Or, my favorite is that when a big bullion ETF blows up, they will point to the fine print and say it was always there in the contract that the unit holders could be settled out in cash only and not have a claim, when it is revealed that the bullion supposedly held by the fund is in actual fact just a book keeping entry.
There is not enough bullion coming out of the ground or available in this market to meet all of the outstanding claims and this situation becomes more acute with every waterfall selling event. Sooner or later one of the leveraged bullion scams is going to blow up like a hand grenade. It will be amusing to me when the analysts are running
around with their collective hair on fire in the aftermath. Just like the furor over the MFG collapse, everyone will be shocked it can happen and trying to find out how. Well folks, it is going on before your very eyes right now, for those who bother to look. Sure as the day follows the night, sooner or later one of the crooks is going to go too far and then there will no longer be the cover of tinfoil hat speculation to discount what we have been saying all along.
Have a great weekend Bill!
MexicoMike
MM is right on too, as is James Mc about these hideous waterfall attacks and constant price suppression being long in the tooth. We are gearing up for something spectacular on the precious metals upside, and it should not be too far off.
Perhaps this is why the gold/silver shares paid scant attention to today’s financial market terrorist attack. The XAU only fell .25 to 163.36. The HUI lost .32 to 322.05.
Dave from Denver is right on too. We have a mania coming. Hang in there!
GATA BE IN IT TO WIN IT!
Bill Murphy
www.LeMetropoleCafe.com