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Bloomberg: Gold Traders Most Bullish Since Bear Market Began

7th Jun 2013, 4:30 pm by Ed Steer

¤ YESTERDAY IN GOLD & SILVER

The gold price slid quietly lower in Far East trading on their Thursday, hitting its low of the day [around $1,393 spot] shortly after the London open.  From there it rallied until 8:30 a.m. in New York...almost the exact moment that the dollar index began to head south with a vengeance.

During the next thirty minutes gold got sold down about ten bucks before beginning to rally a bit.  This quiet rally really gained serious strength around 11:40 a.m. in New York...and got cut off at the knees just before 12:30 p.m. EDT when it appeared that the market was about to go 'no ask'.  The high tick of the day was $1,422.70 spot at that point.

From there, a not-for-profit seller sold it down to around $1,415 spot...and the gold price didn't do much after that.

Gold closed at $1,413.70 spot...up $11.00 on the day.  Gross volume was pretty heavy...around 185,000 contracts.  It's obvious from the price action and this volume number that yesterday's rally did not go unopposed.

It was more or less the same chart pattern in silver, except the price was more 'volatile'...and the 8:30 a.m. EDT sell-off was far more pronounced.  The silver market went 'no ask' at 12:25 in New York before a seller of last resort put an end to it.

From there the silver price got sold down pretty hard into the close.  The low in early London trading was around $22.25...and the high tick touched $23.00 before being the rally was brought to an end.

Silver closed the day at $22.59...up 3 whole cents on the day.  Net volume was 37,500 contracts which, considering the volatility, wasn't a lot.

Platinum and palladium didn't do much better, but the real big price moves were in gold and silver...and the other two white metals only watched from the sidelines.  For the day, gold was up 0.78%...silver was up 0.16%...platinum was the star, up 1.06%...and palladium was only up 0.40%.

The dollar index did not have a good time yesterday.  It closed late Wednesday afternoon in New York at 82.56.  From there it began to sag a bit as the Far East and London trading days came and went...and at 8:30 a.m. EDT, the real sell-off began.

By the time the low tick of 81.18 was in at 12:20 p.m. in New York, the dollar index had shed 138 basis points.  From there it recovered 42 basis points by 1:30 p.m...and then traded more or less unchanged for the remainder of the New York session.  The index closed at 81.59...down 97 basis points from Wednesday's close.

As should be apparent to all but the willfully blind, if gold and silver prices hadn't been capped when they were, both metals would have closed materially higher.  One can only imagine the slaughter in the precious metals that would have occurred if the dollar index had risen that amount. Here's the 3-day dollar index chart.

The gold shares chopped around the unchanged mark until the gold price really took off at 11:40 a.m. EDT.  At one point the gold stocks were about 2 percent...but the stocks faded a bit into the close...and the HUI finished up only 1.35%.

As is almost always the case, Nick Laird's Intraday Silver Sentiment Index followed a similar price pattern...and it closed up 0.56%.

(Click on image to enlarge)

The CME's Daily Delivery Report showed that 318 gold and zero silver contracts were posted for delivery within the Comex-approved depositories on Monday.  In gold, it was the same crooks as Wednesday...JPMorgan was the biggest short/issuer with 317 contracts...and the two big long/stoppers were HSBC USA and Barclays...with 186 and 125 contracts respectively.  And we still haven't seen hide nor hair of Canada's Bank of Nova Scotia this delivery month.  The link to yesterday's Issuers and Stoppers Report is here.

There was another withdrawal from GLD yesterday.  This time an authorized participant withdrew 86,999 troy ounces.  And as of 10:22 p.m. EDT last night, there were no reported changes in SLV.

It's been three weeks since I've heard from the good folks over at Switzerland'sZürcher Kantonalbank.  During that period their gold ETF showed a reduction of 209,955 troy ounces...and their silver ETF declined by 784,044 troy ounces.

And, for the second day in a row, there was no sales report from the U.S. Mint.

Over at the Comex-approved depositories on Wednesday, they didn't receive anysilver, but they shipped 761,514 troy ounces of the stuff out the door.  The link to that activity is here.

In gold, they didn't report receiving any on Wednesday, but they did ship out 39,557 troy ounces...all of it out of Scotia Mocatta...and the link to that activity is here.

Here are a couple of charts that Nick Laird sent our way on Wednesday that I just didn't have the space for in yesterday's column, so here they are today.  They are the 12-year trend lines for both gold and silver.  Of course they wouldn't look like this if JPMorgan et al weren't interfering.

(Click on image to enlarge)

(Click on image to enlarge)

Here's another graph...this one courtesy of Casey Research's own Jeff Clark.  It's theSt. Louis Fed's Adjusted Monetary Base, which has set another record high at $3.17 trillion.  Unless the Fed wants the banking system to implode, this line will rise forever...until someday it won't matter how much money they give to the banks, as they will implode anyway.

Before I start on the stories, here's your daily "cute quota"...

I have a lot of stories again today and, as always, I'll leave the final edit up to you.

 

¤ CRITICAL READS

Stock Sell-Off Should Be Wake-Up Call: SocGen’s Edwards

Wednesday's sharp selloff in U.S. stocks should be a wake-up call for investors, Société Générale's notoriously bearish strategist Albert Edwards said, adding that weak manufacturing data merely illustrated the continuation of a clear downtrend.

"I might be wrong, but I just don't see this economy as healthy. If I am right, then any sharp rise in bond yields should quickly derail this apology of a recovery," Edwards wrote in a note, published on Thursday.

The Dow Jones Industrial Average closed below 15,000 points on Wednesday, for the first time in a month. This followed the publication of the Institute for Supply Management's (ISM) index, which showed that U.S. factory activity fell to 49.0 in May, below the 50-point level signaling growth. However, many investors are convinced the bull market remains intact, with bargain hunters still keen to step in.

Well, the Plunge Protection Team showed up to save the Dow at its 50-day moving average, so we'll see what happens going forward.  This CNBC story was posted on their website early yesterday morning...and today's first news item is courtesy of U.A.E. reader Laurent-Patrick Gally.

Read more...

Dr. Marc Faber: Even QE99 won't help U.S...India best in Asia

Despite quantitative easing (Q.E.) not really bearing any fruit for the common man, the Federal Reserve is likely to continue with it and go "up to QE99," says investment guru Marc Faber. He strongly feels easy money has not boosted employment for the ordinary people; instead it has given a philip to asset prices owned by very small portion of the population. Property prices over the last 12 months are up 35 percent, but all this has not helped the man on the street, he says.

After Japanese market went up 17 percent between November and two weeks ago and then corrected by 15 percent, Faber cautions investors of the high volatility in the second half of this year.

He feels there has been a remarkable slowdown in economic activity in Asia. Also, there has been a significant slowdown in Indian growth. Europe is in recession. "We are not in a traditional recession where everything is depressed like during SARS in Hong Kong, but it is just not growing anymore and the corporate profits by large are now beginning to disappoint," he says in an interview to CNBC-TV18.

This story was posted on the moneycontrol.com Internet site at 10:13 a.m. IST yesterday...and I thank reader Ken Hurt for sharing it with us.

Read more...

Mortgage Refinance Applications Are Crumbling

Mortgage refinance applications have been taking a hit recently.

Yesterday morning's MBA purchase applications showed that refinance index was down 15% for the May 31st week.

The refinancing index is down four straight weeks, and was down 12% the previous week.

This Business Insider article was re-posted on the seattlepi.comInternet site yesterday...and I thank Washington state reader S.A. for sending it our way.

Read more...

Democratic Senator Defends Phone Spying, and Says it's Been Going on For 7 Years

Senators on both sides of the political aisle moved to defend the National Security Agency's collection of data from millions of Americans' phone records, saying it has been an ongoing practice that has kept the United States safe.

Sen. Dianne Feinstein (D-Calif.) told reporters on Thursday that The Guardian's revelation of the court order that compels Verizon to give data on millions of Americans' calls is a standard three-month renewal of a practice that has been ongoing for about seven years.

Welcome to the Police State of Amerika, Komrade.  Thisbusiness.com story was posted on their Internet site late yesterday morning...and it's today's first offering from Roy Stephens.

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The History Of The Bilderberg Conference — The Most Famous Secretive Gathering Of Elites That Happens Every Year

Yesterday, over 100 masters of the universe assembled at the swanky Grove hotel in Watford, England for one of the most clandestine and controversial meetings in the world — the Bilderberg Conference.

Bilderberg has been around for almost 60 years, bringing together the most powerful people in the United States and Europe.

From CEOs to political bigwigs, it's an opportunity for the global elite to gather every year and have an open dialogue about world affairs, no reporters allowed.

This businessinsider.com news item was posted on their website early yesterday EDT...and it's the second story in a row from Roy Stephens.

Read more...

'Notable Failures': IMF Admits Major Mistakes on Greek Bailout

The International Monetary Fund acknowledges that it made "notable failures" on the first rescue package for Greece, setting overly optimistic expectations for the country's economy and underestimating the effects of the austerity measures it imposed. As such, the fund said in an unusually frank report released on Wednesday, it lowered its own standards on debt sustainability, setting lending levels too high for Greece while not pushing hard enough on Greek debt restructuring.

The IMF, together with the European Central Bank and the European Commission, make up the so-called Troika, which intervened in 2010 to keep the euro-zone country from defaulting on its debts and having to leave the common currency bloc. At the time, the IMF pledged some €30 billion ($39 billion) to Greece, out of a total bailout package of €110 billion. This was followed by a further pledge of €165 billion, plus €107 billion in private loan forebearance.

Some IMF board members and others criticized the fund for giving Greece so much money relative to the size of its economy and accused it of bending to appease its European members. The IMF, however, insisted the debt levels were sustainable as long as its economic projections were accurate. In retrospect, however, the IMF now says that it lowered its bar for Greece.

This article was posted on the German website spiegel.deyesterday...and I thank Roy once again for bringing it to our attention.

Read more...

E.U. commission on the defensive over IMF report

The European Commission has hit back at criticism over its handling of the Greek debt crisis, insisting that cutting the country's budget deficit and keeping it in the euro was "no mean feat."

Speaking with reporters on Thursday (6 June), Simon O'Connor, spokesman for Olli Rehn, the bloc's economic and monetary affairs commissioner, described as "plainly wrong" assertions in an International Monetary Fund (IMF) report that not enough had been done to promote economic recovery in Greece

"We fundamentally disagree that not enough was done to promote growth, this is plainly wrong and unfounded," he said.

This article was posted on the euobserver.com Internet site yesterday afternoon Europe time...and it's another offering from Roy Stephens.

Read more...

Hard-line ECB washes hands of jobless crisis, sees no 'Japanese' deflation

The European Central Bank has refused to take any further measures to lift the eurozone out of recession and curb rising unemployment, counting on spontaneous recovery later this year to do the job.

 

Mario Draghi, the ECB’s president, said the wild moves in currencies and global stock markets over the past two weeks do not change the fundamental picture, though the bank has downgraded its economic forecasts and expects a deeper contraction of 0.6pc this year. “It is not enough to justify immediate action,” he said.

“The ECB seems to have given up. It is as if they have decided that there is not much more they can do and will simply allow events to run their course,” said David Owen from Jefferies Fixed Income.

The Governing Council held interest rates steady at 0.5pc, and discussed a range of measures to alleviate the credit crunch across Southern Europe and boost lending to small business, without reaching any conclusion. “People don’t have definitive ideas yet,” said Mr Draghi.

This Ambrose Evans-Pritchard commentary was posted on thetelegraph.co.uk Internet site early yesterday evening BST...and I thank Manitoba reader Ulrike Marx for bringing it to our attention.

Read more...

The Truth about Erdogan: Turkey's 'Other 50 Percent' Demand a Voice

Turkish Prime Minister Erdogan is driving a wedge through his country. While one half reveres him as a savior, the other reviles him as a dictator. By continuing to condemn his opponents and ignore their demands, he is playing a dangerous game.

In Turkey, there are always at least two truths. On Taksim Square in Istanbul, and on the streets of many other cities in 77 of Turkey's 81 provinces, the prevailing truth is that Prime Minister Recep Tayyip Erdogan is curtailing civil rights, governing in an autocratic manner and is trying to force his conservative religious values on the population.

That is the truth motivating tens of thousands of demonstrators to take to the streets for six days, despite tear-gas and truncheon attacks by police. The Turkish Medical Association (TTB) estimates that three people have died and more than 4,000 have been wounded during the protests. There are no reliable figures regarding the number of arrests.

But there is another truth in Kasimpasa, the former dockyard area of Istanbul where Erdogan grew up, and in other more religious parts of the city and in villages throughout the country. In these areas the prevailing truth is that rioters, who have possibly been incited by opposition leaders and foreigners, are running wild and wrecking the cities, waging a campaign against Islam and vilifying the lone politician deserving of praise. The police, in this view, are only reacting so brutally because they are forced to.

This background story, originally headlined "Erdogan plays dangerous game by ignoring protester demands" was posted on the spiegel.de Internet site late Thursday afternoon Europe time...and the stories from Roy Stephens just keep on coming.

Read more...

Turkey's prime minister vows to continue Gezi Park development

Turkey's prime minister, Recep Tayyip Erdoğan, has vowed to press ahead with the controversial redevelopment of a square in Istanbul, in a move that puts him on a collision course with tens of thousands of anti-government protesters and could provoke further unrest across the country.

Speaking in Tunis before flying back to Istanbul on Thursday evening, Erdoğan acknowledged that some of those who had defended Istanbul's Gezi Park had acted for genuine environmental reasons. But he also said "terror groups" were behind Turkey's biggest demonstrations in years and hinted at a plot involving radical Marxist-Leninists.

"Public property was damaged during the Gezi Park protests. The Taksim [Square] project is a project that will make Istanbul more beautiful," Erdoğan said.

He pledged to press ahead with the building of an Ottoman barracks on the site next to the park, despite the vehement objections of protesters. "You cannot rule a state with the logic of give and take," he said.

This story appeared on the guardian.co.uk Internet site early yesterday evening BST...and it's another news item courtesy of Roy Stephens.

Read more...

China fuels trade row with attack on 'haughty' Europeans

The official mouthpiece of the Chinese Communist Party has attacked the European Union, lashing out at the “haughty attitudes of certain Europeans” and warning that China still had “plenty of cards” to play in an increasingly acrimonious trade dispute.

“China does not want a trade war, but trade protectionism cannot but bring about a counter-attack,” warned an editorial in the People’s Daily newspaper, whose opinion pages often reflect government thinking.

The newspaper’s attack came two days after the EU Commission announced it would begin charging duties on solar panels imported from China.

Hefty tariffs of up to 48 per cent will be placed on subsidised Chinese solar panels, Karel De Gucht, the EU’s trade commissioner, announced on Tuesday.

This news item appeared on The Telegraph's website early yesterday afternoon BST...and it's another contribution by Roy to today's column.

Read more...

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