Alasdair Macleod: Firmer Tone for Gold & Silver

This week started with a severe markdown in gold and silver prices when markets opened in the Far East on Monday morning, taking gold down $12 to $1278 and silver only 12 cents to $19.03. The clue in this was the resilience of silver, which hardly moved: it was an attack on the gold price presumably designed to take out stop-losses. From there precious metals never looked back.

 


 

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Submitted by Alasdair Macleod, Gold Money: Interestingly, for the first time in a long time, prices advanced in London dealings, indicating they were being driven more by physical demand than trading in US futures. This is hardly a surprise given that GOFO is still negative for up to three months forward and has been in backwardation every day since 3rd April. The sharpness of the bounce in the gold price is shown in the chart below of gold and silver prices for the year so far. Given the short-term bearishness of some of the major banks one can only conclude that there is an underlying firmness in these markets. Gold Silver YTD 16052014 Yesterday’s US Initial Claims numbers came in lower than expected, triggering algorithmic traders to sell gold which fell $10 in minutes. The test will come from London later this morning: will physical buyers keep the market bid, or will there be some profit-taking ahead of the weekend? Computer-driven traders are not getting it all their way. US bond yields have fallen dramatically, which is wholly inconsistent with a recovering economy as Initial Claims would suggest. Treasury Yield 16052014

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It is clear that very little of the money printed through QE is getting into the economy, other than by government spending, and instead is still confined to financial markets. The most important news regarding precious metals markets was the announcement of the end of the silver fix from this August. The background to this move is Deutsche Bank’s withdrawal from the gold and silver fix, which in silver’s case left only HSBC and Bank of Nova Scotia agreeing the daily fix. Given increasing regulatory interest in the fixing processes for both precious metals, coupled with potential litigation for the banks involved, it is clear that for only two banks to continue fixing silver is untenable. The broader question of the future of the gold fix is more important. It appears that no bank is willing to take over Deutsche Bank’s seat, raising the question why. It is likely that compliance officers at the major banks have all reached the same conclusion: that the gold fix may be difficult to defend from allegations of market-rigging, and it would be wise to turn down the opportunity. If nothing else, in my opinion, it looks like there is a growing possibility the daily gold fix will end as well.

Next Weeks’ Announcements

Monday. No important statistics scheduled. Tuesday. Japan: All Industry Activity Index, Leading Indicator, Customs Cleared Trade. UK: CPI, Input Prices, ONS House Prices, Output Prices. Wednesday. Eurozone: Current Account, Flash Consumer Sentiment. Japan: BoJ MPC Overnight Rate. Thursday. Eurozone: Flash Composite PMI. UK: GDP, Index of Services, Public Borrowing, Retail Sales, CBI Industrial Trends. US: Initial Claims, Flash Manufacturing PMI, Existing Home Sales, Leading Indicator. Friday. US: New Home Sales.

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Comments

  1. I scooped up a roll Thursday for 417 bucks.  The market will move sideways until it doesn’t anymore.  Stack on. 

  2. God told me today to be patient (OK that is a big exaggeration, actually I meditated upon His words about the matter).    On or about July 1st, I predict the silver market will be $30 an ounce, and the price will steadily, and slowly grow (again just a prediction and of course I am not good at predicting!) and you and I can sit back and watch God destroy socialist markets, one ounce of silver at a time!  Do not despair my silver stacking friends, and constitutional Americans, the end shortly to come to pass!  :) https://www.youtube.com/watch?v=ptkggmcYi8k 

    • And the US dollar will sink into obscurity around then too…

    • Woke up this morning noting a nice bounce in silver Asia, though down some now. Came back here to re read what I thought I read. Silver $30 oz prediction by July1 +/-. Silver up 50%, $10 in 42 days? What a call if happens. Especially since so many smarty silver gurus have said silver would be this and that and been dead wrong. Hope you’re right. I’m finding it humorous to get good preaching and info on bad guy dirty deeds at a silver web site that sometimes I think is too gold y. Listened to and bookmarked Randall’s 29 min preach. Thought it good except had a couple of questions. Jesus less than God? Hum. Thought Jesus was God- Trinity. A Torah er and I have been disagreeing. I said Jesus would never condone parts of the Torah where God, since Jesus is God, directed Jews to kill their enemies and fellow Jews. Since Jesus preached peace makes no sense to me God, which is Jesus, ordered, if my read is correct, the killing of enemies and other members of the Congregation. Also think Randall said when Jesus returns he will come as a spirit in the sky. IMO Nope. Jesus will come Trip 2 just like he came Trip 1, a walking talking completely human person sensing and doing the Will of God. Haven’t heard McCleod predict $30 silver by July1, 2014.

    • Randall– Why did’t god tell you to invest in bitcoin?? It sounds like you need a new financial advisor.

    • @hookshot – Ha ha ha!

  3. Randall –  You got me to thinking.   As we keep on stacking, and the governments with central banks keep on self destructing, each of us may well end up with more precious metals than the banks.  And if Jesus comes again during our lifetimes, well…   In that perfect world, will we even need gold or silver?   Maybe not.  And who cares!

  4. McCloud is shilling for the parasites. The question of the future of the gold fix is not more important than why the silver fix was stopped completely. The fact the silver fix has been stopped effect August 14 indicates the silver fix is a major can of worms that the parasites are afraid. McCloud is being used to push any thought that the stopping the silver fix is no big deal. Stopping the silver fix is a massive big deal. Obviously fixing the silver fix is where the entire price fixing hinges. Probably the gold fix is being continued in an effort to hide the price fixing tied to the silver fix. The problem for the Fed parasites has always been in silver, not gold. There will probably be a lot of shilling that the gold fix investigation is horrible news for the parasites. This will be propaganda for the purpose of diverting attention away from very obvious and easy to prove price fixing connect to the silver fix. If anyone has a desire to put the parasites heads on concrete and stomp, the time to do it is now. The opportunity to stomp is found in the reason why the silver fix will be stopped in August. Powerful Peeps minimizing the importance of the stopping of the silver fix are exposing themselves as agents mouths for the parasites. 

    • Anon– Alasdair Macleod strikes me as someone who is intelligent and honest. Just because he says something that you disagree with does not mean he’s been bought off. 

    • hookshot- U are correct. Macleod strikes me as intelligent and honest. I definitely do not think the gold fix is more important than stopping the silver fix completely. Not sure shilling for parasites is the same thing as bought off by parasites. Macleod may know what the parasites want spread around and spreads it and feels its good for his business.   

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