Alasdair Macleod: Something’s Afoot in Gold & Silver…

silver rallyAlmost unnoticed, Open Interest in gold futures has taken off spectacularly, increasing by over 35,000 contracts since the beginning of the month, which is shown in the chart below.
Money Managers have closed some of their silver shorts but are still exposed at three times their average. The squeeze in the market might also have something to do with commercial businesses locking in low prices for physical silver into the fourth quarter of 2013, with no matching increase in hedging by the mines.
So if there is a short-term crisis developing in precious metals, it could well be in silver.
Something is clearly afoot in gold & silver.

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Submitted by Alasdair Macleod, GoldMoney:

gold

As a general rule of thumb, an increase in Open Interest on a rising gold price is bullish, indicating the bulls are back in charge. The pick-up in silver’s open interest is not so marked because it starts from a higher base.

silver

Here the pattern is somewhat different from that of gold, with open interest having already risen sharply on the falling price three months ago and remaining elevated ever since. In this case, the bulls appear to have held their nerve during a very bad time for the silver price, which is a sign that the bears never actually gained control.

Furthermore the bullion banks in silver appear to be getting nervous. On a number of recent occasions in quiet trade silver has been marked down with little or no corresponding move in gold, only to fully recover in the absence of selling. This pattern is consistent with market-makers (a.k.a. the bullion banks) trying to close their shorts, but there is not the liquidity for them to do so. The next chart, of the four largest traders’ net position says it all.

silver - largest 4 net position

Note how in 2013 these bullion banks covered 60,000 net shorts, amounting to 300,000,000 ounces, only to see this hard-won ground begin to slip away from them in recent weeks. The second largest four are suffering the same fate, having got their net shorts down to as little as 475 contracts in early November, only to see the position deteriorate to 13,777 last week, This is a big exposure for these smaller traders.

Money Managers have closed some of their silver shorts but are still exposed at three times their average. The squeeze in the market might also have something to do with commercial businesses locking in low prices for physical silver into the fourth quarter of 2013, with no matching increase in hedging by the mines. So if there is a short-term crisis developing in precious metals, it could well be in silver.

Turning to economic developments over the last week, there has been growing hope expressed that economic recovery is on its way in the UK and to a degree in the US. While the talking heads have been promoting equities and talking glibly about future economic prospects, the statistics suggest a very bumpy road. Most discouraging perhaps is the Baltic Dry Index, which is a pretty good indicator of global commercial activity: this has been in freefall since mid-December, when it dropped from 2,330 to 1,374 earlier this week.

Next week

Next week looks like being very quiet for announcements. Here is the list:

Monday.

Japan: Capacity Utilisation, Industrial Production (Final).

Tuesday.

Eurozone: ZEW Economic Sentiment.
UK: CBI Industrial Trends

Wednesday.

Japan: All Industry Activity Index, Leading Indicator (Final).
UK: Average Earnings, Unemployment Rate, Public Borrowing.

Thursday.

Eurozone: Flash Composite PMI, Current Account.
US: Initial Claims, Flash Manufacturing PMI, FHFA House Price Index, Existing Home Sales, Leading Indicator.

Friday.

UK: BBA Mortgage Approvals.

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Comments

  1. http://flashtrafficblog.wordpress.com/2014/01/18/why-is-canadas-evangelical-christian-prime-minister-heading-to-israel/

    Genesis 12:3:
     ”And I will bless those that bless you and curse the one who curses you. And in you shall all families of the earth be blessed. ”
    :) Some World leaders and PM bloggers would do well to learn this verse, commit it to memory and to live it out.

    • Proverbs, you come across as someone who is, or at least considers themselves an observant christian so I will offer the following, not as a flame but as a perspective I have.
       
      You anchor yourself to scripture in this regard and then in the post below essentially you utilize what can be regarded as a pedestrian form of numerology. The bible is quite clear about astrology, mediums, magicians, those trying to interpret omens and the like.
      deuteronomy 18:9-12
      “When you come into the land that the Lord your God is giving you, you shall not learn to follow the abominable practices of those nations. There shall not be found among you anyone who burns his son or his daughter as an offering, anyone who practices divination or tells fortunes or interprets omens, or a sorcerer or a charmer or a medium or a necromancer or one who inquires of the dead, for whoever does these things is an abomination to the Lord. And because of these abominations the Lord your God is driving them out before you.”
       
      Proper biblical christian teaching says that discernment is critical when dealing with such forces, and that they should simply be avoided as they are dangerous.
       
      Mark 13:32 
       
      But of that day and that hour knoweth no man, no, not the angels which are in heaven, neither the Son, but the Father.
       
      The 2 verses together are profound in that an observant christian should realize that there is a time not to know, but to anchor themselves to the word.
       
      Do not anchor yourself to something worldly – like the country of Israel – where a panel recently stated that there should be free abortion for women 20-33. Something which is expressly forbade in the bible as God knows each soul before it is born and has a plan. Backing up unlike some Christian denominations, I do believe we have free will in this reality versus some who talk of predestination. Many aren’t in a place to think about this, but I offer you the following in that regard.
       
      The Christian God ( who as manifested in the trinity and uniqueness of Jesus Christ ) lives outside of space and time, and that is where we will join him when we die. Since he is there, he has access to every second of every minute of history simultaneously. This is why across the Bible there is a thread of intertwined prophecy from start to finish. The upshot is that everyone arrives at God’s throne at the same time which is comforting.
       
      If you want to live by biblical verses try this one:
       
      Ephesians 6:12
       
      For we wrestle not against flesh and blood, but against principalities, against powers, against the rulers of the darkness of this world, against spiritual wickedness in high places.
       
      Take Care,
      Lump

    • Romans 11

    • @Proverbs1616 old friend, I have to agree with what CDL said. Now, I’m hoping you are using this “numerology BS” to try and interpret the evil one’s plans, but do not get caught up in it. I have since my early years been able to find patterns in numbers and see things that others cannot see until it is pointed out. Gift or Curse? Depends on how it is used. But I pray that you do not fall victim to this system, as I am sure you pray for all of us @SD. 
      Sincerely,
      RGR

    • PS: After further review, LaGarde’s opening comments were Numerology, in the video below…

    • @undeRGRound
      lol don’t worry, I am not into numerology.
      I was referring to the video, as you seem to have caught on to. Lagarde and the elite like numerology, and as you say, she starts her speech off by talking about numerology.
       

  2. https://www.youtube.com/watch?v=ZUXTzVj5-uE
    Christine Lagarde’s recent National Press Club speech which the media hasn’t covered. VERY ODD SPEECH
    I read one commentary that said that the reference to 25 pointed to 7/25… July 25th.
    But what I find interesting is the 2014 with the zero dropped comment, giving us 214, or 2/14: February 14th.
    She mentions the New Year a lot with a mention of the coming Lunar (Chinese) New Year, which begins January 31st, and which lasts 15 days, thus ending on the Lantern Festival on February 14th. Hmmm.
    She mentioned something about being half-way between the New Year and Lunar New year and mentioned 2×7=14, so maybe she is referring to something happening half-way through the Asian New Year, as in Feb 7th?
    So… I’ll be eyes-wide-open January 25th, 31st, February 7th and 14th and July 25th (which is 3 days before the 70th anniversary of Bretton Woods and 3 days after the 100th anniversary of the start of WWI).

    • Ah yes,
      and she finishes her speech by quoting Jacques Chirac (and Walter Cronkite) who, when she was in meetings with him to address distressing catastrophes which had just happened somewhere around the globe, used to say, “voilà, c’est comme ça” .. “there you go, that’s how it is”.
      And then she walks off stage.
      Wow.

    • Furthermore – there is a full moon on February 14.

    • @Mammoth
      Not to mention that the Sochi Olympics in Russia begin February 7th (2/7), and that the half-way point of the Olympics .. as well as 2×7= 14… is around Feb 14th. Hmm.

       
       
       

    • Also my Wedding Anniversary. Lol

  3. Numbers, numbers, numbers… and nary a one to think.  ;-)

  4. You know somethings ‘a foot’ when some of the guys you have been listening too are taking off to freighn lands, closing up and shutting up. That’s what I’m seeing.

  5. Interesting times we are in? I hear I’mF ~ is moving forward with the ReSet button?

  6. Legarde’s NPC speech was spooky.  The first thing I noticed is that she seldom referred to her notes and spoke very extemporaneously.  Cool as a cucumber.  She’s single-focused and apparently being a real bitch to the bankers opposing some of the IMF guidelines. 
    One thing she kept harping on is the disparity of economic conditions between the developed countries and the emerging and ‘lower income’ countries.  She made several references to economic growth not going where it should.
     
    She spoke of Bretton Woods and said that, in that spirit, world cooperation was needed to resolve our problems.
     
    She took a question on whether currency wars were still a factor in the world economic balance and she downplayed their significance.  As she did so, the look on her face was betrayed with an icy smile.
     
    Ok, if not currency wars, then she much have another way in mind… because the currency wars are in full effect right now… and they ain’t about to go away voluntarily.
     
    I’m smelling that currency reset again….

  7. Make no mistake, the IMF is a tool of the globalists, as is the BIS.  It was conceived originally as a means of allowing them to insert themselves into the politics and finances of the third world developing countries and it’s role has expanded.  Our SD worldview, as least, as I see it, is to be affected by the actions of these entities.  Without their influence, we probably would not even have SD as there would be no need for folks to put their heads together in a collective effort to strategize how best to survive a coming period of forced change designed to ruin and impoverish us all.
     
    Remember, it was the IMF that instituted the Cyprus banking system bail-ins.

    BTW, @RGR recently, I responded to your post about domestic monetary confidence… what article was that in? You replied and I want to answer, but now I can’t find the original thread? Do you recall where it is?

    • Yeah, I been waiting on that. The one where I said most folks don’t realize that 
      WE THE PEOPLE  control the fate of the U$D? 
       
      Lemme see, I’ll put an @SE in there. I’d like your input! 

    • @Sovereign Economist
       
       
      http://www.silverdoctors.com/is-sub-1000-gold-in-the-cartels-script/#comment-93202
       
      I believe that will take you right to the post we are speaking of! 
      I appreciate your desire to answer my post! Perhaps I can learn something more about this, 
      eve though I sometimes make my responses a bit “in your face” it is simply for emphasis. 
      No disrespect meant at all. You are a man of integrity and credentials, but I appreciate how 
      you come to SD as a humble, yet learned newer (to some of us) member. A fine addition 
      to SD readers, in my opinion! 

    • I don’t find your responses ‘in your face’ at all…  everybody has their own style here and we all come into this forum at different levels of  understanding and with different backgrounds informing our participation here.
      FYI, I responded to your other post with a request for clarification on a question I have before I go further… we’ll finish it up over there since I can find it again.  :)
       

  8. IMF recently announced they want a 10% wealth tax on the Europeans.  By this statement, they will focus later on the US. 
    LeGard has a sordid history with legal actions that connect her to the French treasury officials. She could be jailed for this as would her former boss Sakosy, for a 280 million euro payment to a political supporter. She was instrumental in the Greek debt fiasco, and Cyprus bail-ins and went on a begging cup tour of the world, asking for $150 million (or was it billion) in donations and arm twisting forced extractions from banks and countries barely a year ago.
    She is a cold calculating automaton and apparachik with all the warmth of block of ice. I am quite sure she would steal the pennies from a dead man’s eyes if it furthered her globalist ambitions.

    • @AGXIIK
       
      The IMF feels Europe needs the cash infusion now, so they’ll victimize the Europeans first,  mostly, because they can and probably get away with it without the Europeans revolting.  Remember, they’ve had a few more years of the globalist-appointed EU bureaucrats running their lives and are more “used to it’.  If they try that wealth tax thingy here in American now, the fear is they will get too much social unrest blowback from a populace already ready to lynch politicians.  Remember, for the past three years they’ve begun each year in congress trying to introduce and advance legislation to appropriate (steal) the private sector pension and retirement nest egg of Americans…  what is it, $9 to $11 Trillion?   (I really need to go look this number up, since I keep having to refer to it)  The legislation always dies because TPTB are afraid Americans aren’t yet cowed and quiescent enough because we haven’t had the economic false-flag terror event yet to scare and convince us that we need to sacrifice for the good of America yet….
       
      LeGarde was the target of a campaign to take her down a peg or two back a few years ago… those charges you alluded to were trumped up improper payoff charges that appeared on her horizon back in, what was it, late 2009, early 2010?  Seems she wanted to follow in Dominique Strauss Kahn’s footsteps and ease off the austerity measures for Greece and Portugal, saying they were too extreme. Like Kahn, who they had to set up with that silly ‘maid-molestation’ takedown (at the behest of French President Sarkozy — another story) LeGarde was ‘feeling her oats’ so-to-speak.  Her handlers materialized these legal issues and then gave her a stern spanking and sent her back into the arena to continue their full court press in that arena.  She took her rebuke and promised fealty to her handlers and the legal problems promptly went away…  Since then, she’s been a good girl and performed her masters bidding with a steely resolve.  She knows her stuff… again, I note in her NPC speech, she spoke extemporaneously and not from notes… that’s very unusual in the era of carefully scripted public disclosures…. especially for a straw man puppet.
       
      Remember, that, to the globalist cabal, the IMF is the financial enforcer in the way the US military is the political enforcer as we saw in Libya.  They sent the velvet-fisted Troika to financially carpet-bomb and conquer Greece while they sent the iron-fist of NATO to take out Libya with the aid of our Al CIA-da collaborators.  Remember that one of the first things they did when they started the Libyan campaign was to create a Central Bank facility there.  Bankers wars utilize the weapons most appropriate to their objectives.
       

    • @Sovereign Economist
       
      I have seen 17 to $20T figure for private pension funds, and I remember because that was when we had the $17T estimated national debt. Like they could wipe it out with a single maneuver… 

  9. .

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