dollarGold and silver prices continued to drift along close to recently established lows this week, showing some support at current levels.
Whether or not there is further weakness to come appears to be a reflection of dollar strength, and it should be noted that the dollar has recently broken into new high ground on a trade-weighted index of other currencies. 


economic dollar collapseWith Gold and Silver Smashed Below Their Respective 200 Day Moving Averages On the Heels of the FOMC Statement, Alasdair Macleod Joins the Show to Discuss All the Action: 

  • Metals SMASHED- Are Gold and Silver Headed to NEW LOWS?
  • Would An Interest Rate Hike By the Fed Ignite the Next BULL Market in Gold & Silver? 
  • We Already Have HYPERINFLATION! (of the fiat currency quantity- & We’ll Have Currency Collapse Within 2-3 Years!)
  • Can the Banks Talk Gold Down to $900?
  • Alasdair is Ready for the Collapse: Lets Get On With It!

The SD Weekly Metals & Markets With The Doc, Eric Dubin, and Alasdair Macleod is Below: 

There is a line drawn in the sand.   At the LBMA conference in Vienna this week, analysts’ consensus was for lower gold prices, with some major houses even talking gold down as far as $900 (BNP Paribas – 2017 average). This suggests that they are prepared to ride short positions, though they will obviously trade round them. Given that their shorts are not excessive at the moment, there is unlikely to be a concerted effort to move prices lower – yet.
The danger to the bullion banks is either their shorts become worryingly large from here, or alternatively they change their mind about the bearish outlook.

holterThe effect on commodities:
If NIRP looks like becoming a reality, commodity markets should begin to adjust to a general state of backwardation, reflecting the anticipated cost of holding cash deposits compared with owning physical commodities. Speculators holding short positions and therefor long of dollars will expect a cost arising from negative interest rates to replace the positive interest rate return normally reflected in futures pricing.
In other words, all market participants would be better off being long instead of short.
The effect could be dramatic…

nuclear dollarIf the Bank of England is looking at ways to overcome the zero bound on a permanent basis, it is a fair bet that it is being looked at by other central banks in private as well.
And if NIRP gains traction at the Top Table, the life-expectancy of all fiat currencies could become dramatically shortened.

JPM gold vaultNegative interbank rates would obviously be good for precious metal prices, because the bullion houses will find it more costly to hold dollars than gold and silver, reversing the standard position in paper markets.
Unfortunately for them,
physical liquidity of all precious metals is probably too low for such a switch to take place with major market disruption.

falling-bearSince the Lehman crisis, investors have bought into this bullish argument to the exclusion of any likely risk that a bear market will happen.
Consequently, considerable amounts of speculative money are committed to the concept of a perpetual state-guaranteed bull market; so if the destructive forces of reality do intervene, the potential for a severe fall in equity prices will be much greater than before.

collapseThe remarkable statistic in an unremarkable week was that the ratio of deliverable gold to outstanding Comex gold contracts fell to less than one in two hundred.
So long as the holder of an expiring contract has the right to insist on delivery, this could become a problem…

gold leasingThe underlying bullion position however remains very tight. The Financial Times reported that the cost of borrowing physical gold has risen sharply in recent weeks, reflecting refining demand from the big Swiss refiners. We know from our own contacts that for the last three years the Swiss refiners have been fully occupied in refining 400 ounce LBMA bars into the one kilo .9999 Chinese standard, so the drain on western vaulted stocks would eventually produce an acute shortage.
If the FT report is right about the gold being borrowed, this stores up more trouble for the future, because borrowed gold has to be returned.