Bo Polny is a student of cycles.  Based upon his observations during our interview on election day in November 2014, he predicted that a major precious metals rally was starting that day. While his timing was off by perhaps 48 hours at most, his call has been on the money.  
Below is Bo’s follow-up on where markets are heading. You’ll be happy to know that all your stacking was not in vain.
Quite the contrary, the big move is almost upon us!


What a day.  Late last night we got word that two brokerage firms are in serious trouble due to these guys being on the wrong side of the Long USA dollar/short Swiss Franc trade.   Then today, many more firms stated that they have lost serious money on the trade.
What is interesting on the Swiss unpegging of its currency (the peg was 120 Swiss Franc/1 Euro) was this was done in total  secrecy.  Christine Lagarde was totally unaware that this was forthcoming.
Generally the bankers know in advance but this time everyone was in total darkness.
Again we are witnessing central banks not trusting one another.
You can bet the farm that there will be huge derivative losses on the Swiss unpegging.


Oil continues to be the big topic of the day.  At one point in the day, both Brent and WTI traded at identical levels as Europe continues to deflate. The losses in the oil patch are huge due to losses in the mega dollar short plus the oil and other commodities that were bought with the dollar short.  The yen carry trade continues to unwind as does the Nikkei/gold cross trade. Expect to see billows of massive smoke from the mammoth losses in the TRILLIONS!
Let’s head immediately to see the major data points for today:


Gold had a boost today with news that the Ukraine has reserves of only 7.5 billion dollars.  They are now within a whisker of default and need help from the IMF.
It also looks very likely that we are going to have a GREXIT and with it all the ramifications for derivatives. 
Our European bankers do not like this one bit.

Let’s head immediately to see the major data points for today:

gold bull

David Morgan, Alasdair Macleod, & Bill Murphy join The Doc & Eric Dubin this week for a special Precious Metals Round Table edition of Metals & Markets, discussing: 

  • Is JPMorgan sourcing silver by the warehouseload- directly from the miners via financing global miners’ refining? 
  • Dhragonomics: ECB only 1 step behind Japan- paper fiat currencies on way to collapse in 2015
  • David Morgan: Fundamentals reflect $4800 current value in gold- physical shortage may develop in 2015-2016, resulting in a MASSIVE MANIC/PANIC stampede into metals & mining shares- something could lite a match to the gasoline filled warehouse of this market tomorrow!
  • Alasdair Macleod: Dollar strength distorting the picture- Gold has doubled vs Ruble in past year, all hell is breaking loose across the currency markets- 2015 will be the year for gold
  • Why the short sellers CANNOT be taken down by standing for delivery- is the entire game RIGGED?
  • Bill Murphy: Gold and silver may just Go Bonkers in 2015!  When this blows, we will have the MOST HISTORIC MOVE IN HISTORY

You won’t want to miss the Power Packed Special Edition of Metals & Markets With David Morgan, Alasdair Macleod, & Bill Murphy breaking down whats in store for gold and silver in 2015 and beyond:

gold bottom

The firmly entrenched bearish opinions in recent months for the outlook for gold and silver have backed off from recent extremes.
There is confusion in dealers’ minds, brought about by the threat of deflation and the collapse in oil prices.  Whereas hedge funds would automatically sell gold whenever they detected dollar strength, this is no longer the case.   Precious metals now seem to be responding more to the threat of global financial instability triggered by a strong dollar, and fund managers are selling other commodities instead. Indeed, it is remarkable that despite the USD hitting new highs against nearly all currencies, 
gold has not only held its ground but is actually rising.


Now for the wild silver comex results:   Silver OI rose by 1022 contracts from  152,879 up to 153,901 despite the fact that  silver was down by 9 cents  yesterday. The front January contract month saw its OI lower to 15 contracts for a loss of 76 contracts. We had 76 notices filed yesterday, so we neither gained nor lost any silver contracts standing for silver in the January contract month.
The next big contract month is March and here the OI rose by 430 contracts up to 103,678.  The estimated volume today was simply awful at 12,034. The confirmed volume yesterday was fair at 37,951. We had 0 notices filed for nil oz today.
It sure looks like the bankers have scared away all investors wishing to play the COMEXLeverage has completely disintegrated.


In gold we had a monstrous increase in OI with the rise  in price of gold  yesterday to the tune of $15.40. The total comex gold OI rests tonight at 394,021 for a gain of 15,536 contracts. The January gold contract reads 133 contracts.  The bankers were not afraid to supply the non backed gold comex paper.


Today we had a lot of developments.  First WTI broke into the 47 dollar column creating havoc for our sovereign countries loaded with oil e.g Canada, Russia, USA, England (North sea), Venezuela etc.  The dollar keeps rising due to the breaking up of the dollar carry trade.
As we have mentioned to you on many occasions, this in turn blows up the derivatives in oil and the major banks who have underwritten much of these contracts when oil was north of 100 dollars per barrel.
It certainly looks like the bankers are having a tough time trying to contain gold
Generally the bankers do not like to see gold/silver rise on two consecutive days, but that is exactly what we got today…

gold repatriation

Yesterday we received news that the FRBNY withdrew 47 tonnes of gold, of which 3 tonnes went to Holland and the remainder, most likely, was Germany. We will probably have a statement officially from Germany on that matter.
If true, it would certainly kibosh the Bloomberg story earlier in the year as totally false. (that Germany does not want to repatriate the gold stored at the FRBNY)

No doubt we are now seeing central banks no longer trust each other as confidence falters.  As Bill Holter constantly reminds us, this is the biggest run on the banking system, the repatriation of one’s gold.
Germany is going to have a tough time explaining why Holland received its 122.5 tonnes before Germany got hers with a further question as to why it is taking longer to repatriate Germany’s gold with the added fact that Holland got their gold in less than one year.

Gold Bundesbank

The big news today came from the FRBNY where we witness $64 million dollars worth of gold leave the bank (and New York shores) to repatriate the last amount owed to Holland and most likely Germany has resumed her repatriation.
This gold is valued at $42.20 per oz and thus 1.516587 million oz (47.17 tonnes) leaves the bank.
We know that Holland was to receive its last 3 tonnes in November (they have thus repatriated 122.5 tonnes from the beginning of 2014).  Since Germany is the only country that officially has asked for her gold back, you can safely assume that Germany has received 44 tonnes of her 1500 tonne hoard held in NY back to Frankfurt. 
The repatriation leaves behind a HUGE MESS OF DERIVATIVES as there is approximately 100 paper obligations per one oz of gold repatriated!

JP Morgan

The Doc & Eric Dubin discuss this week’s PM raid on thin holiday volume and look forward to whats in store for 2015 in this special Holiday Edition of Metals & Markets discussing: 

  • Eric explains why 2015 will see a supply deficit in silver for the first time in years
  • Given the Titanic Volume turnover in mining shares- the capitulation bottom in gold & silver has ALREADY Occurred! 
  • Ruble stabilizes and recovers as China backstops Russia
  • Oil free-fall continues- what’s in store for 2015? 

The SD Weekly Metals & Markets With The Doc & Eric Dubin is below: 

JP Morgan