In this week’s Metals & Markets, The Doc & Eric Dubin break down the week’s action discussing:
- First Majestic Silver takes on the cartel- holds back 35% of Q3 silver production- CEO Keith Neumeyer issues call for silver miners to form their own cartel to put an end once and for all to paper manipulation
- Russian/ US Geopolitical crisis escalates- Putin warns of MAJOR CONFLICT with US, loss of reserve currency status for dollar
- Swiss Gold Referendum- could a YES vote shatter the cartel’s grip on gold?
- Silver market tightens- premiums are on the rise as Royal Canadian Mint begins allocating silver maples, major private mints running production delays on PHYSICAL metal
- Gold predictably capped at $1250- whats next for gold & silver?
The SD Weekly Metals & Markets With The Doc & Eric Dubin is Below:
The cartel showed its face Wednesday and said, “no mas.” No surprise. But all things considered, the last few weeks have been productive. Gold turned in a respectable bounce after having slipped below $1,200. Asian buyers stepped up to the plate. Silver, while suffering greater technical damage, has nevertheless demonstrated that physical market demand is acting to put a floor on further downside.
While we’re not expecting much upside action for the near-term, it does appear that the risk of stirring even greater physical demand lower prices would stimulate has the cartel capping, but probably not targeting new lows for the time being. If the cartel pushed its case and tried to move gold back down to $1,180, that roughly $50 move would likely translate into an addition of at least $20 to the after duty premium price paid in India what with their festival buying season now in full swing.
Indian authorities are looking to restrict gold imports again – click here. So much for all the Modi government talk about liberalization. In any event, the last thing the cartel wants to do is make it more attractive for Indian smugglers. Bottom-line: with demand responding to lower prices in China and India, we’re sticking to our call a couple of weeks ago that the bottom was made with the triple bottom on gold.
Swiss Gold Referendum
On November 30th Swiss voters will cast ballots on the Swiss People’s Party (SVP) proposal that would require the Swiss National Bank to hold at least 20 percent of its assets in gold, and to ban any future selling of gold. According to official estimates, the SNB holds 1,040 tons of gold, representing 7.8 percent of the central bank’s reserves. Berne-based research institute gfs.bern and Swiss broadcaster SRG conducted a recent poll indicating 44% approval for the initiative, and 39% opposed (click here).
This is an exciting development. The Swiss have have long had an affinity for gold that runs deeper than other western nations. But odds are high that even if the referendum passes, expectations for a quick impact to the price of gold will not follow other than a quick blip of $50/oz or some-such. The Swiss financial authorities will likely pull a Germany and backpedal, stalling for time. It’s not like there’s that much gold available for bulk purchase so the Swiss powers that be will be extra motivated to avoid having a big impact to physical market pricing. If the referendum passes, expect to see discussion about the buyer period to expand to an extended period of many, many years — a time-frame of a decade wouldn’t surprise me. The propaganda from the “no” camp will be ratcheting higher in the coming weeks too.
Beyond implications to the precious metals market, it’s important to recognize that this referendum grows out of the rising skepticism of the financial system and the policies of the European Union. The Swiss People’s Party surprised the mainstream Swiss political establishment with the SVP’s successful campaign to address immigration. The party is nationalist and conservative, and the same general forces that are helping the rise of Nigel Farage’s UKIP are at play with the rising profile of SVP. We’ll cover the referendum in more detail next week.
First Majestic CEO Keith Neumeyer Calls For Industry Execs To Fight Back
Listeners will recall GATA’s Bill Murphy and I bemoaning three weeks ago about precious metals industry executives rolling over and playing dead in the face of massive cartel price suppression. Keith Neumeyer is the rare exception. This week, Future Money Trends interviewed Neumeyer about First Majestic holding back production and his call for fellow precious metals industry CEOs to consider forming a cartel similar to OPEC given the wide divergence between paper market manipulated prices and the physical market. Click here to watch the interview.
Neumeyer has a deep background in finance. He understands the onslaught of manipulation the industry labors under and this isn’t the firs time he’s spoken out against manipulation. Industry CEOs should follow his example!
I’m biased. I own shares in First Majestic. I consider it to be one of the best silver equities to own, and the fact that Neumeyer is a stand-up guy most certainly is a factor behind why I view First Majestic as a core holding in my portfolio.
For your weekend reading, be sure to check out the Chris Powell’s prepared remarks delivered last Thursday at the 40th Annual New Orleans Investment Conference. Click here. It’s a great read.
Alan Greenspan will be speaking at the event. That ought to be interesting. Don’t be surprised if he makes favorable noises about gold while tap dancing ever so gently with criticism about the current state of western financial markets. The man is obviously concerned about his legacy, as he should be. History will not judge him kindly.
I was also on Dr. Dave Janda’s Oct. 19th show. We cover a lot of ground and his other interviews are interesting too. Click here to listen.
Have a great weekend — Eric Dubin