T. Ferguson on The Curious Case of the GLD

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GLDTFMetalsReport’s T. Ferguson joins the show this week to discuss: 

  • The Vaults Are NEARLY EMPTY– why claims of a physical gold shortage is not stacker hysteria, but rather the COLD HARD TRUTH!
  • PM Sentiment sucks by design: Cartel fears Western investment demand with vaults vastly depleted- vigorously capping any and all price rallies
  • Big picture outlook:  Summer stock market decline & tapering halt
  • Doc sees the first signs of renewed PHYSICAL SILVER SHORTAGE– 90% silver premiums leap as supply dries-up

The SD Weekly Metals & Markets With The Doc, Eric Dubin, & T. Ferguson is below!

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Did you hear?  The Gold & silver bull market is dead!

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The Fed and media sock puppets will continue taper talk throughout this month.  But the stock market is already showing signs of weakness as the level of asset purchases decline.  Look no further than the pull-back in high flyers in the tech and biotech sectors;  witness the Russell 2000 crossing over the 10% correction line earlier this month.

Bond market trading continues to be odd, at best.  As we discussed last week, some of the money exiting stocks is finding a temporary holding bin in the US bond market, contributing to a counter intuitive decline in bond yields.  If the US economy is doing so well, interest rate sensitive long duration bond yields should rise, not fall.  But it looks like the bond market’s decline in yields has run its course, and the Fed is going to have a hard time finding sufficient buying interest.  Maybe we’ll see even more purchases based out of Belgium, which smells like the product of a hidden Fed swap line being used to support the US bond market.  I can’t prove this theory — at least, not yet.  But something certainly isn’t normal in bond land.

10-Year_US_Bond_May_9_2014

 

In any event, the decline in the 10 year’s yield is probably over, and I continue to believe we’re heading for a larger stock market correction this summer.  Rising interest rates will not help.  As equities and real estate come under pressure, the Fed will be forced to move away from further tapering.  Eventually, liquidity expansion will return.

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We keep bouncing off strong support in both gold and silver.  The pattern is all the more significant in silver given that technical signals momentum traders follow have been ugly.  But the pricing action suggests that physical demand is underpinning the market, and longs buy when the cartel delivers lower prices.  Silver was pushed down to erase part of late last week’s snap-back rally.  But the fact that the cartel wasn’t able to reach last week’s lows is telling.  That, combined with the first signs that the market for 90% US silver coinage is starting to tighten-up again suggests the buying of this latest dip is not trivial.

 

A saleswoman arranges a gold necklace inside a jewellery showroom in the southern Indian city of Kochi

India’s five week election cycle will conclude on Monday. Polls have consistently indicated that BJP and prime minister candidate Narendra Modi maintain a comfortable lead.  This is great news for gold and silver.  Odds are, Modi will usher in relaxation of duties and other restrictions on gold imports.  Gold buyers in India are consistently paying premiums of $120 or more over spot, and that’s not even factoring the full dollar impact of elevated taxes.  Given tight gold supply globally, any incremental increase in demand from India buyers must have Western financial markets masters of the universe concerned.  Final India election results will be published on May 16th.  Keep an eye on this story.  Next week, precious metals markets should react positively to India’s elections.

Nomi Prins

For your weekend review, check out my interview with Nomi Prins.  Her latest book, “All The President’s Bankers,” is a fantastic read.  Click here to access the interview.

Enjoy the weekend — Eric Dubin

 

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