Good evening Ladies and Gentlemen:
Gold closed today up $6.60 to finish the comex session at $1619.00. Silver also finished higher by 20 cents at $27.27. During the early hours within the Euro trading period, gold rose to its zenith at $1626 exactly at the first morning gold London fix and then the bankers went to work knocking gold all the way down to below 1600.00 dollars. However that was short lived as physical buyers came out of the woodwork buying gold as the European debt contagion was catching fire. I will discuss all of these facts with you today. I consider the various commentaries today critical in understanding the mess within Europe.
Right now gold in the access market here are the prices for gold and silver:
gold: $1621.00
silver: $29.19
Today we have a plethora of news for you to digest as we plow through the mine fields discovering the eventual price of gold and silver. Let us head over to the comex and assess trading, inventory movements and amounts of metal standing for delivery.
The total gold comex OI fell by 2054 contracts today as the banking cartel put on a lame attack.
Tonight's new gold OI stands at 421,221 which is very low considering the relatively high price of gold today. The front options expiry month of January saw its OI rise by 15 contracts despite 2 deliveries yesterday. Thus we gained 17 contracts or 1700 oz of gold ounces standing and lost nothing to cash settlements. The front delivery month of February saw its OI fall quite precipitously to 224,763 from 234,311. We are now starting to see the remaining paper players roll into a future month. The estimated volume at the gold comex today was very good at 172,582. The confirmed volume yesterday was also very high at 184,043 contracts.
The total silver comex OI fell by 1413 contracts to rest tonight at 105,688. It seems that the OI around 105,000 is stable and in strong hands. The front options expiry month of January saw its OI fall from 78 to 62 for a loss of 18 contracts. We had 59 delivery notices yesterday so we again gained more silver ounces standing and lost nothing to cash settlements. The next front delivery month of March saw its OI fall 1571 contracts to rest tonight at 57,220. We got some early rollovers. The estimated volume at the silver comex continues to be weak coming in at 37,623. The confirmed volume yesterday was also weak at 38,679.
06 January 2012
Gartman admits he made a bad call on gold
John Shmuel Jan 5, 2012 – 10:53 AM ET | Last Updated: Jan 5, 2012 2:05 PM ET
Investment letter writer Dennis Gartman has declared that he was wrong about gold.
In his daily investment letter Thursday, Mr. Gartman officially reversed his outlook for gold, saying he now views the precious metal as being in a bull market.
The new position follows a month where Mr. Gartman was the subject of some high-profile name calling from fellow investment letter writer, Peter Grandich. Mr. Grandich called Mr. Gartman “one of the Three Stooges” of gold forecasting after the latter declared that gold was officially in a bear market (if you’re wondering, the other two accused of being in that trio are Jeff Christian of CPM Group and Jon Nadler of Kitco).
Mr. Gartman’s reversal comes as he has failed to buy back gold below the price he sold it at a few weeks ago. He said that now that gold priced in euros has taken out its previous interim high, he sees the metal returning to a bull market.
“The bear run that began in August has now officially ended, for the string of lower lows and lower highs is over,” he said in his Gartman Letter. “This does not help us in hoping for/expecting/indeed demanding some weakness into which to buy, but it does give us “permission” to become officially bullish once again.”
Investment letter writer Dennis Gartman has declared that he was wrong about gold.
In his daily investment letter Thursday, Mr. Gartman officially reversed his outlook for gold, saying he now views the precious metal as being in a bull market.
The new position follows a month where Mr. Gartman was the subject of some high-profile name calling from fellow investment letter writer, Peter Grandich. Mr. Grandich called Mr. Gartman “one of the Three Stooges” of gold forecasting after the latter declared that gold was officially in a bear market (if you’re wondering, the other two accused of being in that trio are Jeff Christian of CPM Group and Jon Nadler of Kitco).
Mr. Gartman’s reversal comes as he has failed to buy back gold below the price he sold it at a few weeks ago. He said that now that gold priced in euros has taken out its previous interim high, he sees the metal returning to a bull market.
“The bear run that began in August has now officially ended, for the string of lower lows and lower highs is over,” he said in his Gartman Letter. “This does not help us in hoping for/expecting/indeed demanding some weakness into which to buy, but it does give us “permission” to become officially bullish once again.”
Saudis, Gulf states on war alert for early US-Iran clash
DEBKAfile Exclusive Report January 5, 2012, 10:35 AM (GMT+02:00)
The armies of Saudi Arabia and fellow Gulf Cooperation Council states stood ready Thursday Jan. 5, for Washington to stand up to Iranian threats and send an aircraft carrier or several warships through the Strait of Hormuz into the Persian Gulf. Riyadh has been leaning hard on the Obama administration not to let Tehran get away with its warning to react with "full force" if the USS Stennis aircraft carrier tried to reenter the Gulf or Iran's pretensions to control the traffic transiting the world's most important oil route.
Wednesday night, the Iranian parliament began drafting a bill prohibiting foreign warships from entering the Gulf without Tehran's permission.
debkafile's Washington sources report that Saudi Arabia has warned the Obama administration that Iranian leaders mean what they say; their leaders are bent on provoking a military clash with the United States at a time and place of their choosing, rather than leaving the initiative to Washington. To this end, Iranian officials are ratcheting up their belligerence day after day.
The armies of Saudi Arabia and fellow Gulf Cooperation Council states stood ready Thursday Jan. 5, for Washington to stand up to Iranian threats and send an aircraft carrier or several warships through the Strait of Hormuz into the Persian Gulf. Riyadh has been leaning hard on the Obama administration not to let Tehran get away with its warning to react with "full force" if the USS Stennis aircraft carrier tried to reenter the Gulf or Iran's pretensions to control the traffic transiting the world's most important oil route.
Wednesday night, the Iranian parliament began drafting a bill prohibiting foreign warships from entering the Gulf without Tehran's permission.
debkafile's Washington sources report that Saudi Arabia has warned the Obama administration that Iranian leaders mean what they say; their leaders are bent on provoking a military clash with the United States at a time and place of their choosing, rather than leaving the initiative to Washington. To this end, Iranian officials are ratcheting up their belligerence day after day.
French debt costs rise at bond sale as AAA decision looms
INTERNATIONAL. France sold 7.96 billion euros (US$10.2 billion) of debt, with borrowing costs rising in its first bond auction of the year as credit companies threaten to cut the nation’s AAA rating.
The government sold 4.02 billion euros of benchmark 10-year bonds at an average yield of 3.29 percent, from 3.18 percent on December 1. France, which also auctioned 2023, 2035 and 2041 securities, had aimed to sell a maximum of 8 billion euros. French 30-year bonds pared their declines.
“This is proving to the market again that they can still raise finance without too many difficulties,” said Eric Wand, a fixed-income strategist at Lloyds Bank Corporate Markets in London. “There’s still the threat of a downgrade hanging over France and until we get that situation cleared up you can’t signal the all-clear and it’s still going to be vulnerable.”
France has the biggest debt burden of the six top-rated euro nations, at 85% of gross domestic product. The extra yield investors demand to hold French bonds instead of benchmark German bunds rose to 204 basis points on November 17, the most since 1990, as concern deepened Europe’s debt crisis was spreading.
While the gap was 145 basis points at 12:24 p.m. Paris today, it compares with a premium of 44 basis points for AAA rated Finland and 37 basis points for the Netherlands.
The euro extended its decline against the dollar, reaching the weakest level in 15 months, after French borrowing costs rose. The 17-nation common European currency was 0.8% weaker at $1.2831 against the dollar at 12:10 p.m. London time.
The government sold 4.02 billion euros of benchmark 10-year bonds at an average yield of 3.29 percent, from 3.18 percent on December 1. France, which also auctioned 2023, 2035 and 2041 securities, had aimed to sell a maximum of 8 billion euros. French 30-year bonds pared their declines.
“This is proving to the market again that they can still raise finance without too many difficulties,” said Eric Wand, a fixed-income strategist at Lloyds Bank Corporate Markets in London. “There’s still the threat of a downgrade hanging over France and until we get that situation cleared up you can’t signal the all-clear and it’s still going to be vulnerable.”
France has the biggest debt burden of the six top-rated euro nations, at 85% of gross domestic product. The extra yield investors demand to hold French bonds instead of benchmark German bunds rose to 204 basis points on November 17, the most since 1990, as concern deepened Europe’s debt crisis was spreading.
While the gap was 145 basis points at 12:24 p.m. Paris today, it compares with a premium of 44 basis points for AAA rated Finland and 37 basis points for the Netherlands.
The euro extended its decline against the dollar, reaching the weakest level in 15 months, after French borrowing costs rose. The 17-nation common European currency was 0.8% weaker at $1.2831 against the dollar at 12:10 p.m. London time.
Safe haven status returning to gold as euro sinks after weak bond sales
INTERNATIONAL. Wholesale market prices to buy gold touched a two-week high at US$1,625 per ounce as London opened for business on Thursday, before pulling back to US$1,609 as commodities and world stock markets fell, led by Eurozone banking shares.
The 17-nation Euro currency fell to its lowest level in 16 months vs. the US Dollar.
Prices to buy gold and other precious metals had remained "well bid throughout" Asian trade on Thursday said a note from a Hong Kong dealer.
"Jewellers were restocking [and] demand was good in southern India," says bullion merchant Chanda Venkatesh of CapsGold in Hyderabad, speaking to Reuters and citing a southern Indian festival.
"Jewelry demand for gold is pretty good," agreed another dealer, but added that the price for gold futures holders to 'exchange for physical' (EFPs) fell hard overnight, possibly ahead of bullion sales due to New Year rebalancing in the big commodity-tracking investment indices.
"Gold appears at present to be living up more to its status as a safe haven again," says a note from Commerzbank, citing "geopolitical risks" in Western sanctions against Iran, plus the ongoing Eurozone debt crisis.
In Iraq today, at least 50 people were killed in a series of bomb attacks, extending the death-toll since US troops pulled out in mid-December, while protests over rising fuel prices in Nigeria, the world's 10th largest oil producer, were broken up by police.
Base metal and other commodity prices fell hard, but European crude oil contracts pushed higher to US$113 per barrel despite the rising US Dollar.
Silver prices fell back 3% from a 3-week high at US$29.70 per ounce.
"[Wednesday] saw gold finally beginning to break away from trading in step with risk assets," said one London dealer this morning.
The correlation between gold prices and the VIX volatility index of daily movement in US equities – positive during most of 2011 – recently fell to its most negative reading in two years, notes Reuters Technical analyst Wang Tao.
"We believe that gold prices will recover in 2012, and we maintain our bullish posture," says HSBC analyst James Steel, despite cutting his average forecast for this year from $2025 per ounce to $1850 this week.
Eurozone investors looking to buy gold today saw the price touch 3-week highs above €40,000 per kilo as the single currency slumped on the forex market to its lowest level against the Dollar since Sept. 2010 at US$1.28.
The 17-nation Euro currency fell to its lowest level in 16 months vs. the US Dollar.
Prices to buy gold and other precious metals had remained "well bid throughout" Asian trade on Thursday said a note from a Hong Kong dealer.
"Jewellers were restocking [and] demand was good in southern India," says bullion merchant Chanda Venkatesh of CapsGold in Hyderabad, speaking to Reuters and citing a southern Indian festival.
"Jewelry demand for gold is pretty good," agreed another dealer, but added that the price for gold futures holders to 'exchange for physical' (EFPs) fell hard overnight, possibly ahead of bullion sales due to New Year rebalancing in the big commodity-tracking investment indices.
"Gold appears at present to be living up more to its status as a safe haven again," says a note from Commerzbank, citing "geopolitical risks" in Western sanctions against Iran, plus the ongoing Eurozone debt crisis.
In Iraq today, at least 50 people were killed in a series of bomb attacks, extending the death-toll since US troops pulled out in mid-December, while protests over rising fuel prices in Nigeria, the world's 10th largest oil producer, were broken up by police.
Base metal and other commodity prices fell hard, but European crude oil contracts pushed higher to US$113 per barrel despite the rising US Dollar.
Silver prices fell back 3% from a 3-week high at US$29.70 per ounce.
"[Wednesday] saw gold finally beginning to break away from trading in step with risk assets," said one London dealer this morning.
The correlation between gold prices and the VIX volatility index of daily movement in US equities – positive during most of 2011 – recently fell to its most negative reading in two years, notes Reuters Technical analyst Wang Tao.
"We believe that gold prices will recover in 2012, and we maintain our bullish posture," says HSBC analyst James Steel, despite cutting his average forecast for this year from $2025 per ounce to $1850 this week.
Eurozone investors looking to buy gold today saw the price touch 3-week highs above €40,000 per kilo as the single currency slumped on the forex market to its lowest level against the Dollar since Sept. 2010 at US$1.28.
Soros says EU break-up would be catastrophic: report
"Today, the euro is potentially endangering the political cohesion of the European Union," the Business Line newspaper cited Soros as saying in the south Indian city of Hyderabad.
"If the common currency were to break down, it will lead to the break up of the European Union itself. And this will be catastrophic not only for Europe but also for the global financial system."
MF Global trustee tussles with regulators: report
Freeh, a former director of the Federal Bureau of Investigation and who represents MF Global's parent company, has asserted attorney-client privilege in deciding not to release certain documents to the CFTC, according to his office and people familiar with the matter, the Journal said.
The dispute is complicating efforts to learn how the firm lost the customer funds and to return the money to its owners and could slow the investigation, the Journal said, citing people familiar with the investigation.
Market Outlook 2012 - Thoughts of a Professional Investor
By: Deric O. Cadora | Thu, Jan 5, 2012
An exercise I find quite useful to perform at the beginning of each year involves putting together an executive summary of the prognostications found in my Member Letter. In this fashion, any major discrepancies in the big picture outlook can be identified and addressed. The methodology discussed in the Member Letter involves cycle analysis, primarily for the dollar, stocks, gold, and the CRB. The outlook for each of these asset classes is outlined below.
The U.S. Dollar in Decline
More so than the last few years, I believe 2012 and even 2013 will be dominated by the behavior of the U.S. Dollar. A currency war is underway... a race to devalue... and I have little doubt the United States will "win" this war. As anticipated in the 2011 Outlook, the dollar formed a major low last spring, though the low was not quite immersed in the sense of crisis I expected. That crisis, I believe, will arrive with the next 3-year cycle low in the autumn of 2014.In fact, the rally out of the 2011 low may be exhausting itself as I type. Public sentiment for the dollar is running very hot, and dollar cycles are behaving exactly as would be expected in the vicinity of a major trend change. Furthermore, as I will discuss below, commodities just left behind a major cyclical low in December, lending credence to the presence of a turning point for the dollar.
Given the macroeconomic backdrop in Europe, almost no one believes the dollar can fall. Therefore, once a trend change becomes obvious, everyone will be rushing for the exit simultaneously. The key level to watch during the decline is, of course, the 3-year cycle low from May 2011. Once that level is breached, we will have a failed cycle on our hands and should see generally lower prices for the buck until the next major cycle low in 2014.
Commodities - An Inflationary Storm Has Arrived
Gold – Is It Still Worth Buying?
By Esther Tanquintic-Misa:
January 5, 2012 9:15 PM EST
After a strong year in 2011, with gains registered at roughly 15 per cent in just 12 months, gold has been forecast to average $1,850 a troy ounce for 2012 and 2013 by HSBC. The question now hangs: Is gold - long considered a safe haven to guard one's assets - still worth buying?
The answer could still be yes.
"For investors who have a strong opinion on where gold is headed, or for traders looking to make a quick return, there is a wealth of options available. Perhaps the most direct method comes from the February GC Gold futures contract offered on the COMEX. The February contract is currently the most heavily traded future and will offer the best liquidity," Jared Cummans wrote on www.seekingalpha.com.
January 5, 2012 9:15 PM EST
After a strong year in 2011, with gains registered at roughly 15 per cent in just 12 months, gold has been forecast to average $1,850 a troy ounce for 2012 and 2013 by HSBC. The question now hangs: Is gold - long considered a safe haven to guard one's assets - still worth buying?
The answer could still be yes.
"For investors who have a strong opinion on where gold is headed, or for traders looking to make a quick return, there is a wealth of options available. Perhaps the most direct method comes from the February GC Gold futures contract offered on the COMEX. The February contract is currently the most heavily traded future and will offer the best liquidity," Jared Cummans wrote on www.seekingalpha.com.
Why Has Gold Been Down?
By Jeff Clark, Casey Research
In spite of some short-term fixes, there remains no real resolution to the sovereign debt issues in many European countries. We're certainly not spending less money in the US, and now we're bailing out Europe via currency swaps with the European Central Bank. Shouldn't gold be rising?
Yes, but nothing happens in a vacuum. There are some simple explanations as to why gold remains in a funk.
The MF Global bankruptcy, the seventh-largest in US history, forced a high degree of liquidation of commodities futures contracts, including gold. Many institutional investors had to sell whether they wanted to or not. This is similar to why big declines in the stock market can force funds and other large investors to sell some gold to raise cash for margin calls or meet redemption requests.
The dollar has been rising. Money fleeing the Eurozone has to go somewhere, and some of it is heading into US bonds, which means first converting the foreign currency into dollars.
It's tax-loss selling season, something that's also impacting gold stocks. Funds and individual investors are selling underwater positions for tax purposes. Funds also sell their big winners to lock in gains for the year and dress up quarterly reports.
In spite of some short-term fixes, there remains no real resolution to the sovereign debt issues in many European countries. We're certainly not spending less money in the US, and now we're bailing out Europe via currency swaps with the European Central Bank. Shouldn't gold be rising?
Yes, but nothing happens in a vacuum. There are some simple explanations as to why gold remains in a funk.
The MF Global bankruptcy, the seventh-largest in US history, forced a high degree of liquidation of commodities futures contracts, including gold. Many institutional investors had to sell whether they wanted to or not. This is similar to why big declines in the stock market can force funds and other large investors to sell some gold to raise cash for margin calls or meet redemption requests.
The dollar has been rising. Money fleeing the Eurozone has to go somewhere, and some of it is heading into US bonds, which means first converting the foreign currency into dollars.
It's tax-loss selling season, something that's also impacting gold stocks. Funds and individual investors are selling underwater positions for tax purposes. Funds also sell their big winners to lock in gains for the year and dress up quarterly reports.
These 5 forecasters see Gold hitting $3000 in 2012 and beyond
By Lorimer Wilson
Back in 2009 I began keeping track of those financial analysts, economists, academics and commentators who were of the opinion that it was just a matter of time before Gold reached a parabolic peak price well in excess of the prevailing price. As time passed the list grew dramatically and at last count numbered 140 such individuals who have gone on record as saying that gold will go to at least $3,000 - and as high as $20,000 - before the gold bubble finally pops.
Goldrunner: $3,000
Goldrunner uses fractal analysis off the gold bull market of the 1970s to arrive at his assessment of where gold is now in the bull run and where it is going. In his November, 2011 article he set forth the basics of his technical analysis and said:
"Early this year we suggested a 50% rise in Gold to $1860 - $1,920 into mid-year. Now, we see the Gold tsunami realizing an approximate 100% rise that will crest at $3,000+ into the middle of 2012."
Bob Chapman: $2,500 - $3,000
In Chapman's August, 2011 issue of the International Forecaster he had this to say about gold:
"Debt monetization will Lead to ever-higher inflation...and explain the systemic problem of many nations, which have nowhere to turn to except the creation of money and credit to temporarily keep their economies going...[and] when you put it all together you get higher gold and Silver prices...We would expect a move to $2,000 to $2,200, some backing and filling and a move to $2,500 to $3,000 by the end of February 2012, as we earlier predicted."
Ian McAvity: $2,500 - $3,000
Ian McAvity, author of the newsletter, Deliberations on World Markets, speaking on Mineweb.com's Gold Weekly podcast in June of 2010, said that while he is a gold bug, buying gold in the current economic climate is very much like buying life insurance for a short term capital gain. McAvity says that he expects gold to head north toward the $3,000 level over the next two years [i.e. sometime in 2012] but, says he cannot yet quantify "the magnitude of the crisis that takes it higher". According to McAvity, one of the most critical factors for the gold price currently is the return on risk-free capital which is currently negative in real terms saying:
"As long as the yield on treasury bills is 40 to 50 basis points, then the perceived inflation rate is 200 to 300 basis points - basically holding paper is negative. And that is one of the strongest underlying features of the gold market and we basically have the central bankers and their quantitative easing load saying that they're going to try and keep interest rates as close to zero as possible, until they successfully borrow their way out of debt. The concept of borrowing your way out of debt is I guess, the new math that I haven't quite grasped yet."
Back in 2009 I began keeping track of those financial analysts, economists, academics and commentators who were of the opinion that it was just a matter of time before Gold reached a parabolic peak price well in excess of the prevailing price. As time passed the list grew dramatically and at last count numbered 140 such individuals who have gone on record as saying that gold will go to at least $3,000 - and as high as $20,000 - before the gold bubble finally pops.
Goldrunner: $3,000
Goldrunner uses fractal analysis off the gold bull market of the 1970s to arrive at his assessment of where gold is now in the bull run and where it is going. In his November, 2011 article he set forth the basics of his technical analysis and said:
"Early this year we suggested a 50% rise in Gold to $1860 - $1,920 into mid-year. Now, we see the Gold tsunami realizing an approximate 100% rise that will crest at $3,000+ into the middle of 2012."
Bob Chapman: $2,500 - $3,000
In Chapman's August, 2011 issue of the International Forecaster he had this to say about gold:
"Debt monetization will Lead to ever-higher inflation...and explain the systemic problem of many nations, which have nowhere to turn to except the creation of money and credit to temporarily keep their economies going...[and] when you put it all together you get higher gold and Silver prices...We would expect a move to $2,000 to $2,200, some backing and filling and a move to $2,500 to $3,000 by the end of February 2012, as we earlier predicted."
Ian McAvity: $2,500 - $3,000
Ian McAvity, author of the newsletter, Deliberations on World Markets, speaking on Mineweb.com's Gold Weekly podcast in June of 2010, said that while he is a gold bug, buying gold in the current economic climate is very much like buying life insurance for a short term capital gain. McAvity says that he expects gold to head north toward the $3,000 level over the next two years [i.e. sometime in 2012] but, says he cannot yet quantify "the magnitude of the crisis that takes it higher". According to McAvity, one of the most critical factors for the gold price currently is the return on risk-free capital which is currently negative in real terms saying:
"As long as the yield on treasury bills is 40 to 50 basis points, then the perceived inflation rate is 200 to 300 basis points - basically holding paper is negative. And that is one of the strongest underlying features of the gold market and we basically have the central bankers and their quantitative easing load saying that they're going to try and keep interest rates as close to zero as possible, until they successfully borrow their way out of debt. The concept of borrowing your way out of debt is I guess, the new math that I haven't quite grasped yet."
SilverDoctors: 'US Deploys Troops in Israel for Iran War'
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SilverDoctors: HSBC & Brink's Receive Another 2 Million Ounces of...
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SilverDoctors: PSLV Premium to Net Asset Value Nears 30%!
SilverDoctors: PSLV Premium to Net Asset Value Nears 30%!: In the wake of the freezing/ confiscation of gold and silver in the MFG collapse (see MFG client Jason Fine who had 15,000 ounces of his own...
SilverDoctors: Ted Butler: Commercials Have No Interest in Shorti...
SilverDoctors: Ted Butler: Commercials Have No Interest in Shorti...: Ted Butler has allowed the publication of a few paragraphs from his latest private subscription report, which includes some doozies. Butle...
SilverDoctors: Ann Barnhardt: MFGlobal Will End in Bank Holiday
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SilverDoctors: KPMG plans timely return of MF Global assets
SilverDoctors: KPMG plans timely return of MF Global assets: 2 months and counting after their accounts were frozen and confiscated is a 'timely return'!?! More like the cartel has just realized that ...
SilverDoctors: MF Global Client Learns Mr. Dimon Confiscated His ...
SilverDoctors: MF Global Client Learns Mr. Dimon Confiscated His ...: Maybe its because The Doc worked Sunday and Monday this week, but it's been a long week and we could use some levity. Perhaps this man jus...
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