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Gold, Discussion
mullokintyre
post Posted: Jul 9 2020, 12:48 PM
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From GATA
QUOTE
“We are all used to the bullion banks covering their shorts on Comex by waiting until the speculators are over-bullish and vulnerable to mark-downs that trigger their stops. Algorithmic traders go from long to short in a heartbeat as well, and they dump contracts into a falling market, speeding up the decline. We should say at this juncture that the Managed Money speculators are short-term, attracted by futures leverage, and their gold position is often part of a wider risk strategy deployed by hedge funds. They do not intend to stand for delivery. The wider investment world taking strategic portfolio decisions does not often get involved with gold, so the Comex gold contract has been a secular play.

In the non-speculative category, the bullion banks (Swaps) had 56% of the shorts and the Producer/Merchants 44%. Mark-to-market value of the Swaps net short position was $25bn. Of the speculative longs, the managed money category (hedge funds) held 69%, and at 296,106 long contracts it was almost a record. There was a high level of bullishness; easy pickings for the bullion banks, who by the following December drove the price down to $1120, reducing their net shorts to under 50,000 contracts.

It was a game that evolved out of Comex futures being used simply to offset long bullion positions at the LBMA. Over time, bullion bank traders increased their trading position limits, as opposed to their pure hedging activity, making easy money jobbing the other side of Managed Money trades.

Now look at the current situation, with the gold price at decade highs ($1775) and open interest at 561,628 (30 June).

Bullion banks are between a rock and a hard place. For years they’ve been playing the hedge funds as an angler hooks and plays a fish. That game has ceased and there is no easy way for them to get level. For the moment they are trying to put a lid on the price, but the cost has been rising open interest, and therefore rising mark-to-market positions.
The August active contract runs off the board at the end of this month and bullion banks are likely to be forced into large delivery volumes again. Furthermore, the exchange for delivery arbitrage facility between Comex and the LBMA is broken, allowing Comex premiums to London spot to go unchallenged.

It is increasingly possible the gold contract is evolving into deep crisis, and that force majeure might have to be declared if, as seems increasingly inevitable, a wider banking crisis ensues.”


The comeuppance frot he Commercial banks scamming the gold price is something I have been waiting for.
Its a bit like the the line from Fiddler on the Roof. "It seems we have been waiting for the messiah for a very long time".
Maybe this time they will finally get crushed.
Wouldn't be bad for the price of PM's either!.
Mick




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sent from my Olivetti Typewriter.
 
nipper
post Posted: Jul 9 2020, 09:02 AM
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ASX-listed gold miners and explorers are positioned for another positive session after spot prices for the precious metal sailed passed $US1800 an ounce in trade overnight, setting fresh post-GFC highs.

After hitting technical resistance just below the $US1800 milestone in US trade one day earlier, prices on the spot market last night jumped to as high as $US1818 an ounce. Prices have eased back to just above $US1810 heading into early Asian trade.

Demand for physical gold has seen sustained support from investors looking to hedge inflation risk in an environment where cash rates are not expected to be lifted from historic lows for the foreseeable future and the supply of money is increased.

.



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Jul 4 2020, 05:10 PM
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With so much medical, economic, and political uncertainty, what’s the best asset class for investor allocations today? The best asset class is also the oldest asset class — gold.

For the past three months, gold has been trading in a narrow range between US$1,685 per ounce and US$1,750 per ounce (that’s a 1.9% range above or below the central tendency of US$1,720 per ounce).

In recent days, that range has narrowed further to a US$1,720–1,745 per ounce range, a mere 0.7% above or below the US$1,732.50 centre of the range.

When trading in a volatile asset narrows to that extent, it’s a sign that the asset is ready for a material technical breakout. The question is will gold breakout to the upside or downside?

Here are the fab four signs that gold will break out to the upside:

The first sign is that it’s already happening. In early morning trading on 22 June, gold broke out to US$1,770 per ounce. That’s a decisive break above the prior US$1,750 per ounce high end of the recent trading range. Of course, we’re not day traders and another pullback is always possible. Still, this kind of decisive move is confirmation that the upside breakout thesis is correct.

The second sign is continued strong buying of gold by central banks. The central banks as a whole went from net sellers to net buyers of gold in 2010. The recent buying has been growing larger, now around 500 tonnes per year. That’s a huge amount considering that the total official supply of gold is only 34,000 tonnes. When central banks are buying, you should ask yourself what they’re seeing that everyday investors may be missing.

The third factor is that global mining output is flat at around 3,500 tonnes per year. Output is not going down, but gold is getting harder to find despite low costs of capital, higher gold prices, and improved technology. When supply is flat and demand is up, then prices have nowhere to go but up.

The fourth factor is the emergence of a two-tier market. Gold futures prices and London market prices are around US$1,740 per ounce recently. But, if you call a real dealer to buy real gold, the price they quote is ‘spot plus commission’. That’s fine, but the commissions have been expanding from 2% to 4%, to 10%, and even higher in some cases.

This means that US$1,740 per ounce gold is really US$1,915 per ounce with a 10% commission. That higher commission is not the result of dealer greed. It’s the result of scarcity and the dealer’s efforts to balance supply and demand.

What it really means is that real price of gold is closer to US$1,850 per ounce once the excess commission is added to the spot price. When it comes to gold prices, forget New York and London. Real prices are already higher than you know.

Gold is an inflation hedge for obvious reasons. It is also a deflation hedge because deflation will cause central banks to create inflation by raising the price of gold. Gold is also liquid in all states of the world. Physical gold cannot be electronically hacked, frozen, or seized. A 10% allocation of investible assets to gold is the best cure for COVID-19.

Jim Rickards



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

Said 'Thanks' for this post: mullokintyre  
 
nipper
post Posted: Jun 13 2020, 11:20 AM
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Gold to benefit from ongoing Fed Intervention

https://www.sharecafe.com.au/2020/06/12/gol...d-intervention/

1. Equities are expensive
2. Fed Policies Exacerbate Income Equality
3. Which brings us to gold
4. Silver emerging from Gold's shadow
QUOTE
Summary

There is a remarkable disconnect between Wall Street and Main Street. Markets have rallied sharply due to the unprecedented amount of liquidity injected into them, while most investment funds remained underweighted, and are now being forced back into the markets.
The economic and financial damage will be long-lasting and will provide ongoing support for the current precious metals rally. Gold and silver have a major role to play and there is strong upside potential with respect to both, especially if we use their post-GFC price performances as a guide ..




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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
mullokintyre
post Posted: Jun 10 2020, 10:26 AM
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Maybe time for another gold run.
Most of mine up today.
RMS is up on strength of some good drill results.
Mick



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sent from my Olivetti Typewriter.
 
nipper
post Posted: May 30 2020, 03:59 PM
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The Case for Gold
QUOTE
...physical gold has zero credit risk, is highly Iiquid, has generated strong long-term returns and has proved to be an effective hedge against a range of unpleasant economic outcomes, of which high inflation is just one.

https://www.livewiremarkets.com/wires/gold-...-inflation-myth

plus; Key similarities (4) and differences (7) between the GFC and COVID-19



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 

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mullokintyre
post Posted: May 27 2020, 06:01 PM
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In Reply To: mullokintyre's post @ May 18 2020, 10:18 AM

And just like that, it gets crushed.
First time for six weeks its has been below 2600.
Time for some consolidation, keep ones powder dry until the next run/
The funnymentals have not changed, every CD is QE'ing like there is no tomorrow.
Debasing fiat currencies never ends well.
Mick



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sent from my Olivetti Typewriter.
 
mullokintyre
post Posted: May 18 2020, 10:18 AM
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Gold smashed the 1700 USD level, and the asian markets are pushing it towards the 1800 level.
Lifes good.
Mick



--------------------
sent from my Olivetti Typewriter.
 
mullokintyre
post Posted: May 18 2020, 10:18 AM
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Gold smashed the 1700 USD level, and the asian markets are pushing it towards the 1800 level.
Lifes good.
Mick



--------------------
sent from my Olivetti Typewriter.
 
mullokintyre
post Posted: May 18 2020, 10:18 AM
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Posts: 2,531
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Gold smashed the 1700 USD level, and the asian markets are pushing it towards the 1800 level.
Lifes good.
Mick



--------------------
sent from my Olivetti Typewriter.
 
 


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