Category: Gold

Gold, silver getting roughed up by little risk aversion at present  Kitco NEWS

Gold, silver prices pressured by rallying global stock markets  Kitco NEWS

Gold price struggling to find momentum following mixed U.S. CPI data  Kitco NEWS

Santiago de Chile, 18 December 2019: Gold Fields Limited (Gold Fields) (JSE, NYSE: GFI) is pleased to announce that the Atacama Environmental Assessment Commission today approved the environmental impact study for its Salares Norte project in Chile.

Johannesburg, 10 October 2019: Ten Australian mining, energy and resource companies, including Gold Fields, have joined together to develop a practical toolkit to pre-screen for modern slavery risks within supply chains.

The U.S. Treasury Department announced Monday that China is no longer on a list of countries deemed to be “currency manipulators.” The timing was awfully convenient, coming just ahead of an expected Phase One trade deal between the two powers.

Nobody actually believes China has stopped manipulating the value of its yuan versus the U.S. dollar.

But the Trump administration is apparently willing to accept a certain degree of currency rigging in exchange for other concessions on trade.

It’s not as if the U.S. government has a stellar record when it comes to heeding principles of free and fair currency markets. It (through the Exchange Stabilization Fund and other vehicles) is constantly trying to manage the value of the dollar versus the currencies of trading partners, too.

It’s not as if equity markets, interest rate markets, and precious metals futures markets are free from manipulation, either. Price rigging schemes of various sorts – ranging from small-scale “spoofing” to large-scale suppression – occur practically around the clock.

Occasionally, there are prosecutions.

Last year, for example, the U.S. Department of Justice criminally charged several JPMorgan traders for fraud and racketeering in a conspiracy to rig precious metals markets.

Yet previous criminal investigations by federal regulators have often gone nowhere, with evidence of manipulation inexplicably disregarded.

Congressman Alex Mooney from West Virginia has asked Attorney General Bill Barr to look into price rigging, particularly within the silver market which is regularly subjected to artificial volatility induced by large institutional traders (i.e., bullion banks) with outsized positions.

The manipulation may be occurring on an even larger scale if the Federal Reserve or the U.S. government or its agents are involved. It is widely suspected but difficult to prove since the Fed operates in secret and the government isn’t keen on investigating itself.

Regardless of what the motivation may be, it is an objective fact that the supply of futures contracts surged last year in both gold and silver markets.

Open interest in gold was up over 70%. Put another way, the supply of paper gold rose by 70% or 33 million new ounces – absorbing much of the growing demand for the metal and preventing prices from rising even more than they did.

Even as vastly more contracts for gold exchanged hands, the amount of physical gold available for delivery in vaults barely budged. Thus, while gold itself is scarce and highly sought after, futures contracts can seemingly be generated in unlimited quantities to divert buyers away from the real thing.

According to Dave Kranzler of Investment Research Dynamics, “Since the introduction of paper gold, the Comex – gold and silver trading – has evolved into what can only be described as a caricature of a ‘market.’ The open interest in gold contracts is nearly 10 times the amount of physical gold reportedly held in Comex vaults. It’s 60 times the amount of ‘registered’ gold, the gold designated as available for delivery.”

Some gold bugs expect an eventual COMEX default – a force majeure, a run on the bank for physical metal that sends prices explosively higher. While such a scenario is possible, it is not necessarily probable.

The powers that be have been adept at playing the paper charade to their advantage for decades. They may be unscrupulous or even evil, but they are not dumb.

The campaign popularized briefly a few years ago of “Buy Silver, Crash JPMorgan” was based on a misunderstanding of the mega banks’ short exposure to silver.

The banks aren’t making an enormous long-term bet that silver will fall and risking everything on it. They are in the markets with complex hedges and trading algorithms that can generate micro-profits on minute-by-minute moves up or down.

Yes, the banks can suppress rallies and trigger sell-offs by going heavily short – even selling more ounces than they could possibly deliver. But the reality is, they will never have to settle their contracts in physical metal.

Financial institutions are playing in a cash market tied to precious metals, not the actual physical market.

The best physical investors can hope for is that the cash/paper markets for gold and silver lose credibility and diverge from real-world pricing for industrial users and wholesale bullion buyers.

Or, alternatively the powers-that-be could avoid such an embarrassment by standing aside while prices reset higher, and then choose a new level at which to try to hold the line.

Ultimately, however, the supply of physical precious metals cannot be manipulated into existence any bank or government. Either it’s real and it’s available or it isn’t.

The key to defeating market riggers – or at least rendering their paper shenanigans irrelevant – is for buyers to avoid derivative markets and insist on obtaining physical metal from physical sources.

Source: Clive Maund for Streetwise Reports   01/13/2020

Technical analyst Clive Maund charts silver’s progress in comparison to gold’s following recent world events.

Silver’s recent rally looks diminutive and stunted compared to gold’s, but that’s normal at this early stage of a new bull market, when silver typically underperforms gold due to investors being risk-averse and silver being perceived as more risky and volatile than gold.

Nevertheless, as we can see on its latest 6-month chart, silver did manage to break out of its reactive downtrend in force from early September. Last week, at the time Iran lobbed missiles at U.S. bases in Iraq, it had a go at breaking above its late September highs. But it was not up to the task and fell back, putting in a reversal candle on big volume, which suggests that it probably has further to fall short term—perhaps back to the upper boundary of the downtrend channel shown. But with the overall tenor of this chart positive, it should then turn higher again.

Wheeling out the 10-year chart once more, which gives us the big picture, we see that, although so far looking much more restrained than gold, silver appears to be ascending away from the second low of a giant double-bottom pattern. The advance out of the lows of last summer was on good volume, which has driven both volume indicators quite strongly higher. This is bullish and marks a breakout drive out of the base pattern, with a completed breakout being signaled by silver breaking above the resistance, approaching and at $22/ounce. A break above this level will usher in a period of much more dynamic advance.

The latest COT chart shows that Commercial short and Large Spec long positions are still at fairly extreme levels, which makes more corrective action over the near term likely.

Conclusion
Although last week’s reversal candle and the current rather extreme COT readings make short-term weakness likely, perhaps to the upper boundary of the fall downtrend, the overall picture for silver is favorable, with it readying to break out of a giant, 5-year plus base pattern to follow gold higher. Marked acceleration is likely to follow a breakout above the $22 level.

Article originally published on CliveMaund.com on Sunday, Jan. 12, 2020.

Clive Maund has been president of www.clivemaund.com, a successful resource sector website, since its inception in 2003. He has 30 years’ experience in technical analysis and has worked for banks, commodity brokers and stockbrokers in the City of London. He holds a Diploma in Technical Analysis from the UK Society of Technical Analysts.

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Charts and graphics provided by the author.

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The above represents the opinion and analysis of Mr Maund, based on data available to him, at the time of writing. Mr. Maund’s opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund’s opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.