Beginning with February 24th, 2013, the tide has changed against the market manipulators and little by little the curtain is being pulled back to expose to the world what really is going on that the government and the media have ignored for so long. I have stood my ground against the banks that have engaged in market manipulations under their proprietary trading departments. What has been taking place the press would never report.
Ever since Goldman Sachs’ Robert Rubin and Larry Summers worked to get Glass Steagall repealed, the financial world has never been the same. These people have not been “traders” but manipulators for they are only interested in the “guaranteed trade”. They have put out bogus research and misled people into buying #$%$ and have then turned around and trade against their clients knowing who has what position. The level of inside info is off the charts.
What's a cartel to do when a NFP winds up being this awful? Throw the kitchen sink at gold on the Comex open, that's what. In the first minute of pit trading gold hit its 1% limit in about 3 nanoseconds. Any worried spec shorts had to be hearing the Hallelujah Chorus at that point. The next 9 minutes saw fierce price capping at the ubiquitous number I always circle on my pad: $1241.60. With no technicals in sight the minute chart was as follows:
8:31 AM: $1240.30
8:32 AM: $1238.50
8:33 AM: $1240.20
8:34 AM: $1241.40
8:35 AM: $1241.60
8:36 AM: $1242.70
8:37 AM: $1243.80
8:38 AM: $1241.70
8:39 AM: $1240.00
Volume was very heavy, with 8,304 contracts trading in the first minute. A whopping 22,373 Feb. contracts traded in the first 9 minutes yet gold seemingly achieved perfect equilibrium between buyers and sellers at exactly +1.00%! This is impossible of course, and only a kitchen sink being thrown at gold prevented a monster rally. Nearly 70 tons of gold traded in those 9 minutes, an amount equal to nearly 6 times the entire available dealer gold inventory at the Comex. The next hour and 10 minutes showed a real tight range right under the 1% limit. While gold did add another $3-4 after 10:00 AM any further rally attempts were still well-contained. Interestingly even the PM fix showed a gain over the AM fix of exactly +1.00%.
Last Friday's close showed a weekly gain of $24.60, or exactly +2.00%. While today's Comex close technically shows a follow through weekly gain it is a puny $8.90, not much of a follow through. In this environment of suppression asking for 3 consecutive weekly gains is a lot. In fact it hasn't happened since 2011. If next week bucks that, or any other cartel pattern we could be close. At the current rate of disillusioned workers falling off the official unemployment count we are now only 7 or 8 million more unemployed workers from having full employment. Orwell lives and his name is MOPE.
Whether they have the algo guts to gun for the $1200 mark is highly debatable with the resiliency of late. If so the loud roar will be coming from China, who will be cheering them on.
Without demand at higher prices, the price will not rise. Snippet....
No follow-through on a weekly basis either?
Gold was firmly being capped today at $1230. Minute charts show at least 11 attempts to break through between 8:20 and 8:36 AM, but the algos set up camp there. Volume was low, with only 400 - 600 contracts required each minute to keep it there. It's funny how that with flash crashes the norm only selling 1-2 tons per minute is now considered paltry. Like the critters in Animal Farm conditioning people to a false reality becomes accepted.
As I have said before I believe that in addition to the daily percentage caps there are also weekly percentage limits. There may also be monthly limits although I've done no research on that one. In the past 2 years though going back to Jan 1 of 2012 out of 105 weeks there have been a total of 17 weeks that have exceeded 2% gains. Of those 17 weeks only 10 exceeded 3%, and a mere 3 exceeded 4%. The highest single weekly gain was +$64.60, or +5.3%, which occurred from July 5 to July 12th of this year. As you may remember that occurred in one single trading day. This weekly gain limit is in my opinion the ultimate effect of the 2%, 1%, steady, down hard manipulation. By doing so the cartel can trick the technicians into further selling, and reverse any longer term trend gaining momentum.
What is remarkable about the past 2 years is how not only have there been no follow-through rally days allowed, there have been virtually no follow-through weeks allowed either. Amazingly only three times have there been consecutive weeks that exceeded 2% gains. (weeks ending 1/25 and 2/1 of 2012, along with weeks 9/6 and 9/13, & 10/21 and 10/28 of this year.) In other words out of 105 trading weeks only 3 had another rally week that followed up. That puts the odds of no a follow-through week at 97.1%! Talk about an iron lid. With 2 weeks until Feb. op. ex. and FND it would be standard fare to sit on gold the rest of this month.
Bull it should take 20 years for Germany to get it back. Russell seems perplexed that they have refused to audit the gold since the 1950's.
Richard Russell: Is U.S. avoiding gold revaluation
because it has lost its gold?
Richard Russell, speculates today that the United States
has been avoiding a traditional method of reliquefying its
government, an upward revaluation of gold, because it
no longer really has its gold reserves. Russell concludes:
“If it’s true that the United States has gotten rid of a large
portion of its gold, this could turn out to be one of the
greatest economic scandals in U.S. history. Technically,
gold is part of the Treasury holdings and is owned by the
citizens of the United States. It’s our gold; show it to us.
There is something funny about why they won’t proceed
with an audit. Something strange is going on.”
TF Wednesday, January 8, 2014 at 1:48 pm
Almost a year ago, the German government put in a formal request to reclaim (repatriate) a portion of their gold reserves held outside of Germany. Reports on the progress of this initiative have raised quite a few questions.
Here's the first report, from ZeroHedge and released on Christmas Eve:
At the time the plan was announced, many in the gold community made note that it would take over 8 years for Germany to reclaim this portion of its foreign reserves. Seven hundred metric tonnes...though a lot of gold...should simply be sitting in New York, London and Paris vaults, collecting dust. Why not just brush it off, certify that the bars numbers match up and then ship that shiny stuff back to Germany. No big deal and certainly not something that should take eight years to accomplish.
Now news comes that, in the first year of the plan, Germany only received back 37.5 metric tonnes of their gold. This is only 5% of the total repatriation amount. At this rate, it will take twenty years, not eight, to reclaim the gold.
Further muddying the waters are reports that this gold came exclusively from the vaults of the Federal Reserve Bank of New York (FRBNY). If that was the case, then the gold returned should have been a simple transfer. The Germans deposited the gold there decades ago. It is being shipped back to them now. Problem is, it wasn't a simple transfer!
Apparently, The Bundesbank took the unusual step of having "its" bars assayed, melted and recast into London Good Delivery form before taking delivery. Now, why would they do that? And why would they do this in the U.S. and not in Frankfurt? These bars should simply be the same bars that were deposited decades ago. Do they not trust the FRBNY? Are these not the same bars?
The mint expects to have stocks of the coins again by the end of January, it said in a statement e-mailed today. Gold dropped to a six-month low of $1,182.27 an ounce in London on Dec. 31, capping the largest annual decline since 1981.
“Since the dip in the price of gold we have seen increased demand for our gold bullion coins from the major coin markets, and this presently shows no sign of abating,” the mint said in the statement. “The Royal Mint continues to supply to its customers and is increasing production to accommodate the higher demand.”
Watching Indian bureaucrats attempt to halt more than one billion human beings’ desire for gold has been one of the more entertaining and pathetic stories of all of 2013. It is one that I have covered on many occasions, the latest being my post from earlier this month: Gold Smuggling Increases 7x in India and Surpasses Illegal Drug Trade.
Well it appears the trend continues, potentially at an accelerated rate, as we just learned that, incredibly, “almost every passenger on a flight from Dubai to Calicut was found carrying 1kg of gold.” As I have said many times in the past, if an Indian wants their gold, they will have their gold.
Allied Nevada's Hycroft asset produced 52,198 oz of gold and 184,070 oz of silver in the same quarter. All in sustaining costs for Hycroft are approximately $1,165 as calculated by fellow SA author Itinerant. Hycroft is a producing asset that has over 8x the resources and 4x proven & probable reserves as Marigold at a much lower all-in sustaining cost. If Marigold can fetch "at least $200M", Hycroft should be worth about 8x more at $1.6 billion. Subtracting the $500M debt on Allied Nevada's balance sheet, a $1.1 billion valuation would give shares a value of ~$10.58. This isn't a perfect comparison, as accessing most of Allied Nevada's resources requires a large capital commitment in the construction of a mill (~$400M-$500M). The company's enormous resource base and depressed valuation still makes it a compelling buy though.
The mining industry involves depleting assets. One way or another major gold miners have to either discover and build out more mines or acquire already developed or partially developed ones. For most miners, purchasing Allied Nevada is much more economical than exploring and developing an entirely new mine from scratch, especially since the company is trading at less than half of book value ($7.59). Those purchasing the stock at these levels may also find comfort in the fact that the company issued $150.5M worth of new stock at $10.75 back in April, 2013. Even if Allied Nevada doesn't get bought out anytime soon, it has the liquidity to survive until market conditions improve. If gold prices remain depressed for years, all bets are off and Allied Nevada, like many other junior gold miners, may go bankrupt. On the flip-side though, Allied Nevada should provide great leverage to higher gold prices and is trading at a relative bargain compared to other junior gold miners.
Unlike Barrick though, which has a lot of its resources in politically unstable parts of the world, Allied Nevada's entire resource base is in Nevada. Any major mining company could vastly increase their reserve base at a relatively low price. Comparisons to similar large cap gold mining companies yield similar results. Allied Nevada's proven resources are being assigned a much lower value than other miners.
Relative to Barrick Gold, Allied Nevada looks like a bargain on an enterprise value per oz basis, but let's take a step back and compare Allied Nevada's enterprise value per oz of gold to its junior peers. The chart below is from the company's own June, 2013 investor presentation. The stock has fallen considerably since June, but so has every other name on the chart, so the comparison is still relevant.
With gold prices down from almost $1,700/oz to $1,200 this year and many miners strapped for cash, M&A in the sector has collapsed, but recently started to pick up. With its huge resource base, Allied Nevada is a takeover target, but an all cash deal is unlikely. A well-capitalized company like Newmont Gold can purchase Allied Nevada in an all stock deal and commit capital to fully build out the Hycroft asset. All stock transactions preserve cash for the acquirer and the dilution at depressed valuations is largely irrelevant, as mining assets purchased with stock are also trading at depressed valuations. So, how much is the Hycroft asset worth? It's the largest deposit in Nevada. The Marigold mine seen in the above chart is currently in the process of being sold. Joint owners Goldcorp and Barrick hired BMO Capital Markets to sell the asset, and it's expected to fetch "at least $200M." Marigold produced 40,000 oz of gold in the third quarter at a steep all-in sustaining cost of $1,476 per ounce. In comparison,
As most readers are well aware, gold mining stocks (GDX) have fallen a whopping 50%+ year to date, with juniors (GDXJ) down over 60%. Most names in the industry are close to their 52 week lows, but few names have been hit as hard as Allied Nevada (ANV). The company is down over 86% year to date from a January, 2013 high of $30 to a recent low of $3.01. The company isn't in danger of bankruptcy as fellow SA author Skip Olinger pointed out, which means the company can survive until market conditions improve or a takeover takes place. With a market capitalization of ~$325 million and an enormous resource base, Allied Nevada offers tremendous value and is a ripe takeover target.
Relative to other gold mining companies, Allied Nevada is trading at extremely attractive multiples. The company's flagship and only producing property, Hycroft in Nevada, has 20.793 million gold oz equivalent [AuEq] proven and probable reserves. Let that number sink in for a moment. For most readers that's just a big number, so let's try and put that into perspective. Barrick Gold is set to spend over $8.5 billion developing Pascua-Lama in Argentina/Chile. That $8.5 billion will get Barrick access to a little under 30 million gold oz equivalents of proven and probable reserves. That means Barrick is spending $283 for each oz of gold equivalent to develop Pascua-Lama. Any company that purchases Allied Nevada will get access to ANV's proven AuEq reserves at ~$15.70 per oz. If we divide the proven resource base by enterprise value, the number is a bit higher at $40 per oz. If we look at that same calculation for Barrick's entire global proven and probable AuEq reserves we get ~$192 an oz (enterprise value). This isn't an entirely fair comparison, as the cash costs between these two miners are vastly different. Barrick's cash costs per oz of gold was $558 in 2012 while Allied Nevada projects theirs to be between $800 and $825 for 2013.
Jesse...see video the 2014 mining outlook
"Gold? We don't need no stinkin' gold!"
And the natural reaction at this point in what has proven to be a year of a brutal, almost relentless market correction is to say, 'if this is so, how can they keep selling gold down in price?'
How can they indeed. By being audacious. Like this: Secret Traders' Club Rigged Biggest Market's Rates
And they remain arrogantly defiant.
"But there is a sort of 'Ok guys, you're mad, but how are you going to stop me' mentality at the top."
This is going to be interesting.
In this MUST WATCH clip, Bloomberg Industry’s Kenneth Hoffman shockingly reveals that London’s gold vaults are “virtually empty“:
“You could go into a vault in London a couple of years ago. The vaults were packed to the rafters with gold, and the gold would trade from me to you to somebody else. You can walk into those vaults today and they are virtually empty. All that gold (26 million ounces) has been transferred from London and has gone to Switzerland where it has been recast to higher grade formats and shipped off to Hong Kong and then to China never to return.”
Hoffman discusses What’s Happening to All the Gold? openly on financial MSM below:
No worry mate..this too shall pass. China not happy with India beating them to the 200 tonnes?
TRX will be producing at higher prices. Let the crooks get the price they want on sale for everyone.
The problem will be the back log of getting the metal. If miners are stupid enough to sell into the market a prices below production , they deserve to be on idle. Wait until the other 60 show up for the same ounce they assumed they bought.
12/19/2013 08:21 -0500
What is $55 trillion between friends? Very little according to the CFTC. In perhaps the biggest under the radar news of the day - to be expected with every watercooler occupied by taper experts - the WSJ reports that the Commodity Futures Trading Commission said Wednesday that technical errors at two so-called swaps data repositories, which collect and supply regulators with transaction data, have led the CFTC to misreport the overall size of the swaps market by undercounting its size. Isn't it curious how all these "glitches" always work out in the favor of preserving market calm and confidence and away from spooking investors and speculators? Either way, a better question is how big was the so called undercounting? The answer: as large #$%$ trillion!
Regulators aren't sure how much the repositories are undercounting. One CFTC official familiar with the matter said the discrepancy could be as high #$%$ trillion, though another official said the figure is closer to $10 trillion once regulators cancel out certain transactions to prevent double counting.
One just has to laugh: the total US swaps market is what - roughly $400 trillion? So... just add enough notional to that number equal to the GDP of the entire world - or 4 times the size of US GDP - and call it a day. And in this environment somehow the Fed and other central planners are expected to have any clue what they are doing on a day to day basis?
Naturally this discovery makes a mockery of such transaprency enchancing initatives as Dodd-Frank.
The lack of clarity over the size of the market may undermine a key plank of the 2010 Dodd-Frank law aimed at bringing transparency to the opaque derivatives market. Swaps, which were at the heart of the 2008 financial crisis, are complex financial contracts that allow financial firms and their clients to hedge against risks or bet on an asset's value.
The gold market has become little more than scheduled carpet bombings. The brazen nature of the assaults keep reaching new heights. The scheduled flash crashes around 3:00 AM, 8:00 AM, Comex open, 9:30 AM and 10:00 AM are nothing more than pure unadulterated cartel hits. Incredibly 1.327 million ounces of paper gold was sold in just 6 flash crash minutes. That's a total of 46.66 tons at an average of 1 ton sold every 7 seconds. No legitimate trading could ever go down like this.
2:40 AM: 1,262 Feb. contracts sold -126,200 oz. / 3.94 tons
2:41 AM: 3,709 Feb. contracts sold - 370,900 oz./ 11.59 tons
8:21 AM: 1,654 Feb contracts sold - 165,400 oz./ 5.17 tons
8:47 AM: 2,295 Feb contracts sold - 229,500 oz./ 7.17 tons
10:00 AM: 2,530 Feb contracts sold - 253,000 oz./ 7.91 tons
10:06 AM: 3,482 Feb contracts sold - 348,200 oz./ 10.88 Tons
2:40- 2:41 AM was the biggy.
No news, just 4,971 shorts hitting in the thinnest trade possible. Once more hats off to those "new breed" spec shorts, who keep knocking it out of the park. Those alleged commercials that got very long must be feeling like boneheads right now. We can assume that if JPM is indeed the commercial long (as some allege) then these devastating trading losses will be showing up in their Q-4 P&L. Seeing how JPM makes money virtually every single trading day of the year this will be a real switch! The RSI and stochastics would indicate that $1180 is still the goal, as I have suspected since early November. We came within $12 of that figure after today's last flash crash at 10:06 AM. $1180 is now only a hop, skip, and flash crash away. The next 3 Fridays should provide ample thin trade to make it happen.
Ring out 2013, and hope the cartel physical ammo is as low as they are acting. Surely they've seen those spaghetti westerns where the bad guy dies only after his revolver starts making clicking noises instead of firing bullets. That's the best visual I have right now for where we are.
TF metals report....
As we approach the 100th "birthday" of The Fed, please join us for this timely opportunity to visit with G. Edward Griffin, author of the great book, "The Creature From Jekyll Island".
Webinar....Thu, Dec 19, 2013 12:00 PM - 1:00 PM EST
QUESTION: Are not the bankers now preaching gold down?
ANSWER: Yes. This is what is necessary. At the lows, the MAJORITY will give up and then point to much lower lows. I wrote previously:
“At the low, everyone is bearish and shorts abound. That in turn is the fuel for the reversal to the upside. The classic short-cover out of the hole, So we need the majority of analysts to now turn bearish at last. They will begin to call for $600 gold soon. We need this type of bearishness to build in order for the low to take place.”
The more bearish the people get, the closer you get to the turn. But that turn will not come until 2014 at best.