Until there is a clear break of elite’s central banking dominance over the gold and silver markets, there will be no dramatic recovery reflective of where the true price for both metals should be.
Whether it is $5,000 or $10,000 for gold or $100 or $200 for silver [the ounce], the current distorted pricing, as dictated by the paper derivative market and not actual physical metal, will prevail demonstrating the power the elites exert at will.
The probability of the elites being “all in” has not even reached the stretching point, yet,
although it may be getting there. All that remains, really, is to wait and let events take
the unnatural course they have been on for several decades. The undoing of too many
decades of gold/silver manipulation/suppression will not be accomplished in a single year,
as it has not been over the past few years, and there is no way of knowing the time factor
for change in the year[s] ahead.
We have said on several occasions, the elites think in terms of decades, while most people
have trouble planning a year in advance. Back in 1988, the Economist, [A Rothschild-
backed publication, certainly in terms of content], published an article, “Get Ready For
A World Currency By 2018.” Here is a 30 year plan as evidence of how the elites work,
and there was surely years of planning involved before the article was even published.
The new world currency was to be administered by the International Monetary Fund.
It could only work if nations gave up their sovereignty [Hello, European Union], and all
currency control to the IMF, as it was imagined back then. Greece, Cyprus, Ireland, Spain,
etc, etc, and more to follow, have virtually given up their sovereignty in favor of increased
debt “bail-outs” to “cure” the excessive debt under which each country was already buried.
There is no one who would agree that increased doses of heroin will “cure” an addict, or
increased whiskey or vodka will “cure” an alcoholic, yet the Western banking elites have
sold the notion that the only way to save a financially destitute country is to take on even
more debt as a “cure,” and the masses continue to buy into it.
There is one thing upon which almost all can agree as a certainty: the paper fiat currency
scheme, as it exists today, is near its end, inevitably doomed to failure. Consider a few
related circumstances. Seven years ago, the Fed’s balance sheet was 6.3% of the U S
economy. Today, it is over 25% of Gross Domestic Product. During that time span, the
Fed’s balance sheet grew 5 times larger while the actual economy was up about 20%. All
that the Quantitative Easings have done is shore up the entire underwater banking system
while the US economy has been purposely gutted in the process.
In the 10 year period prior to 2007, $13.88 of new GDP was created for every new Federal
Reserve Dollar printed by the Fed. From 2007 through the first half of 2014, only 81.8
cents of new GDP was created for every fiat Federal Reserve Note. This is but one example
of how the elites are destroying the Federal Reserve Dollar, gutting the economy, and
propping up their precious “Do Not Disturb” fiat debt enslavement Ponzi scheme. Most
Americans remain in a comatose state of [un]awareness when it comes to understanding
how the fiat monetary system [does not] works.
The G-20 met in Australia last week, and guess what has been announced as a part of their
agenda? The G-20 has vowed to focus on a plan to add $2 trillion to world GDP. This
kind of economic insanity has no limits for the elite’s New World Order, to be controlled
by a single IMF currency. Can it be any clearer why gold and silver are being suppressed
in order to serve the greater NWO good?
We mentioned the importance of the Swiss referendum requiring the Swiss National Bank
to maintain a 20% gold reserve requirement, from the current 8%, and it also prohibits the
Swiss central bank from ever selling any Swiss gold. What is of great interest is the ability
of the elite’s central bankers possibly preventing the Swiss referendum from passing.
Should it pass, despite both Swiss government and banking pressure against it, the
question then becomes, what will the payback consequences be against the Swiss for
fighting the elite’s system of controlled debt.
All Western politicians are controlled by the Rothschild central banking system, and all
Western governments are subservient to these banking interests. While it may appear
that China and Russia, along with the other BRICS nations, have banded together to put
an end to the elite-controlled fiat currency system led by the once “almighty dollar,’ now
in rapid decline, appearances are never what they seem to be, on purpose. What is not
clear is the extent to which the elite’s central banking system has control over both the
Chinese and Russian governments.
The United States, as a world-dominating power, fades with each passing month. This
country is done, finished, and is running on its remaining military might. The US has no
viable means of sustaining itself. There is no manufacturing base, there are no savings
in plant and equipment from which to rebuild. Cities, even states, are facing bankruptcy,
burdened by decades of public pension promises that can no longer be met, along with
diminishing tax revenues. Which country will take over?
Both Russia and China have a host of issues that preclude them from implementing a
workable world-serving financial currency/system. It is not clear that China even has
the capacity to become the next world powerhouse. Russia does not. Yet both nations
have expressed support of a currency system run by the IMF, the elite-controlled
mechanism for running its New World Order agenda. Why would they say that?
The elite-dominance of its fiat paper dynasty has ruled the world for a few centuries.
Money is least understood by the masses, yet it is the greatest controlling influence by
a small group pulling the strings by which the Western world operates. Does that
small but most powerful group extend its control over China and Russia? While the
thinking is that both countries will “reset” the price of gold and silver as the fiat system
of the Western world is toppled, who knows if the elites are simply changing horses, as
it were, and will eventually be running China and Russia as it has the US/UK/EU?
There are so many unanswered [unanswerable?] questions, beyond when will gold and
silver “take off?” As to the latter, the charts still say “No time soon.” While this is true
as the way things stand now, change can occur at any time, but that is future, and all we
is address what is actually known in the present tense.
Yes, last Friday was the best for silver in a single day in over two years, but that does not
materially change anything. Three weeks ago there was a S/D [Supply over Demand], two
day move lower when the recent 16.60 support area was broken. The decline started from
the 17.20 level, so resistance is defined by that range. Last Friday was an attempt to begin
an assault on this immediate overhead resistance.
Friday was a D/S bar, [Demand overcoming Supply]. Combining the last two Fridays, we
are starting to see a change in the character of market behavior where the strongest bars
in the down trend are to the upside. For next week, it is important to see if there will be
any upside follow-through, and to what extent, given the overall layers of resistance, and
also the way in which Friday’s rally bar is retested.
An example of a positive retest is what occurred two Fridays ago when price moved in a
sideways manner for four trading days, maintain the gains. Once a pattern of gains being
able to hold emerges, it will lead to a trend change.
When last Friday’s impressive rally is incorporated into the weekly chart, the response is
not as enthusiastic for its impact. There will be an increasing number of articles declaring
silver is on its way, probably from the same writers that said the same thing over the past
several months. Glance back at the low for 2010, and you can see how after an initial rally,
price moved sideways for about five months. It does not mean a similar pattern develops
here, just that it can take some time for a trend to change course, and being first in is not
always the best situation. Waiting for an upside breakout of the 5 month pattern brought
more immediate results, so it pays to be more select in one’s timing, at least for futures.
Gold’s pattern is more stable than silver’s, even though silver outperformed gold last
week on a relative price relationship basis. The previous two swing bottoms in 2013
and almost 2014 did not lead to sustained rallies, and there is zero available evidence
that says a new bull move will commence, presuming the recent low holds as a swing
low. Let the market prove itself first.
You can see how the general level of volume has picked up in the month of November.
The fact that the volume increase is occurring at the lows, if they hold, usually indicates
a change from weak hands into strong. Keep in mind, it takes time to turn around a
trend, and the down trend can change into a sideways move before an up trend occurs,
so patience has merit for not “jumping the gun,” which often means a false start.
Note the combined volume of the last 10 TDs [Trading Days]. In total, it still has not led
a price move over the single down day and its volume from 31 October. It shows the
difficulty of effort required of buyers to overcome sellers in a down trend. It also suggests
the volume and price behavior is more in the form of short-covering as opposed to new
longs being established.
Gold has dropped 770 dollars from its highs. A rally of 55 dollars should not be viewed as
The gold market has a full plate next week: there’s a major meeting of the Organization of Petroleum Exporting Countries, inflation data out of the eurozone, and a major holiday in the U.S. to keep volatility high.
Gold could see some mercurial trade to start off the week as Comex December gold options expire on Monday, adding another dimension to the week’s action. The market may also see some last-minute positioning ahead of the Nov. 30 Swiss gold referendum.
December gold futures rose Friday, settling at $1,197.70 an ounce on the Comex division of the New York Mercantile Exchange, up 1.02% on the week. December silver rose Friday, settling at $16.395 an ounce, up 0.5% on the week.
In the Kitco News Gold Survey, out of 36 participants, 23 responded this week. Of those, 14 see prices up, while six see prices down and three see prices sideways or unchanged. Market participants include bullion dealers, investment banks, futures traders and technical chart analysts.
Gold saw a volatile trading this week, ultimately closing the week higher and notching a third straight week of gains. A surprise interest rate cut Friday by China pumped up the yellow metal, traders said. The People’s Bank of China cut the one-year benchmark lending rate by 40 basis points to 5.6% and the one-year deposit rate by 25 basis points to 2.75%.
“At face value, policy easing in China should be gold-supportive, particularly if it helps to hold up economic growth,” said Joni Teves, analyst at UBS. “But UBS China economists do not think that today’s rate cut moves the needle for 2015 GDP growth expectations. So, while today’s rate cut may be gold-friendly at the margin, ultimately the effect should be more muted than what the initial reaction might suggest.”
Gold managed a rise above $1,200 even as the dollar gained on the Chinese news and as the European Central Bank started to buy asset-back securities as part of its stimulus program.
George Gero, vice president with RBC Capital Markets Global Futures, said gold attracted some buying when it rebounded over $1,200.
“There were too many negatives priced in the past two weeks,” he said about why gold bounced on Friday.
Gold will start out the week watching Monday’s options expiration for the December contract, and it could lead to some volatility, Gero said. Option strike prices that are “in the money” or are the same value as the current futures price will become futures after the expiration.
“There were many $1,125 and $1,100 strike puts and there are many $1,200 and $1,225 call options as well, so some nail-biting may ensue,” he said.
Early next week also features traders moving positions out of the December futures and into deferred months as the calendar nears the month of December, he said. Ahead of first notice day traders need to eventually exit futures positions of the spot month according to exchange rules.
Later in the week, analysts said they’ll watch to see what eurozone inflation data shows. Inflation has remained tame, which doesn’t support gold, analysts said, and eurozone inflation has been particularly soft.
In the U.S., third-quarter gross domestic product data is set for release, and analysts at Nomura expect it will come in at 3.5%, which is unchanged with the preliminary reading.
Robin Bhar, head of metals research at Société Générale, said those two data sets will likely underscore the current view of a stronger U.S. economy versus a weakening eurozone.
“I think the theme will still be U.S. growth, and the Fed (Federal Reserve) is ooh-ing an ahh-ing about being data dependent, and it (stronger data) could cause the Fed to have to raise rates down the road, which would weigh on gold,” he said.
In his weekly market review, Frank Holmes of the USFunds.com summarizes this week’s strengths, weaknesses, opportunities and threats in the gold market for gold investors. Gold closed the week at $1,200.29 up $11.54 per ounce (0.97%). Gold stocks, as measured by the NYSE Arca Gold Miners Index, rose 4.24%. The U.S. Trade-Weighted Dollar Index gained 0.87% for the week.
Gold Market Strengths
Gold reversed losses after China cut benchmark interest rates for the first time since July 2012. Additionally, Standard Chartered raised its forecast for 2015 average gold prices to $1,245 per ounce, up from $1,160 saying that many of the factors pressuring gold will be neutralized. Standard expects dollar bullishness to fade and worries about deflation to subside.
The U.S. Mint has sold 2,570,500 ounces of silver coins so far in November. If the pace continues, total sales for the month would be around 4,284,167, up 257 percent from a year earlier.
The Dutch central bank shipped 122 tons of gold from safekeeping in New York back to Amsterdam, increasing its home reserves to 31 percent from 11 percent previously. The bank said it is joining other central banks that are keeping a larger share of their gold supply in their own country, contributing to a more balanced division of the gold reserves. This move may also have a positive effect on public confidence.
Gold Market Weaknesses
Hedge funds extended their fastest exit from gold this year, cutting bullish gold wagers for a third week. Holdings tumbled 49 percent over three weeks, the most since December. Additionally, assets in exchange-traded products backed by the metal dropped to the lowest since 2009, as the World Gold Council said third-quarter global demand was the weakest in almost five years.
The U.S. Geological Survey noted on Monday that gold production by U.S. mines in August had decreased by 11 percent from a year earlier.
Gold Market Opportunities
Canaccord Genuity’s study looking at the four major Venture Composite corrections in the last three decades found that historically, the up-ticks after the corrections have varied from 144 percent to 347 percent. They also note that the previous three corrections ended around the year-end. The current correction is the second-longest at 43 months and Canaccord believes we could be closer to the end.
gold miners corrections 1987 November 2014 investing
As can be seen in the chart, gold and the S&P 500 traded in a narrow range for much of 2012 but in the last two years the spread between S&P 500 and gold had widened significantly. For portfolio rebalancing at year end this presents an opportunity to readjust your weightings. Sell some of the assets that have been the strongest performers and reinvest the proceeds in the underperformers to reset your portfolio asset allocation mix back into balance for the new year.
Gold vs SP 500 2011 November 2014 investing
The rate at which gold is lent for dollars is the most negative since March 2001 as refineries spend longer recasting bars from vaults to meet demand from Asia, where consumers prefer smaller ingots and jewelry. This signals a bottleneck in supply that could support or even increase prices.
Gold Market Threats
Goldman Sachs executives were probed on Thursday by members of Congress due to allegations that the bank had taken too large a role in the commodities market. The Senate subcommittee released a 400-page report saying that Goldman devised policies that made it hard to get aluminum out of its Detroit warehouses, pushing up the price of aluminum for American companies.
India is examining policy to curb the surge in gold imports that increased to $4.17 billion in October, up from $1.09 billion a year earlier. The policy measures are being considered to narrow the current account deficit and support the currency. As the second largest importer of gold, any measures would create a headwind for gold prices.
The headline index for a survey of manufacturers in the Philadelphia area improved significantly in November, hitting its highest level in 21 years, according to a report released Thursday.
The index for current general activity in the Philadelphia Fed’s manufacturing business outlook survey jumped to 40.8 from 20.7 in October, the regional bank said. The reading was the highest since December 1993, the bank reported. It has now been positive for nine months in a row.
The consensus expectations compiled by various news organizations were for a November reading of somewhere around 18.0 to 18.5.
“Although this can be a volatile survey, that is still a sharp improvement and took the survey to easily its highest level since the recession,” said a research note from CIBC World Markets. “It is also some reassuring news on the manufacturing sector following the release 15 minutes prior of a softer-than-expected preliminary reading from Markit’s national PMI (Purchasing Managers Index, which fell to 54.7 from 55.9 in October).”
Still, another firm offered caution about the data, suggesting the index will fall back sharply next month.
“At face value, the Philly Fed index is now consistent with annualized GDP (gross-domestic-product) growth of around 6.5% in the fourth quarter,” Capital Economics said. “We’ve been optimistic on the outlook for growth for some time now, but even we think such an outturn is not possible.
“It’s worth remembering that the headline index is derived from a separate question on overall business conditions, which means it is vulnerable to swings in sentiment. And while all the sub-indices on new orders, employment etc., all improved sharply, they are consistent with a headline index of closer to +20 than +40.”
In the Philadelphia Fed report, 49% of the firms reporting said they saw increased activity this month, compared to just 9% reporting decreased activity.
“Firms reported continued increases in overall activity, new orders, shipments and employment this month,” said the report. “The survey’s future activity indexes remained at high readings, suggesting continued optimism about manufacturing growth. Firms were more optimistic about employment increases over the next six to 12 months.”
The current new orders index, which reflects the demand for manufactured goods, increased 18 points to 35.7.
Labor market indicators also showed improvement this month, the report said. The current employment index rose 10 points in November to 22.4, the highest level in more than three years. Firms also reported higher work hours, with the average workweek index rising from to 7.8 from minus 1.3 the prior month.
Also, the monthly survey asked manufacturers for details about their expected changes in employment during the next year. Nearly 56% of the firms expect to increase their employment over the next 12 months, the Philadelphia Fed reported.
Both the prices paid and prices received diffusion indexes moderated this month. The prices paid index fell 10 points to 17.3 this month. Reflecting the prices of their own manufactured goods, the prices received index decreased 9 points from October.
Traders suspect that gold might have a hard time reclaiming $1,200 an ounce ahead of an options expiration Monday, while silver may remain around $16 or slightly below.
Meanwhile, some observers say they typically look for a pick-up in volatility afterward when market participants unwind new futures positions they get as a result of the expiry.
Expiration of Comex December options for gold and silver is scheduled for Monday.
A call option gives the holder the right to call, or buy, a specific futures contract at an agreed-upon price during the life of the option. A put gives the holder the right to sell a specific futures contract at an agreed-upon price. Jockeying ahead of these expirations often impacts prices in the short term and can add to volatility. Of course, this would be trumped if there should be some major breaking news event or the market accelerates through a key technical support or resistance level.
Preliminary CME Group data through Wednesday show that the number of open positions for puts in December gold options was 158,361. Open interest in calls was 370,305.
In the case of gold calls, many positions were established some time ago at strike prices well above current values, said James Ramelli, trader with KeeneOnTheMarket.com, which focuses on options. This means these positions are far out of the money.
“I don’t think there is too much to read off of that,” Ramelli said. “But there is a decent amount of open interest on the $1,200 put line.”
Preliminary CME Group data as of Wednesday show that open interest for puts at this strike price stood at 7,506 contracts.
“So it looks like somebody out there is going to make a nice profit with gold below $1,200,” Ramelli said. “That being said, we’re not so far below $1,200 that we wouldn’t be able to come back between today’s session and Friday.”
As of late Thursday morning, Comex December gold was hovering slightly on either side of $1,190 an ounce.
Nevertheless, the $1,200 area may offer some resistance based on options positioning, he said. Still, there will be a certain amount of buying and selling around there, he added.
“There are a lot of traders involved at that level,” Ramelli said. “So those who are long those puts will be trying to buy futures ahead of that expiration to cover that position. And those who are short those puts will be trying to sell those futures. So there is kind of a push-pull at that level.”
However, he added, that level has also offered some technical-chart resistance.
“There is a confluence on the open interest and that chart saying ‘we’re probably not going to be able to push through this level here’” ahead of the expiration, he said.
Much of the open interest and recent volume in the December puts is centered on strike prices in the area from $1,175 to $1,200 an ounce, said Jim Comiskey, senior account executive with Archer Financial Services. Data on the CME Group website show open interest for these levels combined is 18,388, including 3,059 at $1,180 and 4,153 at $1,175. Additionally, there is another 6,791 at $1,150.
Meanwhile, on the bullish side of the equation, the most open interest for any relatively close-by strikes is 4,860 at $1,250.
“There’s a lot of bears out there, brother. A lot of bears,” Comiskey said. “My thinking is we are going to gravitate toward the $1,175 to $1,170 range.”
He later explained: “Somebody has a lot of firepower who committed to those strikes on the put side…..Now, Mr. Market is bigger than any one entity. But, whoever committed their funds to those strikes is going to do everything in their power to drive the price of metal down toward the strike or below the strike so they can profit rather handsomely going into expiration.”
Further, regardless of options positioning, the stronger tone in the U.S. dollar lately is a factor that could also hold down precious metals, Comiskey added.
Meanwhile, there is potential for the market to make a counter move after the expiration as traders unwind newly established futures positions, said Sean Lusk, director of commercial hedging with Walsh Trading. He said the biggest open interest – at strikes that are relatively near current prices anyway — appears to be around major round numbers such as $1,150, $1,175, $1,200, $1,225 and $1,250.
If calls at $1,175-$1,225 up end up being “in the money” as of options expiration, this is likely to mean selling pressure ahead of first-notice day at the end of the month, Lusk said. “Traders will want to lock in profits on the calls that are being exercised,” he said. In a nutshell, they would be looking to sell the futures positions they gain through options expiration.
Conversely, a low gold close into expiration could mean a reversal in the futures, he continued.
“If you sell over or under those thresholds, look for a reversal after options expiration on Monday,” Lusk said. “Futures will either rise or fall depending on how we settle. If we settle on the low end, we’re going higher for a few days. If we settle higher, we’re going lower.”
George Gero, precious-metals strategist with RBC Capital Markets Global Futures, said options expirations typically add a fair amount of volatility after an expiry.
“The key is on Comex, options are not cash settled but become futures contracts the next day, if in the money,” he said. That means traders who don’t want to hold those positions might buy or sell to offset those positions and avoid having to put up money for a margin, he explained. Margins are in essence collateral to back a futures position.
Gold futures prices ended the U.S. day session slightly lower Thursday, while the cash, or spot, gold market saw moderate gains on a corrective bounce from late selling pressure Wednesday. The New York futures market was closed Wednesday before some additional downside pressure occurred in the cash market in the afternoon. Thus, the higher spot market today and lower futures. There has been a dearth of gold-market-bullish headline news events the past couple weeks, which is keeping the bears confident.
February Comex gold was last down $3.40 at $1,191.20 an ounce. Spot gold was last up $8.40 at $1,192.00. March Comex silver last traded down $0.15 at $16.20 an ounce.
A rallying U.S. stock market that continues to funnel money away from other assets such as precious metals remains a bearish underlying factor. U.S. economic data released Thursday included the weekly jobless claims report, the consumer price index, the U.S. flash manufacturing PMI, existing home sales, leading economic indicators, and the Philadelphia Fed business survey. This data was considered upbeat and was another negative for the safe-haven gold market Thursday.
In overnight news, the HSBC China manufacturing purchasing managers index (PMI) came in at 50.0 in November, which is down from 50.4 in October. A PMI reading above 50.0 suggests growth in the sector. That’s just another underlying bearish factor for the beaten-down raw commodity sector. China is the world’s largest importer of raw commodities.
Meantime, the Markit data firm on Thursday reported the European Union’s composite PMI fell to 51.4 in November from 52.1 in October, which is a 16-month low. The survey also showed manufacturers in the EU are not optimistic about future growth. This news helped to pressure European stock markets. It’s also another reason for the European Central Bank to embark on more monetary policy stimulus measures.
The Japanese yen fell to a seven-year low against the U.S. dollar Thursday, as the Bank of Japan’s effort to devalue the yen is working.
The market place is looking ahead to next week’s OPEC meeting. Some believe the beleaguered oil cartel could reduce its overall daily oil production quota, or at least call for strict adherence to existing quotas, most of which are ignored by OPEC nations.
Traders are also already discussing next week’s Swiss referendum which would require the Swiss National Bank to hold 20% of its assets in gold. A Swiss poll on Wednesday showed the majority of voters were not in favor of the measure. This news was credited in part with weakness in the gold market Wednesday.
The London P.M. gold fix was $1,190.00 versus the previous London A.M. fixing of $1,194.00.
Technically, February gold futures prices closed nearer the session high. Bears have the overall near-term technical advantage. Prices are in a 4.5-month-old downtrend on the daily bar chart. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,225.00. Bears’ next near-term downside breakout price objective is closing prices below solid technical support at $1,160.00. First resistance is seen at $1,200.00 and then at this week’s high of $1,204.70. First support is seen at $1,180.00 and then at this week’s low of $1,174.70. Wyckoff’s Market Rating: 2.5
March silver futures prices closed near mid-range. The silver bears have the firm overall near-term technical advantage. Prices are in a four-month-old downtrend on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $17.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the November low of $15.085. First resistance is seen at today’s high of $16.375 and then at this week’s high of $16.575. Next support is seen at this week’s low of $15.93 and then at $15.75. Wyckoff’s Market Rating: 2.0.
March N.Y. copper closed down 220 points at 301.05 cents today. Prices closed near mid-range. The bears have the near-term technical advantage. Copper bulls’ next upside breakout objective is pushing and closing prices above solid technical resistance at the October high of 310.35 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the October low of 295.00 cents. First resistance is seen at today’s high of 302.65 cents and then at 303.60 cents. First support is seen at 300.00 cents and then at today’s low of 299.15 cents. Wyckoff’s Market Rating: 2.5.