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I agree there is quite a big disconnect between the reuters report written 30th of May of record singaporean premiums against london spot and unspecified high premiums in Asia, versus the Commonweath bank report of the 29th of May of a premium collapse in india and HK in the last week or so.

 

http://www.reuters.c...N0EB1R920130530

 

The Commonwealth bank description is however very specific and should be easy to check to see if it is true or false.

 

"Premiums paid

by jewellers in India to banks to secure prompt physical gold

have fallen from USD10-12/oz last month to USD3-3.50/oz

this week, while premiums paid in Hong Kong have fallen

from USD5-6/oz last week to USD3/oz this week".

 

Going by the description of 'premiums paid to secure prompt physical gold' I would imagine there must be a chart of that data somewhere and somebody keeps tabs of it all of the time, since it must be a leading indicator of likely price movements, when used in aggregate for the whole world.

 

------------------------------------------------------------------------------

 

I note from researching this reply that talk about shortages of Gold appears to be mainly hype since normally the premium over the london cash price to buy a kilogram of gold in Dubai is only 50 cents whereas around the end of April it had risen to a mere 6 to 9 dollars.

 

What people are talking about are temporary bottlenecks rather than true shortages.

 

http://www.bloomberg...miums-jump.html

 

"Premiums paid by wholesalers and bulk buyers in Dubai to secure a 1 kilogram bar of bullion are being quoted between $6 an ounce and $9 an ounce over the London cash price, said Frederic Panizzutti, global head of marketing and sales at the Swiss-based bullion refiner. That compares with about 50 cents before the rout,"

 

 

Even if the Singaporean premium over london spot to buy prompt gold from a Singaporean bank is a record high of 9 dollars it still represents a remarkeably small amount on such a high value item.

 

--------------------------------------------------------------

 

Bloomberg of 28th of may has the recent indian and HK premium fall too and quotes sources of that information

 

http://www.bloomberg.com/news/2013-05-28/gold-premiums-tumble-from-india-to-hong-kong-as-demand-wanes.html

 

"Premiums paid by jewelers to banks in India are being quoted between $3 and $3.50 an ounce over the London cash price, compared with $10 to $12 early this month, said Haresh Soni, chairman of the All India Gems & Jewellery Trade Federation. In Hong Kong, consumers are paying about $3 an ounce compared with $5 to $6 last week, according to Heraeus Metals Hong Kong Ltd."

 

“Premiums have come down as demand is slower and there is more supply,” Dick Poon, general manager at refiner and trader Heraeus, said in an interview today."

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Gold futures (August)

AP_zps813d3181.png

 

Gold trade has shifted to the August contract, the Andrew's Pitchfork meshes well with the data with gold snaking along the trendline these last few weeks. Andrew's Pitchfork is slightly unusual, it's an effective method of gaining context over price. It's drawn by taking a significant low, a significant high and another significant low.

 

There are upward and downward sloping trending lines, each should be viewed as a horizon along which price moves, in the example above we can see that gold moved sharply lower during the downward trend section with the downward trendline acting as both support and resistance. It has been steadily climbing the lower up sloping trendline since 17th May.

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Recent events in the precious metals sector are a graphic illustration why being "all in" might not be such a good idea.

 

Because you might be wrong.

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Recent events in the precious metals sector are a graphic illustration why being "all in" might not be such a good idea.

 

Because you might be wrong.

 

Yep, better to predict on the basis of theory than believe on the basis of dogma. You'll then hedge.

 

My interpretation on current events is that the volatility in bullion prices has been deeper and longer than predicted. Still think bullion prices will head up again.

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Chinese selling is probably behind some of the falls this week. However i was surprised that the Fed was so upbeat about the prospects of QE entirely ending by 2014 in the context of the current very weak recovery, where QE is itself a big factor behind some of the improvement numbers. So a bit of a double wammy. The market overall was expecting what the Feds said but I dont think the smaller section of the market that holds Gold would have been. I was sure the Feds would tone down market expecations on QE tapering and instead it seems people believe economic conditions are so good that it is better to end QE even if its too early. There appears to be a bit of a disconnect there to me. However fairly clearly inflation is not our current major problem to worry about and it seems to me to be unimaginable that it will be for years to come.

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China is absorbing the Gold that the GLD Spdr Trust is dumping...

 

GLD GOLD Holdings - Notes :

=========

 

$30 Billion has been wiped from the value of SPDR Gold Trust in 2013,

as prices fall, and the Trust slims down its Gold holdings

 

Zeal041213A.gif

Chart shows:

$1850 = 1375t (x1.345) / $1500 = 1175t (x1.276)

By that measure: 1000t x 1.194 = $ $1194 , so Gold is about $85 ABOVE that expectation.

 

Updated from today's SCMP:

 

RECORD Holdings : was 1,353.35 tonnes in Dec. 2012

(At 35,264 oz. per tonne, that's 47.72 Million oz. x $1,664 = $79.4 Billion)

 

Holdings have now fallen below 1,000 tonnes

 

Recent: 999.56 tonnes (35.25 Million oz. x $1,280 = $45.1 Billion)

 

As GLD slimmed down, new holders were found for 12.5 Million ounces -

That's 12.5 million people buying one ounce more, or 1.25 million people buying 10 ounces.

Not a huge problem in China and Asia. (I bought 10 One-Oz. Coins on Monday)

 

SCMP also reports:

China's Gold consumption is likely to pass India's.

And in just one month (April, when the Gold price fell sharply),

China's "gold consumption" reached 137 tonnes (= 4.8 million oz.) which is more than double a typical month.

 

If we take 4x mo's at 2.4 million and 1x mo at 4.8 million oz., that's 14.4 Million oz, about 20% more than what GLD disgorged.

 

It seems that China is hovering of the GLD gold, and then some.

 

In 2012:

======

India- : took 864.2 Gold tonnes = 30.4 Million oz.

China : took 776.1 Gold tonnes = 27.4 Million oz.

 

India raised its Gold import tax from 6 pct to 8 pct., on June 5th.

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When the price was 1800 I wished I had bought a lot more back in the 1000-1200 area,and told myself when it revisited that price range I would, I also predicted on Gei we would hit 1275 before 5000.

 

Now we are back here at 1275 area I am struggling with buying more there is no logic in this other than fear of loss,however the nextime it is at 1800 the urge to buy more will be very strong but the statistical chance of loss on the purchase will far far higher!!

 

I do now feel the big boys moving the market, whoever they maybe (Isuspect the chinese are hitting the paper market very hard ), have shaken the weak hands out of the game and will now trap the short side sellers with a swift move up!

 

We shall see icon_crazy.gif

 

Regards

 

ML

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John Nadler - ALL IS FORGIVEN! I wonder what he has been saying lately?

 

 

---

 

Some comentary from EdgetraderPlus, and don't worry it is reassuring reading.

 

 

Saturday 22 June 2013

Whatever expectation you may have, expect the unexpected and unlike what you may

expect. So far, that has been playing out quite nicely, and one of our expectations is that

it will continue to unfold in the same manner, and to the ongoing surprise of most.

“Gold will be at/above $2,000 by the end of the year.”

“Gold will reach $3,000 [$5,000, $10,000, etc] and silver $100, [$250, $500, etc]”

“The central bankers are [just about] out of gold.” [The cupboards are likely bare.]

What is wrong with this picture?

Not one Precious Metals guru has gotten anything right in the last 18 months. All have

been calling for considerably higher prices. - See more at: http://edgetraderplu...h.6M5JZUEB.dpuf

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John Nadler - ALL IS FORGIVEN! I wonder what he has been saying lately?

 

 

---

 

Some comentary from EdgetraderPlus, and don't worry it is reassuring reading.

 

 

Saturday 22 June 2013

Whatever expectation you may have, expect the unexpected and unlike what you may

expect. So far, that has been playing out quite nicely, and one of our expectations is that

it will continue to unfold in the same manner, and to the ongoing surprise of most.

“Gold will be at/above $2,000 by the end of the year.”

“Gold will reach $3,000 [$5,000, $10,000, etc] and silver $100, [$250, $500, etc]”

“The central bankers are [just about] out of gold.” [The cupboards are likely bare.]

What is wrong with this picture?

Not one Precious Metals guru has gotten anything right in the last 18 months. All have

been calling for considerably higher prices. - See more at: http://edgetraderplu...h.6M5JZUEB.dpuf

 

Good reading.

 

If you didn't know anything about Gold and were trading just on the charts, there is no [sucessful] technician in the world who would be buying right now. Rather they would probably be shorting back into any strength.

 

Think I'll stay on the sides for a little while longer.

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Good reading.

 

If you didn't know anything about Gold and were trading just on the charts, there is no [sucessful] technician in the world who would be buying right now. Rather they would probably be shorting back into any strength.

 

Think I'll stay on the sides for a little while longer.

 

New 2yr and 3yr lows in gold are bearish indicators. I would wait until the dust settles, one can't stop a freight train with a brick wall. Jesse Livermore says never average down!

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Good reading. (Article: http://edgetraderplus.com/market-commentaries/gold-and-silver-the-end-is-near-just-not-in-sight )

 

If you didn't know anything about Gold and were trading just on the charts, there is no [sucessful] technician in the world who would be buying right now. Rather they would probably be shorting back into any strength.

 

Think I'll stay on the sides for a little while longer.

 

Gold may surprise to upside.

Where are the Sellers going to come from?

 

GCA-W-22-Jun-132.gif

 

He is wrong - the lesser volume is a bullish thing - SELLING is drying up.

Bernanke's statements were a Red Flag, and that was all the bears could manage.

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New 2yr and 3yr lows in gold are bearish indicators. I would wait until the dust settles, one can't stop a freight train with a brick wall. Jesse Livermore says never average down!

 

He also said... buy on new highs, sell on new lows.

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That is true. If gold broke past $1200 that would make a good entry point to sell, your stop isn't far away then. However it is so volatile your stop needs to be wide and gold is difficult to trade at the best of times. One must know this market inside out - I do not.

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Sunday 23 June 2013 - Notanewmember, thank you for the post.

 

DrBubb, you prompted my response. In post 30115, you say about me, "He is wrong - ... "

About what? I made no claim about the bar and volume to which you cite, but stated a fact. That is not my point. What matters is your conclusion, "...the lesser volume is a bullish thing - SELLING is drying up" If you can point to me how that "lesser volume" is bullish, as price makes a new recent low, also UNDER the higher volume green up bars, 3 and 4 bars earlier, I would be interested. In the past 20 months, how many longs would you say are profitable, under that "bullish" interpretation? To your second point, "...SELLING is drying up." Where? That last weekly bar shows ease of downward movement, in the form of a wide range bar lower, and a poor close. These are facts. The logical conclusion to be drawn is, SELLERS remain totally in control. That may change next week, next month, no one knows. All anyone can do is to assess what current developing market activity is "saying," right now. The future has not yet happened. The onus is on buyers to show up and make a change, [in futures]. Right now, they are not meeting that burden. My passion is in interpreting charts, using price and volume, with NO extraneous "technical tools," like RSI, moving averages, MACD, etc, almost all of which are occasionally right, like a stopped clock. I have taken the time to respond, not because you claim I am wrong, for I am but the messenger, but because you made a statement that cannot be substantiated, based SOLELY on the available market information. It can lead one to taking the wrong action for the wrong reason. Cheers to you!

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What ever the "elite" have done it has prompted a physiological wave of selling.

 

My mother this weekend wants to SELL and buy back in lower. The tiny amount she has I shouted, is for insurance purposes and it isn't worth it. The conversation got rather heated - I think this is a lesson, don't give advice to your family.

 

I said my car value is getting cheaper every day, but I don't go out and sell it do I?

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John Nadler - ALL IS FORGIVEN! I wonder what he has been saying lately?

. . .

Not one Precious Metals guru has gotten anything right in the last 18 months. All have

been calling for considerably higher prices. - See more at: http://edgetraderplu...h.6M5JZUEB.dpuf

I don't agree that: "Not one Precious Metals guru has gotten anything right"

 

I have reported the view of Bruno, the Hedge Fund guy, several times.

He has been calling for $1200. And Charles Nenner spoke of "a cycle low at $1280-85 in Mid-June."

 

Both of these forecasts, were repeated several times on DrBubb's diary - though I was not so Bearish as that.

I myself identified a key support level (480d-MA) at higher level, which broken, could lead to a big selloff.

 

So maybe Nadler has been too selective in picking his "Gold gurus".

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Thanks for your post, EdgeTraderPlus.

I liked reading your Blog post, and viewing the charts. So it was good to see you posting here on GEI.

 

Sunday 23 June 2013 -

DrBubb, you prompted my response. In post 30115, you say about me, "He is wrong - ... "

 

About what? I made no claim about the bar and volume to which you cite, but stated a fact. That is not my point. What matters is your conclusion, "...the lesser volume is a bullish thing - SELLING is drying up" If you can point to me how that "lesser volume" is bullish, as price makes a new recent low, also UNDER the higher volume green up bars, 3 and 4 bars earlier, I would be interested. In the past 20 months, how many longs would you say are profitable, under that "bullish" interpretation?

 

Tom Obrien's Timing the Trade system, which is based on Wycoff's system, and Tim Ord's holds that Both High Volume highs and lows are normally beaten or at least tested. So when I see a high volume low like in 15-April (GLD-$130.41 at 93.4 million in GLD) then I will normally await a retest on lower volume. So I think that Thursday's low of $123.33 on 28.9 million could qualify - though that is still high volume - and so may need a retest of its own. BTW, I have discovered that you can get important LOWS on high volume, but those would normally look like V's on an intraday chart, with the closing price above the mid-point of the day's range. And for a climatic V bottom, the highest volume part of the day, may be after the low, on the way back up.

 

Here's what Thursday's trading looked like ... update

 

9pvo.png

 

To your second point, "...SELLING is drying up." Where? That last weekly bar shows ease of downward movement, in the form of a wide range bar lower, and a poor close. These are facts. The logical conclusion to be drawn is, SELLERS remain totally in control.

 

I prefer to look at Intraday charts like the one above.

I would expect there to be a load of stops lined up below the previous low ($130.41), and obviously the Stops got hit on the opening, and the high trade of the day was GLD-$126.38. From there, it traded down by $3.05 to a low of $123.33, and closed at $123.60, which is 91% way down the trading range, and 95% way down on the total "Reach" from Wed's $130.59 close. I agree that this is a weak close, and there was no sign of a V bottom. Friday's trading brought a gap up, and a Close at $125.05. on 16.6 million shares. Not enough to reverse the prior day's downwards trades. So probably we will see a retest of the low - and maybe as early as today (Monday.) If we do see that, I would like to see the low retested on much lighter volume, followed by heavier volume to the upside. I cannot promise that - the market will have to show us where it wants to go.

 

...SELLERS remain totally in control. That may change next week, next month, no one knows. All anyone can do is to assess what current developing market activity is "saying," right now. The future has not yet happened. The onus is on buyers to show up and make a change, [in futures]. Right now, they are not meeting that burden. My passion is in interpreting charts, using price and volume, with NO extraneous "technical tools," like RSI, moving averages, MACD, etc, almost all of which are occasionally right, like a stopped clock. I have taken the time to respond, not because you claim I am wrong, for I am but the messenger, but because you made a statement that cannot be substantiated, based SOLELY on the available market information. It can lead one to taking the wrong action for the wrong reason. Cheers to you!

 

But my main point about selling drying up relates to the bigger picture. The volume of Thursday's big drop was on 31% of the volume on the drop of 15-April. So even though important stops were hit, when the price opened below the prior trading range, it triggered a lesser amount of selling, than on the day of the mid-April low, when GLD dropped by $12.64 on 93.4 million shares.

 

Another part of the Big piture was explained in a posting yesterday on my DrBubb's diary...

 

Basically, the supply of potential sellers has dried up. The likely last gasp of selling was triggered by Bernanke's statement regarding a coming tapering move. There are now many SHORT TERM SHORT POSITIONS in the market, and when these stop growing (and that may happen this week), it is going to trigger a massive short-covering rally, and a price rally will trigger new buying

 

My Evidence:

+ The main sellers have been: In the Paper market, and from GLD shedding ounces, when you look in detail at what's going on, they are unlikely to sell much more (see below)

+ The physical buying has been heavy in China, and that is very likely to continue, and even accelerate after the latest price drop.

+ The market is going to get hit by more physical buying and short covering at the same time, and there will be few sellers - so the price will have to shoot up. It should be fast and furious

 

GOLD SELLERS are running out of ammunition:

===

1/ GLD's SPDR trust are likely to stop slimming :

When the gold price falls, the SPDR Trust will often be forced to buy in its own shares. This happens when buying and selling are not balanced, and there are more net sellers. The Trust's job is to keep the GLD price in line with the value of the Gold it holds, so it will buy-in shares and cancel them. Buying in shares slims down the size of GLD's metal holdings, releasing Gold into the physical market.

 

As seen in post #152 above, the value of the SPDR Trust's gold holdings has fallen from $79.4 billion to $45.1 billion (by -43.2%.) That's from both a fall in Gold price, and a fall in Gold holdings. The Trust's gold holdings fell from 1,353.4 tonnes (47.7 million oz) at 2012 year end, to a recent level of 999.6 tonnes (35.3 million oz) - that's a 26.1% drop. The slide in GLD's holdings have fallen by an average of 2.25 million oz. per month this year. And at this rate, it would hit zero in less than 16 months. That is obviously not going to happen. What is more likely is that the Trust's holdings will stabilise, and it would become a net buyer of gold, if and when investor demand for precious metals returns. A Gold price rise normally triggers GLD buying and the size of the Trust holdings will rise. I expect we would see the GLD trust growing again in a big short covering rally.

 

2/ Gold Producer selling is likely to be halted, or even reversed :

Those producers who sold forward their production at a higher price may feel fortunate now, since they will have locked in a better price than they can achieve today. But few producers are likely to want to sell forward now, because they would be locking in price which will provide very little margin. I doubt that many new gold mines will be financed in the present environment, and so I cannot see new hedges for new mines being put on at current levels. For those gold producers who can afford it, they will likely be reducing the size of their hedges - locking in profits on those hedges. So we may be seeing net buying from gold producers.

 

3/ Speculative Hedge Funds will switch from selling to Buying, as they cover shorts, when price rise enough

 

4/ Central bank "Gold stabilisation selling" is un-necessary at the Current price

 

5/ Bullion banks (Commercials) have already turned from selling to buying.

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Could we see sub-$1000 before much longer? I would never have believed it possible at the start of the year, but you have to say that it is easily possible given how far and fast it has fallen so far this year. The traditional summer equites rout will force liquidation of other asset classes.

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from Yves Lamoureux thread:

 

 

latest from yves via yelnick: http://yelnick.typep...-salvation.html

 

 

Yves Sees Forward to Gold Road to Salvation

 

As panic sets in, Yves Lamoureux is preparing his next bold call. As reported here, he called the peak in gold before other pundits saw it, and made other bold calls that have him now referred to as the new bond and equities guru. Here is a copy of his Feb 8 newsletter on point: Download Lamoureux_Finally Why Gold Will Be Rigged Higher.

 

His most recent views on economic conditions are summarized in this postfrom several weeks ago. We now have hit the inflection point he predicted. The reversal in bond rates is truly stunning:

 

The next phase of global volatilty is a surge of liquidity from a final central bank effort to prevent the reversal of rates and unwinding of all their efforts since the Global Financial Crisis of 2007. Yves expects this Financial Surge will float all boats, including gold.

 

The pattern he saw in gold back in 2010 is now coming to an end, although not imminently. He recommending going long on the Euro and short on gold when the consensus was short Euro long gold. He remains a Euro bull for now, and will be super bullish on gold at the right time. Watch here for his guestblog when the time is nigh.

 

10ytreasury_zpsd990a0c8.png

 

The next phase of global volatilty is a surge of liquidity from a final central bank effort to prevent the reversal of rates and unwinding of all their efforts since the Global Financial Crisis of 2007. Yves expects this Financial Surge will float all boats, including gold.

 

The pattern he saw in gold back in 2010 is now coming to an end, although not imminently. He recommending going long on the Euro and short on gold when the consensus was short Euro long gold. He remains a Euro bull for now, and will be super bullish on gold at the right time. Watch here for his guestblog when the time is nigh.

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