Silver & Gold Tightness to Continue, Here’s Why... Another indicator of a tight gold market can be seen in the CFTC report. As U.S. banks are getting out of their short positions, this could indicate that the gold market is bottoming out. On the other hand, U.S. bank short positions in the silver market are still at an all time high. The U.S. banks have difficulty to get out of their silver short position and this could indicate that a short squeeze is coming soon in the silver market, especially at these low silver prices of $30/ounce. U.S. banks have made use of the 1 week Chinese lunar holiday to make the price drop in precious metals in a low volume market. Though, I believe that this low volume manipulation of the precious metals price will soon normalize in the following week, when Shanghai reopens their gold exchange.
Bearish Noises in The Gold Pit have lowered prices again this week but the real reason for the price fall is the absence of the world’s most voracious buyers, the Chinese who are on a national holiday this week for their New Year, though they have been buying in the gold souks of Dubai instead.Return of Chinese buyers from New Year holiday to rally gold as central banks buy most in 50 years – Global central banks bought more gold last year than at any time in the past 50 years, according to figures published yesterday by the World Gold Council. They added 535 tons to reserves, 17 per cent more than in 2011. Gold prices rose for a 12th successive year.
Gold Completing Huge Triangle Base, Next Upward Run Will Be Massive – Fundamentally, the US dollar is at great risk. Even if politicians make headway in spending cuts in the coming months, it won’t stop the debt from growing. According to CNS news, about 11,000 people sign up for the Supplemental Assistance Nutrition Program (food stamps) every day. As the United States heads back into recession, maintaining a social net will be priority number one. So, leaders can attempt to make progress, but the debt is now over $16.5 trillion.
Unfunded liabilities are more than seven times that amount. A debased currency or much higher interest rates are the government’s ultimate choice. The fundamental issues that are negative for the dollar are also very bullish for gold. With the long-term trend of gold being up, this enormous symmetrical triangle is likely to breakout to the upside. A symmetrical triangle is usually formed during a consolidation period. In the case of gold, the consolidation has gone on now for nearly a year and half. The larger the base, the greater the rise out of the bull market consolidation pattern.
Retail Apocalypse: Why Are Major Retail Chains All Over America Collapsing? If the economy is improving, then why are many of the largest retail chains in America closing hundreds of stores? When I was growing up, Sears, J.C. Penney, Best Buy and RadioShack were all considered to be unstoppable retail powerhouses. But now it is being projected that all of them will close hundreds of stores before the end of 2013. Even Wal-Mart is running into problems. A recent internal Wal-Mart memo that was leaked to Bloomberg described February sales as a “total disaster”. So why is this happening? Why are major retail chains all over America collapsing? Is the “retail apocalypse” upon us? Well, the truth is that this is just another sign that the U.S. economy is falling apart right in front of our eyes. Incomes are declining, taxes are going up, and government dependence is at an all-time high.
Harvey Organ: Banksters Having Extreme Troubles Removing Their Huge Shorts!
Gold closed down $25.90 to finish the comex session at $1608.80. Silver finished down 56 cents at $29.84.
In the access market, here are the final prices:
Friday’s selling was well orchestrated and hopefully we had capitulation. The bankers have sold enough paper shorts to get the main stream media to state that the gold/silver bull run is over. This has brought on the large specs to play along with the bankers and go short e.g. Dennis Gartman. (see the COT report below)
The rigging started in earnest when the CME lowered the margin requirements. This brought in more weaker longs into gold and silver. Then the constant raids brought main stream media to report the end of the gold/silver bull. Dennis Gartman who always gets the sell side right but never the buy side, announced that he was going short in gold. Today the selling reached a climax with gold at one point gold breaching the 1600 dollar barrier. Silver on the other hand breached 30.00 and stayed below that level for the rest of the day. However, when you have massive selling of paper silver and gold, you generally see liquidation of the paper contracts (OI).
You will see below that in gold we had only a minor contraction.
In silver strangely the CME reported a gain of 1417 contracts up to 154,364. We are now at a two year record high in silver OI with a lower price in silver ($29.86 today vs $49.00 in April 2011), In gold, the bankers are getting their way as the OI has fallen to 442,000 contracts. Earlier this year it hit its low point just below 400,000. In June 2010, it hit it’s all time high of 603,000 contracts. The problem this time for the bankers is that the silver OI is ramping higher while the OI in gold is being crushed. Why? it seems that physical silver is becoming scarce and producers are hoarding the metal (see below).
The bankers do not like what they see with silver as every raid at these low prices brings on more longs and they seem to represent strong hands. If the OI on Monday is again higher, our banker friends might as well throw in the towel as nothing can help them. The massive not for profit selling of non backed silver paper at lower prices is futile. The bankers are having trouble removing their huge shorts in silver as our resolute silver holders, instead of pitching their contracts with the onset of a raid, buy more.
The news from Europe on the economy is not good as UK retail sales fall -.5% instead of rising .5%.
European exports fall in the euro area and imports fall even further showing the entire region showing contraction. Bundesbank’s Weidmann announced that the ECB will not cut interest rates and the Euro is not overvalued.
The G7 basically let Japan trash its currency. Thus currency wars will be tolerated in order to inflate their economies. They allowed Japan to trash its currency because all nations are doing the same thing.
The Euro area banks revealed bad loans equal to 7.6% of all loans equating to over 900 million euros.
The ESM must recapitalize these banks but by doing so this would hurt their AAA ratings. The ESM must obtain euros through bond offerings.
In the USA, Wal-Mart set the tone for early trading with statements from the company saying that February has been the worst ever on record for them
Also the state of Illinois has been downgraded, making this state the worst nation in the Union.