Fickle gold and silver prices – a pragmatist’s viewpoint

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Fickle gold and silver prices – a pragmatist’s viewpoint
“For whatever reason gold and silver prices have been falling recently, but this may be irrelevant in the long term scheme of things”

“Overall it would appear to the pragmatic observer that gold and silver are not through their bull runs yet as the global financial turmoil is far from over. The current gold (and silver) price hiatus is because many see the Eurozone crisis, which is the most newsworthy at the moment, as deteriorating further, but those fleeing it financially are putting their trust in the US dollar rather than gold. Given the U.S.’s own economic problems, which are neatly being hidden from public perception in the runup to this year’s Presidential election, this has to be a pretty shortsighted viewpoint and will surely come to an end before too long. When it does both gold and silver will likely resume their overall upwards trend – but probably not as rapidly as the major gold and silver bulls would have you believe.”

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1792 Silver Center cent, from the first group of coins ever struck at the U.S. Mint, may bring $1,000,000

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DALLAS, TX.- One of the most historic coins struck by the early U.S. Mint, a 1792 Judd-1 Silver Center cent pattern, MS61 Brown PCGS, headlines the Heritage Auctions April 2012 Central States Signature® U.S. Coin Auction, April 18-20, with Platinum Night™ offerings on April 19. “Our long-running relationship with the Central States Numismatic Society and conducting its annual convention’s official auction is alive and well,” said Greg Rohan, President of Heritage, “as is our tradition of bringing important rarities to those auctions. The 1792 Silver Center cent is tremendously important to the history of U.S. coinage – arguably far more so than a number of better-known and more celebrated rarities.”

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1792 Silver Center cent, from the first group of coins ever struck at the U.S. Mint, may bring $1,000,000

The Gold GroundHog Grind

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The Gold GroundHog Grind
We Highly recommend you read this one…

“A very important objective change has taken place in the gold market. Its price is not moving above the resistance established in the 1600 to 1900 wide berth range. Its price is not moving below support in the same wide permitted range. When the gold price has approached the 1800 level recently, all manner of naked soldiers emerge with imaginary swords to whack the price down, to bring it under heel. The ruse has a high cost in the real world though, as the gold cartel has been forced to shed an enormous supply of gold as punishment for each naked short episode. The opponents to fraudulent controlled manipulated markets have emerged in force to respond. They fight from the East. They fight for a fair and equitable market.

They are poking holes in the floor of the syndicate helm where legs fall through. Demand for the gold core has become acute with pitched battles. The financial press reports none of it. In desperation, the cartel has conducted regular and routine raids of the Exchange Traded Funds, using shorted shares as the ticket at the rear dock window to cart off gold bars. What a corrupted bill of lading. Meanwhile, the major gold suppliers from mine output appear to be on the defensive or actually on the ropes. The deficit in silver only punctuates the precious metals shortage, as investment demand ramps up. The dutiful lapdog press prefers to tell the story of reduced jewelry demand, without noting how it emphatically signals the powerful bull market. The stories rely on the public being poor students of history. Still, the underlying forces behind the Gold & Silver bull markets remain a team of horses, the 0% cost of money and the debasement of currency in sovereign bond redemptions. The system is broken. Long live the new system that comes, based upon gold and barter, as the US Dollar loses its vital ticket in global trade settlement.

Read the rest here: The Gold GroundHog Grind

Manipulation of the “Paper Gold” Market, “Worthless” Paper versus Physical Gold

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“We have been in and around the gold markets for 53 years and conditions have certainly changed, driven mainly by market manipulation of all markets as a result of the Executive Order, which created the “President’s Working Group on Financial Markets.” Those who doubt that are either on the government payroll one way or the other, or you are just too dumb to understand what is really going on. In spite of these machinations and ignorant naysayers the bull markets in gold and silver are still alive and well. What you are seeing are paper markets and the use of derivatives to effect short-term pricing, especially when negative events are about to occur.

Those events are aided by naked shorting and illegal concentration in both gold and silver and the shares. Mind you, this is being done in a market to control it and in addition government and central banks relish stomping gold and silver into the ground. For years they hid what they were doing. Today their manipulations are in your face. These dramatic forced price falls are fortunately accompanied by heavy buying by China, Russia, India and others.”

Read more here: Manipulation of the “Paper Gold” Market, “Worthless” Paper versus Physical Gold

Silver Producers: A Call to Action

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Silver Producers: A Call to Action
By: Eric Sprott & David Baker

“As we approach the end of 2011, the silver spot price has admittedly endured a tougher road than we would have expected. And let’s be honest – what investment firm on earth has pounded the table on silver harder than we have? After the orchestrated silver sell-off in May 2011 (please see June 2011 MAAG article entitled, “Caveat Venditor”), silver promptly rose back to US$40/oz where it consolidated nicely, only to drop back below US$30 within a two week span in late September.1 The September sell-off was partly due to the market’s disappointment over Bernanke’s Operation Twist, which sounded interesting but didn’t involve any real money printing. Like the May sell-off before it, however, it was also exacerbated by a seemingly needless 21% margin rate hike by the CME on September 23rd, followed by a 20% margin hike by the Shanghai Gold Exchange – the CME’s counterpart in China, three days later.”

Read more here: Silver Producers: A Call to Action

Paper Trading & Manipulation in Precious Metals

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One Comex contract for silver is for 5,000 ounces.
Average inventory of silver available for delivery is 30M ounces.
Silver production for the year is about 800M ounces a year.
Supposedly more than 45 thousand contracts traded on Feb. 29 or about 255M ounces.
In a matter of hours, paper silver sold 8.5 times more than inventory available for sale.

So do I believe that the silver market is manipulated?

Read more here: Paper Trading & Manipulation in Precious Metals

De facto currency Wampum victim of inflation

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“”One of the earliest lessons any child learns is how to identify shapes. Coins are round. Paper money is rectangular. Everyone knows that.

Perhaps this immutable truth is what keeps more early American coin aficionados from pursuing the currency of the early American frontier, which consisted of practically no coins at all.

In the 17th or 18th century, if you wanted to acquire furs from native tribes in places like the Great Lakes, the wilds of Pennsylvania, or New England, a bagful of shillings, ecus or coppers would have served little use.””

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Central banks snap up gold after price pressure

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“(Reuters) – The fall in gold prices has prompted one or more central banks to buy as much as four tonnes of bullion in recent weeks, according to an industry source and a Financial Times report on Friday.”

Read more here: Central banks snap up gold after price pressure

Physical Gold Buyers Win The Day, Shorts Retreat

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“So while the precious metals market may appear quiet on the surface, there are some meaningful crosscurrents going on underneath. Today’s action is another good example that the paper shorts can only push the gold and silver market so far, even with news that should have helped them pressure prices….

“That limit – which we have seen time and again over the years – is when the demand for physical metal starts to overpower the selling pressure in futures, forwards, options and other markets for paper-gold, which is what we saw today.

I think more and more people are starting to recognize this seemingly endless daisy-chain, Eric. Banks gets bailed out by governments, and then governments get bailed out when banks buy their paper. Central banks provide the grease to make it all happen with their ongoing money printing. For example, Spanish banks are borrowing EUR 152 billion from the ECB, three times the amount from one year ago.

So in the end, nothing gets resolved. All the bad debts remain. Even worse, more debt is added creating an ever greater burden. That is not a solution, and as I have said before, the so-called ‘can’ the central planners have been kicking down the road is now a 2-ton boulder.

It is only a matter of days – or weeks at most – before more banks and governments strap on the ECB’s bottomless feedbag to try keep their head above water. But importantly, money printing does nothing to fix so many insolvent banks – and insolvent governments too – here in Europe.

The next step for the precious metals, Eric, is to start probing overhead resistance. There are two levels to watch on silver, with $34 coming first, but the critical level, of course, is the $35 level we’ve been talking about for months now.

The key areas for gold are $1,700 first followed by the $1,800 level. If gold can decisively break above $1,800, the big move I have been expecting will be well under way. There is a fly in the ointment here. Next week is the important gold option expiry and we know from past experience that the shorts try to pressure prices during expiration.”

Read more here: Physical Gold Buyers Win The Day, Shorts Retreat

The relationship between gold and interest rates

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“This week’s downside breakout in the T-Bond futures market and the associated rise in the T-Bond yield has prompted us to re-visit the relationship between gold and interest rates. In the process of doing so we’ll address the question: are rising interest rates bullish or bearish for gold?”

Read more here: The relationship between gold and interest rates