There was a time when the merest mention of gold manipulation in "reputable" media was enough to have one branded a perpetual conspiracy theorist with a tinfoil farm out back. That was roughly coincident with a time when Libor, FX, mortgage, and bond market manipulation was also considered unthinkable, when High Frequency Traders were believed to "provide liquidity", or when the stock market was said to not be manipulated by the Fed, and when the ever-confused media, always eager to take "complicated" financial concepts at the face value set by a self-serving establishment, never dared to question anything. Luckily, all that changed in the past several years, and it has gotten to the point where even the bastions of "serious", if 3-5 years delayed, investigation are finally not only asking how is the gold market being manipulated, but are actually providing answers.
Gold initially ticked slightly higher in Asia overnight after the U.S., China, Russia, the UK, France and Germany reached an agreement with Iran yesterday to limit Iran’s nuclear programme. The agreement allows for the easing of sanctions on trading gold with Iran. This has prevented Iran from diversifying into gold in recent months.
Two hours into trading and gold was slightly higher at $1,244.50/oz. However, gold prices then came under pressure, with more concentrated, significant sell orders commencing at exactly 0600 GMT. Sharp, concentrated selling took place which pushed gold prices from $1,238/oz to $1,225 or $13 in less than two minutes. Interestingly, a volume buyer then stepped in and gold then bounced higher to $1,233/oz.
The detente with Iran is not as bearish for gold as is thought. While the threat of any imminent conflict with Iran has eased in the short term, the move allows Iran to begin accumulating gold again - another source of significant sovereign demand.
There is also still risks of a military confrontation in the region. Israel and Saudi Arabia were extremely opposed to the deal and significant tensions remain in the powder keg that is the Middle East.
On Friday, gold managed to close with a slight gain, but that didn’t stop prices from suffering their biggest weekly loss in 10 weeks - down 3.4%. Gold’s falls came amid peculiar trading on the COMEX last week which saw COMEX suspend trading twice on Wednesday. The incessant speculative chatter over possible, but unlikely, tapering of the Federal Reserve’s debt monetisation programme continues.
DEMAND IN CHINA remains robust as seen in Shanghai gold premiums. Closing wholesale premiums continue to strengthen, gold closed at a $33 premium at $1,265.69 (see table below) today, up from a $11.25 premium at $1,265.69/oz on Friday.
On the heels of unprecedented actions being taken across the globe, today 40-year veteran Robert Fitzwilson warned King World News that China is in the midst of undertaking a frightening and methodical plan to dominate the entire world. He also discussed what this harsh reality means for investors and what they can do to protect themselves. Fitzwilson, who is founder of The Portola Group, put together the following tremendous piece below for KWN readers around the world.
A crack-up boom is exciting. Stocks head for the moon. But it's a flawed moonshot. The rocket ship blows up because there are no real earnings or revenue growth to justify the high prices.
Eventually, investors flee into tangible goods - what von Mises called Flucht in die Sachwerte...
What do you do in a crack-up boom? You hold onto your hat! And hard assets.
It's like walking through an inner-city alley in a high wind. Everything gets picked up by the breeze - plastic bags, old newspapers, sandwich wrappers and Styrofoam cups. And when the wind stops, the whole lot of it falls again to the ground...messier than ever.
We're not predicting anything, mind you.
We're down here in Nicaragua with members of our family wealth investment advisory service, Bonner & Partners Family Office. The weather is warm and sunny. The waves crash upon the beach, as about 20 surfers try to catch a wave in front of our house. The wide, flat ocean is like the surface of a mirror; we see the clouds and the setting sun reflected in it.
The beaches here are very different from those of the East Coast. They are more like California, but prettier and much warmer. Our beach is about a mile wide, shaped in a crescent...with hills rising on each side and flat lands, flushed by two small rivers, in between. In the morning, we walk from one end to the other and back, and then jump in for a little swim. It takes about an hour.
A free trade agreement that is neither about trade nor freedom.While the Obama Administration appears to be growing ever-more-limp domestically, the president is still making a vigorous international push that has the potential to shift economic power dynamics, rewrite intellectual property laws, establish new labor and environmental regulations, and reduce the authority of Congress. And, the White House hopes to have all this sorted out by the end of this year.
The Trans-Pacific Partnership Agreement (TPP), considered the “cornerstone of the Obama Administration’s economic policy in the Asia Pacific,” has been quietly negotiated since since the president's first term began. The U.S. Trade Representative Office (USTR) presents the agreement as a means for the United States and other 11 other Pacific-rim countries to be the leaders of a technology-fueled future by trading with each other free of government tariffs. For all this, it has received a ringing endorsement from the New York Times.
Fifty years is long enough to mold history into mythology, but in the case of John Fitzgerald Kennedy it only took a decade or so. Indeed, long before Lyndon Johnson slunk off into the sunset, driven out of office by antiwar protestors and a rebellion inside his own party, Americans were already nostalgic for the supposedly halcyon days of Camelot. Yet the graceless LBJ merely followed in the footsteps of his glamorous predecessor: the difference, especially in foreign policy, was only in the packaging.