Today gold closed under $1,160 (August 2010 COMEX contract) and appears to have decisively broken the intermediate uptrend established after the February 5 low at $1,050. If the recent...
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Gold and silver are consolidating near their highs and that could be setting up an explosive scenario especially with physical and speculative demand remaining solid...
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Stocks plunged again today after a disappointing jobs report and more fear and loathing out of Europe. In stereotypical fashion, the Hungarians are shooting themselves...
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It was quite an ugly day in the markets on Thursday with longs the world over finding rotten eggs and dirty rocks in their shoes...
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Could this be an interim top in gold and silver today? Quite possibly but the jury will be out as long as gold stays above...
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An incredible thing happened to start this incredible week. Some gold investors happily paid the equivalent of over $1,500 per ounce of gold. Granted this was on a day that gold was posing in preparation for breaking its previous all-time record high, but that record stood at $1,225, at least 20% below the “Lost in Space” buy. Yes, it’s true. As reported by Zero Hedge’s Tyler Durden, this Monday Investors [were] Willing To Pay 31% Premium To NAV For Sprott’s Physical Gold ETF In Strike Over Global Fiat Devaluation Insanity:
And for a far more material indication of what the market thinks of not just gold, but of representations of gold holdings by ETF’s with “imaginary” unaudited stashes all over the world, take a look at the Sprott PHYS physical gold ETF, and specifically the premium over its NAV. Today it hit an all time record of 31%. The NAV differential has steadily crept higher since the launch of PHYS. Investors are willing to pay 30% more than the real value of holdings just for the knowledge that the gold backing their “assets” actually exists.
Personally, I think the insanity is that somebody would pay a 30% premium to the physical gold price and still be stuck with paper gold (which PHYS definitely is)! If you want to know why gold has just hit a record, there it is, an insane mentality where all reason has been tossed out the window and value perception is no longer anchored in any sort of reality but rather in panic, greed and fear. Congratulations Tyler Durden for helping to lead a clueless flock of Robinsonian investors into one of the worst investment decisions I’ve seen in the past 20 years. You sir are no Robot and that is not a compliment.
Sure enough, I just checked here and the premium to NAV in PHYS on Tuesday was still an astonishing 21%!
Today was one of the wildest days in the market that I can remember and zurbo and I had the fortune to be on the phone discussing the market the moment that the bad craziness went down. We watched the Dow and other stock indices dive about 10% in the course of a few minutes and then recover to 5% losses immediately. We quickly scrambled to fill some orders on positions we’ve been eyeing to accumulate at lower prices, but with only moderate success due to the fast and furious price movements. We do think that some weakness will carry over to the next couple of days so we will be looking for more buying opportunities to present themselves.
There were some important lessons learned today.
One. Gold showed today that the next time there is a flight to safety amid a crisis of confidence, we can expect the gold price to be firm and even strong while other markets are crashing. Clearly there is a different group in charge of gold today compared to the Fall of 2008. The last couple of weeks I have felt that gold could make a tiring move to $1,200 but the Midas metal easily slashed through that level today to reach a high slightly above $1,210 spot. Gold continues to hang above the $1,200 level as I write this. Importantly, the basis measures are indicating that the price rise is being supported by bouts of BOTH paper AND physical buying. For example, at several points today June COMEX gold reached a $10 contango (normally around $1 with about 3 weeks to first delivery notice). As I write this, the contango continues to spike momentarily into the $6 range, which is more than 5 times its normal level. What this means is that there is periodically a wave of buying pressure in COMEX gold as compared to the physical market. But the physical market is no slouch either, there having been a number of trades today with gold in backwardation. Moreover, the Gold ETF Basis has seen some spikes in the NAV premium as well to above normal levels, indicating that even while investors were dumping stocks in general, they were buying the gold ETF GLD. The basis indicators don’t show off very well on a crazy day like this but I will try to post some charts later for Metal Augmentor subscribers.
Gold and silver suffered nasty drops this morning as the markets reflected continuing uncertainty around Greek debt. Our basis indicators were already signaling some weakness...
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Today is a classic example of gold and silver “ratcheting up” against the U.S. dollar. First gold and silver rose when the dollar fell...
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We know this is coming really late after the debate has mostly died down, but we wanted to memorialize Metal Augmentor’s thinking on the subject of tungsten-filled gold bars. We also know we said that we wouldn’t officially address this issue because it is too silly, but something tells us that the tungsten bugaboo will rear its ugly head again so it’s probably worthwhile to go ahead and thoroughly debunk it.
Not surprisingly, our take on the topic is that it is almost entirely pure BS, and below you will find how we arrived at that conclusion.
Charlatan Exposed, Gold and Silver Bullion, Market Update BB
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