Peter Grandich: Market Update & 15 Potent Comments

Posted by Peter Grandich & Various Authors

Share on Facebook

Tweet on Twitter

U.S. Stock Market – What recovery? Despite trillions in new paper printing, the U.S. economy barely gained any momentum and is clearly faltering yet again. Any talk of QE ending is out the window (it was b.s. to start with) and the “Don’t Worry, Be Happy” crowd will do their very best to spin it into justifying large equity ownership. Me? I said to be a scale-up seller on the way to Dow 15,000 and nothing has changed.
U.S. Dollar Index – Shhhh… It’s rolling over despite all the bulls who said it’s still a safe haven.
Gold – There are lots of things happening and some may not be making big news but never-the-less are worthy of recognition. The bears can ill-afford a $1,500+ gold tag and are making a stand to prevent it. The end of week trading should go a long way to suggest where we’re heading in May. Stay tuned.
Bonds – Looking for an entry point to actually short bonds. I figure we could see the 10-yr T-Bond go to a 1.50% yield and if so, I hope to make that an entry point for me.

Fifteen Days in April

Editor’s note: Assembled below are fifteen of the best insights and observations on one of the strangest and confusing fifteen day periods in the history of the gold market — a flash crash, a global rush to purchase and a healthy bounce.


1. Peter Grant/USAGOLD (as quoted at Kitco News):
“The price discovery occurs in the paper market. The paper market drove the price down for physical. And there had been a large amount of pent-up demand that just absolutely came out of the woodwork. We were as busy last week and into this week as we’ve been since the financial crisis of 2008-09. It was absolutely unbelievable demand for physical. Physical buyers are not speculators,” he continued. “Our clients are primarily concerned with wealth preservation, portfolio diversification, hedging and so forth. They are not speculators. When the paper market provides a gift (of lower prices), and it was an unnerving gift to be sure…the physical buyers do indeed tend to come out in force to underpin the market.”

2. Chris Hart/Johannesburg Sunday Times:
“Of major interest is the state of the physical market. Over the past six months, gold has been subjected to relentless selling and has frequently been ‘bombed’ — where a large number of contracts are dumped on the New York Commodities Exchange (Comex) over a very short period. On April 12 the market was bombed with more than 500 tons of gold in a manner that caused great downward price pressure and panicked the market into selling. . . The drop in Comex inventories [See Egon von Greyerz below], U.S. gold trade data and Hong Kong trade data suggest the mobilisation of physical gold has resulted in a large transfer from western to eastern vaults.

3. Egon von Greyerz/Matterhorn Asset Management, Switzerland,KingWorldNews:
“Coming back to what is happening in the gold market, it’s extraordinary. The attack on the gold price through the paper market has totally backfired and failed. The $300 drop that we saw, in a few days, has already retraced 50%. That’s nothing compared to what will happen.

The attack in the paper market was always doomed to fail in the light of unprecedented demand and major shortages in the physical market. If you look at the Shanghai gold exchange, deliveries from January are 1,030 tons. That (1,030 tons) is against world gold production for the same period (since the beginning of 2013) of only 934 tons. That is absolutely astonishing volumes (of physical gold demand) you are talking about in China.

If you look at JP Morgan, their eligible gold, which is the stock they can deliver, has been down 65% just in the last couple of days. And COMEX, their stock is also down to about half of what it was over a year ago. Premiums now in Singapore are up $3 per ounce. If we now look at the Swiss refiners, remember Swiss refiners refine 70% of the world’s gold, the Swiss refiners are increasing premiums substantially.”

….read 4-15 HERE