There is clear evidence this week of a massive bear squeeze, particularly in silver. In all likelihood, the correction in gold and silver might be over.
Individual specs will have to unwind their positions or stand for delivery. But as a cohort they can increase their positions significantly to the point where bullion banks can no longer try to manipulate the market.
Alasdair do you have any comment on the reports by Michael Lynch tracking the explosion in the number of off-COMEX overnight settlements, especially for the current June contract? 1600 odd contracts over the last three days and 11.7M oz so far for the June contract.
I read or watch everything that I come across of yours. I think the info you pass along is very accurate and relevant. One thing I don't like is that you (and some other commentators) report in tonnes instead of ounces. I assume that I am not the only one that doesn't keep daily track of how much a tonne is trading for. But, I and I think most others reading your articles know how much an ounce of gold/silver is trading for. I have been making this type of comment whenever I come across a commentator reporting only in tonnes. I see some listing PM volume in tonnes/ozs. or Mozs. I assume it must be easier for you (and others) to use tonnes, but I would think that for most of your followers it makes those numbers more opaque at least without digging out the calculator. If you don't agree, please let me know your reasons why.
AM, when you write, "in all LIKELIHOOD, the correction in gold and silver MIGHT be over" (capitalization mine) I do not read this as a statement given with a strong conviction. Could we strike the word "might" and just state that in all likelihood the correction in gold and silver is now over? Thank you Sir,.
The rapid progress of the Russian offensive in Ukraine toward Kharkov this week could trigger a further advance in gold and silver particularly because- as Alastair reminds us- such a successful Russian push would weaken confidence in the dollar.
Quite so - you're " Right Over the Target " ( sorry ) with this observation , much indeed as the un-matched & un-matchable Russian Military has been from the outset . To all intents and purposes this ' S.M.O. ' is complete with a mopping up operation already underway and at a pace & intensity entirely of the Russian's choosing .
It's when short sellers have to buy back their positions when the bets the price will fall are so out of the money the seller throws in the towel and buys the commodity or share back for a loss. That's often caused by an automated stop order, where the investor sets a limit on the maximum loss they're prepared to bear, and that's usually set when or shortly after they open the position. In doing so that creates more bids and forces the price up even more, which triggers a cascading effect for other shorts which have their stop-loss set similarly or slightly higher. The end result is the price ticks sharply upward.
The COMEX is an odd beast. It's a futures market where a contract can be opened as a simple cash bet on the price going up or down, but the real reason for having a futures market is so that producers and consumers of physical metal can lock in a fixed price for delivery of the commodity.
Until relatively recently the bullion banks have been able to use massive leverage to put a lid on silver prices because the process of delivering the 1000oz bars has been a pain in the neck. You have to deal with a registered market participant, jump through a bunch of hoops and there's a minimum of 5000oz for a single contract. That's hard and costly to get it sorted and securely shipped out of the vaults. Hence most contracts were cash settled or rolled over to the next month.
BUT some big guys have been "standing for delivery" and using the low spot price to clean out a huge chunk of metal from the registered vaults. The contract must be delivered in that case and some shorts have been caught with their proverbial shorts down (!) and consequently have needed to buy on market, forcing the price up.
It's more complicated than that too, with the Exchange for Physical mechanism on the Over the Counter market and some late night shenanigans going on in London, but the dripping tap is becoming a bit of a flood and that's forcing prices up.
Am I right in my interpretation of the post in brackets below thx
“We know the Chinese to be avid speculators, and analysts (incorrectly) assume that they will have to unwind their positions, leading eventually to a fall in the gold price. “
1. If the US / BLS publishing a poor jobless claims number was the , or one of the catalysts to send the metal's higher & bond yield's lower , then given they almost always either lie or get their numbers hideously wrong ...then what reaction might a truly accurate number have brought forth ..??
2. " Furthermore , a successful 30 - year U.S. treasury bond auction allayed fears of funding
difficulties " - If the Chinese , Japanese & pretty much nobody else not in need of an urgent
frontal lobotomy aren't buying this garbage .....then who is . For a long time . Jim Willie has
been saying that the Fed / US Treasury / ESF have been funneling vast quantity's of under the table
dollar liquidity to such as the , UK / Belgian & Irish Governments + various offshore entity's in such
as the Cayman Islands to buy up all of this un-wanted issuance on the ' QT ' . Many other pundits
& analyst's have rubbished ' Dr Jim ' over what he's posited . ' BUT ' he very rarely gets anything
like this wrong , so on the basis of there not being any smoke without fire ....?? .
3. How apt that you've put ' delusion ' + Andrew Bailey's name in the same paragraph ...!! .
This man , if not the worst Governor of the BOE in all time - must surely rank as one of the prime
contenders for this position . Better he looks for a Job more suited to his questionable talents .
Perhaps behind the counter of his local Sub- Post Office .... and even then if I were some dear old
Granny buying a couple of book's of stamps , I'd have to count my change twice over ...etc .
Individual specs will have to unwind their positions or stand for delivery. But as a cohort they can increase their positions significantly to the point where bullion banks can no longer try to manipulate the market.
Alasdair do you have any comment on the reports by Michael Lynch tracking the explosion in the number of off-COMEX overnight settlements, especially for the current June contract? 1600 odd contracts over the last three days and 11.7M oz so far for the June contract.
I read or watch everything that I come across of yours. I think the info you pass along is very accurate and relevant. One thing I don't like is that you (and some other commentators) report in tonnes instead of ounces. I assume that I am not the only one that doesn't keep daily track of how much a tonne is trading for. But, I and I think most others reading your articles know how much an ounce of gold/silver is trading for. I have been making this type of comment whenever I come across a commentator reporting only in tonnes. I see some listing PM volume in tonnes/ozs. or Mozs. I assume it must be easier for you (and others) to use tonnes, but I would think that for most of your followers it makes those numbers more opaque at least without digging out the calculator. If you don't agree, please let me know your reasons why.
AM, when you write, "in all LIKELIHOOD, the correction in gold and silver MIGHT be over" (capitalization mine) I do not read this as a statement given with a strong conviction. Could we strike the word "might" and just state that in all likelihood the correction in gold and silver is now over? Thank you Sir,.
The rapid progress of the Russian offensive in Ukraine toward Kharkov this week could trigger a further advance in gold and silver particularly because- as Alastair reminds us- such a successful Russian push would weaken confidence in the dollar.
Simon - 17th May .
Quite so - you're " Right Over the Target " ( sorry ) with this observation , much indeed as the un-matched & un-matchable Russian Military has been from the outset . To all intents and purposes this ' S.M.O. ' is complete with a mopping up operation already underway and at a pace & intensity entirely of the Russian's choosing .
Sorry what is the definition of bear squeeze?
It's when short sellers have to buy back their positions when the bets the price will fall are so out of the money the seller throws in the towel and buys the commodity or share back for a loss. That's often caused by an automated stop order, where the investor sets a limit on the maximum loss they're prepared to bear, and that's usually set when or shortly after they open the position. In doing so that creates more bids and forces the price up even more, which triggers a cascading effect for other shorts which have their stop-loss set similarly or slightly higher. The end result is the price ticks sharply upward.
The COMEX is an odd beast. It's a futures market where a contract can be opened as a simple cash bet on the price going up or down, but the real reason for having a futures market is so that producers and consumers of physical metal can lock in a fixed price for delivery of the commodity.
Until relatively recently the bullion banks have been able to use massive leverage to put a lid on silver prices because the process of delivering the 1000oz bars has been a pain in the neck. You have to deal with a registered market participant, jump through a bunch of hoops and there's a minimum of 5000oz for a single contract. That's hard and costly to get it sorted and securely shipped out of the vaults. Hence most contracts were cash settled or rolled over to the next month.
BUT some big guys have been "standing for delivery" and using the low spot price to clean out a huge chunk of metal from the registered vaults. The contract must be delivered in that case and some shorts have been caught with their proverbial shorts down (!) and consequently have needed to buy on market, forcing the price up.
It's more complicated than that too, with the Exchange for Physical mechanism on the Over the Counter market and some late night shenanigans going on in London, but the dripping tap is becoming a bit of a flood and that's forcing prices up.
Am I right in my interpretation of the post in brackets below thx
“We know the Chinese to be avid speculators, and analysts (incorrectly) assume that they will have to unwind their positions, leading eventually to a fall in the gold price. “
Simon = 17th May
Been away - hence recent radio silence .
1. If the US / BLS publishing a poor jobless claims number was the , or one of the catalysts to send the metal's higher & bond yield's lower , then given they almost always either lie or get their numbers hideously wrong ...then what reaction might a truly accurate number have brought forth ..??
2. " Furthermore , a successful 30 - year U.S. treasury bond auction allayed fears of funding
difficulties " - If the Chinese , Japanese & pretty much nobody else not in need of an urgent
frontal lobotomy aren't buying this garbage .....then who is . For a long time . Jim Willie has
been saying that the Fed / US Treasury / ESF have been funneling vast quantity's of under the table
dollar liquidity to such as the , UK / Belgian & Irish Governments + various offshore entity's in such
as the Cayman Islands to buy up all of this un-wanted issuance on the ' QT ' . Many other pundits
& analyst's have rubbished ' Dr Jim ' over what he's posited . ' BUT ' he very rarely gets anything
like this wrong , so on the basis of there not being any smoke without fire ....?? .
3. How apt that you've put ' delusion ' + Andrew Bailey's name in the same paragraph ...!! .
This man , if not the worst Governor of the BOE in all time - must surely rank as one of the prime
contenders for this position . Better he looks for a Job more suited to his questionable talents .
Perhaps behind the counter of his local Sub- Post Office .... and even then if I were some dear old
Granny buying a couple of book's of stamps , I'd have to count my change twice over ...etc .
Big Bear hug in Ukraine also...