Wednesday, July 22, 2015

Bunch of gold commentary, in case you missed it

Lots of people talking gold this week, go figger. Here's a sampling:

Bron Suchecki - the spin on the gold smash. This is the part I agree with:
In terms of the why, here are some of the more sensible comments:
Ross Norman: They choose the optimal moment in the early morning and when Japan was closed for a holiday to get the biggest bang for the buck. It was clearly ‘short’ traders using leverage to trigger (technical) stops” he said. The price later regained some of its ground, allegedly as the profiteers cashed in jackpot gains on options that they also had. “It was a trade within a trade”.

Marex Spectron: no coincidence that this happened in the quietest, thinnest period of the week … they deliberately want to move it in a big way

“Traders”: Gold also fell in the Chinese derivatives market, which, traders said, added to the impression of an orchestrated attempt to push the price down, triggering others to sell their positions.

Societe Generale: It was just a bit of a bear raid and there was nobody on the other side to mop up the selling

“Market Participant”: The fact that it was done in Asian hours and in a loud, messy manner suggests it may be done by people not directly under European and US regulation)
Translation: Shanghai Chaos. However:
That is not good for gold as it will give them confidence to test gold again.
So gold can go lower still. $1000 is a magnet, everyone wants to get there now.

Reuters - don't count on India to come to the rescue. Uh, that headline comes from the editor, not the writer:
"This is not a festive or wedding season, so interest remains low," said Kumar Jain, vice-president of the Mumbai Jewellers Association.

This year's Hindu calendar has fewer auspicious dates for weddings, a traditional time for buying and giving gold.

The RBI's inflation targeting efforts have helped bring price rises under control, removing one main reason for Indians to hold gold as a store of value. The rate of inflation has halved to 5.4 percent from double-digits at the end of 2013.


"Many Indian consumers are not buying, thinking there's still scope for downside in prices," said Daman Prakash Rathod, a director at Chennai-based wholesaler MNC Bullion.

And weak monsoon rains mean many farmers from India's rural areas, which make up nearly two-thirds of domestic gold demand, don't now have the ready cash to buy gold, Rathod noted.
Listen to the Indians, not to the white people, if you want the real news about India.

Pragmatic Capitalism - are we nearing peak commodity hatred? Yeah, but Cullen forgets that we're in a secular-stagnant economy: inflation can't go higher because world governments have slain the beast for good. And in any case, you want demand to outstrip supply for prices to go up, Cullen. - four reasons a buying opportunity is fast approaching in gold. Tommy Humphreys (who knows all about economics, commodities and trading due to his vast wealth of experience) has some commentary, with a number of charts. Apparently since spec positioning is very short, and retail sentiment is very negative, he's sure it can't get worse, and August to October is a good seasonal period for gold even though everyone thinks Yellen will raise rates right in the middle of that.

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