“Short gold on market overreaction” – Jeffrey Currie on CNBC on Feb 16, 2016; CNBC host: “Is there any commodity that you can recommend to help our viewers make money?” Jeffrey Currie: “Short gold” – CNBC on April 5, 2016;
Goldman Sachs’ Jeffrey Currie has become the “Jim Cramer” of the gold market (click on graph to enlarge). When he
issues a table-pounding call, do the opposite. When gold was approaching its bottom around the $1050 level, Currie’s price target was $800. Much the same way Wall Street banks like Goldman, with AAPL at $96 and down 27% since July have been forced to lower their price target from $200 to $150, Currie was forced to raise his price target for gold to $1080. And he’s still pounding table with a “short gold” advisory. I guess when he receives a taxpayer-subsidized seven-figure bonus every year, he doesn’t mind looking like a total idiot with regard to the market.
To be sure, there’s several developments that warrant designation as the market story of the year so far. The shocking performance of the stock market would likely get the nod except for the now-obvious fact that the Federal Reserves continuous intervention is the force behind the stock market’s buoyancy. In relation to the true underlying fundamentals, perhaps the only two markets in history that have been more irrational are the Dutch tulip bulb mania of the 1630’s and the Weimar Republic stock market from 1914 – 1923.
Without a doubt in my mind, the move up in the precious metals sector since January 20th is the market story of the year so far. What makes this even more remarkable is the relentlessness of the move despite the obvious repetitious attempts by the Federal Reserve/bullion banks to push the price of gold/silver lower with fraudulent Comex paper derivatives, as evidenced by the rapidly escalating amount of paper gold/silver contracts printed and sold into the “market.” The open interest of paper in relation to the amount of underlying deliverable physical gold/silver on the Comex has been multiplying recently at a geometric rate.
This rise in the price of gold/silver has ensued despite a plethora of skepticism from even the traditionally bullish precious metals-investing analysts. Most market prognosticators – and I’m more less guilty of this myself – have been forecasting a sharp pullback/correction in response to market technicals which heretofore have signaled the imminence of a massive bullion bank price attack.
Further contributing to the surprising price-behavior of gold is the absence of Indian imports which push the market higher with elephantine seasonal demand at this time of year. India’s import machine has been effectively shut down from a jeweler’s strike since March 1. This source of physical demand has begun to stir, which could make the present build-up in the paper short interest in gold and silver particularly interesting to watch.
There’s a flood of capital on the sidelines that stands ready to move into the sector but that is waiting for a big price pullback before initiating or adding to position. The “smart” institutional money has been unloading historically overvalued stocks and is loathe to buy near-zero yielding Treasuries. Perhaps this dynamic in and of itself will pre-empt any meaningful price corrections for the time-being. While it may feel like the metals and mining stocks have made an unsustainably large move since mid-January, these two graphs below provide some perspective on the “scale” of the current move (click to enlarge):
As you can see, the two graphs of gold and the HUI index, while making a large percentage move since mid-January, have barely moved the needle in relation to their mid-bull market tops in 2011.
For as brutal and relentless as the manipulated price correction has been for the last five years, we can expect the next move higher to be a least as equally forceful in its power and durability. Make no mistake, the underlying fundamentals which triggered the de facto financial system collapse in 2008 and drove the precious metals sector its peak in 2011 have become even stronger since the advent of QE – the money printing which further fertilized and enabled these systemically catastrophic inducing trigger-points.
The junior mining stocks are set up to provide life-style changing wealth creation. But finding the ones that are bona fide companies is a challenge. The Mining Stock Journal presents bi-monthly commentary and insight to the precious metals market plus a well-researched junior mining stock idea with each issue. You can access the current report plus the back-issues (distributed via email) here: Mining Stock Journal. The issue that will be published today presents a relatively undiscovered and incredibly undervalued company.
Stock market entering it’s “Sell in May … and go away” phase?.
The weasels at the bullion banks are entering their soiled undies phase.
I don´t care any more for what “anal”ysts say. I´m quite sure they buy physical gold in the same time they bash it. Every future trader knows he bites the hand that feeds him. As long as they can make “money” regardless of which underlying they will do that.
Best thing is stacking PM as long as this financial system is working. Yes, I mean it´s working for me.
Anyone who does not know why precious metals are so “cheap” will wake up one morning and all doors will be closed: those of coin dealers and banks, but instead financial repressions, bail-in etc.
It´s hard to believe that in spite of internet vast majority does not care what´s really going on. The persons responsible know of course and take care of their future by buying gold.
On the other hand, here in Germany we spend about 1 Billion € each quarter for gold.
This Friday afternoon in Australia (morning in America, my country of origin) as I watch both gold and silver breaking above the cartel’s panic zones, I feel like I imagine the American rebels (against enslavement to the Bank of England) must have felt like at Valley Forge in spring 1778 when news arrived from France of the French alliance; that was the moment when the Americans knew they would win the war.
I propose this song as the new anthem for the Federal Reserve, and that at an appropriate time in the near future someone should sing this outside the Eccles Building:
https://www.youtube.com/watch?v=Hd_RZA07EqQ
This is big money hitting metal, about time some of these fools are waking up…stocks or the US $ they can’t save both…if i was in stocks & not holding physical metal , I reckon I would be very concerned this monday & the rest of this year…. Dave great article
A number of random data points to note:
1. Carl Icahn dumped ALL of his Apple stock.
2. This, only few months after Oil King T Boone Pickens dumped ALL of his oil holdings.
In last few days, a surreal name-calling fight has broken up in the precious metals community between Bill Holter & Bob Moriarty about:
Whether it’s possible for COMEX to default, what does the term “default” even mean, and an argument that it’s impossible for any commodities exchange to “technically” default because the “force majeure” clauses are exactly intended for there to not be a default. I have to side with Mr. Holter in this argument, because a claim that any force majeure cash settlement invalidates possibility of commodity default is BULLSHIT. (When such cash could be printed in a Banana Republic out of a porcupine’s arse.) Having said this, despite his BULLSHIT default argument it appears that Mr. Moriarty had been a loud & consistent voice about how much of a cancerous fraud financial derivatives are for many, many years. For that, I’ll give him credit.
I don’t wish to pollute comments section by posting links after links related to this. It should be easily searchable thru any basic search engine. I just wished to bring attention to somewhat important random data points, that’s all.
Moriarty confuses default with remedy. Cash settlement is the remedy of the default of not delivering on your contractual obligation, which is the delivery of physical metal. Since Comex is the exchange that a trader utilizes, the contract terms are one-sided, to their benefit. If you don’t like it use another means of buying physical. I don’t understand why anyone would trade for physical on the Crimex, anyway.
“Is there any commodity that you can recommend to help our viewers make money?” Jeffrey Currie: “Short gold” – CNBC on April 5, 2016;
Great: that made my day!
Just checked for the first time this morning and see silver up again today. Maybe the big guys are “saving up” for a big smash attack??
I do know the longer this goes on the less likely they can put the genie back into the bottle. Pretty soon under $17.50 becomes unlikely in my uninformed opinion.
Gold now breaking through the Goldman Sachs panic leve of 1280, silver almost 18…
…so now I’ve changed my mind about the song I want to sing at the Federal Reserve! Now, rather, I sing THIS to the Eccles Building!: https://www.youtube.com/watch?v=Dn4vkSH6Og8
My new song for – or rather at – the US Federal Reserve:
https://www.youtube.com/watch?v=Dn4vkSH6Og8
Gold and silver moving up nicely today. The dollar not so much.
I’ve been buying Dave’s mining recommendations. As the metals go up, the miners should go up faster. I also have physical and some Bitcoin, freeze dried food and a water filter. My pool should provide enough water to get me through for a while as long as the pump keeps running.
Just saw a headline on CBS Marketwatch proclaiming that Jeff B. predicts Amazon stock is going to $900 a share. Only an idiot would by Amazon at that valuation.
I’m working with one of Amazon’s cloud clients this week. They just made the switch to the cloud last year. It hasn’t gone well.
The AMZN numbers were ALL hype. Stay tuned
The totally f-cking INSANE (as insane as Caligula!) AMZN numbers remind me of THIS, of how mad Emperor Caligula kept PRETENDING to WIN at gambling, until…
…ff to 42:30 et seq (and then just a few minutes will follow after 42:30, until f-cking Caligula – like Bernanke and Yellen and Bush and Obama et al – gets what he deserves…ff to 42:30!)
https://www.youtube.com/watch?v=9sKyc4bTI8U
Here’s how I’m presently imagining the PRESENT AND CONTINUING end and defeat of the f-king central banks (especially the US Federal Reserve and all evil creatures who serve it):
https://www.youtube.com/watch?v=6vry0ijbJVE
Hi Dave,
I’ve been reading your site for quite some time. I have had numerous subscriptions to metals newsletters in the past. Figured I would give you a turn.
Can you give me some info on the precious metals/mining stock fund that you co-manage? What are the parameters for investors to join?
Thanks Murph. Contact my partner Dean DiPaola: Dean@goldenreturnscapital.com and he can send you all the information. The fund is set up like hedge fund. It’s a combination of physical bullion (gold/silver sovereign-minted bullion coins primarily) and junior mining stocks. Investors can elect to receive their pro rata share of the bullion in lieu of cash when they cash out their investment.
I’m also in discussions with a colleague about launching a junior mining stock fund. It’s intended to be “high octane” with thoroughly researched investments and highly concentrated positions. CAPM/diversification pimps would have a heart attack.
That fund, because of the nature of it, will have a $250k minimum because we only want investors who can afford the risk to invest in the fund.