Buying Gold | Massive <b>Gold</b> and Silver Futures <b>Buying</b> :: The Market Oracle <b>...</b> | News2Gold |
- Massive <b>Gold</b> and Silver Futures <b>Buying</b> :: The Market Oracle <b>...</b>
- Here's Why I'm Finally <b>Buying Gold</b> Stocks | Seeking Alpha
- <b>Buying gold</b> to insure against the global bond bubble ArabianMoney
- Your True <b>Gold</b> Savings: Upgrading vs. <b>Buying</b> Individual Resources <b>...</b>
- <b>Gold</b> Near 4-Month Highs As FOMC Warning Sparks <b>Buying</b> <b>...</b>
- <b>Gold</b> Rises by Rs 75 to Rs 28,200 on Sustained <b>Buying</b>, Global <b>...</b>
| Massive <b>Gold</b> and Silver Futures <b>Buying</b> :: The Market Oracle <b>...</b> Posted: 11 Jul 2014 12:27 PM PDT By: Zeal_LLC
A little over a month ago, I wrote an essay on the record shorting of gold and silver futures by American speculators. This one group of traders utterly dominates gold and silver price action, and therefore the fortunes of stock traders' flagship GLD gold ETF and SLV silver ETF. Gold futures had just seen their biggest jump in spec shorts, and silver futures their highest levels of spec shorts, in at least 15.4 years! As I said then with gold and silver loathed and languishing near ugly multi-month lows, extreme shorting is very bullish. Futures shorts contractually have to be covered before expiration, and this is done by buying offsetting longs. The higher speculators' futures shorts get, the more near-future buying they guarantee. And since futures are so hyper-leveraged, this buying to cover often happens quite rapidly. In early June near the gold and silver lows, speculators merely needed to keep $6000 in their account to control a single 100-ounce gold contract, and $8250 for a single 5000-ounce silver contract. But these contracts were worth a whopping $125,000 and $95,000 respectively at $1250 gold and $19 silver. So that represented maximum leverage of an insane 20.8x in gold futures and 11.5x in silver futures! In the stock markets, leverage has been legally limited to 2.0x ever since the Federal Reserve implemented its Regulation T in 1974. At 20.8x leverage, a mere 4.8% gold-futures move in the opposite direction that speculators are betting will wipe out 100% of the capital they risked. It was only a matter of time until some buying catalyst arrived that would unleash furious short covering, and it happened to be Janet Yellen. On June 18th after the latest meeting of the Fed's Federal Open Market Committee, the chair held one of her quarterly post-FOMC-meeting press conferences. CNBC's economics reporter Steve Liesman asked the first question, wondering if the Fed was "behind the curve on inflation" since its 2% target has already been exceeded recently. Yellen's response would prove the catalyst to ignite massive PM futures buying. She replied, "So I think recent readings on, for example, the CPI index have been a bit on the high side, but I think it's – the data that we're seeing is noisy." This "noisy" word would get much play after, as the CPI had just seen its first back-to-back months of 2.0%+ year-over-year growth since early 2012 the morning before. She seemed very out of touch with economic reality and super-tolerant of higher inflation. She finished by saying the Fed expects to "continue to see a gradual pickup over the next several years toward our 2% objective." Inflation was already at 2%+ annually on multiple major indicators and the Fed thinks it is going to take "several years" to get there? This shocking revelation to traders indicated the Yellen Fed will tolerate higher inflation far longer than previously thought. Inflation is bullish for PMs. The reaction that afternoon was rather muted, with gold and silver only up 0.3% and 0.6% on June 18th. But it's important to remember Yellen's quarterly post-FOMC-meeting press conferences don't start until 2:30pm, an hour after the closes of the main US gold and silver open-outcry futures trading days at 1:30pm and 1:25pm. So reactions to FOMC decisions often arrive the next day when full trading resumes. And futures speculators indeed came out in force early on June 19th. They bought aggressively, catapulting gold and silver 3.4% and 4.8% higher! These were the biggest up days in both gold and silver since the mid-September FOMC meeting where the Fed defied expectations to not start tapering its QE3 debt-monetization campaign. Janet Yellen had managed to trigger the gold and silver short squeeze! Though such big surges emerging out of record speculator shorting had to be short squeezes, we couldn't be sure for over a week. Speculators' futures positions are only reported once a week by the Commodity Futures Trading Commission in its famous Commitments of Traders reports. These are published Friday afternoons, current to the past Tuesday. So we had to wait until June 27th to see what really happened. And it was far more awesome than I imagined, not only massive short covering but massive new long-side buying! This first chart looks at the GLD gold ETF superimposed over speculators' total long and short positions in gold futures. The heavy buying unleashed by Janet Yellen's cavalier dismissal of inflation was incredible, and served to confirm the bullish outlook for gold and silver on multiple fronts. You can clearly see Yellen's June 19th gold surge above, though it is certainly overshadowed by gold's wildly anomalous plunge in the second quarter of 2013. But the futures buying behind that Yellen gold surge was truly remarkable. As expected, there was enormous short covering. American speculators bought to cover 25.4k contracts in the CoT week straddling that surge, the equivalent of 79.0 metric tons of gold! This represented specs covering over 1/5th of their total short positions in that week alone! Our CoT data goes back to early 1999, an 809-week span. And only 6 of those weeks had seen short covering over 25k contracts, it is exceedingly rare. Since today's secular gold bull was born in April 2001, there have been only 2 other CoT weeks with such massive short covering. Yellen's epic dovishness terrified the speculators. This decisive plunge in their total shorts cemented a critical downtrend in place for an entire year. At each subsequent major gold low, speculators have been less and less willing to take on excessive shorts. They peaked at an at-least 14.5-year-record 178.9k early last July near gold's initial low, but only hit a substantially-less-extreme 150.0k in early December at gold's next major low. The zeal for shorting was waning. And just over a week before Yellen's short squeeze erupted, the latest peak near the latest major gold low was just 132.8k contracts. This downtrend in peak shorting is very bullish, since major new gold lows are unlikely to be seen without excessive selling by futures speculators. As gold has consolidated over this past year, they are slowly starting to realize the extreme bearish consensus outlook on gold is dead wrong. That CoT week's massive short covering straddling Yellen's press conference was expected. But the big surprise was massive long-side buying as well! Speculator long buying is more important than short covering. Traders contractually have to cover shorts, so that buying is purely mechanical often with no conviction about where gold is heading. But buying new longs is voluntary and requires high conviction. This is especially true in the hyper-leveraged world of futures trading where being wrong can wipe out traders in a matter of days. During that same Yellen CoT week, American futures speculators added an astounding 27.9k long contracts. This exceeded their short covering, and was the equivalent of 86.7 tonnes of gold buying in a single week! They catapulted their long exposure fully 1/7th higher on Yellen. Unlike the traders buying to offset and close shorts, the guys buying new longs were not obligated to buy gold futures. They voluntarily chose to risk their scarce capital in a super-leveraged realm on a high-conviction belief gold was heading higher still. While specs' total longs have been gradually climbing since they bottomed at 170.2k contracts in mid-December, the Yellen buying was still very unexpected. In the 809 weeks of CoT history since early 1999, only 36 have seen spec longs grow by over 25k contracts. The last one happened back in August 2012, well before last year's extreme gold selling anomaly. So speculator gold-futures buying of that magnitude is pretty rare and special, something not witnessed very often. Together that week's long and short buying was the equivalent of a staggering 165.7 tonnes of gold! Such buying is massive beyond belief. According to the World Gold Council, global investment demand averaged 30.2t per week in 2012 and 14.9t in 2013. The American speculators' futures buying alone that was unleashed by Janet Yellen's dismissal of inflation dwarfed that. If it didn't happen in the summer doldrums when precious-metals investment demand is so weak, gold would have surged far higher on it. Now with the US stock markets still levitating on the Fed's epic dovishness, and gold still being totally shunned as an investment class, I figured that Yellen CoT-week spike would be the end of the heavy futures buying for now. So I was very surprised again when the following week's CoT report was released last Friday. It showed continuing heavy speculator buying momentum in gold and silver futures. Speculators covered another 9.0k short contracts in this latest CoT week, but also added an incredibly strong 19.8k on the long side! At just 83.9k total shorts in this latest read, these positions are back down to their support over the past year or so. But they still remain well above their average level in the normal years of 2009 to 2012 before 2013's extreme selling anomaly, which weighed in at 65.4k contracts. The jump in total spec longs to 244.4k contracts was even more impressive. This was the highest level by far seen since mid-April 2013, in the CoT week spanning gold's panic-like plunge. That extremely anomalous outlying event destroyed gold sentiment, but futures speculators are as bullish now as they've been ever since then. This means they will likely continue buying new longs as gold marches higher. And there's a lot of buying left to do. Between 2009 and 2012, average spec longs in gold futures were 288.5k contracts. But after extreme anomalies, mean reversions almost always overshoot dramatically in the opposite direction. So we're probably going to see spec longs at least return to late 2009's 376k level over the coming years. All that speculator buying will accelerate gold's upleg, enticing investors to return. The yellow line above shows the total deviation of both spec longs and shorts from their 2009-to-2012 normal-year averages. It has been the dominant driver of gold and therefore GLD shares over the past year and a half, with a very strong inverse correlation. So as futures traders continue covering shorts and adding new longs heading into gold's autumn strong season, gold and GLD will power higher. The total futures buying in the 2 CoT weeks since Yellen's inflation dismissal saw new spec long-side buying of 47.7k contracts, and spec short covering of 34.4k contracts. So speculators grew their total gold-futures longs by 24% over that little span while slashing their shorts by 29%! Obviously the idea that the uber-dovish Yellen Fed will tolerate high inflation for a long time really resonated with futures traders. And Yellen's attitude on inflation isn't going to change anytime soon, which is very bullish for the precious metals going forward. Not surprisingly since gold drives silver, silver-futures speculators mirrored gold-futures ones with dramatic surges in short covering and new long buying following Yellen. This last chart looks at the same CoT data for silver futures, with the SLV silver ETF superimposed on top. The impact of Yellen's comments and resulting gold surge spread into silver-futures trading as well. Speculators bought to cover massive amounts of silver shorts, and added big new longs, over both of the two CoT weeks following Yellen's press conference. Together this buying added up to 17.1k contracts of short covering, and 12.0k of new long buying, for total silver-equivalent buying of a whopping 145.6m ounces! This was over the latest two CoT weeks, so cut it in half to an average of 72.8m ounces per week. The Silver Institute recently reported that global silver demand hit an all-time record of 1081m ounces last year despite the extreme selling. That equates to just 20.8m ounces per week, showing how massive the buying by American futures speculators was after Yellen's press conference. It was truly enormous. This buying worked wonders for silver and SLV too. In just 4 CoT weeks, the greater-than-15.4-year-record spec silver shorts were cut in half! And provocatively nearly half of that short covering happened in the 2 CoT weeks before Yellen, so it was already well underway before she goosed gold. As I wrote a month ago, extreme spec shorts have to soon be covered. They are guaranteed near-future buying. But the new long buying didn't start until Yellen, and it was massive too with speculators growing their long-side bets on silver by 1/6th in just two weeks. This continued the strong uptrend in silver-futures spec long buying we've seen since last September. Speculators haven't been this bullish, had higher total longs, since back in February 2011 way before last year's anomaly. And that proved a wise bet. Over the next couple months, silver would rocket 46% higher to $48 per ounce! When futures traders start piling on to a long-side trade, prices rise which start enticing in the vastly-larger pools of investment capital. And once investors follow futures speculators' lead and start redeploying, the uplegs take on a life of their own and grow very large before failing. This mid-summer spec silver-futures buying is very bullish too. The past couple weeks look like a sea-change shift in sentiment among futures speculators! For much of the past year, they remained very bearish on and wary of gold and silver after the extreme selling anomaly in the second quarter of 2013. But Janet Yellen signaling inflation isn't a concern even as it crosses the Fed's longstanding 2% target changes everything. Gold and silver are go-to assets in inflationary times. As everyone who runs a household knows, prices are rising like crazy. Our food, shelter, energy, and necessities for living are getting more expensive. Our health-care, education, and tax costs are getting more expensive. Eventually these relentlessly-rising prices will coalesce into high inflation expectations, which will lead investment capital to pour back into gold and silver to ride the Fed's money-printing boom. The massive gold-and-silver futures buying in recent weeks is only the earliest vanguard of the capital flows coming to the precious metals as inflation continues to mount. These capital inflows should really accelerate during the autumn rallying season once we get beyond the usual summer doldrums. Gold and silver, and therefore GLD and SLV, are likely to be among the best performers in the second half of 2014. But as always, the gold and silver stocks will dwarf the gains in their underlying metals. The profits for mining leverage the precious metals' prices, rising much faster than the underlying gains in gold and silver. The larger gold and silver miners should at least double the metals' gains, the mid-tier ones quadruple them, while the smaller miners have the potential to see upside leverage even greater than that. So that's where our focus is at Zeal. We recently finished our latest 3-month project researching the universe of junior gold producers trading in the US and Canada. We started with 63 miners, then gradually whittled them down to our dozen fundamental favorites best positioned to thrive. All are profiled in depth in a fascinating new 23-page report. Buy yours today and get deployed early in gold stocks' new upleg! And you can profit from an essential contrarian perspective on the stock markets and gold through our acclaimed weekly and monthly newsletters. In them I draw on our decades of hard-won experience, knowledge, wisdom, and ongoing research to explain what's going on in the markets, why, and how to trade them with specific stock trades. Forging a contrarian mindset is the only way to consistently buy low and sell high. Subscribe today and start thriving! The bottom line is the gold-futures and silver-futures speculator buying following Janet Yellen's brazen dismissal of inflation was utterly massive. American traders flocked back to gold and silver at incredible rates, not just covering shorts as expected but adding enormous new long positions. And this all happened in the dark precious-metals sentiment wasteland of the summer doldrums no less, a very bullish omen. This represents a sea-change shift in sentiment among the futures speculators who have so dominated the gold and silver prices over the past year and a half. Gold and silver are vastly more attractive for broad investment when central banks are willing to let inflation run high for a long time. And the Yellen Fed has fallen all over itself to telegraph just that, heralding a new era of rising gold and silver investment demand. Adam Hamilton, CPA So how can you profit from this information? We publish an acclaimed monthly newsletter, Zeal Intelligence , that details exactly what we are doing in terms of actual stock and options trading based on all the lessons we have learned in our market research. Please consider joining us each month for tactical trading details and more in our premium Zeal Intelligence service at … www.zealllc.com/subscribe.htm Questions for Adam? I would be more than happy to address them through my private consulting business. Please visit www.zealllc.com/adam.htm for more information. Thoughts, comments, or flames? Fire away at zelotes@zealllc.com . Due to my staggering and perpetually increasing e-mail load, I regret that I am not able to respond to comments personally. I will read all messages though and really appreciate your feedback! Copyright 2000 - 2014 Zeal Research ( www.ZealLLC.com ) © 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.  | |||||
| Here's Why I'm Finally <b>Buying Gold</b> Stocks | Seeking Alpha Posted: 10 Jul 2014 12:39 PM PDT For the past two years, I've told investors to stay clear of gold stocks. If you followed my advice, you avoided a 31% collapse in the gold sector. But now, it's finally time to buy. And there could be big gains ahead... Let me explain... I've avoided gold stocks for the past two years for a few reasons... The first was rising production costs. Almost everything miners had to buy in order to get gold out of the ground was getting more expensive. That includes heavy equipment, labor, electricity, and fuel. And gold prices were falling. In short, profits for gold companies were about to get hammered. Second, for the past few years, inflation has been almost non-existent in most developed countries. Gold prices tend to rise the most during inflationary times. When people get worried about rising inflation and the devaluation of their money, they pile into gold and silver. But with low inflation, many investors see no reason to buy gold and silver. Finally, gold was not a good investment compared to stocks. For the past few years, stocks were trading at dirt-cheap valuations and raising their dividends. Why own gold (which pays no interest), when you can buy a great business like chip-maker Intel or oil giant Exxon Mobil at cheap valuations and collect a yield of more than 3%? With these headwinds facing gold stocks, I told readers they were better off investing elsewhere. But now, it's finally time to get back into the gold sector. You see, while production costs may still be rising, most gold companies have adapted to the tougher market conditions. They have shut down projects, sold off assets to raise cash, and laid off employees. Gold companies are leaner than ever today. They have to be to make a profit. Inflation also looks like it's about to rise. In an effort to stimulate the economy, the Federal Reserve has continued its money printing and has kept interest rates near record-low levels. Now, other countries around the world are following in America's footsteps. Japan is expanding credit and purchasing government bonds to stimulate its economy. The European Central Bank cut interest rates for the first time since 2012. China recently cut its corporate tax rate and increased infrastructure spending. And in the past few months, Australia, India, Turkey, Denmark, Israel, Poland, Mexico, Kenya, and South Korea have all cut interest rates. This will create a huge amount of cheap money that will eventually result in higher inflation around the world. And we're already starting to see inflation head higher. Last month, the Consumer Price Index – how the Fed measures inflation – rose by 0.4%, which is the largest increase in more than a year. Even the hint of higher inflation could push gold prices – and gold stocks – much higher as investors, worried about the devaluation of their money, pour into gold and silver. But even if we don't see higher inflation right away, gold stocks are still attractive today based on valuation. Many dividend-paying stocks are now trading at record highs. But many gold companies are still more than 30% below their 2013 highs... making them cheaper than dividend-paying stocks. In short, gold stocks now offer a good alternative to buying expensive dividend-paying stocks. And it's likely they're headed much higher as inflation starts to rise around the world. Based on the risk-to-reward ratio, I plan to recommend several gold stocks in my Small Stock Specialist and Phase 1 Investor newsletters over the next few months. I suggest adding a few gold stocks to your portfolio as well. Disclosure: None  Seeking Alpha PRO helps fund managers:
Thank you for your interest in Seeking Alpha PRO Our PRO subscription service was created for fund managers, and the cost of the product is prohibitive for most individual investors. At this time, we do not yet have a subscription product for individual investors. If you'd like us to contact you when it's ready, please click here. If you are an investment professional with over $1M AUM and received this message in error, click here and you will be contacted shortly. Thank you for your interest in Seeking Alpha PRO | |||||
| <b>Buying gold</b> to insure against the global bond bubble ArabianMoney Posted: 08 Jul 2014 10:37 PM PDT Posted on 09 July 2014 with 1 comment from readers Investors are piling into bonds around the world again creating a bubble in this asset class. How can investors insure against a bond crash? By buying stocks at all-time highs as they begin a correction? That makes no sense. If historical precedents are followed then precious metals will be the next sector to rise as investors choose intrinsic value over paper money. Gold price up Indeed, gold and silver have proven resilient and gained in value as Wall Street took a post second half breather this week and stocks showed signs of entering a correction phase. If you are looking for the undervalued asset class then surely it is precious metals. Their correction is done and dusted while stocks and bonds have their reversion to long-term averages to come. Investors seem to have great confidence in the Fed and its money printing to produce the inflation that will help to jump start the global economy. Yet if it achieves that aim that won't be good for bond or equity prices. 1970s You only have to look back at the most recent historic example of the 1970s to see that inflation is bad news for financial markets and good news for real assets like oil, gold and silver. Timing this transition is always the difficult part. Getting the next transition right, on the other hand, ought not to be so problematic. Sitting still is not a good option as corrections start. Thinking more than a few days or weeks ahead when you have a lifetime measured in decades is only logical and how the real investment superstars win over time. | |||||
| Your True <b>Gold</b> Savings: Upgrading vs. <b>Buying</b> Individual Resources <b>...</b> Posted: 11 Jul 2014 09:30 AM PDT
And when you factor in your limited-time upgrade and ownership discounts, you can save even more. Then, with Logos 5's powerful tools, you can make new connections across your library, contextualize Scripture, find answers in seconds, and better understand the Word. In a nutshell: upgrading your base package is the smartest, most affordable route to more rewarding Bible study. What if I just want to pick and choose my resources?Fair enough. So, let's say you start with the basics: a few commentaries, a theological dictionary, a contextual resource, and handbooks on the Old and New Testaments. With this in mind, you could get these five resources:
Together, just these five collections cost $1,549.80. For 15 cents more, you could get them all—plus over 1,000 more volumes—by upgrading to Gold instead. Just a handful of resources included in the base package more than cover the cost of the entire thing! What are you waiting for?There's no question that base packages offer the biggest discount on the tools and resources you need. Plus, with limited-time upgrade savings and ownership discounts, you can get even bigger savings. Discover your custom upgrade discount, and upgrade to Logos 5 Gold today! Google+ | |||||
| <b>Gold</b> Near 4-Month Highs As FOMC Warning Sparks <b>Buying</b> <b>...</b> Posted: 09 Jul 2014 01:05 PM PDT Stocks trod water for most of the day until the Fed said they would take the punhbowl away and that markets were complacent and that triggered buying in stocks, bonds, and gold. VIX was the catalyst (just as we saw at the actual FOMC meeting) and we would not be shocked to see a major volume dump after-hours in VXX (as dark pools unload their manipulations). The Dow ripped higher, desperate to reach 17,000 and prove that 'wealth' was back - but failed (although it did manage to get back to unch from the payrolls). Treasury yields limped higher, spiked higher on FOMC then dumped to the low yields of the day by the close (0-1bps lower on the day). Precious metals leaked lower into FOMC but spiked notably after with gold closing near 4-month highs. Oil was sliding into the minutes and did not bounce to close at its lowest in 2 months. VIX did its best to remind everyone that when the FOMC speaks, it's always good market news. The Dow ramp fell short of its 17k target... But did manage to get back to unch from payrolls (though the rest of the markets did not) Stocks remain red on the week... VIX did its best to remind everyone that when the FOMC speaks, it's always good market news. The FOMC Minutes split the markets... Treasury prices dumped and pumped on the FOMC news - closing unch to 1bp lower in yield Commodities faded early but the post-FOMC reaction sent gold and silver soaring - gold near 4 month highs... Charts: Bloomberg Bonus Chart: Oil's dump and gold's pump has driven the gold cost of oil to its one-year average (8 votes) | |||||
| <b>Gold</b> Rises by Rs 75 to Rs 28,200 on Sustained <b>Buying</b>, Global <b>...</b> Posted: 10 Jul 2014 04:46 AM PDT Press Trust of India | Updated On: July 10, 2014 17:24 (IST)   New Delhi: Gold prices rose further by Rs 75 to Rs 28,200 per 10 grams in the national capital on Thursday, extending the previous day's gains on increased buying by jewellers and retailers amid a firming global trend. MORE FROM THE WEB MORE FROM NDTV
|
Both gold and silver have enjoyed massive buying by American futures speculators in recent weeks. It all started with Fed chair Janet Yellen's cavalier dismissal of inflation, but the buying momentum persisted well after that. Happening in the midst of the summer doldrums when global precious-metals investment demand is weak, this is an exceptionally-bullish portent. It is setting up the PMs for a major autumn upleg.
| You are subscribed to email updates from buying gold - Google Blog Search To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 20 West Kinzie, Chicago IL USA 60610 | |
0 Comment for "Buying Gold | Massive Gold and Silver Futures Buying :: The Market Oracle ... | News2Gold"