Advertise | Bookmark | Contact Us | E-Mail List |  | Update Page | UraniumSeek.com 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

Gold Seeker Closing Report: Gold Erases Early Losses to End Unchanged
By: Chris Mullen, Gold Seeker Report

Ira Epstein's Metals Video 7 18 2018
By: Ira Epstein

Housing Market Collapse 2.0 Has Begun
By: David Haggith

Will the Fed’s Tightening Trigger Another Crisis?
By: Arkadiusz Sieron

Merk Research - U.S. Equity Markets
By: Axel Merk

No currency manipulation by China’s government, yet
By: Steven Saville

India Soaks Up Physical Silver Supply
By: Craig Hemke

50 Reasons Why This Bull Market Has Longer To Run
By: Avi Gilburt

Gold Resource Corporation Expands Arista Mine With Drill Intercepts Including 23.39 Meters of 2.00 g/t Gold, 200 g/t Silver and 2.08 Meters of 1.98 g/t Gold, 1,583 g/t Silver in New Vein Discovery
By: Gold Resource Corporation

“Biggest Bubble in the History of Mankind” Is “Going To Burst” – Ron Paul
By: GoldCore

 
Search

GoldSeek Web

 
All eyes on the half-year


 -- Published: Friday, 19 June 2015 | Print  | Disqus 

By Alasdair Macleod, GoldMoney.com

Gold and Silver US

Window-dressing or the management of prices for a favourable mark-to-market valuation at year-ends, half-years and quarters has long been a distorting feature in financial markets.

And, with bank capital adequacy ratios at stake, not to mention traders' bonuses, it has been an increasing feature. With the onset of June 30th it seems reasonable to expect this factor to be a reason why gold and silver prices have generally failed to reflect escalating systemic risk in the face of Greece's insolvency and a developing bear market in bonds. Indeed, losses from bonds are bound to encourage window-dressing of banks' short positions as an off-set, and they are generally short of gold and silver futures contracts.

However, the window dressers did not have it all their way this week with gold rallying $30 from last Friday's lows and silver by $0.55. A look at the markets' internals indicates that commercial traders have instead lowered their short exposure in recent weeks, particularly in silver, potentially limiting the damage from a 'Grexit'.

The Fed, which released its monthly FOMC statement on Wednesday, has been forced to back off from an early rise in interest rates. The reason, though not explicitly stated, is bond market weakness last week, which threatened to undermine bank capital adequacy ratios. While US banks can absorb further moderate falls in bond markets, the Eurozone banking system is especially fragile. Short-dated bonds enjoyed a rally from last week's lows, and so have equities and precious metals. In the case of gold and silver it has the look and feel of a bear squeeze forcing wrong-footed hedge funds to cover their shorts.

Greece is now becoming a serious worry. Last night, according to Reuters, ECB Executive Board member Benoit Coeure raised the possibility that Greece's banks might not open on Monday, with the pace of withdrawals by depositors accelerating. This being the case, gold may move decisively above the $1200 level as Europeans are brutally reminded of the risks to their deposits in Italy, Spain and Portugal. On the other hand, a last minute compromise would obviously be bearish short-term for both metals.

If gold does move sharply higher the effect on silver could be electric. Open Interest on Comex is at record highs, having climbed on a falling price, as shown in the chart below.

Comex Silver

In late-May when the price fell from over $17.50 to $16.25, Open Interest started to rise, reflecting increasing accumulation of contracts on further price falls. The short interest has come from hedge funds, which sold down 33,908 contracts (169,540,000 oz), supplied by commercial dealers balancing their positions. This strategy for the hedge funds looked good price-wise until silver refused to stay under $16, but could turn out to be a trap to be sprung by a rising gold price.

In summary, prices in the very near term are going to be decided by Greece this weekend. If a compromise is found, gold and silver will be marked down to the point where physical buyers step in. If Greek banks remain closed on Monday it will be an epiphany for the shorts.

Next week

Monday

Eurozone: Flash Consumer Sentiment.
US: Existing home sales

Tuesday

Eurozone: Flash Composite PMI, Flash Manufacturing PMI, Flash Services PMI.
UK: CBI Industrial Trends.
US: Durable Goods Orders, FHFA House Price Index, Flash Manufacturing PMI, New Home Sales.

Wednesday

UK: BBA Mortgage Approvals., GDP Annualised (3rd Est.).
Japan: BoJ Minutes.

Thursday

UK: CBI Distributive Trades.
US: Core PCE Price Index, Initial Claims, Personal Income, Personal Spending.
Japan: CPI Core, Real Household Spending, Unemployment.

Friday

Eurozone: M3 Money Supply.

By Alasdair Macleod, GoldMoney.com

Disclaimer: The views and opinions expressed in the article are those of the author and do not necessarily reflect those of GoldMoney, unless expressly stated. Please note that neither GoldMoney nor any of its representatives provide financial, legal, tax, investment or other advice. Such advice should be sought form an independent regulated person or body who is suitably qualified to do so. Any information provided in this article is provided solely as general market commentary and does not constitute advice. GoldMoney will not accept liability for any loss or damage, which may arise directly or indirectly from your use of or reliance on such information.


| Digg This Article
 -- Published: Friday, 19 June 2015 | E-Mail  | Print  | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2018



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer

The views contained here may not represent the views of GoldSeek.com, its affiliates or advertisers. GoldSeek.com makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, is strictly prohibited. In no event shall GoldSeek.com or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.