Monday night metals

Hello friends, just got back from a weekend in London. Here's my take on where the PMs are headed.

I'm a buyer tomorrow of gold and silver if we don't go lower. I realize the risk involved; I see the ~3 month head and shoulders that has developed, I understand some weird things are going on with the rehypothecation etc., which has metals commentators saying paper and physical are finally decoupling (Maybe Kid Dynamite can comment on that; he's been strangely silent on this latest blow-up, though i understand he is mourning a murder most fowl) Nothing would surprise me, but I like to give my opinion, and that is that we're going higher from here.

We've closed at the 144-day MA for the first time in over a year. That's good.

I suggested we were heading back to the lower black line, and there we are. No damage.
We're at important monthly support too:

With respect to silver, first the YTD. All is OK so long as we don't close below the blue (turqoise?) line...

And a few other charts show major support has held so far.

If we have another big down day tomorrow, I too might start getting pessimistic, but I'm not tonight.


Kid Dynamite said...

Hi Gm,

what makes you think that there's a decoupling between physical and paper? completely false, even though the Metals Mafia might wish it to be true. Of course, the silverbugs have been falsely repeating the "paper price <> physical price" mem for a full year now, and it's never been true. Paper price still equals physical price. Is it possible that changes at some point in the future? maybe, but I doubt any dislocation would last.

metals commentators will lie to you every single day, because they literally completely lack an understanding of the markets they are trying to analyze. Also, there is a surplus of available silver each and every year if the Mafia doesn't continue to try to whip up investment demand with their fanciful stories - ponder that. THe balancing factor in the silver supply/demand equation (as you can see from the Silver Institute numbers) is INVESTMENT demand - which has increased MASSIVELY in the last few years. That's not bullish...

I am sure you saw Bron's correction to the recent hype:

finally, re: gold: I saw a few technicians say it broke out if it's recent triangle to the downside...


ps - email me with further questions Warren has my email address. I don't subscribe to threads.

hiptwist said...

As I know, you're working on a database of some kind.

So an unrelated question to the posting above: Is anybody aware of a public source for the historical NAV spread of the Sprott gold and silver trust?

Any hints would be appreciated.

Warren James said...

Hiya Hiptwist,

Apologies, not aware of any NAV source apart from his bar lists.

Sprott seems to be updating his lists once a year, PHY got updated recently on 5th October 2011 - he seems to have added a solid 402,019 gold ounces to his hoard since our last copy back in 14th Oct 2010 (link).

PHYS list has not been updated - last we have is the same file from (link), in theory we can presume an update in March 2012.

But I don't know of any historical daily NAV data for Sprotts - only because we haven't looked. My guess is that because it's a closed end fund, that the amount of bullion held doesn't change that much until he does a big update (or something like that). So the number ounces should remain reasonably static over time. Hope that helps.

hiptwist said...

Warren, thanks for this info!