Despite continuing efforts by the paper establishment in western capital markets to shake out weak gold and silver holders, they are being swamped by Chinese physical demand.
I think that any of the ' Technicians ' who carp on about Silver being at a much too high a level when set against the moving average's possibly need something of a wake up call . The conditions we are seeing right now per supply and demand differentials , the extent of the arbitrage between the
Comex / the LBMA and the SGE / SFE ( + 14 - 15% just recently ) , the massive under-reporting of industrial demand and off-take by China & India in particular , by the ' Silver Institute ' and the fact said demand for photovoltaics is ramping up exponentially where PV's and numerous other new application' where a substitute for Silver simply doesn't exist ........This is all completely unprecedented and form's the " Perfect Storm " in this market - something which you've alluded to any number of times and which has sunk in big time with a vast swathe of highly savvy Chinese savers . The question is just how long is it going to take for any of our fellow bretheren to finally wake up and smell the coffee as it were - possibly never or only when they catch a faint whiff of acrid diesel fumes as the Silver Train is disappearing up the line at an ever increasing lick ...??
" Wake Up & Smell the Coffee " ...etc - Coffee forecast likely to return to its all time high when it reached USD ' $ 3.11 a pound in 1977 ( at the moment $ 2.25 - $ 2.30 a pound ) , with this probably going to happen before the end of 2024 , and this being attributed crop cycles / poor harvest , and with no consideration of currency issues or exchange rates factored in ..etc .
" But with budget deficits continuing to run high , inflation is far from over " - potential winner of the top prize in the ' Understatement of the Year Competition '
So as of the Globex close for the weekend, silver is trading at USD $29.17 as against Shanghai's close of RMB 8150/kg which converts to USD $1124.50 or $34.97/ozt.
That's a massive $5.80/ozt; a full 20.0% premium. It has to be the biggest I've seen.
Even the laziest of arbitrageurs must be looking to exploit that.
Supposedly, the US Non Farm payroll added 227,000 jobs. How antiquated is that term "non farm payrolls!!" A more accurate indicator would be "Non-Government Payroll." Everything else (besides hospitality and healthcare) is where productivity occurs, and that is the number we really need to know.
Basically it's all the BLS's birth-death model adding jobs when they simply don't exist. For starters it's payrolls not workers and so many Americans work multiple part time jobs and are adding more. Additionally the government's model simply assumes the payrolls were added when they weren't. The modelling is always a joke at best but this one was flat out lying. The Household Survey is far more accurate because it speaks to people and that was the opposite - a loss of jobs with headline unemployment rising to 4%. That number is also manipulated because it doesn't count people who simply gave up looking for work nor those who worked just a few hours here and there maybe in the gig economy - delivering for Uber Eats or similar, perhaps only a few hours a week.
Colin, it's probably second and third "moonlighting" jobs because the inflation is getting so bad that many people cannot pay their bills with their main jobs. These poor folk have worked their entire lives and here they are in their sixties and seventies and they have to give up some rest on the weekends just to eat. It's disgraceful.... thanks for that, Joe!
I guess the Chinese took a breather from all their gold buying or as A.M. describes it, their "dollar selling into gold." No doubt a temporary pause since there is no fundamental reason for them to change course.
Also, China’s Central Bank didn’t (officially) add to gold reserves last month. So what? Chinese retail buying continues apace and official buying may have been stashed outside CB reserves. If they were selling then that would be another matter…
Dragon Boat Festival. Three straight days without pesky Chinese buyers has emboldened the shorts. The question is: to what end? To drive the price down enough to cover and exit, or to enlist momentum players and algos for a longer and deeper trough?
Right. So Chinese players are out of the market from early morning UK time (very early US Eastern time) on Friday 7th, re-emerging early morning Tuesday 11th.
It's not comforting news to me if the west is a seller of gold and china is the buyer because you then have to wonder how deep the appetite for gold in China is ?
China is accumulating Gold, but it's a dead asset if they don't put it to work serving political/economic goals of some sort.
I dont think China wants Yuan to become the reserve. It seems reasonable that they want to be free from the dollar for trade settlement.
Just be happy knowing you're not one of those poor suckers who have pieces of worthless paper saying they are the proud owners of hundreds of ounces of silver in storage for them, 'cause one day they're gonna wake up and ask for it and nobody will answer the phone and by the time they drive over to the warehouse they'll find the gates open and no one will be there. Be happy, buy the dip😎👍
There is a massive difference between the Gen Z bunch in the UK and China. Chinese youngsters are way ahead in so many aspects. It would be interesting to see what the percentage difference is between the 2 countries of the Gen Z ers buying gold grammes (beans over there)
What's changed at the ECB that has allowed them to drop their base rate by 25bsp?. It wasn't that long ago that the ECB was in queer street and the economy has not been that great to make any significant changes has it? Is this just yet another theatrical move being played out by the central banks orchestrated by the Fed or has Lagarde gone off on one on her own. Is this just a move to keep the markets happy for a while while they claw the cash lost back from the poor unsuspecting public whilst their attention is diverted away by some pre planned action over in Ukraine or Poland? Or have they just played fast and loose with the figures and dumped a load into the TARGET 2 system, never to be seen again?
"La Garde meurt mais ne se rend pas" famous last words of Cambronne at Waterloo when given a final ultimatum to surrender, before his immortal "Merde". I doubt Christine, an indicted and convicted felon herself for gross misuse of public funds, that's what it takes nowadays to climb the ladder, is made of the same stern Cambronian stuff, at least in reference to the first part of the previous sentence...but she does wear silk stockings, like Napoleon when he described Talleyrand: "stuff in silk stockings." L'éternel retour...the irony of History.
Now there's a thought to wrap your noddle around - Madame Lagarde licking her lips and giving me her most sensuous '' come hither ' look as she slowly glides toward me disgarding her silky stockings , stillettos , thong and strapless bar along the way ...oh ... oh ....oh ... too much - but seriously she doesn't really do it for me . This said she really does look like she could do with a good meal ( too gaunt & skinny - needs a bit more lagging ) . If she does this , then she might just be in with a chance .
I think that any of the ' Technicians ' who carp on about Silver being at a much too high a level when set against the moving average's possibly need something of a wake up call . The conditions we are seeing right now per supply and demand differentials , the extent of the arbitrage between the
Comex / the LBMA and the SGE / SFE ( + 14 - 15% just recently ) , the massive under-reporting of industrial demand and off-take by China & India in particular , by the ' Silver Institute ' and the fact said demand for photovoltaics is ramping up exponentially where PV's and numerous other new application' where a substitute for Silver simply doesn't exist ........This is all completely unprecedented and form's the " Perfect Storm " in this market - something which you've alluded to any number of times and which has sunk in big time with a vast swathe of highly savvy Chinese savers . The question is just how long is it going to take for any of our fellow bretheren to finally wake up and smell the coffee as it were - possibly never or only when they catch a faint whiff of acrid diesel fumes as the Silver Train is disappearing up the line at an ever increasing lick ...??
" Wake Up & Smell the Coffee " ...etc - Coffee forecast likely to return to its all time high when it reached USD ' $ 3.11 a pound in 1977 ( at the moment $ 2.25 - $ 2.30 a pound ) , with this probably going to happen before the end of 2024 , and this being attributed crop cycles / poor harvest , and with no consideration of currency issues or exchange rates factored in ..etc .
" But with budget deficits continuing to run high , inflation is far from over " - potential winner of the top prize in the ' Understatement of the Year Competition '
Michael— Thanks for the link
So as of the Globex close for the weekend, silver is trading at USD $29.17 as against Shanghai's close of RMB 8150/kg which converts to USD $1124.50 or $34.97/ozt.
That's a massive $5.80/ozt; a full 20.0% premium. It has to be the biggest I've seen.
Even the laziest of arbitrageurs must be looking to exploit that.
Something smashed the price down today
Supposedly, the US Non Farm payroll added 227,000 jobs. How antiquated is that term "non farm payrolls!!" A more accurate indicator would be "Non-Government Payroll." Everything else (besides hospitality and healthcare) is where productivity occurs, and that is the number we really need to know.
Basically it's all the BLS's birth-death model adding jobs when they simply don't exist. For starters it's payrolls not workers and so many Americans work multiple part time jobs and are adding more. Additionally the government's model simply assumes the payrolls were added when they weren't. The modelling is always a joke at best but this one was flat out lying. The Household Survey is far more accurate because it speaks to people and that was the opposite - a loss of jobs with headline unemployment rising to 4%. That number is also manipulated because it doesn't count people who simply gave up looking for work nor those who worked just a few hours here and there maybe in the gig economy - delivering for Uber Eats or similar, perhaps only a few hours a week.
For clarity, that’s the birth and death of companies, it’s not the vaccine!
All part-time jobs and almost all going to illegals. Nothing that should move gold.
Colin, it's probably second and third "moonlighting" jobs because the inflation is getting so bad that many people cannot pay their bills with their main jobs. These poor folk have worked their entire lives and here they are in their sixties and seventies and they have to give up some rest on the weekends just to eat. It's disgraceful.... thanks for that, Joe!
I guess the Chinese took a breather from all their gold buying or as A.M. describes it, their "dollar selling into gold." No doubt a temporary pause since there is no fundamental reason for them to change course.
Also, China’s Central Bank didn’t (officially) add to gold reserves last month. So what? Chinese retail buying continues apace and official buying may have been stashed outside CB reserves. If they were selling then that would be another matter…
Dragon Boat Festival. Three straight days without pesky Chinese buyers has emboldened the shorts. The question is: to what end? To drive the price down enough to cover and exit, or to enlist momentum players and algos for a longer and deeper trough?
If the SGE is closed, then I’m assuming that the price there isn’t going down. Surely, this is just creating a massive arbitrage opportunity?
DBF June 8 — June 10 sorry
Right. So Chinese players are out of the market from early morning UK time (very early US Eastern time) on Friday 7th, re-emerging early morning Tuesday 11th.
It's not comforting news to me if the west is a seller of gold and china is the buyer because you then have to wonder how deep the appetite for gold in China is ?
China is accumulating Gold, but it's a dead asset if they don't put it to work serving political/economic goals of some sort.
I dont think China wants Yuan to become the reserve. It seems reasonable that they want to be free from the dollar for trade settlement.
Alasdair - with the 6.7% drop in Silver today - say something to cheer us up please :-)
And have a great weekend!
Just be happy knowing you're not one of those poor suckers who have pieces of worthless paper saying they are the proud owners of hundreds of ounces of silver in storage for them, 'cause one day they're gonna wake up and ask for it and nobody will answer the phone and by the time they drive over to the warehouse they'll find the gates open and no one will be there. Be happy, buy the dip😎👍
Off-topic, I know but I’m delighted to see Alasdair join the GIN of the Fleet Street Letter to which I also subscribe.
https://markets.businessinsider.com/news/etf/how-china-s-central-bank-gold-buying-frenzy-drove-prices-to-record-highs-attracting-gen-z-to-gold-beans-1033334810
There is a massive difference between the Gen Z bunch in the UK and China. Chinese youngsters are way ahead in so many aspects. It would be interesting to see what the percentage difference is between the 2 countries of the Gen Z ers buying gold grammes (beans over there)
What's changed at the ECB that has allowed them to drop their base rate by 25bsp?. It wasn't that long ago that the ECB was in queer street and the economy has not been that great to make any significant changes has it? Is this just yet another theatrical move being played out by the central banks orchestrated by the Fed or has Lagarde gone off on one on her own. Is this just a move to keep the markets happy for a while while they claw the cash lost back from the poor unsuspecting public whilst their attention is diverted away by some pre planned action over in Ukraine or Poland? Or have they just played fast and loose with the figures and dumped a load into the TARGET 2 system, never to be seen again?
"La Garde meurt mais ne se rend pas" famous last words of Cambronne at Waterloo when given a final ultimatum to surrender, before his immortal "Merde". I doubt Christine, an indicted and convicted felon herself for gross misuse of public funds, that's what it takes nowadays to climb the ladder, is made of the same stern Cambronian stuff, at least in reference to the first part of the previous sentence...but she does wear silk stockings, like Napoleon when he described Talleyrand: "stuff in silk stockings." L'éternel retour...the irony of History.
Now there's a thought to wrap your noddle around - Madame Lagarde licking her lips and giving me her most sensuous '' come hither ' look as she slowly glides toward me disgarding her silky stockings , stillettos , thong and strapless bar along the way ...oh ... oh ....oh ... too much - but seriously she doesn't really do it for me . This said she really does look like she could do with a good meal ( too gaunt & skinny - needs a bit more lagging ) . If she does this , then she might just be in with a chance .
Yuk!