Screen Traded Fiat Gold Could Get a Violent Wake-Up Call

Today’s AM fix was USD 1,346.75, EUR 978.81 and GBP 837.06 per ounce.
Yesterday’s AM fix was USD 1,351.00, EUR 978.28and GBP 833.69per ounce.

Gold climbed $1.50 or 0.11% yesterday, closing at $1,353.00/oz. Silver slipped $0.05 or 0.22% closing at $22.47. Platinum rose $9.20 or 0.7% to $1,382.00/oz, while palladium climbed $6.50 or 0.9% to $707/oz.

Gold for immediate delivery gained as much as 0.6% to $1,360.76/oz, prior to a sharp bout of  concentrated selling just before European markets opened at 0800 GMT, that saw gold fall to just above $1,340/oz .

Gold had been near the highest level in five weeks after U.S. economic data showed how weak the U.S. economy remains leading to concerns that the Fed will continue with ultra loose monetary policies.


Gold in US Dollars, 10 Days – (Bloomberg)

Gold is currently 1.3% higher in October. Gold fell into the middle of the month (see chart below) and then as U.S. lawmakers wrangled over the nation’s budget and debt ceiling, triggering a 16-day partial government shutdown, gold began to recover and is now nearly $100 above the low seen mid October at $1,252/oz.

U.S. factory output trailed forecasts in September, while pending sales of previously owned homes fell the most in three years, separate reports showed yesterday.
Asian demand remains robust and holdings in the SPDR Gold Trust, the biggest gold  exchange traded product, held steady at 872.02 metric tons yesterday.


Gold in US Dollars, 1 Month – (Bloomberg)

In the Financial Times, veteran financial journalist and gold watcher, John Dizardnoted the increasing strain in the physical gold market and detailed how that should lead to much higher 
gold prices.

“Something is unsettling the animals in the forest of the gold market. Usually there is a chorus of chirrups and squeaks that are significant, momentarily, for one species or another, such as a few cents of arbitrage between Zurich and London, or a dollar-an-ounce rise in India caused by a dealer’s near insolvency. Then the noise settles down to the murmur of wind through the trees

However, the continuing high level of premiums for physical gold over the kinds you can trade on a screen suggests that the next move in the major gold indices or the various exchange traded funds could be discontinuous and dramatic. It would be much better for the financial world if gold were just bumping along, with only enough volatility and liquidity to keep a few dealers’ lights on. That would mean electronic or paper assets have retained their essential credibility with the public …”

“This could turn into a very violent wake-up call for [screen-traded gold]. People talk about ‘fiat currencies’, but we also have ‘fiat gold.’ Volatility is too cheap right now.”

Taken together, this collection of persistent microeconomic signals in gold could flag macro trouble to come. These noises worried me in August. They worry me more now.

Dizard’s article, ‘Strange gofo cry heralds trouble for gold’ in the Financial Times can be read here.

He has previously warned that ETF gold holdings and central bank gold reserves may be being lent to bullion banks, who then re lend that gold into the market.

Owners of gold exchange traded funds (ETFs) would be surprised and worried to discover that certain banks might be lending out gold that they have bought and believe that they own.

The leading gold ETF, GLD has been criticised by many analysts for its extremely complex structure and prospectus. There have also been warnings about the possible conflict of interest and overall lack of transparency.

If as has been suggested, banks are lending gold into the market that has come from exchange traded funds then this would validate the many concerns raised about the gold ETF market.

Questions would again be asked as to whether many of the ETFs are fully backed by the gold that they claim to own in trust on behalf of clients. 

 
Gold Prices / Fixes /Rates /Volumes – (Bloomberg)

Already more prudent hedge fund, investment and pension fund managers have liquidated their ETF positions in favour of allocated physical bullion.

We would expect that trend to accelerate as prudent investors rightly seek to avoid the high level of counterparty and systemic risk associated with exchange traded gold and other forms of unallocated gold and paper gold.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/LdEbZ7mHGG0/story01.htm GoldCore

The Steve Cohen Era Is Over: S.A.C. To Plead Guilty To Securities Fraud, Stop Managing Outside Money

Nearly three years ago, before anyone had heard of expert networks, before the SEC had brought any major enforcement action against any hedge fund and long before anyone had to gall to accuse SAC of insider trading, Zero Hedge started a series of posts commencing with “Is The SEC’s Insider Trading Case Implicating FrontPoint A Sting Operation Aimed At S.A.C. Capital?” exposing the fraudulent transactions of Steve Cohne’s hedge fund despite fears of violent legal reprisals. We are delighted to inform our readers that this particular chapter is now over: the WSJ has just reported that SAC will plead guilty to securities fraud, pay a final $1.2 billion penalty (still a tiny sum compared to all the ill-gotten gains by Steve Cohen over the years), and most importantly, end the fund’s management of outside money.

From the WSJ:

SAC Capital Advisors LP will plead guilty to securities fraud as part of a landmark criminal insider-trading settlement with federal prosecutors set to be announced by next week, people familiar with the discussions said.

 

The exact timing of the pact isn’t set, and if final details are ironed out quickly, it could still be unveiled by the end of this week, these people said.

 

SAC, run by Wall Street titan Steven A. Cohen, also will agree to stop managing outside money and pay the government criminal penalties of about $1.2 billion, according to these people—which would be the largest-ever insider-trading penalty.

 

 

A spokeswoman for the Manhattan U.S. attorney’s office, Jennifer Queliz, declined to comment, as did SAC spokesman Jonathan Gasthalter, Federal Bureau of Investigation spokesman J. Peter Donald and SEC spokeswoman Judy Burns.

 

After any settlement is approved, Mr. Cohen would remain under criminal investigation, though no charges are expected against him barring unexpected developments in the probe, the people said.

And since in the hedge fund world the bulk of “retained earnings” comes not from capital appreciation, manipulated, centrally-planned markets or not, but from charging outside investors the exorbitant privilege of 2 and 20 or, in SAC’s case 3 and 50, the Steve Cohen era is now effectively over.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/OaNw3uiGE2I/story01.htm Tyler Durden

Gary Weishaupt, 59

Gary Weishaupt, 59, of Augusta, Ga., beloved and devoted companion of Ms. Becky Wallace, entered into rest suddenly on Wed., Oct. 23, 2013.

Born in Japan and a resident of Augusta, Ga. and Lexington, S.C., most of his life, he was a son of the late John A. and Janice F. Weishaupt.

A Vietnam Veteran, he proudly served his country in the United States Army. He was Hiker with Penske. Gary enjoyed shooting pool and singing karaoke.

read more

via The Citizen http://www.thecitizen.com/articles/10-29-2013/gary-weishaupt-59

Doris Pennington Gould, 89

Mrs. Doris Pennington Gould, 89, of Louisville, Ga., died Monday, Oct. 28, 2013, surrounded by her loving family.

Mrs. Gould was born Nov. 25, 1923, the daughter of Moody T. and Lena Eason Evans of Matthews. The widow of Gailord Gould of Grovetown, Mrs. Gould was a graduate of Wrens High School and a caregiver for many years. She was a member of Mt. Moriah United Methodist Church.

Funeral services will be held Thursday at 11 a.m. at James Funeral Home in Wrens, Ga. Visitation will be held Wednesday evening from 6-8 p.m. at the funeral home. Pallbearers will be grandsons.

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via The Citizen http://www.thecitizen.com/articles/10-29-2013/doris-pennington-gould-89

Lynette M. White, 97, of Fayetteville

Mrs. Lynette M. White, 97, of Fayetteville, died Oct. 26, 2013.

She was born in Union, S.C. and was the #1 mother and grandmother in the world to her family.

She was preceded in death by her husband Claude P. White, daughter Barbara Jean Wood and granddaughter Carrie White Dunn.

She is survived by her daughter Carolyn & George Barker of Locust Grove; Christine & Cecil Turner of Locust Grove; son Claude Phillip & Brenda White of Fayetteville; daughter Cindy & Sidney Funk of Fayetteville; 5 grandchildren and 14 great-grandchildren as well as several nieces and nephews.

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via The Citizen http://www.thecitizen.com/articles/10-29-2013/lynette-m-white-97-fayetteville

Here’s what we’ve done so far with visioning for Fayette

By ROBERT ROSS and TREY RAGSDALE

As soon as 150 Fayette citizens and the steering committee decided on Oct 18 that Fayette should develop a vision statement and implementing plan, Fayette immediately took steps to do so.

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via The Citizen http://www.thecitizen.com/blogs/robert-ross/10-29-2013/here%E2%80%99s-what-we%E2%80%99ve-done-so-far-visioning-fayette

Hey, GOP, put on a happy face

“Bye Bye Birdie” is an old musical that survives in high school productions and in some people’s memory bank. It debuted on Broadway in 1960 and was made into a film in 1963. One of the songs from the show might serve as an inspiration, if not a theme, for Republicans in the winter of their discontent over President Obama and congressional Democrats: “Put on a Happy Face.”

A problem Republicans have had since the “glory days” of Ronald Reagan is that too many have forgotten how to be positive and affirming. Nobody likes to be around a sourpuss.

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via The Citizen http://www.thecitizen.com/blogs/cal-thomas/10-29-2013/hey-gop-put-happy-face

The results of race hustling

Bob Costas is one of the premier sportscasters and a very smart guy, so it was somewhat surprising to see him join the chorus of those decrying the fact that the owner of the Washington Redskins is resisting the pressures to change the name of his football team.

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via The Citizen http://www.thecitizen.com/blogs/thomas-sowell/10-29-2013/results-race-hustling

Don’t wait on some day

“Some day,” Daddy used to say often as I was growing up, “I’m going to the Holy Land. I want to walk where Jesus walked.”

He talked about it a lot and dreamed about it even more. In those days before the world was presented to us wrapped up in a passel of knowledge known as the Internet, Daddy bought big maps of that storied land.

They were gingerly rolled up and tied with a ribbon after each time he spread them out on the kitchen table and studied them like a child studying a new game.

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via The Citizen http://www.thecitizen.com/blogs/ronda-rich/10-29-2013/don%E2%80%99t-wait-some-day

Westmoreland needs fresh ideas

I’m a conservative and have voted and contributed to GOP candidates since the mid-1970s; heck, I even voted for Hal Suit for governor in 1970.

That said, I’m extremely disappointed in our local Republican congressman, Lynn Westmoreland. Together with other Tea Partiers, he chose to follow a wrong-headed strategy that put this nation at grave economic risk.

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via The Citizen http://www.thecitizen.com/articles/10-29-2013/westmoreland-needs-fresh-ideas