zaterdag 13 mei 2017

Managed Money COT Report Update

According to the latest COT report, now is a very good time to start buying silver. A lot of commercials have covered their shorts. Also the Shanghai Silver premiums are soaring.



Gold, is a bit less bullish, but still ok.




Silver Net Balance Turns More Negative

The silver institute has reported 2016 silver demand and supply numbers.

 

We see that there was a silver deficit, but the most important number is that a lot of silver was taken away from the market via inventory build.


This is definitely beginning to look like it's 2008, where deficits also soared. A few years later, the silver price went up.

zondag 7 mei 2017

Q1 2017 gold demand and supply

Gold demand was down, but supply was down even more, which confirms that production will likely drop in the next decade.

WGC report

vrijdag 28 april 2017

Gold Production Vs. Gold Price

It is very obvious, but when the gold price drops, it 's probably because production is going up. And when the gold price drops too much, production will start to decrease as gold mines will have to shut down their unprofitable plants. Then the cycle turns. Because of lower gold production, the price of gold will go up due to the demand and supply equation.

So we have a negative correlation between gold production and gold price.


Now where do we stand in 2017?

It is said that it will take 20 years on average to get reserves and resources to a producing mine.


So that peak in discovery in 1995 is coinciding with the peak of production in 2015.


So what are the gold production numbers today? We see that gold mine production is starting to fall after 2015. So our correlation theory discovery/production is correct. 2015 is supposed to be the peak production year. If no new technologies appear, we will see a decline in production.



Conclusion: As gold production will fall, the gold price will rise. It's that easy.

woensdag 26 april 2017

dinsdag 25 april 2017

JP Morgan Suppressing Silver Price

I wonder who is suppressing the silver price with short silver open interest. Yes, JP Morgan.


Registered silver stock is low, while open interest is soaring.


Of course this cannot go indefinitely as silver leverage is starting to spike.

And we all know what happened in 2016 when gold had that leverage spike? Gold soared from $1100 to $1300 per ounce. The same will happen with silver.


woensdag 5 april 2017

Market Outlook

Stock market investors have had a good return since Trump won the election in November 2016. In this article I'll give a quick view on what to expect going forward.

Following the debt ceiling holiday expiration in March 2017, cash in the U.S. treasury plunged to almost zero (blue chart below from FRED). The red chart shows how the Federal Reserve balance sheet was basically flat since 2015 when QE3 ended. The little blip in 2017 managed to push the stock market to all time highs by adding bank reserve liquidity.


This boost in bank reserves is also visible in the increase in the monetary base in 2017.


So while we haven't heard anything on QE4, we actually had an increase in monetary base due to the depletion of cash at the U.S. treasury to prop up the stock market one last time before the debt ceiling holiday expired in March 2017. Now that this cash is fully used, there is nothing that will stop the stock market from declining.

U.S. Treasury Cash Balance

Following the debt ceiling deadline of March 2017, cash in the U.S. treasury plunged to almost zero to push up bank reserves and that subsequently pushed up the stock market.


This is also seen in the increase in the monetary base.

So while we haven't heard anything on QE4, we actually had an increase in monetary base due to the depletion of cash at the U.S. treasury to prop up the stock market one last time before the debt ceiling holiday expired in March 2017. Now that that cash is fully used, there is nothing that will stop the stock market from declining.

vrijdag 24 maart 2017

China's Growth Explodes in February 2017

China's February 2017 power consumption exploded. I have never seen such a large spike.
This means that there is a high probability that China's GDP growth will accelerate and this will bode well for commodities. We'll keep monitoring this trend.


This trend is confirmed by the record high Shanghai gold withdrawals in February 2017. 
Something happened in February...