KER Commentary – Fri 31 Jan, 2014

Grandich on Gold

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Featuring:
Peter GrandichCory FleckAl Korelin

Comments:
  1. On January 31, 2014 at 9:00 am,
    Dennis M. O'Neil says:

    It is that time of year again!!!!!!!!!!!!!

    I posted the below two year ago this time of year 2011 on the HL yahoo board……
    “Last year’s bottom for gold price was contemporaneous with the end of Davos World Economic Forum. Makes sense the Bankers want to feel good about themselves while they mingle. Then after they share private info they run home and buy PM.”
    Early February was the annual low for Gold that year. Certainly not always a low the last 5 Februarys have been kind to the metals.
    I described it as a post Davos/Groundhogs Day rally.
    After options expiration monetary mayhem the Davos attendees return home and do with their money exactly what they tell others not to do. I think February is a nice month to be long. Taking profits in late Feb into March. Then keep an eye out for opportunities like were presented last May.
    Without exception February has been nice to the Gold market for at least the last 5 years. You have to go back to 2006 to find a sideways trade in February which amounted to a set up to a powerful spring rally to $700 Gold. Check out the Kitco Historical annual charts. There tend to be interesting pops in the market this time of year.
    I think February will be kind again to the metals.
    DYODD because Au declined quite a bit last February.

    • On January 31, 2014 at 3:06 pm,
      Cory says:

      Interesting connection Dennis. I’m hoping for a good steady continuation up, but not sky rocketing, in February.

      • On February 3, 2014 at 1:07 pm,
        Silverbug Dave says:

        The seasonal charts available online are quite variable for February, depending on the number of years in the statistics. All I know is that the winter seasons, normally strong for gold have been trash in the last 3 years. And the summer seasons too! Gold has not performed well this winter as during the lprevious two. It has a couple more months to perform before we get to Spring and Summer seasonal weakness.

  2. On January 31, 2014 at 9:02 am,
    CFS2000 says:
    • On January 31, 2014 at 9:55 am,
      Andrew de Berry (Rev) says:

      Good post – thanks CFS.

  3. On January 31, 2014 at 9:07 am,
    SD Marc says:

    CFS, and ALL:
    When a reset comes you will be either in or out….your choice.

    • On January 31, 2014 at 9:43 am,
      HEAVYHITTER says:

      THATS RIGHT…SD……..IF YOUR NOT IN

      YOU WON’T WIN………..PERIOD

      on the old Kitco forum 13 years sgo

      The boys neverr took any lip from the GOLD BEARS whos only agenda is to be

      A NUISANSE

      Lot of food fights. The boys knew that only goal was to be a distraction and
      Disincourage the bulls.

      BE CAREFULL WHO YOU READ AND LISTEN TO

      believe me…..THEY ARE NOT OUT FOR YOUR BEST INTEREST

      ALSO, THEY DO NOT WISH YOU THE BEST

      Why…..one word…its starts with an….L ….and then an…O

      They are wolves in sheeps clothing

      • On January 31, 2014 at 9:52 am,
        Andrew de Berry (Rev) says:

        You’re right HH. There are wolves in sheep’s clothing on this site. Have become very selective as to who I read/listen to, given that this whole blog’s grown like topsy.

        • On January 31, 2014 at 10:00 am,
          HEAVYHITTER says:

          On the old kitco forum

          They got beat up and spit out…..kitco closed it down….kicked lots of guys off too

          Anyway…we can’t behave like the old days.

          STILL……WON’T MENTION ANY NAMES BUT

          I know who these wolves are. I knew it almost immediately when I first
          came on this forum. They are not investing and just blowing smoke up
          everyones……ARSE

          • On January 31, 2014 at 10:06 am,
            Bobby says:

            What!!! traitors??? Blow the whistle Heavy, I had no idea.

      • On January 31, 2014 at 12:33 pm,
        Birdman says:

        Are you trying to spell L-O-V-E ?

  4. On January 31, 2014 at 9:10 am,
    franky says:

    Newmont luk very nice now ! to buy ! slowly !

    • On January 31, 2014 at 12:29 pm,
      har says:

      now if they will only stop cutting the dividend.

      I been short NEM since $70.05.

      • On January 31, 2014 at 2:51 pm,
        franky says:

        real oll the way mmm ! ?

      • On January 31, 2014 at 11:02 pm,
        mike trike says:

        Looking at a 30 year chart on NEM. You started shorting at the absolute all time high in Nov 2011??
        Wow……what a pile of @$#$!

  5. On January 31, 2014 at 9:19 am,
    CFS2000 says:

    Sing along now, you know the tune, you do!

    You put your gold shares in,
    You take your gold shares out,
    In, out, in, out,
    Shake it all about.

    Whoa, the hokey-cokey,
    whoa, the hokey-cokey,
    and you turn around,
    That’s what its all about.

  6. On January 31, 2014 at 9:45 am,
    Birdman says:

    Birdman believes we are in a bad situation that is not going to get any better?” That is not exactly my point of view Al. I happen to think gold and silver will be rather remarkable investments once the consolidation phase has ended. As you will recall my position has long revolved around the parabolic move that silver made more than two years back. After digging around I was not able to find a situation where a major up move immediately followed a commodity that had just blown off its top. The conclusion I derived was that it would take perhaps three years before the uptrend continued. So far that has played out. I just happen to think that a final bottom has not arrived although I will concede it may have happened already and we are now slowly moving up again. James is a bit more negative on metals but then again he lost a great deal of money according to his posts so perhaps we cannot blame him for feeling some bitterness.

    By the way, I did not sense that gold was manipulated today as suggested. If anyone noticed the Dow, S&P etcetera were pummeled early in the day but then staged a recovery somewhat inverse to golds rise and fall. Unless we are to conclude that all the equity markets are also being stage managed then this is just a case of Algo’s taking over and switching momentum. I think this is just machine driven activity is all it is.

    • On January 31, 2014 at 11:01 am,
      Birdman says:

      I just think this is a traders market right now. Not a time for buy and hold. The whole conspiracy angle gets on my nerves. I really don’t believe it however it would seem probable that Central Banks own gold so that its price might be managed in order to keep the existing fiat system intact during times of stress. So maybe that is a concession to those who are convinced the whole process is a racket. If it is true though we should anticipate that the entry of the Chinese into the price setting functions will only support continued management rather than freeing prices to float according to physical demand. They would seem to have an even greater interest in suppression schemes than banks in the West so I would not hold out hope that physical demand will suddenly dictate futures trades. In any case quite a bit has been written on the topic of paper versus physical and I think the arguments of the gold camp have been pretty much debunked. The vast majority of daily metals trading is done in the futures market via the LBMA and that is not likely to change anytime soon so it strikes me as a pointless exercise to cry foul. That paper trading is utterly massive and overwhelms physical buying by orders of magnitude. The volumes of gold traded are actually stunning as most here know. I dug up an old article on my drive that made reference to some facts about the gold market that are worth reviewing. Have a look for yourself…..this is from GATA in January of 2010 and it is frankly a fascinating look at the market for both insiders and outsiders.

      Adrian Douglas: The ‘tiny’ gold market is actually the world’s biggest — GATA
      http://gata.org/node/8248

      By the way Al, I am not sure what your frequent reference to my being in Africa is meant to convey. A lot of people are here now sniffing out the opportunities. I ran into a guy from JPM by chance not long ago in one of the big hotels. That made for a fascinating lunch conversation. Africa is definately on the agenda these days though after having been ignored for so long. The next World Economic Forum (WEF) will be held in Nigeria and I expect we will be hearing about a raft of new investment with announcements being timed for that event. Certainly, more than just lip service is being paid to the continent now and the West has a lot of catching up to just to match the hundreds of billions that China has been pouring into the place these past few years. Western economies look like they will be flat for more than a decade into the future so this is obviously the place to be for genuine growth opportunities. There have been a lot of recent announcements of new money for all variety of projects here. Many are related to infrastructure development that is progressing at a rapid pace. East Africa is intent on connecting their varied countries by rail, road and power grids. Despite some dismal news in some countries the programs nonetheless seem to be remaining on track as part of a larger goal to integrate these economies and bring about a union of African States that has long been the dream here. A free trade zone is virtually inevitable some years in the future. The problem for the average investor though is that there are few ways to participate other than through private equity or direct investments. That is problematic for people who want to be involved but cannot actually stand the idea of coming here for whatever reason. I find it peaceful though. Cuts the stress levels quite a bit to tell the truth and it is very religious.

      • On January 31, 2014 at 1:35 pm,
        franky says:

        YES CHINA WILL EAT AFRICA !

        • On January 31, 2014 at 2:40 pm,
          Birdman says:

          Too late Franky. Already eaten.

          • On January 31, 2014 at 3:03 pm,
            franky says:

            you now CHINA ? and chines ?

          • On January 31, 2014 at 3:43 pm,
            Birdman says:

            Lots of them here…..but only one or two decent Chinese restaurants. They mostly cook at home.

          • On January 31, 2014 at 5:35 pm,
            franky says:

            i go china 4 times last 6 years .Love hong kong and shenzhen ! Day are very hungry . And have no much intelligence fore business ! Day will by the new world FACTORY and Africa to ! sorry may english ! I Belgium sone WW1 1914 TO 1918 remembrance in IEPER city in BELGIUM ! Day kill soo much humans !

      • On January 31, 2014 at 3:25 pm,
        Cory says:

        Thanks for your comments Birdman. First off Al is on the road heading down to the next Cambridge House conference right now.

        As for your comments,..
        Gold market – You are correct on the movements between gold and the conventional markets throughout today. This very well could have been the machines trading short term moves and traders seeing a short term trading opportunity. However I think it is unfair to call it a conspiracy to believe that the gold market is not at all manipulated. Banks have been fined billions of dollars for manipulation tactics in the past couple years. The story can get a bit played out. I am not a daily trader so I try to not let these daily swings get to me.
        I think the gold market will do well but I am still concerned about a major fall in the markets taking gold down with it.

        Africa – There is remarkable investment in Africa right now. It is not mostly the Eastern companies, from my understanding, that are attracted by the resources. The African recovery has been quite strong since 2008 albeit off a much lower base.

        This is simply what I have been reading Birdman although I feel it echos what you have been saying. Please let us know if this is not the case.

        • On January 31, 2014 at 4:02 pm,
          Birdman says:

          I have been seeing a surprising number of Germans here lately, Cory. There are Italians, Dutch, Turks and Swedes showing up too. Seems the word is getting out. It is a nice change of pace to see more Westerners. They tell me the red tape is murder but the profit is worth the trouble if they get what they need. Nobody is barging around too aggressively though. They seem to be just feeling it out step by step and trying to come to grips with the different pace of life and a very foreign system. The Chinese on the other hand….now those guys have confidence. They are really hated by the locals. They pay sh*t wages, no benefits or free time, push workers to overtime without compensation and don’t give a rats ass about family or tradition. They have the plants and the jobs and the money though. Factories are springing up everywhere you go. It is a building and construction boom near me where the government is putting up a few hundred thousand new condos. I know a guy who does nothing more than buy up bankrupt business in Europe and ship the whole fabrication and assembly systems here. He buys plant for 10 cents on the dollar and sells locally for half price new equipment. He is making a freaking fortune. Last week he told me he got an automated window and door machine from a Spanish company that went bust. Got it for five cents and has three bidders over 50 cents each so his take is 30,000 Euros or better after shipping costs and taxes. You don’t often see brokers make such stupidly easy money but he is a pretty sharp tack. Lots of stories to tell. You really must come and see it for yourself. This is the future of manufacturing that China is leaving behind as jobs migrate to the last frontier and the lowest cost jurisdictions and this is where Europe’s dead factories are now headed.

  7. On January 31, 2014 at 10:03 am,
    Laurence says:

    Dear Al,
    Talking of ideas, what do you think of Matt Drudge’s recent tweet,”have an exit plan”.Apparently that was it.Thanks for your good work.I appreciate it……laurence

    • On January 31, 2014 at 3:28 pm,
      Cory says:

      A lot of us chatted off air about his comments. It is hard to tell what he meant by just those 4 words. We can all assume the worst but I would rather keep a level head.

      There is no doubt Matt is very connected and has a very powerful site. The comment got a lot of attention but I have not heard of any explanation. We will keep you updated if anything of substance comes out of it.

  8. On January 31, 2014 at 10:26 am,
    james (the lesserrr) says:

    “James the Lesser believes we are in a bad situation that is not going to get any better?”

    That is not exactly my position Al.

    I stated my position very clearly for the last couple of years…

    I declared way before the April takedown that we had seen the parabolic blow offs in both gold and silver and that when gold failed to take out $1800 for the third time we entered into a bear market.

    I believe we are still in a bear market until proven otherwise.

    That proof will need to be a series of resistance levels that must be taken out and held.

    A key resistance level for me is $1340 which I stated.

    With the breakdown of gold this week I believe we are still seeing lower highs.

    The inability to hold $1270 and now the failure to get back $1250 is a big negative.

    I also made it clear that I have no idea what the direction of gold will be and that no one does or can.

    It is purely speculative at this point.

    I’ve also stated that while manipulation can and probably does exist it cannot be an excuse.
    Markets go in cycles and this cycle is just down until it isn’t.

    So my position is clear

    Gold is in a bear market until it isn’t
    The pressure is still to the downside
    And no one hear has a crystal ball

    • On January 31, 2014 at 11:03 am,
      Birdman says:

      Agree with your comments, James. Nicely stated. Al sounded like he was picking on us today. Maybe he is having a bad day. At least he does not refer to you as James the horse bettor!

      • On January 31, 2014 at 3:34 pm,
        Cory says:

        I assure you guys Al was not try picking on you today. He was just trying to give another side of the argument.

        Thanks for stating your positions very clearly!!

  9. On January 31, 2014 at 10:32 am,
    james (the lesserrr) says:

    Some people on this site are looking under rocks for sheep in wolves clothing.
    They need to take a good long look in the mirror.

    They use phrases like “You cant win if your not in”

    This is right out of the adverstising playbook lie that the LOTTO uses; which he claims to despise.

    WORDS MATTER!

    AND PS – IF YOU CHANGE THE WORDS YOU CHANGE THE MEANING!

    • On January 31, 2014 at 10:44 am,
      HEAVYHITTER says:

      Dear General James,

      Please be advised to clear the deck.

      GOLD WILL AND MUST………BLAST OFF.

      Please fasten your seatbelt and prepare for….

      LIFT OFF…….GOLD IS GOING INTO ……MOONSHOT

      • On January 31, 2014 at 11:05 am,
        Birdman says:

        Been hearing that for almost three long years, HH. Don’t you guys ever tire of the same refrain?

        • On January 31, 2014 at 11:14 am,
          HEAVYHITTER says:

          I guess your right Birdman. Been gone from the gold game a long long time.

          I have to sit here and babysit my positions…..BUT I AM A SUPER BULL

          The world has serious financial issues of recklessness this world
          Has never seen.

          SO KEEP THAT IN MIND. I believe a big gold rush is ahead.

          • On January 31, 2014 at 12:46 pm,
            Birdman says:

            Actually I am in agreement with you HH. I also see a good future for metals but it may come about for all the wrong reasons. By the way….are you a boxer? Heavy Hitter sounds like a name for a guy who spent time in the ring.

      • On January 31, 2014 at 11:42 am,
        Bobby says:

        isn’t the the KER Motto?

        • On January 31, 2014 at 12:08 pm,
          HEAVYHITTER says:

          Oh…..I didn’t know the KER motto…..was

          BLOW IT OUT YOUR ARSE

          • On January 31, 2014 at 12:16 pm,
            JERRY the Long..................O^OTB says:

            I think IRISH WAS FIRST TO COIN THE PHRASE……….

          • On January 31, 2014 at 3:35 pm,
            Cory says:

            Haha I never remember us saying that HH!!

  10. On January 31, 2014 at 11:07 am,
    HEAVYHITTER says:

    OH By the way…….GENERAL JAMES

    It would help out if you give your orders to

    LITE THE FUSE UNDER GOLD

    I’m standing by waiting for your orders …….SIR

    We are ready when you are……thank you …SIR

  11. On January 31, 2014 at 11:11 am,
    SEB says:

    Can’t wait for short squeeze. Based on COT report the amount of shorts is ALL time high. That will get us to 1500 really quick and live rest on sidelines. From there momentum players and S&P crash survivors will pile in into mementum and you will be looking at 1700-1800 market. From there correction 100-120pts and ring ring 2000 by end of 2014. Boom! That’s how it’s done!

    • On January 31, 2014 at 3:36 pm,
      Cory says:

      That is very optimistic SEB. I am not as bullish as you but I don’t have a crystal ball either.

  12. On January 31, 2014 at 12:13 pm,
    james (the lesserrr) says:

    HEAVY HITTER – I WOULD LIKE NOTHING MORE THAN TO GIVE THAT ORDER

    But as a good General I cannot send my men into harms way

    This is TRENCH WARFARE and we cannot go out into No MANS LAND

    It is a war of attrition

    SIT TIGHT AND BE RIGHT!

    • On January 31, 2014 at 12:24 pm,
      HEAVYHITTER says:

      Thank you General. SIR…..

      We bid you a good weekend and we will wait for further orders from you…SIR

      yes…SIR…….well do……over and out

      • On January 31, 2014 at 2:27 pm,
        scooter says:

        Gotta wait till the carpet bombing stops…

        • On January 31, 2014 at 2:41 pm,
          Birdman says:

          Where is Al? No comments today?

          • On February 1, 2014 at 2:29 am,
            Andrew de Berry (Rev) says:

            Give the guy a break BirdMan. Remember he’s turned 70 and I’m only a year behind and get out of breath trying to read a fraction of what he’s wading through.