wurde dies schon gelesen? wenn ja, dann hier nochmals:

verfasst von Emerald, 12.08.2003, 22:01

-->Gold/Bonds/Equities: der Markt und seine Manipuleure:

quote
Timing is 90% of success

Early in February the gold price broke above $370 and then above $380 and every gold bull who had any cash left piled into Comex to buy another contract or two. Open interest on the gold futures reached 240 000 - the highest level since the heydays of 1981 when the gold price was on its way to $1000/oz.

That created the perfect set-up for a smash on the gold price. Everyone and his mate was overextended to the maximum on Comex, and probably in the physical market as well. Since the gold price had risen $24 in 19 trading days, it had left many prospective buyers behind, while speculators were ready to take profit on any adverse developments. These were not long in coming. Heavy selling all round soon had the gold price in retreat, but the clincher was the 50% increase in margin on gold contracts.

As written here before, the gold bulls were in a real fix. With no spare cash to meet the extra margin, they had to sell. But by selling they were pushing the gold price lower which brought additional margin calls on their remaining futures contracts. Furthermore, with gold under pressure and open interest at a 20 year high, there were not too many eager buyers in the market for these contracts. Buyers who had some money in the purse were patiently waiting for prices to bottom before they became interested, and ‘bottom; was almost $70 below the then recent high.

The gold price fell to below $320 and then started a steep recovery; investors tend to have short memories and it may well be the same old crowd who, despite the recent setback from $370 back to $342, spent the past two weeks again piling back into Comex to raise the level of open interest to within a few thousand contracts of the February high. Which, of course, again created a situation where the market was as overextended as it was then and thus again very vulnerable for a sneak raid.

Which was not long in coming; this time, though, so far without another 50% hike in margin requirements from the Comex hierarchy. The desired effect was achieved though; the gold price started to fall and as the long positions were closed on Comex those who had shorted the market could make a handy profit by the time gold dropped back to $356. It held there for a while and then plummeted to below $350 on Friday. The final descent down to $342 was a bonus for those shorts who had held on long enough to sell late in Friday’s US trade.

The strange thing, of course, is that there is a substantial amount of turmoil - some might even say it is on the verge of panic - in US bond markets, spilling over onto Wall Street as well. Normally when such turbulence develops there is sufficient reason for nervous investors to start looking towards gold as a safe haven, but this time the gold price fell as the nervousness increased. Equally strange is the fact that despite different reports that foreign central banks are selling US Treasuries and other US bonds and, presumably, taking the money home to their native currencies, the US dollar was very strong during this period of turbulence.

Last Monday the gold price briefly broke above the resistance on the 6-hourly gold chart that was discussed last week. The promise was there, but could not be fulfilled once the big players in the gold market realised that the time was exactly right to crush the gold price again - with a high level of open interest, much of it taken on over the previous few days, and just at the delicate time when gold was in the process of breaking above key resistance that would have sent a positive signal to the market.

One might find much to be upset about in what happened to gold, but it must be admitted that the timing of gold’s adversaries was excellent. Of course, since their gold supply is being depleted they have to make sure that they use what gold remains or becomes available to obtain the most effect. This means they have to wait for the right moment to get the ‘most bang for the buck’ and experience has now shown that when open interest shoots up very rapidly to approach 240 000 contracts, the market becomes vulnerable.

To their disappointment it may well turn out that without the effect of the jump in margin they will not push the gold price down as much as in February and also that a recovery in the price should start much sooner.

The US bond market

Readers should keep an eye on the yields of US long bonds and - if they have access to the information - the spreads between say the 2 year and 10 year Treasuries as well as between the Treasuries and other commercial bonds, including those of Fannie Mae and Freddie Mac; agencies active in the US mortgage market that are soon to be beleaguered as European central banks follow the advice of the ECB and sell their bonds.

By October 1987 the yield on the US 30 year Treasury bond had increased by more than 30% from its February level. This increase in longer term interest rates was a contributing factor to the October Crash when the Dow Jones lost almost a quarter of its value on one day. The current increase in long bond yields is approaching the 30% level, but from all accounts the new bear market in bonds is not yet over - in fact, the yields bottomed in mid June and the bear market is only 7 weeks old, as yet not nearly the 8 months of the 1987 bear market. If yields keep on rising through this week, the situation in the US could soon become dire enough to send investors flocking into gold again.

Continuation of the trend will also mean that the bull market in US house prices is over and that the refinancing of mortgages - a major factor in sustaining consumer spending over the past 2 years and thus keeping the US economy alive - is also at an end.

All in all the effect of this reversal in the bond market is likely to precipitate one or more crises during the next few months, if not within a week or two. The derivatives market for interest bearing securities is many tens of trillions of dollars and it is difficult to conceive that positions could have been delta hedged and kept neutral at a time when all market players are looking desperately for counter-parties with whom to hedge the steeply rising trend in yields - a case of everybody running for the same exit at the same time.

Readers may remember the case of LTCM, the hedge fund that was too large to fail. It will not surprise to hear that this time there is not just one ‘LTCM’ out there, but quite a number of them.

It is certain that the Fed and the US Treasury and the whole Bush Administration will do all they can to prevent the true situation from becoming apparent and to avoid anything that could spark investor panic. It is becoming clear from what we are learning about the lead up into the Iraq War that the powers that be in the US, and in Britain, stretch and even bend the truth to a remarkable degree in pursuit of their objectives. The cause of stability in the markets surely must rank as even more important than invading Iraq and as such one can expect that more forceful measures will be taken to ensure the markets remain on as even a keel as possible.

One of these is sure to be the pursuit of a strong dollar, which will not be good for gold. An early warning that these efforts are failing will be when market forces take over and the dollar weakens; then gold will fly.


All rights reserved to Daan Joubert and www.GOLDSignals.com www.SAGOLDS.com and www.HugoCapital.com

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• wurde dies schon gelesen? wenn ja, dann hier nochmals: - Emerald, 12.08.2003, 22:01