On gold options…

Bill,..
Update on the May options as we’re less than an hour from expiry,..

Assuming May Gold closes below 890,..

Using open interest statistics from close last night would leave a paltry 63 call options in the money and a whooping 10,644 put options in the money,..

This is staggering when one compares this to what the position would have been if May Gold had closed over $950/oz today, a level it was at only 6 trading sessions ago,..

At May Gold over $950/oz: There would have been 6,031 call options in the money and a miserly 458 put options in the money!..

This gives a combined swing of some 16,154 contracts!?! The short side has made a killing,..

You can see why it merited the shorts to crank down the price by $60,.. And sort of answers those questions about why the precious metals flowed so negatively against the oil and currency tides this last week,..

The good news, if indeed it is, is that personally I can’t see much further downside from here,.. The bears will tell you that the Euro’s uptrend has broken down and oil might yet sell off some more, but so what,.. The price of gold is heavily oversold against the Euro and is due a bounce in that currency, likewise it’s currently at a multiyear low in ratio against oil,.. Looking at the scared kittens running out of the Hui, which has dropped by over 65 points since a week last Wednesday, we must be almost there,..

Together with this, there’s bound to of been a significant stash of ammunition used up by the ‘Dastily Shorts’ to orchestrate this takedown, which they’ll be looking to replenish in the near future,..

They may continue to hold this beach ball under the water until after the Fed meets next week, but the pressure from beneath must be already at wire strain level,..

If I wasn’t so loaded up already, I’d merit it a good time to ‘back up the truck’,..

Anyway let’s hope I’m right,..

Kind regards,..
Rich (Live from ‘The Scarborough Bullion Desk’)

Something’s got to give…

Bill;
I’ve mentioned to you this particular bullion / coin dealer – one of, if not the largest in Canada quite a few times. Spoke with him yesterday. As of very recently he has marked his standard "selling price" for bars to Spot + 12.5 % and he is still having trouble keeping stock. Three months ago his standard selling price for bars was Spot + 6 %. Junk bags or melt can still be had "at or close to spot" but availability is limited. Minted silver Maples and Eagles are for the most part simply not available.

I mention this because it is empirical evidence that the Physical market is decoupling from the fraudulently suppressed COMEX spot price. Amazing how the derivatives COMEX derived price of metal is becoming just about as meaningful in the real world as triple-A-rated mortgaged backed securities which you cannot trade.

This situation warrants close monitoring.
Best,
Rob Kirby

Sabre on Newmont…

Bill,
NEM has one of the worst charts of any gold stock. It has been destroyed all year. I thought markets anticipated good earnings? Earnings came in 50% higher than consensus. Did the analysts get it wrong or are gold stocks the playthings of the cartel and being used to keep gold on a lid?

I mean seriously, the fertilizer companies go up and up. NEM earned 15 cents this quarter last year, versus 80 cents this time around and the stock has gone NOWHERE. Annualized, that is $3.2, which would give NEM a PE under 15. I thought gold stocks were valued oin reserves and cash flow and therefore trade at a much higher multiple. Apparently, the only thing that matters is what the cartel wants to matter, as usual.
Sabre

Adrian on the same…

Bill,
http://www.reuters.com/article/marke...

Newmont just released Q1 results. Net profit rose 444% to $386 million.!! Their revenue was 1.9B$ which means 20% net profit. How many companies are reporting this sort of growth AND net profit? The answer is none outside of natural resources. Last Friday the DOW rallied because Citigroup only LOST 5B$!! The HUI should be on fire with investors chasing real profit growth and stellar growth prospects. Instead they don’t even know this sector exists let alone how to spell "gold". They are too busy buying the garbage the mainstream press is spinning that the best investments are the losers that are not as bigger losers as previously predicted!! How about some real winners instead?

The lights WILL go on and the herd will come rushing to our pasture.
Cheers
Adrian