Loading ...but good to see some buyers late in the day, as opposed to past days always ending on a sour close..!!!!!
GATA on the deep out of the money Dec Gold Calls
Dear Friend of GATA and Gold:
Craig Hemke of the TF Metals Report, writing this week for Sprott Money —
— speculates about the far out-of-the-money options that have been purchased on the December contract for gold on the New York Commodities Exchange, which have caused people to wonder if somebody knows something about a possible upward revaluation of gold by the end of the year.
At his YouTube channel, Vince Lanci of GoldFix guesses at the identities of the options buyers:
He notes that a gold moonshot isn’t necessary for the buyers to make money on them, since any strong rise in the gold price may make the options more valuable.
In previous commentary Hemke has written that a revaluation of gold at some point is plausible and even likely. After all, it has happened before, the most famous example being the gold revaluation and U.S. dollar devaluation proclaimed in the United States by President Franklin D. Roosevelt in January 1934.
Indeed, gold revaluation is a standard mechanism of money creation for central banks to avert catastrophic debt deflations, as the Scottish economist Peter Millar detailed in a study written in 2006:
https://www.gata.org/node/4843
Fourteen years ago the U.S. economists Paul Brodsky and Lee Quaintance argued that major central banks likely were already planning for gold revaluation, surreptitiously redistributing world gold reserves among themselves so they all might be fully hedged against an inevitable devaluation of the dollar:
https://www.gata.org/node/11373
The trillion-dollar platinum coin idea that has been floating around Washington for a few years is a variant of gold revaluation and dollar devaluation, a variant that would try to restrict the benefit to the U.S. government, the only possessor of the coin:
https://www.gata.org/node/23324
While this stuff sometimes seems wild, it is actually serious, at least as anything in a system of infinite fiat money can be serious.
But it is hard to believe that anyone would have much of a chance to cash in on a major revaluation of gold by using Comex gold futures contract options.
Official gold and currency revaluations happen suddenly. They are top secret, matters of national security, since front-running would negate them. So the general thinking about a major gold and currency revaluation has been that it would be proclaimed while all financial markets are closed and that governments would suspend futures markets and require contracts and options to be settled for cash at the prices on the last trading day before the revaluation.
After all, if the Comex, which lately has been more noted for the market manipulation it countenances than for integrity, is glad to let traders, especially big banks, sell far out-of-the-money options on just about anything, the exchange could be confident that the government would intervene as necessary to prevent disaster — like the disaster that might result from such options suddenly becoming in-the-money. If enough gold options like the ones Hemke and Lanci cite ever came into the money, they might bankrupt the exchange. So anyone buying those options is betting not just that gold may go to the moon by the end of the year but also that the U.S. government will let the exchange go bust.
For that matter, anyone owning gold and shares of gold mining companies in the belief that a major revaluation of gold and devaluation of the dollar are inevitable is also betting that the U.S. government will let gold investors keep spectacular capital gains and not take them away via punitive windfall profits taxes or outright confiscation of metal and nationalization of mines.
Bobby Godsell, former CEO of AngloGold Ashanti, once said that he wanted “a good gold price in a good world.” Most gold investors probably share that hope. But as the saying goes, hope is not a strategy, and all investors, especially investors in the monetary metals, must consider whether, and, if so, how they can guard against government’s totalitarian tendencies even in nominally free countries.
Yes, it’s distressing. But as Lee Strasberg’s Hyman Roth told Al Pacino’s Michael Corleone in one of the “Godfather” movies, “This is the business we’ve chosen”:
https://www.youtube.com/watch?v=4Fc5tWRUcuk
Since gold is the secret and even prohibited knowledge of the financial universe, its business is fascinating, exciting, aggravating, demoralizing, sometimes highly profitable, and sometimes ruinous. Of course everyone in this business may hope to get rich from it while helping to make markets and the world financial system a little more honest, transparent, and democratic. But maybe not too rich.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
The Adens meanwhile see a parabolic rise in PM’s, that would allow for such huge prices and allow the option sellers to delta hedge on the way up.
So the exchange would not go bust….just some granters would be a lot poorer.
* * *
Buygold
Since PMs are still driven by Fed interest rates things are still iffy and speculation needs attention and swift responses. We can hope with the job numbers it might offset inflation drivers and no hike.
Now we have a addition to the inflation drivers and to Europe climate change with AI. Ai is not yet deflationary but inflationary along with a big drain on the grid. Now they want to pile more and more data on these chips so if they go it’s going to affect more than a few things.
Artificial intelligence is actively pushing prices higher in the short term, acting as a new catalyst for inflation. While AI is ultimately expected to increase productivity and lower costs, the massive, “insatiable” infrastructure build-out is currently driving up prices before any of the expected deflationary benefits have materialized.
How AI is Fueling Inflation
- Skyrocketing Energy Demand: AI data centers consume enormous amounts of power. This surging demand is putting upward pressure on electricity prices. [1, 2]
- Supply Chain Bottlenecks: The intense capital spending on AI infrastructure (e.g., server components, cooling systems, and advanced chips) has created shortages and driven up hardware prices.
- High-Cost Workforce Competition: The race to build AI systems is driving up wages in related technical and construction sectors.
The Federal Reserve’s Outlook
Inflation remains a persistent problem, with measures like the PCE price index running around 4.1%. Because AI investments are driving up prices in parts of the economy, Federal Reserve officials—including Chair Kevin Warsh and Cleveland Fed President Beth Hammack—are closely monitoring the situation to see if it necessitates higher interest rates to bring inflation back down to the 2% target.
Looks like gold is well contained
They’ll keep those gains below 2%, probably 1. Silver might get us 2%. Both below plat and pall no doubt.
There’s just not enough buyers to withstand the never ending onslaught.
A lot of money at stake
Ukrainian millionaire targeted in bomb plot ‘was planning to expose Kiev corruption’ – former French spy
https://www.rt.com/news/642470-ukrainian-oligarch-blast-corruption/
Helping gold I think
The Kobeissi Letter
@KobeissiLetter
·
28m
BREAKING: The US economy adds 57,000 jobs in June, well below expectations of 114,000.
The unemployment rate fell to 4.2%, below expectations of 4.3%.
May’s jobs number was also revised down by -43,000 jobs.
The labor market remains in a volatile situation.
Nice squeeze
Let’s see if we can hold it all day.
who/what goosed silver?
sudden spike to $61.65
…weak jobs number?
Only
57,000 new jobs added. Interest rate cuts are back on the table!! I’m happy to be wrong!
Ferret
Tks for that…..this is the new UK….as soon as it goes above 25 degrees there will be a hosepipe ban….we have one starting any minute !!!!!
Looks like speculators are dipping their toes in the water before jobs report.weaker report could actually boost chances of a Federal Reserve interest rate cut. )
Economists are forecasting a cooling labor market, with expectations that the U.S. economy added 115,000 jobs in June and that the unemployment rate remained at 4.3%. A result in line with these projections is generally viewed as “good” for maintaining economic balance, though a
(weaker report could actually boost chances of a Federal Reserve interest rate cut. )
The Bureau of Labor Statistics (BLS) will release the June jobs report at 8:30 a.m. ET. Expectations for the data are mixed based on early indicators: [1]
- Slowing Hiring: The expected gain of 115,000 jobs is down from the 172,000 additions recorded in May. [1]
- Mixed Indicators: While job openings in May showed resilience and layoffs have trended lower, private employer hiring from the ADP report has missed expectations. [1]
- Market Sentiment: For investors, a softer labor report could be seen as “good” because it might encourage the Federal Reserve to cut interest rates, which recently pushed stock futures higher on expectations.
ferrett,
evaporative cooling (swamp coolers) works well in areas with low relative humidity. in humid areas (southeast u.s, florida), not so much.
Gold Train
Inspection before the merger
https://www.railpictures.net/photo/905007/
This theatre inspection car was named ‘FOX RIVER’ in Wisconsin and built by the Chicago & NorthWestern when the RR was selling itself to the Union Pacific. UP absorbed the car with the RR and painted it in UP colors.
Maddog; all air conditioning works by evaporation.
So turn your house into an airconditioner. Spray water on the roof and sunniest walls. It doesn’t need much, you aren’t trying to cool the house with cold water, but by evaporation of the water, so ideally you don’t want any run-off. Absorbent tiles like terracotta are best because they will hold water for a while, although it works fine on painted concrete tiles too. If the gutters are easily accessible draping silver tarpaulins from them for shade makes a huge difference too. Just be ready to take them down quickly if a summer storm build up.
If you put in ducted aircon upstairs, the evaporator is in the roof and you can let the cold air percolate down from the bedrooms and stairwell, with the condensor situated almost anywhere outside connected by piping identical to a rainwater downpipe.
Just can’t have
too much excitement in the PM’s, the day before a jobs# comes out…….My guess is that the scum hit the metals in the morning, but hopefully we can get rolling higher after the # comes out…
goldielocks
When the Sun ends….Musk will have us in another galaxy, tks to Starlink !!!!!
Maddog
You don’t have to get central air, they have portable systems of different kinds including solar that can be set to automatically turn on at a certain temp.
Yes I read things about different sleeping hours but in extreme heat it’s not going to make much difference. In the US I never looked into sleeping hours but do know it used to be heavy in agricultural so plowing fields and tending to livestock amongst making or trading their own things or amongst each other was done during the day on natures clock so to speak. When industrial slavery came around in inner cities they just kept those hours.
In a billion years as sun starts to turn into a red giant it will get to about 150F at first and so for life forms to add more years on earth they would probably have to live underground and find underground water sources. Those will be end times before the sun absorbs earth.
Still not strong enough
to sustain a rally all day.👎
goldielocks
Re Aircon
It’s also the past…..in times before aircon in the South of Europe, afternoons were for sleeping, you went back to work in the evening and had dinner at 10 or 11 pm, or later…..Spain was famous for its afternoon siesta and then late dining…it was you Yanks, who said you have to work all day !!!!!
Also many of our houses were built long before Aircon existed and if you installed it, it would be a huge undertaking….most of my walls are 3 ft thick and solid stone……where would the ducting go, it would have to be on the outside and thus very intrusive…..all for a few days a year !
This year is a major El Nino, which is causing the heat.
Buygold
I agree … it’s disgusting greed!
Maddog
That’s a oxymoron, claiming they can control the temperature of the world to save their lives when they can’t control the temperature of their own city because the way it’s built only focusing on carbon and ban air-conditioning that would save lives especially in a city built to retain heat and not do anything about it or find other cooling measures like Ferrett mentioned.
Reasons for this heat wave besides a heat dome hovering over them.
- North African Air Currents: This trapped high-pressure system is drawing incredibly hot, dry air directly northward from the Sahara and Iberian Peninsula, pumping continuous waves of heat into France.
- Urban Heat Island Effect: Paris is highly dense, constructed from concrete, stone, and asphalt that trap and radiate heat rather than absorbing it. Furthermore, nearly 70% of Parisian buildings feature iconic zinc roofs that act like giant radiators under the baking sun.
- They better do something.
- Climate Change: Europe is warming twice as fast as the global average. Human-driven global warming has drastically increased the frequency and severity of these early-summer heat waves.