Gold, Silver Hitting Fresh Highs As Dollar Skids to 3-Year Low

Gold and silver hit record highs on Thursday as the dollar's three-year low against a basket of major currencies attracted non-U.S. investors because of the Fed's accommodative monetary policy.

 

Relentless Dollar Pummeling Continues

Submitted by Tyler Durden on 04/28/2011 05:10 -0400

At the current rate of collapse, in a few more days the dollar will take out all time lows. Currently holding at 73, after hitting 72.8 overnight, the DXY appears set to test the last support from when the dollar carry trade was all the rage again back in 2008. Of course, for that to happen crude will have to be north of $130, which not even the most incompetent CNBC pundits will be able to spin as positive for corporations (let along the US consumer). It will also mean that any opex inspired corrections in precious metals will not be a frequently recurring phenomenon. But at least Bernanke's plan of inflation our way out of insolvency through a complete currency devaluation is working: after all for all who listened to the Bernanke conference, the only way to rescue the flailing dollar, is first to kill it...

Silver Backwardation Doubles Overnight

Submitted by Tyler Durden on 04/28/2011 10:40 -0400

Yesterday we correctly predicted that the entire 10% silver correction would be momentarily taken out as the Comex news is properly digested. And so it continues - as silver is once again pennies away from $50 and a fresh new nominal all time high, we take a quick look at the futures curve where as expected the backwardation is confirming the "negative convexity" (yes, yes, we know silver is not a duration security) once the $50 stops are taken out will send silver surging to unseen before levels (which also considering it will be at a new record over $50 is pretty much intuitive). In the meantime, the chart below is the worst nightmare of anyone still holding short silver positions. While the near-far contract backwardation was about $0.75 yesterday, it has since doubled in less than 24 hours. We can't wait to see what surprising nuggets the Comex will bring us today.

Chinese Yuan is Going For Gold… Literally!

Posted by: Smart Money Europe

Post date: 04/28/2011 - 06:22

The Chinese yuan is going strong again, breaking the 6.5-dollar-level over night: Thanks Ben! In the meantime, gold demand in China is surging... what does this all mean?

FMX Connect Morning Gold Fix: Silver Warehouse Shenanigans Or The Real Deal?

Submitted by Tyler Durden on 04/28/2011 09:09 -0400

Our friends at Zerohedge did some excellent discovery and analysis last night on the recent drawdown in Comex Silver stocks eligible for delivery. We have personally seen this activity before, and while we do not doubt the authenticity of the draw down from the Registered (for delivery) stockpile described below; We add that this has happened many times in the past in short -cons meant as exit strategies for big longs. So far, if this is an exit strategy, it is basically what happened in 1997 when Buffet took delivery, but on a much bigger scale, a long –con if you will. But if the reason is that someone bigger that the usual investor community with pockets and a will deeper than all the Bullion Banks combined has decided to de-dollarize their FX reserves, like say China, then this is the way to do it. We think this is real and will describe why briefly after the ZH analysis.

Visualizing The Collapse: Charting The Drop From Q4 2010 To Q1 2011 GDP (Which Came In At 0.8% Ex-Inventories)

Submitted by Tyler Durden on 04/28/2011 08:52 -0400

The bottom line: Q1 GDP ex-inventories came at 0.8%, the lowest since Q3 2009. The economy has hit stall speed, and absent another fiscal (nope) or monetary (QE3) stimulus, we will go negative in Q2, now that the full impact of the Japanese economic collapse has forced even the ostriches to pull their heads out of the sand. Alternatively, Bernanke will be stuck with the worst case of stagflation since the 1970s. Rock and hard place: just as we predicted in December 2010. The chart below shows the ugly collapse in the economy in Q1: recall that up to a month ago it was supposed to grow by 4%! Now, ex inventories, it is 0.8%. And most importantly, the strong US consumer, in the form of the Personal Consumption Expenditures, sees his share of economic growth drop by over 30%, from 2.8% to 1.9%.

Q1 GDP Prints At 1.8% Misses Consensus OF 2.0%, Plunges From 3.1% In Q4, Initial Claims Surge

Submitted by Tyler Durden on 04/28/2011 08:30 -0400

Key highlights:

• US GDP Price Index (Q1 A) Q/Q 1.9% vs. Exp. 2.3% (Prev. 0.4%)
• US PCE Core (Q1 A) Q/Q 1.5% vs. Exp. 1.4% (Prev. 0.4)
• US Personal Consumption (Q1 A) Q/Q 2.7% vs. Exp. 2.0% (Prev. 4.0%)

and the kicker:

• US Initial Jobless Claims (Apr 23) W/W 429K vs. Exp. 395K (Prev. 403K)

More coming

Goldman On GDP And Surging Claims: Expect "Softer Nonfarm Payroll Growth In April Than March"

Submitted by Tyler Durden on 04/28/2011 09:44 -0400

Not at all surprising, Goldman's economic team continues to (pretend) it is in denial, knowing full well the second it downgrades its Q2 and H2 numbers it is game over. As such its "review" of the ugly Q1 GDP number came out smelling like rainbows and unicorns, namely "this mix of growth - stronger consumption and less inventory building - suggests a bit more momentum heading into Q2." Let's see how this mix is revised in the second and of course third GDP revision. However, where Goldman gets ominous, is its observation of next month's NFP number. If Hatzius is correct (and with his 1.75% Q1 GDP he was the closest of all to the real number), look for the nonfarm payroll number to be beyond ugly, fully opening the door for further QEasing.

Feeling Vindictive? Here Is Your Chance To Bet Bernanke's Printing Career Will End Before December 31, 2011

Submitted by Tyler Durden on 04/28/2011 11:35 -0400

Feeling like the economy is not the only thing that has taken a dump for the worse? Harboring a nagging suspicion that the Chairman's chances to continue presiding over the free world with a Hewlett Packardian fist may have taken a bit of a hit, and his Wall Street overlords are starting to consider pulling a Hudsucker Proxy and replacing him with Mark Zandi? If so, InTrade has you covered. As of today, you have the chance to bet that the mutant second coming of Rudolph von Havenstein and Gideon Gono will be shown the door, either voluntarily or not, by the end of 2011. In some ways this is perfect way to hedge one's precious metal, stock market, and rates bets, since the entire fate of capital markets continues to rest squarely on the Chairman's shoulders. We wonder how long before Goldman securitizes this InTrade contract and sells the equity tranche to idiot European and Korean money managers...

Wal Mart CEO: "Shoppers Are Running Out Of Money"; There Is "No Sign Of A Recovery"

Submitted by Tyler Durden on 04/28/2011 11:12 -0400

When a month ago the CEO of Wal Mart Americas told the world to "prepare for serious inflation", the Chairman laughed in his face, saying it was nothing a 15 minutes Treasury Call sell order can't fix (granted net of a few billions in commissions for JPM). 4 weeks later the Chairman is no longer laughing, having been forced to hike up his inflation expectations while trimming (not for the last time) his economic outlook. "U.S. consumers face "serious" inflation in the months ahead for clothing, food and other products, the head of Wal-Mart's U.S. operations warned Wednesday talking to USA Today. And if Wal-Mart which is at the very bottom of commoditized consumer retail, and at the very peak of avoiding reexporting of US inflation by way of China is concerned, it may be time to panic, or at least cancel those plane tickets to Zimbabwe, which is soon coming to us." In  light of that perhaps today's words of caution from Wal Mart CEO Mike Duke will be taken a tad more seriously (yes, even with the $50 billion in "squatters rent" that the deadbeats spend on iPads instead of paying their mortgage: that money is rapidly ending). Warning is as follows: "Wal-Mart's core shoppers are running out of money much faster than a year ago due to rising gasoline prices, and the retail giant is worried. "We're seeing core consumers under a lot of pressure," Duke said at an event in New York. "There's no doubt that rising fuel prices are having an impact." Tell that to Printocchio please.