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Patrick Souther

Joined: 09/04/15


Comments by Patrick Souther
Oil Traders Follow Market’s Message Jun 01, 2015 6:30PM ET
I fail to see how any of the fleeing from USO can amount to be bullish. Sure you have a point on the followers of price and joiners of the majority but it is a stretch to claim that is what caused everyone to flee USO.
Why A Worldwide Iron Ore Cartel Is Unlikely Jun 01, 2015 6:24PM ET
"These gains in efficiency lead to significantly higher production whilst reducing operating costs and represent a shifting of the efficiency frontier. ". . I believe this is the crux of the argument regarding the feasibility of a worldwide iron ore cartel and I couldn't agree more. Well said Steven. The efficiency gains are often drastic as seen in production changes per efficiency gain. This creates a dynamic factor that would be immensely difficult to control in an organized large scale cartel. Cooperation might still be possible but very unlikely as long as this dynamic variable exists.
Here's The Reason Gold Is Going Nowhere Jun 01, 2015 6:15PM ET
Does anyone remember the well documented visit by CNBC's Bob Pisani to GLD's gold vault? This visit was organized by GLD's management to prove the existence of GLD's gold but the gold bar held up by Mr. Pisani had the serial number ZJ6752 which did not appear on the most recent bar list at that time. It was later discovered that this "GLD" bar was actually owned by ETF Securities.
Here's The Reason Gold Is Going Nowhere Jun 01, 2015 6:14PM ET
I really am not surprised by the lack of interest in GLD specifically. Just read the part in GLD's prospectus where the custodian subcontracts to subcustodians but has no right to audit or visit the subcustodians' vaults. It then requires third-party audits. So we can have the custodian own or pay off the third-party auditor to give a clean audit, while knowing that the subcustodian leases out the gold into the market. If GLD shareholders suspect so and ask custodian to prove otherwise, custodian can simply say "we have no right to check the subcustodians, see the prospectus, but here is a clean audit result" however laughably compromised. If GLD goes bust, no holder of GLD has any claim to any gold. GLD holders simply become unsecured creditors along with all other creditors, with no precedence in bankruptcy court. None of this would matter if GLD gave retail investors the right to redeem for the underlying physical but it doesn't. GLD shares are nothing more than paper.
Why Is JP Morgan Accumulating The Biggest Stockpile Of Physical Silver? Apr 28, 2015 5:10PM ET
Thanks for the insight and discussion Michael. Though the economic indicators certainly do not point to another crisis at this point in time, there is a possibility of one in the distant future. I do wonder why JP is stocking up on silver instead of gold for this purpose though. I suppose silver could be a safer bet with its industrial functions.
No Greek Deal, So Why Did EUR Rally? Apr 28, 2015 5:05PM ET
Either way, the Euro rally is short lived and unlikely to last. It is still in a fragile state due to the Greek uncertainty. Some are ignoring the Greek deal's effect on the Euro under the belief that it is too small to affect the Euro. I don't believe this is true as there was larger repercussions if the Greek deal falls through. Additionally, this uncertainty does not look like it will be resolved any time soon.
Possible Head & Shoulders Top For Gold Apr 28, 2015 4:53PM ET
"To have resolution of these long term chart patterns we will either need to see a lower low below $1130 or a rally above the double-top resistance at $1307". . I'd imagine we'll be remaining within the range for the time being due to the lack of catalysts to move gold in either direction. There have been quite a few catalysts so far this year but they have already been priced in. Gold will without a doubt remain sideways for the foreseeable future.
Precious Metals: It’s All About The Big Picture Apr 28, 2015 4:48PM ET
I also remember there was a well documented visit by CNBC's Bob Pisani to GLD's gold vault. This visit was organized by GLD's management to prove the existence of GLD's gold but the gold bar held up by Mr. Pisani had the serial number ZJ6752 which did not appear on the most recent bar list at that time. It was later discovered that this "GLD" bar was actually owned by ETF Securities. I've always suspected GLD of gold hypothecation but saw no real evidence until that visit. The lack of insurance is also incredibly convenient for bullion lending.
Precious Metals: It’s All About The Big Picture Apr 28, 2015 4:47PM ET
Hello David, I've been doing my due diligence on the GLD fund but have been unable to find any specifics on its insurance policies mentioned in the prospectus. Would you happen to know the details behind GLD's insurance? Below message was an eye opener for me:. . "Did anyone try calling the GLD hotline in search of numerical details on GLD's insurance? The prospectus vaguely states "The Custodian maintains insurance with regard to its business on such terms and conditions as it considers appropriate which does not cover the full amount of gold held in custody." When I called asking for clarification on this clause and about how much of the gold was insured, the representative proceeded act as if he didn't know and said they were just the "marketing agent" for GLD. What kind of marketing agent doesn't know such basic information about a product they are marketing? It seems like they are deliberately hiding information from investors."
3 Days, 3 Forex Volatility Drivers Apr 23, 2015 4:15PM ET
While many others believe in Greece, my conviction on Greece is not as strong. Greece seems to be the one that is not willing to follow through with the plans of its creditors. The creditors have already done quite a bit to keep Greece in the union but Greece has not reflected the same willingness. I am seriously doubting when or if Greece will ever offer any credible reforms.
Surprising Gold Chart Apr 23, 2015 4:11PM ET
I'm leaning towards an agreement with this statement:. . "Gold miners have finally right-sized their cost structure and are set up with considerable operating leverage to higher gold prices". . There were many times when it was the opposite with gold itself outperforming the miners. I believe this was a result of the excessive cost structure of the miners as all other factors seem secondary.
EUR/USD Back Through 1.0700 On Greece-Deal Hope Apr 23, 2015 4:08PM ET
"but the willingness of Greece’s creditors to relax its deadline at least shows that all parties remain committed to keeping Greece in the Eurozone for now.". . The creditors generally have been lenient on Greece from what I'm reading. Greece, however, have not reciprocated the same towards the creditors and have continually refused to make any meaningful changes. It seems like Greece is the one that is intent on kicking the can down the road rather than seek out a real solution.
Precious Metals In 3 Charts Apr 23, 2015 3:58PM ET
I also remember there was a well documented visit by CNBC's Bob Pisani to GLD's gold vault. This visit was organized by GLD's management to prove the existence of GLD's gold but the gold bar held up by Mr. Pisani had the serial number ZJ6752 which did not appear on the most recent bar list at that time. It was later discovered that this "GLD" bar was actually owned by ETF Securities. I've always suspected GLD of gold hypothecation but saw no real evidence until that visit. The lack of insurance is also incredibly convenient for bullion lending.
Precious Metals In 3 Charts Apr 23, 2015 3:57PM ET
Hello David, you see to be very familiar with GLD. Would you be able to tell me any specifics about the insurance of GLD? I haven't had much luck finding any specifics on this subject. There seems to be some truth to the following statement I've come across:. . "Did anyone try calling the GLD hotline at 866-320-4053 in search of numerical details on GLD's insurance? The prospectus vaguely states "The Custodian maintains insurance with regard to its business on such terms and conditions as it considers appropriate which does not cover the full amount of gold held in custody." When I specifically asked for clarification on this clause and about how much of the gold was insured, the representative proceeded act as if he didn't know and said they were just the "marketing agent" for GLD. What kind of marketing agent doesn't know such basic information about a product they are marketing? It seems like they are deliberately hiding information from investors."
The Week Ahead: Geopolitical Risk To U.S. Stocks? Apr 20, 2015 4:21PM ET
Thanks for the insight Jeff. Your commentary is much appreciated. Though many have been calling an economic top, I'm not so sure. Many of the other economic indicators do not necessarily reflect this such as the transportation/shipping sector. We'll have to wait and see. I also do not think the Greece situation will be resolved any time soon. Both sides (though especially Greece) do not seem willing to play ball.
Which Way Will Precious Metals Go? Apr 20, 2015 4:11PM ET
Thanks for the write up Jordan. I've been hearing multiple reports of oil reaching its bottom at this current point in time. It does look like the oil prices have been firming up a bit with the oil demand picking back up. The oil surplus has also somewhat dropped off. Oil is currently looking much more attractive than gold.
Gold: Remains Attracted to $1200 Apr 20, 2015 4:09PM ET
I also remember there was a well documented visit by CNBC's Bob Pisani to GLD's gold vault. This visit was organized by GLD's management to prove the existence of GLD's gold but the gold bar held up by Mr. Pisani had the serial number ZJ6752 which did not appear on the most recent bar list at that time. It was later discovered that this "GLD" bar was actually owned by ETF Securities. I've always suspected GLD of gold hypothecation but saw no real evidence until that visit. The lack of insurance is also incredibly convenient for bullion lending.
Gold: Remains Attracted to $1200 Apr 20, 2015 4:06PM ET
Hello Stuart, would you happen to know any specifics pertaining to GLD's insurance situation? The organizations behind GLD seems a bit sketchy about it. The following is very relevant:. . "Did anyone try calling the GLD hotline in search of numerical details on GLD's insurance? The prospectus vaguely states "The Custodian maintains insurance with regard to its business on such terms and conditions as it considers appropriate which does not cover the full amount of gold held in custody." When I called asking for clarification on this clause and about how much of the gold was insured, the representative proceeded act as if he didn't know and said they were just the "marketing agent" for GLD. What kind of marketing agent doesn't know such basic information about a product they are marketing? It seems like they are deliberately hiding information from investors."
Oil Finds Resistance At Top Of Its Current Range Apr 16, 2015 1:49PM ET
With the declining surplus in addition to the demand for oil picking back up, I do agree that we likely have seen the bottom. It was inevitable since the depressed price levels were unsustainable. Looks like the oil patch is finally recovering.
Grexit Fears Sweep Through Markets Apr 16, 2015 1:36PM ET
The Germans have already made considerable effort to keep Greece in the union but it appears that Greece is not willing to reciprocate. It is a shame really. I do think there is some merit to keeping the union united but from the look of the situation, it is becoming more and more unlikely.
Time To Rethink A Gold Allocation? Apr 16, 2015 1:26PM ET
There was also a well documented visit by CNBC's Bob Pisani to GLD's gold vault. This visit was organized by GLD's management to prove the existence of GLD's gold but the gold bar held up by Mr. Pisani had the serial number ZJ6752 which did not appear on the most recent bar list at that time. It was later discovered that this "GLD" bar was actually owned by ETF Securities. I've always suspected GLD of gold hypothecation but saw no real evidence until that visit. The lack of insurance is also incredibly convenient for bullion lending.
Time To Rethink A Gold Allocation? Apr 16, 2015 1:25PM ET
Gary, you seem particularly familiar with GLD. Would you happen to know any specifics on GLD's insurance situation? I found the following statement to be quite informative: "Did anyone try calling the GLD hotline in search of numerical details on GLD's insurance? The prospectus vaguely states "The Custodian maintains insurance with regard to its business on such terms and conditions as it considers appropriate which does not cover the full amount of gold held in custody." When I called asking for clarification on this clause and about how much of the gold was insured, the representative proceeded act as if he didn't know and said they were just the "marketing agent" for GLD. What kind of marketing agent doesn't know such basic information about a product they are marketing? It seems like they are deliberately hiding information from investors."
No Pity For Euro Longs With $1.0500 In View Apr 13, 2015 6:01PM ET
Thank you for your indepth analysis Boris. I am in agreement with most of your sentiment though I'd like to add that it is especially not a good time to go long on the Euro as a result of the Greek situation. It doesn't appear that it will be resolved any time soon and it adds quite a bit of uncertainty to the Euro.
Gold: A Month Of Downside Risk? Apr 09, 2015 5:46PM ET
Thank you Philip once again for your insights into gold. With the current and upcoming catalysts that would improve the strength of the dollar, it is definitely not a good time to jump into gold. Though if you're already holding some gold, it is worthwhile to keep holding as these lower price levels will not last.
China's Gold Trigger Apr 09, 2015 5:40PM ET
"COMEX and LBMA do not have the inventories to compete with or supply Eastern demand, China will eventually set price whether you want to believe it or not.". . Very true especially considering how much paper gold is involved with the Comex. In regards to the AIIB, it is a big deal in terms of US versus China's influence. Maintaining the dollar dominance is part of this equation.