Gold Soars To Near Six Month High As Silver Overtakes Stocks In 2012

By: Tyler Durden

A very noisy gappy day with much larger volume than in recent days (which all dried up in the afternoon session until the close – for the heaviest volume day in a month) in US equities. European comments lifted us early in a correlated-risk-on manner until Bernanke’s speech which hit markets like a meteor – stops were run up and down – but by the close equities and the USD ended fractionally lower from pre-Ben (notably up on the day to save the month for the Dow), Gold considerably up from pre-Ben, Treasury yields down notably from pre-Ben. Near six-month highs in Gold and five-month highs in Silver were the real movers today – with their largest gains in two months. VIX ended marginally lower at 17.5% (-0.3vols); credit was very thin today and tracked stocks in general (though less volatile); USD ended the week -0.5% which matches Oil’s +0.5% on the week as Copper underperformed. Silver has overtaken Stocks as the Year-to-date winner once again…

Gold vs Stocks vs USD vs Treasury yields… (arrows from pre-Ben to close)…7Y closed under 1%

left Gold and Silver at multi-month highs…

Leaving Silver the winner YTD…

Stocks were a mess all day post-Ben – especially the afternoon noise…but closed at VWAP – amid very heavy volume (month-end and all) but seemed to echo the last Friday buying. We closed at the low volume node (left hand distribution) of the recent range – having auctioned up early on, suspect we test back down by Sunday night…

It’s month-end and the need to exit sizable positions was clear above but the last few minutes were quite fascinating in terms of the Algos In Action. Someone needed to dump a lot so they emplyed the ‘tickle’ algo to lift on low volume but higher block size, gradually wiping out the stack of orders encouraging a trend, getting followers to buy-in (as the crowd sees rising block size into and above VWAP – though not massive volume we should note), then flush their big block well above the start of the startegy – with any luck somewhere around VWAP…

Dow Transports end the month down 1.6%, The Dow managed to creep off unch todayt to make another green month but the NASDAQ was the big winner (thank you AAPL) as it ended the month up almost 5%…

Charts: Bloomberg

Bonus Chart: Facebook Is Barely Legal…

Source: ZeroHedge


One response

  1. I have a question: Bernanke bought $2 Trillion in just 2 QE’s…so, where did the money come from to buy the Treasury Bonds….more, where did the bonds come from? and, who get the majority of the $2 Trillion profit made by buying US Treasury Bonds? Precisely, exactly, with detailed definition, who makes a profit or commission and how much.

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