Gold, Silver sell offs been here before but this time is different

This time, physical demand had been surging just before paper price declines led by the manipulated futures market. Also, hedge funds have also been piling in to short the market to a historic degree based on the negative technical picture.

LONDON(BullionStreet): The precious metals have seen dramatic sell-offs before, although the primary difference between previous precious metal declines and the recent drop is the current shortage of physical metal.

It is also worth considering how well the commercial bullion traders are positioned for a rally after these past two days of sharply dropping prices, especially when the latest price drop came on top of a physical market signalling tightness all along.

Major dealers in North America and the EU seem to be out of physical precious metal stock almost across the board. This physical shortage had been developing for some time, in contrast to the 2008 drop.

In terms of the supply fundamentals, the loss of Kennecott’s Bingham Canyon mine last week, in addition to further postponements for Barrick Gold’s big Pascua Lama Project were as bullish as can be.

Goldman was also openly signaling the rest of the market by notably revising their gold price forecast lower just ahead of the big down move, followed by more major banks revising their price forecasts lower.

Precious metal prices have now been falling overall or range bound for almost two years. Contrast the current situation with the historical September 2010 to April 2011 period, when 30 percent down moves occurred after a short covering rally as a speculative pile-on ensued.

This time, physical demand had been surging just before paper price declines led by the manipulated futures market. Also, hedge funds have also been piling in to short the market to a historic degree based on the negative technical picture.

In contrast, J. P. Morgan Chase et al have been slowly exiting or reducing their notable precious metal short position over the last month without a drop in the market’s open interest. Normally, heavy downside direction in price tends to be accompanied by a reduction in open interest.

Frankly, the most recent selloff seems like just an orchestrated opportunity for the big shorts to cover.

Record highs in equities have been seen recently, despite persistently soft economic data that misses one week after another virtually across the board. Complacency and universal bullishness seem to prevail, despite data indicating that little if any real economic recovery is actually underway.

Another notable occurrence has been the persistent referencing of CPI and employment numbers by authorities and the mainstream media, despite the obvious disconnect of this data from the reality faced by most people.

The last straw was the blatant early release of FOMC Meeting Minutes so that the markets could react when precious metal sentiment was already horrible. According to the latest FOMC Minutes, money creation via asset purchases by the Fed seems likely to subside later this year. Furthermore, London seems to be anticipating that Mark Carney's arrival at the Bank of England will see a more activist monetary policy stance arise in the UK too.

Nevertheless, the world's stock of fiat money is not contracting - quite the opposite, in fact. Japan has just launched another round of monetary stimulus on steroids, which will see the developed world's most indebted economy create a proposed $1.4 trillion in Yen in a bid to break the country free from depression and the perceived threat of deflation.

Once again, the same price pattern seems to be emerging. A massive dump in early overnight trading, followed by a margin increase pulls the rug out from under precious metals support as the market approaches key technical levels.

The panic selling feeds on itself as stops are triggered. The market moves much farther down than statistical or historical norms would suggest seems probable. This latest sharp decline, led by the Asian session, resulted in the biggest two day decline in the price of gold seen over the past thirty years.

From a technical perspective, the sharp move down seen a few days ago broke below the 38.2 percent retracement level of the big post-2008 gold rally from 681.40 to 1920.75, prompting traders to shoot for the 50 percent retracement level at 1301.07.

This 50 percent Fibo level now seems to offer the market both a target and a rallying point to buy gold ahead of. The substantial bounce already seen from the recent 1321.09 low just ahead of this objective indicates that the market’s desire to sell may well already have been satisfied.

Interestingly, it often seems to be the case that when market sentiment is apparently beyond repair, the seeds for a new rally are quietly being sown.
Courtesy: Silver Coin Investor

View the original article here

Gold, Silver sell offs been here before but this time is different

This time, physical demand had been surging just before paper price declines led by the manipulated futures market. Also, hedge funds have also been piling in to short the market to a historic degree based on the negative technical picture.

LONDON(BullionStreet): The precious metals have seen dramatic sell-offs before, although the primary difference between previous precious metal declines and the recent drop is the current shortage of physical metal.

It is also worth considering how well the commercial bullion traders are positioned for a rally after these past two days of sharply dropping prices, especially when the latest price drop came on top of a physical market signalling tightness all along.

Major dealers in North America and the EU seem to be out of physical precious metal stock almost across the board. This physical shortage had been developing for some time, in contrast to the 2008 drop.

In terms of the supply fundamentals, the loss of Kennecott’s Bingham Canyon mine last week, in addition to further postponements for Barrick Gold’s big Pascua Lama Project were as bullish as can be.

Goldman was also openly signaling the rest of the market by notably revising their gold price forecast lower just ahead of the big down move, followed by more major banks revising their price forecasts lower.

Precious metal prices have now been falling overall or range bound for almost two years. Contrast the current situation with the historical September 2010 to April 2011 period, when 30 percent down moves occurred after a short covering rally as a speculative pile-on ensued.

This time, physical demand had been surging just before paper price declines led by the manipulated futures market. Also, hedge funds have also been piling in to short the market to a historic degree based on the negative technical picture.

In contrast, J. P. Morgan Chase et al have been slowly exiting or reducing their notable precious metal short position over the last month without a drop in the market’s open interest. Normally, heavy downside direction in price tends to be accompanied by a reduction in open interest.

Frankly, the most recent selloff seems like just an orchestrated opportunity for the big shorts to cover.

Record highs in equities have been seen recently, despite persistently soft economic data that misses one week after another virtually across the board. Complacency and universal bullishness seem to prevail, despite data indicating that little if any real economic recovery is actually underway.

Another notable occurrence has been the persistent referencing of CPI and employment numbers by authorities and the mainstream media, despite the obvious disconnect of this data from the reality faced by most people.

The last straw was the blatant early release of FOMC Meeting Minutes so that the markets could react when precious metal sentiment was already horrible. According to the latest FOMC Minutes, money creation via asset purchases by the Fed seems likely to subside later this year. Furthermore, London seems to be anticipating that Mark Carney's arrival at the Bank of England will see a more activist monetary policy stance arise in the UK too.

Nevertheless, the world's stock of fiat money is not contracting - quite the opposite, in fact. Japan has just launched another round of monetary stimulus on steroids, which will see the developed world's most indebted economy create a proposed $1.4 trillion in Yen in a bid to break the country free from depression and the perceived threat of deflation.

Once again, the same price pattern seems to be emerging. A massive dump in early overnight trading, followed by a margin increase pulls the rug out from under precious metals support as the market approaches key technical levels.

The panic selling feeds on itself as stops are triggered. The market moves much farther down than statistical or historical norms would suggest seems probable. This latest sharp decline, led by the Asian session, resulted in the biggest two day decline in the price of gold seen over the past thirty years.

From a technical perspective, the sharp move down seen a few days ago broke below the 38.2 percent retracement level of the big post-2008 gold rally from 681.40 to 1920.75, prompting traders to shoot for the 50 percent retracement level at 1301.07.

This 50 percent Fibo level now seems to offer the market both a target and a rallying point to buy gold ahead of. The substantial bounce already seen from the recent 1321.09 low just ahead of this objective indicates that the market’s desire to sell may well already have been satisfied.

Interestingly, it often seems to be the case that when market sentiment is apparently beyond repair, the seeds for a new rally are quietly being sown.
Courtesy: Silver Coin Investor

View the original article here

New method for uncovering side effects before a drug hits the market

Side effects are a major reason that drugs are taken off the market and a major reason why patients stop taking their medications, but scientists are now reporting the development of a new way to predict those adverse reactions ahead of time. The report on the method, which could save patients from severe side effects and save drug companies time and money, appears in ACS' Journal of Chemical Information and Modeling.

Yoshihiro Yamanishi and colleagues explain that drug side effects are a major health problem—the fourth-leading cause of death in the U.S.—which by some estimates claim 100,000 lives every year. Serious side effects are the main reason why existing drugs must be removed from the market and why pharmaceutical companies halt development of new drugs after investing millions of dollars. Current methods of testing for side effects are costly and inaccurate. That's why the scientists sought to develop a new computer-based approach to predicting possible side effects.

They show the usefulness of their proposed method on simultaneous prediction of 969 side effects of 658 drugs that already are in wide medical use. The method is based on knowledge about chemical and biological information about ingredients in these medications. They also used the approach to identify possible side effects for many uncharacterized molecules. Based on that work, the scientists conclude that the new method could be helpful in uncovering serious side effects early in the development and testing of new drugs, avoiding costly investment in medications unsuitable for marketing.

More information: Drug Side-Effect Prediction Based on the Integration of Chemical and Biological Spaces, J. Chem. Inf. Model., 2012, 52 (12), pp 3284–3292. DOI: 10.1021/ci2005548

Abstract
Drug side-effects, or adverse drug reactions, have become a major public health concern and remain one of the main causes of drug failure and of drug withdrawal once they have reached the market. Therefore, the identification of potential severe side-effects is a challenging issue. In this paper, we develop a new method to predict potential side-effect profiles of drug candidate molecules based on their chemical structures and target protein information on a large scale. We propose several extensions of kernel regression model for multiple responses to deal with heterogeneous data sources. The originality lies in the integration of the chemical space of drug chemical structures and the biological space of drug target proteins in a unified framework. As a result, we demonstrate the usefulness of the proposed method on the simultaneous prediction of 969 side-effects for approved drugs from their chemical substructure and target protein profiles and show that the prediction accuracy consistently improves owing to the proposed regression model and integration of chemical and biological information. We also conduct a comprehensive side-effect prediction for uncharacterized drug molecules stored in DrugBank and confirm interesting predictions using independent information sources. The proposed method is expected to be useful at many stages of the drug development process.

Provided by American Chemical Society

View the original article here