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Vincent Lanci: Sell Pressure, Market Dynamics, & Central Bank Illusions

Tom welcomes Vincent Lanci back to the show. Vince questions the speculative nature of the World Gold Council’s gold buying report. Ultimately, Central Bank gold buying is likely bullish, but the reports numbers will certainly be revised at some point and should be taken with some caution.

Vince discusses basic supply demand economics and how they apply to the gold market. Some of these Central Bank deals are done gradually, and such selling may not cause large price swings.

When gold moves up less than two percent, it rarely persists. Generally, such moves retrace themselves within a week. These large moves are unusual and indicate that something has shifted. Vince says, “Mr. Slammy has been absent. The slams may not happen to the extent they did in the past. The depths of hits aren’t what they used to be. The last week or so haven’t seen significant selling in gold.”

Vince discusses the seasonality with gold and the reasons why they occur. These seasons are often correlated with investors rebalancing their portfolio at various times of the year. Based on the historic patterns of commodities, Goldman’s renewed interest in gold is a bullish sign. They are writing again about gold and discussing a coming supercycle in commodities.

Time Stamp References:
0:00 – Introduction
0:42 – C.B. Gold Buying
5:18 – Supply Dynamics
8:40 – Sentiment & Criteria
16:22 – Japan, Gold, & Bonds
25:44 – Recent Gold Behavior
32:24 – Buy Season & Big Funds?
37:06 – ‘Buyish’ Market Signals
44:30 – Wrap Up

Talking Points From This Episode

  • The fundamentals behind gold market buying and supply/demand.
  • Gold’s recent moves have been unusual and seem bullish.
  • Seasonality in the metals and markets and why Goldman’s outlook is buy-ish.

Guest Links:
Special Discount:

Vincent Lanci is the Owner and Founder of Echobay Partners LLC, and is a regular contributor on ZeroHedge.

In 2018 Vince was honored to be a part of Market Wizard Larry Benedict’s Opportunistic Trader project as precious metals and Option expert. In addition, in 2017, Mr. Lanci and Professor Robert Biolsi co-authored Forecasting Oil and Natural Gas Volatility for UCONN.

From 2004-2008, Mr. Lanci was Co-Head of Metals & Energy Trading for CiS Options LLC, Echobay’s predecessor, where he ran the long-short and vol-arb portfolios for CiS’s parent fund and generated $103MM during that time.

From 1993-2003, Vince owned and operated Berard Capital LLC, option market makers. In 2000, he co-founded Whentech with David Wender, where he was the chief architect of the “Pit-Trader” user interface. Between 1987-1993 he gained experience at Lehman Bros and Cooper Neff. Mr. Lanci contributes to Zerohedge, BBG, and RTRS. He has paneled at Mondo Visione, NYC Mines & Money conferences, and is a champion of level investor playing fields.

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