Saturday, August 25, 2012

Harvey's blogspot - gold and silver data and news related items to consider....


http://www.silverdoctors.com/current-silver-supply-shortage-was-foreseen-predicted-by-agxiik-in-march/


CURRENT SILVER SUPPLY SHORTAGE WAS FORESEEN & PREDICTED BY AGXIIK IN MARCH

AUGUST 25, 2012 BY  10 COMMENTS
Over the past week we have learned of at least 4 cases of large silver purchases (5-10 million ounces) either being flat out refused delivery (such as Ned Naylor-Leyland discussed with 2 large orders from the LBMA), or else experiencing severe delays in fulfilling the order.  This comes as silver has rallied nearly 15% from it’s recent lows near $27.
We would like to officially recognize and congratulate AGXIIK for his foresight in predicting the EXACT TIMING of this sudden supply shortage of silver back in early March, at a time in which the world appeared to be awash in silver.
Reposted in it’s entirety, here is AGXIIK’s March 11th call for a ‘Severe Supply Shortage of Silver in August of 2012‘:
Placing my a** hat on the table in front of me, I predict that silver will go into a severe supply shortage by August 2012 or sooner.
Why?
Greek sort of got bailed out, leaving the price of silver to float upwards as opposed to downward should central banks and private owners need to dump PMs to get liquidity.
Absorption of silver continues apace with speculative and aggressive longs outnumbering shorts two to one.
The discount to real silver value will not go unnoticed for long. Sovereign wealth funds in China and Middle East have over $2 trillion in funds ready to deploy. War brings out the best in wealthy buyers. They buy for safety when the chips are down and financial insecurity abounds.
The physical silver is being held for personal investment and industrial and commercial purposes. Miners are holding supply hostage to buyer requests to avoid the taxes on the profits of their silver sales.
The numb-nuts at EPA are stopping mine production due to environmental issues.
Miners are starting continent-wide strikes in Africa for gold, silver, platinum and palladium.
Nearly 100 million ounces were kept from the market in those recent strikes.
Nationalization of silver mines continues apace in south and central America.
Thanks to The Doc for getting the price of 100 ounce bars down so low I could not resist another purchase.  I topped up on those 100 oz bars Friday from SD Bullion. That took about 100,000 ounces of paper silver (1,000 oz of real phyzz) out of the physical supply.
I found a new hidey hole.
Door stops!!!
Kid you not.
I plan to put a few in small colored plastic boxes like Tupperware(R) and hide them in plain sight.
But back to silver supply.In another four months I expect that silver supplies to hit crunch time.
High costs of extraction due to skyrocketing fuel prices. Diesel could go to $9 a gallon. Economic slowdown reduces demand for zinc, lead and copper (silver being a byproduct). Mines are buttoned up due to extraordinary costs of production.
Rapid buying of silver by Asian central banks and sovereign wealth funds.
Since silver is a strategic metal used in vital communications and weapons manufacturing, and war with Iran is a certainty, this demand for silver will get very interesting. We have not had a war in which strategical metals was in critical shortages. But we do now and our purported allies are not quite so friendly to us now.
The lack of this strategic metal will curtail the war efforts. China and Russia doing anything they can to strip-mine silver from the supply chain will cause us to use our already depleted inventory of war materiel, soon finding ourselves unable to replace these silver-laden items.
Without firing a shot they will effectively round up supplies to hamper our efforts. China has a lock on over 90% of the rare earths too boot.
Do I have exact numbers on each of these factors?
No.
But with about 700 million ounces of silver available in a year, 200 million ounces coming from scrap, the US producing less than 10% of the entire world’s annual supply.
That is the key figure. We have less than 10% of the world’s annual supply and things are going to get sticky real quickly. Plus it would be an idea time to help move the US Dollar further off its reserve status.
The reason I chose August 2012:
Israel has about 3 months before it has to get moving on its attack on Iran.
PS:
$3 trillion in new money for Euro Bank bailouts will wash across the Atlantic to the perceived safe harbor of the dollar, flushing up prices in the US.
ZIRP created gross mis-allocation of assets chasing yields, safe or not. PM safety will be quickly seen as a great place to be.
Inflation of 10% will become 15-20% and the US and Euro consumers will scream for a shield against this inflation. Where do they go?
Where anyone trying to safeguard themselves goes: Physical precious metals
Gold is being shipped east at discount prices. When the COMEX is marginalized by physical demands, like the recent 3 million ounce order, gold prices will bounce and silver prices will race upwards, hugging the backside of the Golden Jackass (Thanks Dr Willie for your recent insight)Like Brother John said, if even 1 tenth of one percent of SWF goes to silver, 200% of the world’s annual supply of silver will be up for grabs immediately.
Got phyzz?








http://harveyorgan.blogspot.com/2012/08/republican-party-platform-discussing.html


SATURDAY, AUGUST 25, 2012


Republican party platform discussing gold standard/Mary Schapiro defeated at SEC with respect to Money Markets/Hilsenrath saves the day by stating the Fed as "Further scope for action" and thus a possible QEIII is forthcoming/German finance ministry discussing "Grexit"/

Good morning Ladies and Gentlemen:

Gold closed up 20 cents at comex closing time at $1669.80.  Silver also rebounded to post a positive gain of 16 cents to $30.61. On Thursday afternoon I sent an email to Bart Chilton warning him that a raid was imminent in both silver and gold.  Gold was up $32.00 and silver was up a huge 90 cents on Thursday, yet all of the major gold/silver equities like Barrick, Agnico Eagle, Newmont, Eldorado etc were down in price for the day.  This is a sure sign that our bankers decided to coordinate activities with respect to a raid on our precious metals the following day. And that is exactly what the crooks did. The bankers were well aware of the huge rise in OI again in silver, reaching 3 year highs and they knew that they had to try and eliminate as many silver leaves from the silver tree as possible.  On Friday, they tried.  However physical demand was extremely strong in London and the "long" forces were ready as they knew the drill.  The bankers were thoroughly defeated on Friday as they used up their valuable ammunition by supplying the necessary short paper and the bankers retreated to higher ground. Further  visible evidence of their dismay came in the access market in silver and gold after the comex closed: gold advanced another 90 cents:  $1670.70
 silver advanced another 21 cents:  $30.82

Europe started the day on the downside as Mario Draghi announced that there will be no new news coming forth from the ECB until after the 12th of September (German Constitutional Court decision).  This is a red herring as they just do not have a plan yet. Obama, sensing trouble as his opponent, Romney gained 4% points on him, (they are now even) urged the EU to save Greece.  He did not want to see economic turmoil during his re election bid. The Fed responded with it's mouthpiece John Hilsenrath in the Wall Street Journal stating that the Fed "has further scope for action" and it may increase its balance sheet to accommodate another round of "official" QE.  The Dow rose to finish the day up 100 points and Europe reversed course and also ended the day higher.  We will go over all of these stories but first........

Let us now head over to the comex and see how trading fared on Friday.


The total gold comex OI fell by 6 contracts from 137 to 131.  We had 22 notices filed
on Thursday so in essence we gained another 16 contracts or 1,600 oz of additional gold.
The September gold contract month saw its OI fall by 15 contracts from 1099 down to 1084.
The next official delivery month for gold is October and here the OI rose by 203 contracts from 27,633 to 27,836. The estimated volume today was on the low side coming in at 105,179.  The confirmed volume on Thursday was a little better at 165,748.The total silver comex OI rose to 3 year highs coming in at 129,496 rising by 2627 contracts from Thursday's level of 126,869.  The bankers already knew this figure Thursday night when the raid was orchestrated to commence starting immediately in Thursday's access market, through the European trading session and then onto Wall Street. There was only one problem for the bankers :  they were met with a huge demand for physical and paper contracts which nullified the raid. The August silver contract mysteriously saw its OI rise by 24 contracts,( from 80 to 104) despite only 1 notice filed on Thursday.  We thus gained an additional 23 or  115,000 oz of silver standing. We are now exactly one week away from first day notice which will occur on Friday August 31.2012. In this month of September we had the OI fall by 3186 contracts from 32420 down to 29,234.  All of these guys rolled into December as they continue the play the paper game. The estimated volume at the silver comex was quite good coming in at 59,923. The confirmed volume on Thursday was a real humdinger coming in at 94,470.  The bankers must have been busy and they were joined by our high frequency traders but their attempts to quell demand failed.
***


Activity inside the gold vaults were very quiet again tonight.

The only transaction was a deposit into the HSBC vault of a customer to the tune of 4,469.78 oz
We had no dealer activity and no customer withdrawal.

We did have a tiny adjustment of 103.40 oz at Scotia whereby gold left the customer to enter the dealer. Quite possibly this was a lease arrangement.

The total registered or dealer gold inventory rests this weekend at 2.754 million oz or  85.66 tonnes of gold.

The CME notified us that we had 35 notices filed for 3500 oz of gold.  The total number of
notices filed so far this month total 9709 for 970900 oz of gold.  To obtain what is left to be filed upon
I take the OI standing for August (131) and subtract out Friday's notices (35) which leaves us with 96 notices or 9600 oz of gold.

Thus the total number of gold ounces standing in this delivery month of August is as follows:

970900 oz (served)  + 9600 oz (to be served upon) =  980,500 oz or 30.49 tonnes of gold
we gained 1600 oz of additional gold.  The 30.49 tonnes of delivery notices is very impressive for August!
We are witnessing high amounts of gold settling on the gold comex with no gold coming in. Strange!!

***

The silver vaults were busy again on Friday.

The dealer at Brinks received the following:

1. Into Brinks:  598,359.29 oz

The customer had no deposits of silver.

We had the following customer withdrawal:

i) Out of Brinks: 2070.000 oz
ii) Out of Delaware: 984.50 oz
iii) Out of Scotia: 650,643.01

total withdrawal:  653,697.51 oz

we one one tiny adjustment of 94.00 oz leave the dealer at Scotia and re-enter the customer at Scotia.
The registered or dealer inventory rests this weekend at 36.157 million oz
The total of all silver rests at 139.919 million oz.


The CME notified us that we had a whopper of a delivery notice to the tune of 103 contracts or
515,000 oz.  The total number of notices filed so far this month total 266 for 1,430,000 oz.To obtain what is left to be filed upon, I take the OI standing for August (104) and subtract out Friday's notices (103) leaves us with just 1 contract left to be served upon or 5,000 oz.

Thus the total number of silver oz standing in the month of August is as follows;

1,430,000 oz (served) +  5,000 oz (served)  =  1,435,000 oz
we gained a huge 115,000 oz of additional silver on Friday standing.

If I am a betting man, I will wager than this level will increase as the August month closes out.

Let us wait and see.

***



Gold COT Report - Futures
Large Speculators
Commercial
Total
Long
Short
Spreading
Long
Short
Long
Short
170,780
40,096
26,253
137,903
309,125
334,936
375,474
Change from Prior Reporting Period
9,345
-7,035
935
-9,515
17,767
765
11,667
Traders
182
55
70
49
54
260
161


Small Speculators




Long
Short
Open Interest



63,811
23,273
398,747



9,795
-1,107
10,560



non reportable positions
Change from the previous reporting period

COT Gold Report - Positions as of
Tuesday, August 21, 2012




My goodness, this was some report.

Our large speculators:

Those large speculators that have been long in gold liked the lay of the land and bought a monstrous 9,345 contracts and today they are very happy campers as gold rose smartly in the week. speculators that have been short in gold also thought it wise to cover a massive 7,035 contracts from their short side.

Our commercials:

Those commercials that have been long in gold and are close to the physical scene, covered a rather large 9515 contracts.

Those commercials that have been short in gold continued on their merry way by adding a monstrous 17,767 contracts to their short side.

Our small specs;

Those small specs that have been long in gold, added a huge 9795 contracts to their long side and these guys are also happy campers this weekend.

Those small specs that have been short in gold covered 1107 contracts from their short side.

The specs did the right thing, the commercials increased their risk by supplying the necessary paper.

Conclusion:  the bankers again went net short on the week and this is bearish from the standpoint that the banks will raid which they have attempted to do yesterday.  Sooner or later the banks luck will run out.

 ***

Silver COT Report: Futures
Large Speculators
Commercial
Long
Short
Spreading
Long
Short
35,646
14,446
24,554
43,146
75,623
3,329
-2,284
-2,571
-4,651
4,424
Traders
70
45
48
32
37
Small Speculators
Open Interest
Total
Long
Short
127,776
Long
Short
24,430
13,153
103,346
114,623
2,676
-786
-1,217
-3,893
-431
non reportable positions
Positions as of:
128
110

Tuesday, August 21, 2012
  © SilverSeek.com  

The silver COT followed closely the gold COT report:
Large Speculators:

Those large specs that have been long in silver added a rather large 3,329 contracts to their long side.
Those large specs that have been short in silver, covered 2284 contracts from their short side.
Our commercials;
Those commercials that have been long in silver, covered a huge 4651 contracts from their long side.
Those commercials that have been short in silver added another 4424 contracts to their short side.

the net result from the commercials is a net 227 contracts short.

Our small speculators;
Those small specs that have been long in silver added a rather large 9795 contracts.
Those small specs that have been short in silver covered 1107 contracts from their short side.
Conclusion:  neutral.
It seems that the bankers are loathe to supply the necessary paper.
*** note the GOP considering a gold standard pieces ( at the link but not listed herein )  - I consider this a bs plank to appease Ron Paul supporters....

***


Fast and far moves just ahead for gold and silver, von Greyerz tells King

Submitted by cpowell on Fri, 2012-08-24 02:27. Section: 
10:19p ET Thursday, August 23, 2012
Dear Friend of GATA and Gold:
Matterhorn Asset Management's Egon von Greyerz today sticks his neck way out with King World News, predicting stunningly fast moves up in gold and silver, with gold reaching $4,000 without a major correction. Some of us pray to live to see the day when gold reaches just $1,800 and figure that $4,000 and higher won't be reached any time soon without central banks getting ahead of the collapse of their currencies, getting out of gold's way, and forthrightly remonetizing the metal. But none of us will hate von Greyerz if he's off by a few days. An excerpt from his interview is posted at the King World News blog here: 
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

end

Yesterday I forwarded to you Eric Sprott and David Baker's paper on ZIRP and NIRP and how devastating these two policies are to global economies.  They destroy pension funds, insurance companies as well as highlight to the world the craziness of the financial system as it proclaims the worthlessness of paper money.  If you have not read this piece, I urge you to do so.

The second paper written by John Embry of Sprott in Investor's Digest highlights to the world gold in short supply. He describes how China, Russia, and India are loading the boat and moving gold onto their shores.

He describes the problems in Greece which cannot be fixed and then emphasizes that problems in Spain are so great that it would be impossible to correct without the printing of more money.

He then discusses the USA:
He is in the camp that more QE must be forthcoming as there is only one course left to shield the USA from a deflationary collapse and that is QE to infinity.
Finally, he discusses the woes at Barrick Gold:

1. Barrick announced a production cut from 9 million oz to 8 million this year as large scale mining has finally taken a toll on gold's largest producer.
2. Barrick has delayed production (as I promised you that this would happen) for a least a year due to cost overruns.
3. They have indefinitely postponed production of the big Donlin Creek Project in Alaska
4. They have indefinitely postponed production of the big Cerro Casale Project in Chile which the own 75:25 with Kinross gold.
the 1 million oz reduction this year represents 1.33% of world production off the table at the time of increasing demand for metal coming from countries of eastern persuasion.

I urge you to read this important paper by John Embry

(courtesy Sprott Asset Management/Eric Sprott/David Baker/John Embry)

Sprott guys on ZIRP and NIRP and the gold supply crunch

Submitted by cpowell on Fri, 2012-08-24 02:14. Section: 
10:10p ET Thursday, August 23, 2012
Dear Friend of GATA and Gold:
The latest commentary by Eric Sprott and David Baker of Sprott Asset Management describes how zero and negative interest rates are destroying savers, pension funds, and insurance companies and signify the impending end of the increasingly crazy world financial system with a proclamation of the worthlessness of government money -- a time when gold in hand may be even more valuable than it is now. The Sprott-Baker commentary is headlined "NIRP: The Financial System's Death Knell?" and it's posted at the Sprott Internet site here:
Meanwhile Sprott Asset Management's John Embry, writing for Investor's Digest of Canada, argues that growing demand for gold from central banks is bumping up against the realization that much supposedly "allocated" gold held for customers by investment banks is illusionary. Embry's commentary is headlined "Gold Increasingly Likely to Be in Short Supply" and it's posted at the Sprott Internet site here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

end



Eric Sprott  moves on to discuss leasing with Eric King of Kingworld news.
The central banks are still leasing gold they know they will never get back.

(courtesy Eric Sprott/Kingworldnews)



Central banks still leasing gold they'll never recover, Sprott says

Submitted by cpowell on Fri, 2012-08-24 18:28. Section: 
2:25p ET Friday, August 24, 2012
Dear Friend of GATA and Gold:
Sprott Asset Management's Eric Sprott today tells King World News he suspects that some central banks are still leasing gold to quell the gold price and they'll never get it back, and they'll lose it sooner as markets realize that the world financial system is bankrupt and dependent on bailouts. An excerpt from the interview is posted at the King World News blog here:

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end

I brought this to your attention on Wednesday night, the fact that Pimco's Bill Gross has increased h gold to 11.5% from 10.5% in his big bond fund.  He purchased his gold in the $1500 plus level.  According to Nic Johnson, his co portfolio manager, their concerns are three:
i) loose monetary policy
ii) high levels of sovereign debt
iii) rising commodity prices

all of which will fuel an inflation outbreak.
Bill Gross is watching the 10 year USA bond with great interest.  A rise in yield will mean inflation is building and the deflation play is basically over. (A rise in the 10 yr treasury also spells trouble for JPMorgan and their colossal interest rate swaps.

(Jim Sinclair commentary/Bill Gross/Pimco) 
Dear CIGAs,
Dow Jones is reporting this morning that PIMCO’s Commodity Real Return Strategy Fund, with about $20 billion in assets, has raised its gold holdings to 11.5% of it total assets from 10.5% two months ago. The position was apparently taken when gold dipped towards $1500 according to comments from Nic Johnson, its co-portfolio manager.
Their concern is a triple one – loose monetary policy, high levels of sovereign debt and rising commodity prices are going to fuel an inflation outbreak as we move ahead.
Sounds familiar doesn’t it?
Here is the point – the chart in gold showed tremendously strong support in gold on any retreats in price down below the $1600 level a short while back. Gold would dip down into these levels but would immediatey attract strong buying and would rebound back higher. WE remarked that this sort of chart action showed ACCUMULATION by deep-pocketed players, whether those were of Asian origin or large investment funds elsewhere. REgardless, these well capitalized players are positioning themselves for what they see coming down the road.
Note, that this is not MOMENTUM BASED buying. That crowd only enters the markets AFTER it starts moving higher and takes out technical resistance levels. They are now coming into gold and into silver. ACCUMULATION puts a floor in a market; momentum based buying drives it higher into a trend.
We’ll need to keep a close eye on the yield on the Ten Year Note to see how that acts as we move forward. If the inflation play is replacing the deflation play, we have seen the lows in interest rates for a very long time.
***


And courtesy of Ed Steer, we learn that Eric Sprott received a tiny 320,000 ounces of silver that he purchased.
He still has more than 1 million ounces left to go to complete his deal.  Already it has taken 44 days to receive just under 7 million ounces out of 8 plus million.

 (courtesy Ed Steer)

Sprott's Physical Silver Trust reported receiving 320,000 ounces of silver yesterday...and still has over a bit over a million ounces left to be delivered from their latest offering. Since they got the first tranche on July 11th, they have received just under seven million ounces...and since they purchased a bit more than eight million ounces, they're just awaiting the balance...44 days [6+ weeks] since receiving the first shipment. It will be interesting to see how long it takes to get the rest. From this information it should be obvious that good delivery bars are not exactly laying around.

end

Here is your early morning gold and silver report from Goldcore.  Notice the huge demand reported from Hong Kong and India two of our major physical centres.

The author discusses in detail the 4 major risks to the globe and all will have gold/silver as beneficiaries:

1. Macroeconomic Risk:  this is when all of our industrial giants face a recession at the same time.
These countries are the Eurozone, the UK, USA, China, and Japan. If all of these nations falter at once, then we could have either:

i) inflation
ii) deflation
iii) stagflationor worse..hyperinflation

Policymakers are very concerned of deflation and they are desperately trying to steer away from this monster.

2. Systemic risk.  An example of a systemic risk is a failure like Lehman brothers causing cascading events to freeze all economic activity. A failure in the shadow banking system is another event which could create it's own Black Swan event.

3. Geopolitical event.  This would be Israel launching an attack on Iran and they respond with nuclear attacks on Israel and surrounding Arab neighbours causing much destruction. The rise in the price of oil and the turmoil would freeze all economic activity...another black swan event.

4. Monetary Risk.  This is the risk of continue ZIRP  (zero bound interest rate policy) coupled with NIRP (negative interest rate policy).  This destroys the value of the dollar, creates havoc to various industries like the insurance industry and also causes economic output to falter as valuations become suspect.

This is a very important read for you:

(courtesy Goldcore)


From GoldCore

Precious Metals ‘Perfect Storm’ As MSGM Risks Align
Today's AM fix was USD 1,666.50, EUR 1,329.16, and GBP 1,051.88 per ounce.
Yesterday’s AM fix was USD 1,662.50, EUR 1,324.07and GBP 1,047.57 per ounce.
Silver is trading at $30.37/oz, €24.36/oz and £19.25/oz. Platinum is trading at $1,541.00/oz, palladium at $642.50/oz and rhodium at $1,025/oz.
Gold climbed $14.60 or 0.88% in New York yesterday and closed at $1,669.40. Silver surged to a high at $30.81 and finished with a gain of 2.28%. The precious metals have broken out this week with sharp gains being seen in all four precious metals.
Silver as expected led the gains and surged 8.55% in the week, palladium is up 6%, platinum 5% and gold up 3%.
Currency Ranked Returns – (Bloomberg)
Gold gave back some gains on Friday but it’s still set for its biggest weekly rise in more than 2 months due to the very strong fundamentals.
Today, US durable goods orders are published at 1230 GMT and weakness would confirm weakness in the US economy and should lead to further safe haven demand for gold.
The European Central Banker is fighting to save the European fiscal union and quantitative easing seems certain in Europe.  Investors will wait to see if central bankers are coordinating their efforts and announce further QE at the same time.
Reuters reported increased demand for bullion in Hong Kong with one bullion dealer reporting “purchases by investors in the physical market.”

There are even signs of a pickup in physical demand in India with strong buying being done by stockists ahead of the busy marriage season.
The use of the term “perfect storm” by market participants is a bit clichéd and over used at this stage however it is appropriate with regard to looking at the fundamentals driving the precious metal markets and particularly gold and silver. 
GoldPrices in Dollars – (Bloomberg)
All of the recent focus has been on the Fed and the will it or won’t it engage in QE3 saga. Many of us said long ago that some form of QE on a significant scale is inevitable. However, it is important to realise that the Fed is just one factor driving precious metals higher. 
The Fed is not the be all and end all and while the Fed can jaw bone and manipulate prices higher and lower in the short and medium term - in the long term the free market and forces of supply and demand will dictate prices.
Silver Prices in Dollars – (Bloomberg)

There is a frequent tendency to over state the importance of the Fed and its policies and ignore the primary fundamentals driving the gold market which are what we have long termed the ‘MSGM’ fundamentals.
As long as the MSGM fundamentals remain sound than there is little risk of gold and silver’s bull markets ending.
What we term MSGM stands for macroeconomic, systemic, geopolitical and monetary risks.
The precious metals medium and long term fundamentals remain bullish due to still significant macroeconomic, systemic, monetary and geopolitical risks.
a) Macroeconomic risk is seen in the risk of recessions in major industrial nations with much negative data emanating from the debt laden Eurozone, UK, Japan, China and U.S. in recent days.
It remains difficult to pinpoint the nature of the coming recessions and possibly a Depression and whether it will be deflationary, inflationary, stagflationary or the less likely but possible none the less ‘Black Swan’ of hyperinflation.
Deflation remains the primary concern of most policy makers, politicians, bankers and investors.
However, the risk of deflation is a short term one and the monetary policy response or M means that various forms of inflation remain the medium and long term threat. 
b) Systemic risk remains high as little of the problems in the banking and financial system have been properly addressed and there is a real risk of another 'Lehman Brothers' moment and seizing up of the global financial system.
The massive risk from the unregulated “shadow banking system” continues to be underappreciated.
‘Financial weapons of mass destruction’ in the world wide shadow banking system are now estimated at over $60 trillion in late 2011. 
Globally, a study of the 11 largest national shadow banking systems found that they totalled to $50 trillion in 2007, fell to $47 trillion in 2008 but by late 2011 had climbed to $51 trillion, just over its estimated size before the crisis. 
c) Geopolitical risks are elevated - particularly in the Middle East. This is seen in the serious developments in Syria and between Iran and Israel. There is the real risk of conflict and consequent affect on oil prices and global economy. 
There are also simmering tensions between the U.S. and its western allies and Russia and China. 
Recent days have seen massive industrial unrest in the platinum sector in South Africa, the largest producer of platinum in the world (some 80% of supply) and fifth largest gold producer. There are genuine concerns that unrest in the platinum sector could spread to the gold sector with a consequent impact on gold supply.
Resource nationalism is being seen throughout the world and some developing nations look set to demand higher prices in terms of debased fiat currencies for their finite natural resources. 
d) Monetary risk is high as the policy response of major central banks to the first three risks continues to be to be ultra loose monetary policies, ZIRP, NIRP, the printing and electronic creation of a tsunami of money and the debasement of currencies. 

Should the MSG risk increase even further in the coming months than the central banks response will again be by monetary and further currency debasement which risks currency wars deepening.
This risks the devaluation of all fiat currencies and serious inflation in the coming months and years.
Cross Currency Table – (Bloomberg)
Conclusion
Therefore, we remain bullish in the long term and advise that investors and savers should have a healthy allocation of their wealth in gold in a portfolio to protect against the MSGM fundamental risks.
However, as ever markets are unpredictable and in the short term can do anything. This is particularly the case today with financial markets seeing significant volatility. Euro/dollar has been more volatile than gold in recent days.
We caution that gold could see another sharp selloff and again test the support at €1,200/oz and $1,550/oz. 
If we get a sharp selloff in stock markets in the traditionally weak ‘Fall’ period, gold could also fall in the short term as speculators, hedge funds etc . liquidate positions en masse.
To conclude, always keep an eye on the MSGM and fade the day to day noise in the markets.
We remain bullish in the medium and long term and those who maintain an allocation to gold will be rewarded. However, we caution that there is the possibility of further weakness in the short term.
This seems unlikely due to the bullish technicals having aligned with the fundamentals however “event risk” is high and it would be foolish to completely discount the risk of yet one more sell off.
 ****


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