Harvey's blogspot - news items on gold and silver and data for both PMs.....

http://harveyorgan.blogspot.com/2012/08/italy-posts-huge-increase-in-sovereign.html

MONDAY, AUGUST 13, 2012

Italy posts a huge increase in sovereign debt/Germany again reaffirms no more aid to Greece/

Good evening Ladies and Gentlemen:

Gold closed down today by $10.10 to $1609.60.  Silver fell by 30 cents to $27.76  in a generally lacklustre day. The big news of the day came from Italy which announced a huge increase in incremental national debt.  It is growing by 9.6 billion euros per month and today it almost touches 2 trillion euros.  Germany again reaffirms no more aid will be forthcoming to Greece.  Today Greece announced that its deficit is minus 6.2% on a yearly basis.  Europe rejoiced as they were expecting a contraction of 7%.  We will be going over these stories and many others but first let us see what happened to gold and silver today:Gold and silver were doing fine during the day but 20 minutes before the comex closed this is what happened:

Once London was put to bed,  the bankers supplied massive amounts of  short precious metals paper to lower prices. They do this is broad daylight knowing full well that our regulators do absolutely nothing.
This is nothing but a fraudulent manipulation.

Let us head over to the comex and assess the damage today.

The total gold comex OI rose by a rather large 6122 contracts from 389,451 to 395,573. When you couple this rise in OI with silver, this no doubt was reason for our bankers to engage in some high profile manipulation with the entire world watching. The August gold month saw its OI fall by 339 contracts from 2338 to 1999 for a loss of 339 contracts. We had 269 delivery notices on Friday so in essence we lost another 70 contracts or 7000 oz of gold standing.  The Sept gold month saw its OI fall by 104 contracts to 1311.  The next official delivery month is October which is traditionally a very slow month as most bypass this month and head straight to December.  The October OI rests tonight as 28,767 for a gain of 935 contracts.  The estimated volume again was quite poor at 121,444.  The confirmed volume on Friday was also poor at 122,312.

The total silver comex OI rose by a rather large 1351 contracts from 125,491 to 126,842.  This lofty level of OI in silver is bothering our bankers.  They have tried on many occasions to whack our precious metals in the hope that many silver leaves will fall from the silver tree.  It seems that their task is getting hopeless.
The August silver month saw its OI fall from 11 to 10 for a loss of one contract.  We had one delivery notice on Friday so we are in perfect balance.  The September delivery month for silver is also a slow month.  Here the OI fell by 1779 contracts from 48,324 to 46,545 as most of our paper players moved into December.Many are still in September and this is worth watching.

******

Not much action inside the gold vaults today.  We had no deposit of any kind.

We had the following gold withdrawal:

1.  Out of JPM:  10,121.66 oz
2. Out of Scotia: 11,505.033 oz

total withdrawal by the customer:  21,626.693 oz

we also had the following withdrawal from the dealer at Scotia:

1)   6001.305 oz (out of Scotia)

We had two adjustments and both were leases from the customer to the dealer:

i) From the customer to the dealer at JPM:  59,703.682 oz
ii) From the customer to the dealer at Scotia:  1,017.36

the dealer inventory of gold rests tonight at 2.928 million oz or 91.07 tonnes.


The CME notified us that we had a chunky 963 notices filed for 96300 oz of gold.
The total number of notices filed so far this month total 8590 for 859000 oz.
To obtain what is left to be served upon, I take the OI standing for August (1999) and
subtract out today's notices (963) which leaves us with 1036 or 103600 oz of gold left tobe served upon our longs.

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

859,000 oz (served)  +   103600 oz (to be served upon)  =  962,600 oz (we lost 7000 oz from Friday)
the  962,600 oz is represented by 29.94 tonnes of gold.

*****

We also had very tiny action in the silver vaults today.

The dealer had no activity today.

The customer had the following deposit:

1. Into Scotia:  38,268.32 oz

The customer had the following silver withdrawal:

i) Out of Delaware: 16,422.981 oz
ii) Out of Scotia: 30,181.03 oz

We had no adjustments.
Thus the dealer inventory rests tonight at 35.367 million oz
The total of all silver rests at 137.511 million oz.


The CME notified us that we had only 1 notice filed for 5000 oz.  The total number of notices
filed so far this month total 152 for 760,000 oz.  To obtain what is left to be filed upon, I take the
OI standing for August (10) and subtract out today's notices (1) which leaves us with 9 notices sor
45,000 oz left to be served upon our longs.Thus the total number of silver ounces standing in this month is as follows:

760,000 oz  (served) +  45,000 oz (to be served upon)  =  805,000 oz
exactly the same as Friday.

*****

And now for some physical stories;

Dave from Denver, from his GoldenTruth website comments on the silver movements inside registered comex vaults.  He emphasizes the huge 5.1 million oz of silver that left HSBC vaults into Delaware's vault on Friday. He emphasizes that Delaware is not a bullion bank like JPM and HSBC although it is a registered Comex vault.  He believes that HSBC had to make a huge futures delivery and the customer moved it into Delaware as he will not resell this silver soon.
As Ted Butler and I have pointed out to you on many occasions, the massive movements of silver into and out of the Comex are occurring on a daily basis and as such, that  delivery stock is becoming quite thin!!

(courtesy Dave from Denver/the GoldenTruth)


This is interesting
A bit of an outlier/unusual in terms of size of the move. 5.1 million ounces of silver was moved on Friday from HSBC's comex vault to Delaware Depository's eligible account. Because DD is a not a bullion bank and does not make markets in futures - it is a dedicated customer depository - I'm speculating that HSBC had to make a futures delivery and the customer who will not resell the silver on the Comex anytime soon.

As Ted Butler as pointed out, we are seeing large movements of silver in and out of the Comex on a daily basis now. It's something we were not seeing for the first 10 years of the metals bull market. If I had to infer anything from this, it's that available for delivery stock is starting to get tight and investors are starting to become more interested in where their bullion is being safe kept.

*****

(the following story is brought to you from our friends over at the silverdoctors web site)

CAN USE SEGREGATED CLIENT FUNDS TO PAY CREDITORS

AUGUST 12, 2012 BY THE DOC 2 COMMENTS

A federal appeals court ruled Thursday that brokerages can use segregated client funds to pay off creditors in bankruptcy proceedings.
This essentially means that supposedly segregated customer funds are toast in the event of your brokerage’s bankruptcy.
The only way to remove your counter-party risk is to become your own central bank and hold your assets in your own personal possession.

A ruling in the case of failed futures brokerage Sentinel Management Group could make it more difficult for customers to recoup money lost in the much larger collapse of MF Global, according to Sentinel’s bankruptcy trustee.

A federal appeals court on Thursday upheld a ruling that puts Bank of New York Mellon ahead of former customers of Sentinel in the line of those seeking the return of money lost in the 2007 failure of the suburban Chicago-based futures broker.

The appeals court affirmed an earlier district court ruling that the bank had a “secured position” on a $312 million loan it gave to Sentinel, which turned out to have been secured by customer money.

Futures brokers are required to keep customers’ funds in dedicated accounts to protect them from being used for anything other than client business.

However, Thursday’s ruling suggests that brokerages can use customer funds to pay off other creditors, Sentinel trustee Fred Grede told Reuters.
Read more:

*****

Citibank has provided a great commentary today on gold.  Due to the risk averse world, is gold
now becoming the first choice of many due to the negative interest rates of Germany and Switzerland?

(courtesy Citibank/zero hedge)

On Gold's Recent Resilience

Submitted by Tyler Durden on 08/12/2012 22:33 -0400

• Commodity Futures Trading Commission
   
• Derisking
   
• Germany
   
• Gross Domestic Product
   
• Japan
   
• Nominal GDP
   
• Precious Metals
   
• Switzerland
 
• Volatility

Some might be surprised by the title's positivity, but while the barbarous relic has meandered in an ever-compressing (triangle pattern) series of waves in the last few months, it has rathernotably outperformed relative to global risk aversion, CFTC positioning, and central bank balance sheet dynamics - especially in the last few weeks. Whether the yellow metal'szero-yield is now 'technically' attractive to safe-haven flows relative to the NIRPs of Germany and Switzerland - or in fundamental anticipation of the next bout of central bank largesse, Citi's global macro strategy group remain bullish of the precious metal and the charts below suggest they are not alone.

$1650 seems like the key 'technical' line in the sand for another leg up as the small (and large) triangles come into play...

but Gold's resilience in the face of...

1. a 'slowing' or contracting global central bank balance sheet...

2. volatility in Citi's risk-aversion index (GRAMI)...

3. and a notable 'apparent' derisking based on CFTC Futures & Options Net Positioning...

It seems there is either a degree of buying in precious metals that is anticipating an increase in risk-aversion OR it is anticipating central bank largesse. What is critically clear is that gold's gyrations and uncertainty relative all of these three indicators since the end of LTRO2 has fallen suggesting its diversification and 'hedge-ability' for both risk-on (liquidity-driven exuberance) and risk-off (safe-haven sourcing in a NIRP world) is increasingly appealing.

One thing is sure - the view that precious metals are a put on political stupidity remains front-and-center - as fundamentals take a back-seat to the monetary addiction of the world's advanced economies (and perhaps tonight's negative nominal GDP print for Japan - leaving the nation in deflation 50% of the quarters of the last 5 years - is priming for more print-and-be-damned excess - though China's reverse-repo test should be a concern for all those 'hoping' for stimulus extravaganza)

*****

And finally this Chris Powell editorial on questions the press should ask the Fed,
the Bank of England, the BIS etc:

(courtesy Chris Powell GATA/)

If there's ever serious journalism about gold, ask central banks these questions By: Chris Powell, Secretary/Treasurer, GATA

-- Posted Monday, 13 August 2012 | Share this article | Source: GoldSeek.com Dear Friend of GATA and Gold: For years GATA has been glad to respond to the occasional question about the gold market from financial journalists in the mainstream news media but has always urged them to question the primary actors in the market, central banks, in light of the documentation we have amassed showing or suggesting their often-surreptitious intervention in the market: http://www.gata.org/taxonomy/term/21 As far as we know, no such journalists have yet tried to question central banks about gold and reported the answers or refusals to answer, even as the efforts to question Germany's central bank, the Bundesbank, by the Canadian market analyst Rob Kirby in 2009 and the German freelance journalist Lars Schall in 2010 extracted some sensational confirmations in the form of denials: http://www.gata.org/node/7713 http://www.gata.org/node/9363 So to make it easy for mainstream news media financial journalists in case they ever want to pursue the gold story seriously, GATA compiles below some critical questions for central banks. These are only a start and we'll welcome suggestions for additional questions. These questions also may be used to turn away financial writers who disparage complaints of gold market manipulation without ever having first tried to put a critical question to a central bank.

For the Federal Reserve
1) What are the Fed's gold swap arrangements with foreign banks acknowledged by Fed Governor Kevin M. Warsh in his adjudication of GATA's freedom-of-information request in September 2009?:
http://www.gata.org/files/GATAFedResponse-09-17-2009.pdf
2) What are the other parties to these gold swap arrangements?
3) Have such arrangements ever been implemented? If so, when, how, and why?
4) What are the other gold-related documents the Fed succeeded in withholding from disclosure in GATA's freedom-of-information lawsuit against the Fed in February 2011? Will the Fed disclose them?
http://www.gata.org/node/9560
For former Federal Reserve Board of Governors member Kevin M. Warsh
1) In your commentary in The Wall Street Journal on December 6, 2011, you wrote that "policy makers are finding it tempting to pursue 'financial repression' -- suppressing market prices that they don't like." You added, "Efforts to manage and manipulate asset prices are not new."
http://www.gata.org/node/10839
Which prices did you mean as being subject to "financial repression"?
2) Which previous "efforts to manage and manipulate asset prices" did you mean?
3) Did you learn about "financial repression" during and because of your service at the Fed?
For the U.S. Treasury Department
1) In the last 20 years has the U.S. government tried to influence the price of gold, openly or surreptitiously, directly or through intermediaries? If so, how and for what purpose?
2) Are the gold-related records of the U.S. government, including those of the Treasury Department and the Exchange Stabilization Fund, fully available to the public? Why or why not?
3) Has the Treasury Department or any other agency of the U.S. government, including the Exchange Stabalization Fund, undertaken gold swaps or gold swap arrangements or other gold transactions in the last 20 years?
4) Will the Treasury Department fully disclose its gold-related records? If not, why?
For the Bank of England and the United Kingdom Treasury
1) In December 2011 the Bank of England acknowledged that it had been active surreptitiously in the gold market prior to 2007 and did not want its gold transactions known to the market generally:
http://www.gata.org/node/10778
With whom were these transactions undertaken and what were their purposes?

2) Will the Bank of England and the U.K. Treasury fully disclose their gold-related records? If not, why?

For the Deutsche Bundesbank
1) In August 2009 the Bundesbank replied to an inquiry from the Canadian financial writer Rob Kirby about the Bundesbank's handling of Germany's gold reserves. The Bundesbank wrote: "The Deutsche Bundesbank keeps a large part of its gold holdings in its own vaults in Germany, while some of its gold is also stored with the central banks located at major gold trading centres. This has historical and market-related reasons, the gold having been transferred to the Bundesbank at these trading centres. Moreover, the Bundesbank needs to hold gold at the various trading centres in order to conduct its gold activities. It is common practice for central banks to keep part of their gold reserves abroad."
http://www.gata.org/node/7713
In December 2010 the Bundesbank replied to an inquiry from the German freelance journalist Lars Schall. The Bundesbank wrote: "In managing foreign reserves, the Bundesbank fulfils one of its mandated tasks as an integral part of the European System of Central Banks. We trust you will understand that we are not able to divulge any further information regarding this activity. Particularly with respect to the confidential nature of information about where gold holdings are kept, we are unable to go into any greater detail concerning exact locations and the quantities stored at each of these. Likewise, owing to the strategic nature of the activity, we are not at liberty to provide you with more detailed information about gold transactions."
http://www.gata.org/node/9363
What are the "gold activities" cited in the reply to Kirby? What is the "strategic ... activity" cited in the reply to Schall?
2) Has the Bundesbank undertaken any gold swaps or gold swap arrangements with the U.S. Federal Reserve, U.S. Treasury Department, or any agency of the U.S. government? If so, what were the purposes of the swaps?
3) Will the Bundesbank make its gold records fully available for public inspection? If not, why?
For the International Monetary Fund
1) Where is the IMF's gold kept? Is it kept in the IMF's own vaults, in the vaults of IMF member nations, or elsewhere?
2) Is the IMF's gold actually in the IMF's possession or is it essentially just a claim on the gold reserves of its member nations?
3) When during the last 20 years the IMF said it was selling gold, did any gold actually leave any vault? If so, from which vaults did it leave and to which vaults was it delivered?
4) Will the IMF make its gold records fully available for public inspection? If not, why?
For the Bank for International Settlements
1) What is the "gold pool" cited by BIS President Karl Otto Pohl in his interview with the financial journalist Edward Jay Epstein published in the November 1983 edition of Harper's magazine?
http://www.gata.org/node/11622

2) Exactly how and why does the BIS trade in gold on its own behalf or on behalf of its members? Is information about this trading fully available to the public? If not, why?

3) A presentation made by the BIS to prospective central bank members at a meeting at BIS headquarters in Basel, Switzerland, in June 2008 --
http://www.gata.org/node/11012
-- includes, among a list of BIS services, interventions in the gold market. What are these interventions and their purposes and exactly how are they undertaken? Are they public or secret? Why?
4) In a speech delivered at a conference at BIS headquarters in Basel in June 2005 --
http://www.gata.org/node/4279
-- William S. White, head of the BIS' Monetary and Economic Department, said that among the major purposes of international central bank cooperation is "the provision of international credits and joint efforts to influence asset prices (especially gold and foreign exchange) in circumstances where this might be thought useful."
In the last 20 years what efforts has the BIS been involved in to influence asset prices, particularly gold prices? Of which such efforts is the BIS aware?
5) Did the BIS undertake any gold transactions simultaneous with the devaluation of the Swiss franc in September 2011?
For every central bank
1) What is the central bank's policy toward gold?
2) Has the central bank loaned or swapped gold or does it have gold swap arrangements with other central banks or government agencies? If so, who are the counterparties of these swap and swap arrangements and what is their purpose?
3) Is it the bank's policy to support the gold derivatives market by making the bank's gold available or through other means? If so, why?
4) Are the bank's gold-related records fully available for public inspection? If not, why?
For JPMorgan Chase & Co.:
1) Are the enormous interest rate derivatives positions and the monetary metals positions on the bank's books the positions of JPMorgan Chase & Co. itself or are they essentially the positions of the U.S. government or other governments?
http://news.goldseek.com/GoldSeek/1249407911.php
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.