Harvey's blogspot - gold and silver action for thursday October 4th and gold / silver news and interesting articles .....

http://harveyorgan.blogspot.com/2012/10/gold-rises-to-1794-silver-breaks-3500.html

THURSDAY, OCTOBER 4, 2012

Gold rises to $1794. Silver breaks 35.00 to end up at $35.04/Iran enters hyperinflation/Open revolt in France/Greeks take to the streets to riot austerity/

Gold closed up today by a rather large $16.80 to finish the comex session at $1794.10.  Silver broke the 35 dollar barrier finishing the session at $35.04.  Resistance levels have no been broken and the two key areas that lie ahead are very big:

gold:  1800.00
silver:  $36.00

The bankers showed up early today trying to bash gold and silver down.  At one point in the day, silver hit its low of $34.41. with gold touching its low of around $1782.  However the physical markets are truly on fire and thus the bankers are having great difficulty holding the prices of these two precious metals down.You will see below, that silver is of a major concern to our bankers since JPMorgan has over 25% of the entire short position in  comex silver.

In other news, Cyprus cannot handle the austerity measures that the troika issued to this island nation.
Strikes are being called for in Greece as this nation is having great difficulty as the austerity measures crippled this nation.  Rajoy needs a bailout but he does not want to subject his nation to any kind of austerity namely because auditors will find that Spain's balance sheet is nothing but fiction.  Hyperinflation has now arrived in Iran and the west is pouring it on, as more embargoes are called for. It also looks like there is going to be an open revolt in France as citizens are totally against the new tax structure brought on by Hollande's government.  They wish to tax capital gains equal to ordinary tax and this has the citizens in open revolt.
In the USA the jobless numbers increased again by 4,000.  We will go over all of these stories but first.....



Let us now head over to the comex and assess trading today.
The total comex gold complex rose by 3,080 contracts today (basis yesterday..remember OI is always 1 day back) rising from 480,908 to 483,988. Gold had a good day price wise yesterday so this is understandable and the bankers were the ones who sold the non backed paper gold contracts.  The active delivery month of October saw its OI fall from 857 to 728 for a loss of 129 contracts.  We had 150 delivery notices filed yesterday so again we gained 21 contracts or an additional 2100 oz of gold standing.  I can now state categorically, that Blythe is having her difficulties convincing the longs to settle for cash.  Those standing want the physical metal.  If you go back to my previous commentaries on any active delivery month you will constantly see cash settlements.  This month:  none.  It appears to me that the bankers are in serious trouble.The non active delivery month of November saw its OI rise by 19 contracts to 1392. These guys are trying to a jump start before December arrives.  Speaking of the big December gold contract, the total OI rose to almost record levels resting tonight at 350,000 a rise to 1441 contracts from yesterday's level of 348,559.

The estimated volume at the gold comex today came in at 163,506 which was very good.  The confirmed volume yesterday was anemic at 132,761.

The total silver comex OI is totally baffling our bankers.  The total OI rose again by 718 contracts from 139117 to 139835.  The bankers did everything they could to get the price of silver below 35.00 dollars.  Not only are they short in the silver metal but they also have derivative problems in the interest rate swap category as well as credit default swaps.  JPMorgan is the world's largest derivative owner of this crap. The non active October contract saw its OI fall by 4 contracts down to 312.  We had 11 delivery notices filed yesterday so in essence we gained an additional 7 contracts or another 35,000 oz of silver is standing. The non active November contract saw its OI fall by 2 contracts down to 42.  The big December contract which no doubt will be the ultimate battle ground, whereby we will see the longs standing for delivery and the bankers trying to settle upon a huge number standing.  If they fail to deliver upon all of these longs then we will have our long awaited commercial failure.  The OI for December rose by a tiny 92 contracts resting tonight at a very lofty 87,407.  The estimated volume was fair at 36,393 as the bankers are loathe to supply the non backed paper.  The confirmed volume yesterday was also fair at 34,814.



Comex gold figures for Oct 4th :

Today, we again had no activity inside the gold vaults.

The dealer had no deposit and no withdrawals.
The customer had no deposit.
The only transaction was a tiny withdrawal by the customer at Brinks for 96.45.oz

i) customer withdrawal:  out of Brinks;  96.45

There was no adjustments.
Thus the total delivery gold remains at 2.56 million oz.
It is strange that we had over 19 tonnes of gold settled upon last month and over 2 tonnes this month and yet activity inside the gold vaults are tiny.
Difficult to explain!

The CME notified us that we had only 2 notices filed for 200 oz.  The total number of notices filed so far this month total 6377 for 637700 oz of gold.
To obtain what is left to be served upon, I take the OI standing for October (728) and subtract out today's notices (2) which leaves us with 726 notices or 726000 oz left  to be served upon our longs.

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

637,700 oz (served)  +  72600 oz (to be served upon)  =  710,300 oz
or 22.09 tonnes.

****

Silver:

Oct 4.2012:

Again, we had tiny activity inside the silver vaults today.

However we had no dealer deposit and no dealer withdrawal:

We had the following customer deposit:

1. Into Delaware:  999.13 oz

we had the following customer withdrawal:

i) Out of Delaware:  1978.80 oz.
we had no adjustments.
Thus the total registered or dealer silver inventory rests tonight at 40.58 million oz
The total of all silver rests at 142.58 million oz.


The CME notified us that we had 11 notices filed for 55,000 oz.  The total number of silver notices filed this month total 170 for 850,000 oz.  To obtain what is left to be served upon, I take the OI standing for October (312) and subtract out today's notices (11) which leaves us with 301 notices  or 1,505,000 left to be served upon our longs.

Thus the total number of silver ounces standing in this non active month of October is as follows;

850,000 oz (served)  +  1,505,000 oz (to be served upon)  =  2,355,000 oz
we gained 7 additional contracts standing or 35,000 oz.

***

some key pieces....

Gold bullion coin sales skyrocket 76% in September.
Silver sales up 13%

(courtesy USA MINT) 

GOLD BULLION COIN SALES SOAR 76% IN SEPTEMBER, SILVER SALES UP 13%

October 1, 2012

According to the latest report from the U.S. Mint, demand for both gold and silver bullion coins during September surged to the highest levels since January.
Total sales of the American Eagle Gold bullion coins during September soared 75.6% to 68,500 ounces from 39,000 ounces in August. Monthly sales of gold bullion coins have fluctuated widely during 2012 with a high of 127,000 ounces in January and a low of 20,000 ounces in April. The average monthly sales of gold bullion coins through September is 53,500.
Total sales of the American Eagle Gold bullion coins through September total 481,500 ounces. Unless sales surge dramatically during the last three months of the year, 2012 will be the fourth year of declining sales of the gold bullion coin. As detailed below, the all time record for sales of the gold bullion coins was during 2009 when sales exceeded 1.4 million ounces.

Gold Bullion U.S. Mint Sales By Year
Year		Total Sales Oz.
2000		164,500
2001		325,000
2002		315,000
2003		484,500
2004		536,000
2005		449,000
2006		261,000
2007		198,500
2008		860,500
2009		1,435,000
2010		1,220,500
2011		1,000,000
Sept-12		481,500
Total		7,731,000

U.S. Mint sales of the American Eagle Silver bullion coins during September totaled 3,255,000 ounces, up 13.4% from August sales of 2,870,000 ounces.
Investor demand for the American Eagle Silver bullion coins has been relatively consistent throughout the year. After a very strong January during which over 6.1 million coins were sold, demand remained strong with monthly sales well in excess of 2 million ounces except for February when sales slumped to 1,490,000 ounces. If monthly sales of the American Eagle silver coins continue at the September sales pace, total sales for 2012 will be close to the record year of 2011 when almost 40 million ounces were sold.
Total annual sales by the U.S. Mint of the silver bullion coins since 2000 are shown below. Sales for 2012 are through September.

American Silver Eagle Bullion Coins
YEAR		OUNCES SOLD
2000		9,133,000
2001		8,827,500
2002		10,475,500
2003		9,153,500
2004		9,617,000
2005		8,405,000
2006		10,021,000
2007		9,887,000
2008		19,583,500
2009		28,766,500
2010		34,662,500
2011		39,868,500
Sept-12		25,795,000
TOTAL		224,195,500

QE3 could push gold up to $2,400/oz

Quantitative easing could cause a rally in the gold price, with the precious metal hitting $2,400/oz by next summer.Gold could hit an all-time high of $2,400 by next summer, driven up by a third round of quantitative easing in the US. The first round of QE in February 2009 caused the gold price to increase rapidly from a base of $900/oz – from which it has never looked back.
BlackRock fund manager Evy Hambro who invests in the precious metal and gold equities, predicted that QE3 could result in the gold price hitting US$2,400/oz by the middle of next summer.http://www.telegraph.co.uk/finance/personalfinance/investing/gold/958
7117/QE3-could-push-gold-up-to-2400oz.html

http://www.silverdoctors.com/goldcores-mark-obyrne-discusses-implications-of-fake-gold-scandal-with-lauren-lyster/#more-14965

GOLDCORE’S MARK O’BYRNE DISCUSSES IMPLICATIONS OF FAKE GOLD SCANDAL WITH LAUREN LYSTER

OCTOBER 4, 2012 BY THE DOC 1 COMMENT

Welcome to Capital Account. Gold hit an 11 month high today, supposedly bolstered by signs that the ECB will keep borrowing costs low and the notion that the central bank stands ready to buy bonds in the secondary market. As long as central banks continue to print and maintain negative real interest rates, should investors consider owning gold? A recent PIMCO report stated the following:

“We believe investors should consider allocating gold and other precious metals to a diversified investment portfolio“.  Could this mean investing in gold will become mainstream? We speak to GoldCore’s Mark O’Byrne about the impact of PIMCO’s report. We discuss both the supply side, as well as the demand side of the gold bull run. Are people using gold to hedge, not against moderate inflation, but against the potential for dislocating deflation or runaway inflation and hyperinflation?

Also last month a gold dealer in Manhattan discovered a certified gold bar was in fact made up of more than 75 percent Tungsten. Does fake gold really represent a tail risk for buying physical gold or is this a one-off thing? We discuss the role of gold and the potential for fraud.

2012 ALCHEMY? SCIENTISTS CLAIM ABILITY TO PRODUCE 24-KARAT GOLD USING BACTERIA

OCTOBER 4, 2012 BY THE DOC 9 COMMENTS

Image: G.L. Kohuth

A group of Michigan State scientists claim to have discovered a bacteria able to convert liquid gold chloride into solid 24-karat gold nuggets.

Before Blythe wets herself, the process is massively cost prohibitive and would not be feasible for commercial production.  Tungsten remains a much better option for our bankster friends.

All joking aside, we recommend our readers stick to financial alchemy of converting digital 1′s and 0′s and fiat Federal Reserve debt notes into 24-karat gold and .999 silver bullion.

04 OCTOBER 2012

Financial Fukushima: US Big Bank Derivative Bets Double in Six Years To $236 Trillion

Well, the derivatives market is like Fukushima Daiichi before it failed and melted down, when the utility company and the Japanese government were blithely assuring themselves and everyone else that nothing could go wrong. Just as Greenspan and other very important people said nothing could go wrong with the US housing market and the wholesale collateralization of debt. Nothing to see here, move along.

I was working on my own update, between the usual distractions, of the Sept 2012 BIS information, when Peter Miller sent this nice summary of the situation my way. A relatively small number of very large banks represent enormous counterparty risk to the world financial system because of the almost geometric growth of the largely unregulated and historically unprecedented derivatives market.

The distortions caused by such massive leverage ripple through the financial system, with both intended and unintended consequences, including the distortion of real markets and the transfer to and concentration of wealth in the money manipulation sector. And the marriage that the financial sector has made with politics is particularly dangerous to the average person.

This affects every country through the transmission power of the US Dollar and its pre-eminent role in decision making in our financialized world economy.

OurBroker

Big Bank Derivative Bets Nearly Double In Six Years
By Peter G. Miller
October 4th, 2012 

America’s major banks now hold derivatives with a notational worth of $225 trillion – about a third of the world total. No kidding. Trillion.

And that’s up from a mere $120 trillion six years ago. Rather than being weened off derivatives, America’s big banks are more deeply entrenched then ever.

Hopefully Wall Street has it figured out just right and there won’t be any major losses, say a few billion here or there. After all, when has Wall Street ever been wrong about financial instruments?

“Derivatives are dangerous,” says Warren Buffett. “They have dramatically increased the leverage and risks in our financial system. They have made it almost impossible for investors to understand and analyze our largest commercial banks and investment banks.”

While many in Washington would like to limit derivatives trading, make such trades open to public scrutiny or both, Wall Street is vehemently against regulation.

In fact, there’s a simple way to resolve derivative worries. Allow unlimited derivatives trading — but only by individuals and partnerships willing to personally take the risk of profits and losses...

According to the Bank for International Settlements (BIS), the notational value of derivatives at the end of 2011 was $648 trillion.

The gross credit exposure from these securities was believed to be $3.912 trillion according to the BIS — that’s up from $3.5 trillion at the end of 2009.

But what if the estimates are wrong? For instance, let’s say losses are just one tenth of one percent bigger than expected. Not a big deal, except in the context of international derivative levels that’s more than $640 billion.

Do taxpayers have exposure? You bet. According to the FDIC, at the end of June 2012 all depository institutions held derivatives with a notational value of $224,998 trillion. However, such bets are not spread across the entire banking system. Banks with at least $10 billion in assets hold virtually all derivatives, securities with a notational value of $224.803 trillion. While the FDIC insures deposits in some 7,200 banks and savings associations, only 59 FDIC-insured institutions have deposits of more than $10 billion. Your little community bank, savings association or credit union likely has no derivatives department.

Derivatives are simply bets. They finance no factories, no research, no colleges, no homes and no cars. Any jobs they produce are incidental and inconsequential relative to the potential risk they represent, the risk that credit exposure has been incorrectly figured by hundreds of billions of dollars if not more. Since big banks hold virtually all derivatives, and since taxpayers can face massive costs if big banks fail, it follows that something should be done to limit taxpayer risk....

Read the entire story with an explanation of derivatives here.

Here is a glossary of terms which you might wish to keep.