Gold and silver News and Views- December 24 , 2012.... News and views include data for the day , Articles from Jessie's Crossroad Cafe , Harvey's blogspot , Jim Willie discussing Shanghai arbitrage with Comex , gold " credit card " , gold could be used for medical purposes ......

http://jessescrossroadscafe.blogspot.com/2012/12/gold-daily-and-silver-weekly-charts_24.html

24 DECEMBER 2012

Gold Daily and Silver Weekly Charts - Christmas Eve

With the Bank of Japan and the Federal Reserve now committed to printing money without limitation, it is understandable that some attempt is being made to cap gold and silver.

However, I do believe that this capping is secular, as it was last year in December. The 'big shorts' do not wish to mark their accumulated losses to market at a high price, preferring to hide their losses while they trade around them and take positions for the next leg up in higher beta wagers like miners.

Here is a brief comment from Ted Butler:

"The one good thing about this week’s price smash in silver (and gold) is that it should have removed any doubt that it had nothing to do with anything except COMEX price manipulation. By anything I mean the smash had nothing to do with physical market fundamentals or the trading of metals in any other market; this was a COMEX production pure and simple.

It was actually refreshing that it was so clearly a COMEX generated smash, as it made any attempt at alternative explanation look silly. If one doesn’t see that paper COMEX trading was the cause of this week’s sharp price declines, it can only be because of a refusal to see the clear facts.

The fact is that paper positioning on the COMEX silver futures derivatives market is overwhelming the price influence emanating from the host world market for physical silver, or in other words, the tail is wagging the dog. Real supply and demand go out the window and artificial and manipulative pricing have replaced it. The commercial paper traders, led by JPMorgan, are involved in a private big money speculative trading war with other speculative traders called technical funds and that war, because it is so much larger at times, is dictating the price of silver to everyone else in the real world – miners, users and physical investors.

That’s why so many are scratching their heads trying to explain the price swoon this week – it made no sense from a real world perspective. While I was quite upset with the circumstances of this week’s smash, I certainly was not scratching my head as to how it occurred. Hopefully, that goes for you as well. I’ll have much more to say after the usual review.

As I have been reporting, the signals from the real world of physical silver have been unusually bullish in that they all point towards tightness. The signals from the paper market have been bearish, mainly in the form of JPMorgan’s large concentrated short position. This remains the one negative in silver against a wide array of positives.It came down to which was going to dominate the other in the short term, as in the long term the physical world will win out. It still comes down to paper versus physical to my mind. Clearly, the crooks at JPMorgan and the CME had their way with the price this week, with the wimps and incompetents at the CFTC looking on. It is entirely possible that the crooks may succeed in inducing more technical fund selling with lower prices from here. But there are also increasingly strong signals from the physical silver market that the crooks won’t prevail for much longer."

Three Experts on the Gold/Silver Price Drop

and.......

http://harveyorgan.blogspot.com/2012/12/arbitrage-now-surfaces-between-shanghai.html

MONDAY, DECEMBER 24, 2012

Arbitrage now surfaces between Shanghai gold/silver exchange and comex/new uses of gold/Indians switching to gold coins instead of jewelry/

Good evening Ladies and Gentlemen:

Gold closed down 60 cents to $1658.60 in a lacklustre day at the comex.  Silver fell by 30 cents down to $29.84.  Tonight's commentary will be brief as you have other more important things to attend to re your children. Today I am going to delve more into the physical stories than the paper news as generally there was a scarcity of paper stuff and a plethora of real physical stories.
I want to emphasize the big story introduced on Saturday through Andrew Maguire re the differential in pricing of gold and silver re Shanghai and the Comex.  ( I urge you to listen to Andrew Maguire on Kingworld news and then read Jim Willie.)  I have no doubt that the Chinese wish to back their yuan currency with gold.  They have surplus USA dollars on their shelf.  What better way to obtain gold from the comex and LBMA is through arbitrage where  an investors buys gold at the comex, seeks delivery and then jets over the gold via a rented plane to Shanghai where the investor had simultaneously sold short the higher priced gold in Shanghai.  It would not take long to bankrupt the comex.

In gold it looks like 9.62 tonnes of gold will eventually stand in December and in silver a whopping 19.5 million oz.I would encourage you to read the entire Lars Schall interview with Alasdair Macleod.

Both of these gentlemen certainly understand the gold and silver market and the manipulation we face.
The Indians, after a much love affair with gold jewelry are now switching to gold coins.  And also today, we learn of a new use of gold in fighting cancer.

*  *  * 

Let us now head over to the comex and assess trading today.
The total comex gold open interest fell by 5192 contracts from 430,442 down to 425,250.  We had a good day on Friday as gold rose by 10 dollars so maybe we have some jittery bankers wishing to exit.  The active December contract saw it's OI fall from 303 down to 191 for a loss of 112 contracts. We had 134 notices served on Friday so in essence we gained 22 contracts or an additional 2200 oz of gold will stand in December.  The next non active contract month is January and here the OI fell by 160 contracts down to 1142. The next big active contract is February and here the OI fell by 6748 contracts from 263,632 down to 256,884. The estimated volume today was non existent, reading only 30,457.  The confirmed volume on Friday was much better at 146,357.

Thew total silver comex OI continues to hover around the 140,000 mark.  Today the reading came in at 140,617 a loss of 2280 contracts from Friday.  As in gold we may be losing a few bankers who are quite nervous about the fiscal cliff and other big developments coming down the pipe.  The active December contract saw it's OI fall from 967 down to 568 for a loss of 399 contracts.  We had 382 delivery notices filed on Friday so we finally lost a few oz in silver standing in December to the tune of 17 contracts or 85,000 oz.
The non active January contract saw it's OI fall by 37 contracts down to 584. The next big active contract month is March and here the OI lost 1993 contracts despite silver's rise in price on Friday.  The estimated volume today was a minuscule 7,311 contracts. The confirmed volume on Friday was very good at 47,114.

Gold Report....

Today, we  had huge activity  inside the gold vaults 

The dealer had no deposits  and no   withdrawals.

We had 3  customer deposits:

 i)  Into HSBC:  682.45 oz
ii   Into Brinks:  1899.91 oz
iii) Into Scotia: a monstrous 112,292.934 oz
total deposit:  114,875.294 oz

we had 2   customer withdrawals:


i) Out of HSBC 39,739.27 oz
ii) Out of Scotia:  682.47 oz

total customer withdrawal  40,421.74 oz

Adjustments: 1  transaction

2198.90 oz was adjusted out of Brinks customer account 
2790.85 oz was added to the Brinks dealer account
591.95 oz leaves Brinks altogether.


Thus the dealer inventory rests tonight at 2.621 million oz (81.33) tonnes of gold.

The CME reported that we had 54 notices  filed  for 5,400 oz of gold. The total number of notices filed so far this month  thus rises to 2956 notices or 295,600 oz of gold. To obtain what will stand for December, we take the open interest standing for December (191) and subtract out today's notices (54) which leaves us with 137 contracts or 13,700 oz of gold left to be served upon our longs.

Silver Report....

Today, we again had good activity  inside the silver vaults.

 we had no dealer deposits but did have 1   dealer withdrawals:

i) Dealer withdrawal at Brinks:

1,011,533.25 oz

We had 4 customer deposits of silver:

i) Into Brinks:  516,289.30  oz
ii) Into CNT:  605,061.000  oz  (another perfectly round number of a withdrawal)
iii) Into Delaware:  15,827.778 oz
iv) Into HSBC  600,530.83 oz

we had 3 customer withdrawals:

I )Out of brinks:  590,545.73 oz  
ii) out of Delaware:  1935.8 oz
iii) Out of CNT:  158,176.000 oz  (another round number withdrawal)

total customer withdrawal:  750,653.53  oz

if we add the entire deposits it comes to 1,737,708.908 oz
and the withdrawals:  1,762,190.78 oz

which is pretty close and probably this will settle upon our longs.

we had 1  adjustments:

Today, we had 478,506.0000 oz of silver leave the customer and enter the dealer account at CNT. 

I have still not received any answer from the CFTC  regarding the round numbered deposits/withdrawals in gold and silver we have been witnessing lately, especially from the CNT vault.  

  

Registered silver remains today at :  42.123 million oz

total of all silver:  146.879  million oz.

The CME reported that we had 96 notices filed for 480,000 oz. 

*  * * 

Selected News / Views  ..... 

The Shanghai Gold Contract Arbitrage Potential

Jim Willie CB
www.goldenjackass.com

THE STAGE IS SET FOR ARBITRAGE OF THE HIGHER SHANGHAI GOLD PRICE. A SNAPSHOT OF DECEMBER 7TH REVEALS THE DIFFERENTIAL. THE POTENTIAL FOR ARBITRAGE EXISTS, WHICH COULD CONCEIVABLY WRECK THE C.O.M.E.X. BY DRAINING IT. THE SUPPLY COULD GO TO SHANGHAI FOR SALE. OF COURSE, THE NEW YORK GANG COULD REFUSE TO MAKE DELIVERY, OR STEAL MORE CLIENT ACCOUNTS LIKE WITH MF-GLOBAL. THE PRICE SPREAD WILL EVENTUALLY BECOME A TOPIC FOR COMPLIANCE AND RISK DEPARTMENTS TO ADDRESS, AS THE MARKET WILL BE COMPELLED TO EXPLAIN THE DISCREPANCY FROM A CORRUPT MARKET IN THE UNITED STATES.

Thanks to the London Siren for reporting on the price differentials between the COMEX and Shanghai Gold price, which are not minor. A price arbitrage of $20 to $25 is plenty to capture and to exploit. Consider a snapshot taken on December 7th. The Shanghai Gold contract closed at 1728. At no point did the Gold price on the COMEX/Globex trade at that level overnight, no touch. Alert parties with a global footprint will start arbitraging this differential, since they can. They could sell gold in Shanghai, but buy gold on COMEX. Anyone doing that would essentially be going against the cartel with threat to bust the COMEX. The roadmap is there, which can be implemented for quick exploit. Some logistics could interrupt the process. If supply is taken in New York, the gold bars must be shipped to Shanghai for sale and delivery. That might cost must be managed in arbitrage, if indeed delivery is permitted and taken. The New York side might refuse to deliver if they see what is being done. They also might attempt to engineer a more targeted account theft if they could isolate the party conducting sales in Shanghai. It will be interesting to observe if the price differential expands.

Update with another snapshot taken on December 13th. The COMEX Gold futures contract was trading at 1691 at one point when the London Siren checked the price. The Shanghai Gold price closed at 1715. At no point did gold trade anywhere close to 1715 on COMEX overnight, no touch. The differential was $24 at that snapshot, equal to a tiny 1.4% spread. Note also, the COMEX Silver futures contract was priced on December 13th at 32.65, while at the India MCX it was 35.46, a very wide differential of 2.81 per ounce, equal to a ripe 8.6% spread. The COMEX Platinum also offers arbitrage potential, since the COMEX Platinum futures price was 1616, but in Shanghai at 1690. The dislocation between COMEX prices and Shanghai/India prices continues to grow, equal to a 4.6% spread. Execution of the arb trade is possible, just must be managed with certain challenges.

The London Siren made some conclusions. He wrote, "Some points are important to understand in sequence. 1) The Gold arbitrage is a tool that China can now use against JPM, GSax, USFed, USGovt, USTBonds anytime they want to cause a systemic failure. 2) They do not have to sell USTBonds as most people believe, since they now have an alternative weapon of mass financial destruction in the arbitrage. 3) China is now the price setter for gold. They would not start trading gold in Shanghai unless very confident about its success. 4) This is another step in making the Chinese Yuan a reserve currency, toward enabling its free convertiblity into Gold in size."

Thorny issues must be addressed eventually, which strike at the heart of the corruption behind the COMEX. Compliance and Risk Departments must determine which is the true market price, and at what price client positions are marked to market for equity determination and margin calls decisions. The logistics would not be any formidable challenge to a wealthy well-equipped merchant player in execution of arbitrage trades to exploit the price spread. A $25/oz spread translates to a $80.4k arbitrage potential gain per kilogram. A private jet could be secured to manage the transported bullion bars, loaded with several hundred kilograms. The key is actual delivery taken in the devil's den of New York. Sophisticated traders with big accounts and big vault space and assistant mules in both locations could conduct the arbitrage trades. However, unless physical bars move, the trades remain trapped within the paper world on the two sides, separated by a wall (two distinct markets) and ocean. Contracts are not interchangeable. Other risks would be from robbery by employed JPMorgan thugs or hired Blackrock thugs or dedicated FBI thugs working under the USGovt badges. If believed far-fetched, then naive to the core. The level of financial crime and protection by USGovt law enforcement and security agencies is astonishing, backed up by the US courts. The FBI protected Goldman Sachs when their UNIX box for snagging order flow data was stolen by the Russian employee. They painted the Russian as a thief and protected the venerable GSax putrid house.

and...

Iraq boosts gold reserves by 25 tonnes

Submitted by cpowell on Sun, 2012-12-23 16:30. Section: Daily Dispatches

By Javier Blas
Financial Times, London
Friday, December 21, 2012

http://www.ft.com/intl/cms/s/0/87ab2a18-4b7e-11e2-887b-00144feab49a.html

Iraq has joined the growing list of countries buying gold for their official reserves, purchasing more than 25 tonnes of the precious metal in the market to beef up the gold reserves of its central bank for the first time in years.

The purchases by Baghdad come as Iran is using gold as a currency to settle import-export transactions with neighbouring countries, including Turkey. But Iraq has so far not disclosed any gold transaction with Tehran.

Analysts said it was unclear whether the purchases showed dealings with Iran or were simply a sign that the Iraqi central bank is diversifying its foreign exchange reserves, as others in emerging countries have done recently.

Iraq joins countries from Russia to Brazil in buying gold to diversify its official reserves this year. According to data released late on Thursday by the International Monetary Fund, Iraq bought gold during August-September, lifting its official precious metals reserves from 5.8 tonnes to 31.07 tonnes.

The so-called official sector -- a group that includes central banks, sovereign wealth funds, and other quasi-government entities -- has been a significant buyer of gold since 2010, having been a strong seller in the previous 15 years.

The Iraqi additions are among the biggest officially reported so far this year, behind only Russia, Turkey, and Kazakhstan. Some countries have bought gold secretly in the past, including China, disclosing their purchases years later.

The purchases have lifted Iraq in the global ranking of gold holders from 78th to 54th position, according to data from the World Gold Council, the lobby group of the gold industry. Iraq is the first buyer of gold in the Middle East region that has acknowledged its purchases, although the market suspects Saudi Arabia and several regional sovereign wealth funds have also bought gold in the past.

"Having a new buyer in the central bank space, and especially from a new region, is an important development," said Joni Teves at UBS in London.

Gold has been trading in a relatively narrow band of between $1,500 and $1,800 per troy ounce for the past year. Over the past week, spot gold prices in London fell 2.5 per cent to $1,651 per ounce. On Thursday, gold prices briefly hit their lowest since August, trading at $1,635 per ounce on the spot market.

Weak physical demand, particularly from India and China, has weighed on the gold market for most of the year, analysts said. The weakness from the jewellery sector is so far offsetting bullish financial factors, including ultra-low interests rates in major economies and the worries about the so-called fiscal cliff of automatic tax increases and spending cuts in the US.

and...

We have a new 50 gm "credit card" of gold divided into fifty slots.  This will make payment easy as 1 gm of gold is almost equivalent to 2 oz of silver:

(courtesy zero hedge)

Demand For Gold "CombiBars" Soaring

Submitted by Tyler Durden on 12/24/2012 08:11 -0500

One of the biggest complaints about gold - always a parallelcurrency to paper, and soon to be serial, once the world shifts to a post-paper currency reality in which faith in infinitely creatable electronic paper money is finally destroyed - is that it would be an impractical medium of exchange, as the traditional denominations are so large one would be unable to trade one ounce (and certainly one bar) for every day needs. This is also one of the main reasons various retail investors prefer silver over gold. All this may be changing courtesy of Swiss refiner Valcambi which has created a CombiBar, a credit-card sized, 50 gram block of 99.9 gold, which is precut, and which can easily be broken into one gram pieces which can then be used as forms of payment in an emergency. And since one gram of gold has roughly the value of two ounces of silver, it is a far more practical lowest common denominator unit of exchange than the traditional one ounce minimums in broad circulation.

More on this novel, and practical, use of gold from Reuters:

Swiss refinery Valcambi, a unit of U.S. mining giant Newmont Mining Corp., wants to bring its “CombiBar” to market in the United States and build up its sales presence India – the world’s largest consumer of gold where the precious metal has long served as a parallel currency.

"The rich are buying standard bars or have deposits of phsyical gold. People that have less money are buying up to 100 grams," said Michael Mesaric, CEO of Valcambi "But for many people a pure investment product is no longer enough. They want to be able to do something with the precious metal."

Mesaric said the advantage of the "CombiBar" - which has been dubbed a "chocolate bar" because pieces can be easily broken off by hand into one gram squares - is that it can be easily transported and costs less than buying 50 one gram bars.

"The produce can also be used as an alternative method of payment," he said.

Valcambi is building a sales network in India and plans to launch the CombiBar on the U.S. market next year. In Japan, it wants to focus on CombiBars made of platinum and palladium.

Will the golden chocolate bar soon replace the one ounce gold coin as the most favored denomination?

The CombiBar is particularly popular among grandparents who want to give their grandchildren a strip of gold rather than a coin, said Andreas Habluetzel head of the Swiss business of Degussa, a gold trading company.

Other customers buy gold for security reasons.

Whatever the final outcome, demand is soaring:

Elsewhere, demand is particularly strong among Germans, still scarred by post-World War One hyperinflation, when money became all but worthless and it took a wheelbarrow full of notes to buy a loaf of bread.

"Above all, it's people aged between 40 and 70 that are investing in gold bars and coins," said Mesaric. "They've heard tales from their parents about wars and crises devaluing money."

“Demand is rising every week,” Mr. Habluetzel said. “Particularly in Germany, people buying gold fear that the euro will break apart or that banks will run into problems.”

Naturally, there are those who are desperate to infuse skepticism toward the new product. After all, one can't print gold, and any form of money that takes away wealth dilution power from the central banks (i.e. printing money), is implicitly disastrous for the status quo.

Stephan Mueller, who manages bank Julius Baer’s $6-billion gold fund, said one problem with using gold as a method of payment is that people have to take its value on blind trust.

“Gold is a useful store of value,” Mr. Mueller said. “However I doubt whether it will succeed as a method of payment.”

True- is is much better to have value in a EUR paper bill, collateralized by such non-blind trust items as Greek geta and Kalamata olives.

One thing is certain: after a record November, December sales of gold in the US Mint have already surpassed the total from 2011, and are set to be third most active gold purchasing month in 2012, recent violent paper smackdown of gold notwithstanding. Perhaps the US population has finally learned that all increasingly more frequent smackdowns of paper gold by central banks and other authorities do, is to make gold more affordable for more people, for longer. And increasingly more are taking advantage of precisely this, not of hopes of striking it rich overnight and then converting hard money once more into worthless paper equivalents.

and........

Gold particles could deliver cancer drugs

BY KAREN WEINTRAUB

| Globe Correspondent

December 24, 2012

CytImmune
A longtime challenge has been delivering medicine in high enough doses to kill cancer cells while not harming the patient.

The pharmaceutical giant AstraZeneca­ is expected to announce this week that its oncology unit in Waltham is collaborating with a Maryland company to develop an innovative cancer therapy. The proposed treatment involves delivering powerful cancer drugs on the backs of gold nanoparticles made by CytImmune, of Rockville, Md., that are so tiny 5,000 of them can fit in the width of a human hair.
At that size, the gold flecks make a particularly good vehicle because they can easily carry other molecules, like cancer drugs. They are also believed safe to use in the body.
The gold nanoparticles may solve a longtime challenge facing cancer drug developers: delivering medicine in high enough doses to kill the cancer cells but not the patient, said Dr. Steven K. Libutti, director­ of the Montefiore Einstein Center for Cancer Care in New York.That often means finding the right vehicle to deliver the drug directly to the cancer cells, a promise offered by nanomedicine because the particles are so small they bypass healthy tissue but get trapped in tumors.
"We are in kind of a revolution now," said Dan Peer, head of the laboratory of nanomedicine at Tel Aviv University. "We’re going to witness more and more nanoparticles as vehicles for chemotherapy."
CytImmune has been developing a gold nanoparticle that will be particularly effective at seeking out and killing tumor cells, without causing devastating side effects.
"If we can reduce the tumors where they are, we can significantly reduce or completely eliminate the need for surgeries, which would reduce time in hospitals. I would posit that this would reduce health care costs," said CytImmune’s chief executive, Lawrence ­Tamarkin.
Although gold as an investment commodity has been steadily posting record prices, there is so little used in the making of the medicine that "the bottle costs more than the nanoparticles in the bottle," he added.
Each CytImmune gold particle is designed to carry three elements: a drug called TNF that is too toxic to be delivered in more conventional ways; a second cancer drug from AstraZeneca­ that the two companies hope will combine with TNF to kill more cancer cells; and a molecule of ethylene glycol designed to disguise the treatment from the body’s immune system.
The treatment is called 6091, and the TNF gives it an edge over other nanoparticles, Tamarkin said, by making the drug better at finding and killing tumor cells. The TNF drug, or tumor necrosis factor, seems to improve the nanoparticle’s homing mechanism for tumor cells. Early research suggests that gold molecules with TNF accumulate better in tumor cells than those without the drug, Libutti said.
TNF was considered extremely promising as a cancer drug back in the 1980s, based largely on animal data. But when it was tried on its own in people, the outcome was bad: "The dose at which half the patients died was lower than effective dose" needed to treat the cancer, said Libutti, who has led clinical trials that use CytImmune’s compounds.
Tamarkin said the TNF works by binding to and killing cells that make up the tumor’s blood vessels. This deprives the tumor of needed blood supply and creates openings for chemotherapy drugs to get into the tumor, he said.
The "eureka observation," Libutti said, was that attaching TNF to gold particles actually made the drug less toxic. It could be given at higher doses, making it more effective at killing cancer cells, but less dangerous to healthy ones, he said.
Many drug companies have cancer drugs on their shelves that are too toxic to deliver to the whole body, but might be less dangerous if paired with gold and targeted directly at the tumor, Libutti said.
AstraZeneca has spent a year investigating different targeted cancer therapies and chose CytImmune’s approach as one of several investments in the area."CytImmune is one of the most exciting ones," said Detlev­ Biniszkiewicz, vice president for strategy in AstraZeneca’s oncology innovative medicines unit.
The Maryland company has expertise that AstraZeneca can benefit from, he said, while the bigger company can help speed up the drug development process.
"Together we might do something nice," Biniszkiewicz said. "Pharma needs to be more innovative. We’re trying."
Libutti said he is about to launch a new phase of research, giving patients the 6091 nanoparticle drug along with a regimen of Taxol, a chemotherapy commonly used against breast, ovarian and lung cancers, to see if the combination improves Taxol’s effectiveness­.
He is submitting a grant proposal for early clinical research to put Taxol directly onto the 6091 molecule to see if that works even better.

http://bostonglobe.com/business/2012/12/24/astraz
eneca-waltham-unit-aims-use-gold-nanoparticles-deliver
-cancer-drugs-directly-tumors/Rq3b1KKx0hJWgkCxt5KVcO/story.html

 

And now Andrew Maguire's piece with Kingworld news.  

The big news on Friday was the big premium for physical silver in Shanghai.

While silver traded at $29.61 in USA, over in Shanghai, silver was trading at $32.50 a premium of $2.89 per oz.  The Chinese are willing to pay more to get the real stuff.  Expect arbitrage to intensify between these two markets:

(courtesy Kingworldnews/Andrew Maguire)

Paper raid on metals causes 'unprecedented' silver premiums, Maguire tells King World News

Submitted by cpowell on Sat, 2012-12-22 01:00. Section: Daily Dispatches

7:56p ET Friday, December 21, 2012

Dear Friend of GATA and Gold (and Silver):

London metals trader and silver market whistleblower Andrew Maguire reports via King World News tonight that premiums for delivery of physical silver in Shanghai today reached "unprecedented" and "ludicrous" levels, so distortive was the Western central bank intervention against the monetary metals in London and New York. Maguire says the bullion bank agents of the central banks "are fully aware of the physical drain" caused by their paper raid, "and I guarantee you that they are going long on this final stage of the selloff."

An excerpt from Maguire's interview is posted at the King World News blog here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/12/21_M...

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