http://tradewithdave.com/?p=16559

( Great catch on the big adjustment..... )

Trade (At Settlement) With Dave

Captain Nemo and the professor consider the CME’s ultimate price discovery version of the lost city of Atlantis

In case you missed it, Terry Duffy and your friends over at the CME Group did some “self-certifying” back on April 26, 2013 with your favorite regulator Bart Chilton at the Commodity Futures Trading Commission. Why did the CME self-certify? That’s simple. The self-certification, namely “Trading At Settlement”, according to Team Terry“is being adopted based on requests from market participants.” Why else would you self-certify? Dave can’t think of any better reason. As to the question of just why is the CME even allowed to self-certify, I guess that’s a question for your governor or your congressman, or maybe your broker or maybe Jon Corzine if you run into him this summer in the Hamptons since he was kind of a Governor-Senator-Broker-Bundler all wrapped up in one man.

What is Trade At Settlement exactly? If you ask Dave, I would call it the “sandbagging rule.” You see Dave has been a sales manager more than once and Dave can sniff out a sandbagger quicker than you can say “where’s my allocated account?” What is sandbagging exactly? Sandbags can be used to keep a flood out, but they can also be used to keep a flood in. Let’s take a simple example of sandbagging. Let’s say Dave is sales managing a car dealership and that Dave’s paying $500 bonuses to every salesman who sells fifteen cars per month. If you sell sixteen cars the first month and fourteen cars the next month then you would only get the $500 bonus in the first month even though you sold thirty cars in two months. It doesn’t take long to figure out if someone is sandbagging a car sale on the last day of the first month in an attempt to move that sale to the second month. Maybe the salesman calls in sick. Maybe the salesman asks the customer to come back tomorrow.

If the salesperson is attempting to defy that verse from the Holy Scriptures (Matthew 6:24) “No one can serve two masters. Either you will hate the one and love the other, or you will be devoted to the one and despise the other. You cannot serve both God and money.” Maybe the salesperson might go so far as to tell the customer “Hey come back tomorrow and I’ll slide you an extra Benjamin when you pick up the keys”. That my friends is a classic example of “Trading At Settlement” or making a trade within a trade. When you Trade With Dave At Settlement, the price discovery process which occurred when the customer and the salesperson “shook on the deal” is no longer the genuine deal because now the car has been sold for $100 less than the original price, and an extra $500 in commission has been paid. Who’s to know the difference?

Well Dave knows and believe me so does every other sales manager at the CME. Dave has not only been a sales manager he’s also been a VP of Marketing and a company President and he’s had more than one sales manager working for him who, if the salesperson was willing to split yet another Benjamin with the sales manager, the sales manager would then comply with the salesperson’s scheme. I guess you could describe a scheme where the salesperson and the sales manager were colluding to extract an additional $500 in bonus money from the company at a cost of $200 to the salesperson individually as a scheme that would be “adopted based on requests from market participants” if those market participants could make extra money. Why not, especially if you can self-certify?

Let’s take a look at what other forms of self-styling went on over at the CME around the same time as the self-certification hair styling (also known as the business mullet policy – that being all business in the front while there’s a party in the back) was going down.

From Harvey Organ:http://harveyorgan.blogspot.com/2013/04/silver-and-gold-risesilver-oi-rises-to.html

Today (April 24th), we had huge activity inside the silver vaults. We had 0 dealer deposits and 1 dealer withdrawals.Out of Brinks: another of those perfectly round withdrawals, 9507.0000 oz leaves the dealer We had 3 customer deposits:i) Into CNT: 597.191.600 oz
ii) Into Brinks: 351,279.500 oz
iii) Into JPM; 573,219.091 oz

From Dave: Take note of the 573,219.091 oz. into JPM

Do you remember April 25th? That was the day when the Comex reported that JP Morgan’s eligible gold fell from 402.4K ounces to 141.6K ounces or 65% in 24 hours. This was the lowest recorded level since JPM’s “vaulting capabilities” were touted and the vault opened in late 2010 (http://tradewithdave.com/?p=5814).

Did anyone notice that on May 8th there was a silver “adjustment” out of Scotia for 573,219.091 ounces? No destination for the mother lode was offered as an explanation of the adjustment. It appeared to be an accounting error, at least according to Harvey Organ. The fact that the amount is exactly the same and exactly two weeks have gone by… nothing to see here folks… move along.

What is the definition of Trading At Settlement exactly? Here you go, according to some financial glossary and the initiator of adoptions based on requests from market participants, but not according to Trade With Dave’s rogue salesman metaphor. Here’s the official definition:

Trading at settlement is an exchange rule which permits the parties to a futures trade during a trading day to agree that the price of the trade will be that day’s settlement price or the settlement price plus or minus a specified differential. What differential exactly? At the CME, TAS transactions may be executed at the current day’s settlement price or at any valid price increment ten ticks higher or lower than the settlement price.

How did the folks over at the CME manage to explain to the folks over at the CFTC via email on the very day in question why they were “lastly” establishing the Trading At Settlement block trade minimum threshold? Here’s the explanation in their own words:

Lastly, the establishment of TAS block trades in Gold and Silver futures at the existing block trade minimum threshold of 25 contracts for each product is being adopted based on requests from market participants.

This rule change was made on April 26th the day after the noted transfers and the full documentation of the notice to the CFTC is here:

http://www.cftc.gov/stellent/groups/public/@rulesandproducts/documents/ifdocs/rul042613nymexandcomex001.pdf

Harvey Organ again on May 8:

http://harveyorgan.blogspot.com/2013/05/gold-and-silver-risejpmorgan-loses.html?m=1

The market reached fresh lows yesterday. Dave couldn’t think of a better way to describe what is going on in the paper version of the metals market than to describe it as “fresh lows” indeed. http://www.zerohedge.com/news/2013-05-08/jpm-eligible-gold-drops-fresh-record-low-following-withdrawal-28-holdings

So, 573,000 ounces into JPM on April 24th. Then a 573,000 ounces accounting adjustment on May 8th. What happened between the 24th and the 8th besides a New York Times article attempting to connect Blythe Masters to Enron and Bernie Madoff and an email from Terry Duffy to Bart Chilton re-engineering a product based solely on “requests from market participants.” If you ask Dave, somebody has been sandbagging the lost city of Atlantis and that somebody is most likely a “market participant.” Maybe it’s THE market participant.

http://www.goldmoney.com/gold-research/alasdair-macleod/the-role-of-gld-and-slv.html?gmrefcode=gata

( Counterparty risk exists for both ETFs .... so , now you know ! )

The role of GLD and SLV

2013-MAY-12

In August 2011 I wrote to the Financial Services Authority to seek confirmation that the London-based custodians of SPDR Gold Trust (GLD) and iShares Silver Trust (SLV) were being regulated as custodians, despite the fact that physical bullion is not a regulated investment. After some chasing on my part I finally got a response, kicking my letter firmly into touch. The FSA accepted that the custodians (HSBC Bank USA NA for GLD and JP Morgan Chase Bank NA London Branch for SLV) were regulated, but appeared to be unwilling to do anything about it other than to pass my letter on to “the supervisors of the relevant firms”.

My reason for writing to the FSA was to establish if allegations were true that bullion owned by these two trusts was being used in contravention of custody agreements. If they had any foundation there would be an important regulatory risk for the FSA which should be drawn to their attention, and in any event needed clarification to prevent a false market. Suspicions that this was the case were fuelled by obvious conflicts of interest in the firms concerned. The sensible course for the FSA would have been to investigate the matter with the custodians and give them a clean bill of health, or alternatively take appropriate action in the event of a breach. Instead, they ducked the issue, leaving the impression that there was indeed a problem.

This may have been to do with the fact that bullion, being dealt with in an over-the-counter market, operated under a different set of dealing and settlement procedures from a normal regulated investment. Subsequently the 2012 GLD prospectus was amended under “Risk Factors” on page 12, by the insertion of a new clause headed “The custody operations of the custodian are not subject to specific governmental regulatory supervision.” It is now clear that the FSA had ceded its custodial responsibility to the “best practices of the LBMA”.

This matters because investors naturally expect custodians to be properly regulated. It also matters because the bullion market settles through a separate entity called London Precious Metals Clearing Limited (lpmcl.com) owned by five LBMA members, including the two custodians for GLD and SLV. LPMCL is therefore at the heart of the London bullion market.

Because the bullion market in London is over-the-counter, bullion banks are exposed to counterparty risk, unlike traders on a regulated market. And if a big bullion bank fails, which is certainly possible in a global banking crisis, all the bullion held by the members of the LPMCL both for themselves and their clients could become available to central banks managing the crisis through the Bank of England.

In a systemic meltdown it may be naïve to expect central banks to fully respect property rights. So GLD and SLV are only suitable for investors prepared to accept a lower standard of custodial regulation, and who look to benefit from a rising gold or silver price until they decide to take their profits. They are definitely not for those seeking a safe haven or hedge from a financial crisis.

And has gold deliveries also dried up at Shanghai Exchange ....

Shanghai Gold Exchange (SGE)

Shanghai Gold Exchange (SGE) Gold -- Au(T+D):
- 10 May 2013 Close:
  - Trade Volume: 23.8 tons of gold, a change of -11.2% from previous close.
  - Open Interest: change of 0.4% from previous close.
  - Physical Delivery: 0 tons of gold.
  - Gold Price: $1477, a change of -0.7% from previous close.
- Peak One Day Trade: 115.1 tons of gold, 16 April 2013.
- Peak One Day Delivery: 35.7 tons of gold, 22 March 2013.
- Current Month Delivery: 0.3 tons of gold as of 10 May 2013.
- Peak One Month Delivery: 328 tons of gold, March 2013.
- Gold Delivery Since 1 January 2013: Gold delivery (year to date): 1030.3 tons.
- Shanghai Gold Exchange physical deliveries, past years:
  - 2012: 2,379.6 tons.
  - 2011: 1,897.8 tons.
- Week of 26 April -- strange drop off in physical delivery? As of 25 April, physical deliveries on the SGE have been 1 ton (0 tons 22 April, 24 April and 25 April). The last time the SGE has a week of just limited deliveries as base in January 2011, a month that saw 21 days with less than 1 ton of gold delivered per day. Is this due to lack of inventory for delivery?
World Gold Production (year to date) estimate: 1055 tons.
25 April 2013, JPMorgan's Eligible Gold Plummets 65% In 24 Hours To All Time Low
9 April 2013, Comex Gold Inventories Collapse By Largest Amount Ever on Record. Interesting headline when contrasted with the delivery records in Shanghai during March, 2013.

Fed reckless QE showing up in interesting places....

http://soberlook.com/2013/05/bernanke-signals-fed-is-uneasy-with.html

SUNDAY, MAY 12, 2013

Bernanke signals the Fed is uneasy with "reaching for yield"

As Merrill's junk bond index yield crossed the historical low of 5% on Thursday, some senior Fed officials are clearly becoming uneasy. Corporate credit markets are entering bubble territory (see discussion) and up until recently very little has been said on the topic by the US central bank. On Friday Ben Bernanke sent a signal to the markets that the Fed is watching the "reaching for yield" situation "particularly closely".

Ben Bernanke (May 10, 2013) - ... We follow developments in markets for a wide range of assets, including public and private fixed-income instruments, corporate equities, real estate, commodities, and structured credit products, among others. Foreign as well as domestic markets receive close attention, as do global linkages, such as the effects of the ongoing European fiscal and banking problems on U.S. markets.

Not surprisingly, we try to identify unusual patterns in valuations, such as historically high or low ratios of prices to earnings in equity markets. We use a variety of models and methods; for example, we use empirical models of default risk and risk premiums to analyze credit spreads in corporate bond markets. These assessments are complemented by other information, including measures of volumes, liquidity, and market functioning, as well as intelligence gleaned from market participants and outside analysts. In light of the current low interest rate environment, we are watching particularly closely for instances of "reaching for yield" and other forms of excessive risk-taking, which may affect asset prices and their relationships with fundamentals. It is worth emphasizing that looking for historically unusual patterns or relationships in asset prices can be useful even if you believe that asset markets are generally efficient in setting prices. For the purpose of safeguarding financial stability, we are less concerned about whether a given asset price is justified in some average sense than in the possibility of a sharp move. Asset prices that are far from historically normal levels would seem to be more susceptible to such destabilizing moves.
The chart below must give at least some US central bankers a reason to reflect on the current pace of monetary expansion. What "unusual patterns in valuations" will another $1.5 trillion of securities purchases create? The FOMC is likely to have at least some debate on the topic at the next meeting.

Fed hoisted by its own petard ?

http://truthingold.blogspot.com/2013/05/and-yet-another-big-joke-fed-qe.html

SATURDAY, MAY 11, 2013

And Yet, Another Big Joke: Fed QE Tapering? Riiiiight

The Fed is now serving up rainbows, unicorns and fairy tales. And that mindless, moronic mouthpiece of Federal Reserve intentional deceit, Jon Hilsenrath, is more than happy to put it all in print. Our system, especially as it operates in NYC and DC has become analogous to one big New City street shell game. Keep your eye on the ball, NOT where they want you to think the ball is so that they can fleece you of your money.

So the rumor of the Hilsenrath article about Fed QE "tapering," curiously released 20 minutes after the Comex close Thursday in order to enable the paper gold market manipulators dump a lot of paper in one of the most illiquid trading periods for paper gold in any given 24 hour period, finally hit the tape Friday afternoon.

The timing of a late day Friday release, after the stock and bond markets had closed for the weekend, is curious as well. I'll let the readers decide why.

Having said that, I know for a fact that the Fed will not be "tapering" anytime soon. I know a bank executive who recently met with Fed staff in DC. To a man they admitted to this person that no one - as in "nobody" - at the Fed has any clue whatsoever how Bernanke and the Fed can possibly even begin to extract itself from QE, let alone start unloading it's massive $3 trillion portfolio of Treasuries, mortgages and insidiously toxic assets.

But why do we need inside word on that? Play the tape forward. Think about what happens if the Fed tries to stop, or even reduce, its rate of bond buying. In the first 7 months of its fiscal year, the Government ran up a deficit of $700 billion, or $100 billion per month. This includes a tax revenue windfall in December from asset selling ahead of the new tax laws that kicked in Jan 1 and it includes the big jump in tax revenues associated with the timing of tax deadline filings. And the economy was not quite in decline, like it is now.

So with all the stars aligned, the Government was still running a $100 billion a month deficit, requiring about $80-$90 billion per month in new Treasury issuance. The Fed was buying more than $45 billion - or more than half of this new issuance - because it is also rolling cash flow from interest into more purchases. I'll leave it to your imaginations to decide what happens if the Fed pulls back on its Treasury purchases, but keep in mind that the economy is tanking and corporate taxable income and worker wages are in decline - all of which means lower tax revenues than planned.

How about mortgages? See previous posts this week for my view on that. But keep in mind that the housing market is starting to soften in most areas and the "organic," buy a home and live in it purchasers, are having to resort to using - more often than not now - subprime quality FHA financing. That paper, my friends, is being bought by the Fed and is guaranteed by you and me.

One more point: how quickly we all forget that just last week the FOMC issued a statement which implied that it stands ready to lower interest rates if necessary. I guess that moron Hilsenrath doesn't get that particular information feed from his Fed source.

Sure the Fed can start "tapering" QE, but it would also have to be willing to live with the consequences. We know Bernanke isn't willing to live with the consequences of what he's done, which is why he's leaving in January. And there isn't a politician alive - except may Ron Paul - who is willing to live with consequences of the Fed reducing QE. Even more catastrophic, the Fed itself has no clue how it will unwind QE. Keep your eye on that little red ball - not the criminal hands moving the shells around in a manner designed to rob you of your money.

http://silverdoctors.com/the-million-dollar-question-when-does-the-comex-default/

Submitted By Bill Holter, Miles Franklin Ltd,:

China imported 900 tons last year and India roughly 800 tons versus total global production of 2,500 tons, did the rest of the world make due with only 700 tons? Hardly. So far this year through March, China has already imported some 372 tons putting them on a pace of 1,500 for the year. This figure does not even include April where we know that VERY conservatively their appetite increased by 50% from the previous month which was just over 220 tons. So through April a conservative number would be 600 tons for the trimester making an annual pace of 1,800 ton for that country ALONE !

So where is all of this Gold coming from if mine supply cannot satisfy the current and apparently exponentially growing demand? You can look at the numbers from the Shanghai exchange. They reportedly delivered 1,900 tons in 2011 and 2,400 tons in 2012. So far this year they have delivered over 1,000 tons. We also know that the COMEX, GLD, JP Morgan and HSBC inventories are being seriously bled down. Not by “leeches” mind you, no, the current deliveries and drawdown of inventories is like open arterial wounds gushing into the streets. It has become so serious at JP Morgan that they report only to have 137,000 (just over a whopping 4 tons) ounces left of “eligible” Gold for delivery.

Over the course of the last 2 months there have also been reports of investors withdrawing their “registered” Gold. This has come about not because people “missed” their metal and wanted it delivered so they could see how shiny it was. No, these “withdrawal pains” (pun intended) have been requested because people are afraid of the Gold not being there. They want control of their money and don’t want to be MF Globalled or Cyprus’d. This mindset is adding to the “run” on inventories. The funny thing is this, IF the metal was not really purchased in the first place (Morgan Stanley…ABN Amro anyone?), these demands for deliveries will act as CURRENT demand. Call it “deferred demand” or anything you’d like, these requests for delivery will put further pressure on existing and real inventories OR on price as firms go out to actually buy the product to deliver.

As I said, “when” does the fractional reserve metals market fail? When does it end in the same fashion that every banking panic in human history has seen? When do investors change their gait from the current very brisk walk and break into an outright “run”? What is happening and will happen is absolutely no different than 2,000 or more years ago when the Goldsmith issued too many “credits” versus the amount of Gold he was holding. The only minor difference is “scope”. 2,000 years ago there were no options, no futures, no derivatives (except for the letters of credit) and certainly no computers (except by those who built the Pyramids). The current and prospective “run on the bank (vaults)” is nothing new, only the scope is exponentially larger and the final action quicker “when” it arrives.

Regards, Bill H.

http://harveyorgan.blogspot.com/2013/05/andrew-maguire-comments-on-huge-cracks.html

Saturday, May 11, 2013

Andrew Maguire comments on huge cracks at the LBMA/GLD inventories decline again/ Silver deliveries increase to 17.26 million oz/ Gold now at 6.02 tonnes of deliveries/Italy bank delinquencies increase to 8% of all loans/Japanese yen/dollar surpasses 100 and sets off competitive devaluations by neighbors/

Today's commentary is very important. Take your time and read all passages.

Gold closed down $32.00 to $1436.80 (comex closing time). Silver fell by only 25 cents to $23.63 (comex closing time)

In the access market at 5 pm gold and silver are the following :

gold: $1448.10.
silver: $23.87

The reason for the whack yesterday afternoon and this morning was the rumor that the Fed will taper QE. The article by Hilsenrath is now out (shown below USA news). As we explained yesterday, the USA has a 900 billion to one trillion deficit and with every nation buying their own debt, who on the planet will buy the USA debt other than themselves? It seems no journalist is willing to ask the right questions.

Although gold was weak throughout the day, silver refused to buckle. Gold/silver equity shares held quite firm throughout the day.

At the Comex, the open interest in silver rose by 8 contracts to 145,341 contracts. The silver OI is holding firm at elevated levels . The open interest on the gold contract rose again by 480 contracts to 442,341 as we have a few more dumb paper players willing to take on the crooked bankers. The gold deliveries for May rose a bit today surpassing 6 tonnes at 6.02 tonnes and this is an off month for gold. In silver we continue to see the total number of ounces standing rise above the quantity that stood on first day notice. The number of silver ounces, standing for delivery in May now stands at 17.260 million oz. ( On first day notice: 14.860 million oz.)

Again, at the Comex, gold is departing as investors are frightened to death of a confiscation similar to what happened at MFGlobal or Refco. Tonight, the Comex registered or dealer gold rests at 1.835 million oz or 57.07 tonnes. The total of all gold at the comex rose just above 8 million oz at 8.062 million oz.

The GLD again resumed its loss of gold falling by another 2.53 tonnes on Friday.
The SLV inventory of silver remained constant.

The big news of the day was the huge loss in the Japanese yen as it crossed not only the 100 yen/dollar barrier but broke into the 101 column closing at 101.66.
The lower yen boosted the Nikkei and most of Europe (the lone exception was Spain). Japan also witnessed the halting of its huge bond market due to the rapid rise in yields on the 10 year bond closing at .70 basis points a rise of 16% from Thursday's close. The Japanese investors are now dumping their Japanese bonds and buying "high quality" European bonds like the Italian and Spanish sovereigns. This is an accident waiting to happen. No doubt that Japanese investors are also turning to gold.

In Italy, bank loan delinquencies rose by almost 22% to 8% on the entire bank loan outstanding. This will put tremendous pressure on the Italian banks.

We will go over these and other stories but first.....................

Let us now head over to the comex and assess trading over there today:

The total gold comex open interest rose again on Friday by 480 contracts today from 441,861 up to 442,341, with gold falling by $5.10 on Thursday. We no doubt had new ball players enter the arena at these lower prices for gold. The front non active delivery month of May saw its OI fall by 15 contracts down to 129. However we had 21 delivery notices filed on Wednesday. Thus we gained 6 contracts or 600 additional gold ounces will stand for delivery in May. The next active contract month is June and here the OI fell by 8,538 contracts to 222,813 as most of these paper players rolled into August. June is the second biggest delivery month in gold's calendar and first day notice is less than 3 weeks away. The estimated volume on Friday was excellent at 230,749 contracts. The confirmed volume on Thursday was also very strong at 222,357 contracts.

The total silver Comex OI fell by a tiny 8 contracts from 145,332 down to 145,324 with silver's fall in price of 1 cent on Thursday. The front active silver delivery month of May saw it's OI rise by 48 contracts up to 947. We had 117 delivery notices filed on Thursday so we gained 165 contracts or an additional 825,000 oz will stand for delivery in May. The next delivery month for silver is June and here the OI fell by 22 contracts to stand at 404. The next big active contract month is July and here the OI rose by 8 contracts to rest this weekend at 79,137. The estimated volume on Friday was good, coming in at 49,033 contracts. The confirmed volume on Thursday was also very good at 45,293.

Comex gold/May contract month:

May 10/2013

Gold	Ounces
Withdrawals from Dealers Inventory in oz	nil
Withdrawals from Customer Inventory in oz	6430.000 (Scotia)
Deposits to the Dealer Inventory in oz	nil
Deposits to the Customer Inventory, in oz	64,232.137 (Scotia)
No of oz served (contracts) today	8 (800 oz)
No of oz to be served (notices)	121 (12,100)
Total monthly oz gold served (contracts) so far this month	1817 (181,700)
Total accumulative withdrawal of gold from the Dealers inventory this month	nil
Total accumulative withdrawal of gold from the Customer inventory this month	483,433.23 oz

We had tiny activity at the gold vaults.

The dealer had 0 deposits and 0 dealer withdrawals.

We had 1 customer deposits today:

i) Into Scotia: 64,232.137 oz

total customer deposit: 64,232.137 oz

We had 1 customer withdrawal:

i) out of Brinks: 6430.0000 (another nice round number of a withdrawal)

total withdrawal: 6430.000 oz

We had 0 adjustment

Thus the dealer inventory remains tonight at its low of 1.835 million oz (57.07) tonnes of gold.
The total of all gold rises a bit at the comex and this time, this time just inches above the 8 million oz as it rests at 8.06 million oz or 250.7 tonnes.

The CME reported that we had 8 notices filed on Friday for 800 oz of gold.
To calculate the quantity of gold ounces that will stand, I take the OI standing for May (129) and subtract out Friday's notices (8) which leaves us with 121 notices or 12,100 oz left to be served upon our longs.

Thus we have the following gold ounces standing for metal in May:

1817 contracts x 100 oz per contract or 181,700 oz (served) + 121 notices or 12,100 oz (to be served upon) = 193,800 oz or 6.02 tonnes of gold.

This is extremely high for a non active month. We gained 600 additional gold ounces standing for the May comex gold contract today.

The big June delivery month will surely be exciting to watch judging by the huge demand for gold in May. We will watch what happens with JPMorgan at its customer gold remains at a very low 4.9 tonnes of gold and the dealer gold at its nadir at 1.835 million oz.

end

Silver:

May 10.2013: May silver:

Silver	Ounces
Withdrawals from Dealers Inventory	147,733.59 (Brinks)
Withdrawals from Customer Inventory	730,292.31 oz (Delaware, Brinks, CNT, JPM ,Scotia )
Deposits to the Dealer Inventory	nil
Deposits to the Customer Inventory	nil
No of oz served (contracts)	nil
No of oz to be served (notices)	727 (3,635,000 oz)
Total monthly oz silver served (contracts)	2725 (13,625,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month	204,097.65
Total accumulative withdrawal of silver from the Customer inventory this month	1,333,117.3

Today, we had good activity inside the silver vaults.

we had 0 dealer deposits and 1 dealer withdrawals.

i) Out of Brinks we had 147,733.59 oz withdrawn

Total dealer withdrawal: 147,733.59 oz

We had 0 customer deposits:

total customer deposit; nil oz

We had 5 customer withdrawals:

1) Out of Delaware: 2978.78 oz

ii) Out of Brinks; 902.5 oz
iii) Out of CNT: 1003.20 oz
iv) Out of JPM: 709,764.40 oz
v) Out of Scotia: 15,643.43 oz

total customer withdrawals: 730,292.31 oz

we had 1 adjustments today

i) Out of the Scotia vault: 69,533.40 oz was adjusted out of the customer and into the dealer.

Registered silver at : 44.491 million oz

total of all silver: 165.495 million oz.

The CME reported that we had 220 notices filed for 1,100,000 oz. To calculate the number of ounces that will stand in silver, I take the OI standing for May (947) and subtract out Friday's notices (220) which leaves us with 727 notices or 3,635,000 oz

Thus the total number of silver ounces standing in this active delivery month of May is as follows:

2725 contracts x 5000 oz per contract (served) = 13.625,000 + 727 contracts x 5000 oz = 3,635,000 oz ( to be served) = 17,260,000 oz.

we gained a rather large 825,000 oz of silver standing for May today.

end

At 3:30 pm we get the COT report which shows position levels of our major players.
Let us first head over and see what we can glean from the gold COT. The report is from Tuesday April 30 until closing Tuesday, May 7.

Gold COT Report - Futures
Large Speculators			Commercial		Total
Long	Short	Spreading	Long	Short	Long	Short
189,343	99,920	23,851	186,671	274,390	399,865	398,161
Change from Prior Reporting Period
-3,967	3,662	3,736	16,460	8,616	16,229	16,014
Traders
127	103	74	61	52	220	202

	Small Speculators
	Long	Short	Open Interest
	38,066	39,770	437,931
	615	830	16,844
	non reportable positions		Change from the previous reporting period
COT Gold Report - Positions as of				Tuesday, May 07, 2013

Our large speculators:

Those large speculators that are long in gold pitched 3967 contracts from their long side.
Those large specs that have been short in gold added another 3662 contracts to their short side.

Our commercials:

Those commercials that have been long in gold and are close to the physical scene added a whopping 16,460 contracts to their long side.

Those commercials that have been short in gold added another 8616 contracts to their short side.

Our small specs:

Those small specs that have been long in gold added a tiny 615 contracts to their long side

Those small specs that have been short in gold added another 830 contracts to their short side.

Conclusions:

the commercials went net long by another strong 7844 contracts
the large specs went net short by 7629 contracts.

Generally this is extremely bullish and yet gold was whacked on Thursday and Friday.

end

And now for our silver COT:

the silver COT looks comatose

Silver COT Report: Futures
Large Speculators			Commercial
Long	Short	Spreading	Long	Short
35,834	22,183	23,765	65,703	80,159
114	-1,347	365	18	244
Traders
59	50	48	38	38
Small Speculators		Open Interest		Total
Long	Short	144,156		Long	Short
18,854	18,049			125,302	126,107
182	1,417	679		497	-738
non reportable positions		Positions as of:		124	116
		Tuesday, May 07, 2013		© SilverSeek.com

Our large speculators;

Those large specs that have been long in silver added a very tiny 114 contracts to their long side.

Those large specs that have been short in silver covered 1347 contracts from their short side.

Our Commercials;

Those commercials that are long in silver and are close to the physical scene added a very tiny 18 contracts to their long side.

Those commercials that are short in silver covered a very tiny 244 contracts.

Our small specs;

Those small specs that have been long in silver added a tiny 182 contracts to their long side

Those small specs that have been short in silver added 1417 contracts to their short side.

Conclusions:

The commercials went slightly long to the tune of 226 contracts which is slightly bullish

May 10.2013:

Tonnes1,051.65

Ounces33,811,468.47

Value US$48.222 billion

May 9.2013:

Tonnes1,054.18

Ounces33,892,812.62

Value US$49.641 billion

Selected news and views....

Andrew Maguire tells Eric King that 40 tonnes of physical metals were bought with the reduced gold price today. He also states that the gold price drop is just not sustainable with so much physical demand!!

( first interview,courtesy Andrew Maguire/Kingworldnews)

Gold price drop isn't sustainable with so much metal offtake, Maguire says

Submitted by cpowell on Fri, 2013-05-10 17:37. Section: Daily Dispatches

1:30p ET Friday, May 10, 2013

Dear Friend of GATA and Gold:

Today's dip in gold was used by central banks to obtain a bargain price on 40 tonnes of real metal, London metals trader Andrew Maquire tells King World News. Price suppression "cannot stick with this kind of volume coming through," Maguire says. "I saw premiums in Shanghai this morning at close to $26. That's outrageous. The Mumbai premiums are through the roof. If you want physical today, you are going to have to pay a premium price for it."

And if you want only paper? Why not save yourself some time and just flush your money down the toilet?

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

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/5/10_Ma...

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

end

Your most important commentary of the year: the cracking of the LBMA.

In the international wholesale market for gold trading in London (LBMA) the bullion banks (like they have been doing over at the comex) has been to take the long side of fresh shorting by the hot money, the hedge funds. Remember that the price setting mechanisms for gold (and silver) is the Comex and LBMA. The amount of naked shorting vs the real physical metal present is no doubt over 100 fold. The bullion banks are settling on these hedge funds who cannot supply. The bullion banks are also mega long term short of metal as these guys are scrambling to supply China and Russia. The supply of metal comes from the LBMA who in turn gets its supply from GLD who in turn gets it supply from the Bank of International Settlements and the Fed who in turn borrow the gold from official supplies. The lower price of gold has caused massive cracks in the fractional reserve gold price setting by causing massive global demand for gold for which they cannot supply. The huge leverage must now be unwound. For every ounce tendered to China/Russia probably 100 paper obligations must be unwound to which no supply can be find.

Then the derivative mess ignites!!! Thus, your answer as to why Comex gold and GLD gold inventories have declined massively these past 4-5 months.

a must read

(2nd interview Andrew Maguire/Kingworldnews)

Cracks appearing in London and Comex markets, Maguire tells King World News

Submitted by cpowell on Sat, 2013-05-11 02:15. Section: Daily Dispatches

10:15p ET Friday, May 10, 2013

Dear Friend of GATA and Gold:

A major supply problem is developing in the international bullion market, London metals trader Andrew Maguire tells King World News tonight, so much so that cracks are appearing in the London and Comex markets. An excerpt from the interview is posted at the King World News blog here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/5/10_Ma...

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

end

A superb editorial from Chris Powell of GATA explaining why experts are refusing to look at the proof of gold's (and silver's) manipulation by our bullion banks:

(courtesy Chris Powell/GATA)

What does it take to get gold 'experts' to look at the proof?

Submitted by cpowell on Thu, 2013-05-09 16:15. Section: Daily Dispatches

1:32p ET Thursday, May 9, 2013

Dear Friend of GATA and Gold:

In a market letter for his subscribers that has been republished by Casey Research, financial writer Chris Martenson reviews evidence recently reported by Sprott Asset Management that the U.S. government may have secretly leased 4,500 tonnes of gold.

Martenson is inclined to think that there is something to it, and if there is, he writes, then "the gold slam begins to smell like an operation designed to shake as much gold as possible out of weak hands so that the bullion banks can begin to recover it to square up their accounts. GLD, the gold exchange-traded fund that so many small investors participate in, is one large, obvious target, as it was sitting on 1,350 tonnes as of January 2013. The most recent figure I have shows that GLD has coughed up close to 175 tonnes and will certainly lose more in the coming days, as long as the price of gold is held down or even dropped further."