http://harveyorgan.blogspot.com/2013/07/july-252013gold-and-silver-withstand.html
Gold fell $9.10 to $1329.00 (comex closing time ). Silver was also up by 14 cents to $20. 15 (comex closing time).
Gold and silver rose despite options expiry today. There were many in the money gold calls at $1300.00. All of these players will receive a futures contract. Let us see if they stand for delivery. The bankers will no doubt try and influence their decision by whacking gold. However the demand for physical is huge and this may hinder their plans.
In the access market at 5:00 pm, gold and silver skyrocketed northbound for no apparent reason:
At the Comex, the open interest in silver fell by 671 contracts to 131,077 with silver falling by 24 cents.
Tonight, the Comex registered or dealer inventory of gold remains below the 1 million oz mark at 950,344.702 oz or 29.55 tonnes. This is dangerously low especially when we are coming up to the August delivery month.
Remember in June we had almost 31 tonnes of gold stand for delivery. The total of all gold at the comex (dealer and customer) remains constant tonight still well below the 7 million oz barrier resting at 6.924 million oz or 215.36 tonnes.
JPMorgan's customer inventory remains constant tonight at only 46,069.447 oz or 1.43 tonnes. It's dealer inventory rests at 390,092.326 oz (12.13 tonnes) but it still must settle upon contracts issued in the May and June delivery month which far exceeds its inventory. (see last Wednesday's Bill Kaye interview with Lars Schall on the lack of deliveries at the comex per outstanding issues).
The GLD reported another big change in inventory tonight with a reading of 927.35 tonnes of gold a loss of 2.41 tonnes. We had a huge gain in silver inventory at the SLV to the tune 4.63 million oz.
Today, we had the 14th consecutive day for negative GOFO rates with the 3 months rate at -032%. The 6 month GOFO rate lowers to only a positive .04%. The 14 consecutive days of negative GOFO is unprecedented.
On the physical side of things, Kingworld news and Eric King discusses gold
with Bill Kaye, Stephen Leeb and Keith Barron.
We also have a commentaries from Jan Skoyles who discusses the meaning of GOFO and backwardation of gold. We also have a commentary from Patrick Heller who asks will the Comex default in 90 days?
Finally, we have Jeff Nielson who discusses the fact that nobody wants paper gold anymore..only the real physical stuff.
The total gold comex open interest fell by 7933 contracts from 434,750 down to 426,817 with gold falling in price by $15.20 yesterday. We are now into the non active July contract and here the OI rests at 100 up 25 contracts . We had 0 delivery notices filed yesterday so in essence gained 25 contracts or 2500 additional oz that will stand for the July delivery month. The next active delivery month for gold is August and here the OI fell by 11,758 contracts from 105,943 down to 94,185 as we are 1 week away from first day notice for the August contract month(July 31). The estimated volume today was good at 227,037 contracts. The confirmed volume yesterday was also good at 234,863.
The total silver Comex OI fell by 671 contracts with silver falling in price yesterday by 24 cents. The total of all comex silver OI stands at 131,077 contracts. We are now into the big delivery month of July and here the OI rose by 1 contract up to 195. We had 18 notices filed yesterday so in essence we gained 19 contracts or 95,000 additional oz of silver will stand in the July contract month. The next big delivery month is September and here the OI fell by 1735 contracts down to 75,203. The estimated volume today was fair coming in at only 31,947 contracts. The confirmed volume yesterday was good at 41,915.
i) Out of Delaware: 2,000.47 oz
ii) Out of Scotia: 500,890.69 oz
total customer withdrawal : 502,891.16 oz
Thursday, July 25, 2013
July 25.2013/Gold and silver withstand attack on options expiry day/Gold inventories hold constant/14th consecutive negative GOFO/ GLD declines another 2.41 tonnes/:
Good evening Ladies and Gentlemen:
Gold fell $9.10 to $1329.00 (comex closing time ). Silver was also up by 14 cents to $20. 15 (comex closing time).
Gold and silver rose despite options expiry today. There were many in the money gold calls at $1300.00. All of these players will receive a futures contract. Let us see if they stand for delivery. The bankers will no doubt try and influence their decision by whacking gold. However the demand for physical is huge and this may hinder their plans.
In the access market at 5:00 pm, gold and silver skyrocketed northbound for no apparent reason:
gold: $1333.90
silver: $20.26
At the Comex, the open interest in silver fell by 671 contracts to 131,077 with silver falling by 24 cents.
The open interest on the entire gold comex contracts fell by 7933 contracts to 426,817 with gold's fall in price on Tuesday of $15.20.
Tonight, the Comex registered or dealer inventory of gold remains below the 1 million oz mark at 950,344.702 oz or 29.55 tonnes. This is dangerously low especially when we are coming up to the August delivery month.
Remember in June we had almost 31 tonnes of gold stand for delivery. The total of all gold at the comex (dealer and customer) remains constant tonight still well below the 7 million oz barrier resting at 6.924 million oz or 215.36 tonnes.
JPMorgan's customer inventory remains constant tonight at only 46,069.447 oz or 1.43 tonnes. It's dealer inventory rests at 390,092.326 oz (12.13 tonnes) but it still must settle upon contracts issued in the May and June delivery month which far exceeds its inventory. (see last Wednesday's Bill Kaye interview with Lars Schall on the lack of deliveries at the comex per outstanding issues).
The total of the 3 major gold bullion dealers( Scotia , HSBC and JPMorgan) in its Comex gold dealer account registers only 24.92 tonnes of gold. The total of all of the dealers remains tonight at 29.55 tonnes!! Brinks continues to record a low of only 4.18 tonnes in its dealer account.
The GLD reported another big change in inventory tonight with a reading of 927.35 tonnes of gold a loss of 2.41 tonnes. We had a huge gain in silver inventory at the SLV to the tune 4.63 million oz.
Today, we had the 14th consecutive day for negative GOFO rates with the 3 months rate at -032%. The 6 month GOFO rate lowers to only a positive .04%. The 14 consecutive days of negative GOFO is unprecedented.
On the physical side of things, Kingworld news and Eric King discusses gold
with Bill Kaye, Stephen Leeb and Keith Barron.
We also have a commentaries from Jan Skoyles who discusses the meaning of GOFO and backwardation of gold. We also have a commentary from Patrick Heller who asks will the Comex default in 90 days?
Finally, we have Jeff Nielson who discusses the fact that nobody wants paper gold anymore..only the real physical stuff.
* * *
Let us now head over to the comex and assess trading over there today.
Here are the details:
The total gold comex open interest fell by 7933 contracts from 434,750 down to 426,817 with gold falling in price by $15.20 yesterday. We are now into the non active July contract and here the OI rests at 100 up 25 contracts . We had 0 delivery notices filed yesterday so in essence gained 25 contracts or 2500 additional oz that will stand for the July delivery month. The next active delivery month for gold is August and here the OI fell by 11,758 contracts from 105,943 down to 94,185 as we are 1 week away from first day notice for the August contract month(July 31). The estimated volume today was good at 227,037 contracts. The confirmed volume yesterday was also good at 234,863.
The total silver Comex OI fell by 671 contracts with silver falling in price yesterday by 24 cents. The total of all comex silver OI stands at 131,077 contracts. We are now into the big delivery month of July and here the OI rose by 1 contract up to 195. We had 18 notices filed yesterday so in essence we gained 19 contracts or 95,000 additional oz of silver will stand in the July contract month. The next big delivery month is September and here the OI fell by 1735 contracts down to 75,203. The estimated volume today was fair coming in at only 31,947 contracts. The confirmed volume yesterday was good at 41,915.
Comex gold/May contract month:
July 25/2013
the July contract month
the July contract month
Ounces
| |
Withdrawals from Dealers Inventory in oz
|
nil
|
Withdrawals from Customer Inventory in oz
|
nil
|
Deposits to the Dealer Inventory in oz
|
nil
|
Deposits to the Customer Inventory, in oz
| nil |
No of oz served (contracts) today
|
0 ( nil oz)
|
No of oz to be served (notices)
|
100 (10,000 oz)
|
Total monthly oz gold served (contracts) so far this month
|
112 (11,200 oz)
|
Total accumulative withdrawal of gold from the Dealers inventory this month
|
339,257.96 oz
|
Total accumulative withdrawal of gold from the Customer inventory this month
| 583,999.18 oz |
We had no activity at the gold vaults
The dealer had 0 deposits and 0 dealer withdrawals
We had 0 customer deposits today :
Total Customer withdrawals: nil oz
Today we had 1 adjustment:
i) Out of the HSBC vault 96.45 oz was adjusted out of the dealer account and back into the customer account.
i) Out of the HSBC vault 96.45 oz was adjusted out of the dealer account and back into the customer account.
Silver:
July 25/2013: July silver contract month:
July contract month
July contract month
| Silver |
Ounces
|
| Withdrawals from Dealers Inventory | 596,859.57 (Scotia)_ |
| Withdrawals from Customer Inventory | 502,891.16 oz (, Scotia, Delaware,) |
| Deposits to the Dealer Inventory | nil |
| Deposits to the Customer Inventory | 617,735.67 (,Brinks, JPM) |
| No of oz served (contracts) | 18 (90,000 oz) |
| No of oz to be served (notices) | 177 (885,000 oz) |
| Total monthly oz silver served (contracts) | 3264 (16,320,000) |
| Total accumulative withdrawal of silver from the Dealers inventory this month | 2,543,533.2 |
| Total accumulative withdrawal of silver from the Customer inventory this month | 5,162,453.4 oz |
Today, we had good activity inside the silver vaults.
we had 0 dealer deposits and 1 dealer withdrawal.
i) We had the following dealer withdrawal:
596,859.57 oz leave the Scotia dealer (and this landed in the customer account of JPM)
We had 2 customer deposits:
i) Into JPM: 596,859.57 oz
ii) Into Brinks: 20,876.10
total customer deposit: 617,735.67 oz
we had 2 customer withdrawals:
i) We had the following dealer withdrawal:
596,859.57 oz leave the Scotia dealer (and this landed in the customer account of JPM)
We had 2 customer deposits:
i) Into JPM: 596,859.57 oz
ii) Into Brinks: 20,876.10
total customer deposit: 617,735.67 oz
we had 2 customer withdrawals:
i) Out of Delaware: 2,000.47 oz
ii) Out of Scotia: 500,890.69 oz
total customer withdrawal : 502,891.16 oz
we had 0 adjustments today
Now let us check on gold inventories at the GLD first:
July 25.2013: we had another huge 2.41 tonne gold bleed today.
July 25.2013: we had another huge 2.41 tonne gold bleed today.
Tonnes927.35
Ounces29,815,389.67
Value US$39.521 billion
* * *
selected news and views...
This is not good: declining gold mine production is threatening future contracts but also hurting the mining companies
(courtesy Keith Barron/Kingworldnews)
This is not good: declining gold mine production is threatening future contracts but also hurting the mining companies
(courtesy Keith Barron/Kingworldnews)
(courtesy Keith Barron/Kingworldnews)
Declining gold mine production threatens futures contracts, Barron says
Submitted by cpowell on Thu, 2013-07-25 18:05. Section: Daily Dispatches
2p ET Thursday, July 25, 2013
Dear Friend of GATA and Gold:
Geologist and mining entrepreneur Keith Barron tells King World News today that low gold prices are suppressing mine production and the viability of mining companies and thereby raising the possibility that gold may not be available for delivery against futures contracts. Meanwhile, Barron adds, Western gold is steadily being shipped to Asia, which is paying a premium for real metal. An excerpt from the interview is posted at the King World News blog here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
A good commentary courtesy of Jeff Nielson: nobody wants "paper" gold.
(courtesy Jeff Nielson/Bullionsbullcanada.com)
Jeff Nielson: No one wants paper called gold
Submitted by cpowell on Thu, 2013-07-25 19:45. Section: Daily Dispatches
3:45p ET Thursday, July 25, 2013
Dear Friend of GATA and Gold:
Only a big rally in the gold price can save the bullion banks and their "paper gold" system, Bullion Bulls Canada's Jeff Nielson writes today. Nielson's commentary is headlined "No One Wants Paper Called Gold" and it's posted at the Bullion Bulls Canada Internet site here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committeee Inc.
Patrick Heller thinks we may have a comex default in 90 days:
(courtesy Patrick Heller/Liberty gold.)
Will COMEX Gold Market Fail Within 90 Days?
The COMEX gold market exists as an easy way for investors to take a position in the price of gold without the necessity of having to bother with possession of the physical metal. The contracts traded on this exchange are for 100 ounce gold bars that are deliverable almost exclusively in some future month. Most traders, since they are only investing in the price, pursue one of two options as a contract nears maturity. They might purchase an offsetting contract to close out their position entirely or, if they wish to continue to invest in gold, they might close the contract by trading it for one with a maturity further into the future. Historically, only a tiny percentage of COMEX gold contracts are held to maturity to take delivery of the physical metal.
The COMEX bonded warehouses store gold for two different purposes. Gold bars can be “registered” on the COMEX, which means that the gold is specifically being held for physical delivery to a customer holding a maturing contract. Sometimes investors will use the convenience of COMEX storage but not commit their holdings for delivery against COMEX contracts. Such inventories are classified as “eligible,” which means they could be used to deliver on a maturing COMEX contract, but only if the owner decides to make it available for that purpose. While total COMEX inventories are important, the key figure is only the registered quantities, because only they can be called upon to fulfill maturing contracts.
Total COMEX gold inventories have declined by more than one-third since the beginning of 2013. Registered inventories are now below one million ounces and declining quickly. Many analysts, including me, believe that the significant decline in exchange traded fund gold holdings this year was caused by major gold dealers cashing in shares. The probable reason they have done this is to obtain physical gold to deliver to maturing COMEX contract holders who wanted to take physical possession.
If the COMEX inventories get too low, especially when you consider that there are open COMEX contracts representing a liability of well over 40 million ounces of physical gold, the COMEX allows contracts to be settled by cash payment instead of physical metal. At the rate the registered warehouse inventories are being depleted, there is the very real possibility that all gold contracts may have to be settled for cash before the end of 2013.
At the same time that the influence of the COMEX on the price of physical metals is on the brink of disappearing, activity on the Shanghai Gold Exchange is soaring. The Shanghai Gold Exchange does not deal in paper contracts. Instead, every contract is to be fulfilled by delivering physical gold. For the first six months of 2013, a total of 35 million ounces of physical gold was delivered on this exchange, which is close to 100% of worldwide newly mined gold over that time.
The Shanghai Gold Exchange, by far, delivers the largest amount of physical gold of any market in the world. The London and the New York COMEX markets may trade much larger amounts, but they are almost exclusively dealing in paper contracts.
It probably would not surprise you to know that the gold price on the Shanghai exchange trades at a premium to prices in the London and New York markets. If the Shanghai market was actively traded during the same hours as London and New York, I think it would be supplanting those markets as the reference point used for trading all physical gold. As the COMEX turns largely into a paper and cash market in the coming months, I would not be at all surprised to see the Shanghai Gold Exchange becoming THE market used for pricing physical gold around the world.
Goldcorp reports a massive 1.93 billion second loss on the big writedown on the Penasquito mine in Mexico.
(courtesy toronto's Financial Post)
Goldcorp reports massive US$1.93-billion second-quarter loss on Penasquito impairment
13/07/25
Goldcorp Inc. reported an enormous net loss of US$1.93-billion in the second quarter after taking a big writedown on the Penasquito mine in Mexico.
The news overshadowed disappointing adjusted earnings, though the company maintained its full-year guidance.
The US$1.96-billion writedown reflects the exploration potential of Penasquito, Vancouver-based Goldcorp said. It is the company’s first major impairment charge this year, as it previously avoided the writedowns that have plagued competitors like Barrick Gold Corp. and Kinross Gold Corp…
http://business.financialpost.com/2013/07/25/goldcorp-q2-earnings-penasquito-writedown/
Submitted by cpowell on Thu, 2013-07-25 18:05. Section: Daily Dispatches
2p ET Thursday, July 25, 2013
Dear Friend of GATA and Gold:
Geologist and mining entrepreneur Keith Barron tells King World News today that low gold prices are suppressing mine production and the viability of mining companies and thereby raising the possibility that gold may not be available for delivery against futures contracts. Meanwhile, Barron adds, Western gold is steadily being shipped to Asia, which is paying a premium for real metal. An excerpt from the interview is posted at the King World News blog here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Gold Anti-Trust Action Committee Inc.
A good commentary courtesy of Jeff Nielson: nobody wants "paper" gold.
(courtesy Jeff Nielson/Bullionsbullcanada.com)
A good commentary courtesy of Jeff Nielson: nobody wants "paper" gold.
(courtesy Jeff Nielson/Bullionsbullcanada.com)
(courtesy Jeff Nielson/Bullionsbullcanada.com)
Jeff Nielson: No one wants paper called gold
Submitted by cpowell on Thu, 2013-07-25 19:45. Section: Daily Dispatches
3:45p ET Thursday, July 25, 2013
Dear Friend of GATA and Gold:
Only a big rally in the gold price can save the bullion banks and their "paper gold" system, Bullion Bulls Canada's Jeff Nielson writes today. Nielson's commentary is headlined "No One Wants Paper Called Gold" and it's posted at the Bullion Bulls Canada Internet site here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committeee Inc.
Patrick Heller thinks we may have a comex default in 90 days:
(courtesy Patrick Heller/Liberty gold.)
Will COMEX Gold Market Fail Within 90 Days?
The COMEX gold market exists as an easy way for investors to take a position in the price of gold without the necessity of having to bother with possession of the physical metal. The contracts traded on this exchange are for 100 ounce gold bars that are deliverable almost exclusively in some future month. Most traders, since they are only investing in the price, pursue one of two options as a contract nears maturity. They might purchase an offsetting contract to close out their position entirely or, if they wish to continue to invest in gold, they might close the contract by trading it for one with a maturity further into the future. Historically, only a tiny percentage of COMEX gold contracts are held to maturity to take delivery of the physical metal.
The COMEX bonded warehouses store gold for two different purposes. Gold bars can be “registered” on the COMEX, which means that the gold is specifically being held for physical delivery to a customer holding a maturing contract. Sometimes investors will use the convenience of COMEX storage but not commit their holdings for delivery against COMEX contracts. Such inventories are classified as “eligible,” which means they could be used to deliver on a maturing COMEX contract, but only if the owner decides to make it available for that purpose. While total COMEX inventories are important, the key figure is only the registered quantities, because only they can be called upon to fulfill maturing contracts.
Total COMEX gold inventories have declined by more than one-third since the beginning of 2013. Registered inventories are now below one million ounces and declining quickly. Many analysts, including me, believe that the significant decline in exchange traded fund gold holdings this year was caused by major gold dealers cashing in shares. The probable reason they have done this is to obtain physical gold to deliver to maturing COMEX contract holders who wanted to take physical possession.
If the COMEX inventories get too low, especially when you consider that there are open COMEX contracts representing a liability of well over 40 million ounces of physical gold, the COMEX allows contracts to be settled by cash payment instead of physical metal. At the rate the registered warehouse inventories are being depleted, there is the very real possibility that all gold contracts may have to be settled for cash before the end of 2013.
At the same time that the influence of the COMEX on the price of physical metals is on the brink of disappearing, activity on the Shanghai Gold Exchange is soaring. The Shanghai Gold Exchange does not deal in paper contracts. Instead, every contract is to be fulfilled by delivering physical gold. For the first six months of 2013, a total of 35 million ounces of physical gold was delivered on this exchange, which is close to 100% of worldwide newly mined gold over that time.
The Shanghai Gold Exchange, by far, delivers the largest amount of physical gold of any market in the world. The London and the New York COMEX markets may trade much larger amounts, but they are almost exclusively dealing in paper contracts.
It probably would not surprise you to know that the gold price on the Shanghai exchange trades at a premium to prices in the London and New York markets. If the Shanghai market was actively traded during the same hours as London and New York, I think it would be supplanting those markets as the reference point used for trading all physical gold. As the COMEX turns largely into a paper and cash market in the coming months, I would not be at all surprised to see the Shanghai Gold Exchange becoming THE market used for pricing physical gold around the world.
Goldcorp reports a massive 1.93 billion second loss on the big writedown on the Penasquito mine in Mexico.
(courtesy toronto's Financial Post)
Goldcorp reports massive US$1.93-billion second-quarter loss on Penasquito impairment
13/07/25
Goldcorp Inc. reported an enormous net loss of US$1.93-billion in the second quarter after taking a big writedown on the Penasquito mine in Mexico.
The news overshadowed disappointing adjusted earnings, though the company maintained its full-year guidance.
The US$1.96-billion writedown reflects the exploration potential of Penasquito, Vancouver-based Goldcorp said. It is the company’s first major impairment charge this year, as it previously avoided the writedowns that have plagued competitors like Barrick Gold Corp. and Kinross Gold Corp…
http://business.financialpost.com/2013/07/25/goldcorp-q2-earnings-penasquito-writedown/
Submitted by cpowell on Thu, 2013-07-25 19:45. Section: Daily Dispatches
3:45p ET Thursday, July 25, 2013
Dear Friend of GATA and Gold:
Only a big rally in the gold price can save the bullion banks and their "paper gold" system, Bullion Bulls Canada's Jeff Nielson writes today. Nielson's commentary is headlined "No One Wants Paper Called Gold" and it's posted at the Bullion Bulls Canada Internet site here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committeee Inc.
Gold Anti-Trust Action Committeee Inc.
Patrick Heller thinks we may have a comex default in 90 days:
(courtesy Patrick Heller/Liberty gold.)
Patrick Heller thinks we may have a comex default in 90 days:
(courtesy Patrick Heller/Liberty gold.)
Will COMEX Gold Market Fail Within 90 Days?
The COMEX gold market exists as an easy way for investors to take a position in the price of gold without the necessity of having to bother with possession of the physical metal. The contracts traded on this exchange are for 100 ounce gold bars that are deliverable almost exclusively in some future month. Most traders, since they are only investing in the price, pursue one of two options as a contract nears maturity. They might purchase an offsetting contract to close out their position entirely or, if they wish to continue to invest in gold, they might close the contract by trading it for one with a maturity further into the future. Historically, only a tiny percentage of COMEX gold contracts are held to maturity to take delivery of the physical metal.
The COMEX bonded warehouses store gold for two different purposes. Gold bars can be “registered” on the COMEX, which means that the gold is specifically being held for physical delivery to a customer holding a maturing contract. Sometimes investors will use the convenience of COMEX storage but not commit their holdings for delivery against COMEX contracts. Such inventories are classified as “eligible,” which means they could be used to deliver on a maturing COMEX contract, but only if the owner decides to make it available for that purpose. While total COMEX inventories are important, the key figure is only the registered quantities, because only they can be called upon to fulfill maturing contracts.
Total COMEX gold inventories have declined by more than one-third since the beginning of 2013. Registered inventories are now below one million ounces and declining quickly. Many analysts, including me, believe that the significant decline in exchange traded fund gold holdings this year was caused by major gold dealers cashing in shares. The probable reason they have done this is to obtain physical gold to deliver to maturing COMEX contract holders who wanted to take physical possession.
If the COMEX inventories get too low, especially when you consider that there are open COMEX contracts representing a liability of well over 40 million ounces of physical gold, the COMEX allows contracts to be settled by cash payment instead of physical metal. At the rate the registered warehouse inventories are being depleted, there is the very real possibility that all gold contracts may have to be settled for cash before the end of 2013.
At the same time that the influence of the COMEX on the price of physical metals is on the brink of disappearing, activity on the Shanghai Gold Exchange is soaring. The Shanghai Gold Exchange does not deal in paper contracts. Instead, every contract is to be fulfilled by delivering physical gold. For the first six months of 2013, a total of 35 million ounces of physical gold was delivered on this exchange, which is close to 100% of worldwide newly mined gold over that time.
The Shanghai Gold Exchange, by far, delivers the largest amount of physical gold of any market in the world. The London and the New York COMEX markets may trade much larger amounts, but they are almost exclusively dealing in paper contracts.
It probably would not surprise you to know that the gold price on the Shanghai exchange trades at a premium to prices in the London and New York markets. If the Shanghai market was actively traded during the same hours as London and New York, I think it would be supplanting those markets as the reference point used for trading all physical gold. As the COMEX turns largely into a paper and cash market in the coming months, I would not be at all surprised to see the Shanghai Gold Exchange becoming THE market used for pricing physical gold around the world.
Goldcorp reports a massive 1.93 billion second loss on the big writedown on the Penasquito mine in Mexico.
(courtesy toronto's Financial Post)
Goldcorp reports massive US$1.93-billion second-quarter loss on Penasquito impairment
13/07/25
Goldcorp Inc. reported an enormous net loss of US$1.93-billion in the second quarter after taking a big writedown on the Penasquito mine in Mexico.
The news overshadowed disappointing adjusted earnings, though the company maintained its full-year guidance.
The US$1.96-billion writedown reflects the exploration potential of Penasquito, Vancouver-based Goldcorp said. It is the company’s first major impairment charge this year, as it previously avoided the writedowns that have plagued competitors like Barrick Gold Corp. and Kinross Gold Corp…
http://business.financialpost.com/2013/07/25/goldcorp-q2-earnings-penasquito-writedown/
The COMEX gold market exists as an easy way for investors to take a position in the price of gold without the necessity of having to bother with possession of the physical metal. The contracts traded on this exchange are for 100 ounce gold bars that are deliverable almost exclusively in some future month. Most traders, since they are only investing in the price, pursue one of two options as a contract nears maturity. They might purchase an offsetting contract to close out their position entirely or, if they wish to continue to invest in gold, they might close the contract by trading it for one with a maturity further into the future. Historically, only a tiny percentage of COMEX gold contracts are held to maturity to take delivery of the physical metal.
The COMEX bonded warehouses store gold for two different purposes. Gold bars can be “registered” on the COMEX, which means that the gold is specifically being held for physical delivery to a customer holding a maturing contract. Sometimes investors will use the convenience of COMEX storage but not commit their holdings for delivery against COMEX contracts. Such inventories are classified as “eligible,” which means they could be used to deliver on a maturing COMEX contract, but only if the owner decides to make it available for that purpose. While total COMEX inventories are important, the key figure is only the registered quantities, because only they can be called upon to fulfill maturing contracts.
Total COMEX gold inventories have declined by more than one-third since the beginning of 2013. Registered inventories are now below one million ounces and declining quickly. Many analysts, including me, believe that the significant decline in exchange traded fund gold holdings this year was caused by major gold dealers cashing in shares. The probable reason they have done this is to obtain physical gold to deliver to maturing COMEX contract holders who wanted to take physical possession.
If the COMEX inventories get too low, especially when you consider that there are open COMEX contracts representing a liability of well over 40 million ounces of physical gold, the COMEX allows contracts to be settled by cash payment instead of physical metal. At the rate the registered warehouse inventories are being depleted, there is the very real possibility that all gold contracts may have to be settled for cash before the end of 2013.
At the same time that the influence of the COMEX on the price of physical metals is on the brink of disappearing, activity on the Shanghai Gold Exchange is soaring. The Shanghai Gold Exchange does not deal in paper contracts. Instead, every contract is to be fulfilled by delivering physical gold. For the first six months of 2013, a total of 35 million ounces of physical gold was delivered on this exchange, which is close to 100% of worldwide newly mined gold over that time.
The Shanghai Gold Exchange, by far, delivers the largest amount of physical gold of any market in the world. The London and the New York COMEX markets may trade much larger amounts, but they are almost exclusively dealing in paper contracts.
It probably would not surprise you to know that the gold price on the Shanghai exchange trades at a premium to prices in the London and New York markets. If the Shanghai market was actively traded during the same hours as London and New York, I think it would be supplanting those markets as the reference point used for trading all physical gold. As the COMEX turns largely into a paper and cash market in the coming months, I would not be at all surprised to see the Shanghai Gold Exchange becoming THE market used for pricing physical gold around the world.
Goldcorp reports a massive 1.93 billion second loss on the big writedown on the Penasquito mine in Mexico.
(courtesy toronto's Financial Post)
Goldcorp reports massive US$1.93-billion second-quarter loss on Penasquito impairment
13/07/25
Goldcorp Inc. reported an enormous net loss of US$1.93-billion in the second quarter after taking a big writedown on the Penasquito mine in Mexico.
The news overshadowed disappointing adjusted earnings, though the company maintained its full-year guidance.
The US$1.96-billion writedown reflects the exploration potential of Penasquito, Vancouver-based Goldcorp said. It is the company’s first major impairment charge this year, as it previously avoided the writedowns that have plagued competitors like Barrick Gold Corp. and Kinross Gold Corp…
http://business.financialpost.com/2013/07/25/goldcorp-q2-earnings-penasquito-writedown/
Recent media reports in China and Russia suggest that China is continuing to consider backing the yuan with gold.
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