http://www.zerohedge.com/news/2013-08-14/physical-gold-supply-tightness
( for the video , go to the link... )
Submitted by Tyler Durden on 08/14/2013 22:25 -0400
( for the video , go to the link... )
On Physical Gold Supply Tightness
It's been a busy few days for the precious metals... it seems the physical demand is creeping back into paper prices...
Submitted by Michael Krieger of Liberty Blitzkrieg blog,
If the physical gold market is anywhere near as tight as these two market observers indicate, get ready for some serious fireworks in the precious metals markets. The first video is one that has been making the rounds in recent days. It’s an interview with Mihir Dange, co-founder of commodity trading firm Grafite Capital from the NYMEX, in which he discusses Chinese demand, backwardation and physical supply tightness.
The second video is an interview of Tarek El Mdaka, managing director at Kaloti Jewellery Group in Dubai. While it starts off slow, bear with it, as toward the end he states:
“After this drop [in price] we have 90 days order logbook. So we cannot fill the demand we have at this stage.”
http://www.caseyresearch.com/gsd/edition/china-publicized-western-gold-market-rigging-just-hours-after-april-smash
¤ YESTERDAY IN GOLD & SILVER
It was another day where gold chopped sideways in a wide range in rather directionless trading. This state of affairs latest until just before 9:30 a.m. EDT in New York. Then by 10:30 a.m. gold had tacked on fourteen bucks or so, and then worked its way a few dollars higher, closing the electronic session almost on its high of the day.
The low tick [around $1,315 spot] came shortly after 9 a.m. Hong Kong time, and the high tick [$1,337.70 spot] came very late in the New York Access Market.
The gold price closed on Wednesday at $1,336.50 spot, up $15.10 from Wednesday, just about regaining all it lost on Tuesday. Volume, net of August and September, was 128,000 contracts, with a big chunk of that coming before the 10:30 a.m BST London a.m. gold fix.
Here's the New York Spot Gold [Bid] chart on its own, so you can see the most important aspect of the Wednesday trading day, and that was the 1-hour rally in New York starting around 9:20 a.m. EDT.
The silver price began to rally right around the 8 a.m. BST London open, and never looked back. Most of the day's gains were in by minutes after 3 p.m. EDT in electronic trading in New York. After that, it traded basically flat.
I'd guess that the low tick was around $21.25 spot some time during the Hong Kong trading session, and the high tick was recorded by Kitco as $21.99 spot, and that came within an hour of the 5:15 p.m. EDT close of electronic trading.
Silver finished the day at $21.875, up 41.5 cents from Tuesday. Net volume was 39,000 contract but, like gold, a lot of this was of the HFT variety, and , like gold, occurred before the London a.m gold fix.
Platinum got sold down pretty good in Far East and London trading yesterday, but then dug itself out of that hole and closed up a hair on the day. It was pretty much the same chart pattern for palladium as well, but the price action was far more subdued. Here are the charts,
The dollar index closed late Tuesday afternoon in New York at 81.77, and when it opened on Wednesday morning in Tokyo, it traded in a very tight range for the entire day on Planet Earth yesterday, close in New York at 81.71, down 6 basis points. Nothing to see here, folks, please move along.
*****
The CME's Daily Delivery Report showed that one gold and one silver contract were posted for delivery on Friday, and that was it! Checking the preliminary open interest numbers for Wednesday, I note that there are still 1,182 gold contracts open in the August delivery month.
GLD reported receiving some gold yesterday, as an authorized participant deposited 67,614 troy ounces. And as of 11:24 p.m. EDT, there were no reported changes in SLV.
There was no sales report from the U.S. Mint.
Over at the Comex-approved depositories on Tuesday, they reported receiving 99 troy ounces of gold, and shipped 32,365 troy ounces out of the stuff out the door. Virtually all the gold withdrawn was out of the HSBC USA vault. The link to that activity is here.
In silver on Tuesday, these same depositories reported receiving 574,138 troy ounces, and shipped out 191,210 troy ounces. The link to that action is here.
****
Three King World News Blogs
1. Ron Rosen: "Gold and Silver to Skyrocket as Stocks Begin Historic Collapse". 2. Grant Williams: "Singapore Fund Manager - Perfect Storm Now in Gold and Silver". 3. Robert Fitzwilson: "We're Seeing History Being Made in the Gold and Silver Markets".
CFTC war on precious metals schemes snares supposed scam
The U.S. Commodity Futures Trading Commission is keeping up the pressure on Southern Florida companies reportedly involved in multi-million fraudulent precious metals schemes—this time accusing the Worth Group and a brother and sister team of fraud in a scheme involving $73 million in precious metals sales.
The complaint filed Tuesday in the U.S. District Court for the Southern District of Florida claims that, from July 16, 2011, through the present, Worth Group has purported to sell physical gold, silver, platinum and palladium on a fully-paid basis as well as on a finances basis, to hundreds of retail customers throughout the United States.
The complaint alleges that pursuant to the scheme, “Worth took in over $73 million in customer funds between July 18, 2011 and December 31, 2012.” However, the CFTC contends that, although retail customers paid the full purchase price for metals, Worth did not actually deliver metal to most customers from at least Aug. 15, 2011 through Nov. 8, 2012.
Now if the CFTC would be just as diligent by making a move against JPMorgan Chase in that almost-five-year-old silver price management scheme, then I'd really have something to write about. This news item appeared on themineweb.com Internet site yesterday...and it's courtesy of reader Walter Stepko.
Royal Canadian Mint: Gold, Silver Product Demand Is 'Very Strong'
Demand for the Royal Canadian Mint's gold and silver bullion products remains "very strong," said an official from the mint on Wednesday.
"Year-to-date, after the second quarter, we've had record volume for silver Maple Leafs, the greatest we've had in the over 25 years that we've produced them. We've seen near-record volume, only second to 2000, year-to-date, for our gold Maple Leafs," said Chris Carkner, managing director, sales, for bullion, refinery and exchange-traded products at the Royal Canadian Mint.
When the mint released its annual report in May, it also made a special mention of sales volumes for the first four months of 2013, calling demand "aggressive" at the time.
The Northern Hemisphere summer is traditionally a slow time for coin and metal sales, but that's not the case this year, he said. That's following a trend established over the past five to six years where demand holds up. "That's because of the extended bull market," he said.
This must read interview was posted on the Kitco website yesterday...and it's another story courtesy of Ulrike Marx.
John Paulson Dumped Half Of His Gold ETF Holdings
John Paulson's new 13F quarterly regulatory filing is out.
The highlight of the filing is that he's scaled back on his gold position.
At the end of Q2, Paulson held just 10,234,852 shares of SPDR Gold Trust, down from 21,837,552 shares in Q1.
Despite the negative connotations of this article posted over at thebusinessinsider.com Internet site very early yesterday evening EDT, it will be Paulson who has the last laugh before all is said and done. This is another contribution from reader M.A.
Gold Smuggling to Climb in India on Tax Increase, Festivals
The third increase in import taxes on gold this year by India, the world’s biggest user, is set to boost smuggling ahead of the festival and wedding seasons as official imports halt on central bank curbs, a trade group said.
Gold premiums in India have jumped to a record after banks and traders suspended imports since the Reserve Bank of India made it mandatory on July 22 for shippers to set aside 20 percent of shipments for re-export as jewelry and the increase in tariff to 10 percent from 8 percent will further crimp supplies, said Haresh Soni, New Delhi-based chairman of the All India Gems & Jewellery Trade Federation.
“Smuggling of gold will increase and the organized industry will be in disarray,” said Soni, whose federation represents about 300,000 jewelers and bullion dealers. “Goods will be kept unofficially and the situation will be uncontrollable. Jewelry prices will rise.”
India increased taxes on imports of gold, silver and platinum yesterday to tackle a record current-account deficit that’s weakened the rupee to an all-time low. Overseas purchases surged 87 percent to 383 metric tons in the four months through July from a year earlier after a slump in bullion prices spurred demand for jewelry, bars and coins. Increased smuggling may undermine government’s efforts to curb demand and hurt sales at retailers including Bangalore-based Titan Industries Ltd.
This Bloomberg news item was posted on their website very early yesterday morning Denver time...and it's another contribution from Ulrike Marx.
China publicized Western gold market rigging just hours after April smash
On April 16, just hours after the smashing of the gold price by the dumping of so much gold and gold futures that it could have been instigated only by Western central banks, the Chinese government news agency China Network Television appears to have published a long commentary reasserting China's awareness of the constant efforts of Western central banks to rig the gold market by leasing gold.
What seems to be the new Chinese government press commentary, posted this week by the blogger Koos Jansen at his Internet site, also notes the difficulty of the German Bundesbank in retrieving the gold it has vaulted at the Federal Reserve Bank of New York. An Internet translation of the Chinese commentary that has been posted by Jansen is, predictably enough, largely incoherent, Chinese requiring a lot more massaging into English than computer programs can yet do well, but the translation is enough to show that China is scrutinizing the gold market, is familiar with the latest developments and details, and long has known exactly what is going on.
Indeed, it may be suspected that China actually cooperated with the Western central banks' smashing of the gold price in April on the understanding that China then could join in the purchase of sharply discounted gold unloaded by panicked Western investors. The Chinese government also may have chosen April 16 to publicize Western gold price suppression to a domestic audience so that its own people would not be panicked out of their own gold. Of course the Chinese were panicked only into besieging gold shops to get still more metal.
This commentary by GATA's Chris Powell was posted on their Internet site yesterday...and is definitely a must read...as are all the links he provides. This should keep you off the streets for a while.
¤ THE WRAP
What’s so intriguing about the discovery of the gold market corner is that the evidence is so simple and compelling that the regulators may be forced to do something radical, like address it. I won’t set odds on that happening, as we all know they are very low. But neither are they non-existent, and any move by the regulators (or JPMorgan on its own) to dissipate the gold market corner would seem to mesh with JPM not adding additional silver short contracts. I may be grasping at straws in hoping for that outcome, but I’m not grasping at anything in identifying that JPM’s behavior on the next rally will determine silver’s price fate. - Silver analyst Ted Butler, 14 August 2013
The gold price managed to gain back just about everything it lost on Tuesday, and the precious metal equities gained back all their loses and more. It's not possible to read much into yesterday's price action, but I am of the opinion that the high-frequency traders are in this market 24/7 to ensure that these rallies in the precious metals don't raise too much excitement. The one percent rule that Bill Murphy over at lemetropolecafe.com has been talking about for years, was certainly in effect in yesterday's price action, as the gold price was only allowed to rise a percent.
Gold has now closed above its 50-day moving average for three consecutive days, and in silver, it's been four consecutive days. One has to wonder how long it will be before those technical funds holding record short positions will finally race to cover, and as I go on about in this column every day, who will be selling to them on the way up?
And even more to the point, who has been selling to these short holders that have been covering during the last reporting week? We'll find out more tomorrow when the COT Report puts in an appearance.
There's not a thing in this current rally that hints that JPMorgan Chase is going to put their hands in their pockets and let prices rip to the upside. It seems to me that if they were going to follow that strategy, they would have started last week when this rally got underway. However, there's still time left if they wish to follow that route.
All you can do, dear reader, is wait it out and see what happens, and that's precisely what I'm doing at the moment.
All four precious metals showed signs of life in morning trading in the Far East on their Thursday, but it didn't amount to much, or wasn't allowed to mount to much, you choose. And as I type this paragraph, the London market has been open for about forty-five minutes. Volumes are pretty chunky in both gold and silver, and all four precious metals are slightly above their Wednesday closing prices in New York. The dollar index is down about 16 basis points.
And as I hit the 'send' button on today's effort at 5:15 a.m. EDT, nothing much has changed in gold, it's up about three bucks, but silver, platinum and palladium are up about a percent each. Volumes are way up there once again. Gold's gross volume is around 37,000 contracts, and silver's net volume is a bit over 13,000 contracts. As is always the case, a large chunk of this volume is of the HFT variety. The dollar index is now down about 21 basis points.
I haven't any idea what will happen in New York trading today, but it's a good bet that whatever major price action occurs today, it will happen during the Comex trading session.
*****
I hope your day goes well, and I'll see you here tomorrow.
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