http://www.caseyresearch.com/gsd/edition/mike-maloney-hidden-secrets-of-money...the-seven-stages-of-empire
Registered (deliverable) gold on the COMEX fell to a new low as JPM took delivery of 28,809 ounces from Scotia Mocatta.
There were a few transfers from the Eligible to Registered category with the only one of note being 4,605 ounces at Scotia Mocatta.
This is activity that occurred on Thursday. We will have the information on Friday next week. Let's see if the higher prices have shaken any more gold loose from weaker hands.
Next week we will see an option expiry on the COMEX for the precious metals on Tuesday, and the end of the August delivery period on Friday.
The 'owners per ounce' remains very high at a little over 48 potential claims for every ounce of gold in the registered (deliverable) category. It will take higher prices to move more of the gold from 'eligible,' or stored in an approved COMEX warehouse, to 'registered,' or available for delivery.
Although it remains fairly stable at around 7 million ounces, the drop in total gold from all categories in all COMEX warehouses from over 11 million ounces at the beginning of the year is stunning. It takes a bit of work to get that gold back into the system. And much of it seems to have headed to other shores, and may not be coming back at any price.
I think that in their arrogance and greed, the gold cartel may have gone a bit too far in their latest pricing gambit, and painted themselves into a corner. Higher prices may cause more accumulation of physical bullion by the ETFs, and nothing seems to halt the strong demand for physical bullion from Asia. The writing is on the wall.
Weighed, and found wanting.
Stand and deliver.
¤ YESTERDAY IN GOLD & SILVER
Gold did virtually nothing price wise until minutes before the London a.m. gold fix. At that point the price started to move sharply higher, and once the "fix was in" the gold price was up to $1,395 spot by 10:30 a.m. EDT. From that point it traded basically flat, but began to slowly inch higher once Comex trading was done for the day at 1:30 p.m.
For a few minutes, the gold price actually poked its nose above the $1,400 spot price mark, but quickly got sold back below it, and from there traded sideways into the close. Kitco reported the high tick as $1,401.40 spot.
Gold finished the Friday session at $1,397.80 spot, up $21.70 from Thursday's close. Volume, net of August and September, was a very chunky 171,000 contracts, so this rally did not go unopposed.
It was more or less the same story in silver, except for the fact that there were two rallies of note during the New York trading session, the one right after the London p.m. gold fix, and the second one after Comex trading ended for the day. The 2:20 p.m. EDT high tick checked in at $24.24 spot.
Obviously the silver price got sold down a bit from there, but still manged to close above the magic $24 spot price mark, at $24.08. Net volume was pretty high at 50,500 contracts.
****
The dollar index opened on Friday in Far East trading at 81.48 and proceeded to chop sideways in a very tight range. The spike high [81.66] came minutes after 9 a.m. in New York, and from there headed south in a hurry, hitting its nadir of 81.23 around 10:40 a.m. EDT. The dollar nose dive and the price rally in gold happened more or less at the same time, but to say that the currency move caused the big rallies in gold and silver at the time, is more than a stretch, especially when you consider that it had zero impact on either platinum or palladium.
******
The CME's Daily Delivery Report showed that 72 gold and 9 silver contracts were posted for delivery within the Comex-approved depositories on Tuesday. Canada's Bank of Nova Scotia was the short/issuer on 65 of those gold contracts, and as you probably already suspect, it was JPMorgan Chase in its in-house [proprietary] trading account that took delivery of 64 of them. JPMorgan Chase was also the short/issuer on all 9 silver contracts. The link to yesterday's Issuers and Stoppers Report is here.
There was a pretty large amount of gold deposited in GLD yesterday, as an authorized participant[s] added 212,482 troy ounces. And as of 10:05 p.m. on Friday evening, there were no reported changes in SLV. It's a good bet that the reason no silver is being added is because there just isn't any available for the authorized participants to buy without sourcing it on the Comex and driving the price to the moon and the stars. Since the silver isn't available, the authorized participants [read JPMorgan] is shorting SLV shares in lieu of depositing the metal.
Without a doubt, Ted Butler will have more to say about this situation in his weekly review for his paying subscribers later today.
There was no sales report from the U.S. Mint yesterday.
Over at the Comex-approved depositories on Thursday, the only activity was a 20,809 troy ounce of gold transfer from Canada's Bank of Nova Scotia to the vaults of JPMorgan Chase. This is just more gold that JPMorgan is finally taking delivery of in the physical form, and is a direct reflection of what's being reported in the CME's Daily Delivery Report four paragraphs up from this one.
Its the August delivery month for gold, and those entities [including that paragon of virtue, JPMorgan Chase] that have stood for delivery in the Comex futures market, are now doing exactly that, and what you're observing is the natural order of things. There's nothing mysterious or illegal about this process, but you'd never know it if you read the breathless tripe that passes as gospel, and posted yesterday on the Zero Hedge website yesterday.
Anyway, the link to yesterday's action in gold, is here.
In silver, these same depositories reported receiving 371,193 troy ounces of silver, and shipped a smallish 80,010 troy ounces out the door. The link to that activity ishere.
As expected the Commitment of Traders Report showed deterioration in the Commercial net short positions in both gold and silver. That was the bad news.
The good news was that the deterioration wasn't anywhere nears as bad as either Ted or I expected it was going to be, particularly in silver
In silver, the Commercial net short position increased by only 3,000 contracts. Under the hood, it was slightly worse as Ted Butler said the technical funds covered about 5,000 of their short contracts, and the Big 4 increased their short position by about 700 contracts. It could have been far worse.
In gold the technical funds covered about 10,000 contracts of their short position, and all the selling was done by JPMorgan Chase, which sold about 11,000 of their long contracts. Ted says that JPMorgan is down to a long position of 6.6 million ounces, or around 20 percent of the entire Comex futures market in gold on a net basis.
I'll have more to say about this in The Wrap at the bottom of today's column.
*****
Selected news and views.....
Moody’s considers downgrading top U.S. banks
Moody's has warned that it could cut the credit ratings of the six biggest US banks, saying the federal government may be less likely to bail them out if they got into trouble in the future.
Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo could be downgraded, the rating agency said on Thursday. The ratings of Bank of America and Citigroup are also under review, but with "direction uncertain", Moody's said.
The review by the second-largest rating agency in terms of market share follows a similar statement from rival Standard & Poor's in June, and comes as governments are reshaping the regulation of banking and trying to prevent a repeat of the bailouts of the credit crisis era.
This story is a reprint from the Financial Times of London...and was posted on the CNBC website shortly after midnight EDT yesterday. I thank Ulrike Marx for her second offering in today's column.
IMF's Lagarde Pleads: Fed Tapering Will Be 'Arduous' on Global Economy
The head of the International Monetary Fund cautioned the world's major central banks Friday not to withdraw their unconventional support for weak economies too soon. IMF Managing Director Christine Lagarde said stimulative policies are still needed in key regions, especially Europe and Japan, which have struggled with prolonged weakness.
Lagarde and many global central bank officials fear the increased risks of a sharp economic slowdown in emerging markets while the U.S. Federal Reserve is signaling that it could slow its bond purchases later this year if the U.S. economy continues to improve. The Fed's bond buying has helped keep U.S. interest rates near record lows.
“Even if managed well,” Lagarde said of a central bank’s exit from easy-money policies, that could still present an “arduous obstacle course” for other countries. Lagarde said what’s needed is greater policy coordination and cooperation for the sake of the entire globe.
Translation: "Ben, if you stop printing, we're all screwed." This article was posted on the newsmax.com Internet site yesterday evening...and I thank Roy Stephens for his first contribution to today's column.
Lagarde and many global central bank officials fear the increased risks of a sharp economic slowdown in emerging markets while the U.S. Federal Reserve is signaling that it could slow its bond purchases later this year if the U.S. economy continues to improve. The Fed's bond buying has helped keep U.S. interest rates near record lows.
“Even if managed well,” Lagarde said of a central bank’s exit from easy-money policies, that could still present an “arduous obstacle course” for other countries. Lagarde said what’s needed is greater policy coordination and cooperation for the sake of the entire globe.
Translation: "Ben, if you stop printing, we're all screwed." This article was posted on the newsmax.com Internet site yesterday evening...and I thank Roy Stephens for his first contribution to today's column.
Doug Noland: All the Makings for a Major Top
The excesses from 1999 set the backdrop for a major market Bubble top in early-2000. Yet the late-nineties Bubble was relatively contained, chiefly impacting a narrow group of stocks, the technology sector and only a segment of the U.S. and global economy. The now well-entrenched “global government finance Bubble” has become deeply systemic in the U.S. and abroad. The Bubble essentially enveloped all risk market and myriad strategies. It has fueled conspicuous speculative excess in risky strategies. It has, as well, fueled unappreciated excesses throughout perceived low-risk strategies.
The Bubble has spurred excessive issuance and mis-pricing in high-risk junk bonds, leveraged loans and risky municipal debt. It has also spurred massive over-issuance of perceived high-quality Treasury securities and “money-like” debt instruments. It has spurred a boom in perceived liquid and low-risk ETF products, funds that loaded up on illiquid securities as “money” flooded in. It has fueled record assets in hedge funds and sovereign wealth funds. It has spurred incredible concentration of assets in the hands of a group of sophisticated financial operators most adept at playing policy-driven speculative markets.
As an analyst of Bubbles, I readily admit it is impossible to accurately predict the timing of their demise. Even in hindsight, I have no idea why technology stocks put in Bubble highs in March of 2000. It’s not clear why stocks peaked again when they did in 2007. It’s never been clear to me why the U.S. equities Bubble cracked when it did in late-1929. But all those major market tops were put in after speculative market melt-ups pushed the divergence between inflated securities price Bubbles and deteriorating fundamentals to precarious extremes. And all three speculative melt-ups were fueled in part by powerful short squeezes, squeezes made possible by traders shorting securities in response to deteriorating fundamental backdrops. A similar environment exists for a major top in 2013.
Doug Noland's weekly Credit Bubble Bulletin always falls in the must read category for me...and this one is no exception. I thank reader U.D. for sharing it with us.
The Bubble has spurred excessive issuance and mis-pricing in high-risk junk bonds, leveraged loans and risky municipal debt. It has also spurred massive over-issuance of perceived high-quality Treasury securities and “money-like” debt instruments. It has spurred a boom in perceived liquid and low-risk ETF products, funds that loaded up on illiquid securities as “money” flooded in. It has fueled record assets in hedge funds and sovereign wealth funds. It has spurred incredible concentration of assets in the hands of a group of sophisticated financial operators most adept at playing policy-driven speculative markets.
As an analyst of Bubbles, I readily admit it is impossible to accurately predict the timing of their demise. Even in hindsight, I have no idea why technology stocks put in Bubble highs in March of 2000. It’s not clear why stocks peaked again when they did in 2007. It’s never been clear to me why the U.S. equities Bubble cracked when it did in late-1929. But all those major market tops were put in after speculative market melt-ups pushed the divergence between inflated securities price Bubbles and deteriorating fundamentals to precarious extremes. And all three speculative melt-ups were fueled in part by powerful short squeezes, squeezes made possible by traders shorting securities in response to deteriorating fundamental backdrops. A similar environment exists for a major top in 2013.
Doug Noland's weekly Credit Bubble Bulletin always falls in the must read category for me...and this one is no exception. I thank reader U.D. for sharing it with us.
Has Eric Holder Found Wall Street’s Nightmare?
Why didn’t the U.S. Justice Department get someone like Leslie Caldwell years ago when it needed her?
Caldwell, a partner at the New York law firm Morgan Lewis & Bockius LLP, is the former prosecutor who led the Justice Department’s Enron Task Force from 2002 to 2004, which resulted in criminal prosecutions of 36 defendants after the Houston energy-trading company collapsed. She is now the lead candidate to become chief of the department’s criminal division, succeeding the rather passive Lanny Breuer, who left in March to return to the white-shoe law firm Covington & Burling LLP. Caldwell, 55, is in the final stages of the vetting process, Bloomberg News reported this week.
The Enron team’s record under Caldwell wasn’t perfect, of course. Yet when the country needed a seasoned prosecutor to bring tough cases and help restore investor confidence after a wave of accounting scandals, she and her squad performed admirably. Enron’s former chief financial officer, Andrew Fastow, pleaded guilty to fraud charges shortly before Caldwell stepped down as the task force’s director in March 2004. His testimony later helped prosecutors win guilty verdicts against former Enron Chief Executive Officers Jeffrey Skilling and Ken Lay.
In July 2002, after the telecommunications giant WorldCom Inc. imploded, President George W. Bush created a new corporate-fraud task force that went far beyond Enron. It resulted in almost 1,300 convictions, which included about 200 CEOs and corporate presidents and more than 50 CFOs.
This op-ed piece by Jonathan Weil was posted on the Bloombergwebsite on Thursday afternoon MDT. My thanks go out to Washington state reader S.A. for sending it our way.
Paul Craig Roberts: Gangster State US/UK
It is fashionable in the US and UK governments and among their sycophants to speak of “gangster state Russia.” But we all know who the gangsters are. The worst criminals of our time are the US and UK governments. Both are devoid of all integrity, all honor, all mercy, all humanity. Many members of both governments would have made perfect functionaries in Stalinist Russia or Nazi Germany.
This is extraordinary. It was the English who originated liberty. True, in 1215 it was the freedom of the barons’ rights from the king’s infringement, not the freedom of the commoner. But once the principle was established it spread into the entire society. By 1680 the legal revolution was complete. The king and the government were subject to law. The king and his government were no longer the law and above the law.
In the 13 colonies the Englishmen who populated them inherited this English achievement. When King George’s government refused the colonies the Rights of Englishmen, the colonists revolted, and the United States was born.
The descendants of these colonists now live in an America where their Constitutional protections have been overthrown by a tyrannical government that claims it is above the law. This raw fact has not stopped the US government or its puppets from continuing to cloak the war crime of military aggression in the faux language of “bringing freedom and democracy.” If the Obama and Cameron governments were in the dock at Nuremberg, the entirety of both governments would be convicted.
Although controversial, Paul is right on the money with this essay, which was posted on his Internet site on Wednesday...awaiting a spot in today's column. I consider it a must read, especially for all my U.S. subscribers...and I thank reader Ken Hurt for his second contribution to today's column.
Brazilian Currency Surges After Central Bank Launches Intervention Program to Stop the Bleeding
The Brazilian real has been one of the hardest-hit currencies in the sell-off that has gripped emerging markets this summer in response to rising Treasury yields in the United States.
Since May 2, the day before the big sell-off in the Treasury market started and sent yields soaring, the real is down 15% against the dollar.
Thursday, the Central Bank of Brazil (BCB) launched a program of intervention into foreign exchange markets to stem the depreciation of the Brazilian real, and so far, it appears to be having its exact intended effect on the currency.
This short story appeared on the businessinsider.com Internet site during the New York lunch hour yesterday...and if you don't want to read the article itself, the embedded chart is worth a quick look. I thank Roy Stephens for bringing it to our attention.
Argentina Just Lost Huge To A Bunch Of Hedge Fund Creditors, And The Judge Was Brutal About It
Argentina just lost its appeal to continue refusing to pay a group of hedge fund managers, led by Paul Singer, $1.6 billion worth of sovereign debt dating back to its $95 billion default in 2001.
For years the country has been trying to avoid paying a bunch of "vulture" hedge fund managers that refused to take a 70% haircut on Argentine bonds like every other investor. This has resulted in some wacky news items — Paul Singer getting the government of Ghana to impound an Argentine naval ship last October, President Cristina Fernandez de Kirchner flying commercial to see the Pope so her jet isn't taken — you get the idea.
For years the country has been trying to avoid paying a bunch of "vulture" hedge fund managers that refused to take a 70% haircut on Argentine bonds like every other investor. This has resulted in some wacky news items — Paul Singer getting the government of Ghana to impound an Argentine naval ship last October, President Cristina Fernandez de Kirchner flying commercial to see the Pope so her jet isn't taken — you get the idea.
Now it's (almost) come to a head. A New York Judge fully rejected Argentina's appeal of a decision made last year — a decision that would've had it pay Singer and company in full. Argentina wanted to be able to pay hedge funds that restructured debt without making a payment to Singer (the "vulture"), and yet again that idea has been given a massive thumbs down.
This very short story is right out of the top drawer of the "You can't make this stuff up" filing cabinet. It was posted on thebusinessinsider.com Internet site early yesterday afternoon EDT...and I thank Roy Stephens for his third contribution to today's column.
Washington frets over Saudi ties
As the administration of President Barack Obama continues wrestling with how to react to the military coup in Egypt and its bloody aftermath, officials and independent analysts are increasingly worried about the crisis's effect on US ties with Saudi Arabia.
The oil-rich kingdom's strong support for the coup is seen here as having encouraged Cairo's defense minister General Abdul Fattah al-Sisi to crack down on the Muslim Brotherhood and resist Western pressure to take a conciliatory approach that would be less likely to radicalize the Brotherhood's followers and push them into taking up arms.
Along with the United Arab Emirates and Kuwait, Saudi Arabia did not just pledge immediately after the July 3 coup that ousted president Mohamed Morsi to provide a combined US$12 billion in financial assistance, but it has also promised to make up for any Western aid - including the $1.5 billion with which Washington supplies Cairo annually in mostly military assistance - that may be withheld as a result of the coup and the ongoing crackdown in which about 1,000 protesters are believed to have been killed to date.
This Asia Times story was posted on their website yesterday...and it's the final contribution to today's column from Ulrike Marx. It'sworth reading, as you don't find such in-depth reporting in any main-stream media outlet that I know of.
The oil-rich kingdom's strong support for the coup is seen here as having encouraged Cairo's defense minister General Abdul Fattah al-Sisi to crack down on the Muslim Brotherhood and resist Western pressure to take a conciliatory approach that would be less likely to radicalize the Brotherhood's followers and push them into taking up arms.
Along with the United Arab Emirates and Kuwait, Saudi Arabia did not just pledge immediately after the July 3 coup that ousted president Mohamed Morsi to provide a combined US$12 billion in financial assistance, but it has also promised to make up for any Western aid - including the $1.5 billion with which Washington supplies Cairo annually in mostly military assistance - that may be withheld as a result of the coup and the ongoing crackdown in which about 1,000 protesters are believed to have been killed to date.
This Asia Times story was posted on their website yesterday...and it's the final contribution to today's column from Ulrike Marx. It'sworth reading, as you don't find such in-depth reporting in any main-stream media outlet that I know of.
Three King World News Blogs
1. Eric Sprott [#1]: "How Investors Can Make 3,000% in One Year". 2. Egon von Greyerz: "Here is the Road Map to $10,000 Gold and $500 Silver". 3. Eric Sprott [#2]: "World to Witness a Frightening Collapse".
Swap your gold shares for coins, ETF firm offers
Index fund provider ETF Securities has teamed up with Government-owned coin maker Royal Mint to offer investors with shares in its leading exchange traded fund Gold Bullion Securities the option of cashing in shares for physical bullion coins.
Exchange traded funds have mushroomed in recent years as a highly popular way for private investors to own gold. Real holdings of gold, stored in bank vaults, are represented by shares which trade daily on the London Stock Exchange. This makes it possible for investors to buy and sell cheaply – and in relatively small quantities.
Investors can choose to receive Britannias or Sovereigns, at a cost of 4.5pc per transaction. Britannias are made from one troy ounce and minted from 22 carat gold, while Sovereigns weigh just under a quarter a troy ounce.
But the barriers to entry are high. Investors must stump up £8,250 – which equates to 109 shares in Gold Bullion Securities – to purchase a tube containing 10 Britannias. A tube of 25 Sovereign coins is cheaper at £4,800. There is no tax to pay on the switch, ETFS says.
This gold-related news item was posted on the telegraph.co.ukInternet site early Thursday evening BST...and I found it buried in a GATA release yesterday.
¤ THE WRAP
There are no market anymore, only interventions. - Chris Powell, GATA
*****
I was astonished and very happy with what I saw when I turned on my computer yesterday morning. That, coupled with a not-as-bad-as-expected Commitment of Traders Report, makes me believe that this rally really does have some legs after all.
I took a peek a the CME's preliminary volume and open interest numbers for Friday's price action, and gold's open interest was up less than 4,000 contracts, and silver's o.i. change was flat. These were numbers I wasn't expecting, to see. However, as I've stated before, I've learned from hard experience that these numbers can't be taken at face value, and it's only the final numbers that will show up in next week's COT Report that can be believed. It seems like I'm always anxiously waiting for the next COT report by the time I've devoured the latest one, with yesterday's COT Report being a case in point.
Over the last couple of weeks JPMorgan Chase has been selling part of their massive Comex long position in gold into this rally in order to keep prices from rising too quickly. I was sort of hoping that they would really let prices rip to the upside at some point, but that hasn't happened yet, as everything to date has been very orderly, for now, that is.
Here are the six-month charts for both gold and silver. As you can see from the silver chart, the RSI is well into overbought territory, and gold's RSI is heading in that direction at a good clip as well. As I've said on several occasions recently, it really is a mug's game trying to guess what happens from day to day, but it appears likely that we'll see substantially higher prices in all four precious metals before the 2013 calendar year breathes its last.
(Click on image to enlarge)
Next week is the last week of deliveries in the August delivery month for gold. There are still 572 gold contracts left open, and as I said yesterday, it will be interesting to see who the short/issuer is that has waited until the last possible moment to announce their presence.
Next week is also the last trading week of the month, and it's very possible that there could be more price surprises in store for us then, as well. First notice day for the September delivery month in silver will be posted on the CME's website late Thursday evening, and I'll have all the details for you in next Friday's column.
***
That it for the day, and for the week.
See you Tuesday.
24 AUGUST 2013
COMEX Registered Gold Falls To a New Low As JPM Takes a Large Delivery From Scotia Mocatta
There were a few transfers from the Eligible to Registered category with the only one of note being 4,605 ounces at Scotia Mocatta.
This is activity that occurred on Thursday. We will have the information on Friday next week. Let's see if the higher prices have shaken any more gold loose from weaker hands.
Next week we will see an option expiry on the COMEX for the precious metals on Tuesday, and the end of the August delivery period on Friday.
The 'owners per ounce' remains very high at a little over 48 potential claims for every ounce of gold in the registered (deliverable) category. It will take higher prices to move more of the gold from 'eligible,' or stored in an approved COMEX warehouse, to 'registered,' or available for delivery.
Although it remains fairly stable at around 7 million ounces, the drop in total gold from all categories in all COMEX warehouses from over 11 million ounces at the beginning of the year is stunning. It takes a bit of work to get that gold back into the system. And much of it seems to have headed to other shores, and may not be coming back at any price.
I think that in their arrogance and greed, the gold cartel may have gone a bit too far in their latest pricing gambit, and painted themselves into a corner. Higher prices may cause more accumulation of physical bullion by the ETFs, and nothing seems to halt the strong demand for physical bullion from Asia. The writing is on the wall.
Weighed, and found wanting.
Stand and deliver.
Follow the trend.........
Chris Martenson: An unapocalyptic explanation for negative GOFO
Submitted by cpowell on Sat, 2013-08-24 18:26. Section: Daily Dispatches
2:24p ET Saturday, August 24, 2013
Dear Friend of GATA and Gold:
Market analyst Chris Martenson writes today that negative gold forward offered rates (GOFO) may be less an indicator of imminent defaults in the gold market than a product of a record-low London Interbank Offered Rate (LIBOR) combined with increased hedging (and futures shorting) of gold by mining companies. Martenson says he isn't disputing that gold supply may be tight but rather disputing suggestions that the apocalypse has arrived for the gold market. His commentary is posted at his Internet site, Peak Prosperity, here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Gold Anti-Trust Action Committee Inc.
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