Monday, August 19, 2013

Gold and Silver news , data and views - BTW , Germany recognizes Bitcoin as a legal currency August 19 , 2013 .... Good posts from Jesse Crossroads cafe , Harvey Organ snippets , Gata items of note.....

http://jessescrossroadscafe.blogspot.com/2013/08/gold-daily-and-silver-weekly-charts_19.html


19 AUGUST 2013


Gold Daily and Silver Weekly Charts - Goldman Was Buying Gold While They Were Saying 'Sell?'


Gold and silver had quiet pullbacks today as the markets digested some of their recent gains.

Overall trading is very quiet as many traders are on their summer vacations.

Registered inventory bounced back up a little bit last week, but remains rather thin and indicative of an intermediate trend change.

A reader informs us that:
"For those with a bloomberg terminal, type up the command: {GLD Equity PHDC1 } ... GS bought $5b USD of GLD last quarter, while they were pitching their "sell gold" call to the world."


Export stats confirm massive outflow of Western gold to Asia, 

maybe ETF gold

Submitted by cpowell on Mon, 2013-08-19 19:30. Section: 
UK Gold Exports Surge Tenfold This Year
By Jack Farchy
Financial Times, London
Monday, August 19, 2013
The UK's gold exports have surged nearly tenfold this year as investor selling drives the bullion out of London vaults into the hands of Asian consumers.
UK gold exports to Switzerland, the hub of the gold refining industry, leapt to 798 tonnes in the first six months of the year, up from just 83 tonnes in the first half of 2012, according to data from Eurostat, the European Union's statistics office.
The exports -- worth E29 billion and equivalent to nearly 30 per cent of global annual mine production -- underscore the scale of the shift in gold ownership taking place as Western investors lose their enthusiasm for the metal.
The UK has no commercial-scale gold mines, but London is the centre of the global gold market, with bankers estimating that some 10,000 tonnes are held in the city's vaults, including at the Bank of England, largely by investors and central banks.
Large-scale selling by investors triggered a 26 per cent slide in gold prices from the start of the year to a near three-year low of $1,180 a troy ounce in June.
The price fall has stimulated a huge increase in demand in Asia, particularly China, whose gold association reported a 54 per cent increase in demand in the first half of the year.
Matthew Turner, precious metals analyst at Macquarie, said the rise in gold exports had closely tracked outflows of the metal from exchange-traded funds, a popular investment product which helped to popularise gold when they were launched a decade ago.
"If investors don't want the gold, it has to go somewhere else," said Mr Turner. "The Chinese are simply willing to pay more for it."
The large-scale shift of gold out of Western trading hubs toward Asia has led to a spike in business for traders and refiners.
The London Bullion Market Association said that the daily cleared trading volume on the London market by its members hit a 12-year high of 900 tonnes -- worth $39 billion -- in June on the back of "strong physical demand particularly from China and India."
At the same time Swiss gold refiners, such as Metalor, Pamp, Valcambi, and Argor-Heraeus, have enjoyed a boom, melting down large 400-ounce bars from London vaults and reprocessing them into smaller products that are preferred by Asian buyers.
"The Swiss are running three or four shifts to keep the refineries going non-stop. They're throwing bodies at it," said one senior gold trader.
Gold prices touched a two-month high of $1,384 a troy ounce on Monday amid hopes that the recent wave of investor selling was beginning to slow.


Germany plans tax on bitcoin after virtual currency is recognized as 'private money'

Submitted by cpowell on Mon, 2013-08-19 19:54. Section: 
From The Telegraph, London
Monday, August 19, 2013
The German Finance Ministry ruled that bitcoin is a "unit of account" and therefore "mining" them is a form of "money creation."
This means that, like stocks or shares, any profit from them is subject to Germany's capital gains tax, at 25 percent -- unless they are held for more than a year, according to German newspaper Frankfurter Allgemeine Zeitung.
However, the ruling may prove difficult to enforce, as Bitcoin are traded anonymously, and therefore cannot be traced.
In June, America's Internal Revenue Service (IRS) said it was examining the use of virtual currencies such as bitcoins amid fears that Americans are using them to evade taxes.
In the future, taxpayers could be forced to disclose to the IRS whether they are using PayPal accounts for the virtual transfer of money, according to Victor Lessoff, director of the IRS.
Last month Thailand became the first country to ban bitcoins after the central bank ruled it is not a currency.
The ruling means it is illegal to buy and sell bitcoins, buy or sell any goods or services in exchange for bitcoins, send any bitcoins to anyone outside of Thailand, or receive bitcoins from anyone outside the country.
Launched in 2009 in the wake of the global financial crisis, bitcoins are "mined" using complex computer source code. The virtual currency started as a relatively niche method of payment, devised by an anonymous programmer, but can now be used for anything from online gambling to pizza delivery.


Zero Hedge: Does the basement gold vault go too when JPM sells its NYC headquarters?

Submitted by cpowell on Sun, 2013-08-18 17:33. Section: 
1:31p ET Sunday, August 18, 2013
Dear Friend of GATA and Gold:
Noting a Bloomberg News report that JPMorganChase plans to sell its headquarters building in New York, Zero Hedge today wonders what is to become of the huge gold vault in the building's basement.
While JPMorganChase announced last month that it planned to leave the commodities business, the company suggested, according to the Financial Times, that it would continue trading and vaulting gold and silver:
Of course if the gold vault is to be sold along with the headquarters building, questions arise. Zero Hedge poses them:
"Is JPM set to fully and completely exit the precious metals vertical which it inherited when it was handed Bear Stearns on a $10 platter (together with the now-defunct firm's legacy short positions)? If so, is it also in the process of unwinding any and all legacy precious metals exposure including rumored 'whale-sized' shorts in the paper silver and/or gold axes, and what happens to the price of silver and gold when a massive stock position becomes 'flow' in the other direction (i.e., short covering)?
"... If indeed JPM is getting out of Dodge, is there some hope that a semblance of normalcy will return to a market best known for the AM-PM closing fix arbitrage, as well as the occasional bid stack take-out slam and close (and open) banging? Or will the buyer of the building, and vault, be none other than the Federal Reserve, which will merely take this opportunity to merge its own and the world's largest commercial gold vaults, which just happen to be located next to each other and connected by tunnel deep below the ironically named Liberty Street?"
The Zero Hedge commentary is headlined "JPMorgan Is Selling the Building that Houses Its Gold Vault" and it's posted here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.


India's war on gold fails to protect the rupee, which keeps plunging

Submitted by cpowell on Mon, 2013-08-19 12:39. Section: 
But maybe it's still protecting the U.S. dollar.
* * *
India's Efforts Fail to Prevent New Rupee Low
By James Crabtree and Josh Nobel
Financial Times, London
Monday, August 19, 2013
India and Indonesia appeared trapped in a race to the bottom on Monday, as both the rupee and the rupiah fell sharply against the US dollar, prompting a selloff in equities.
The Indian rupee continued its relentless decline, hitting the latest in a series of all-time lows against the US dollar and dashing hopes the government had succeeded in calming the country's unsettled financial markets.
The currency touched a new low of Rs62.70 around lunchtime, dropping below its previous lowest level set during a dramatic day of stock market falls on Friday, down by roughly 1.7 per cent from its previous close. On Monday the benchmark Sensex index of shares dropped a further 2.3 per cent.

The Indonesian rupiah fell some 2 per cent, sparking a 5.6 per cent drop in the country's main equity market. Data released on Friday by the country's central bank showed that Indonesia's current account deficit widened sharply in the second quarter to 4.4 per cent of gross domestic product.
Like India, Indonesia relies on foreign capital to fund its deficits. But global investors have been pulling back from emerging markets since May, amid expectations the US could soon start reversing its ultra-loose monetary policy.
The Indian rupee has now overtaken the Australian dollar and the Japanese yen to become Asia’s worst performing currency this year, having fallen 12 per cent against the US dollar. Globally, only the Brazilian real and the South African rand have recorded bigger declines.
The fresh currency falls also increased pressure on the debt markets. Yields on India's 10-year debt spiked above 9 per cent for the first time since late 2011, while Jakarta's cost of borrowing jumped 18 basis points to the highest level since March 2011.
A series of interventions by the Reserve Bank of India in recent weeks aimed at protecting the rupee have seen India's bond yields surge, from just above 7 per cent in May, but have not succeeded in stemming the rupee’s fall.
Over the weekend a range of senior figures including Prime Minister Manmohan Singh tried to calm investor fears that the country's mixture of weakening growth and an unsustainable current account gap was pushing India’s economy towards a crisis point.
Notably, officials ruled out capital controls on foreign investors, following a series of limited regulations restricting movement of funds for domestic institutions that alarmed markets last week, amid concerns that larger foreign "long only" funds might soon begin to remove money from India.
"I've really never seen confidence in India this low, especially amongst the domestic companies," said one international investor at a global institution, who spoke on condition of anonymity.
"But the problem is there isn't anything they [the authorities] can really do now, given that where this goes is all very dependent on what happens globally . ...  The authorities can avoid exacerbating the situation, which they failed to do last week, but it is now too late to stop this. The gap in the current account deficit is there, and the confidence is lost."
India now faces a series of delicate policy choices, given that any steps to fix the underlying problems of the current account deficit could backfire and would in any case take many months to have an effect, while market confidence is ebbing much more quickly, analysts said.
"This turbulence will continue in the short run, but Friday's mayhem was really triggered by the fear that the RBI would do more in the way of capital controls," said Shubhada Rao, chief economist at Yes Bank in Mumbai. "I think that was overdone  ...  but the problem is that while India is trying to mend its current account problem this will take time, while the markets are reacting to overnight news."


http://harveyorgan.blogspot.com/2013/08/gold-and-silver-fallgld-losses-another.html

Monday, August 19, 2013


gold and silver fall/GLD losses another 3 tonnes of gold/Comex dealer gold falls to 24.760 tonnes/JPMorgan customer inventory falls to 130,044 oz/

Good evening Ladies and Gentlemen: 

Gold closed down  $5.50 to $1366.20 (comex closing time ).  Silver was down 16 cents to  $23.16 (comex closing time).  



 
 In the access market today at 5:15 pm tonight here are the final  prices: 

gold: $1365.40
silver:  $23.10


At the Comex, the open interest in silver fell by 1443  contracts to 132,284 with silver up 39 cents on closing Friday night.

  
The open interest on the entire gold comex contracts fell by 10,937 contracts to 380,782 with  gold's rise in price on Friday to the tune of $6.10 . 

Tonight, the Comex registered or dealer inventory of gold fell slightly again, but it is still well below the 1 million oz mark, at 796,034.708 oz or 24.76 tonnes. This is dangerously low especially when we are now into  the August delivery month.  The total of all gold at the comex (dealer and customer) fell tonight resting just below the 7 million oz barrier resting at 6.981 million oz or 217.17 tonnes. 

JPMorgan's customer inventory falls tonight to 130,044.021  oz or 4.04 tonnes.  It's dealer inventory remains constant at  286,485.185 oz (8.91 tonnes) 

The total of the 3 major gold bullion dealers( Scotia , HSBC and JPMorgan)  in its Comex gold dealer account saw an decrease in gold inventory tonight to 20.17 tonnes of gold. Brinks continues to record a low of only 4.13 tonnes in its dealer account.



The GLD  reported a big loss  in inventory  tonight of 3.0 tonnes with a  reading of 912.32  tonnes of gold.  We had no change in silver inventory at the SLV.  The reading of the SLV inventory tonight is 338.409 million oz.

Today, we have recorded the 31st consecutive trading day for negative GOFO rates with the 3 months rate slightly falling in negativity to .-8000 from Friday's-.08167%.  The one month GOFO rate slightly falls in negativity to a relatively high .110000 form Friday's -.11167%.  The two month rate increases  in negativity at -.09667 from Friday's rate: -.09500%. ; and the 6 month GOFO rate increased in negativity and landed further back into negative territory at -.01000 from Friday's -.00500%.    Basically it means that gold is dearer in the present than in the future and it also signifies that London has scarce supplies of good delivery bars.  No doubt that China, being a huge buyer of physical gold is responsible for this.  The whacking of gold this month is incompatible with an increasing negative GOFO rates.



On the physical side of things, we have an  important commentary with Eric King of Kingworld news with: Bill Haynes and Dan Norcini.  They talk about the large specs becoming less short and buying huge amounts of future gold longs.

James Turk talks about the silver market.

Bill Holter tonight has two commentaries:

The first commentary deals with JPMorgan's call to investors to buy gold
The second commentary is on backwardation of gold out to 6 months.


 The big story of the day on the paper side of things is the rise in the 10 year USA bond yield closing today at 2.88%.  The speed at which the yield has been rising has no doubt caused the many bank underwriters of interest rate swaps to blow up. The rise in yields is certainly having an effect on the housing sector in the USA.  We have a few stories on that front tonight.

*****



Comex gold/August contract month:
August 19.2013


Ounces
Withdrawals from Dealers Inventory in oz
nil
Withdrawals from Customer Inventory in oz
 50,044.17 (Brinks, HSBC,JPMorgan)
Deposits to the Dealer Inventory in oz
nil
Deposits to the Customer Inventory, in oz
32,108.55 (Scotia)
No of oz served (contracts) today
 0 ( nil  oz)
No of oz to be served (notices)
1141  (114,100 oz)
Total monthly oz gold served (contracts) so far this month
2965  (296,500 oz)
Total accumulative withdrawal of gold from the Dealers inventory this month
29,518.655 oz
Total accumulative withdrawal of gold from the Customer inventory this month


 
218,360.0  oz


****



August 19/2013:  August silver contract month:

   August contract month

Silver
Ounces
Withdrawals from Dealers Inventorynil
Withdrawals from Customer Inventory 1,121,187.45 oz  (Delaware,HSBC,Scotia)
Deposits to the Dealer Inventory nil
Deposits to the Customer Inventory 1,041,474.4 ( CNT,Scotia)
No of oz served (contracts)0  ( nil oz)
No of oz to be served (notices)13 (65,000 oz)
Total monthly oz silver served (contracts) 216  (1,080,000)
Total accumulative withdrawal of silver from the Dealers inventory this month3,026,205.5  oz
Total accumulative withdrawal of silver from the Customer inventory this month3,135,905.3  oz



*****


August 19.2013: we lost 3.00 tonnes of gold at the GLD today.





Tonnes912.32

Ounces29,331,950.16

Value US$40,026  billion






****



Bill Holter today tackles JPMorgan's call to its clients that they should go long in gold.  Remember that they are now net long by about 77,000 contracts or 7.7 million oz. JPMorgan had a perfect trading record making a profit on each and every trading day.  We will now have manipulation with its prevailing winds behind us as the net short speculators take it on the chin.

 (courtesy Bill Holter/Miles Franklin)

NOW...they tell you?



Well, well, well, JP Morgan now is advising clients to buy Gold.  I'm pretty sure they are not advising to buy Gold from THEM because their inventory at COMEX has dropped to under 9 tons from the nearly 50 tons they had last year.  Boy they are good "timers"!  They made the call to clients back in April to sell Gold short just before the ambush.  Are they "good" or are THEY the ones who instigated the sale of 6 months global supply over less than 12 trading hours ?

   I mentioned earlier in the week that Ted Butler who has been on the CFTC's case regarding Silver manipulation for nearly 20 years has now reported that JPM has "cornered" the market in Gold.  He claims (I personally believe him as he is a meticulous researcher) that a bank (or 4 banks or less) have gone from net short 75,000 contracts at the beginning of the year to net long over 85,000 contracts currently.  This is a swing of 160,000 contracts or 16 million ounces or about 500 tons.  According to Mr. Butler, the current net "corner" amounts to a 25% position by the largest bank and 42% for the 4 largest banks in relation to all net longs.
  So why is the above important?  Because for the first time since at least 1999 (probably since the 1960's) the "manipulation" is no longer to suppress the price.  No, if JP Morgan is truly long then the "manipulation" will be to the upside and the "wind" will finally be at our backs.  You can look at this in several ways, first, Mother Nature is there to give a natural push higher.  Secondly, you can also look at this as a "surrender".  A "surrender" as in pushing the short side was (is) no longer possible as demand has been set on fire and inventories depleted by the artificially low prices. 

  This is VERY significant because JP Morgan "never loses", or at least they had not one daily loss for the first half of the year (I think impossible but this is what they reported).  Also interesting is that hedge funds who are continually fleeced are now more "short" Gold than ever before so they are "set up" and in the crosshairs of destruction.  If you asked me, this looks like JP Morgan finally doing what had to be done, they are simply running with the natural flow and no longer fighting it.

  Switching gears just a little, we had a very bad day in ALL markets Thursday, August 15.2013.  The Dow was down 225 points and CNBC had the nerve to call it a "low volume" drop.  I heard this several times from both anchors and guests...so this was the spin, "low volume".  "Low volume" as in "nothing here to see, please move along".  But wait, was it really a low volume day?  No, it was the HIGHEST volume day in 7 weeks!  This was absolutely false reporting so that the "alarm" did not go off.


  I mention the above "false reporting" because I suspect we will soon hear a different "spin" on Gold and Silver.  You will recall that a week before the April "ambush" of Gold and Silver CNBC and Bloomberg ran all sorts of negative stories and even to the point where anchors would laugh childishly at the mention of anyone who was long.  Now however, the natural forces for higher prices have become so great and it looks like JP Morgan is long...so you can pretty much bet the farm that the "stories" or the tone to the stories will change to the positive (how strange will this be?) and favor Morgan's bullish stance.

  If this is truly a "corner" and I don't doubt it, the shorts are in for Jim Sinclair's long talked about "spiritual experience".  We will soon hear positive stories from the news channels, other banks and brokers will put up "buy" recommendations and a short squeeze rivaling the Hunt brothers Silver squeeze can be expected.  Please remember that it won't take a lot of money to get this operation started and finished because this manipulation will have the natural force of a beach ball held too far under water for too long behind it!  I would even venture to say that after "fighting" for all these years for every inch we gained, it will probably feel strange at a minimum and maybe even "scary".  I say "scary" because I myself know that I'd feel uncomfortable knowing that Wall Street is on the same side that I am but this had to come sooner or later.  As I have said all along, you can obscure or hide Mother Nature for only so long before her will is too strong to fight...then you must yield and join her which is what it looks like JP Morgan may be doing right now.

  To finish, I'd like to make an "outrageous" prediction (not outrageous at all).  "Gold will finish the year positive".  We need about a $300 run from here to do it and 4 1/2 months time to do it in.  In reality a move like this could be done in a month, a week or even just a day or two.  In fact it can (I think likely) even be done while you are sleeping!  I still believe that some sort of "mark up" is in the cards and may even be kicked off at the G-20 Summit by our angry trading partners.  As usual I have a question for you to ponder, if a "mark up" of the price of Gold had been decided on already...would JP Morgan be... A. short, B. long, C. really long, or D. really REALLY long and have the Gold market cornered?  A no brainer right ? 

 Regards,  Bill H.




and.......




Bill Holter addresses backwardation in gold up to 6 months:

(courtesy Bill Holter/Miles Franklin)

A measly 70 cents.



Bill Gross's tweet on Friday "Gross: Pogo said, We have met the enemy & he is us. I say, All asset mkts peaking; W/o central bank ck writing we only have ourselves 2sell2" pretty much sums it all up...and if you really think about it, Gross explains in one sentence that it is all a Ponzi scheme.  "We only have ourselves 2sell2".  Isn't this the way Ponzi schemes end?  When the "money" stops coming in it's all over...which is exactly what he says here "without central bank check writing"... 

  As I read the above tweet I thought that it was the big news for over the weekend, I was wrong.  I then heard that Russia is stepping up to support Egypt's military...right after we have suspended aid.  Yes there is danger that shipping gets crimped with uncertainty over the Suez canal but more importantly this puts us directly at odds AGAIN (Syria) in the Middle East with Russia.  I don't want to get into the politics of what is right or who is wrong but we are not sending clear signals of where we stand and whether we will actually back our stance with any muscle.  This is a show of weakness and just as in the animal kingdom, the perception of weakness brings on predators. 

  While the above two stories (amongst others) are important, the big news is "a measly .70 cents"...let me explain.  On Friday we had the Aug. Gold contract close .70 cents above the Dec. contract, this is backwardation.  Previously for the last month we have had a "negative basis" in London for the Gold forward rates, similar but not exactly the same.  This has now lasted for a full 30 days. 

  Theoretically this (backwardation) cannot happen in Gold because it is "money" rather than a commodity.  It has stable supply growth and Gold "today" should never be worth more than Gold "4 months from now".  Basically Gold for future delivery should "cost" more and is a basic function of interest to be earned over that time.  Is this just an anomaly?  Will it persist time wise?  Yes, it definitely is an anomaly and as I mentioned, it should NEVER happen.  Will it last any length of time?... it really shouldn't because it should be arbitraged out but my guess is that there is a good chance the backwardation gets deeper and then becomes an emotional event.

  When I say "emotional", this is what it's all about because mathematically Gold today cannot be worth more than future Gold...except in one instance.  Gold "in hand" may become more valuable than future Gold if, and ONLY if the market believes or fears that they will not be able to get their Gold in the future,  When you purchase an option, future or OTC derivative that "promises" you Gold at a price and date in the future you have to have "trust" that the issuer of the promise can and will perform (deliver the Gold).  If or when this "trust" fails or breaks down you get this situation where the mentality is "I want it and I want it now!"...and thus current Gold more valuable than Gold delivered in the future (or not ?)

  To me it is not surprising that Gold futures have finally backwarded.  We have seen all sorts of oddities this year.  We have seen price go down accompanied by massive demand and delivery delays because of shortages.  We have seen vault inventories eaten away.  Germany was told that they could not repatriate their Gold from the Federal Reserve while publicly the story was "it's just so much Gold that it will take 7 years to ship it all".,,  (BOGUS answer)!  We have seen "vault fires" (I wonder what was so flammable?) and now JP Morgan plans to sell the Chase Manhattan building which houses the world's largest vault  

  Many of these various oddities by themselves might be "explained" away (maybe) but collectively they are creating TOO MUCH smoke for there not to be a fire somewhere (everywhere).  It is this "smoke" which is spooking investors into the "I want it and I want it now" mode.  Remember we live in a "fiat" world where confidence is not only everything it is the ONLY thing that holds the system together. 

  I want you to ask yourself a few questions.  If it turned out that inventory data turned out to be false or if Gold held by the Federal Reserve for other nations turned out not to be there, what would the ramifications be?  What would happen if the Gold in Ft. Knox isn't there and the world found out factually and publicly?  What would happen to our bonds and interest rates?  How would it affect our ability to borrow?  What would it mean for the "value" of the Dollar?  What or how many more Dollars would it take to buy a gallon of gas or a dozen eggs.  How would trade be affected (or from our point of view even "effected") ?

  These are all big questions.  It will be important to keep your eye on whether or not the backwardation in Gold persists or inverts further.  I know that currently it is only .70 cents, it should never ever be even 1 penny.  With inventories bled down as they are, further backwardation could become a self fulfilling prophecy where a panic gets larger and spreads simply because a panic got started in the first place.  I have said this many times before, "confidence is a funny and fragile animal, it is easy to lose and once lost very hard to get back".  

Regards,  Bill H.

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