http://www.caseyresearch.com/gsd/edition/gold-premiums-in-india-jump-on-festive-demand-supply-crunch
¤ YESTERDAY IN GOLD & SILVER
Once again the gold price did nothing in Far East and early London trading. But as you are already keenly aware, that all changed about 20 minutes after the Comex open, as the not-for-profit sellers took out the bid stack, and the gold price cratered more than fifteen bucks in less than two minutes, tripping trading circuit breakers.
After that, the price traded more or less flat in a tight range until minutes after 2:30 p.m. EDT, when it rallied slowly but steadily into the close.
The CME recorded the high in the December contracts as $1,294.80, and the low was recorded as $1,259.60.
Gold closed at $1,273.20 spot, which was down $13.20 from its Thursday close. Gold volume, net of October and November, was pretty chunky at 196,000 contracts.
It was more or less the same chart pattern in silver. The smack down took a bit over 2% off the silver price in less than two minutes. After that it gained back a percent in short order, and then traded almost ruler flat until 2:30 p.m.
The highs and lows recorded by the CME in the December delivery month were $21.86 and $20.95, which was an intraday move of over 4%.
Silver closed at $21.34 spot, down 34 cents on the day. Volume, net of October and November, was pretty high at 53,000 contracts.
It was the same story in platinum, but the HFT boys gave palladium a pass. Here are the charts.
The dollar index closed at 80.43 late Thursday afternoon in New York. It rallied up to 80.51 in early Far East trading before rolling over and hitting its 80.26 low at precisely 11 a.m. BST in London. From that low, it rallied in fits and starts to its 80.52 high at half-past lunchtime in New York. After that it sagged a bit into the close, finishing the Friday session at 80.38, which was down 5 whole basis points.
Needless to say, the violent price move in gold, silver and platinum at 8:40 a.m. EDT had nothing to do with the currencies. With the odd exception, this is almost always the case.
****
The CME's Daily Delivery Report showed that 28 gold and 36 silver contracts were posted for delivery on Tuesday within the Comex-approved depositories. In gold, Jefferies and Canada's Bank of Nova Scotia were the short/issuers, with JPMorgan Chase stopping 22 of those contracts. In silver, the biggest short/issuer was Jefferies with 34 contracts, and JPMorgan Chase stood for delivery on 31 of them. The link to yesterday's Issuers and Stoppers Report is here.
There was a fairly decent withdrawal from GLD yesterday, as an authorized participant shipped out 173,749 troy ounces. And as 9:10 p.m. EDT yesterday evening, there were no reported changes in SLV. But when I checked the Web site again at 5:13 a.m. EDT this morning, I see that there's been an update. An authorized participant withdrew 1,927,268 troy ounces of silver. That amount is within 150 troy ounces of the size of the withdrawal reported on October 7. It seems like too much of a coincidence, but maybe I'm imagining things.
I was surprised to see another small sales report from the U.S. Mint yesterday. They sold 4,000 ounces of gold eagles.
There wasn't a lot of activity in gold over at the Comex-approved depositories on Thursday. They reported receiving 4,201 troy ounces, and shipped out 13,839 troy ounces. The link to that activity is here.
For a change, it wasn't overly busy in silver, either. Nothing was reported received, and a smallish 81,576 troy ounces were shipped out the door. The link to that action is here.
With no Commitment of Traders Report to discuss, it's going to be a short report for a Saturday.
In my conversations with Ted yesterday, he said that even though though there is no COT Report, it's a dead certainty that the Commercials were buying every long that the technical funds and small traders were puking up, and taking the long side of any short trade that these same two groups of traders were putting on.
Selected non redundant news and views......
U.S. Debt Standoff Provokes Ire Among China's Officials
Washington's debt brinkmanship has provoked deep anger in Beijing and bolstered its resolve to lessen the world's reliance on the dollar, according to current and former Chinese government advisers.
Political leaders in the U.S. have intensified talks about their fiscal standoff, fuelling hopes that Washington will raise its debt ceiling before next week's deadline.
However, the prospect of last-minute negotiations will test already-frayed nerves in China, the biggest foreign holder of US government debt.
"You can't hijack the global economy through political struggles. It's not responsible," says Yu Yongding, a member of the Chinese Academy of Social Sciences, a leading government think-tank.
This news item appeared in the Financial Times of London yesterday, and it's posted in the clear in this GATA release.
U.S. debt default? Asian policymakers ready $6 trillion forex safety net
As the U.S. struggles to avert a debt default, Asia's policymakers have trillions of reasons to believe they may be shielded from the latest financial storm brewing across the Pacific.
From South Korea to Pakistan, Asia's central banks are estimated to have amassed some $5.7 trillion in foreign exchange reserves excluding safe-haven Japan, much of it during the last five years of rapid money printing by the U.S. Federal Reserve.
Data this week showed those reserves continued to pile up, with countries having added an estimated $86.7 billion in the July-September quarter, according to data for 12 Asian countries whose reserves are tracked by Reuters.
This Reuters piece, co-filed from Mumbai and Seoul, was picked up by the finance.yahoo.com Internet site early yesterday morning...and I thank West Virginia reader Elliot Simon for his first offering in today's column.
Doug Noland: The Perils of Mopping Up
Injecting liquidity into already overheated speculative markets is tantamount to QE as rocket fuel. It both inflates securities prices directly while also heavily incentivizes risk-taking and speculative leveraging. Couple rocket fuel QE with “transparency,” “forward guidance,” and a promise to backstop markets in the event of a “tightening of financial conditions,” and you’ve progressed all the way to reckless monetary policy. Is the Fed really promising the markets that they will remain ultra-accommodative for at least the next couple years in the face of conspicuously speculative securities markets and increasingly overheated asset markets generally?
Our great nation’s brilliant Founding Fathers clearly appreciated the perils of unsound money. They understood the dangers of excessive power and the necessity for checks and balances. They would have never anticipated an American central bank printing money without restraint. There was a major flaw in the structure of the Federal Reserve System – and for central bank structures generally. I just don’t think anyone ever anticipated that central bankers might someday resort to creating Trillions of “money” as they do today – on a whim or academic theory. The Federal Reserve needs some basic concrete rules. It’s insanity to allow a small group of unelected officials the discretion to pump $85bn – or more! - of purchasing power into the markets every month. It’s undemocratic, highly risky and this has gone on for much too long. If there was one issue worth closing down the government and risking default, this would be it.
Doug's weekly Credit Bubble Bulletin over at the prudentbear.comInternet site every Friday is a must read for me. I thank reader U.D. for sliding it into my in-box last evening.
Our great nation’s brilliant Founding Fathers clearly appreciated the perils of unsound money. They understood the dangers of excessive power and the necessity for checks and balances. They would have never anticipated an American central bank printing money without restraint. There was a major flaw in the structure of the Federal Reserve System – and for central bank structures generally. I just don’t think anyone ever anticipated that central bankers might someday resort to creating Trillions of “money” as they do today – on a whim or academic theory. The Federal Reserve needs some basic concrete rules. It’s insanity to allow a small group of unelected officials the discretion to pump $85bn – or more! - of purchasing power into the markets every month. It’s undemocratic, highly risky and this has gone on for much too long. If there was one issue worth closing down the government and risking default, this would be it.
Doug's weekly Credit Bubble Bulletin over at the prudentbear.comInternet site every Friday is a must read for me. I thank reader U.D. for sliding it into my in-box last evening.
Pepe Escobar: Fear and loathing in House of Saud
Every sentient being with a functional brain perceives the possibility of ending the 34-year Wall of Mistrust between Washington and Tehran as a win-win situation.
Ay, there's the rub. Everybody knows why the Israeli right will fight an US-Iran agreement like the plague - as Iran as an "existential threat" is the ideal pretext to change the debate from the real issue; the occupation/apartheid regime imposed on Palestine.
As for the House of Saud, such an agreement would be nothing short of Apocalypse Now.
As for the House of Saud, such an agreement would be nothing short of Apocalypse Now.
A part of this essay was a bit of a slog, even for me, but it's only a couple of paragraphs, and once you're through that, the picture becomes clear. I consider this a must read, especially for all serious students of the New Great Game. I thank Roy Stephens for bringing it to our attention.
Four King World News Blogs
1. Tim Gardiner: "Gold Plunge, Who's Responsible, Who's Buying and What's Next?". 2. Andrew Maguire: "The "Vampire Squid" is Busy in the Gold Market". 3. Egon von Greyerz: "Gold and Silver Smash...and a Nation on the Edge of a Precipice". 4. Art Cashin: " Danger For the U.S...and Strange Happenings in Gold".
"Stop Logic" Gold Slam Was So Furious It Shut Down CME Trading Again
As part of the already noted massive gold slam down just before 9 am Eastern, when "someone" sold an epic 2 million ounces of gold in one trade, the CME just went dark for 10 seconds, blaming it on an appropriately named "stop logic" event.
What is Stop Logic? Basically, it is a the mother of all stop hunts, which takes out the entire bid stack and continues until such time as there is absolutely no liquidity left in the entire market!
This must read commentary contains some excellent charts, and was posted on the Zero Hedge Internet site yesterday morning shortly after the 'event' occurred. But nowhere in this article is the question asked as to who the perpetrators were, or what their motives might have been. It was, unquestionably, JPMorgan et al...and since no one asked the question, I'm happy to provide the answer anyway. I thank Ulrike Marx for being the first reader through the door with this story yesterday morning.
There's a slightly different take on this issue in a story posted on the cnbc.com Internet site late yesterday morning. It's headlined "Gold's plunge blamed on one big sell order". I found this news item in a GATA release that Chris Powell filed from Auckland on Saturday local time...and it, too, is worth reading.
U.S. watchdog readies tighter new commodity limits rule
The U.S. derivatives regulator is finishing a new rule to curb speculators with large positions in commodity markets that is in parts tougher than the previous version, two sources with direct knowledge of the plan said.
Commodity Futures Trading Commission Chairman Gary Gensler is rushing to get a revamped rule out before his term runs out in December, said the sources, even while agency lawyers are preparing to defend the original position limits rule that was knocked back by a U.S. court last year.
"Gary wants to get this done before he leaves," said one of the sources, asking not to be named because he was not authorized to talk to the press.
I wish him well, but I'm not holding my breath. This Reuterspiece was posted on their Internet site early Friday afternoon EDT, and another item I found in a GATA release yesterday. It's worth the read.
India's top bullion bank to work with jewellers to tease out gold hoards
The biggest bullion-importing bank in India plans to team up with jewellers for the first time to offer a gold deposit scheme, hoping ease of access and attractive interest rates will tempt people to part with their jewellery and relieve tight supplies.
Bank of Nova Scotia is in talks with trade group the Gems and Jewellery Trade Federation (GJF) and the Reserve Bank of India (RBI) to finalise details, the head of the bank's Indian bullion operations said.
Gold imports to the world's biggest bullion buyer have all but dried up after steps taken by the government and RBI to cut them to help rein in a record current account deficit, leaving domestic jewellers scrambling for supplies.
With demand still strong and expected to rise in the next few months as the festival season starts, the gold industry has turned its sights on the 20,000 tonnes of gold thought to be squirrelled away in homes.
These guys never quit...and it's no surprise to me to see one of the '4 or less' Comex short holders in both gold and silver futures contracts to be front and center here...Canada's beloved Bank of Nova Scotia. I've posted a story on this already, but that was a week or so ago, and things have advanced since then, so this story has a little more information and depth to it. It's another contribution to today's column from Ulrike Marx.
Gold premiums in India jump on festive demand, supply crunch
Gold premiums in India, the world's biggest buyer of the metal, jumped sharply this week as the festive season began, driving up demand, and supply remained tight on a lack of imports.
Premiums to London prices jumped to $30-40 per ounce from last week's $5-7, the All-India Gems and Jewellery Trade Federation (GJF) said.
"There is no official gold available. People are not willing to sell their old jewellery either, at these prices," said Sudheesh Nambiath, an analyst with metals consultancy Thomson Reuters GFMS.
"Current availability is largely unofficial metal, which is being sold into market at a lower rate than the prevailing premium."
This Reuters story, co-filed from Singapore and Mumbai, was picked up by the New Delhi Television website late Friday afternoon IST...and I thank Ulrike Marx for her final offering in today's column.
Premiums to London prices jumped to $30-40 per ounce from last week's $5-7, the All-India Gems and Jewellery Trade Federation (GJF) said.
"There is no official gold available. People are not willing to sell their old jewellery either, at these prices," said Sudheesh Nambiath, an analyst with metals consultancy Thomson Reuters GFMS.
"Current availability is largely unofficial metal, which is being sold into market at a lower rate than the prevailing premium."
This Reuters story, co-filed from Singapore and Mumbai, was picked up by the New Delhi Television website late Friday afternoon IST...and I thank Ulrike Marx for her final offering in today's column.
*****
¤ THE WRAP
There are no markets anymore, only interventions. - Chris Powell; April 2008
Today's pop 'blast from the past' is an R&B/soul number by an American groupfrom the early 1970s, and it still gets air time to this day, and rightly so. It's hard to believe that this hit is 40 years old this year. For a trip far back down memory lane, click here. They don't make music like this anymore.
Today's classical 'blast from the past' was something I was listening to on CBC FMon the way to work at the bullion store yesterday. It's the symphonic tone poemDon Juan [Op. 20] by Richard Strauss, which he composed in 1888 at the tender age of 24 years. This recording dates from 1984 and was performed in Osaka, Japan. It requires a big orchestra to do justice to the monstrous orchestration prevalent in the classical music of the Romantic era of the late 19th and early 20th centuries. The extreme difficulty and virtuosity of nearly every part has made the piece a staple of orchestral audition lists for most instruments. The world renown Herbert von Karajan does the honours from the podium, and the link is here.
Everything that happened at 8:40 a.m. EDT in the Comex futures market in gold, silver and platinum has already been adequately described by others, so I won't bother going through it again.
But I would certainly give a day's pay to know what the Commitment of Traders looking like at the close of trading yesterday.
I took a quick look at the preliminary volume/open interest numbers for Friday's trading that the CME posted on their Internet site in the wee hours of this morning, and it shows that open interest blew out by over 13,000 contracts in gold and 4,400 contracts in silver. The bulk of it in gold was put on in the December delivery month, and in silver it was split up between December and March. It's possible that a technical fund put on a big short position yesterday, and if that's the case, then JPMorgan et al definitely took the other side of that trade.
There's also the possibility that it was the usual HFT games, and they hid their tracks with big spread trades.
Of course neither of these possible options will be known to us until the next COT Report, and that won't be forthcoming until after the government employees responsible for producing it go back to work. Maybe we'll get some idea of when that might be as events unfold next week.
In the meantime, there's not a damn thing we can do about it. We already know that the CFTC and the CME, along with the precious metal miners, aren't going to do a thing about it either, so we just have to suffer in silence. This is just another sign of how corrupted the entire process has become, and it should be obvious to all that the system is rotten to its very core.
That's all I have for the day and for the week, and I'll see you here on Tuesday.
No comments:
Post a Comment