http://www.caseyresearch.com/gsd/edition/chinas-gold-conduit-from-london-a-financial-coup-detat
¤ YESTERDAY IN GOLD & SILVER
Except for the rally going into the London open, which was dealt with in the usual manner by the not-for-profit sellers, it was a very quiet trading day everywhere on Planet Earth on Friday.
According to the CME's website, the high and lows ticks for gold in the December contract were $1,328.90 and $1,311.20. The high tick was at the London open, and the low came at 12:45 p.m. EDT in New York.
Gold closed at $1,317.40 spot, which was down $2.70 from Thursday's close. Volume, net of October and November, was only 112,000 contracts.
Silver also rallied going into the London open, but the moment it broke above the $22 spot price mark, down it went. This happened several times during the Friday session, twice in London trading and a couple of times in New York. All attempts ran into a willing seller.
According to the CME, the high and low for the December contract were $22.05 and $21.74.
Silver closed at $21.955 spot, up 6.5 cents on the day. Volume, net of October and November, was a very light 25,500 contracts.
The trading pattern for both platinum and palladium were also similar, and price action in these two metals was even more subdued. Here are the charts.
The dollar index closed on Thursday in New York at 79.69 and then sagged about 15 basis points by around 11:30 a.m. BST in London. After that it recovered a handful of basis points and closed in New York on Friday at 79.62, down seven whole basis points.
****
The CME's Daily Delivery Report showed that 47 gold and zero silver contracts were posted for delivery within the Comex-approved depositories on Tuesday. Canada's Bank of Nova Scotia was the only short/issuer, and JPMorgan Chase was on the receiving end of all of them. The link to yesterday's Issuers and Stoppers Report is here.
For a change, there were no withdrawals from GLD yesterday, and as of 9:37 p.m. EDT yesterday evening, there were no reported changes in SLV, either.
The U.S. Mint had another tiny sales report. They sold 1,000 troy ounces of gold eagles and 500 one-ounce 24K gold buffaloes. Month to date the mint has sold 25,000 troy ounces of gold eagles; 12,500 one-ounce 24K gold buffaloes; along with 1,687,000 silver eagles. Based on these sales, the silver/gold ratio checks in at 45 to 1.
It was huge day in gold over at the Comex-approved depositories on Thursday. They reported receiving 203,114 troy ounces, and shipped 88,831 troy ounces out the door. The link to that activity is here, and it's worth a peek.
It was another big day for silver as well, as these same depositories reported that although they didn't receive any silver, they did ship out a chunky 1,063,218 troy ounces to parts unknown. The link to that action is here.
I know that Ted Butler will certainly have something to say about these warehouse movements in his weekly commentary later today.
True to form since the 20th of the month fell on a weekend, the Central Bank of the Russian Federation updated their website with their September data. I was somewhat surprised, and mildly disappointed, that they didn't add any gold to their reserves during the latest reporting month. Their reserves still sit at 32.6 million ounces. Here's Nick Laird's chart updated with that information, or lack thereof.
As I mentioned in yesterday's column, despite the fact that government was now back to "work," there would be no Commitment of Traders Report or Bank Participation Report on Friday, and they were true to their word.
Here's a chart that Nick Laird sent my way early this morning. It shows that equity markets have risen to a new high, eclipsing the previous top in 2008. As Doug Noland mentioned in today's lead story, this giant equity/credit bubble is now in its terminal phase and will, sooner or later, run into a pin of some sort.
****
Selected news and views touching on the precious metals.....
Doug Noland: Terminal Phases
There is another key “Terminal Phase” dynamic at work in the Chinese Bubble, as was (and remains) the case in the U.S and elsewhere. As late-cycle financial and economic Bubble risks grow exponentially, policymakers turn increasingly timid. Powerful Bubble Dynamics become impervious to policy “tinkering,” while officials come to see the environment as too risky to implement the type of stringent (pain-inflicting) tightening measures required to quash (now well-entrenched) inflationary biases and rein in increasingly destabilizing excess.
The above reference to “serious imminent issues” reflects my expectation that the Chinese are likely gearing up for another stab at restraining Credit Bubble excess. It’s reasonable to presume they won’t do anything that would cause serious disruption. Yet, from my perspective, if they are serious about disrupting an increasingly destabilizing Bubble, there is no way around major global ramifications. And with international securities markets turning more intensely overheated by the week, this creates a potentially volatile dynamic.
There were more rumblings out of Beijing this week. At this point, it’s difficult to gauge whether they are more frustrated with Congress or the Federal Reserve. One of these days they may even be willing to rein in their Credit system and let the global chips fall where they will. Perhaps even one of these days global policymakers may actually part ways in what has been to this point concerted efforts to reflate global economies and markets. Over time, when monetary inflation’s fog begins to break, those on the losing end of inflationary processes begin to see things a little more clearly.
Doug's Credit Bubble Bulletin is more than worth your time this week, as he describes a credit situation that is totally out of control, and almost at the point where the cure is worse than the disease. It was posted on the prudentbear.com Internet site yesterday evening...and I thank reader U.D. for today's first story.
The above reference to “serious imminent issues” reflects my expectation that the Chinese are likely gearing up for another stab at restraining Credit Bubble excess. It’s reasonable to presume they won’t do anything that would cause serious disruption. Yet, from my perspective, if they are serious about disrupting an increasingly destabilizing Bubble, there is no way around major global ramifications. And with international securities markets turning more intensely overheated by the week, this creates a potentially volatile dynamic.
There were more rumblings out of Beijing this week. At this point, it’s difficult to gauge whether they are more frustrated with Congress or the Federal Reserve. One of these days they may even be willing to rein in their Credit system and let the global chips fall where they will. Perhaps even one of these days global policymakers may actually part ways in what has been to this point concerted efforts to reflate global economies and markets. Over time, when monetary inflation’s fog begins to break, those on the losing end of inflationary processes begin to see things a little more clearly.
Doug's Credit Bubble Bulletin is more than worth your time this week, as he describes a credit situation that is totally out of control, and almost at the point where the cure is worse than the disease. It was posted on the prudentbear.com Internet site yesterday evening...and I thank reader U.D. for today's first story.
Wasted E.U. Funds: Brussels Ignores Tip-Offs from Greek Official
Anti-corruption officials in Brussels have failed to investigate reports of squandered EU funds at a training institute in Greece, a German paper reported Friday. Well-connected teachers were allegedly paid up to €610 per hour for up to 225 work hours per month.
The German daily reports that a Greek civil servant uncovered multiple cases of nepotism and vastly inflated salaries while inspecting the finances of a vocational training institute. Officials in Brussels have apparently not acted on any of the whistleblower's suspicions, which he communicated in several letters, the paper added.
The German daily reports that a Greek civil servant uncovered multiple cases of nepotism and vastly inflated salaries while inspecting the finances of a vocational training institute. Officials in Brussels have apparently not acted on any of the whistleblower's suspicions, which he communicated in several letters, the paper added.
According to the newspaper report, Giorgos Boutos, a government finance official in Athens, began auditing the books of the Organization for Vocation Education and Training (OEEK) in 2006. The institute receives and distributes EU funds earmarked for vocational training in Greece. Boutros repeatedly stumbled upon irregularities and documented the cases in numerous letters to OLAF.
The suspected squandering of public funds is a particularly touchy issue, as it was considered a contributing factor in Greece's ongoing debt crisis.
You know it's a slow news day when this was the top story on the German website spiegel.de yesterday. Not surprisingly, it's courtesy of Roy Stephens.
Four King World News Blogs
1. Andrew Maguire: "Maguire Predicted Gold Surge - Now Says West is Collapsing". 2. Eric Sprott [#1]: "Billionaire Sprott Asks How Will People Survive What's Coming?". 3.Grant Williams: "All Hell Will Break Loose and It's Going to Be "Pandemonium". 4. Eric Sprott [#2]: "Billionaire Sprott Says Gold and China to Dominate the World".
Alasdair Macleod: China and Gold
There can be little doubt from these actions that China is preparing herself for the demise of the dollar, at least as the world’s reserve currency. Central to insuring herself and her citizens against this outcome is gold. China has invested heavily in domestic mine production and is now the largest producer at an estimated 440 tonnes annually, and she is also looking to buy up gold mines elsewhere. Little or none of the domestically mined gold is seen in the market, so it is a reasonable assumption the Government is quietly accumulating all her own production without it becoming publicly available.
Recorded demand for gold from China’s private sector has escalated to the point where their demand now accounts for significantly more than the rest of the world’s mine production. The Shanghai Gold Exchange is the mainland monopoly for physical delivery, and Hong Kong acts as a separate interacting hub. Between them in the first eight months of 2013 they have delivered 1,730 tonnes into private hands, or an annualised rate of 2,600 tonnes.
This commentary by Alasdair was posted on the goldmoney.comInternet site yesterday...and it's definitely worth reading. I found it in a GATA release yesterday.
Mike Kosares: China's gold conduit from London, a financial coup d'รฉtat
The United Kingdom’s gold exports to Switzerland jumped from 85 tonnes to 1,016 tonnes in the first eight months of 2013 — a twelve times increase. Some bullion market watchers attribute the huge increase to withdrawals or sales from ETFs — an explanation that covers only half the story…….if that.
Switzerland, according to the Koos Jansen website, has exported nearly 500 tonnes of gold to Hong Kong through July, 2013. Hong Kong, in turn, has exported over 1200 tonnes of gold to the Chinese mainland over the same period. Now, with this report of ramped-up exports from the United Kingdom, another piece of the puzzle falls into place and we begin to get a fairly clear picture what these gold mobilizations entail. Switzerland and Hong Kong are acting as a conduit of western gold on its way to China — and probably Chinese central bank reserves.
To what extent this gold mobilization is the result of some yet-to-be-identified external pressure on London’s bullion banks, or simply business as usual, remains to be determined, but gold movements of this size usually do not occur in a vacuum.
This short, but very excellent commentary by Michael was posted on the usagold.com Internet site yesterday afternoon...and it, too, is worth reading.
( Additional news items from Editor FRED W )
( Additional news items from Editor FRED W )
TF Metals Report: Bullion banks pillaging GLD for metal
Submitted by cpowell on Fri, 2013-10-18 23:34. Section: Daily Dispatches
http://www.blacklistednews.com/Anti-austerity_protest_rips_through_Rome/29694/0/38/38/Y/M.html
( video at the link above. )
10:30a AEST Saturday, October 19, 2013
Dear Friend of GATA and Gold:
The TF Metal Report's Turd Ferguson today reports more evidence that the gold exchange-trade fund GLD is being pillaged by the major bullion banks to cover short positions in gold elsewhere:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Mario Draghi, European Central Bank head, wrote to the European Commission last month asking that bondholders be spared any losses in the event of a bank rescue until a Europe-wide banking union is fully operational, la Repubblica newspaper reported on Saturday.
The Italian daily cited sources with direct knowledge of the letter sent by ECB President Draghi.
The ECB and the Commission were not immediately available to comment.
"The ECB president is not against imposing losses on bank creditors once the European banking union operates at full speed. Draghi, however, fears that imposing losses on bondholders now, potentially for dozens of European lenders at once, can destabilize markets," the paper said.
Read More...
Gold Anti-Trust Action Committee Inc.
Mario Draghi, European Central Bank head, wrote to the European Commission last month asking that bondholders be spared any losses in the event of a bank rescue until a Europe-wide banking union is fully operational, la Repubblica newspaper reported on Saturday.
The Italian daily cited sources with direct knowledge of the letter sent by ECB President Draghi.
The ECB and the Commission were not immediately available to comment.
"The ECB president is not against imposing losses on bank creditors once the European banking union operates at full speed. Draghi, however, fears that imposing losses on bondholders now, potentially for dozens of European lenders at once, can destabilize markets," the paper said.
Read More...
Source: Al Jazeera
Thousands of Portugese took the streets of Portugal’s two most populated cities to demonstrate against planned cuts of pensions and salaries.
Thousands of Portugese took the streets of Portugal’s two most populated cities to demonstrate against planned cuts of pensions and salaries.
Saturday’s demonstrations are a response to the government’s decision to extend austerity measures in the 2014 budget.
In Lisbon, hundreds of buses slowly crossed the April 25th bridge in a protest organised by Portugal’s main labor group, the General Confederation of Portuguese Workers. In the northern city of Porto, thousands gathered in the main square shouting anti-austerity slogans.
( video at the link above. )
Protesters are clashing with police, throwing stones, fire-bombs in Rome, Italy. They are protesting against austerity measures.
http://video.repubblica.it/
http://video.repubblica.it/
More images about the last riots…
http://foto.ilmessaggero.it/ROMA/foto1/0-55706.shtml?idArticolo=341764
Riots in front of Ministry of Finance Headquarters in Rome.
http://video.ilmessaggero.it/index.jsp?videoId=15378§ionId=87&t=manifestazione-no-tav-violenza-di-fronte-al-ministero-delle-finanze
Now you can see thousands of protesters facing the cops, not 50.
http://video.ilmessaggero.it/index.jsp?videoId=15379§ionId=87&t=corteo-guerriglia-urbana-nelle-strade-dei-ministeri
http://foto.ilmessaggero.it/ROMA/foto1/0-55706.shtml?idArticolo=341764
Riots in front of Ministry of Finance Headquarters in Rome.
http://video.ilmessaggero.it/index.jsp?videoId=15378§ionId=87&t=manifestazione-no-tav-violenza-di-fronte-al-ministero-delle-finanze
Now you can see thousands of protesters facing the cops, not 50.
http://video.ilmessaggero.it/index.jsp?videoId=15379§ionId=87&t=corteo-guerriglia-urbana-nelle-strade-dei-ministeri
¤ THE WRAP
It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly; who errs and comes short again and again; because there is not effort without error and shortcomings; but who does actually strive to do the deed; who knows the great enthusiasm, the great devotion, who spends himself in a worthy cause, who at the best knows in the end the triumph of high achievement and who at the worst, if he fails, at least he fails while daring greatly. So that his place shall never be with those cold and timid souls who know neither victory nor defeat. - Theodore Roosevelt
Despite how quiet it was in the precious metal market yesterday, it was more than obvious that JPMorgan et al were out and about at the London open. As I've commented on many times when these short sellers of last resort put in an appearance; one has to wonder how high their respective prices would rise if allowed to trade freely. Some day we'll find out. But the question remaining, is when?
In the meantime, China is gobbling up gold from a number of sources that we can see, and it's a good bet that they're getting more gold from sources that aren't visible to the general public. Many writers have commented on that, including a couple in today's column. One has to wonder just how much gold will be enough for them, along with other countries that are grazing the golden grass at JPMorgan-sponsored sale prices.
And even though the psychology of the market is the gloomiest I can remember, one should not lose sight of the fact that all four precious metals are selling for many multiples less than their free-market prices. For that reason alone, it's still worth your while to sock away as much physical metal as you can afford, as the day will come when all of them, except for silver, will be out of reach of all but the super rich which, hopefully when the day comes, will include a few of us.
Until that time arrives, all we can do is wait it out, and as for me, I'm still "all in".
Here's Nick Laird's famous Total PMs Pool chart updated to include Friday's data. As you can see at a glance, despite the fact that prices have one in the toilet recently, the total number of ounces held by all visible depositories is basically unchanged, and the chart pattern continues [rather unsteadily at times, to be sure] from "lower left to upper right" as the now thoroughly discredited Dennis Gartman is wont to say from time to time.
That's all I have for today, and for the week. If you're looking for some clue as to how the precious metal market will perform next week, you're talking to the wrong guy. I don't know, and neither does anyone else, as we're all making this up as we go along. And as I said before, the only people that know for sure are Jamie Dimon and Blythe Masters, along with a handful of others, and they aren't about to tell us.
See you on Tuesday.
and..............
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