Gold Celebrates America's Three Month Can Kicking, Soars
Remember that persistent seller of epic and oddly periodic amounts of gold futures contracts, whose dumps have resulted in two NYMEX "stop logic" shutdowns in the past month alone, and whose daily tape bombing is now watched carefully by all (even the CFTC's Bart Chilton who can rejoice - the CFTC is now open and he can go back to "supervising" the market and stuff)? Well, he is mysteriously absent this morning, as gold (which is now back in backwardation for the second day in a row) soars by $50 from $1275 to $1320 in the matter of minutes, showing just how furious the short covering spreed in the gold space can and will be when it becomes clear just how right Dagong was. The next such instance of clarity we expect will take place in December, early January when the farce repeats itself.
http://www.caseyresearch.com/gsd/edition/jim-rickards-central-bank-and-hedge-fund-bear-raids-push-gold-from-west-to
¤ YESTERDAY IN GOLD & SILVER
Gold didn't do much of anything in Far East trading on their Wednesday, but the smallish rally going into the London open proved to be the high tick of the day, as a seller showed up immediately. The gold price then sold down a bit into the London a.m. gold fix, rose into the noon BST silver fix, before getting sold down to its low of the day which occurred at precisely 3 p.m. BST, which was the close London close. That was 11 a.m. in New York.
The tiny rally that followed got capped just minutes after the 1:30 p.m. Comex close, and that was it for the day.
The high and low ticks in the December contract were reported by the CME as $1,289.20 and $1,268.60.
Gold closed the Wednesday session at $1,282.70 spot, up $1.70 from Tuesday. Volume, net of October and November, was pretty decent at 177,000 contracts, most of which were of the HFT variety.
Here's the New York Spot Gold [Bid] chart on its own so you can see the precise timing of the low tick at the London close.
The silver price traded erratically within a very tight range everywhere on Planet Earth on Wednesday. The highs and lows aren't worth mentioning.
Silver closed at $21.42 spot, up a whole 12 cents from Tuesday. Net volume was pretty decent as well, at 43,000 contracts.
Both platinum and palladium had an easier time of it. Here are the charts.
The dollar index closed in New York at 80.42 on Tuesday afternoon. It's Far East high of 80.57 came at 9:30 a.m. in Hong Kong. At that point it headed slowly lower, hitting its low tick of 80.29 just before the 8:20 a.m. EDT Comex open. The subsequent rally peaked out at 80.75 about 12:15 p.m. in New York before sliding back to 80.40 by 2 p.m. After that it didn't do much. The index closed at 80.40, which was up eight basis points on the day.
****
The CME's Daily Delivery Report showed that 58 gold and zero silver contracts were posted for delivery within the Comex-approved depositories on Friday. Canada's Bank of Nova Scotia issued 56 of those contracts, and JPMorgan Chase stopped 55 contracts. The link to yesterday's Issuers and Stoppers Report is here.
Another day, and another withdrawal from GLD. This time it was 115,828 troy ounces. And as of 9:53 p.m. EDT, there were no reported changes in SLV.
Over at Switzerland's Zürcher Kantonalbank for the week ending 11 October, they reported small declines in both their gold and silver ETFs once again. In gold it was 20,393 troy ounces, and in their silver ETF it was 219,814 troy ounces.
There was a tiny sales report from the U.S. Mint yesterday. They sold 1,000 ounces of gold eagles and 1,000 one-ounce 24K gold buffaloes.
It was fairly busy at the Comex-approved depositories in gold on Tuesday. They didn't report receiving any, but they did ship out 51,201 troy ounces. Almost all of the warehouses were involved to a certain extent, and the link to yesterday's activity is here.
It was another big day for silver at these same depositories. They reported receiving 321,474 troy ounces, and shipped out 1,149,701 troy ounces. Virtually all of the activity was within the Scotiabank depository. The link to that action ishere. And please note Ted Butler's comments on this in the quote in The Wrapsection further down.
****
Selected gold and precious metal related news......
Flaherty Anti-QE Stance Opens Central Bank, G-20 Rift
Canadian Finance Minister Jim Flaherty’s criticism of U.S. monetary policy, which he ramped up last week in Washington, may be putting him at odds with the Bank of Canada and the Group of 20.
Flaherty said he criticized the Federal Reserve’s use of unconventional monetary policy known as quantitative easing at a private dinner of G-20 officials on Oct. 10, with U.S. Federal Reserve Chairman Ben S. Bernanke in attendance.
“I was fairly clear” at the meeting, Flaherty told reporters the next day. “It’s not good public policy,” he said, describing quantitative easing as “the printing of money.”
"It's our currency, but it's your problem."...was the famous quote from U.S. Treasury Secretary John Connally back in 1971...and that still applies to this day for all countries that depend on exports for most of their GDP...Canada included. ThisBloomberg story was posted on their Internet site yesterday morning Denver time. I thank reader "Alex B." for sending it along.
Three King World News Blogs
1. Dr. Stephen Leeb: "China May Seize Control of Entire U.S. Financial System". 2. Rob Arnott: "What We Have Right Now is the Battle For the Soul of a Nation". 3. John Ing: "China is Setting Up the Worst Nightmare For the U.S.".
Mark Mahaffey: Why gold production is going to go to zero
Without much higher gold prices the gold mining industry is dead, Hinde Capital co-founder and Chief Financial Officer Mark Mahaffey writes this week, noting that the shares of many gold mining companies are down as much as 90 percent because the cost of production is higher than the metal's declining price.
On the other hand, if the world continues to find a piece of paper labeled "gold" as useful and reliable as the metal itself, and if the gold mining industry concurs in that judgment and has no clue about the monetary nature of its product and the surreptitious suppression of its price by Western central banks, who needs the gold mining industry? The paper industry will substitute just fine.
The headline is a bit more than misleading, as almost all the companies to which he refers are non-producing resource companies that may or may not have the resources they claim...all hat and no cattle, if you like. It's not surprising that their market caps have vanished. But based on this, it's a good bet that the Cambridge House Resource Conference in Vancouver this coming January could be a disaster in the making. I thank Chris Powell for wordsmithing the first two paragraphs of introduction. Despite my comments, it's worth reading, but keep its obvious shortcomings in mind as you do.
For shagun: Indian Jewellers to lift ban on gold coins
Jewellers have decided to lift a self-imposed ban and sell gold coins in the Diwali season.
"Gold coins are not bought for investment but are rather seen as shagun and given as gifts. So we have decided to temporarily lift the ban on sale of gold coins for Dhanteras and Diwali," said Ashok Minawala, board member at the All-India Gems and Jewellery Trade Federation.
The federation, which represents over three lakh players including jewellery retailers, manufacturers, wholesalers and exporters, had in July asked its member jewellers not sell gold coins and bars to help contain the current account deficit (CAD).
However, jewellers are now convinced they can go back to selling gold coins.
This short story was posted on the indianexpress.com Internet site early this morning IST...and it's certainly worth your time. I thank reader M.A. for finding it for us.
Central bank and hedge fund bear raids push gold from West to East, Rickards says
Central bank and hedge fund bear raids have knocked gold futures prices down in the West only to increase demand for real metal in Asia, fund manager and geopolitical strategist James G. Rickards tells Bloomberg News in a video interview this week.
This 5:09 minute video clip was posted on the goldsilver.comInternet site on Tuesday...and I found it embedded in a GATA release yesterday. It's a must watch. [Note to James: Get a hair cut!]
¤ THE WRAP
A three to four million troy ounce gross turnover [in silver] weekly [on the Comex] is the equivalent of 150 to 200 million ounces annually, or 15% to 20% of total world production (mine, plus recycling) and total world silver demand and total world inventory of silver in 1,000 oz bar form. That such a large percentage of the world’s silver production, consumption and inventory is being moved into and out from the COMEX is astounding. Obviously, most of the world’s silver production and consumption occurs in areas where it would be impossible to be funneled in and out of the COMEX; so that, in effect, increases the true percent of COMEX silver being turned over relative to the world. Thus, the turnover is even more astounding and indicative of silver tightness. - Silver analyst Ted Butler: 12 October 2013
Wednesday was just another day when gold was held in check, as the high-frequency trader were ever vigilant as the deficit crisis went down to the wire. Three things gave that away; the timings of the declines and rallies during the Wednesday trading session, the big volume on small price changes, and the rallies that began in all four precious metals shortly before 9 a.m. BST in London this morning.
With some, if not most, U.S. government employees heading back to "work" today, it will be interesting to see if the CFTC has a Commitment of Traders Report tomorrow. I'll also be looking for the long-delayed monthly Bank Participation Report as well. If they do put in an appearance, then I'll have all the details in Saturday's column.
And as I hit the send button on today's missive, I note that these moon shot price rises all ran into not-for-profit sellers immediately. Volumes in both gold and silver as of 5:20 a.m. EDT are over the moon: more than 75,000 contracts in gold, and 23,000 contracts in silver. This means that the sellers of last resort; JPMorgan Chase et al are throwing everything they have at this rally, so the price management scheme is still intact. Gold is hanging on to the $1,300 price mark by its proverbial fingernails, and "da boyz" have silver well below the $22 spot price mark once again. The high price ticks in the December contract at 9 a.m. BST in London were $1,320.50 and $22.18. And based on the current price action, I would guess that those will be the highs for the day, and maybe for the week. However, I'd love to be proven wrong, so we'll just have to see what today and tomorrow have in store for us.
Here are the Kitco charts as of 5:20 a.m. EDT
That's it for today, and based on the current price action, the rest of the week's trading activity in all four precious metals will be worth watching.
See you here tomorrow.
http://jessescrossroadscafe.blogspot.com/2013/10/comex-warehouses-continue-to-bleed-gold.html
16 OCTOBER 2013
COMEX Gold Warehouses Continue to Bleed Out As 'Owners Per Ounce' Climbs Back Over 53
"We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake. Therefore at any price, at any cost, the central banks had to quell the gold price, manage it."
Sir Eddie George, Bank of England, reported in private conversation, September 1999
We saw more significant action in the Comex warehouse complex yesterday.
A total of almost 4,000 ounces left the greatly diminished deliverable category, bringing it down to 717,666 ounces. The ownership per ounce for each of those deliverable ounces is back up to 53.
Over 50,000 ounces left the Comex complex overall, taking the total amount of gold bullion there to 6,859,476 ounces.
As you know the gold bullion has been coming out of the ETFs in particular, and it is not showing up in the Comex warehouses. There is widespread speculation and anecdotal evidence that this gold is being used to fulfill deliveries in Asia, after being refined into 400 ounce bars. I do not think that it is likely to come back anytime soon.
There was a great deal made today of a letter that was sent out by JPM, limiting cash withdrawals by customers significantly and eliminating overseas wire transfers completely. I have heard from some well-heeled individuals who are pulling their cash out in response to this.
I do not think this is a sign of government capital controls. It is more likely involved with the trouble that JPM had gotten into with the OCC over their lack of compliance with regard to anti-money laundering measures. As you may recall they received a 'cease and desist' order in January over this and have been under stricter surveillance since then.
It could also be a short term cash problem at the bank. Perhaps there is some perceived risk there that the general public is not yet aware. I find that a little hard to believe, but it seems more likely than a move to more general capital controls by the government. If another big bank or two institute similar rules then maybe there is a little heat there worth our notice.
When it comes to metals, this market is just a mess. I am appalled at the manner in which the CFTC and the CME have been conducting their roles as overseers. These big market sells in quiet periods are almost unbelievable in their frequency and brazen effect on price.
Are some bullion banks in trouble with their positions again? It seems like something very odd is going on, and we know that when the banks get too badly offsides the market, the central banks are often willing to extend themselves to help them 'for the sake of the system.'
Gold forwards have gone negative again. This represents tightness in the short term supply of physical bullion. There have been massive drawdowns in Comex deliverable gold and the ETFs this year, without anything at all like it in silver, platinum, or palladium which have held steady or gained over the same time period. And no one seems to notice. Le monde autour est sourd, bien entendu!
I suspect that those who see nothing unusual at all in this, and are seasoned watchers and traders in precious metals, are probably whistling past the graveyard. It will take higher prices to free up more gold to be available for delivery, and that will make it harder to keep tapping the ETFs to obtain physical supply with which to satisfy Asia. It is quite the predicament.
And there remains the fact that the Fed told the Bundesbank that they may have the return of the German people's gold, but not for seven years. These obviously suggests that the gold might otherwise be occupied, spoken for, and encumbered.
There may be a reckoning when the smoke clears, and the quantities actually available to buyers readily on the shelves are revealed at last.
Weighed, and found wanting.
Stand and deliver.
No comments:
Post a Comment