Tuesday, December 24, 2013

Gold and Silver news and views - December 24 , 2013 ..... Bundesbank has repatriated a paltry 37 tons from New York and Paris ( recall goal of Germany was to repatriate 700 tons by 2020 - good luck Germany ) ...... Ed Steer's Gold and Silver report for December 24 , 2013 - Data , News and Views pertaining to the precious metals.......Dubai to India smuggling going off the charts ......Silver Doctors items of interest ......Jesse Crossroad Cafe cover December delivery at Comex.....


The Gold Rush Spreads From China And India To Saudi Arabia

Tyler Durden's picture

In the "west", the higher the price of gold rose, the more demand there seemingly was bymomentum-chasing gamblers investors, if only for paper certificates claiming to represent gold, or GLD as the case may be. Conversely, once the momentum turned, the same investorscouldn't be bothered with gld (sic) even at 30% lower. At the same time, in the "east" the higher the price of gold rose, the lower the demand was for physical, which for that extinct breed of deranged gambler known as "value investor" is a familiar concept."  And now that gold's price is not only back to early 2011 levels, but is essentially below production costs, demand out of China is off the charts. Demand in India - traditionally the greatest in the world - continues to also at unprecedented levels, although now that official purchases of gold are regulated and limited through capital controls, it is forcing the local population to smuggle in gold through the most innovative of schemes.
But while the west is the west, and the east is the east, and no amount of adaptive behavioral modifications can change that, much to central bankers' chagrin, what lies in-between? Courtesy of the Saudi Gazette we learn that the uber-rich middle eastern kingdom, which floats on a sea of oil has picked its side... and it has chosen to take advantage of the ongoing paper-driven price collapse and load up on as much gold as possible.
From the Saudi Gazette:
The gold shops in Jeddah are now flourishing as more customers are buying various gold types thanks to the international drop of gold prices.

Saleh who works in Al-Amari gold shop said that more people are now buying various gold jewelries and others are buying gold bullions to store their money after staying away from gold for quite sometime.

According to him various nationalities are approaching them including Saudis, Africans and Indians. The prices he said range from SR165 to SR140 per gram based on the item being sold. The price is set based on any additional work or jewelries being added. The country where the gold comes from also determent the price, “We have Italian Indian, Bahraini, Korean and local gold creations each with a distinct price,” said Saleh.

Speaking to the Saudi Gazette, Ali Batarfi,  deputy chief of gold in Jeddah, said that they anticipate that the gold prices will continue to drop towards this month to reach $1150 per once, however the prices are likely to increase during the first quarter of 2014.

Batarfi said “the gold market is now witnessing an increase in sales thinks to the drop in gold prices, however not only that but also the school break that will start very soon will also drag more consumers into the market who will buy gold for their special occasions especially weddings.”

The gold has marked a drop this year from $1,920 per once to $1,193.3, which crated a difference in the costumer attitude in buying and storing gold, said Batarfi and added, “we anticipate that more gold will be sold both with jewelries and pure bullions.”
Experts in the field believe that the international move towards investing in various sectors and the stabilization of these moves have decreased the investment in gold with China and India lessening their investment in gold. The demand on gold from central banks has also lessened. Consumer demand for gold jewelry worldwide grew by 20 percent for the year ending September 2013, reaching 3,757 tons and valued at $183.9 billion.

According to a report released lately by The World Gold Council’s Gold Demand Trends, regional consumer demand for gold jewelry has grown by 25 percent, reaching 225.8 tons and valued at $10.9 billion, with the UAE and Saudi Arabia featuring prominently.
So while the rest of the world celebrates the anti-Giffen good nature of gold, a function of sophisticated US investors for whom only momentum and 200 DMA lines matter, and is buying it up at an unprecedented pace, these same sophisticated investors in the US are dumping the certificates representing to be backed by the yellow metal in droves and are BTFATHing stock certificates exchangeable for a currency that is being diluted at a pace of $85$75 billion per month, even as more and more gold miners are set to go out of business if the price of gold continues to drop below production cost.
We are confident that we know how this latest "conflict" between "east" and "west" will end...


( Just compare the  flows of gold to China this year with what Germany has been able to " claw back " from the New York Federal Reserve Bank ! )

A Year Later, The Bundesbank Has Repatriated Only 37 Tons Of Gold (Of 700 Total)

Tyler Durden's picture

Procuring physical gold seems to be a rather problematic and time-consuming process, as the Bundesbank is learning.
Recall that it was almost exactly one year ago in mid-January, when the German central bank, in a shocking development expressing the bank's lack of trust in its central banking peers, announced that it would proceed with the repatriation of 700 tons of gold held by its "partners" the New York Fed and the Banque de France, by the end of 2020.
Since we had posted numerous articles on the topic of German official gold just prior to this announcement, many of which speculated about its quality and existence, it seemed like a shocking confirmation that the most hawkish of European central banks was taking its commitment to hard-money so seriously, especially after just weeks prior it swore up and down it has confident about its gold where it currently was.
This is what we said at the time:
There is no need to explain why this is huge news (for those who have not followed our series on the concerns and issue plaguing German gold can catch up hereherehere, here, and certainly here) . At least no need forus to explain. Instead we will let the Bundesbank do the explanation. The following section is the answer provided by the Bundesbank itself in late October in response to the question why it does not move the gold back to Germany:
The reasons for storing gold reserves with foreign partner central banks are historical since, at the time, gold at these trading centres was transferred to the Bundesbank. To be more specific: in October 1951 the Bank deutscher Länder, the Bundesbank’s predecessor, purchased its first gold for DM 2.5 million; that was 529 kilograms at the time. By 1956, the gold reserves had risen to DM 6.2 billion, or 1,328 tonnes; upon its foundation in 1957, the Bundesbank took over these reserves. No further gold was added until the 1970s. During that entire period, we had nothing but the best of experiences with our partners in New York, London and Paris. There was never any doubt about the security of Germany’s gold. In future, we wish to continue to keep gold at international gold trading centres so that, when push comes to shove, we can have it available as a reserve asset as soon as possible. Gold stored in your home safe is not immediately available as collateral in case you need foreign currency. Take, for instance, the key role that the US dollar plays as a reserve currency in the global financial system. The gold held with the New York Fed can, in a crisis, be pledged with the Federal Reserve Bank as collateral against US dollar-denominated liquidity. Similar pound sterling liquidity could be obtained by pledging the gold that is held with the Bank of England.
And in case the above was not clear enough, below is the speech Buba's Andreas Dobret delivered to none other than NY Fed's Bill Dudley in early November:
Please let me also comment on the bizarre public discussion we are currently facing in Germany on the safety of our gold deposits outside Germany – a discussion which is driven by irrational fears.

In this context, I wish to warn against voluntarily adding fuel to the general sense of uncertainty among the German public in times like these by conducting a “phantom debate” on the safety of our gold reserves.

The arguments raised are not really convincing. And I am glad that this is common sense for most Germans. Following the statement by the President of the Federal Court of Auditors in Germany, the discussion is now likely to come to an end – and it should do so before it causes harm to the excellent relationship between the Bundesbank and the US Fed.

Throughout these sixty years, we have never encountered the slightest problem, let alone had any doubts concerning the credibility of the Fed [ZH may, and likely will, soon provide a few historical facts which will cast some serious doubts on this claim. Very serious doubts]. And for this, Bill, I would like to thank you personally. I am also grateful for your uncomplicated cooperation in so many matters.The Bundesbank will remain the Fed’s trusted partner in future, and we will continue to take advantage of the Fed’s services by storing some of our currency reserves as gold in New York.
Incidentally, what Zero Hedge did provide after this article, was factual evidence that the Buba's very much "trusted partner" had been skimming it on physical gold deliveries on at least one occasion, in "Exclusive: Bank Of England To The Fed: "No Indication Should, Of Course, Be Given To The Bundesbank..."
So we wonder: what changed in the three months between November and now, that has caused such a dramatic about face at the Bundesbank....
* * *
The question of Buba's relationship with other central banks still remains open, however one thing we have just learned is the pace at which the German Central Bank has been able to repatriate its gold. It would make a snail proud.
Yesterday Buba head Jens Weidmann told Bild that gold valued at €1.1 billion has been repatriated so far. Putting a weight to this number: to date the Bundesbank has received shipments of a paltry 37 tons of gold from its existing storage place in either New York or Paris to Germany: "The gold reserves of the country will be stored in Frankfurt because it has a special storage with the corresponding equipment,” said Carl-Ludwig Thiele, a Bundesbank board member. 
The repatriated amount over the course of all of 2013 represents just over 5% of the total stated target of 700 tons, and is well below the 87.5 tons that the Bundesbank would need to repatriate each year if it were to collected the 700 tons ratably ever year in the 8 year interval between 2013 and 2020.
So the question begs: since the price of gold has tumbled in 2013 (according to many driven in part by the Buba's own demand, which would make procuring gold in the open market for the US and French central banks that much easier for subsequent dispatch to Frankfurt) and one would assume there would be many more sellers than buyers of physical, why would the Bundesbank not be able to obtain a far greater share of the gold? Unless, of course, neither New York nor Paris actually have free, unencumbered physical gold in their possession -with most of it leased out to various even closer "partners" - and are scrambling to procure as much physical as they can find at the new low, low prices (thank you paper gold ETF dumping).
However, a snag seems to have emerged: unlike in the "west" where momentum is the only driver of "value", buyers out of China (and of course India, especially when one considers the black market attempt to circumvent the Bank of India's capital controls on gold imports) are hoarding as much physical gold as they can get. Could it be that the Bundesbank is unable to repatriate more just because China is already buying up every marginal tons of physical gold in the market, and is making physical gold purchases by the Fed next to impossible?
In other words, is China now holding Germany's gold hostage, and if so when and what price would it release it to the New York Fed and the Banque de France? One look at just the pace of imports by China reveals that if indeed this is the case, then there may be a few snags in this hardly best laid plan of central bankers and men.



Not surprisingly, it was pretty quiet in the gold market yesterday in the run-up to Christmas---and the rest of the holiday season.  The gold price traded mostly within five bucks or so of the $1,200 spot price mark.
The highs and lows, if you wish to dignify them with that name, were recorded by the CME at $1,205.60 and $1,191.80 in the February contract.
Gold closed in New York on Monday afternoon at $1,198.40 spot, which was down $5.10 from Friday's close.  Volume, net of December and January, was 87,000 contracts.  I wouldn't read much [if anything] into yesterday's price action except for the fact that I'm not surprised that gold didn't close above the $1,200 spot price mark.
The same lack of price action occurred in silver as well, with the price trading within a two bit range of its Far East open for the vast majority of the Monday session.
Silver closed at $19.46 spot, which was down 4.5 cents from Friday.  Net volume was an anemic 19,000 contracts.
Platinum had a bit of a rally that got capped shortly before 9 a.m. EST---and it was then sold down below Friday's close by the London p.m. gold fix.  After that it didn't do much.  Palladium had no rally at all, but it got sold down as well, with the low coming shortly after London closed for the day at 11 a.m. EST.  Here are the charts.
The dollar index closed late on Friday afternoon in New York at 80.56.  Once trading began in the Far East on their Monday morning, the index chopped lower, hitting its nadir of 80.34 around 10:45 a.m. EST in New York.  The subsequent rally pared the loss---and the index closed at 80.45---which was down 11 basis points on the day.  Here's the 3-day chart.


The CME's Daily Delivery Report showed that 20 gold and 7 silver contracts were posted for delivery on Thursday within the Comex-approved depositories.  JPMorgan stopped all 20 gold contracts, and 4 of the silver contracts---all of them in its in-house [proprietary] trading account.  The link to yesterday's Issuers and Stoppers Report is here.
There was another big withdrawal from GLD yesterday.  This time an authorized participant took out 270,555 troy ounces.  And as of 8:03 p.m. EST yesterday evening, there were no reported changes in SLV.
The U.S. Mint reported selling a fairly healthy 13,000 troy ounces of gold eagles on Monday---but that was everything.  It seems obvious to me that the mint is done selling the 2013 silver eagles, as sales have been static at 1.2 million for the last 10 days or so.
Over at the Comex-approved depositories on Friday, there was more big in/out movement in gold, as 117,745 troy ounces were reported received---and precisely two metric tonnes [64,300.000 troy ounces] were shipped out of Scotia Mocatta.  JPMorgan received a bunch as well. The link to that activity is here.
In silver, 874,482 troy ounces were received, most of which went into JPMorgan's vault---and 614,022 troy ounces were shipped out.  The link to that action is here.


Selected news and views........

Nine King World News Blogs/Audio Interviews

1. John Embry: "Despite the Propaganda, the U.S. Economy is Collapsing".  2. James Turk: "Bail-Ins, Financial Collapse and the Great Money Bubble".   3. Dr. Paul Craig Roberts [#1]: "U.S. Propaganda and Outright Lies".  4. Robert Fitzwilson: "The Drama and Suspense as We Kiss 2013 Goodbye".  5. Dr. Paul Craig Roberts[#2]: "We No Longer Have Free Markets".  6. Andrew Maguire: "Behind The Scenes Look at the Fierce War in Gold".  7. Richard Russell: "Global Shock and Massive Wealth Destruction".  8. The first audio interview is with Andrew Maguire...and the second audio interview is with Dr. Paul Craig Roberts.

Iranian gold stars in Turkish corruption scandal

It is difficult to predict how the bribery/corruption investigation into several Turkish ministers will end. Although there are those who frame the event as a power struggle between the Fethullah Gulen movement and the government, conspiracy theories expand its dimensions to include the United States and Iran. With the detentions of Suleyman Aslan, CEO of Halkbank, and Riza Sarraf, an Iranian businessman who deals with gold and was originally named Reza Zarrab, the focus is now on the Iran-Halkbank-gold triangle.
The government is looking for US and Israeli hands in the operation because of the use of Halkbank to circumvent the sanctions imposed on Iran. Prosecution sources stress that the investigation is aimed not at Halkbank but its CEO, after a search of his house yielded $4.5 million hidden in shoe boxes. But the arrival in Turkey of David Cohen, the US Treasury's undersecretary of terrorism and financial intelligence, shows the importance of the Sarraf-Halkbank file in the affair.
Since Iran was banned from using the international money-transfer system SWIFT as of March 2012 as stipulated by US-EU embargoes, there have been many media reports that Tehran has been using Turkey’s Halkbank to evade the restriction.
This news item appeared on the Turkish Internet site al-monitor.com, but there's no dateline, however it's certainly less than two days old.  I thank U.A.E. reader Laurent-Patrick Gally for sharing it with us.

Drop in gold price fuels buying frenzy in Saudi Arabia

The gold shops in Jeddah are now flourishing as more customers are buying various types of gold thanks to the international drop in gold prices.
Saleh, who works in the Al-Amari gold shop, said that more people are now buying gold jewelry and others are buying gold bullion to store their money after staying away from gold for quite some time.
He said various nationalities are approaching the shop, including Saudis, Africans, and Indians. Prices, he said, range from 165 Saudi riyals to SR140 per gram. The price is set based on any additional work or jewelry being added. The country where the gold comes from also helps determine the price. "We have Italian, Indian, Bahraini, Korean, and local gold creations, each with a distinct price," Saleh said.
This interesting news item, filed from Jeddah, was posted on thesaudigazette.com.sa Internet site yesterday morning local time...and I found it buried in a GATA release.  It's worth reading.

Indians working abroad start bringing huge amounts of gold back home legally

Faced with curbs on gold imports and crash in international prices leaving it cheaper in other countries, gold houses and smugglers are turning to non-resident Indians to bring in the yellow metal legally after paying duty. Any non-resident Indian who has stayed abroad for more than six months is allowed to bring in 1 kilogram of gold.
It was evident last week when almost every passenger on a flight from Dubai to Calicut was found carrying 1kg of gold, totalling up to 80kg (worth about Rs 24 crore). At Chennai airport, 13 passengers brought the legally permitted quantity of gold in the past one week.
"It's not illegal. But the 80kg gold that landed in Calicut surprised us. We soon got information that two smugglers in Dubai and their links in Calicut were behind this operation, offering free tickets to several passengers," said an official. The passengers were mostly Indian labourers in Dubai, used as carriers by people who were otherwise looking at illegal means, he said. "We have started tracing the origin and route of gold after intelligence pointed to the role of smugglers."
Where there's a will...there's a way!  This very interestingnews item, filed from Chennai, was posted on The Times of Indiawebsite in the wee hours of Sunday morning IST...and it's another item I found embedded in a GATA release.

India's commerce ministry calls for easing of gold import restrictions

India's commerce ministry has asked its finance counterpart to ease the restrictions on the import of gold, imposed by the Reserve Bank of India, in an effort to push exports.
In a letter to Economic Affairs Secretary Arvind Mayaram, Commerce Secretary S R Rao has asked him to ``look into the matter'' with regard to gold imports by exporters and, issue necessary instructions to the RBI for the removal of the anomaly. "The commerce department is repeatedly receiving representations from stakeholders in the matter and our exports are suffering,'' Rao said in the letter.
Rao also pointed out that as the Foreign Trade Policy did not prohibit exporting first and then importing for replenishment purposes, the prohibition imputed by the department of revenue, based on the RBI circular, ``did not  appear to be in order.''
If implemented, the move would come as a relief to jewellery exporters who have been reeling from the government induced gold import curbs.
This article, filed from Mumbai, was posted on the mineweb.comInternet site yesterday...and it's another offering from Ulrike Marx.

RBI chief: No doubt gold smuggling will rise if import curbs continue

Gold smuggling into India will pick up if the import curbs continue for too long, the Reserve Bank of India chief Raghuram Rajan said in an interview to television channel CNBC Awaaz on Monday.
India will keep a tight leash on gold imports despite a recent improvement in its trade deficit and lobbying by a bullion industry struggling with high premiums and a supply crunch.
Earlier this year, the Indian government and the central bank issued a series of curbs on imports of gold - the second-most expensive item on India's import bill - hoping to ease the pressure on the currency. Measures included hiking import duties on gold to a record 10 percent.
Those three paragraphs posted above are all there is to thisReuters story, there's nothing else.  It was filed from Mumbai late yesterday afternoon IST...and it's the final contribution of the day from Ulrike Marx, for which I thank her.

GoldCore's O'Byrne: Gold market rigging isn't an outlandish complaint anymore

In yesterday's commentary for bullion dealer GoldCore, Mark O'Bryne notes that complaints of gold market rigging are gaining credence, as measured by the attention starting to be paid by respectable people in positions of prominence.
O'Byrne writes that commentary published last week byBloomberg News and called to your attention by GATA "shows how what was once dismissed as an outlandish 'conspiracy theory'" whose proponents were "laughed at as paranoid tin-foil hat wearers is now not considered quite so outlandish. This is especially the case given that banks have been found to be manipulating and rigging many markets and governments are openly active in currency and especially bond markets today."
Mark's commentary was posted at the goldcore.com Internet site...and it's another article I found on the gata.org Internet site yesterday.  I thank Chris Powell for wordsmithing 'all of the above'.



Technical funds, as their name indicates, trade on price signals alone; particularly selling when new price lows are recorded, as was the case this week. Technical funds don’t care a whit about anything except price movement and not a one pays any attention to outside supply/demand factors or what the Fed does or says. These trading funds sold and sold short on Wednesday and Thursday because gold and silver prices were down to new lows; pure and simple. Therefore, the unanimous conclusion that gold and silver prices fell because of the Fed announcement is pure poppycock.
The far more compelling explanation for the price downdraft is that the counter-parties to the technical funds, led by JPMorgan and other commercials acting in collusion, used the Fed announcement to illegally set prices lower on the Comex in order to induce technical fund selling. The Fed’s announcement was merely a convenient cover story for the commercials to rig prices lower so that they could buy as much as they could from the technical funds. I can understand how easy it is for the media to get the story completely wrong; what I can’t understand is how some precious metals market commentators still profess not to see the real story. - Silver analyst Ted Butler: 21 December 2013
There's not a thing worth commenting on regarding yesterday's price action, or lack thereof.  The Christmas/New Year holiday season is upon us---and unless there is some "midnight move" that no one expects, or some black swan shows up out of left field, it's pretty much guaranteed that there won't be much price action between now and the first business week in January.
That's certainly confirmed in Far East price "action" on their Tuesday, as there is no price action---and very little volume.  London has been open for about 30 minutes as I write this---and volume is under 10,000 contracts in gold, and about 2,500 contracts in silver.  The dollar index isn't doing much, either---and I expect the exchanges to close in New York early today.
And as I hit the send button on today's column at 5:20 a.m. EST, not much has changed since I wrote the above paragraph. Prices are up a hair, volumes are up a bit, but other than that, "there's not a creature stirring..."
As I mentioned in Saturday's missive, I'll have a column on Saturday morning, but I haven't decided if I'll have one on Friday or not.  If there's no price activity worthy of the name, don't expect one in your in-box.
Let me take this opportunity to wish you and yours a happy and safe holiday season.


Almost Every Passenger On A Flight From Dubai To India Was Found Carrying 1 Kilo Of Gold

Tyler Durden's picture

Submitted by Michael Krieger of Liberty Blitzkrieg blog,
Watching Indian bureaucrats attempt to halt more than one billion human beings’ desire for gold has been one of the more entertaining and pathetic stories of all of 2013. It is one that I have covered on many occasions, the latest being my post from earlier this month:  Gold Smuggling Increases 7x in India and Surpasses Illegal Drug Trade.
Well it appears the trend continues, potentially at an accelerated rate, as we just learned that, incredibly, “almost every passenger on a flight from Dubai to Calicut was found carrying 1kg of gold.” As I have said many times in the past, if an Indian wants their gold, they will have their gold.
CHENNAI: Faced with curbs on gold imports and crash in international prices leaving it cheaper in other countries, gold houses and smugglers are turning to NRIs to bring in the yellow metal legally after paying duty. Any NRI, who has stayed abroad for more than six months, is allowed to bring in 1kg gold.

It was evident last week when almost every passenger on a flight from Dubai to Calicut was found carrying 1kg of gold, totalling up to 80kg (worth about Rs 24 crore). At Chennai airport, 13 passengers brought the legally permitted quantity of gold in the past one week.

“It’s not illegal. But the 80kg gold that landed in Calicut surprised us. We soon got information that two smugglers in Dubai and their links in Calicut were behind this operation, offering free tickets to several passengers,” said an official. The passengers were mostly Indian labourers in Dubai, used as carriers by people who were otherwise looking at illegal means, he said. “We have started tracing the origin and route of gold after intelligence pointed to the role of smugglers,” he said.

Reports from Kerala said passengers from Dubai have brought more than 1,000kg of gold in the last three weeks. People who pay a duty of Rs 2.7 lakh per kg in Dubai still stand to gain at least Rs 75,000 per kg, owing to the price difference in the two countries. Gold dealers in Kerala say most of this gold goes to jewellery makers in Tamil Nadu and Andhra Pradesh.

These government measures to control the current account deficit did not reduce the demand for gold in the market. “RBI tried to discourage gold purchases because it doesn’t have the utility of other commodities like oil or copper. It mostly sits there in lockers. But when the gold imports through proper channels have come down, merchants have started depending on illegal channels to meet the demand from consumers,” he said.
As expected, a gigantic fail, but at least it served to enrich smugglers from across the region.


After a year, Bundesbank repatriates only 37 of 700 tonnes of gold

1:16p ET Tuesday, December 24, 2013
Dear Friend of GATA and Gold:
While Germany's Bundesbank announced a year ago that it would repatriate most of the 700 tonnes of gold it has vaulted with foreign central banks, the Berlin newspaper Bild reported yesterday that only 37 tonnes have been repatriated so far:
Even that much repatriation was to involve only 20 percent of the German gold reserves held at the Federal Reserve Bank of New York, and repatriating even that small fraction was going to require seven years.
Zero Hedge notes the Bild report with some acerbic commentary today.
The pace of the Bundesbank's gold repatriation, Zero Hedge says, "would make a snail proud."
"Since the price of gold has tumbled in 2013 (according to many, driven in part by the Bundesbank's own demand, which would make procuring gold in the open market for the U.S. and French central banks that much easier for subsequent dispatch to Frankfurt) and one would assume that there would be many more sellers than buyers of physical, why would the Bundesbank not be able to obtain a far greater share of the gold? Unless, of course, neither New York nor Paris actually have free, unencumbered physical gold in their possession -- with most of it leased out to various even closer "partners" -- and are scrambling to procure as much physical as they can find at the new low, low prices. (Thank you, paper-gold ETF dumping.)"
Zero Hedge's commentary is headlined "A Year Later the Bundesbank Has Repatriated Only 37 Tons Of Gold (0f 700 Total)" and it's posted here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Silver Doctors items......


Lelde Smits Jim RickardsWhen asked by Aussie Lelde Smits what prompted the plunge in gold & silver Jim Rickards responded:
We know there is some central bank manipulation, we know this is going on, its actually disclosed in certain ways.
Whenever you’re trying to solve a crime you ask who has the motive?  The person with the greatest motive to keep the price of gold low is actually China because they have the most to buy.  People point their finger at the Fed, but you might suspect China.
Rickards full interview on gold, QE, & Bitcoin is below:


Few analysts are watching the evolution of the COMEX/LBMA markets as closely as Jesse (Jesse’s Café Américain). Both markets are where the gold spot price is determined and a lot of paper gold contracts and physical gold movement are involved. So it’s important to watch both markets waiting for a potential default event that would start to free the determination of the gold price from manipulationIn this interview with Jesse, we discuss the issues at the very center of the gold market today : COMEX/LBMA manipulation, default event and how investors should react to the long correction in precious metals.

 Submitted by GoldBroker:
Fabrice Drouin Ristori (FDR)Reading your blog and market comments, one can see you spend a lot of time analyzing what’s going on in the COMEX and LBMA markets. Can you explain why you think these two markets are key markets to analyse in order to understand gold ?
JessePrices for gold globally are still being set largely by the COMEX and the LBMA, despite the remarkable shift in physical markets and bullion buying to the developing countries, especially those in the Mideast and Asia.
This may not make sense, and I have noted this many times, as ‘the tail wagging the dog.’ How can what are highly leveraged markets, paper markets I call them, that are dominated by speculation and short term transactions and wild price volatility, be setting the prices and thereby the resource allocations for a global market which has to some extent grown beyond them.
This is the symptom of the changes which we have been seeing in the evolution of the international monetary system. It has become outmoded to the point of instability, as the forces of the old Anglo-American banking cartel attempt to maintain the status quo in a system that no longer works.
As the physical exchanges continue to grow I am adding them into my thoughts, very actively. I expect the changes in the monetary system, which I have called the ‘currency war,’ to be driven by their countries and by them. It is the old story of thesis and antithesis. The synthesis will be a new monetary system globally. What that will be I cannot yet know, but I think we can know where to look, and what to look for.

FDRYou are among the few gold analysts who have been warning about a manipulation in the gold and silver markets for a long time now. Can you explain how it operates specifically on the COMEX/LBMA ?   
Jesse: Thank you for the compliment, but I am hardly the primary one and certainly not the first. GATA and Ted Butler among others have been doing quite a bit of the ‘heavy lifting’ in sounding the alarm about irregularities in these markets. And I think that they are in a better position to explain the mechanics of it, having examined the market structures in great detail.
I first became interested in gold, and later in silver, around 1999 as a result of an intense study of the international monetary system. I had always enjoyed economics, and had managed a multi-billion dollar business unit that spanned almost 100 countries, so I became much more aware of the international currency markets and trade issues than most Americans certainly.
It was in this study that I first became interested in gold because one cannot understand money and international trade historically without understanding gold. And in another intense study of financial crises and bubbles, prompted by my own ringside seat at the tech bubble at the end of the twentieth century, I became intrigued by the role of money and paper and their interactions with real things and people.
Most manipulations of markets are control frauds by their nature, and contain all the usual characteristics of fraud. There is opacity, because frauds thrive in the dark, and on the asymmetric availability of information. There are always a few and very powerful insiders who have the ability to know more than others, to have access to privileged information, and to be able to manipulate the rules and the market mechanisms for their own purposes and advantage.
This is the heart of it. Everything else is detail, which you can surely find out in any amount of depth you may wish. But anyone who is watching these markets closely can no longer miss it unless they are naive or willfully blind.

FDRIn view of this manipulation and the objective it serves (protecting the current fiat monetary system), should long term gold/silver investors be worried about the more than two year correction we have been experiencing so far ?
Jesse: Corrections are all a part of a bull market. I would suggest that people not hold over large positions or use leverage if they are worrying. That is often a sign that they have not come to terms with what they are doing, and have not taken a position that serves them and their needs suitably. But to be direct, based on my own portfolio and positioning I am not concerned. My investment horizon is very long term. I am playing the turn of a page in history and these only have the appearance

FDR: Do you consider the bail-in risks (bank account /pension funds seizure) as very likely to manifest in the coming months in Western countries ?
Jesse: I cannot say how likely because that is contingent on human decisions that have not been made. But it goes without saying that the risk of ‘bail-ins’ is much greater now than it was even a few years ago. We have the example of both Cyprus and even MF Global, and more broadly the entire bailout process engaged in by the US and the EU in response to the financial crisis. That was the beginning of the bail-ins of the public to support the bankers.

FDRA lot of investors only focus on gold as an investment. Would you agree that investors know it’s the best way to protect themselves against what’s coming (inflation, bail-in), but don’t fully realize that, by investing in physical gold/silver, they are actually helping a move back to a sounder monetary system, which benefits societies in general ? Would you consider gold as a « political » investment, a vote against a corrupt monetary system, as confirmed by the recent scandals (LIBOR, exchange rates manipulation) ?
Jesse: I can see where some might see it that way but I don’t, and would prefer that it not become so. I liken gold to a refuge, a place where an individual may seek to protect some of their wealth from the uncertainty of uncertain times, which is what all times of major change become as you know. I think the political battles will be conducted on the world stage by very powerful players, and it would be better for the average person to ‘keep their heads down and stay out of harms way.’

FDRIt’s hard to make any forecast in the precious metals markets, but what are you looking at that would signal an end to the manipulation in the gold and silver markets ?
Jesse: I think that the tension between the paper markets and the physical bullion markets is growing little by little, almost daily now. And it has reached levels that are noticeable.
A few saw the financial crisis of 2008 coming, but predicting when it would arrive was quite a challenge. That is because imbalances can grow and grow, seemingly without end, and make one wonder if they are real. But as they grow, there comes some tipping point, that causes that imbalance to topple.
How can one predict when that tipping point will occur ? Many try but I believe it is not possible. As the imbalance grows, the power required to enable a tipping point becomes less and less, until at times something almost inconsequential can trigger the avalanche of consequences.
Sometimes it is the outbreak of war, sometimes it is the failure of a single banking institution, sometimes it is a piece of news that flashes across the public consciousness like lightning across the night sky.
What I can say is that we are now seeing some odd things happening in the gold and silver markets, increasing volatility and concentrated actions amongst a few powerful players. There is a struggle going on, and when something will happen to cause this tension to slip cannot be predicted precisely.
Those who claim to predict it follow roughly the same pattern, they forecast the even over and over and over, and when it does happen they say ‘see I did predict it.’ And all other past incorrect predictions are forgotten. People fool themselves this way in the market every day with their ‘systems.’
Watch for a break in the market, the failures to deliver. There will be little ones, here and there, and the powerful will seek to ‘fix them’ like plugging holes in a dike. Their supporters and representatives will actively downplay them, and ridicule those who sound any concerns over it. And for a while they will be in control, because the truth remains hidden and events will be difficult to predict.
But at the end of the day, the truth will come out, and things will make sense again, always. And then these same ones will say, ‘Who could have seen this coming ?’ This is how it always is, if you look back over the history of bubbles and crises.

FDR: I would like to thank Jesse again for taking the time for this interview.


Part of the reasoning for the price of gold to attain levels that are multiples of the current price, sometime into the future is the Federal Reserve central bank creating trillions and trillions of digital currency to support every underwater bank in existence. None of the newly created imaginary computer entries, aka currency, has made it into the hands of the business community, nor into the hands of the people, aka financial serfs, as far as bankers are concerned.
The elites use central banks as their ATM machines to pay all the huge bonuses bankers are paid, in return for financially destroying capitalism and maintaining control of the Western world.  What the New World Order elites did not count on was the fact that their own central banks and the countries they bankroll would be faced with the Ponzi scheme destroying themselves from within, much like the United States and that failed European Union scheme.

Under such dire circumstances, the demand for gold has never been greater, at least from Eastern interests.  The demand from public interests, while high, is not enough to cause alarm for central planners.  They can keep the masses under control.
However, they have been blindsided by China.

Submitted by ETP:
China has been the recipient of every tonne of gold they can buy.  Other countries have
also increased gold purchases, the BRICS nations and Turkey, primarily, but  China is
the largest buyer of gold, by far.  This has undermined the financial control of Western
central bankers, who are selling all their gold in order to keep China at bay.   The elites
have spent the past few hundred years accumulating, giving paper in return, and now
they are selling all they have as their own paper is coming back to roost.   It has left their
vgolden cupboards bare.
Russia has inserted themselves into the world as a new power in energy, undermining
central banker control via the petro dollar, aka Federal Reserve Notes, that are backed
by nothing but schemes to defraud the world and transfer as much wealth as possible
into the control of the elites.
Syria has not been about use of chemicals [supplied by the West] in a civil war [stirred
up by the West].  No.  It has been about Syria as a strategic delivery point for supplying
Europe with Russian natural gas.  That makes a lot of the world less reliant on Saudi oil,
which weakens the fiat Federal Reserve Notes, aka the “dollar.”
Less demand for the US fiat “dollar” means there is less need, [really none, now] for the
financially toxic Treasury bonds the US has been issuing [forcing upon] the rest of the
world in order for the US to finance its now broken, debt-riddled country.  The Fed has
become the buyer of last resort to purchase its own debt in its desperate attempt to keep
its Ponzi scheme alive.
What most of the public does not seem to grasp is events like these are responsible for
gold and silver being intentionally suppressed by central bankers to keep themselves in
power.  It is almost that simple.  We will never know the full stories behind what the
Western governments are doing, but their powers have been destroying the countries
under their control, and that control is maintained by worthless fiat currency, such as
the dollar, backed by nothing, and the Euro, a forced currency created to “unite” Europe
so it would be easier to fleece the member nations.
The stake to be driven into the hearts of these ruthless bureaucrats, more than well-
paid to carry out the grand scheme of the elite New World Order, [call it whatever you
will] is not wooden but golden.  Gold is what the Rothschilds coveted the most.  They
discovered how controlling interest can be when greedy sovereign rulers needed money
to finance their control and wars with other countries.  [This all started a few hundred
years ago.]
The Rothschilds supplied all the money necessary for kings to finance their wars.  In
return for unlimited availability of funds to pay the troops and all the other costs of battle,
the Rothschilds demanded gold and silver as payment in return for their loans.  Script was
loaned out, gold and silver was paid back.  When the ability to repay only gold and silver
became untenable, Rothschild demanded control of that sovereign nation’s money supply.
Hence his famous, “Give me control over a nation’s money, and I care not who makes the
rules.”  The Rothschilds ruled the rulers, and they ruled from behind the scenes.  This is
how the New World Order, the powerful elites who control all the currencies, came into
Who elected the International Monetary Fund, the Bank of International Settlements,
those who dictate to the central banks?  Who elected the bureaucrats in Brussels that
run the European Union?  This is an overly simplified version of “follow the money trail,”
but when you do, it leads back to the Rothschilds.  Everything else is a symptom.  The
moneychangers are the root cause.
To this day, almost all Americans have no idea that the Federal Reserve is not a part of the
Federal government.  The central bank, like all Western central banks is a privately owned
corporation.  The Fed, as a private corporation, “lends” money to the U S Treasury.  It does
not actually lend anything, it creates bookkeeping entries and issues bonds, debts the U S
must pay back to the Fed for the Fed lending a bookkeeping entry.  What must the US pay
back?  Gold and silver.
What happens when the gold and silver run out?  The elites who own and run the Fed puts
the US into bankruptcy, [1933], declares a “bank holiday” by shutting down the U S bank
system and reopens a few days later under the Federal Reserve banking system.  The U S
is gone.  The Rothschild formula is now in control of the nation, the laws, the people.
The irony is China and Russia are not under the control of the central bankers, [yet?].
Neither country will play the Rothschild debt game.  Neither China nor Russia will
surrender their gold in return for participation in a world banking system that will give
both countries unlimited amounts of fiat paper.  China and Russia went in the opposite
direction and built up their gold reserves, especially China.
China told the Western banking cartel to keep their paper.  That nation even went as far
as saying, “keep your Treasury Bonds, they are worthless.  In fact, here, take them back
and give us gold in return.”  If the Western banking cartel did not comply, China would
simply dump all their bond holdings onto the market and bankrupt the Rothschild



24 DECEMBER 2013

Gold Daily and Silver Weekly Charts - Merry Christmas!

"God bless us, everyone."

Charles Dickens, A Christmas Carol

Please do not forget the poor this year, for whom Christmas is often sadly just another cold and dreary day. For they are many, and their plight can condemn or redeem us.

Have a pleasant holiday.

See you later this week.


23 DECEMBER 2013

Gold Daily and Silver Weekly Charts - Muddling Through the End of December Delivery

"The gold and silver money which circulates in any country may very properly be compared to a highway, which, while it circulates and carries to market all the grass and corn of the country, produces itself not a single pile of either.

The judicious operations of banking, by providing, if I may be allowed so violent a metaphor, a sort of waggon-way through the air, enable the country to convert, as it were, a great part of its highways into good pastures, and corn fields, and thereby to increase, very considerably, the annual produce of its land and labour.

The commerce and industry of the country, however, it must be acknowledged, though they may be somewhat augmented, cannot be altogether so secure, when they are thus, as it were, suspended upon the Daedalian wings of paper money, as when they travel about upon the solid ground of gold and silver."

Adam Smith, Wealth of Nations

There was intraday commentary related to gold and silver here and here.

If you look at the CME precious metal inventory report below you can see that there *should* be more than enough gold to deliver into the remaining longs that are standing. And January is an inactive month for delivery, so all should be well until February.

Again, and I cannot stress this enough, I am not looking for a default on the Comex in the metals. I think that if there is a market break it will occur in some physical market overseas, and spread in a more domino fashion to the paper markets, including the exchanges and ETFs that may be mispricing the risk of leverage.

There is nothing wrong with the inventory situation at the CME that could not be cured, at least in the short term, by higher prices.  That does not seem to be forthcoming, so we will have to see what happens.

I don't suppose it would help to remind our financial sophisticates of the old saying, 'when you find yourself in a hole, stop digging.'  

Have a pleasant evening.