Thursday, January 23, 2014

Gold News and views for January 23 - 24 , 2014 - JPMorgan's Gold Vault Has Biggest One-Day Withdrawal Ever ...... Ed Steer's daily report for January 24 , 2014 ........... Harvey Organ's daily report for January 23 , 2014 ..... articles to consider on gold from Zero Hedge , Gata , Jesse's Crossroads Cafe , the Golden Truth and Koos Jansen ......


( Customers getting their gold out before February delivery demands hit ? )

JPMorgan's Gold Vault Has Biggest One-Day Withdrawal Ever

Tyler Durden's picture

Curious why over the past few months JPM has quietly been accumulating a substantial amount of eligible physical gold (even as its registered gold inventory is the lowest it has ever been at just 87K ounces since December 13, 2013when 147K ounces of gold was withdrawn - keep that date in mind for a few minutes)? This may have something to do with it: moments ago the daily Comex gold vault reportconfirmed what many expected, namely that the JPM accumulation was merely in advance anticipation of major withdrawals. How major? Well, on January 23, JPM saw 321,500 ounces of gold depart in one day. This was tied for the single biggest daily withdrawal in history!The last time JPM had an identically sized withdrawal? December 13.... 2012.
Something tells us the next few days will see matching withdrwawals from JPM's gold vault, which at last check was officially owned by the Chinese.
And for those wondering how JPM's total gold holdings look over time here it is:

24 JANUARY 2014

Gold Daily and Silver Weekly Charts - Flight to Safety, Papier-mâché Gold Story Fraying

"The paper gold in the London Bullion Market takes the familiar forms that bankers have turned into profit machines: futures, options, leveraged trades, collateralised obligations, ETFs . . . a storm of exotic instruments...

But one day the ties that bind this pixelated gold may break, with potentially catastrophic results.   So if you fancy gold at today’s depressed price, learn from Buba and demand delivery."

Neil Collins, Financial Times

And if and when this reconvergence of appearance and reality does happen, I would look for the news to break over a weekend, or otherwise suddenly, like a thief in the night.

There was intraday commentary on this remarkable piece of mainstream paper-physical gold divergence thinking here.

Silver was under pressure, but gold had some follow through from yesterday as stocks sold off hard on expectations for the emerging markets. So what we saw was a continuation of a flight to safety, that saw some currencies falling hard against gold and the US dollar.

This can said to be the start of a trend. Again, I would like to see more follow through in both stocks and precious metals, with the usual reversals, before I get too excited about this. Although gold seems to be putting some interesting ink on the chart formations.

The good news on Bloomberg TV today was that Jamie Dimon, banker extraordinaire, is receiving a 74% pay increase this year, from $11 million to $20 million.   I am sure most Americans will be enjoying The Recovery just as well.

There were some rather large movements in the Comex warehouses yesterday.  A little over 349,000 ounces of gold bullion came out of the eligible category for parts as yet unknown, with most of that coming from JPM, and somewhat less from Scotia.  The details are in the report below.

A little over 5,000 ounces at Brinks were recategorized from eligible to deliverable.  This does not help much as the registered, or deliverable, category remains shockingly low at a bit over 375,000 ounces with the heavy delivery month of February only weeks away.

But there is plenty of gold in the eligible category, even with today's withdrawals, and higher prices can certainly tempt profit-motivated holders to sell some of that.

I just noticed the Deutsche Bundesbank put out a self-congratulatory press release on having wrapped up phase one of their repatriation of some portion of their nation's gold. Well done Buba.

I do not want to make too much of this, but I do think it is a matter of time before some of the ongoing charades in the economy and financial system fall apart.  And once they do, it may happen at a much faster pace than we might imagine, or that those masters in the universe at Davos would otherwise allow.

Have a pleasant weekend.

Buyers of physical picking off bullion at every London fix, Maguire says

2:35p ET Friday, January 24, 2014
Dear Friend of GATA and Gold:
Longs are taking control of the London gold market and "the physical buyers are picking off the bullion at every single fix," metals trader and market-rigging whistleblower Andrew Maguire tells King World News today:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Fitzpatrick, Hathaway tell KWN about likely short squeeze in gold

8:36a ET Friday, January 24, 2014
Dear Friend of GATA and Gold:
Citgroup analyst Tom Fitzpatrick, interviewed by King World News, senses a short squeeze in gold:
And Tocqueville Gold Fund manager John Hathaway tells KWN why he thinks gold's rise this week has been short covering:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Hugo Salinas Price: Everything in our modern world is a lie

8:30a ET Friday, January 24, 2014
Dear Friend of GATA and Gold:
Interviewed by Mexican financial writer Guillermo Barba, industrialist Hugo Salinas Price, president of the Mexican Civic Association for Silver, says, among many other things: "Of course the gold and silver markets are manipulated. You have to be either blind or a Harvard graduate with a doctorate in economics to ignore the fact." The interview is headlined "Everything in Our Modern World Is a Lie" and is posted at Barba's Internet site, Inteligencia Financiera Global, here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.


The gold price got sold off a few dollars in early Far East trading, but the price was back to unchanged by the London open.  Then at 9:45 a.m. GMT the gold price rallied, only to get capped by 10 a.m. GMT by a wall of HFT selling.
The gold price began rallying anew just moments before the Comex open, but got capped at the London p.m. gold fix---and then chopped sideways into the 5:15 p.m. EST close of electronic trading in New York.
The low and high ticks were reported as $1,230.80 and $1,267.00 in the February contract.
Gold closed in New York yesterday at $1,264.60 spot, up $27.80 from Wednesday's close.  Net volume was pretty chunky at 159,000 contracts.
Silver hit its HFT-induced low tick at 10 a.m. Hong Kong time on their Thursday---and then rallied quietly up until 9:45 a.m. in London.  Then, like gold, away went the price to the upside, only to get capped 15 minutes later on huge volume.  The rally at the noon London silver fix ended the same way---and from there the silver price got sold down a bit into the Comex open.
The rally from that point also ended at the London p.m. fix---and from there the not-for-profit sellers hammered the price back to the $20 spot mark shortly after that.  Then even the tiniest rally got capped after that---and silver was forced to trade sideways for the remainder of the New York session.
The CME Group recorded the low and high ticks at $19.645 and $20.31 in the March contract.
Silver closed nowhere near its high of the day at $20.015 spot, up 22 cents on the day.  Volume, net of January and February, was very heavy at 55,500 contracts.


The dollar index closed on Wednesday in New York at 81.19---and then chopped sideways until about 3:20 p.m. Hong Kong time.  Then the roof caved in.  By the time the low tick was in at 4 p.m. in New York on Thursday, the index had fallen all the way down to 80.42.  From there it recovered a few basis points into the close, finishing the Thursday session at 80.48---which was down 71 basis points from the prior day.


The CME Daily Delivery Report showed that 51 gold and 11 silver contracts were posted for delivery on Monday within the Comex-approved depositories.  Jefferies was the short issuer on 50 gold contracts and 10 of the silver contracts---and Canada's Bank of Nova Scotia was the long/stopper on all the contracts that Jefferies issued.  The link to yesterday's Issuers and Stoppers Report is here.
Another day---and another withdrawal from GLD.  This time an authorized participant took out a chunky 173,552 troy ounces.  And as of 9:39 p.m. EST yesterday evening, there were no reported changes in SLV.
While on the subject of SLV---Joshua Gibbons, the "Guru of the SLV Bar List" updated his website with the data from the current reporting week for SLV---and here is what he had to say: "Analysis of the 22 January 2014 bar list, and comparison to the previous week's list --- 4,241,905.5 oz were added (all to Brinks London), and no bars were removed or had a serial number change."
"The bars added were from: Solar Applied Materials (1.6M oz), Aurubis AG (0.9M oz), Krasnoyarsk (0.4M oz), KCM SA (0.3M oz) and 8 others. As of the time that the bar list was produced, it was overallocated 746.5oz. All daily changes are reflected on the bar list"  The link to Joshua's website is here.
There was a tiny sales report from the U.S. Mint yesterday.  They sold 34,500 silver eagles---and that was it.
Once again there was no reported in/out movement in gold at the Comex-approved depositories on Wednesday.
There was some activity in silver, as 25,001 troy ounces were reported received---and 176,513 troy ounces were reported shipped out.  The link to that activity ishere.


Selected non redundant news related to the PMs.....

Russian gold miners to cut 2014 output after price slump

Two Russian gold miners - Petropavlovsk and Nord Gold - plan to cut production in 2014 as they focus on cost reduction after a slump in the gold price, they said on Thursday.
Many gold producers were hit by a 28 percent fall in the price of gold last year - its biggest annual loss in 32 years - prompting miners to cut costs, delay new projects and hedge, selling their production forward. 
"The miners were mining at the highest possible cost because the gold price was going up and when it stopped going up, they had to reduce that. So that means that they will mine less gold," Peter Hambro, Petropavlovsk chairman, told Reuters.
Petropavlovsk expects its 2014 gold production to decline 16 percent year-on-year to 625,000 troy ounces after it sold high-cost alluvial assets, the company said in a statement.
This Reuters story, filed from Moscow, put in an appearance on the Internet site yesterday---and my thanks got out to Ulrike Marx for bringing it to our attention.

Platinum Talks Today Will Seek End to Pay Strike at Mines

South Africa’s government and union officials will meet today to try to resolve a strike that’s crippling mines run by the three biggest platinum producers.
The companies should expect “marathon negotiations,” AMCU President Joseph Mathunjwa said by telephone.
At least 70,000 employees downed tools at platinum mines yesterday in South Africa, home to 70 percent of the world’s production of the metal, causing about $13.1 million a day in lost revenue. The police force stepped up safety measures as it sought to avoid a repeat of labor unrest that claimed the lives of at least 44 workers near platinum mines in August 2012.
This Bloomberg news item, filed from Johannesburg, was posted on their website yesterday afternoon Mountain time...and it's courtesy of reader Ken Hurt.

Sonia Gandhi seeks easing of gold curbs - reports

Congress party chief Sonia Gandhi has asked the government to review tough import restrictions on gold, which include a record 10 percent import duty, a television channel and a news website said on Thursday.
"You are requested to kindly look into the matter for appropriate action," said a letter written by Gandhi's office to the Ministry of Commerce and Industry, according to the Financial Express website quoting a report by Press Trust of India.
The jewellery industry has been calling for a reduction in the duty and a relaxation of a Reserve Bank of India (RBI) rule that calls for 20 percent of imports to be turned around as jewellery exports. Business has shrunk under the curbs and smuggling is rising.
This Reuters story, filed from Mumbai, was posted on their website yesterday evening IST---and it's the final offering of the day from Ulrike Marx.

No Plans to Roll Back Gold Import Curbs -- Chidambaram

India is not planning any changes to its record import duty on gold and other restrictions on imports until the current account deficit is firmly under control, Finance Minister P. Chidambaram told CNBC TV18 in Davos.
"Until we have a firm grip on the current account deficit I do not contemplate any roll back in any measure. We will have a full idea of the current account deficit only when the budget is presented and when the year comes to an end," Chidambaram said.
He was answering a question about an earlier TV report that Sonia Gandhi, the leader of the ruling Congress party, had written to the government asking for gold import restrictions to be eased. Chidambaram said he had not read the letter.

This is also a Reuters story, also filed from Mumbai.  It was posted on their website late yesterday afternoon IST---and I found it embedded in a GATA release.

Global mined gold output rose 4% in 2013

Contrary to many reports and arguments put forward by gold commentators, the latest analysis by Thomson Reuters GFMS shows global new mined gold output as rising in 2013 – to 2,982 tonnes – an increase of around 4% on the 2012 figure.  As the GFMS report suggests this tends to show the gold mining sector’s short term inelasticity to the sharp fall in the gold price.
In our view the rise in global mined gold production is not surprising.  Major new gold mining project developments already under way will have come on stream, adding to the global total, while the industry’s rapid conversion to a focus on bringing operating costs down to profitable levels at the lower gold prices now prevailing does not mean, as many seem to suggest, that gold output would actually fall as uneconomic units are closed down, Rather, the tendency is for it to rise in the short term as miners struggle to make ends meet without actually having to close down their operations, except in extreme cases.
This commentary by Lawrence Williams was posted on Internet site earlier this morning GMT.



Even though JPMorgan was never able to get its net short position in Comex silver futures below 10 to 12,000 contracts over the past six years because of a limit to technical fund selling and raptor buying competition, it looks to me that the bank has been able to accumulate physical silver because there are different participants in physicals than futures. What this also highlights is the madness and illegality of having the paper price on the Comex setting the price in the physical market. If JPMorgan hadn’t been capable of rigging silver prices lower in 2013, it would never have been able to buy back 100 million ounces of short paper contracts and buy many tens of millions of physical silver as well. -Silver analyst Ted Butler: 22 January 2014
Well, it should be obvious to all that if JPMorgan et al hadn't put in an appearance at several key moments yesterday, the precious metal prices would have closed significantly higher than they did.  Volumes were massive---and although it's a pretty good bet that a decent amount of short covering was involved, the not-for-profit sellers were at battle stations until well after the London p.m. gold fix.  Their calling cards were everywhere on the Kitco precious metal charts.
Gold had a decent rally, but silver got closed back below its 50-day moving average, after a huge breakout going into the London p.m. gold fix---and almost back below the $20 spot price mark, as a seller of last resort sold massive quantities of paper silver in the Comex futures market in order to drive the price back to that level.
If we're going to have a  short covering rally of any consequence at this point, or any time in the near future, it will be over the collective dead bodies of JPMorganet al---as it appears they are prepared to take on all comers.
Based on yesterday's price action alone, I'd guess that JPMorgan's long-side corner in gold has declined significantly, as they certainly sold whatever part of their long position to stop the budding gold rally in its tracks.  I'd also guess that their short side-corner in silver has also grown as well.  However, this won't be known until next Friday's Commitment of Traders Report on January 31.
Talking about COT Reports, we get the new one later today---and after last week's big surprise, neither Ted nor I wish to hazard a guess as to what today's numbers will look like.  But, whatever they are, the changes shouldn't be too big---and I'll have all the details in tomorrow's column.
Also, both the HUI and the Silver Sentiment Index experienced net loses over the last two trading days, so yesterday's big rally didn't help the shares all.  Whether this was by chance, or by design, is irrelevant, as I'm not exactly dancing in the streets about this turn of events.
In Far East trading action on their Friday, gold got sold down about five bucks in the early going---and is now trading sideways with 25 minutes left to go before London opens.  Silver has been trading in a very tight range either side of the $20 spot price mark---and platinum and palladium prices haven't been doing much, either.  Volume in gold, net of roll-overs, is very light for this time of day---and silver volume is extremely quiet.  The dollar index is flat.
And as I fire today's effort off to Stowe, Vermont at 5:10 a.m. EST---nothing much is happening now that London has been trading for a bit more than two hours.  Gold and silver prices are basically unchanged from where they were back then, but both platinum and palladium are down a bit more since the London open.  Net volume in gold is pretty light---and silver's volume is very light.  The dollar index is still dead.  It's like Thursday never happened.
Since today is Friday, nothing will surprise me when I power up my computer later this morning.
Enjoy your weekend, or what's left of it---and I'll see you here on Saturday.

Gold Spikes To Highest Since November

Tyler Durden's picture

Following yesterday's early morning surge when gold jumped $30 from the low $1230, on news that India may relax its gold capital controls, today's sharp spike follow through is more a function of ongoing emerging market currency devaluation and overall risk-offness hitting equities around the globe. And with Bitcoin going nowhere even as both Turkey and Argentina continue to turmoil, it means there is only one good old faithful fiat-alternative - the barbarous relic. Sure enough, at last check, gold was trading north of $1270, back to levels last seen in November, and one sovereign default away from soaring a few hundred fiat equivalents higher. And since all hopes now rest on more BOJ easing (or else watch out below), and more of the same pent up inflation, we may have seen recent lows in gold for quite some time, especially with Gartman once again openly "hating" gold.
2-day move:

Thursday, January 23, 2014

Jan 23/GLD sees a massive 5.39 tonnes of gold leave its vaults in England/SLV remains constant/Comex gold remains constant/gold and silver rise

Gold closed up $23.70  at $1262.30 (comex closing time ). Silver was up  16 cents at $19.99 

In the access market tonight at 5:15 pm
gold: $1264.00
silver:  $20.00

The bankers were set to whack gold/silver last night  trying to our two precious metals huge demand of late. However news from China that they are contracting in their economy plus news of a possible default in one of their trust funds plus news of a bank run on some of its Co-ops banks (Farmer's Co Op) sent gold propelling northbound and it never looked back. A breakout over $1270 /oz will be a huge catalyst.  The gold/silver equity shares rocketed higher as well today.

Now let us see how the GOFO rates are behaving this morning:

Here are today's readings with yesterday's comparison:

  Rates are slightly moving to the positive in direction (slightly away from backwardation)

i) One Month:  +.025000%   vs  yesterday: +.00400000%
ii Two Months:  +.03500000%.  vs  yesterday:  +.018000000%
iii) Three Months:+.0416700000% vs yesterday:  +.0280000000%
iv) Six months:  +.090000000%  vs   yesterday:   +.0640000%

London good delivery bars still in short supply

Let us now head over to the comex and assess trading over there today,

Here are today's comex results:


The total gold comex open interest fell today by 2,424 contracts from 410,959 down to 408,535 as gold was down $3.30 yesterday.  In the non active front month of January  the OI fell by 28 contracts down to 152. We had 0 notices served upon yesterday so we thus  lost 28 contracts or an additional 2800 oz of gold will not stand for the January contract month (probably cash settled). The next big active month for gold is February and here the OI fell by 9,499 contracts to 129,697 . We have  1 week before first day notice for the big February contract month which falls on Friday, Jan 31.2014. Last February we had over 40 tonnes of gold stand for delivery. The estimated volume today was excellent at 245,145 contracts.    The confirmed volume yesterday was poor  coming in at 109,024.  

The total silver Comex OI rose by 42 contracts as silver was par in price  yesterday.  The total OI now rests tonight at 139,510. contracts.   The non active month of January saw it's OI rise by 96 contracts up to to 161. We had 3   notices served yesterday so we gained 99 contracts or an additional 495,000 oz of silver will stand for the January contract month.Today we had a rather large 143 notices served upon for 715,000 oz. The next big active delivery month for silver is March and here the OI fell by 345 contracts  to 86,839.  The estimated volume today was excellent coming in at 52,837 contracts. The confirmed volume yesterday was poor  at 19,629 contracts.

Comex gold/ contract month

Jan 23.2014   the January delivery month.   

Withdrawals from Dealers Inventory in oz
Withdrawals from Customer Inventory in oz
Deposits to the Dealer Inventory in oz
Deposits to the Customer Inventory, in oz
No of oz served (contracts) today
 20  (2700 oz)
No of oz to be served (notices)
132  (13,200  oz)
Total monthly oz gold served (contracts) so far this month
27  (2700 oz)
Total accumulative withdrawal of gold from the Dealers inventory this month
  156,334.1 oz
Total accumulative withdrawal of gold from the Customer inventory this month

  68,417.194 oz

Again we had no activity in the Comex gold vaults today.  Throughout the whole month we have seen very little activity at the Comex vaults.  What is even more puzzling is that we have a week to go before a big delivery and no gold enters any dealer vaults.  It looks to me like the bankers are having trouble locating some gold bars

We had 0 dealer deposit  and 0 withdrawals

total dealer deposits and withdrawals;  zilch

 we had 0 Customer deposits

Total customer deposits: zilch oz

We had 0 customer withdrawals:

Total customer withdrawals: zilch oz
Today we had 0  adjustments
JPM dealer inventory remains  tonight at 87,071.35:  oz or 2.708 tonnes

JPM customer inventory remains  tonight at: 1,371,956.437 oz  or 42.673 tonnes

Today, 20 notices was issued from  JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 20 contracts  of which 0 notices were stopped (received) by JPMorgan dealer ( house account or 0% of the issuance) and 0 notices stopped by JPMorgan customer account.  Today's stopper or receiver of the gold is Scotia.
The total dealer comex gold  remains  tonight  at  370,137.237 oz or only 11.512 tonnes of gold . The total of all comex gold (dealer and customer) rests at 7,812,297.887 oz or  242.99 tonnes.
Tonight, we have dealer gold inventory for our  3 major bullion banks(Scotia, HSBC and JPMorgan) with its gold inventory  resting  tonight  at only 8.881 tonnes.

i) Scotia:  88,532.124 oz or 2.753 tonnes
ii) HSBC: 109,981.67 oz or  3.420 tonnes
iii) JPMorgan: 87,071,35 oz or 2.708 tonnes

total: 8.881 tonnes

Brinks dealer account which did have  the lions share of the dealer gold saw its inventory level remains constant tonight  at only 80,138.17 oz or 2.492 tonnes.  A few months ago they had over 13 tonnes of gold at its registered or dealer account.

Today we  had 20 notices served upon our longs for 2,000  oz of gold.  In order to calculate what will be  standing for delivery in December, I take the total number of notices served  (27) x 100 oz per contract to give us 2700 oz so far tonight +  the difference between the OI standing for January (152) minus today's delivery notices  (20) or 15,900 oz which will stand in the January contract month: 

In summary:

27 notices x 100 oz per contracts already served this January month or 2700 oz +
(152) notices served already this month -  20 (notices served today)  =  15,900 oz or 0.4945 tonnes standing for the January gold month.  We lost 2800 oz of gold standing (probably due to cash settlements).

As you will see below we have only 8.881 tonnes in the registered or for sale category for the big 3 (JPMorgan, HSBC,Scotia) and 11.373 tonnes if you include Brinks.(If you include the tiny Manfra, we end up with a total dealer gold of only 11.512 tonnes). We have witnessed little gold enter the dealer except small deposits from Brinks. Brinks settled finally on its tiny issuance from last week and this landed into the JPMorgan customer account..

In Summary:
i) the total dealer inventory of gold settles tonight  at  a very dangerously low  level of only 11.512 tonnes. Dealer gold has never ever been to this level!!

i)  a) JPMorgan's customer inventory rests tonight at  1,371,956.437 (42.673) tonnes)

ii  b)  JPMorgan's dealer account rests tonight at  87,071.35 oz (2.708 tonnes)

iii) the 3 major bullion banks have collectively only 8.881 tonnes of gold left in their dealer account.(JPMorgan, HSBC,Scotia)

and what is totally remarkable is the fact that little gold entered the dealer comex vaults despite December being the busiest month for the gold calender and February around the corner. January is generally very quiet but we should see some gold transfer into JPMorgan from HSBC and Scotia for December settlements.

In going back over the data for the month of December and today, we have now had 6 withdrawals from the dealer:

3.7 tonnes
1.92 tonnes
1.669 tonnes (from Brinks on last Thursday in December)

We had 2,700.600 oz ( jan 3/2014 from Manfra) or 0.084 tonnes
(Jan 9)   1.987 tonnes from Scotia and
2.79 tonnes (from Brinks  Jan 15.2014)
plus 3 adjustment from the dealer to the customer account of 3.806 tonnes + , .006 tonnes and last Thursday's .3547 tonnes of HSBC adjustments

total:  16.310 tonnes of gold comex settlements.

We had 20.19 tonnes of gold standing for the December contract month and therefore 3.880 tonnes is left to be settled upon  (20.19 tonnes - 16.310 tonnes)

Thus from the big 3 of JPMorgan, HSBC and Scotia we have a dealer inventory of only 8.881 tonnes which must settle upon the 3.880 tonnes still outstanding.

Since JPMorgan has stopped 97% of all issuance, if you remove them from the big three, then we have HSBC and Scotia having an inventory of only 6.173 tonnes of gold which must settle upon 3.880 tonnes of gold still outstanding.

The fun will begin in February especially if we have a large amount of physical gold standing!!


Jan 23:
wow!! we lost a huge 5.39 tonnes with gold rising huge today. The custodian at the GLD must be having nightmares as demand for shares pick up as does China's appetite for metal as bankers buy shares and tender these shares for metal and send the stuff off to Shanghai!!

Jan 23.2014: a huge drop of 5.39 tonnes of gold



Value US$32,087,806,478.44

Jan 22/2014:  a drop of 1.2 tonnes of gold.



Value US$31,744,430,858.67


Another great commentary from Bill Holter

(courtesy Bill Holter/Miles Franklin)


Maybe I'm jumping the gun in wondering what will happen in the February Gold futures on COMEX.  We are a week away from having a fairly good idea about how much will stand for delivery.  Last year if you recall, 40 tons or nearly 1.3 million ounces stood for delivery.  Could this year be a repeat?  The open interest with a week to go is still nearly 14 million ounces...yet the registered category has (net after a completed Dec. delivery) less than 200,000 ounces.

  "Not to worry" we are told because the "eligible" category has over 7 million ounces and with the "flip of a switch" (or twist of an arm?) much of this gold can be changed to eligible and then delivered.  "They" had better hope so because very little "new gold" entered the "registered" vaults for ALL of last year.

  Gold is up $25 today (the magical 2% number) and more than likely "stuck" for the rest of the day because 2% in a day has been a very big line in the sand for several years now.  Zerohedge has suggested that gold is rising today because India may ease their import restrictions.  I have also heard that the "taper whisper" out of Japan and the cross currency turbulence may have a part to do with.  Of course you must keep in mind the German gold brouhaha and the potential (minor but very first) debt default out of China as potential movers.

  I think that the most important event or "thing" currently and even over the last year has been that more people are hearing about the "manipulation story".  Manipulation is now an everyday word and not necessarily attached to the crazy conspiratorialists anymore.  Yes of course the average person's eyes glaze over when hearing this but they glaze over when they hear almost anything of any substance.  The point is, that what was once crazy is now thought of as certainly plausible and actually probable by more and more people.  In other words, there is very little "shock" claiming that gold is manipulated or the Fed has sold our gold or even foreigners gold. 

  Think about this, the "shock" is gone because we have been "shocked to death" for well over 10 years.  Almost everything today ..."ain't what it used to be" and almost nothing however stupid or ridiculous it might be is considered "shocking".  I went to Drudgereport to pull up stupid "shocking" headlines as some examples and had more than a dozen but decided that even this was stupid after reading the headline "sperm donor in Kansas ordered to pay child support to lesbian couple".  Stupid?  Shocking?  Well, yes and that order.

  I know, I'm getting off track here but think about the very basic financial principles that existed 50 years ago that have morphed into today's "normal".  Could "money" ever have been pieces of paper without any tie at all to gold or silver?  How about debt?  What would have been the reaction to the current $17 trillion (really closer to $200 trillion) of national debt?  Or ANY number that had a "t" for trillion in it?  I can still remember when Texaco was taken over in 1985 for about $13 billion...that was THE biggest deal ever done and is now considered chump change.  Or how about the Fed announcing rate policy or doing a press conference, this was all unheard of.  Or better yet, how about the revelation that the Fed lent out "secretly" $17 trillion in late 2008 and more than half of that went to foreign institutions?  Or now the use of the letter "q" as in quadrillion for derivatives ?

  It is not just America or her citizens, the lack of "shock" is a worldwide phenomenon.  Why aren't German citizens going crazy regarding their gold?  Because no one cares anymore.  Our lives have become so rigid and regimented that as long as a paycheck (private, public, retirement or entitlement) comes in the mail ...cashed ...and spends, no one gives a rat's butt about anything.  Oh, some crazy nun had a baby and named it after the Pope you say?  Our gold is gone?  Doesn't matter...what's the difference?  Nothing matters.

  In reality a "lot" really does matter.  The scary thing is that people today are simply no longer equipped (mentally, physically or spiritually) to go through many of the trials and tribulations that our grandparents and earlier generations went through.  I think that what will end up being "the shock" is when "control" is lost.  People today say to any negative scenario "the government will never let that happen", can you imagine the shock when it turns out that there are no more easy solutions and no, governments did let it happen because they couldn't stop it?  Markets have ALWAYS been bigger than governments and it is still so (more so) today, this fact in my opinion will not only be a shock but the majority of thought processes will be altered by this reality.  

Regards,  Bill H.

Gold Surges On Speculation India May Ease Import Restrictions; China Reports Gold Reserves Unchanged

Tyler Durden's picture

Over the past year India's attempt to impose price controls on gold imports has only achieved one thing: forced citizens to find ever newer and more creative means of smuggling gold. It has gotten so bad Indians are now smuggling the yellow metal through Pakistan, on airplanes, and has now even surpassed theillegal drug trade. Which perhaps is why the biggest news in the commodity space overnight was the appeal by India's Congress party chief, Sonia Gandhi - widow to Rajiv - to the government asking for a cut in the record import duty on gold and for other restrictions to be eased, television channel CNBC Awaaz said citing sources that it did not identify.Reuters adds that "the coalition government, led by Congress, is considering easing restrictions, which include a 10 percent import duty and a rule that says 20 percent of all imports must leave the country as exports, government sources told Reuters earlier this month. India used to be the world's biggest buyer of bullion until the government introduced the curbs in order to contain a record current account deficit."
Judging by the spike in gold on the news, two things are apparent: Gandhi may just get her wish granted, as nobody buys the official story scapegoating gold as the reason for the relentless Indian trade deficit. Second, India may soon regain its role as dominant buyers of gold, after massive pent up demand by Indian retail buyers is unleashed on the world, sending the price of gold soaring.
Should that happen, the holdings of the GLD ETF may need to slide below zero in order for sales of imaginary paper gold to offset ever rising demand for physical.
And in other, far more humorous news, China announced that its gold reserves remained unchanged at the end of 2013, at 33.89 million troy ounces, the same as it has been for the past 5 years.
Needless to say, absolutely nobody believes this particular Chinese number.

Bank Of America: "Gold Squeeze Gets Explosive Above 1270"

Tyler Durden's picture

Just out from Bank of America's head technician MacNeill Curry:
Gold gets explosive above 1270. Watch out.

With the US $ coming under pressure, the potential further gold gains is high and rising. 1270 IS KEY. A break of the 1270 pivot should be the catalyst for short squeeze higher, exposing the confluence of resistance between 1362/1399

23 JANUARY 2014

Gold Daily and Silver Weekly Charts - Do It To Me One More Time

Gold and silver had a nice upside pop today, running up to resistance on gold, and the miners finally showed some spirit.

Watching gold and bonds move higher in unison suggests that we were seeing either an asset reallocation out of stock, or even an old fashioned 'flight to safety.'

This precious metals market needs follow through more than ever, to break the downtrend which is an intermediate trend. We have some semblance of an inverse head and shoulders on the chart, little formations nested in larger formations, like fractals.

Let's see another up move like today's a few more times.

There was no movement in the Comex gold warehouse, typical for the non-active month of January.

Have a pleasant evening.

22 JANUARY 2014

Gold Daily and Silver Weekly Charts - Stasis

There was some intraday commentary that I will recommend for your reading:  Where We Are At in the Global Precious Metals Markets - A Framework.

It is a short summary of what I think is driving the precious metals market, particularly gold, but certainly including silver. It seeks to include quite a number of events over the past twenty years that may not make sense in isolation, but certainly can come together as an understandable whole in some framework such as the one which I propose. There are certainly others.

There was no movement in or out of the Comex gold warehouses yesterday.

I have to specially thank Grant Williams for the kind words which he had for Le Café in his newsletter, Things that Make You Go Hmmmm.
"Well, one of the most respected names in the bullion markets is that of Arthur Cutten, proprietor of Jesse's Café Américain (if you follow gold and silver but don't have that page bookmarked, I'd recommend you do so right now.) In a post he wrote in March 2010, Arthur asked a pertinent question [about AIG]"
It is nice to be recognized for something you care about from someone whom you respect.

I showed this to she-who-must-be-obeyed, and in response she recounted some of her favorite excerpts from His Mistakes and Shortcomings in six volumes which she has maintained over the past 41 years.

Many of them are sins of omission,  according to her judgement, and 'stupid things all men say and do' for which I therefore am not personally responsible.  But alas, the rest are spot on.

So I can assure you such effusive compliments will not go to my head.

But I may have a Manhattan tonight as a personal bonus for having done something right.  And besides, its my 62nd birthday, and it's the little things that make life worth living.

The Dude abides.

Have a pleasant evening.

Open Letter To CPM Group

To CPM Group,

On January 15, 2013 CPM Group released a Market Alert addressing the facts and fantasies being spread throughout the mainstream media and the financial blogosphere regarding Chinese central bank gold purchases. An endeavor much appreciated by me as I'm highly concerned with credible figures. In the article various subjects about the Chinese gold market are discussed, not on all do I wish to comment, but there was one I feel obliged to respond to. At one point CPM stated:

One of the commentators added gold deliveries via the Shanghai Gold Exchange to gross supply figures, apparently unaware that the gold involved in these deliveries gets re-delivered repeatedly via the exchange over time. Adding this gold to supply is confusing new supply with market turnover. 

Because I have been the most active reporter on SGE deliveries (or actually withdrawals) chances are this "one commentator" is me. Hence my desire to share my point of view on this matter. I have written extensively on this in the past (which you can read hereherehere and here) but would like to present the rules as disclosed by the SGE and the implications from it on Chinese demand for physical gold once again.

Physical delivery on futures exchanges relates to the amount of gold in the vaults of the exchange that changes ownership after settlement between long and short contracts, a process that in theory can be repeated to infinity and therefore a completely inaccurate indicator for physical supply and demand. The Shanghai Gold Exchange, however, does not only publish data on physical deliverythey also publish data on the amount of physical gold that is being withdrawn from the SGE vaults. There has been confusion about the difference between SGE deliveries and withdrawals because the SGE has been naming withdrawals asdeliveries inconsistently. The numbers I've published on this website always related to the withdrawals from the SGE vaults (these numbers are only released by the SGE on their Chinese website). 

The crucial SGE rule that makes the withdrawal numbers significant is this: once SGE bars are withdrawn from the vaults they are not allowed to be re-depositedThis rule can be found in the SGE rule book (#23), and, for example, is disclosed on several ICBC webpages regarding gold products.

(2) According to the Shanghai Gold Exchange rules, physical gold taken out of the warehouse cannot be taken into the gold warehouse designated by the Shanghai Gold Exchange again.

To be absolutely positive please call the SGE (phone number; 0086 2133189588), they speak fluent English and will confirm this rule.

The rule implies these withdrawals can't be re-delivered. The purpose of the rule is that SGE bars are granted to be of the highest quality, no one can counterfeit an SGE bar and bring it in the vaults. The same rule applies on the Borsa Istanbul

Once gold bars have been released from the Istanbul Gold Exchange vaults, they cannot be re-admitted to the Exchange vaults. They must be melted again and assayed and tested by an Istanbul Gold Exchange approved authority. Such re-melted gold is admitted in the Istanbul Gold Exchange again essentially as new gold bars and can then be traded. 

We can compare this type of policy with the LBMA Chain of Integrity. Bullion Management Group, which is an LBMA associate, states on its website:

If the documentation and the background checks passed scrutiny, then all bars coming from outside the Chain of Integrity are re-assayed and re-cast to Good Delivery standards.

The SGE rule, combined with the Chinese laws that require all imported and mined gold to be sold through the SGE, implies that the withdrawals are equal to total Chinese gold demand. The following quote is from theChinese media, translated by Soh Tiong Hum:

China's explosion in demand for physical gold in 2013 left a deep impression on international investors. The Shanghai Gold Exchange  withdrawals for the year up till 27 December 2013 exceeded 2180 tons. Considering the exchange's position as a hub for domestic gold circulation, in conjunction with a system that forbids withdrawn gold from re-entering inventory, to a large extent the withdrawals number can be treated as the best benchmark for physical gold demand in the Chinese market. Not to mention that the entire 2013 global mined gold production does not exceed 2700 tons. China's massive demand has to a large extent remade the world's gold circulation system. Newly mined and stocked gold is moving through trade links in London – Switzerland – Hong Kong – into China in a large scale orientation towards the East. The impact of China's demand on international gold price will inevitably increase.

I sincerely hope this information will clear up some of the misconceptions of the Chinese gold market.  

Kind regards,

Koos Jansen


India plans no easing of gold restrictions, finance minister says

No Plans to Roll Back Gold Import Curbs -- Chidambaram
By Suvashree Choudhury & Siddesh Mayenkar
Thursday, October 23, 2014
MUMBAI -- India is not planning any changes to its record import duty on gold and other restrictions on imports until the current account deficit is firmly under control, Finance Minister P. Chidambaram told CNBC TV18 in Davos.
"Until we have a firm grip on the current account deficit I do not contemplate any roll back in any measure. We will have a full idea of the current account deficit only when the budget is presented and when the year comes to an end," Chidambaram said.
He was answering a question about an earlier TV report that Sonia Gandhi, the leader of the ruling Congress party, had written to the government asking for gold import restrictions to be eased. Chidambaram said he had not read the letter. ...
... For the full story:

Jan Skoyles: Understanding the London gold fix

1:30p PT Tuesday, January 22, 2014
Dear Friend of GATA and Gold:
Jan Skoyles, research director of The Real Asset Co. in London, today notes growing suspicions about the integrity of the gold market and offers criticism of the daily London gold price fixings. "Even if regulators find little evidence of manipulation," Skoyles writes, "the benchmark is still outdated and wide-open to abuse, particularly due to the closed-curtain nature of the actual fix meetings." Her commentary is headlined "Understanding the London Gold Fix" and it's posted at The Real Asset Co. Internet site here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Inflection point in U.S.-China relationship hinges on gold, Leeb tells KWN

11:54a PT Wednesday, January 22, 2014
Dear Friend of GATA and Gold:
Fund manager Stephen Leeb tells King World News today that an inflection point has been reached in the relationship between the United States and China and that gold figures heavily in it:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

The Golden Truth......


The Golden Rule

"He who owns the gold makes the rules"

Please note:  the "Golden Rule" refers to actual physical gold in one's possession and not futures contracts, GLD shares or even the gold that you have "invested" in via products marketed to wealthy bank clients that claim to have the gold sitting bank vaults (please see this:  ABN Amro Halts Gold Delivery and this:  Rabobank Halts Gold Delivery).

Based on several inquiries in response to the article I co-authored with Dr. Paul Craig Roberts - LINK - I wanted to clarify a couple points.

It is of critical importance to distinguish between paper gold and physical gold.  The majority of gold commentary generically references the trading of gold, without differentiating between "paper gold" - Comex gold futures and other paper-derived products like GLD or bank investment accounts marketed to wealthy clients - and actual physical bars.  The difference is crucial because paper gold contracts can be printed in unlimited quantities and dumped on the market.  But the seller of real gold takes the risk that his buyer on the other side might demand delivery of the physical gold.  If the seller of a futures contract or a bank investment product like the ones marketed by JP Morgan et al is selling security interest in gold that is not really in the vault, the buyer of that product does not own gold.  He does not get to make any rules.

The issue is that historically big buyers of physical gold would leave their gold in bank and Central Bank vaults rather than paying the cost of taking delivery in their own possession for safekeeping (cost of transporation + insurance).   But China as well as other big buyers now require all purchases to be delivered to their own safekeeping because they no longer trust the western banks and Central Banks.  The Fed and its banks have been leasing and borrowing gold from all the vaults in the west in order to have enough gold to deliver to the Asian/Indian buyers.  This has kept the price down in order to support the U.S dollar and the euro. The ratio of paper gold products to actual physical gold is at least 90-100:1.  At least.

But this gold Ponzi scheme is coming to an end and all signs indicate that the Fed, BOE and ECB are out of physical gold other than some gold in the GLD Trust and scrap remnants sitting at the back of bank vaults that has to be melted and recast in order to deliver to Asia.  We know for a fact that the scant 5 tonnes of gold shipped from the NY Fed vault to the German Bundesbank had to melted and recast.  And now Germany is left holding 5 tonnes of the 1500 tonnes it gave to the U.S. after WWII for safekeeping.

The bottom line is that the Fed does not have Germany's gold and there will eventually be consequences.  This is how sacred the German public considers gold:  Imagine that Germany came to this country, took over all the Starbucks, shopping malls and reality tv production studios.  Next imagine that they shut them all down and forbid any access to them at all.  None.  Imagine the response of the U.S. public. That is what is starting to foment in Germany over the missing gold issue.

As I mentioned in the article linked above, Venezuela was able repatriate 160 tonnes of gold in four months.  Why is it going to take the U.S. 7 years to ship back 300 tonnes to Germany when it would require just two trans-Atlantic cargo shipments via air?  The cost of shipping and insurance is miniscule compared to the value of 300 tonnes.  It's because the gold is not there.  It's gone.  No public official is willing to state the obvious and mostly oblivious Americans have no clue it's even an issue.

But it is an issue and the severity of that issue will grow with time.  Already German politicians are preparing legislation that will demand the repatriation of ALL of Germany's gold from the U.S. and France.  That will be fun to watch our Government if the legislation passes.

But the bottom line is that the U.S. gold being held by the Fed - all of it - is gone.  And soon the U.S. will not be making any rules in the global geopolitical arena.