Wednesday, January 15, 2014

Gold news January 15 , 2014 - China remains the dominant force in physical gold demand while JP Morgan still holding the whip hand at Comex ( paper market )....


Another Chinese analyst says gold is crucial to his country's economic security

4p ET Wednesday, January 15, 2014
Dear Friend of GATA and Gold:
Gold researcher and GATA consultant Koos Jansen reports today on another leading personage in China's financial markets, Zhang Bingnan, market analyst for China Central Television and vice president of the China Gold Association, who told a financial conference in Beijing last year that gold is essential to China's economic security:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

TF Metals Report: Fun with GLD

3:23p ET Wednesday, January 15, 2014
Dear Friend of GATA and Gold:
The plundering of the gold exchange-traded fund GLD has reached astounding levels, described in detail today by the TF Metal Report's Turd Ferguson. His commentary is headlined "Fun with GLD" and it's posted here:
CHRIS POWELL, Secretary/Treasurer

China Eases Physical Gold Restrictions

Tyler Durden's picture

As India continues its anti-gold stance (and does nothing but drive the undergound smuggling business), China is continuing its opening of the world's biggest physical bullion market. As India's Economic Times reports,China has granted licenses to import gold to two foreign banks for the first time. "China is actually increasing its transparency," noted on analyst, allowing more banks to import gold could increase the supply of the metal into the country, easing local prices that are higher than in most Asian nations (premiums are currently about $15 an ounce over London prices, compared to less than $2 in Singapore and Hong Kong). They rose to a record high of $30 in April-May last year. "This is the first step that the regulators are taking to ensure that its [physical] gold futures contract in the free-trade zone can take off."

China has granted licences to import gold to two foreign banks for the first time, sources said, as moves to open the world's biggest physical bullion market gather pace.

Allowing more banks to import gold could increase the supply of the metal into the country, easing local prices that are higher than in most Asian nations.

China's gold imports more than doubled last year to over 1,000 tonnes - ousting India as the biggest buyer - as demand soared to unprecedented levels due to the first drop in international prices in 12 years


"China is actually increasing its transparency. I think there will possibly be further access to other banks as well," said Cameron Alexander, manager of Asian precious metals demand at metals consultancy GFMS, which is owned by Thomson Reuters.

China faced a supply crunch early in 2013 when a sharp plunge in gold prices released pent up demand that eroded inventories at banks and jewellery sellers.

Premiums in China tend to be higher as supply is tighter than other parts of Asia due to the quota system and the limited number of import licences.


The granting of new licences is the latest in a string of steps by China to ease restrictions on bullion trading and boost market accessibility.

China approved its first gold-backed exchange-traded funds last year and extended trading hours on the futures exchange.


The move also comes as the SGE plans to launch gold futures in the city's pilot free trade zone this year that would be open to foreign investors.

"China will need to allow more foreign players into the physical gold market if it's planning to have foreign investors participate on its gold futures," said one of the sources.

"This is the first step that the regulators are taking to ensure that its gold futures contract in the free-trade zone can take off."

15 JANUARY 2014

Gold Daily and Silver Weekly Charts - JPM Holds the Whip Hand on the Comex - Buy Signal

About 89,757 ounces of gold bullion left the deliverable category at Brinks, and a similar amount showed up in the eligible inventory at JPM yesterday.  

I do not know who owns the registered gold, since title can be transferred fairly easily.  But it remains fairly clear that JPM was in the driver's seat in stopping most of the deliveries, and now likely holds the 'whip hand' on the Comex in terms of gold.

This brings the overall number of deliverable gold ounces down to 370,137 which is a shockingly low number considering that we are coming into the normally heavy delivery month of February in a few weeks. 

Along with a few other indicators this triggers a 'buy signal' for gold in the intermediate term.  This is the first buy signal that I have issued since gold broke out of its cup and handle and ran to its all time high.  This is a 'structural' buy signal that must be confirmed by price and the chart formation.   The price signal will remain active unless gold sets a lower low on price.

I will post something about potential claims per ounce later tonight. 

There is sufficient gold in the eligible categories at the bullion banks, and while we do not know who actually 'owns it,' there is a high probability that it will take higher prices to pry that gold into the delivery process in February, at least from profit motivated holders. 

Take a look at the distribution of all categories of gold on the Comex.   Brinks and Manfreda have been 'cleaned out,' and the three bullion banks, JPM, HSBC and Scotia Mocatta are the big holders.  This market is now made up of big holders and bag holders.

There is some strong overhead resistance at 1260 which any number of analysts have noted, and there does seem to be an effort to hold the line on price here.

I have marked the most important resistance level, at least from my charting perspective, on the chart in red, just under 1,350 dollars per ounce.  A breakout through 1350 will confirm the buy signal.

February is shaping up to be an interesting month.   The various indicators have come together to signal a buy here but one might wish to wait for confirmation if you wish.  After all, it is a manipulated market.  There might be a rocky road before the precious metals finally break out.

I am now holding a full allocation of trading account gold and am considering adding more on pullbacks.    There are likely to be some vicious pullbacks since the Banks will not wish to have small spec company during the initial leg of this bull market move.  They are just like that. 

If the specs jump on the metals here with leverage they are going to get their teeth knocked out.   I was of two minds in writing this, because I do not wish to see amateur traders throwing themselves to the sharks.  But on the other hand sentiment is so bad that perhaps now they will stand aside and take a more measured approach to investing rather than speculating.

It's been a long time coming.  But change is going to come.
Have a pleasant evening.