Commentary on the economic , geopolitical and simply fascinating things going on. Served occasionally with a side of snark.
Tuesday, February 11, 2014
Gold news February 11 , 2014 -- Bundesbank Changes Gold Repatriation Schedule - while Buba tries to hide what's happened to Germany's gold , the is leaking out ... and Germans want to know the deal ! ! A 500-tonne gap in China's gold consumption data is fuelling talk that the central bank took advantage of weak prices last year to bulk up its holdings of the precious metal ...... Trends Of The Latest Bank Participation Report - by Turd Ferguson ! Harvey Organ's daily missive - data , news and views !
One of the initiators of the German public campaign “Repatriate our Gold” is Peter Boehringer of “German Precious Metal Society” (est 2006). After lengthy efforts together with partner the “European Taxpayers Association”, the team finally, in January 2013, brought about Bundesbank´s decision to repatriate 300 tons of gold from the US and 374 tons from France by end-2020. Because asking your gold back from the US being quite sensitive, the repatriation would be spread over an eight year period. This was the original allocation schedule for the German official gold holdings, 3390.6 tons, set up in January 2013:
………………… 2013 ……….. 2020
Frankfurt ……. 31% ………… 50%
New York ……. 45% ………… 37%
London ………. 13% ………… 13%
Paris ………….. 11% ………….. 0%
What I just found out, and what presumably few people in the English speaking world knew, was that the Bundesbank had made an earlier repatriation request in the fall of 2012, to ship home 150 tons from the US in three years (ending in 2015). So after January 2013 two repatriation schedules co-existed. They were not mutually exclusive – so most Germany expected to see back was 150 tons from the US by 2015 – and ultimately 674 tons by end-2020 from both the US and France.
This was the plan.. But in 2013 only 37 (remelted) tons of gold reached German grounds of which 5 tons from the US. Needless to say, this lifted a few eyebrows. The Bundesbank has now withdrawn the original schedule to repatriate 150 tons from the US before 2015, but continues plan B, to repatriate 674 tons from NY and Paris by end-2020.
The following is the translation of an article written by Peter Boehringer published on Goldseitenblog (click hereto read the original post). It’s a response to a full three page title story that appeared in a German newspaper (Handelsblatt Feb 6, 2014, print version only, not online) on the latest developments regarding the gold repatriation schedule discussed in German politics.
German gold: Bundesbank moves away from specific repatriation schedule
by Peter Boehringer , Founder German Precious Metal Society
06-02-14, for Goldseitenblog
Due to new developments, the initiators of the Repatriate Our Gold action today publish a small update. The print version of the German Handelsblatt today (02.06.2014) published a substantial three page feature exclusively on the German Gold Reserves, widely known to be stored by the German Bundesbank, the Fed, the Banque de France, and the Bank of England. Under the ambiguous title ”Silence is Golden,” no less than four Handelsblatt editors along with Norbert Häring, a senior and competent voice in matters of Gold vs Money, delivered a piece that is in parts pretty critical against the Bundesbank and addresses questions that are familiar to the readers of this blog.
Some of these are the same questions for which we have been labeled as paranoid conspiracy theorists by almost every mainstream publication from the beginning of our initiative in 2011-2012 right up to a few days ago. Questions which, from the perspective of the Bundesbank (BuBa), are apparently too delicate to be answered. But today, the usual rhetorical billy club of “conspiracy theory” is absent from the Handelsblatt piece.Apparently, the German mainstream publication is finally coming to the realization that it would make a ridiculous fool of itself, were it to continue to stick with its conspiracy theory vilification strategy in the face of such overwhelmingly critical BuBa-Gold inquiries from its very own readership, as well as from hundreds of reports from international observers and media, most recently even from the Financial Times. By now, articles on the German gold repatriation demand of Repatriate Our Gold has even appeared in dozens of Chinese, Russian, American, Indian and African publications. The German Gold, opaquely held in custody by the Fed & other central and currently worth more than 100 billion Euros, is not only the core component of BuBa’s balance sheet and the property of the German people, but it is also a geopolitical issue and an important founding stone of the suspected world fractional gold banking system.
The Handelsblatt writes today: ”The policy makers are putting pressure on the Bundesbank.”
=> To which we reply: German “Policy makes” have done almost nothing in the past 50 years. After David Marsh in 1992 and Bruno Bandulet in 2002, and Martin Siegel and Dimitri Speck, Martin Hohmann in 2002 was the first POLITICIAN who at least posed questions - albeit without any results. The same holds for lawyer and member of parliament (MP) Peter Gauweiler. And as a staunch trans-atlanticist, his MP-colleague Mißfelder who currently serves as the German “federal commissioner for the German-American relationship” would never have jumped on the Fed-Gold topic had there not been the mounting public pressure and a need to relieve some of that pressure. In any case, “Policy makers” have not helped us a lot. But at least, a few weeks ago, Mr Mißfelder has finally and rightfully called for the retrieval of ALL foreign holdings of the German Bundesbank (i.e., 2300 tons instead of the planned 700 tons; totally new “dimensions” for BuBa´s imagination…)!
Handelsblatt: ”The repatriation falters – for enigmatic reasons.”
=> Don’t let the BuBa hear that Mr. Häring, otherwise you will quickly be labeled a conspiracy theorist. Nothing is “enigmatic” in the cellars and books of the BuBa and the Fed, absolutely nothing! We are talking (quoting BuBa) about “partner-banks whose integrity is not be questioned,” much like the purity of gold itself. Let that be heard!
Handelsblatt: ”The Bundesbank no longer feels bound to the [concrete repatriation commitment time table] as they now admit for the first time [towards the HB].”
=> Interesting – because this is in fact the first time that the BuBa is partially revoking their promise, made to the German Bundestag (parliament) in 2012, for a full inventory inspection and a repatriation of “150 tons from New York by 2015″. After the 5 tons retrieved from NY in 2013 and the 30-50 tons announced for 2014, the BuBa seems to already KNOW today that not even 100 tons (= 6.7 % of the portfolio) will be forthcoming from NY in 2015! Honi soit qui mal y pense. (“Shame on him who thinks evil of it!”)
=> Indeed, in January 2013 BuBa has come up with a new (less specific) repatriation concept that would retrieve 300 tons from NY & Paris by the end of 2020. However, the concrete repatriation time table from the Bundestag hearings of 2012 had thus far not been withdrawn – which is why the above quoted admission of the unfeasibility of repatriation by 2015 is quite remarkable! And which naturally feeds our mistrust of the Fed’s ability and willingness to deliver the gold.
Handelsblatt: ”Due to ‘logistical challenges,’ the BuBa no longer feels bound to its promise to the Bundestag.”
=> We have already dealt exhaustively with this issue in previous articles. If even the ridiculously low amounts of 80-100 tons of gold per year are too challenging for the Fed and BuBa to transport (and that despite Weidmann’s request for help from the BIS), then one must wonder how back in 2000-2002 nearly 1000 tons of gold were delivered from the Bank of England to Frankfurt without all this fuss and public whining. The BuBa itself has been claiming this successful transportation performance of the early 2000s since 2012.
=> And quite apart from that, the BuBa is of course free to simply ask the Fed for a swap of their bullion with a European gold holder or international dealer, upon which the bars would simply be retrieved from London, Zurich, or even Frankfurt. No physical transatlantic transport required – and everything guaranteed to be LGD compliant! The disadvantage would be that we paranoid gold historians would never get to see in Frankfurt the old German bullion from the 1950s and 1960s that are held at the Fed (since they would be swapped with European gold). But that would be a small disadvantage given that the BuBa has already refused publication of any photos or number lists of the already allegedly repatriated and supposedly already re-melted original Fed bullion, due to “security reasons.” In fact, from the perspective of the BuBa, the swap solution would have the great advantage that we would finally have to put to rest the silly and delicate questions about the whereabouts of our original German bullion bars. But no – even such logistically and legally simple options, by which 2300 tons of overseas gold could be “home by Christmas” are not good enough for BuBa. Honi soit qui mal y pense. (“Shame on him who thinks evil of it…”)
Handelsblatt: ”Peter Gauweiler will no longer accept these delay tactics. He calls for the ‘immediate on-site inspections of the gold stocks and their immediate delivery to Germany’.”
=> Dear Mr. Gauweiler, we happily extend our invitation to you once again to sign the Repatriate Our Gold initiative. Your clearly formulated demands are the same as ours. Since 2011. Let us finally reinforce our demands with the will to actually implement them!
Handelsblatt: ”In 2012, the auditors of the Bundesbank could visually inspect the German bullion.”
=> It’s Groundhog’s day again. This statement is not new. And it remains utterly blank and vague. Furthermore, the BuBa refuses to say anything about who these ominous auditors were (names), when and what exactly they audited, what “visually inspect” exactly means, what inspection reports have been produced and who signed them – in other words, why all this information is being held “confidential”?
=> But wait – we learn some more: BuBa board member Thiele “personally visually inspected” the German gold stocks in June 2012 in NY. Well, Mr. Thiele, did you arrive at any counts and inspection results? And apparently “beyond that” you have also been “in the vaults in London and Paris.” Did you indeed meet the Queen there during a walk in the depths of the BoE? Everything was fairy-tale-fabulous there, was it not? And your spokesman also tells us more: “Mr. Thiele could see everything that he wanted to see.” There is but one question that arises: what did he WANT to see? Ninety years ago your predecessor Hjalmar Schacht explicitly wanted to see NOTHING, although at the time the former Fed chairman B. Strong simply could not find any German gold at the Fed (for “fans” of the German Reich’s gold: these were NOT the 3400 BuBa-tonnes of today!). At that time Schacht had said succinctly: “It doesn’t matter Mr. Strong – I know you are good for it (the replacement gold).” Hmm – we wonder whether Janet Yellen is also “good for it” in the year 2014?
Handelsblatt: ”In addition, an external expert has observed the re-melting of the gold bars.”
=> Oh yeah, baby. That sounds very good, Mr. BuBa Speaker (anonymous). If you would now kindly provide and publish a NAME of this “expert”, his exact procedure for the “counting observation”, his signed report and his expertise – after your recent refusal to provide this information to the Handelsblatt upon their request. Honi soit qui mal y pense. (“Shame on those who..”)
Let us close this small update today not with our own conclusion, but with these “no-longer-conspiracy-theoretical” findings from the mouth of MP Gauweiler:
“I wonder why the Bundesbank cannot repatriate the gold and then allow it to rest in an appropriate form [as reported by GS Blog from 25.12.2013 ]. My suspicion: Apparently the bars are no longer untouched and available. This [leads to] the presumption that the gold bars, while in storage, have been used in a manner that lacked transparency.”
=> Conclusion of the Handelsblatt: “Transparency as promised by Bundesbank looks different.” To be continued.
An old piece of advice – relevant both for individuals and for our Federal Bank board managing our gold. The convenience of naive ignorance will soon cease to work:
“There are two ways to sleep well at night: be ignorant or be prepared.”
Gold Daily and Silver Weekly Charts - Gold Runs Higher
Janet Yellen's testimony today was a bit painful at times, but perhaps it will improve as she becomes more familiar with dancing in the lions' den. Her answer about raising the minimum wage shows her to be a tried and true economic General Pétain, well versed in failure and capitulation to the forces of neo-liberalism.
Trickle down stimulus is going to most likely stretch the social fabric to the point of tearing. But its failure is going to have to be demonstrated quite forcefully it seems. Keep an eye on the UK and parts of Europe for early warning signs.
It was interesting to see gold move higher with stocks, with silver moving higher as well, but somewhat sluggishly. I have a suspicion that this is about gold's February delivery issues and the general shortage of physical gold bullion which is developing. But only time will tell.
About 26,858 ounces of gold bullion came out of Scotia yesterday, in both categories of storage. We have yet to see the kinds of deliveries tacked up that the standing and stopped orders suggests, but it looks like there will be no close shaves this month.
I have marked the key overhead resistance levels for gold in red lines on this chart. And you will notice that gold is still 'channel bound.'
Have a pleasant evening.
Financial Times, London Tuesday, February 11, 2014
SHANGHAI -- A 500-tonne gap in China's gold consumption data is fuelling talk that the central bank took advantage of weak prices last year to bulk up its holdings of the precious metal.
The last time the Chinese central bank said it increased its gold holdings was nearly five years ago, in early 2009. Officials have since then repeatedly insisted that they do not view gold as a useful asset for diversifying the country's $3.8 trillion mountain of foreign currency reserves.
But the latest official figures show that China imported and produced far more gold in 2013 than its citizens bought. This chasm suggests that the central bank was a buyer in the gold market last year in spite of its protestations to the contrary, say analysts.
The China Gold Association published data on Monday showing that Chinese demand for gold surged 41 per cent to 1,176 tonnes last year, making it all but certain that China overtook India as the world's biggest consumer of bullion.
Yet Chinese import and production volumes were even stronger. China imported 1,158 tonnes of gold via Hong Kong, more than double its 2012 total. Domestically, production of bullion rose 6 per cent to 428 tonnes, making China again the world's top producer. On top of that, China also imported gold directly through Shanghai, though these numbers have not been published.
Adding up the reported and estimated figures, Na Liu, of CNC Asset Management, calculated that China's "apparent gold consumption" exceeded 1,700 tonnes in 2013, more than 500 tonnes higher than reported.
"We would not be surprised to hear the People's Bank of China announce a new, significantly higher figure, if it chooses to do so," Mr Na said. The PBOC has said that its gold reserves have been steady at 1,054 tonnes since April 2009.
Tom Kendall, precious metals analyst at Credit Suisse, said it was generally assumed that the Chinese government purchases the majority of domestic production for state reserves.
"In that context, the government buying 500 tonnes of gold last year is quite feasible. Some people think it's significantly higher than that."
But central bank buying is only one of the explanations for the chasm between China's apparent and actual gold consumption.
Liu Xu, an analyst with Capital Futures in Beijing, said that companies in the jewellery market may have also built up their gold stocks and that commercial financial institutions such as banks have also been adding to their holdings. Neither would show up in the gold demand data, which measures final consumption.
"It's not only about increases in official holdings. It's more accurate to say that every level of society, from individuals up to banks, has been allocating more to gold," Mr Liu said. "Wealth is expanding and people have limited investment channels, so gold is attractive."
Moreover, the Chinese jewellery industry has also grown quickly and exports of finished products would not necessarily be captured by the gold data.
The price of gold rose every year from 2001 until 2012, soaring from $271 per ounce to $1,670. But last year its bull run ran out of steam, and prices fell 28 per cent. The drop would have been much greater were it not for the surging demand in China, where consumers took advantage of the lower prices to buy small gold bars, coins and jewellery.
The precious metal has clawed back 6 percentage points this year, and rose to a near three-month peak on Tuesday, trading as high as $1,287.50.
Speculation has been mounting in recent months that the Chinese central bank might announce updated figures for its gold holdings, but Mr Liu said the recent rebound in prices could lead it to remain quiet, for fear of sparking a jump in the market.
The central bank has said the global gold market is too small relative to China's foreign exchange reserves to serve as a viable channel for asset diversification.
Even if the Chinese central bank's gold holdings were twice as large as officially reported, they would still account for roughly 2 per cent of the country's official reserves, well below the norm in more developed economies.
Trends Of The Latest Bank Participation Report
By Turd Ferguson | Tuesday, February 11, 2014 at 10:57 am
The price of gold has rallied to begin the year. With today's move UP through the 100-day moving average, price is now nearly $100 off of the lows of 12/31/13. Through January, you had to wonder which firms were buying and which were selling. With the release of the latest Bank Participation Report, we now have some idea.
First, some background. Recall that this monthly report aggregates the positions of the four largest U.S. banks and the twenty largest non-U.S. banks. In the "U.S." category, this report always includes JPMorgan. The other three firms vary but often include the likes of Citi and MorganStanley. Firms included in the "non-U.S." category are HSBC, The Scoshe, DoucheBank, UnlimitedBS, Barclays and others.
The critical change to this report came last June. Up until then, both sides of the report were NET SHORT since time immemorial. Led by JPM on the U.S. side and HSBC on the non-U.S., the 24 bank total NET SHORT position reached 185,000 contracts on the report dated 10/2/12. (It's important to note that this was the beginning of the entire, post-QE∞ and counter-intuitive selloff that began at $1800 and concluded nine months later at $1180.) The report specifically looked like this:
DATEGROSS LONGGROSS SHORTNET
10/2/12 US Banks 40,625 146,809 -106,184
Non-U.S. 34,881 113,445 -78,564
By the time price had bottomed, the report looked like this:
DATEGROSS LONGGROSS SHORTNET
7/2/13 US Banks 69,656 24,939 +44,717
Non-U.S. 34,904 58,656 -23,752
Taken as a whole, that's a 205,713 contract FLIP.By ounces, that's 20,571,300. By metric ton, that's about 640!! Stated another way...At the onset of QE∞, the 24 largest banks were caught massively NET SHORT paper metal. Their only option was to smash price, creating speculative selling/shorting into which the banks could buy/cover. As you can see, this plan was remarkably effective.
In the seven months since, these summary positions have remained mostly unchanged. The total NET position dropped as low as 8,000 contracts on 9/3/13 and reached a peak of 43,000 on 12/3/13. As of last month, it looked like this:
DATEGROSS LONGGROSS SHORTNET
1/7/14 US Banks 59,291 20,032 +39,259
Non-U.S. 26,128 32,492 -6,364
And, of of last Tuesday, it looks like this:
DATEGROSS LONGGROSS SHORTNET
2/4/14 US Banks 68,658 24,937 +43,721
Non-U.S. 18,752 48,860 -30,108
There are certainly quite a few things that should jump out at you:
First of all, JPM. They are The Big Tuna here. Of the U.S. Bank gross long position, I ascribe 90% to them. This gives them a current NET LONG position that once again exceeds 60,000 contracts. This is far and away the most significant factor that will effect price in the weeks ahead. As has been well-documented, JPM stopped over 6,000 contracts in December and that, along with their December rollovers, reduced the US Bank gross long position from 71,897 on 12/3/13 to 59,291 on 1/7/14. Note that JPM used the month of January to rebuild their position and the US Bank gross position is back to 68,658. Yes, I know that JPM does not appear to be stopping contracts in February. That's fine. Let's wait to see what they do in April and June.
To answer the question posed in the opening paragraph, the firms that were selling and attempting to cap the January rally were basically "everybody but JPM". The other three U.S. banks added some shorts but look at the massive change in the non-US position. They increased their NET SHORT position by over 400% or some 24,000 contracts. If you're wondering who was pounding price back from $1260 and attempting to keep it in check, now you have your answer.
And the similarities to the report of 9/3/13 must be noted. Back then, price had rallied well off the June lows and was UP over $200 at $1413. We all know what happened next. Price stalled and was beaten back through the fall of 2013 to the eventual Double Bottom. What did the BPR of 9/3/13 look like? Does it look familiar ?
DATEGROSS LONGGROSS SHORTNET
9/3/13 69,510 24,604 +44,906
23,626 60,350 -36,724
So the question becomes...Will price continue to rally OR will price now falter, just as it did last September?
As much as you may not like it, the key will be the technicals such as horizontal resistance and the moving averages. Why? Because breaking these levels will spur the tech-based funds and WOPRs to cover shorts. Further rallies will create a double-buy by encouraging these specs to flip long, too.
Late last summer, as price rallied, it briefly exceeded the 50-day and the 100-day moving averages. This generated a virtuous cycle of buying and drove price all the way to $1434. However, back then the critical 200-day moving average was still all the way up near $1500 and price was never able to exceed it. Momentum faded. The non-US banks won and price receded.
What's different this time?
Upside momentum appears to be growing as more and more market participants become aware of The Double Bottom.
Price has exceeded the 50-day MA and, just today, has exceeded the 100-day MA. too.
The miners, as reflected by the HUI, are rallying with many maintaining above their own 200-day MAs.
And, most importantly, the all-important 200-day MA has continued to decline and now resides near $1315. That's just $40 away.
Though it won't be easy, I expect price to soon exceed the 200-day MA and break through significant horizontal resistance at $1320. Once this happens, price will begin to accelerate to the upside and will make a move to challenge the highs of last September. On the chart, it looks like this:
Now remember...I was just about the only guy in the entire blogosphere who told you in early December that the June lows would hold and that a Double Bottom would form before a rally in January. http://www.tfmetalsreport.com/blog/5295/courage-and-convictionSuddenly, there are quite a few rear-window "analysts" in the bullish camp and that's fine. Just remember, though, that I continue to urge patience. Crawling out of this Cartel Bank-induced hole has not and will not be easy. It will take time. As I've often stated, it took nine months to complete the Cartel book-flipping smash from $1800 to $1180. It will likely take another nine months before it is clear to everyone that price has turned and the bull market in paper gold has resumed. This means we could easily have another two months of slow, churning grind higher. Therefore, again, stay patient. Ifhttp://www.providentmetals.com or http://www.jmbullion.com are actually willing to sell you an ounce of gold for $1300, freaking take them up on it! Your days of acquisition at this dollar-conversion price level are numbered. You should be using this time ensure that you have enough "insurance" against the coming fiat disaster and TEOTGKE.
feb 11/GATA ready to present evidence to the German newspapers/Bundesbank had two repatriation schedules/GLD advances by 1.8 tonnes/gold hits $1293.00 per oz/
Gold closed up $15.30 at $1290.10 (comex closing time ). Silver was up 4 cents to $20.14
In the access market tonight at 5:15 pm
silver: $20.23 Today we witnessed a huge breakout of gold beyond the huge resistance level of $1270.00 finishing the comex session at 1290.00 and the access market at $1292.00. The bankers were intent on whacking gold below $1270 but failed miserably. The weak silver price relative to gold probably means that the crooks will try again tomorrow.
Now let us head over and see the readings for the GOFO rates.
OH OH!! Here are today's readings with yesterday's comparison:
Rates still moving strongly to the negative in direction ( all months moving towards backwardation/now first THREE months in backwardation)
i) One Month: -.034000% vs yesterday: -.01400000% (in backwardation) ii Two Months: -.02000%. vs yesterday: -.0020000% (in backwardation) iii) Three Months:-.00400000% vs yesterday: +.012000% (in backwardation) iv) Six months: +.0580000% vs yesterday: +.064000%
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 rose today by 3,145 contracts from 371,037 all the way up to 374,182 as gold was up 11.50 yesterday . In the big active month of February the OI fell by 128 contracts to 1,602 . We had 118 notices filed yesterday so we lost 10 contracts or 1000 oz will not stand. (no doubt that they were cash settled). The next non active gold contract month is March and here the OI fell by 21 contracts. The next big active contract month is April and here the OI rose by 2924 contracts up to 234,632. The estimated volume today was fair at 148,829 contracts. The confirmed volume yesterday was poor coming in at 100,412.
The total silver Comex OI rose by 1580 contracts as silver was up in price to the tune of 15 cents yesterday. The total OI now rests tonight at 147,735 contracts. The non active February silver contract month saw its OI remain constant at 11 contracts. We had 0 notices filed yesterday so we neither gained nor lost any silver contracts standing in February.The next big active delivery month for silver is March and here the OI fell by 3014 contracts to 75,161. First day notice for the silver March contract is Friday, Feb 28.2014. The estimated volume today was excellent coming in at 64,180 contracts. The confirmed volume yesterday was also excellent at 64,539 contracts.
Total monthly oz gold served (contracts) so far this month
3179 (317,900 oz)
Total accumulative withdrawal of gold from the Dealers inventory this month
Total accumulative withdrawal of gold from the Customer inventory this month
Today we had some activity in the Comex gold vaults today but still no gold enters the dealer
We had 0 dealer deposit and 1 dealer withdrawals
i) Out of Scotia: 19,371.875 oz
total dealer withdrawal; 19,371.875 oz
we had 0 Customer deposits
Total customer deposits: nil oz
We had 1 major customer withdrawals:
ii) Out of Scotia: 7,486.57 oz
Total customer withdrawals: 7,486.57 oz.
Today we had 0 adjustments:
Thus we have the following with respect to JPMorgan's inventory.
JPM dealer inventory remains tonight at 214,097.318 oz or 6.659 tonnes
JPM customer inventory remains tonight at: 602,530.808 oz or 18.741 tonnes
Today, 26 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 512 contracts of which 0 notices were stopped (received) by JPMorgan dealer and 23 notices stopped by JPMorgan customer account. Deutsche bank today issued 449 of the 512 contracts and HSBC stopped 115.
The total dealer comex gold remains tonight at 638,022.651 oz or 19.845 tonnes of gold . However this will decline in inventory once settlement occurs. The total of all comex gold (dealer and customer) rests at 7,118,444.923 oz or 221.41 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 16.959 tonnes.
i) Scotia: 156,440.000 oz or 4.865 tonnes ii) HSBC: 174,742.211 oz or 5.435 tonnes iii) JPMorgan: 2144,097.318 oz or 6.659 tonnes
total: 16.959 tonnes
Brinks dealer account which did have the lions share of the dealer gold saw its inventory level remains constant tonight at only 88,329.199 oz or 2.747 tonnes. A few months ago they had over 13 tonnes of gold at its registered or dealer account.
Another big effort for and by GATA.
As you might know I attended the Jim Sinclair Q and A session in Austin on Saturday with Bill Murphy of GATA. The seminar lasted over 4 hours and we met many smart people and I call them "truth seekers". One of these was a well dressed German fellow who looked to be in his early 40's. He came up to Bill Murphy during the first break and asked why GATA had not gotten all of their information out to the regulators and the media? He said "the manipulation is so obvious, why don't you go whistleblower?". Bill explained that GATA has tirelessly given uncovered information out for years, 16 years now and no one wants to hear it. Murphy went right down the line, he told of his CNBC appearance that was cut short and the his never being allowed to appear since then ... He explained that he and Chris Powell have given the CFTC piles of information, they've given multiple "smoking guns" to the press...yet nothing but silence.
Bill even explained that over the years, some reporters have even told him that the word "GATA" (gold antitrust action committee) could never be printed. In fact, about the only press over the years has been foreign press. He told of the 2001 Durban, South Africa trip and the press coverage, the fact that even Russia has carried news of and spoken of GATA...but only silence and suppression of the truth here in the U.S. and Britain.
The German guy wouldn't give up though (because he's a stubborn German, I should know as I am the same), he approached Bill 2 more times and couldn't understand why GATA hasn't been able to do what their primary mission is, namely exposing the truth about the suppression of gold's price as part of keeping the markets "tame" (rigged). GATA's mission has been merely about "free markets" or I should say the LACK of free markets. All they want is a free gold price and for that to reflect the "temperature" of markets much like a thermometer.
As I said, the German was stubborn and approached Murphy one last time after the conference...and only then did things start to roll. It turns out that this guy was quite successful, he retired 6 years ago (presumably in his 30's) after selling his "headhunting" business. This is significant because he has ties and acquaintances in the German media...it was GAME ON! You could see Murphy's face light up like a Christmas tree! Could this be possible? A German who truly understands what has been happening AND connections to the German media...at a time when Germany has been defaulted on and it appears that their gold is gone ?
The 3 of us spent a couple of hours brainstorming as to how to approach this and of course nothing was set in stone but much as an artist sketches an outline...it was drawn up last night. Bill is going to pull the "entire file" with every piece to the puzzle and every smoking gun that GATA has uncovered over the years. This "file" will be shown to several journalists in Germany AND also to Bafin. Bafin if you will recall is the financial regulatory agency that is cracking down on LIBOR, bank fraud and also "gold manipulation". Bafin's president Elke Koenig made the comments last month that "if there is gold manipulation it would be far worse than LIBOR".
This is a dream come true! Germany is hungry for any information about gold right now...because they have figured out that their's is, well, "it's gone"! And compiling information about gold and the fraud that has surrounded it for at least 42 years is the only thing that GATA has done for 16 years...except no one wanted to hear it in the U.S., NO ONE. Chris Powell had already sent this information last month to Bafin with no response from them at all. The plan is to get this information to Bafin "publicly" so that the German populace knows full well that the regulator has all of the smoking guns and 1 media outlet in an exclusive scoop. This information will be followed by a "presentation" to the German public who are only now beginning to ask questions since the U.S. has dragged its feet on shipping German gold back to its rightful owners.
This will not be a presentation by a bunch of knucklehead conspiracy theorists. Please understand that GATA has now and has had for quite some time enough information that put together properly paints an absolute masterpiece of who did what and how. Murphy wants to put together an All Star team to make this presentation, he intends to request that the likes of Jim Sinclair, Eric Sprott, James Turk, John Embry, (a special surprise guest) and others participate. Please understand that this presentation will not be some sort of "he said she said" or "I think" blah blah blah, no, there is a paper trail evidence of much that has transpired over the years. There is a "paper trail" in reality for EVERYTHING that has transpired over the years though much of it is hidden and out of sight. This evidence is NOT out of Bafin's sight however.
The thought process is this, inform the German people exactly what has happened, why it has happened and where we (they) are now. This will obviously put some pressure on politicians to get behind this which will pressure the regulators to dig...deep. We were told last night by our "German friend" that the population is just now beginning to ask questions about their gold, that the media sources that he knows very well may have an interest in this, that there are some politicians (more than just Ron Paul here in the U.S.) already asking these questions and of course Elke Koenig who has already claimed gold manipulation.
It looks to me like "GATA" is all they need. GATA finally after all these years (of digging for the truth and finding piece after piece after piece and thinking with each one "no one could ignore this") may have their mission statement accomplished. Germany is expressing a desire for answers and GATA has them all in one file. The funny thing is that Bill Murphy and Chris Powell have always said over the years that "once the system collapses, Congress will investigate and we'll have everything that they need to find out why". I've even kidded Murphy many times that I can picture him testifying to Congressmen who don't even have a clue what he's talking about. Little did I know that he may end up testifying to a German translator in a foreign land. I might add that the Germans are also a little ticked off over Angel Merkel being spied on and our wonderful diplomat who said "F_CK the EU...(and we have the nerve to be upset that she was spied on ?)
If this does work and I believe it will because Germany is hungry for the truth, the world will change drastically and quickly. It will surely feel like it's for the worse in the short run but in the long run, fraud deceit, theft and rigged markets to keep the status quo can never be permanent. GATA has the "power of truth" behind them, hopefully I am not being naïve and this mission gets accomplished.
Regards, Bill H
Barrick Gold Production Seen Hitting Nine-Year Low
Barrick Gold Corp. (ABX) is poised to cut output to a nine-year low, a sign the world’s largest gold miner is making headway on its plan to put profits before growth.
Barrick may produce 6.3 million ounces of gold this year, based on the average of four analysts’ estimates compiled by Bloomberg. That would be as much as 15 percent less than last year and the lowest since the company became the gold industry leader in 2006.
The Toronto-based miner, which is expected to issue 2014 forecasts when it reports fourth-quarter earnings Feb. 13, isn’t alone in its strategy. Gold producers have cut budgets, sold mines and curtailed operations after the metal plunged last year by the most in more than three decades.
“Barrick represents a turnaround situation,” Robert Gill, who helps manage C$3.3 billion ($3 billion) including Barrick shares at Lincluden Investment Management, said yesterday by phone. “It’s a different company now than what it was for much of its existence.”
The miner led an industrywide pursuit of expansion over the past decade as gold producers sought to capitalize on prices that rose for 12 straight years. A shift began in 2012 after money-losing multibillion-dollar takeovers, overbudget projects and relentlessly rising costs pushed the companies to focus on returns.
Gold futures in New York fell 28 percent in 2013, the biggest annual decline since 1981. The metal has pared some losses this year, increasing 6 percent to settle at $1,274.70 an ounce yesterday.
The changing industry landscape will be further delineated this week as four of Canada’s five largest gold miners report earnings. Producers will probably announce further writedowns -- potentially $2 billion to $3.5 billion in Barrick’s case -- and declines in gold-reserve estimates as they adjust assumptions, Royal Bank of Canada analysts led by Stephen Walker said in a Feb. 5 note.
Barrick may report fourth-quarter earnings excluding one-time items of 41 cents a share, the average of 21 analysts’ estimatescompiled by Bloomberg. That compares with adjusted profit of $1.11 a year earlier.
Barrick, which fell 46 percent in Toronto last year, has increased 14 percent since the start of 2014 while the Philadelphia Stock Exchange Gold and Silver Index of 30 companies has risen 13 percent.
Andy Lloyd, a Barrick spokesman, declined to comment on the production outlook or potential writedowns ahead of the earnings report.
Changing priorities is the right approach for gold producers, saidDavid Christensen, chief executive officer of San Mateo, California-based ASA Gold & Precious Metals Ltd., which manages about $300 million.
“Qualitatively you end up with a better company than you would have had last year at this time,” Christensen said Feb. 5 in a telephone interview.
Barrick has agreed to sell more than $850 million of assets in the past seven months, including its oil and gas unit, five Australian mines and a minority interest in a Nevada gold operation. The company also suspended construction of its delayed and overbudget Pascua-Lama project in the Andes, started closing its Pierina mine in Peru last year and cut its dividend 75 percent.
Barrick has forecast 2013 output of 7 million to 7.4 million ounces of gold, which would represent the fourth annual decline, according to data compiled by Bloomberg, and compares with a peak of 8.64 million ounces in 2006, when Barrick completed its acquisition of Placer Dome Inc. for $10.2 billion including debt.
Production will fall in 2014 following the sales and as the company adjusts mine plans to focus on the most profitable production, CEO Jamie Sokalsky said at a conference in Whistler, British Columbia.
“The company has been transformed into a much stronger and leaner company,” he said Jan. 23. A decision to focus on free cash flow and returns rather than production represents a “sea change” for Barrick and the industry, Sokalsky said.
Barrick became the No. 1 producer when it bought Placer Dome. Barrick had targeted an increase to 9 million ounces by 2016 when the company fired CEO Aaron Regent in June 2012 and replaced him with Sokalsky.
Less than two months after taking the helm, Sokalsky lowered the goal to 8 million by 2015, and then abandoned the target altogether a year later, saying that returns would drive production growth, not the other way around.
Not all gold miners are shrinking. Goldcorp Inc. (G), the second-largest Canadian producer, expects production will increase as much as 18 percent this year as the company starts up new mines in Canada and Argentina. Output will increase further if the Vancouver-based miner succeeds in its C$2.84 billion hostile cash-and-stock bid for Osisko Mining Corp.
While Goldcorp is increasing production, growth isn’t a goal in itself, CEO Chuck Jeannes said at the same Whistler conference.
“The way you improve an overall portfolio is to both add high-quality things and sell off your non-core things,” Jeannes said. “We’ve done that several times in the past, and we’ll continue to do it.”